{"id":3106,"date":"2021-04-01T16:36:32","date_gmt":"2021-04-01T19:36:32","guid":{"rendered":"https:\/\/votorantim2020.blendon.com.br\/?page_id=3106"},"modified":"2021-04-08T11:06:34","modified_gmt":"2021-04-08T14:06:34","slug":"strategy-and-management","status":"publish","type":"page","link":"https:\/\/votorantim2020.blendon.com.br\/en\/the-investment-holding-company\/strategy-and-management\/","title":{"rendered":"Strategy and Management"},"content":{"rendered":"\n

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Investment thesis<\/h2>\n\n\n\n

Votorantim: a permanently capitalized investment holding company, with a long-term investment approach, that seeks to deliver superior financial returns with positive social and environmental impacts.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n

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Achieving the investment objectives of its shareholders, acting in accordance with the management approach established in its DNA and complying with the financial and dividend policies are the essence of Votorantim\u2019s management mandate. The investment approach encopasses major themes that apply both to existing businesses and to new opportunities: (i) strengthening the core business through investments in modernization, expansion and consolidation; (ii) extracting greater value from the asset base and leveraging existing skills and abilities; (iii) operating in business adjacencies, assessing additional opportunities and risks associated with products and processes; and (iv) paying close attention to new production and consumption patterns, as well as new business models that can present new opportunities and mitigate risks.

As a permanently capitalized investment holding company, with a long-term investment approach, Votorantim seeks to deliver superior financial returns with positive social and environmental impacts. From a financial standpoint, its business portfolio is exposed to the typical seasonal cycles of different industries in different locations around the world. To reduce exposure to risks, the company seeks to add to its asset profile new businesses with secular demand and potential for value creation – such as energy and real estate, which are already part of the portfolio. Aligned with this approach, in 2020, Votorantim advanced its investment strategy through the approval of R$ 2 billion to be invested in the development of new wind farms in the northeastern region of Brazil by the joint venture between Votorantim Energia and CPP Investments (learn more<\/a>).

Also in line with the search for opportunities to drive new businesses, Real Estate Investments evolved from an internal area into the company Altre, Votorantim\u2019s real estate investment platform.

In parallel, the company expects to increase its investments in developed markets, which may occur directly or via portfolio companies. An example of progress in this area was the announcement of the combination of cement assets in North America with McInnis Cement, which will result in a partnership between Votorantim Cimentos and Caisse de d\u00e9p\u00f4t et placement du Qu\u00e9bec (CDPQ), with a focus on expanding operations in the Great Lakes region, eastern Canada and the northeast coast of the United States (learn more<\/a>). Also in the context of this strategy, during the year Votorantim increased its exposure to developed markets through investments in highly-liquid securities.<\/p>\n\n\n\n

The investment approach is driven by a key principle: our capital is patient, our business purpose is non-negotiable. This means carefully analyzing opportunities to make investment decisions in line with Votorantim\u2019s values and DNA, as well as the guidelines discussed with shareholders. This behavior is one of the fundamental drivers of the construction of Votorantim\u2019s portfolio and its business conduct, and it is also reflected in the influence it exerts over the portfolio companies to adopt best practices in the environmental, social and corporate governance areas.<\/p>\n\n\n\n

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Objectives of the capital allocation strategy<\/h4>\n\n\n\n
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Patient capital, non-negotiable purpose<\/strong><\/p>\n\n\n\n

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ESG engagement<\/h2>\n\n\n\n

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Votorantim adopted ESG (Environmental, Social and Governance) standards even before the term was created. In 2020, Mem\u00f3ria Votorantim, a content hub that connects the company\u2019s past and present, conducted a survey to review the history of Votorantim and its portfolio companies in the environmental, social and governance spheres. This project identified, for example, that the first publication of Votorantim\u2019s Annual Report dates back to 1923; since then, the company has maintained its commitment to transparency, evolving the level of information disclosed and adapting to the best market practices, such as assurance or use of a global methodology for standardizing ESG indicators. The year 2020 marks the tenth publication of the Annual Report in accordance with the standards of the Global Reporting Initiative (GRI).<\/p>\n\n\n\n

During the year, Votorantim also advanced its initiatives on ESG from the perspective of the investment holding company, developing a structured plan that includes a renewed approach that was discussed both by its Board of Directors and within the portfolio companies.<\/p>\n\n\n\n

According to corporate governance principles, each of the portfolio companies has autonomy to manage ESG issues, in line with its business strategies. In this context, Votorantim has three key ESG-related objectives:<\/p>\n\n\n\n

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Based on the ESG plan, the holding company intensified its participation in the UN Global Compact, an initiative that promotes fundamental and internationally accepted values \u200b\u200bin the areas of human rights, labor relations, the environment and the fight against corruption, to which Votorantim has been a signatory since 2011. This voluntary commitment extends to the portfolio companies. In 2020, banco BV and Votorantim Energia also became direct signatories, joining Votorantim Cimentos, Nexa and CBA.<\/p>\n\n\n\n

During the year, Votorantim also became a member of CDP, the largest environmental database in the world. The purpose of joining the organization was to develop a pilot project with Votorantim Cimentos and CBA for the analysis of their environmental information and how to integrate it to the investment analysis process in a structured manner.<\/p>\n\n\n\n

With regard to reporting on ESG issues, one advance is the inclusion, starting with this annual report, of Votorantim\u2019s main contributions to the Sustainable Development Goals (SDGs). A United Nations (UN) initiative launched in 2015, the 17 SDGs are divided into 169 goals and 248 indicators that combine the three dimensions of sustainable development: economic, social and environmental.<\/p>\n\n\n\n

To this end, Votorantim developed a methodology to identify and prioritize these contributions, in order to determine which of them met basic criteria to be considered for this publication. In addition, the company conducted a market study, including an assessment of the reporting practices of the portfolio companies, to determine how these contributions would be disclosed.<\/p>\n\n\n\n

The methodology included extensive work to verify each target, to identify, according to Votorantim\u2019s materiality, which of them:<\/p>\n\n\n\n