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Bradesco Asset Management

PRI reporting framework 2017

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 03. Percentage of each incorporation strategy

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
99.78 %
Percentage of active listed equity to which the strategy is applied
0.22 %
Total actively managed listed equities 100%

03.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

BRAM has decided to integrate ESG analysis transversally to activelly managed equity portfolios. SRI funds adopt positive screening and integration strategies, whereas mainstream equity funds use ESG analysis integrated to mainstream research to influence asset allocation decisions.

03.3. Where assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Funds with ESG criteria in their regulation (for example, Fundos ISE e Fundos Governança) adopt positive screening (using the ISE and IGOV market indexes as their investment universe) and integration strategies based on the ESG analysis as an influence on asset allocation decisions. ESG issues are integrated into the process of analysis and portfolio management.

 


LEI 04. Type of ESG information used in investment decision (Private)


LEI 05. Information from engagement and/or voting used in investment decision-making (Private)


(A) Implementation: Screening

LEI 06. Types of screening applied

06.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

For sustainability/governance equity funds, there is a screening process based on the inclusion of companies in the Brazilian Stock Market Sustainability Index (ISE) and differentiated levels of corporate governance practices (Nível I, Nível II and Novo Mercado)

06.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

ESG criteria for positive screening is based on recognized benchmarks for sustainability (the Brazilian Corporate Sustainability Index) and corporate governance (differentiated corporate governance levels stated by the Brazilian Stock Exchange). These are criteria widely used by the Brazilian investment industry, and are also combined with specific ESG criteria developed by BRAM in sectorial methodologies.


LEI 07. Processes to ensure screening is based on robust analysis

07.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

07.2. Additional information. [Optional]

BRAM's ESG research provider has developed a methodology that is validated by our research team annualy. The material provided includes not only the ESG rating for listed equities, but also a raw database with all sources and justifications for each company, that is presented and discussed with mainstream research analysts to be considered into their recommendations.


LEI 08. Processes to ensure fund criteria are not breached (Private)


(C) Implementation: Integration of ESG issues

LEI 10. Review ESG issues while researching companies/sectors

10.1. Indicate if E, S and G issues are reviewed while researching companies and/or sectors in active strategies.

ESG issues

Coverage/extent of review on these issues

Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

10.2. Additional information. [Optional]

ESG research is applicable to all our invested companies, with specific methodologies that consider general issues and ESG topics specific to their industry.


LEI 11. Processes to ensure integration is based on robust analysis (Private)


LEI 12. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate which aspects of investment analysis you integrate ESG information into.

12.2a. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

12.3. Describe how you integrate ESG information into portfolio construction

ESG ratings are part of the research stock guide, that is considered by analysts to make recommendations to portfolio managers. Apart from that, there is a pilot project to monitor ESG ratings of equity portfolios, which startes in 2016.

12.4a. Describe the methods you have used to adjust the income forecast / valuation tool

As ESG ratings is integrated to BRAM's stock guide, analysts consider potential risks and differentiated performances to influence discount rates and beta, when applicable

12.2b. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

12.4b. Describe the methods you have used to adjust the income forecast / valuation tool

ESG ratings are part of the research stock guide, that is considered by analysts to make recommendations to portfolio managers. Apart from that, there is a pilot project monitoring ESG ratings of equity portfolios, which started in 2016.

12.5. Additional information.


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