If you run a small or medium-sized business (SME/SMB) in Brazil, you’ve probably felt the winds of change. Clients, banks, investors, and even regulators are no longer satisfied with surface-level promises about sustainability. They want data, transparency, and proof that you’re managing your environmental, social, and governance (ESG) responsibilities.
For Brazilian SMEs and SMBs, this shift can feel intimidating. Many owners are already juggling rising costs, compliance requirements, and the need to meet regulatory compliance standards, along with tough competition. Adding “ESG reporting” to the list may seem like one more burden. But here’s the truth: ESG reporting is not just about compliance — it’s about opportunity. It helps you stay in international supply chains, access better financing, and strengthen your company's reputation in a competitive market.
Key Takeaways
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ESG reporting is now essential for Brazilian SMEs/SMBs that want to keep international clients, especially in Europe.
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Frameworks like GRI, SASB, and CSRD give a roadmap for transparent, credible reporting.
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Companies that act early can turn ESG compliance into a growth advantage in Brazil’s fast-changing economy.
Introduction to ESG Reporting
Think of ESG reporting as telling the story of how your business operates — but with numbers, policies, and evidence. Instead of saying, “We care about sustainability,” you can show, “We reduced our carbon emissions by 10% last year,” or “Our workforce is 40% women in leadership positions.” These are examples of ESG factors—environmental, social, and governance elements—that companies need to identify and manage in ESG reporting.
In Brazil, this is becoming crucial for SMEs/SMBs. Take agribusiness as an example: exporters of soybeans, beef, or coffee now face strict EU regulations against deforestation. Without ESG disclosure, those products risk being blocked from European markets. For tech startups in São Paulo or Recife, ESG reporting is equally important when raising capital from foreign investors who want proof of good governance and social responsibility.
Frameworks like the Global Reporting Initiative (GRI), widely used across Latin America, and the Sustainability Accounting Standards Board (SASB), which focuses on industry-specific standards, provide practical templates. They give you a structure to collect data, track progress, and communicate your company's performance clearly. Choosing the right reporting framework is essential, as different ESG frameworks—such as GRI, SASB, and others—help companies align with global standards, disclose ESG data effectively, and demonstrate their commitment to sustainability.
Importance of ESG Reporting
For Brazilian SMEs, ESG reporting is not just about being “green.” It’s about survival and growth.
On the one hand, supply chain pressure is real. Many Brazilian companies sell into Europe, where the Corporate Sustainability Reporting Directive (CSRD) is reshaping expectations and new ESG regulations are having a significant impact on Brazilian exporters. A medium-sized coffee exporter in Minas Gerais might not be legally bound by CSRD, but its European buyers are — and they’ll demand ESG compliance from suppliers. These buyers are also increasingly focused on esg disclosure requirements, which affect supply chains by requiring transparent and credible ESG reporting from all participants.
On the other hand, domestic demand is growing too. According to IBGE surveys, most Brazilians believe companies should be socially and environmentally responsible. In practice, this means a consumer in São Paulo is more likely to choose a brand with clear sustainability efforts over one that hides behind vague promises. Implementing strong sustainability initiatives is crucial for companies to meet these rising consumer expectations.
And let’s not forget financial performance. Brazilian banks like BNDES and private lenders are increasingly tying loan conditions to ESG metrics. If you can show reliable ESG data, you may access lower interest rates or better financing terms.
In short: ESG reporting is both a shield (protecting your reputation and market access) and a sword (opening new opportunities).
ESG Reporting Frameworks and Regulations
Here’s where it can get confusing. There are global standards, European rules, and Brazilian laws — all overlapping. In addition, regional reporting frameworks play a significant role in ESG reporting, as organizations may need to comply with specific national or regional disclosure requirements. But once you see how they fit together, it becomes manageable.
In Brazil:
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The CVM (Comissão de Valores Mobiliários) requires listed companies to disclose climate and governance data, including corporate governance data, which is essential for demonstrating transparency and accountability to stakeholders. Even though this applies directly to large firms, SMEs that supply them will feel the pressure.
