**3.2.** **Model | Comply or Explain**
As abovementioned, B3 proposes that the Annex should be applied on a "comply or explain" basis. This approach requires the issuer to present evidence of adoption of the practice established in the rule and, in the case of total or partial non-execution, indicate the explanation for such conduct.
This model preserves transparency and accountability for the market, allowing access to information on corporate governance and practices so that investors and other stakeholders may engage in dialogue with the issuer's senior management on ESG matters, and taking the information provided into account for their investment decision-making.
This approach encourages market familiarization with ESG aspects and does not adversely affect a possible proposition, in the future, of mandatory rules in special segments.
**3.3.** **Submission of Evidence | FRe**
On the "comply or explain" model, issuers will have to provide evidence under specific sections on FRe of the compliance or explanation for total or partial non adoption of each ESG measure, as indicated in the Annex (Annex IV).
The timeframes for submission of evidence or explanations set out in the Annex will be aligned with the mandatory annual presentation deadline of the FRe (Article 25, Paragraph 1 of CVM Resolution No. 80 – "RCVM 80" – which revoked CVM Instruction No. 480/2009).
In the event of any change after such presentation, which may adversely affect the adoption of the measure set out in the Annex resulting in the mandatory re presentation of evidence under FRe (RCVM 80, Article 25, Paragraphs 2 and 3), the issuer shall have the same timeframe to comply or explain the non compliance of the measure.