The first evaluation of the Ranking of the Socioenvironmental Performance of Financial Institutions (RASA) has been published by Sustainable Inclusive Solutions ​​(SIS). In all, ten banks were analyzed with respect to 6 major topics

The Ranking of the Socioenvironmental Performance of Financial Institutions (RASA), created by Sustainable Inclusive Solutions (SIS), has recently evaluated ten large Brazilian banks (Banco do Brasil, Caixa Econômica, Itaú, Bradesco, Santander, BTG Pactual, Safra, SICOOB, SICREDI and Rabobank) based on its own methodology. This guarantees a broad, in-depth and objective analysis of the policies, and, above all, of the actions of the Brazilian financial institutions in socioenvironmental matters. Six major topics were included:

a) ESG themes (environmental, social and governance) covered by the policies and their further development in sectoral policies (i.e., for specific economic sectors) – 30 different themes are included, with different weightings;

b) thematic core of risk management: databases consulted and due diligence performed on each topic, weighting of the ESG evaluation in the decision-making process (which may lead to the rejection of the operation/investment or socioenvironmental requirements), adopted actions of risk mitigation (engagement with companies that take credit or receive investments), reflections on the conditions of the transaction (terms, interest rates, credit limits, interest rates and maturity dates in the case of debt securities, coverage and costs in the case of insurance, etc. ), and risk monitoring (frequency, scope and depth);

c) financial products with a positive impact (indicators used and percentage of the portfolio);

d) composition of the portfolio (sectoral profile, location, and risk profile of the companies);

e) governance of the sustainability (size of the sustainability team, gender and racial diversity in the governing bodies, integration of ESG factors in the remuneration, and training in the subject for the substantive areas of the financial institution, etc.);

f) involvement of the financial institution in ESG disputes (with regulators, customers and the Prosecution Office).

The report explains: “The first evaluated theme (with a weighting of 3% in the final grade) is the presence of ESG themes (environmental, social and governance) in the Sustainability Policies of the banks (relating to their credit and investment portfolios, not to their direct operations), because there is no single understanding of what the concept encompasses – there are those who think that the ESG agenda is limited to climate risks, there are those who believe that it is limited to environmental issues in general. However, the reality is that there are several environmental and social aspects (and governance issues, such as preventing and combating corruption, are closely related to the social aspects) that deserve to be taken into account by the financial institutions when granting credit or in the management of investments.” Read the evaluation here

Credit: Unsplash

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