Mar 2023


Law Over Borders Comparative Guide:

Environmental, Social & Governance


1 . How is “ESG” in your jurisdiction defined in a corporate/commercial context, and what are its major elements?

ESG is not defined under Chilean Law. Even though several laws and regulations address ESG related matters, specific ESG standards have been included in Chilean regulation only recently. 

Under Chilean law, supervised entities (listed companies, securities issuers and entities part of the financial market, including banks, insurance companies, pension fund administrators, among others) must disclose to the public information that would be considered important for the investment decisions of a person of good judgment. 

On November 2021, the Chilean Commission for the Financial Market (Comisión para el Mercado Financiero, CMF) issued General Rule No. 461 (NCG 461). NCG 461 sets forth certain ESG related information that must be disclosed by supervised entities starting in end-of-year reports of 2022. This has updated prior instructions relating to social responsibility and sustainable development issued in 2015, which had focused on requiring disclosure of information about diversity and salary breach within regulated entities.  

The CMF cited the principles issued by the International Organization of Securities Commissions (IOSCO), such as the importance of ESG disclosure for the transparency of the capital market and the stability of the financial system, for the issuing NCG 461. Accordingly, NCG 461 emphasises disclosure of matters related to corporate governance, the sustainability of the business of the entity, the environment (particularly climate change), social interactions (especially with the relevant stakeholders of the entity), diversity (including the elimination of organizational, social or cultural barriers that may prevent diversity of abilities, conditions, experiences and perspectives from existing within the organization of the entity) and respect for human rights (including eradication of poverty, education for the community and health).

Among other matters, regulated entities must disclose those strategic commitments adopted in furtherance of the Sustainable Development Goals (SDGs) set by the United Nations (UN) or other similar initiatives. Mandatory disclosure is also set out in the Report on the Implementation Strategy in Chile for the UN 2030 Agenda for Sustainable Development, published by the Chilean National Council. This report advises the President of the Republic of Chile and sets out the Chilean Government’s strategy to coordinate public institutions for the fulfilment of the Sustainable Development Goals and the UN 2030 Agenda. According to this report, “investments are only sustainable if they combine the three dimensions of development: environmental, social, and economic. Therefore, sustainable investments include initiatives that can be associated with investments that aim directly at sustainable and inclusive development, that incorporate sustainability criteria (or ESG) or that are capable of measuring, mitigating, compensating and/or reversing their negative impacts”.


2 . What, if any, are the major laws/regulations in your jurisdiction specifically related to ESG?

The major Chilean specific ESG-related corporate regulations have been issued by supervising entities of the financial market. The main regulation is NCG 461 and the related guidelines of the CMF regarding the sustainability indicators by type of industry in accordance with the Sustainable Industry Classification System (SICS). Other relevant regulations were issued by the Chilean Pensions Superintendence (SP), on November 2020:

  • instructions applicable to Chilean Pension Fund Administrators (AFPs, which manage mandatory pension funds of the Chilean population and are large investment players in the Chilean capital market), establishing the obligation of AFPs to include in their annual reports how climate risks and ESG factors have been considered in the AFP’s investment decisions and risk analysis of the long-term sustainability of the securities and markets in which they invest (General Rule No. 276); and   
  • new parameters for the risk-based supervision model of AFPs, in order to properly identify climate risks and ESG factors in the risk analysis of AFPs (Resolution No. 43).

3 . What other laws/regulations in your jurisdiction touch on ESG themes?

Aside from regulation of a more general nature – contained, for example, in the Constitution (such as the right to live in an environment free of pollution, the freedom of work, and so on), the International Pact on Economic, Social and Cultural Rights, 49 international conventions of the ILO (International Labor Organization) the Labor Code and Criminal Code – some of the Chilean laws and regulations that, while not specific, relate to one or more aspects of ESG are the following:

