Chile Sustainability Disclosures Toward ISSB IFRS S1 and S2: CMF NCG 519 updates NCG 461 to converge sustainability disclosures toward ISSB IFRS S1 and S2, introducing a transition pathway

What’s Required

1) Adopt a sustainability disclosure approach consistent with IFRS S1 and S2 (where required)
NCG 519 explicitly references reporting in line with IFRS S1 (general sustainability-related financial disclosures) and IFRS S2 (climate-related disclosures). Practically, this requires:

• identifying sustainability-related risks and opportunities that could affect enterprise value.

• explaining governance and strategy responses.

• disclosing material metrics and targets, with calculation basis and assumptions.

2) Upgrade climate disclosure structure and controls
The climate component becomes more structured: scenario considerations (where applicable), transition risk vs physical risk, and how those map to financial impacts and risk management. Firms should implement cross-functional sign-off between sustainability, finance, risk, and legal.

3) Manage transition rules and scope segmentation
NCG 519 is described by CMF materials as an update and convergence path from NCG 461 toward ISSB-aligned disclosures. Entities must map which parts apply by category and timing, and plan for phased implementation.

4) Evidence and assurance positioning
Even where external assurance is not strictly mandated for all elements, the rule direction increases investor expectation for verifiable, consistent information. Companies should define what is verified, by whom, and under what standard, to avoid implied assurance.

Important Deadlines

• Date of adoption: 28 Oct 2024 (NCG 519 issuance date in CMF document).

• Implementation: transition timing and application to Annual Reports depend on CMF’s applicability and staged enforcement described in CMF communications.

Current Status

In force as the CMF rule updating NCG 461 and related reporting instructions, positioning Chile toward ISSB-aligned sustainability disclosure in regulated filings.

Penalties for Non-Compliance

• CMF actions for deficient, incomplete, or misleading sustainability disclosures in filings.

• enforcement through filing review, corrective orders, and potential sanctions under securities supervision.

• market impacts through investor scrutiny and potential covenant breaches.

Examples of Known Violations

• “climate risk” descriptions without quantification or without a link to financial impacts.

• inconsistent time horizons and boundaries across risk disclosures.

• targets disclosed without baselines, definitions, or measurement methods.

• omission of material climate-related issues while making strong public climate claims.

Resources

• https://www.cmfchile.cl/normativa/ncg_519_2024.pdf

• https://www.cmfchile.cl/portal/prensa/615/articles-101046_doc_pdf.pdf