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The B3 Stock Exchange created the ISE B3 (Índice de Sustentabilidade Empresarial), which highlights top-performing companies on ESG. This index indirectly sets benchmarks for smaller businesses trying to join supply chains.
Globally:
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The Corporate Sustainability Reporting Directive (CSRD) in Europe is a game-changer. If you export to the EU, you’ll need to align with these requirements soon.
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The International Sustainability Standards Board (ISSB) offers a global baseline, making reports easier to compare across countries.
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The European Sustainability Reporting Standards (ESRS) and EU Taxonomy define what counts as sustainable in practice. The EU Taxonomy specifically sets out criteria for which economic activities are considered environmentally sustainable, providing a standard to prevent greenwashing.
The good news? You don’t need to master every rule at once. Start with one recognized framework like GRI. As your reporting matures, you’ll naturally cover the overlap with CSRD or ISSB.
ESG Data and Metrics
Data collection is often the most challenging part for SMEs in Brazil. But without it, ESG reporting becomes just words. ESG reports should include both qualitative and quantitative information to provide a complete picture of a company's environmental, social, and governance performance.
Think about three categories:
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Environmental: Carbon emissions, water use, waste disposal. In drought-affected regions, water metrics are critical.
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Social: Labour practices, workplace safety, diversity. Brazil’s CLT labor laws already cover many of these issues, making them easier to track.
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Governance: Executive compensation, board diversity, anti-corruption policies. With Brazil’s history of corporate scandals, governance data is a big trust factor.
For example, a family-owned logistics firm in São Paulo might track fuel consumption and emissions from its fleet. A clothing SME in Santa Catarina could measure water usage in textile production and worker safety in factories. These numbers not only satisfy regulations but also highlight areas where cost savings can happen. Disclosing the company's ESG activities in these areas builds trust with stakeholders by demonstrating transparency and genuine commitment.
Climate-Related Financial Disclosures
Brazil is one of the countries most vulnerable to climate risks. Floods in Rio Grande do Sul, droughts in the Northeast, and rising temperatures across the country affect crops, infrastructure, and energy use.
Investors want to know: are you prepared? The Task Force on Climate-related Financial Disclosures (TCFD) provides a framework to answer this. It asks companies to disclose:
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Physical risks: How would a drought affect your operations?
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Transition risks: How would a new carbon tax affect your costs?
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Opportunities: Can your business grow by investing in renewable energy or sustainable products?
These physical and transition risks are part of a broader set of ESG risks, which include environmental, social, and governance vulnerabilities that organizations must assess and manage.
For SMEs, this doesn’t need to be complex. Even a simple disclosure that your company installed solar panels or reduced water use shows stakeholders that you’re thinking ahead. Addressing human rights issues is also an important part of climate-related and social disclosures, demonstrating your commitment to ethical business practices and social responsibility.
ESG Report and Performance
Your ESG report is where everything comes together. It’s the document that says: Here’s how we operate, here’s the progress we’ve made, and here’s where we’re going. Sustainability reports provide transparency and help companies communicate their ESG progress to stakeholders, following recognized frameworks like GRI or TCFD.
In Brazil, many SMEs worry about the cost of producing these reports. But it doesn’t have to be expensive. A clear, 15–20 page report aligned with GRI or SASB standards is often enough for smaller companies.
For example, a coffee cooperative in Minas Gerais might publish a report showing:
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Compliance with deforestation-free sourcing.
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Worker training programs.
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Annual reductions in carbon emissions.
The value is not in producing the longest report but in producing one that is honest, consistent, and backed by data. An esg score can also be used to benchmark your company’s ESG performance, making it easier for investors and stakeholders to evaluate your progress.
Corporate Social Responsibility
CSR is deeply rooted in Brazilian business culture. Many SMEs already support their communities — sponsoring local football teams, donating to schools, or helping during floods.
