Amec CEO addresses the evolution of ESG factors with focus on governance

In the webinar of Agência Estado, Mr. Fábio Coelho, CEO of Amec, addressed the growing importance of ESG factors for listed companies in Brazil, highlighting the special relevance of governance. In an interview to journalist Matheus Piovesana on October 16, he focused on the corporate governance aspects that affect the rights of minority shareholders represented by the association.

During the webinar, Mr. Coelho analyzed the scenario of a tumultuous year as 2020 and highlighted three main themes. The first one is the low interest rates all over the world that should remain at low levels for a long time. The second one is the increase in investments by individuals in the stock exchange and the subsequent transformation of the financial industry as a whole. And the third one is the emergency of ESG-related topics.

The drop in real interest rates has strongly impacted not only institutional investors, but also individual ones. “Brazil has been changing since real interest rates dropped below 4% and continued to decrease. Institutional investors are the first ones to suffer the impact as they need to seek profitable investments, but individuals are also impacted,” he said. In this sense, Mr. Coelho highlighted the importance of reinforcing the financial education to reach these investors.

The CEO talked about the rising importance of ESG criteria to companies because of the Covid-19 pandemic. “Brazil is already familiar with governance. When we talk about the three letters, the “G” is the one investors were already familiar with because the essence of the Brazilian market pushed them to have at least a basic understanding of the impacts of corporate conflicts.”

Mr. Coelho highlighted that global investors are very determined when it comes to considering social and environmental criteria in their investment options. “This movement started in Europe, reverberated in the United States, and these same investors knocked on Brazil’s door to say they see lack of alignment with their investment principles, such as the rise in the fires in the Amazon and the lack of gender diversity in the companies, among others,” he said.

According to him, there is also the dilemma facing the country’s regulatory authority, that is, whether this culture should be incorporated into the Brazilian legislation. “I believe we will take some steps forward and, in this respect, I make reference to a sociological reductionism concept: it is not possible to import everything that exists abroad without considering the characteristics of the Brazilian market.”


Over the years, and generally speaking, the regulation of capital markets was shaped based on the reality of large investors, mainly institutional investors. The growing participation of individual investors in the market will eventually lead to a review of many aspects of the regulatory framework.

Mr. Coelho highlighted that, even for professional investors, the communication issue is a regulatory aspect that continues to create some conflict. “There were recent events in which investors had difficulty in taking informed decisions because they did not have access to information, which is one of the reasons for the need of a regulatory framework.”

ESG factors have been leading investors to perceive the advantages of having healthy relationships with companies through engagement and stewardship. “Institutional investors benefit in long-standing, long-term relationships with the companies. On the other hand, the advantage for the companies is that they can deal with a highly-skilled audience – which is Amec’s audience –that has a clear view of the governance improvement process.”


Amec CEO also addressed some cases of conflict, such as Stone’s offer to acquire Linx. “Whenever a target company makes a proposal on an offer, the board of directors is responsible for carrying out an assessment with consultants to approve or reject the operation,” he pointed out. This is crucial to ensure shareholders’ right to decide on company’s future in the general meeting. In this concrete case, it seemed that the board itself circumvented rules to avoid the decision at the meeting, which is sovereign.

Mr. Coelho also commented on the IRB case, whose unfolding of events generated healthy discussions. “When engagement is mentioned, the first reaction among companies is not very positive; they usually react in a defensive way.” Despite that, the topic has begun to evolve in the country. During the case, some problems in the administrative sphere aroused doubts that called and continue to call attention because of indications of misconduct related to the ownership basis, among other issues,” he explained “Companies should have an investor relation area ready to talk with all stakeholders, and this a lesson the whole market has learned.”

He also explained that, in takeovers, boards’ members should comply with their duty of care and act on an unbiased basis to ensure that the final decision is made by the shareholders at the meeting. “When one tries to circumvent this right, there is room for an endless debate, leading to the holding or not of the meeting and the parties’ legitimacy to decide, and this is harmful for the market as a whole.”

Click here to watch the full interview (In Portuguese).