  • Climate Change Framework Law No. 21,455, Chile’s Long-Term Climate Strategy and Chile’s Nationally Determined Contributions (2020 updated submission).
  • Environment Framework Law No. 19,300 which establishes that certain projects and activities must be previously approved by the environmental impact assessment system (which in some instances will entail mandatory citizen participation).
  • Waste Management, Extended Producer Responsibility and Recycling Promotion Law No. 20,920.
  • Energy Efficiency Law No. 21,305, which includes a set of measures that aim at reducing energy intensity by 10% by 2030, with an expected cumulative saving of USD 15.2 billion and a reduction of 28.6 million tons of CO2, as stated by the Ministry of Energy of Chile.
  • Green Taxes Law 20,780, establishing an annual tax on air emissions of polluting substances produced by certain types of establishments.
  • Criminal Liability of Legal Entities Law No. 20,393 which sets a limited list of crimes that may create criminal liability of a legal entity and includes a cause for exemption in the event that a Crime Prevention Model has been implemented in a timely manner. Currently this list of crimes include the following: money laundering, financing of terrorism, bribery of national or foreign public officials, receiving stolen property, incompatible negotiation, corruption among private parties, misappropriation, wrongful administration, water pollution, processing of prohibited marine products, illegal extractive activities, overexploitation of hydrobiological resources, infringement of quarantine or isolation measures decreed by the health authority, fraudulent obtaining of unemployment benefits, arms control crimes, human trafficking, cyber-crimes, timber theft and other related crimes.
  • The National Decent Work Program, subscribed to by the largest labor union and employers’ trade association, emphasizes the eradication of child labor, gender mainstreaming in employment policies, youth employment, occupational health and safety, and education and training.
  • Occupational accidents and diseases Law No. 16,744 which establishes the compulsory social insurance covering contingencies such as transitory disability resulting from occupational accidents and diseases.
  • Multiple and recent labor laws regarding working conditions which have updated the Labor Code, such as the regulation of remote working, labor inclusion of people with disabilities and work on digital platforms, among others.
  • An Association Agreement between the European Union and Chile was recently agreed in November 2022, which will include a chapter regarding sustainable development.

4 . What, if any, litigation or enforcement activity has your jurisdiction seen related to ESG?

The following are some examples of litigation and public enforcement activity in connection with ESG-related matters: 

  • From a social perspective, the Labor Department enforces compliance with labor legislation, monitoring and controlling employer’s activities and policies. Compliance with labor law is also verified by the labor courts which have the competence to hear all labor matters. From a hygiene and security at work point of view, the Ministry of Health has the authority to control the fulfillment of the legal obligations established to ensure safety conditions at work.
  • In a citizen promoted litigation, the Supreme Court has ruled that the guidelines and principles related to sustainable development should have been considered in the environmental assessments of projects and activities (Jara Alarcon Luis v. Servicio de Evaluación Ambiental (2019)).
  • Consumer Protection Law includes possible sanctions for misleading advertising of products. The development of greenwashing may lead to enforcement action under this law.
  • Governmental environmental authorities encouraged the industry to stop producing single-use plastic products by issuing voluntary stamps such as “Bye-Plastic Bags” and “Bye-Plastic Drinking Straws”. These initiatives were codified, and the supply of single-use plastics to consumers is now banned (Laws No. 21,100 and 21,368).
  • In 2008, the General Electric Services Law introduced a quota for generators to source at least 10% of their annual energy usage from Non-Conventional Renewable Energy (NCRE). The 10% quota was managed easily, and in 2013 was increased to 20% (as of August 2022, 34.4% of net capacity is sourced from NCREs). 
  • In 2021, the National Electric Coordinator launched a blockchain renewable energies registry (RENOVA platform), with the goal of providing a traceable and unalterable record of each megawatt hour of renewable energies to enable generators and users to verify its origin and delivery.

The following are examples of private initiatives and enforcement activity:

  • The Council for Self-Regulation and Advertising Ethics (CONAR) has produced the Code of Advertising Ethics, which includes regulations regarding advertising related to the environment, and has ruled on cases of greenwashing.
  • Voluntary industry-sector Clean Production Agreements entered into by private companies with Governmental authorities, which were registered in the UNFCCC Secretariat’s Nationally Appropriate Mitigation Actions (NAMAs) registry.
  • More than 100 Certified B Corps (with headquarters in Chile) have voluntarily agreed to implement specific provisions on stakeholder governance, environmental, workers policies, community and costumers in their bylaws to meet the legal requirement for B Corp Certification. 
  • The Ministry of Energy has developed an Energy Roadmap for 2018-2022, which includes the gradual phase-out of coal-fired power plants that do not have carbon capture and storage systems or other equivalent technologies (the Decarbonization Plan). Pursuant to this plan, the Ministry of Energy entered into agreements with relevant energy companies to retire coal-fired thermal power plants.
  • The Ministry of Labor and Social Security established a 40-hour Certificate for employers who have voluntarily implemented a reduction of their weekly working hours.

5 . What are the major non-law/regulatory drivers of ESG trends and developments in your jurisdiction?

