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Fator Administração de Recursos

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 research team evaluates 28 items regarding Environment, Social and Governance issues. They input a grade to each one of those items and for each company covered by our them. According to the methodology, the grade is positive when the analysts have a positive view regarding the appraised company to that specific issue, and negative if they have a negative view. The company has then an overall grade and this grade is normalized considering the grades of all the companies covered. With the final normalized grade, our research team is able to increase or decrease the target price for the stock in up to 5%.

Environment issues are appraised considering the following items: (i) Average Environmental impact of the sector, (ii) Environmental impact considering the value chain, (iii) Waste management, (iv) Carbon Pollution, (v) Energetic Matrix, (vi) Environmental Licences Suitability and (vii) Biological Asset Management.

Social Impacts are evaluated based on the following items: (i) Qualified Jobs creation, (ii) Professional development and retetion policies, (iii) Technological spillover, (iv) Economic chain spillover, (v) Activity Social impact and (vi) Anti-slavery policies.

Corporate Governance issues are appraised based on the following items: (i) Board members qualification, (ii) Bord of Directors scope, (iii) Independent Board members, (iv) Board members representatives of minority shareholders, (v) Related Parties Transactions policies, (vi) Executive Compensation, (vii) Executive Management Qualification, (viii) Fiscal Board, (ix) Succession Policies, (x) Risk Management, (xi) Auditing, (xii) Capital Allocation, (xiii) Risk and Compliance Policies, (xiv) Labour, civil and tax liabilities and (xv) Investor Relations policies.

Among the reasons we choose this framework is worth to mention that the methodology: (i) provides a framework that becomes possible to evaluate a company compared to its sector, not only in an isolated way , (ii) creates a framework of analysis that direct and encourage analysts to research the previously mentioned issues, independent of the information provided by the companies, that is frequently biased and (iii) enables us to incorporate the ESG analysis objectively to the portfolio composition.

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


LEI 02. Type of ESG information used in investment decision (Private)


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


(A) Implementation: Screening

LEI 04. Types of screening applied

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

Type of screening

Screened by

Description

Our research team evaluates 28 items regarding Environment, Social and Governance issues. They input a grade to each one of those items and for each company covered by our them. According to the methodology, the grade is positive when the analysts have a positive view regarding the appraised company to that specific issue, and negative if they have a negative view. The company has then an overall grade and this grade is normalized considering the grades of all the companies covered. With the final normalized grade, our research team is able to increase or decrease the target price for the stock in up to 5%.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

We notify clients using marketing material issued at least monthly when changes are made to our screening criteria.


LEI 05. Processes to ensure screening is based on robust analysis

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

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]


LEI 06. Processes to ensure fund criteria are not breached (Not Completed)


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