CHILE Law and Practice Contributed by: Pablo Méndez, Christian Rojas, Pablo Neupert and Vicente Huidobro, TM Abogados
• state-owned enterprises and publicly controlled corporations, in so far as they perform public func- tions or manage public resources; and • private entities performing public functions, when they exercise delegated administrative authority (eg, private certification entities accredited by the SMA or concessionaires under public law regimes). 16.3 Corporate Disclosure Requirement As mentioned in 6.5 ESG Requirements , Chilean corporate law did not impose explicit “environmen- tal disclosure” duties on all companies. However, a significant shift has occurred since 2021, when the Comisión para el Mercado Financiero (CMF, for its Spanish acronym) issued General Rule ( Norma de Carácter General ) No 461, which modernised corpo- rate reporting obligations by introducing the Environ- mental, Social and Governance (ESG) framework. Under these regulations, publicly traded corporations, banks and insurance companies must disclose quali- tative and quantitative information on how environ- mental and climate risks may affect their business, and what measures they adopt to manage them. This disclosure forms part of the Memoria Anual (Annual Report), a mandatory filing under Law No 18,046 and its regulations. 16.4 Green Finance In Chile, green finance mechanism includes: • green bonds (governed by CMF’s NCG No 461 and the Ministry of the Treasury’s Green Bond Frame- work); • sustainability-linked bonds and loans; • green investments funds (regulated under Law No 20,712); and • CMF regulations. Chile issued its first sovereign green bond in 2019, making it the first country on the continent to issue this type of instrument. These issues fund renewable energy, clean transport, water management and bio- diversity projects under verified impact metrics. Responsibility for monitoring and enforcing these agreements lies with the following:
• the CMF (which supervises private issuers); • the Ministry of the Treasury, which governs sov- ereign issuances through the Public Debt Office, publishing annual impact reports audited by exter- nal verifiers; and • the Chilean Central Bank, which integrates climate and environmental risks into its Financial Stability Reports and supervises the resilience of financial institutions to transition and physical climate risks.
17. Transactions 17.1 Environmental Due Diligence
In Chile, environmental due diligence is a standard practice in M&A transactions, project financing and real estate investments, particularly in high-risk sec- tors such as mining, energy and industry. The initial review usually focuses on documentation from SEIA, including: • environmental authorisations (RCAs) and their amendments; • compliance reports; • communications with authorities; and • publicly available records on official platforms, such as the National Environmental Inspection Information System ( Sistema Nacional de Infor- mación y Fiscalización Ambiental , or SNIFA, for its Spanish acronym) of the SMA. When the inherent risk of the asset justifies it, the review is supplemented with technical site visits, sam- pling or specific studies, as well as verification of the legal status of environmental and sectoral permits and the transferability or updating of RCAs in the event of a change of ownership, following the guidelines issued by the Environmental Assessment Service. Due diligence also considers: • enforcement history; • pending administrative proceedings; and • any environmental damage lawsuits, along with potential civil or criminal actions, with their respec- tive limitation periods that could affect the pur- chaser’s exposure.
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