Soft non-binding laws

Chilean authorities have promoted the following soft non-bindings laws:

  • The UN SDGs and the 2030 Agenda for Sustainable Development. According to the 2022 Sustainable Development Report, Chile is on track or maintaining achievement of SDG No. 1 (No Poverty), No. 6 (Clean Water and Sanitation), No. 7 (Affordable and Clean Energy), No. 11 (Sustainable Cities and Communities) and No. 17 (Partnerships for the Goals).
  • The UN Guiding Principles of Business and Human Rights.
  • OECD Guidelines for Multinational Enterprises.
  • 9 out of 10 of the International Labour Organization’s fundamental conventions including the Forced Labour Convention (No. 29).  
  • OECD Guidelines on Corporate Governance of State-Owned Enterprises. 
  • Public procurement guidelines for state agencies incorporating environmental and energy efficiency criteria issued by the procurement state agency Chile Compra.


Stakeholders that promote the consideration of soft-law or ESG in general:

  • More than 100 companies are members of the UN Global Compact’s Chilean Network. The top sectors of these members are food production, electricity, mining and financial services.
  • Up to August 2022, 29 Chilean companies from various sectors (food and beverage, infrastructure, financial, mining, transportation, renewable resources and alternative energy, among others) reported using the Sustainability Accounting Standards Board (SASB) Standards.
  • The State of Chile has issued sovereign Green Bonds structured in accordance with Chile’s Green Bond Framework prepared by the Ministry of Finance and the support of the Inter-American Development Bank. Proceeds are used to finance public projects such as clean transportation, energy efficiency, renewable energies, live natural resources, water management and green buildings.
  • Banco Estado (state-owned bank) has issued green financial instruments, such as loans for NCRE projects, mortgages for ecological housing and clean transportation loans.

National Contact Points (NCPs)

Some National Contact Points active in ESG matters in Chile are the following:


6 . Are the laws, regulations and obligations highlighted in Question 2 primarily related to corporate disclosure?

Yes, those regulations are related to corporate disclosure.


  • NCG 461 provides that annual reports of regulated entities must contain ESG related information such as:
    • The strategy relating to environmental aspects, with special attention to climate change issues and compliance with the strategic commitments adopted within the framework of the UN SDGs.
    • Sustainability metrics that are relevant according to its industrial sector pursuant to the Sustainable Industry Classification System (SICS) and the definition of metrics under the Sustainability Accounting Standards provided by SASB.
  • NCG 276 establishes that the annual reports of AFPs must expressly mention the treatment of credit and market risks, climate risk and ESG factors.
  • The Sustainability Reporting and Disclosure Guidelines for Issuers in the Chilean Stock Market of the Santiago Stock Exchange and the Global Reporting Initiative are a resource for companies to comply with NCG 461 and NCG 276.

7 . Which sectors are most impacted by ESG in your jurisdiction? How significant is ESG investment in your jurisdiction?

  • Large companies of several sectors (food producers, electricity, mining, financial services, transportation, renewable resources and alternative energy and resource transformation) are impacted by ESG initiatives. 
  • More than 100 companies with headquarters located in Chile are certified as B Corp companies. 
  • According to the 2021 Ipsos Climate Change + Consumer Behaviour survey in Chile, 24% of those surveyed stated that they have made a lot of changes in their consumption behavior out of concern about climate change, and 49% stated that they have made a few changes. 
  • Under the Extended Producer Responsibility Law companies that produce “priority products” (such as tires, containers and packaging, batteries and electronic items, and lubricating oils) must organize to implement and finance individual or collective management systems that allow them to comply with waste management goals. 
  • Under the Energy Efficiency law, companies with an energy consumption for final use of over 50 tera-calories in the previous calendar year are Energy Management Capable Consumers, who must submit an energy management plan to the authority.
  • Under Labor Inclusion Law No. 21,015, employers with more than 100 employees must comply with the inclusion of people with disabilities in the labor market (through a hiring quota for people with disabilities or with two possible alternatives to comply in the event of unsuccessful searches for applicants for the workplace: (i) donations to an NGO’s project or activity for people with disabilities; or (ii) entering into service contracts with companies that employ people with disabilities).

Hedge funds/asset managers

AFPs are required to comply with NCG 276 of the SP.


The Chilean Central Bank in its most recent Financial Stability Report has highlighted the challenges that climate change may have for the stability of the financial system and has outlined a work agenda to face those challenges. In addition, many banks have voiced that they have incorporated sustainability indicators and climate change into their credit policies and sustainability-linked loans. 


