Environmental, Social and Governance
The senior partners at Brasil Capital have actively participated in the development of best corporate governance practices in the Brazilian capital markets since 2000. Therefore, since our foundation in 2008, Brasil Capital has been a strong advocate of corporate governance in Brazil, contributing directly with the invested companies.
We believe that the risk/reward relationship of our investments can be improved, and our philosophy incorporates the challenge to achieve more consistent returns with risk reduction from environmental, social and governance factors. We understand that companies that focus on best corporate governance practices, with a social outlook and encouraging diversity, generate more consistent returns over the years.
Our methodology does not rely on scores or screeners, but rather presents a collaboratively ESG approach to analyze potential impacts in our invested companies and helps improve standards of operations, governance, and transparency. We believe in the consistency of results over the long run and are continuously evolving our analysis on key environmental and social factors in our investable universe.
As a process-driven organization, Brasil Capital has established checklists for most of its operations and investment activities. We have an ESG section in our investment checklist to better monitor these factors and have a more objective evaluation of them, comprising of 5 sections with more than 70 items. There are several studies from prestigious organizations highlighting that ESG perspectives are even more compelling in emerging economies, where the correlation between ESG initiatives is highly linked to the economic performance, and the opportunity to generate higher alpha is factual. These factors are key for Brasil Capital as we do not plan to deviate our status of a high-performance asset manager.
We believe the combination of qualitative and quantitative metrics is the best approach to understand the challenges and opportunities associated with our investments. ESG related factor analysis is no different. We aim to measure the financial impact related to ESG factors in our invested companies, incorporating this data into our valuation models. This process is aligned with international responsible investing best practices.
On March 2019, Brasil Capital has signed for the United Nations Principles of Responsible Investment (PRI), the world’s leading proponent of responsible investment. The PRI was founded in 2006 is led by the United Nations, alongside a group of 20 global investors in 12 countries. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.
According to PRI, signing these principles allows organizations to publicly demonstrate their commitment to responsible investment, and places them at the heart of a global community seeking to build a more sustainable and conscious financial system. The PRI signature is a continuation of the decade-long evolution of Brasil Capital approach toward sustainability.
Examples of ESG Issues:
Brasil Capital's carbon emissions are neutralized through the preservation of forestry and biodiversity in an area of native forest. The Projects seek to promote qualification of the sustainable forest management and agroextractivism productions, promoting the well-being of the communities and turning them into partners for the maintenance of the forest resources.
Philanthropy and Social Initiatives
Brasil Capital and its partners dedicate resources to social projects and college sponsorship to students with outstanding academic performance and in need of financial aid. We have also contributed to the enhancement of Brazilian universities libraries, as well as with active an participation on the training of students with investment analysis techniques. We believe that investing in education is part of our social responsibility and an efficient manner to contribute the development of our country.