The shift today is about integrating CSR with ESG. That means connecting your social projects to measurable outcomes. For example:
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If you sponsor reforestation in the Amazon, track the number of trees planted and CO2 offset.
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If you support education programs, measure the number of students trained and their employment outcomes.
This way, CSR becomes part of your sustainability strategy, not just charity. Embedding sustainability into your core business practices is essential for creating long-term value and strengthening your ESG profile.
ESG Initiatives and Strategies
So, what can SMEs actually do? Here are examples tailored for Brazil:
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Environmental: Install solar panels (supported by Brazil’s ProGD program), switch to cleaner transport, reduce packaging waste.
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Social: Create apprenticeship programs for youth in favelas, improve worker safety, adopt diversity hiring practices.
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Governance: Publish an anti-corruption policy, tie executive pay to ESG results, ensure transparency in procurement.
Developing clear ESG strategies helps companies align their actions with global standards and integrate sustainability into their core business practices.
The trick is to align initiatives with your business model. If you’re in food production, focus on deforestation-free sourcing. If you’re in tech, focus on energy efficiency and digital governance. ESG principles play a crucial role in guiding decision-making and ensuring that strategies foster transparency and long-term value.
These efforts also support sustainable investing and help attract responsible investors seeking companies committed to ESG values.
Corporate Governance and Sustainability
Governance might feel distant for SMEs, but it’s really about how you make decisions. Good governance ensures ESG doesn’t get dropped when times are tough.
For Brazilian SMEs, this can be as simple as:
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Assigning an ESG champion (a manager or director).
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Including ESG in quarterly business reviews.
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Aligning with Lei das Sociedades por Ações (Corporate Law) for transparency.
Good governance is the glue that makes ESG efforts stick. Transparent governance practices also help build trust with other stakeholders, such as customers, employees, and partners, not just investors and regulators.
Benefits of ESG Reporting
Embracing ESG reporting brings a host of benefits for companies aiming to thrive in today’s competitive and sustainability-focused landscape. By systematically disclosing environmental, social, and governance (ESG) data, businesses enhance their transparency and demonstrate a genuine commitment to corporate sustainability. This transparency not only builds trust with stakeholders—such as clients, investors, and regulators—but also positions companies as responsible partners in global supply chains.
Utilizing key ESG reporting frameworks like the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) helps companies structure their sustainability reporting, ensuring that ESG metrics are both credible and comparable. These frameworks guide businesses in tracking progress on critical issues, from reducing carbon emissions to improving labour practices and corporate governance.
Effective ESG reporting also strengthens risk management by identifying potential vulnerabilities and opportunities within a company’s operations. By regularly assessing ESG performance, companies can make informed decisions that drive financial performance and support sustainable growth. Meeting stakeholder expectations for transparency and accountability is increasingly essential, especially as regulations like the Corporate Sustainability Reporting Directive (CSRD) raise the bar for disclosure.
Ultimately, ESG reporting is more than a compliance exercise—it’s a strategic tool for tracking progress, improving social and governance ESG outcomes, and building a more sustainable future for both the company and the communities it serves.
Best Practices for ESG Reporting
Brazilian SMEs/SMBs can simplify ESG reporting by following a few best practices:
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Be transparent: Don’t hide weaknesses — showing progress is more important than perfection.
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Stick to a framework: GRI is most common in Brazil, but SASB works well for industry focus.
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Prioritize: Identify and focus on ESG priorities—those environmental, social, and governance issues most relevant to your sector—for more effective reporting.
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Engage stakeholders: Employees, suppliers, and customers can highlight sustainability issues you might overlook.
Challenges of ESG Reporting
Challenges are real. Brazilian SMEs often face:
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Costs: ESG data collection and audits can feel expensive.
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Complexity: Balancing IBAMA, PNMC, CSRD, and state-level rules.
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Resources: Smaller teams lack dedicated ESG staff.
The way forward is to start small and scale. Begin with two or three ESG metrics, adopt affordable ESG reporting software, and grow your process step by step.
