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Bank of America survey points to small but growing investment in ESG in Latin America

Nearly 90% of investors surveyed in the region said they already use ESG factors to make investment decisions

Bank of America's logo
Bank of America's logo, in 30/01/2019. Photo: REUTERS/Carlo Allegri/ File Photo
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  • On Monday, the largest cellulose producer in Brazil, Suzano, issued $1 billion in bonds linked to sustainability goals;
  • In May, Natura&Co, the holding that owns Natura and other beauty brands in Latin America, did the same thing.

A survey by Bank of America showed that assets dedicated to investments focused on better environmental, social, and governance (ESG) practices in Latin America are still small, but growing rapidly.

Nearly 90% of investors surveyed in the region said they already use ESG factors to make investment decisions or plan to do so in the near future.

READ ALSO: Redpoint eventures’ managing partner Romero Rodrigues points out ESG as the biggest trend for 2021

BofA’s team remembers that ESG metrics can reduce profit risk, but premium ESG profiles tend to be more expensive.

In Brazil, assets dedicated exclusively to ESG are small but growing, with positive flows accelerating since 2019 to more than BRL 5 billion, although well below flows to equity funds (+BRL 190 billion).

READ ALSO: Natura’s Andrea Alvares: “We transform socio-environmental challenges into business opportunities”

On Monday, the largest cellulose producer in Brazil, Suzano issued $1 billion in bonds linked to sustainability goals; it’s the company’s second issuing along these lines. Investor demand was more than three times the supply. In May, a similar thing happened with Natura&Co, the holding that owns Natura and other beauty brands in Latin America.

(Translated by LABS)

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