Master's – Environmental, Social and Governance: analysis of investments in agribusiness from the perspective of investment funds
Advisor: Prof. Dr. Cláudio Antonio Pinheiro Machado Filho
Comission: Profs. Drs. Jose Roberto Ferreira Savoia, Marco Antonio Conejero and Prof. Dr. Pedro Braga Sotomaior Karam
Population growth, consumption changes, increased purchasing power and urbanization process are some of the structural variables that directly influence agricultural production. We are in a world that is in constant growth and transformation, where Brazil will be responsible for supplying a great demand of the world's needs as derived from agricultural production. Thus, it will also be necessary to expand agricultural production and the capital market is being an important vehicle for fostering its development and growth. In this context, there is an intense global concern about sustainability issues in view of the expansion of agricultural activity and the growth of companies in its production chain. One of the most sensitive and important parts when we talk about agribusiness is the environment, due to its relevance in terms of impact and consumption of limited natural resources. On the social side, the sector has an important economic role in generating income for many families dependent on agricultural activity and other sectors of its production chain, as well as in terms of food supply for the world population. On the governance side, there is a lot to be built for agribusiness to grow in an organized manner, with solid and sustainable bases in the capital market. Based on the above and the growing demand for sustainable investments based on ESG (Environmental, Social and Governance) principles, this study sought to answer the following research problem: How investment funds, under analysis of responsible investments regarding Environmental, Social and Governance (ESG), are they including agribusiness in their investment portfolios? Assuming that the greatest demand of agribusiness will be on food production, allocations exclusively in shares will not be the main driver of the effective contribution of agribusiness to society. Thus, new forms of financing are being introduced the sector in the capital market through investment in the most valuable asset of agricultural activity: land. A qualitative, exploratory and descriptive research was carried out, with the aim of trying to understand how the managers are managing agribusiness resources and inserting in their analysis the bases of ESG principles in the investment decision. The research is a study of multiple cases, analyzing three managers, two with allocation in the same segment but in different stages of implementation and the other manager with a position in a portion of shares in the sector. Data were collected through interviews and document analysis. The main conclusions were: (1) there is a great growth power of agribusiness in different forms of financing through the capital market; (2) ESG will be a valuable tool for improving gaps present in the sector; (3) it is necessary to develop an ESG framework for the agribusiness sector, emphasizing priority issues on the sector's sustainable agenda; and (4) the challenge for agribusiness is to communicate to the world that it is possible and that we produce sustainably. Through this study, it is expected that it contributes to the development of new research on the theme of agribusiness and investment principles based on the ESG pillars.
*Abstract provided by the author