Colombia: Companies must elaborate and file corporate sustainability reports that reveals the reality of their corporate practices

Colombia - 29 / 11 / 2023

The Superintendence of Companies has issued administrative recommendations for the submission of corporate sustainability reports that certain entities must prepare.

Through External Directive 100-000010 dated November 21, 2023, the Superintendence of Companies included Chapter XV in its Basic Legal Directive (External Directive 100-000008 dated July 12, 2022) to establish guidelines and recommendations regarding a sustainability report that promotes better business practices.

The recommendations are directed to the following business entities:

Business entities under the supervision or control of the Superintendence of Companies that have attained total income or assets equal to or exceeding forty thousand (40,000) Legal Monthly Minimum Wage (LMMW), as of December 31 of the immediately preceding year.
Business entities belonging to any of the sectors listed below and meeting all specified requirements:
1. Mining and Energy sector.
  1. Subject to supervision or control by the Superintendence of Companies.
  2. Engaged in activities related to the use of non-renewable energy and natural resources, such as electric power, mining, fossil fuels, among others, as per their registered company purpose.
  3. Total revenues equal to or exceeding thirty thousand (30,000) LMMW as of December 31 of the immediately preceding year.
2. Manufacturing sector
  1. Subject to supervision or control by the Superintendence of Companies.
  2. Engaged in manufacturing activities, defined as the "mechanical or chemical transformation of organic and inorganic substances into new products, either by hand or through the use of machinery.”
  3. Total revenues equal to or exceeding thirty thousand (30,000) LMMW as of December 31 of the immediately preceding year.
3. Construction sector
  1. Subject to supervision or control by the Superintendence of Companies.
  2. Involved in the production of materials or supplies of materials for the construction of buildings or infrastructure, as indicated in the registered company purpose.
  3. Total revenues equal to or exceeding thirty thousand (30,000) LMMW as of December 31 of the immediately preceding year.
4. Tourism sector
  1. Subject to supervision or control by the Superintendence of Companies.
  2. Their economic activity registered in the commercial registry or the economic activity that generates the highest total income for the company according to applicable rules corresponds to those identified with the codes 5511, 5513, 7911, 7912, 7990 of the ISIC Rev. 4 A.C (2022).
  3. Total revenues equal to or exceeding thirty thousand (30,000) LMMW as of December 31 of the immediately preceding year.
5. Telecommunications and new technologies sector
  1. Subject to supervision or control by the Superintendence of Companies.
  2. Essential use, creation, or commercialization of information and communication technologies as part of their business activities.
  3. Total revenues equal to or exceeding thirty thousand (30,000) LMMW as of December 31 of the immediately preceding year.

The purpose of the recommendations is to facilitate the preparation and submission of a sustainability report by the aforementioned entities, providing information on their business practices, the regions in which they operate, the stakeholders they engage with, and the verifiable effects arising from the application and development of their business model.

One of the recommendations indicates that the entities should implement a due diligence process to verify the solidity, credibility, and transparency of the information presented, considering the specific characteristics of each entity. This includes:

Evidence of the evaluation and scope of activities undertaken.
Accreditation of an adequate risk management system to verify and assess the impact of business model activities.
Monitoring the effectiveness of implemented measures, processes, and tools to prevent, mitigate, or reduce negative impacts that have occurred or could occur.

For the report's preparation, the following elements should be considered:

The name of the international reporting standard used to depict the reality of business practices.
Table of contents.
Profile and data of the business entities.
Context and sustainability strategy of the business entities.
Disclosure of activities generating risks, opportunities, and impacts, and the mediation approach.
Assignment of a sustainability report manager.

The resulting report must be published and disclosed within the business entity and communicated to different stakeholders at least once a year. Additionally, it is recommended as a best practice for business entities to publish the sustainability report on their websites for general public reference.