Check out our ESG Newsletter, which brings together information on recent legislation, news, public consultations, and bills related to environmental, social, and corporate governance across multiple sectors.
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– ENVIRONMENTAL ASPECTS
European Union begins full implementation phase of the CBAM
The full implementation phase of the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) initiated on January 1, 2026, introducing additional requirements for proving the emissions embedded in products imported by European companies.
Initially aimed at the iron, steel, aluminum, cement, fertilizers, hydrogen, and electricity sectors, the CBAM is a regulatory instrument that seeks to equalize carbon costs between domestic and imported products, requiring imported goods to internalize the cost of greenhouse gas “(GHG”) emissions to prevent “carbon leakage” and protect the competitiveness of the local industry. Carbon leakage is the phenomenon in which industries, pressured by stringent climate policies (such as high emission costs), relocate their production to places with more flexible climate policies.
During the transitional phase, companies were required to report the emissions embedded in their products subject to the mechanism, without having to make any financial adjustments. As of January 1, 2026, the mechanism began requiring the purchase of CBAM certificates proportional to the emissions embedded in goods originating from countries without carbon pricing equivalent to that of the EU.
From this stage onward, Brazilian exporters of iron and steel, cement, fertilizers, aluminum, electricity, and hydrogen must:
- Improve the granularity and traceability of emissions reports;
- Comply with calculation methodologies compatible with European regulations;
- Assess opportunities for reducing or offsetting emissions across the value chain; and
- Monitor any negotiations between Brazil and the EU on the mutual recognition of carbon-pricing systems.
National Treasury expands rules for investment funds in the 3rd Eco Invest Brazil Program Auction
Established by Law No. 14,995/2024 and regulated by Ministry of Finance Ordinance No. 964/2024, Eco Invest Brasil is a pioneering initiative by the National Treasury aimed at creating structural conditions to attract foreign private investment and mobilize resources for sustainable, long-term projects in the country.
The 3rd Eco Invest Brazil Auction, regulated by STN/MF Ordinance No. 2,302/2025, aims to mobilize national and international investments through equity instruments in sectors deemed strategic, such as energy transition, bioeconomy, circular economy, and climate change adaptation infrastructure, contributing to decarbonization targets and the UN Sustainable Development Goals.
On January 2, 2026, the National Treasury Department (“STN”) published STN/MF Ordinance No. 10/2026, introducing material changes to the 3rd Eco Invest Brazil Auction rules, expanding the use of different investment fund structures and increasing the attractiveness of transactions focused on ecological transformation.
As a result, Eco Invest Brasil Funds are no longer restricted to Equity Investment Funds (FIPs) and can be established in any type of fund authorized by Brazilian Securities and Exchange Commission (CVM) regulations and other applicable rules. Such flexibility seeks to enable alternative structures, such as Financial Investment Funds, ensuring greater diversity of instruments, liquidity, and the capacity to mobilize private capital for projects aligned with the ecological transformation agenda.
The Operational Manual for the 3rd Auction was updated on January 5, 2026, to incorporate these changes. The deadline for submitting proposals to the 3rd Auction ended on January 07, 2026.
National Treasury issues ordinance for the 4th Eco Invest Brazil Auction to attract private investment in bioeconomy and sustainable tourism with a focus on the Amazon
On December 5, 2025, the STN published STN/MF Ordinance No. 3,103/2025, which regulates the Eco Invest Brazil Auction No. 4/2025, aimed at mobilizing domestic and foreign private capital for sustainable projects in the Bioeconomy, Sustainable Tourism, and Infrastructure sectors, with a focus on the development of the Legal Amazon.
The ordinance sets out the rules and conditions for financial institutions wishing to access the resources of Auction No. 4/2025, as well as eligible activities, geographic scope, and final beneficiaries.
Eligible activities include, in broad terms, the following sectors:
- Sociobioeconomy, productive restoration, timber and non‑timber management, and bio‑industrialization.
- Sustainable ecotourism, sustainable ecotourism in Conservation Units and parks, and community‑based tourism.
- Enabling infrastructure and inland waterway and port infrastructure.
The auction prioritizes projects located in the Legal Amazon and provides for an additional tranche of funds for the implementation of incentive mechanisms that:
- mitigate operational or credit risks;
- improve the financial viability of projects;
- reduce barriers to accessing financing; and
- promote structural conditions for the development of eligible sectors.
