Ethical Performance
inside intelligence for responsible business


Unibanco leads the way in Brazil with ethical research service

February 2001

The sell-side equity research department of Brazilian bank Unibanco has launched a socially responsible investment (SRI) research service on Brazilian equities.

The fourth-largest private sector bank in Brazil claims it is the first to begin assessing the social and environmental profiles of companies in the country.

It is not creating a rating system to rank companies' performance in these areas, but has decided to concentrate on providing 'as much hard environmental and social data as possible' for its clients, said Unibanco SRI analyst Christopher Wells. 'Since environmental and social criteria vary greatly according to each fund, we feel that the investor should take the decision as to how to rank each company,' Wells said.

Unibanco's stock recommendations are based on financial criteria and SRI reports are being produced to provide additional data for those investors who need them, according to Wells.

The Sao Paulo-based bank marked the launch of the new service by releasing SRI reports on two companies – steel maker CST and food manufacturer Perdigao. It intends to produce reports on other companies on a regular basis.

The reports will be distributed free of charge to institutional investor clients.

Unibanco's report on CST, which is the world's largest producer of steel slabs, says the company has a relatively good record on employee relations and also has an active environmental management system.

On diversity issues, it points out that all of the board members of CST are male.

Perdigao does less well on the environment, but Brazil's second-largest meat-packer is described as being 'very open and forthcoming on SRI issues'.

Perdigao plans to pilot an environmental management system this year.

Unibanco's 100-strong research department is one of the largest in the country and tracks companies in most sectors of the Brazilian stock market. The bank has more than 1000 branches throughout Brazil.


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