This engagement was part of the Emerging Markets Disclosure Project (EMDP), a group of global investors working toward increasing sustainability reporting among emerging market companies.

Improving sustainability disclosure in Brazil

In Brazil, the investors focused on engaging with local listed companies to encourage adoption of the Global Reporting Initiative (GRI) framework. In the three years of the project, 36 PRI signatories supported the EMDP Brazil Team, including 21 local and 15 foreign investors. The engagement efforts were also supported by the GRI Focal Point Brazil.

The team contacted the 102 largest Brazilian listed companies by letter in 2010 and 2011 to congratulate those who had used the GRI framework, and to encourage those who had not to produce a GRI-based report. In 2011, the group followed up through phone calls or meetings with 17 companies. To support the engagement meetings, the team used two different scorecards to evaluate the level of the companies’ disclosure. In the first round with eight companies, the investors used a scorecard developed by the EMDP. In the second round with nine companies, the team chose to analyse the companies’ level of disclosure using the GRI core indicators. The GRI representative joined some of the meetings with investors. To improve awareness, the EMDP Brazil team also held workshops in 2010 and 2011 to discuss with listed companies the importance of reporting ESG information and adopting the GRI framework.

During the 17 engagement meetings, two companies discussed with investors their just-published GRI report. Seven companies indicated that they would issue a GRI report in 2012 or 2013. Eight other companies are still discussing the prospects of sustainability reporting using GRI guidelines.

The participation of a significant number of PRI signatories demonstrated the importance investors place on the subject and the Brazilian market. Collaboration between international and local investors with knowledge of, and language skills and contacts in the target market proved to be an effective model. The use of scorecards was very useful for the investors in meetings with companies, especially in offering a benchmark for good corporate disclosure.