The deadline to submit proposals and pre-allocation reports ended on February 25, 2026.
B3 announces new Carbon Efficient Index (ICO2 B3) portfolio for 2026
On January 5, 2026, the B3 (Brazil’s Stock Exchange) announced the new composition of the Carbon Efficient Index (“ICO2”) for the 2026 cycle. The indicator now includes 65 companies, four more than in the previous cycle, reflecting the progress Brazilian companies have made in adopting good practices for the efficient management of their GHG emissions.
The ICO2 simultaneously assesses climate management practices (including assured emissions inventories, Net Zero targets, transition plans, and Board of Directors oversight) and emissions efficiency in relation to revenue, reinforcing the alignment between sustainability and financial performance.
The new portfolio consolidates the index as a seal of climate quality in the capital market, supporting investors and issuers in the transition to a low-carbon economy.
Ministry of Agriculture and Livestock establishes minimum requirements for recognizing good agricultural practices
On January 2, 2026, MAPA Ordinance No. 876/2025 entered into force, establishing minimum requirements for recognizing programs to promote and certify good agricultural practices at the primary production stage of agricultural and livestock chains.
The regulation’s scope extends from planning and cultivation to harvesting, post-harvesting, and primary transportation in the case of crops, as well as husbandry, reproduction, breeding, conservation, and primary transportation in the case of livestock, with a focus on sustainable production, food safety, plant health, and animal welfare.
The regulation seeks to standardize criteria across public and private programs, strengthening traceability, quality, competitiveness, and alignment with international standards.
Programs promoting good agricultural practices previously registered under MAPA Ordinance No. 337/2021 will have one year to comply.
Brazil advances the standardization of carbon‑credit certification
The Ministry of the Environment and Climate Change (“MMA”) entered into a technical cooperation agreement with the Ministry of Finance and the Brazilian Development Bank (“BNDES”) to advance the structuring of carbon‑credit certification.
The initiative is part of the national ecological transformation strategy and contributes directly to fulfilling Brazil’s Nationally Determined Contribution (NDC) by strengthening integrity, traceability, and governance mechanisms for GHG reduction and removal projects.
The agreement seeks to establish technical‑institutional foundations to improve the reliability of credits generated in the country, promote greater alignment with international standards, and encourage the development of projects in strategic sectors. The measure also reinforces the BNDES’s role in shaping environmental markets and mobilizing investment geared toward the low‑carbon economy.
For companies, this move signals the need to closely monitor future certification requirements, particularly regarding environmental integrity, independent verification, and project governance. It will also be essential to assess how this process can interoperate with regulated instruments, including those provided for in the design of the future Brazilian Emissions Trading System (SBCE), expanding opportunities and compliance requirements in the domestic carbon market.
For more information on hiring specialized consultants to assist the government in consolidating the technical and institutional foundations for carbon credit certification, visit: Seleção Pública FEP Fomento nº 01/2026 – Estudo “Certificação de Crédito de Carbono no Brasil”.
The deadline for submitting proposals to the BNDES ended on March 02, 2026.
Federal Government establishes national programs for decarbonization of ports and shipping
On December 11, 2025, the Ministry of Ports and Airports published Ordinance No. 736/2025, establishing the National Port Decarbonization Program (PND-Portos) and the National Shipping Decarbonization Program (PND-Navegação). The initiative sets guidelines to reduce GHG emissions in the port system and in navigation, with structuring led, respectively, by the National Secretariat of Ports (SNP) and the National Secretariat of Waterways and Navigation (SNHN). Each body must publish, within 365 days, the act detailing its program.
The ordinance stipulates that programs may include measures related to Scopes 1 (direct GHG emissions from the inventory organization), 2 (GHG emissions from the reporting organization linked to electricity generation, heating or cooling, or steam purchased for own consumption), and 3 (indirect emissions from the reporting organization not included in scope 2), with periodic monitoring and review of targets and actions, reinforcing energy transition and operational efficiency throughout the waterway logistics chain.