The Ministry of the Environment announced that it will strive for the amendment of the Extended Producer Responsibility Law to include textile products as a priority product to combat clothing dumping and other illegal actions. 

Automobile industry 

In 2013, Chile became the first Latin-American country to introduce a mandatory energy efficiency labeling for motor vehicles. In February 2022, the Ministry of Energy issued a new regulation setting minimum energy efficiency performance levels for new vehicles commercialized by the automobile industry starting from 2024. The relevant metric to define the new standards will be energy yield in kilometres per liter of petrol.

Energy industry 

Under the Decarbonization Plan, main power generators entered into agreements with the Chilean government for the decarbonization of the energy matrix. In addition, energy generators have modified their project portfolios due to the lower cost and technology improvements of NCRE projects, bottlenecks following the delays in the construction of extensions and modifications to the National Electric Grid, and the decrease in hydropower production due to the water drought. The State and the private sector are promoting a campaign for the production and use of green hydrogen.

Real estate industry 

The Energy Efficiency law establishes that new residential, public, commercial and office buildings must have an energy efficiency label and rating report in order to obtain the definitive building approval.


The CONAR’s Chilean Code of Advertising Ethics includes regulations regarding advertising related to the environment. 

In 2021, the Ministry of Economy issued Decree 6/2021, setting forth an e-commerce regulation aimed at strengthening the transparency and quality of information provided to consumers.


8 . What are the trends in your jurisdiction regarding ESG governance?

Corporate disclosure

Several large Chilean companies are publishing sustainability reports and some have set up specialized teams in sustainability and corporate affairs matters. However, NCG 461 and NCG 276 are a bigger challenge for companies that had not invested so far in these matters.

According to the preliminary results of a 2021 survey to companies’ directors and CEOs carried out by Los Andes University, more than 50% of the surveyed did not have experience regarding ESG topics, but indicated that their companies were making efforts to implement ESG metrics and were starting to hire ESG specialists and creating stronger sustainability departments to respond to stakeholders’ demands, comply with regulations and closing gaps with competitors on ESG matters.


Since the enactment of Law 20,393 on Criminal Liability of Legal Entities in 2009, and especially during the last few years, there has been significant progress and development of the compliance area within companies. 

Although in Chile it is not legally mandatory to have a Crime Prevention Model or compliance policies in place, in practice the lack of such Model is considered by criminal courts as a breach of the general duties of care within the company when a crime is committed. For that reason, it is common for medium to large size companies as well as those most exposed to risk, to have and implement such policies and to designate a compliance officer for the company, either because they seek to maintain a high standard of compliance or to comply with the international standards of their international parent companies. 

As a result, companies with a more sophisticated governance have started to introduce ESG-related activities and issues into the organization as part of their compliance programs. Specifically, to their training plan, communication guidelines, as well as to their monitoring and risk management plan.


9 . To what extent are ESG ratings or ESG benchmarks relied upon in your jurisdiction?

ESG rating agencies 

The first ranking of the Corporate Reputation Business Monitor (Merco) for Chile was published in 2022, listing 100 Chilean companies in a general ESG ranking and in sub-rankings for each ESG aspect. Merco states that the three key variables for considering a company to be ESG responsible are ethical behavior, transparency and good corporate governance, and responsibility towards its employees. 

The Federation of Chilean Industry (SOFOFA) published in September 2022 the general results of their ESG SOFOFA 2022 index with more than 55 companies. See 

ESG benchmarks 

The following ESG benchmarks are used in the Santiago Stock Exchange:

  • Dow Jones Sustainability MILA Pacific Alliance Index, which tracks the performance of companies with the highest sustainability ratings for the Pacific Alliance region, including Chile, Colombia, Mexico and Peru.
  • Dow Jones Sustainability Chile (DJSI Chile) Index, which uses the “best-in-class” approach representing the top 40% of the Santiago Stock Exchange’s General Share Price Index based on long-term environmental, social and governance factors.
  • S&P IPSA ESG Tilted Index, which follows selection criterion based on ESG principles.
  • Stakeholders Sustainability Index Chile (SSIndex), which provides an ESG map risk with a cross-analysis of ESG information from employees, clients, suppliers, communities, and investors.

10 . What is the role of the private markets versus public markets in driving ESG developments in your jurisdiction?

ESG developments and the ESG agenda have progressed by a combination of public and private initiatives. 