ESG Reporting Software and Tools
Brazilian SMEs don’t need corporate-level software. Affordable tools now exist to:
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Automate GHG emissions tracking.
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Collect HR and social data aligned with CLT rules.
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Generate reports for GRI or ISSB frameworks.
Some Brazilian banks even offer ESG-linked credit, where better ESG performance unlocks better financing terms. Using the right tools isn’t just about compliance — it can literally save money.
Future of ESG Reporting
The future of ESG reporting is set to become even more dynamic and integral to business success, as global expectations for transparency and accountability continue to rise. The International Sustainability Standards Board (ISSB) is leading the way in developing unified reporting standards, making it easier for companies to disclose sustainability-related and climate-related risks and opportunities in a consistent manner. This move toward standardization will help businesses of all sizes, including Brazilian SMEs, align their sustainability reporting with international best practices.
At the same time, the European Sustainability Reporting Standards (ESRS) and the EU Taxonomy are shaping how companies define and report their environmental impact, ensuring that sustainability efforts are both measurable and comparable across markets. As these reporting standards become more widely adopted, companies will be better equipped to track progress toward a more sustainable future and manage climate risks more effectively.
The adoption of ESG reporting software and advanced data analytics is also transforming the reporting process. These tools enable companies to streamline data collection, monitor ESG metrics in real time, and generate actionable insights that support sustainable growth. As ESG considerations become embedded in business models, companies will be able to make more informed decisions that balance financial performance with long-term environmental and social responsibility.
Looking ahead, ESG reporting will be characterized by greater standardization, transparency, and accountability. Companies that proactively adapt to these changes will not only meet regulatory requirements but also strengthen their reputation, drive innovation, and contribute to a more sustainable and resilient business model for the future.
Conclusion
For SMEs and SMBs in Brazil, ESG reporting is no longer optional. It’s a gateway to staying competitive, accessing international markets, and building resilience against climate and regulatory risks.
Whether you’re exporting agribusiness products, running a tech startup, or managing logistics, ESG reporting helps you protect your reputation, attract investors, and grow sustainably.
The global market is shifting fast — and those who embrace ESG today will lead tomorrow.
FAQs
What is ESG reporting in Brazil?
It’s the structured disclosure of environmental, social, and governance data, aligned with frameworks like GRI and Brazilian regulations from CVM.
Why is ESG important for SMEs/SMBs?
It keeps you competitive in supply chains, ensures compliance, and builds trust with partners and consumers.
Which frameworks are most used in Brazil?
GRI is the most common, SASB is growing, and ISSB provides international alignment.
How does CSR connect to ESG?
CSR projects like education or reforestation are now documented as part of ESG reports.
How do investors use ESG data?
Banks and funds use ESG scores to evaluate risk and determine loan conditions.
What are climate-related disclosures?
They cover risks like droughts and floods, and opportunities like renewable energy adoption.
What challenges do SMEs face?
Costs, complexity, and lack of in-house expertise.
How often should ESG reports be published?
At least annually, with updates tied to key changes in operations or compliance needs.
Can ESG improve financial performance?
Yes. Companies with transparent ESG reporting often access cheaper credit and attract new clients.
What tools can SMEs use?
Affordable ESG reporting platforms that align with GRI or ISSB, some linked to Brazilian financing incentives.
About ESG The Score
ESG The Score makes it easy for small and medium businesses to stay ahead of ESG reporting requirements and growing supply chain audit pressures. We understand that SMEs are often downstream from larger entities and face increasing demands for transparency and compliance. Our solutions are designed to be quick, smart, and affordable, giving you the right tools without heavy consulting fees or complex software. From ESG reporting kits to core policy bundles and IT compliance frameworks, we simplify sustainability and make it actionable. With ESG The Score, companies can take control of their reporting, build trust with partners, and stay competitive in their industries.
ou may also want to read our ESG Reporting Toolkits for Canada, United States, India, United Kingdom, Australia, Brazil, Singapore, Malaysia, Germany and Turkiye.