Annual mandatory emission‑reduction targets approved for fuel trade
On December 29, 2025, the President of Brazil approved Resolution No. 21/2025, of the National Energy Policy Council (“CNPE”), which establishes mandatory annual targets for reducing GHG emissions related to fuel sales in Brazil.
The targets were set based on the carbon intensity of Brazil’s fuel matrix, its trend of improvement over the years, and the parameters set forth in Federal Law No. 13,576/2017, which establishes the National Biofuels Policy (Renovabio).
For each year from 2026 to 2035, the resolution sets values for:
- projected carbon intensity (gCO₂/MJ);
- percentage reduction in carbon intensity compared to the 2018 baseline;
- annual targets in millions of Decarbonization Credits (CBIOs); and
- tolerance ranges, with minimum and maximum limits.
The targets are mandatory for fuel sellers and are intended to steer the energy sector toward a progressively less carbon-intensive matrix, encouraging efficiency and the use of lower-emission fuels.
CNPE Resolution No. 21/2025 entered into force on December 30, 2025, joining the set of regulatory instruments that support the trajectory of emission reductions in the fuel sector, in line with national climate objectives.
ICMBio establishes program to foster sociobiodiversity economies in Conservation Units
On February 2, 2026, the Chico Mendes Institute for Biodiversity Conservation (“ICMBio”) published Ordinance No. 163/2026, establishing the Program to Promote Sociobiodiversity Economies in Federal Conservation Units (“ECOSociobio Program”), with the objective of integrating and coordinating actions to promote economies based on the socio‑environmental diversity of traditional peoples and communities in federal Conservation Units.
Specific objectives are defined, such as supporting economies based on the sustainable use of sociobiodiversity; generating income and food security; strengthening socio‑productive organizations; providing access to technical assistance; supporting value chains and commercialization arrangements; adding value to sociobiodiversity products; and ensuring access to economic‑incentive instruments and public policies.
The Program is structured into Strategic Lines of Action, which include, among others, access to basic rights and infrastructure; strengthening socio‑productive organization; developing local capacities; supporting investments in logistics and technology; access to differentiated markets; promoting equity; improving authorization processes for the sustainable use of sociobiodiversity; and data and information management. Actions must be aligned with the management instruments of the Conservation Units and with applicable legislation.
The ordinance also defines cross‑cutting axes – such as socio‑productive diagnosis and planning, inter‑institutional coordination, continuous training, communication, partnerships, and mobilization of financial resources – and establishes a participatory, decentralized governance model with local, regional, and national bodies within ICMBio, including the creation of a Program Management and Monitoring Committee.
As for financing, the program may be funded by the ICMBio budget, public funds, the Environmental Compensation Fund, international cooperation resources, the private sector, and the own revenues of the Conservation Units, without prejudice to other sources.
[STATE]
Federal District establishes Low Carbon Hydrogen Policy
On December 24, 2025, State Decree No. 48,103/2025 established the District Low-Carbon Hydrogen Policy, setting goals, guidelines, and governance for the development of the hydrogen chain in the Federal District.
The act defines, among other terms:
- “low-carbon hydrogen” (with emission limits lower than those established in Federal Law No. 14,948/2024);
- “green hydrogen” (produced by electrolysis using renewable energy);
- “hydrogen value chain” (covering from production to end use); and
- “hydrogen derivatives” (such as green ammonia and methanol).
Projects and activities related to the low-carbon hydrogen chain within the Brazilian Federal District must comply with the risk management guidelines and requirements established in Federal Law No. 14,948/2024, especially regarding the adoption of specific instruments for the prevention of accidents or disasters, for example, via Risk Analysis Study (EAR), Risk Management Plan (PGR):
Objectives include developing the value chain; stimulating sectoral applications (public transport, industrial processes, agriculture); fostering research, development, and technological innovation; expanding the adoption of renewables; and contributing to the district GHG reduction targets.
The decree provides for integration with federal policies (for example, the National Hydrogen Program, the Brazilian Hydrogen Certification System, and the Special Incentive Regime for the Production of Low‑Carbon Hydrogen) and creates a Management Committee to coordinate implementation. Within 180 days, this committee must prepare the first Low‑Carbon Hydrogen District Plan, containing targets, indicators, and at least two priority pilot projects.
