IDC vs. Edifício Galeria Responsabilidade Limitada and BTG Pactual (Real Estate Investment Fund and Climate Risks)

In August 2026, the Institute of Collective Law (IDC) filed a Public Civil Action against the Edifício Galeria Limited Liability Real Estate Investment Fund and its administrator, BTG Pactual Serviços Financeiros S/A DTVM, due to the alleged lack of adequate assessment, management, and disclosure of climate risks associated with the fund's real estate asset. The fund is a "brick-and-mortar" type fund and its assets are entirely tied to a physical asset, the Edifício Galeria, a commercial building located at Rua da Quitanda, nº 86, in the Center of Rio de Janeiro/RJ, situated in an area identified as having high exposure to climate risks.

The IDC argues that the property is exposed to significant climate risks, especially floods, extreme temperatures, landslides, and forest fires, capable of affecting its physical integrity, functionality, and economic value, as well as rental income and shareholder returns. It alleges that, although the fund discloses other types of risks to investors, it does not present specific information on climate or environmental risks, nor has it published the asset valuation report, a circumstance considered especially serious given the existence of 3,750 unit holders, of which 3,727 are individuals. It further argues that climate risks constitute material financial risks and that Real Estate Investment Funds must incorporate them into their management and provide clear and sufficient information to investors to allow for adequately informed decisions.

Therefore, the IDC requests: (i) the presentation and publication of an asset valuation report containing a detailed analysis of the aspects capable of affecting its value, including physical and transitional climate risks; (ii) the organization and periodic disclosure of the identified climate risks and the methodologies used for their assessment and management; and (iii) the development and implementation, by the administrator, of a Formal Policy for the Management and Disclosure of Climate Risks for the fund. IDC vs. Edifício Galeria Responsabilidade Limitada and BTG Pactual (Real Estate Investment Fund and Climate Risks) (Brazil, Rio de Janeiro State Court)