In addition to the issuance of the Report on the Implementation Strategy in Chile for the UN 2030 Agenda for Sustainable Development discussed above, in December 2019 the Minister of Finance, with the support of the Ministry of the Environment, presented a voluntary Green Agreement between the government, regulators (CMF, Central Bank, SP, Inter-American Development Bank representatives in Chile, and Banco Estado) and private actors in the financial sector. This agreement aims to contribute to financial stability and the achievement of Chile’s climate commitments.

In addition, the ESG agenda has been driven by international organizations. For example, as a member of the OECD since 2010, Chile should follow the conclusions of the OCDE’s report regarding the future of corporate governance in capital markets following the Covid-19 crisis and improve its management of ESG. This OECD report concludes that ESG disclosure frameworks will also help the corporate sector meet increased expectations when it comes to recognizing and appropriately balancing the interests of different stakeholders, including investors, employees, creditors, customers and suppliers, and their contribution to the long-term success of corporations, and recommends measures for companies, policy makers and regulators, and corporate boards. 


11 . What are the major challenges in terms of compliance for companies under ESG obligations?

Some of the major challenges in terms of complying with ESG obligations for Chilean companies are the following:

  • Investment in ESG specialized teams.
  • Establishing labor policies that promote health and quality of life at work.
  • Training the board members, executives and workers in ESG matters.
  • The implementation of new reporting regulations (NCG 461 and NCG 276, as applicable) and other regulation, such as:
    • the waste management systems required by the Extended Producer Responsibility Law; 
    • the new e-commerce regulations; and 
    • other measures to avoid greenwashing and meet consumers’ demands.
  • The implementation of the Chile’s NDC that may result in the shutdown of highly polluting industries and projects (e.g., through the Decarbonisation Plan described above) that currently provide many direct and indirect jobs to local communities.
  • The implementation of new technologies for the energy transition, such as storage systems and green hydrogen projects, considering current infrastructure limitations and constantly evolving regulation (e.g., a regulation on sufficiency capacity is underway, which is expected to have an impact in achieving clean energy goals).

12 . What information sources are most relevant for ESG considerations in your jurisdiction?

As mentioned above, the main sources are university centers, business associations and state organizations. Furthermore, an important source of information has been the Chilean companies’ sustainability reports.


13 . Has your jurisdiction developed a Taxonomy related to ESG?

Not yet. However, in May 2021, the Ministry of Finance and the Climate Bonds Initiative published a “Taxonomy Roadmap for Chile” report with the support of the International Climate Initiative (IKI). In June 2022, a Preliminary Committee on Green Taxonomy started to work.


14 . What does the future hold for ESG in your jurisdiction?

In the short to medium term, regulated entities will face the challenges in implementing the new mandatory ESG disclosure regulations. This could pose a bigger challenge for companies that have not yet invested in ESG matters. 

In the medium to long term, we may see different actors work to improve their ESG performance and align their internal goals with sustainable development. We may also see the development of a Chilean taxonomy. These efforts will probably be driven by the need to adapt to the effects of climate change, the oversight and regulation of the competent authorities, the community’s opinion, consumers preferences, and the expectations of shareholders and investors in respect of greater profits for companies that contribute with a sustainable development approach.




Guillermo Jorge
Pablo Crimer


Vanessa M. R. Hall


Carolina Queiroga Nogueira
Thiago José da Silva


Gary Gao

European Union

Patricia Volhard
Geoffrey Burgess
Jin-Hyuk Jang


Anniina Järvinen
Annika Schauman
Johanna Vanninen
Laura Sainio
Tero Pikkarainen


Christina Heil
Jin-Hyuk Jang
Patricia Volhard


Fabio Gallo Perozzi
Federico Longo
Giuseppe Taffari
Roberto Randazzo


Yasuyuki Kuribayashi
Yuko Toyoda


Diego Sierra
Edmond Frederic Grieger
Elias Jalife
Luis Burgueño
Pablo Jiménez


Davine Roessingh
Dennis Horeman
Jasper van Uden


Claudio Ferrero Merino
Francisco Tong
Tomás Denegri Vargas
Ursula Zavala

South Korea

Curie Lee
Eugenia Stavropoulou
Hye Sung Kim
Sae Youn Kim


Emma Greiff
Jenny Lundberg
Joel Montin
Rezan Akkurt


Dr. Martin Eckert
Lars A. Fischer
Stephan F. Greber

United Kingdom

Jannis Bille
Rebecca Perlman
Sebastian Morton
Silke Goldberg

United States

Andrew M. Levine
Caroline N. Swett
Ulysses Smith

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