Minas Gerais sets rules for classifying SIT MG priority projects to issue incentivized and infrastructure debentures
Joint Resolution SEINFRA/ARTEMIG No. 01/2026, published on January 23, 2026, establishes requirements and procedures for classifying and monitoring priority investment projects under the State of Minas Gerais Transport Infrastructure System (“SIT‑MG”) for the purpose of issuing incentivized and infrastructure debentures, in accordance with Ordinance No. 689/2024 of the Minister of State for Transport.
The rule sets the requirements for SIT‑MG investment projects to be considered priority. In this regard, projects must include integrated actions across three fronts:
- mitigation of environmental impacts;
- infrastructure adjustment and resilience to climate change; and
- instruments for the social and environmental management of infrastructure impacts, in compliance with environmental licensing and consultation with traditional communities, where applicable.
The Minas Gerais Transport Regulatory Agency (Artemig) has become responsible for establishing supplementary rules, defining monitoring criteria, and issuing the technical statements required by the Ministry of Transport to qualify road and rail projects for incentivized debentures.
Acre creates Integrated System for the Environment and Climate Change and Integrated Center for Intelligence, Geoprocessing, and Environmental Monitoring
State Law No. 4,749/2025, which seeks to integrate policies, actions, and administrative structures related to the environment, agriculture, Indigenous peoples, territorial management, and civil protection, establishes two environmental‑governance instruments in the State of Acre: the Integrated System for the Environment and Climate Change (“Simamc”) and the Integrated Center for Intelligence, Geoprocessing, and Environmental Monitoring (“Cigma”).
Simamc brings together the following state agencies in a single system:
- State Secretariat for the Environment (“Sema”)
- State Department of Agriculture (Seagri)
- Special Secretariat for Indigenous Peoples (SEPI)
- Acre Environmental Institute (Imac)
- Institute for Climate Change and Environmental Services Regulation (IMC/AC)
- Acre Land Institute (Iteracre)
- State Coordination Office for Protection and Civil Defense (CEPDC)
Simamc will be managed by a Management Committee composed of the heads of the agencies that are part of the system and chaired by the head of Sema. This committee will be responsible for the integrated coordination of environmental actions and may invite experts and representatives of civil society to participate in its meetings.
The Executive Branch is authorized to create Simamc Regional Offices, defined as territorial areas of joint action by the agencies that are part of the system. The Regional Offices must, at a minimum, rely on the support of Sema and Imac, and will be continuously evaluated by the Management Committee, which will establish performance and implementation criteria for actions.
An Operational Group for Command, Control and Territorial Management has also been created, formed by members of the Executive Committee provided for under Simamc, with the possibility of participation by other state bodies involved in combating deforestation, burnings, and extreme climate events.
In structural and technical terms, Cigma will be the core entity responsible for managing the state’s environmental and territorial data. Its responsibilities include:
- administration of the databases of the Ecological‑Economic Zoning (ZEE/AC) and the Rural Environmental Registry (CAR/AC);
- processing orbital images and updating the raster database;
- producing studies, diagnostics, territorial analyses, and environmental indicators;
- developing integrated monitoring platforms;
- supervising publications and technical products;
- hydrometeorological monitoring and drafting of technical notes;
- supporting the development and evaluation of environmental public policies; and
- coordinating environmental data governance, with a focus on standardization, interoperability, and security.
Cigma will be coordinated by Sema, which will also assume technical, administrative, and financial management, ensuring data sharing with all Simamc member agencies.
State of Santa Catarina authorizes transfer of funds for implementing the Selo ABC+ SC Program
On January 22, 2026, the Santa Catarina State Council for Rural Development (Cederural) published Resolution No. 11/2026, authorizing the State Rural Development Fund (“FDR”) to transfer funds to the State Secretariat of Agriculture and Livestock (“Sape”) for the development and implementation of the “Selo ABC+ SC” Program.
The resolution authorizes the allocation of up to R$ 1 million from the FDR for implementing the program, with a final deadline for resource deployment, evaluation, and submission of a final report by December 31, 2027, subject to the Fund’s budgetary and financial availability.
The standard is aligned with SAPE Ordinance No. 65/2025, which established the ABC+ SC Seal Program to promote good agricultural practices and the adoption of Low‑Carbon Agriculture and Climate‑Change Adaptation technologies, in line with the minimum requirements established by the Ministry of Agriculture and Livestock (“Mapa”) for programs of this nature.
