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Vinci Partners Investimentos Ltda.

PRI reporting framework 2020

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
100 %
Total actively managed listed equities 100%

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

Our policy for ESG incorporation has been developed with the support of a specialized consulting firm (Sitawi).

Our approach to integrating ESG into listed equity funds that invest in listed companies comprises the following steps:

1. The first step consists of a materiality assessment, where we filter the environmental, social and corporate governance issues relevant to the companies we are analyzing. Themes considered non-relevant or non-material are downgraded.

2. Then, using sectoral ESG assessment questionnaires, we evaluate the main indicators and metrics of the companies, based on public information. The questionnaires were developed using some of the main sustainability standards for company analysis. From these questionnaires, we were also able to identify critical gaps and recurrent ESG controversies, which can be further explored later.

The information to carry out these analyzes comes especially from annual and sustainability reports of companies, providers of financial and sustainability information, direct questions from our analysts to the companies analyzed, as part of our traditional research process, as well as news.

3. In the subsequent stage, we assign an overall score and theme for the companies analyzed, ranging from one to one hundred. This score is a summary of the companies' ESG performance, which allows us to create sectoral and general rankings.

4. Finally, the ESG analysis is integrated into our investment analysis based on the following actions:

• Potential adjustment in the discount rate according to the perception of the responsible analyst;
• Committee discussion and in-depth analysis of ESG topics considered critical;
• Limit on exposure to papers issued by a company with ASG performance in the last quartile;
• Requirement of a higher rate of return for the acquisition of papers from companies with lower performance.

 

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

We don´t use a combination of ESG incorporation strategies


LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

02.2. Indicate whether you incentivise brokers to provide ESG research.

02.4. Additional information. [Optional]

We use data from multiple sources:

1) Environmental

  • Annual reports
  • Sustainability Reports
  • CDP (https://www.cdp.net/pt)
  • Bloomberg
  • WRI Aqueduct: https://www.wri.org/

2) Social

  • Company´s Reference Forms
  • Bloomberg
  • Annual reports
  • Sustainability Reports

3) Governance

  • Annual reports
  • Sustainability Reports
  • Bloomberg

LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate whether your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

We formalized our ESG Policy and Management System for listed equities at the end of 2019. As such, not 100% of our existing portfolio has gone through the ESG analysis. However, starting in 2020, all new investment will pass through the ESG analysis - so 100% of new investments will be impacted by the analysis


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

In 2019 we hired a ESG consulting firm to review and formalise our ESG Policy and Management System.

The ESG analysis is integrated into our investment analysis based on the following actions:

• Potential adjustment in the discount rate according to the perception of the responsible analyst;
• Committee discussion and in-depth analysis of ESG topics considered critical;
• Limit on exposure to papers issued by a company with ASG performance in the last quartile;
• Requirement of a higher rate of return for the acquisition of papers from companies with lower performance.


LEI 10. Aspects of analysis ESG information is integrated into

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

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

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis.

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

It is a qualitative assessment based on the experience and inputs of the head of the equities research team, the financial analyst responsible for the sector and the portfolio manager. Based on a consensus, they define the level of impact on the discout rate, taking into consideration the best practices of the sector peer group

10.6. Additional information. [OPTIONAL]

In 2019 we hired a ESG consulting firm to review and formalise our ESG Policy and Management System.

The ESG analysis is integrated into our investment analysis based on the following actions:

• Potential adjustment in the discount rate according to the perception of the responsible analyst;
• Committee discussion and in-depth analysis of ESG topics considered critical;
• Limit on exposure to papers issued by a company with ASG performance in the last quartile;
• Requirement of a higher rate of return for the acquisition of papers from companies with lower performance.


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