CEO of Leading Institution in Responsible Investment – Brazil 2018 – MARCELLO SINISCALCHI
ITAU ASSET MANAGEMENT
CEO of Leading Institution in Responsible Investment
1. How the responsible investment issues are formally addressed in your role as CEO?
As the CEO of Itaú Asset Management I oversee the investment process for all asset classes. ESG integration is already an important part of our investment processes, and part of my role as CEO is promoting a strategic and long-term view on such matters. One important internal governance achievement in my tenure has been the possibility of veto power in the credit committee by the ESG team. In the Brazilian Bond market there is no liquidity in the secondary market, so ESG analysis play a crucial role in aligning the best interests of our clients with our investment mandates. Local liquidity restrictions led me to step up in our ESG governance and the importance of the theme in the Asset Management credit committee. I believe it is important to mention that ESG veto power in the credit committee is an unprecedented feature among large investment managers in Latin America and across the globe.
2. Indicate which of the following three areas of the responsible investment of your invested portfolio, in your opinion, is the most important
3. In your role as CEO, could you describe in particular a project that has led and highlighted by its positive impact, whether in the Environmental, Social or Corporate Governance (ASG) in the last 12 months?.
The formal integration of ESG factors and the possible ESG veto power in the credit committee has led to some very interesting discussions with analysts and portfolio managers. However, despite some interesting cases, I believe the most positive impact was achieved engaging with investee companies and promoting the adoption of ESG best practices. In the last 12 months, we were able to positively influence the development of investee companies remuneration plans, better aligning them with sound corporate governance and shareholder interests.
4. Please indicate how you will lead in the next 12 months, from the identification of the risks and opportunities of Environmental, Social and Corporate Governance (ASG) factors, the measurement of the corporate sustainability performance of the companies included in your investment portfolio.
ESG analysis currently covers ~90% of our assets under management. In the next 12 months we will continue our ESG integration efforts focused at reaching full ESG coverage. About the measuring of sustainability performance of the companies included in our portfolios, we currently have in place the calculation of the carbon footprint and governance score of our flagship portfolios against their benchmarks. This information is used internally to engage with portfolio managers and promote awareness of climate change impacts and corporate governance in an aggregated portfolio level. When applicable, the results from these tools can also be used to engage with investee companies – sharing how ESG is used and calculated in our portfolios raises awareness and promotes the importance of ESG issues across the markets in which we participate.