The resolution assigns to SAPE’s Directorate of Cooperativism and Rural Development (DICO) and Directorate of Sustainable and Land Development (“DISF”) the authority to regulate the operationalization of the transfer and implementation of the program. It also provides that DISF and SAPE’s Project Management Office, supported by the Project Management Unit (NUPROJ/SAPE), will be responsible for registering, managing, and updating the Program on the Projeta SC Platform.
– SOCIAL ASPECTS
Amendments to the Racial Equality Statute of the State of Pernambuco
State Law No. 19,130/2025 amended Law No. 18,202/2023, which establishes the Racial Equality Statute of the State of Pernambuco. The main purpose of the new rule is to make it mandatory to reserve a percentage of vacancies for Black and Brown people, Indigenous peoples, and quilombola communities in public examinations and simplified selection processes within the state government.
The amendment introduces Article 41‑A into the statute and provides that the reservation of positions applies to two types of proceedings:
- public competitive examinations aimed at filling permanent positions and public‑employment roles within the government, autonomous agencies, foundations, public companies, and mixed‑capital companies, pursuant to Law No. 14,538/2011.
- simplified selection processes used for temporary hiring in situations of exceptional public interest, pursuant to Law No. 14,547/2011.
– GOVERNANCE ASPECTS
[FEDERAL]
Federal Decree No. 12,705/2025 establishes the Brazilian Sustainable Taxonomy
On November 3, 2025, Decree No. 12,705/2025 was published, establishing the Brazilian Sustainable Taxonomy (TSB) as an instrument of the Ecological Transformation Plan (PTE). The TSB is a classification system for activities, assets, and project categories that contribute to achieving climate, environmental, and social objectives, based on specific criteria established by the Federal Government.
As a structuring instrument of the PTE, the TSB will be used to drive economic incentives, label financial products, improve public procurement, and monitor sustainable capital flows. The standard provides for interoperability with international taxonomies and periodic reviews every five years, with a minimum interval of one year between them.
Highlighted below are some aspects of the rule and the technical handbooks drafted by the Inter‑Institutional Committee on the Brazilian Sustainable Taxonomy (CITSB):
- Strategic objectives:
(i) mobilize and channel public and private resources to activities with positive climate, environmental, and social impacts;
(ii) foster technological innovation focused on sustainability, increasing the competitiveness of the national economy; and
(iii) ensure reliable information on sustainable financial flows, fostering transparency and long-term vision.
- Priority environmental and socioeconomic objectives:
(i) climate change mitigation;
(ii) climate change adaptation; and
(iii) reduction of socioeconomic inequalities.
- Economic sectors covered:
(i) agriculture, livestock farming, forestry, fishing, and aquaculture;
(ii) extractive industries;
(iii) manufacturing industries;
(iv) electricity and gas;
(v) water, sewage, waste, and decontamination;
(vi) construction;
(vii) transportation, warehousing, and postal services; and
(viii) social services (including tourism, urban planning, and information and communication technology).
- Criteria for classifying an activity as sustainable:
(i) making a substantial contribution to at least one of the TSB’s objectives;
(ii) not causing significant harm to other objectives; and
(iii) complying with minimum environmental, social, and governance safeguards.
Decree No. 12,705/2025 aims to consolidate a regulatory framework to allocate investments and structure public policies focused on sustainability in Brazil, in line with international best practices in green taxonomies and sustainable economic activities.
Drafting and disclosure of sustainability‑related financial information reports become mandatory for listed companies
As provided for in CVM Resolution No. 193, for fiscal years beginning on or after January 1, 2026, listed companies must prepare and disclose sustainability‑related financial information reports.
The CVM resolution, published on October 20, 2023, requires listed companies to report information aligned with the standards of the Brazilian Committee for Sustainability Pronouncements (CBPS), which are based on international standards IFRS S1 and IFRS S2 –addressing, respectively, general requirements for sustainability‑related disclosures and climate‑related disclosures.
This new phase closes the voluntary‑adoption period, which ran from 2024 to 2025, and inaugurates a new integrated reporting cycle for listed companies, with a focus on materiality, governance, measurement of risks and opportunities, and transparency in internal control processes.
