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Brazil Prosperity Fund: call for proposals for Foreign Investment Study

The British Embassy Brazil seeks a supplier for assessment and training on Environmental, Social and Governance (ESG) criteria for complex foreign investment.

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As part of UK Government’s Prosperity Fund Green Finance Programme, the British Embassy in Brazil is commissioning a study with the following objectives:

Objectives

  • design a best practice guideline aimed at increasing knowledge of the Brazilian market (mainly pension funds) and building capacity within the industry on complex and innovative investments, including on Environmental, Social, and Governance (ESG) related opportunities
  • conduct a study of the current state of the financial market with regards to existing responsible investment initiatives and map out key ESG risks to which the market is exposed
  • train Superintendencia Nacional de Previdencia Complementar (Previc)’s employees so they can expand their investment orientation and monitoring activities related to complex investments including ESGs
  • propose a common vocabulary that addresses complex and innovative investments issues in the Brazilian financial market, in line with the initiatives of United Nations Environment Finance Initiative (UNEP FI)
  • train Previc’s managers and investment managers to integrate ESG factors into investment decisions
  • Encourage self-regulatory initiatives in the complementary social security market
  • increase market knowledge of foreign investments and Green Finance

Context

The UK Government has collaborated with the Brazilian Government in light of the Economic Financial Dialogue (EFD) conversations on the matter of overseas investments and it is very committed to collaborating further with Brazil in this field by providing support on capacity-building initiatives for institutional investors to be more confident about complex investments, including ESG criteria.

Taking into consideration the recent changes in Brazilian regulation where CMN 3792 was updated into CMN 4661 it is of high importance to discuss and develop more guidance on this subject and provide more clarity to investors.

Sustainable investing is rapidly growing. It has gone from a niche investment idea to attracting enough capital to start having an impact on global challenges at a significant scale.

In a global scale, more than $22.8 trillion are invested sustainably. This represents more than $1 in every $4 under professional management. The magnitude of recent growth has been driven by a fundamental shift in the way investors and asset owners view environmental, social and governance (ESG) factors.

The British Embassy is developing a programme to support and accelerate these efforts. The programme considers catalysing and mobilising private finance and supporting effective allocation of government resources to leverage private investment into sustainable infrastructure thus addressing some of the key challenges related to this complex field.

In order to boost investments into more complex investments, pension funds, insurers and asset managers must be equipped to understand and respond to potential risks and opportunities arising from ESG-related factors in order to safeguard the assets that they invest on behalf of their beneficiaries and clients.

At the same time, regulators must be confident that institutional investors meet the required standards of prudence and care when they include ESG considerations in portfolio decisions. Designing a well-functioning and standard ESG methodology reduces risk perception and decreases borrowing costs for ‘green’ projects supporting a country’s path to not only an environmentally responsible and low carbon economy but also a socially balanced financial services system.

Furthermore, all initiatives using UK technical assistance have to comply with the Gender Equality Act 2014 and should support IDA compliance. GEA states ‘All UK ODA has to meaningfully consider the impact of how it will contribute to reducing gender inequality and demonstrate that it has done so.’

For further information, please refer to the Prosperity Fund Gender Policy and Guidance note. Bidders should demonstrate that they have the requisite expertise to ensure gender equality is mainstreamed into the work they are commissioned to do.

Deliverables

The British Embassy in Brazil is seeking for a specialist to undertake this project and provide the information requested as below:

  1. Design a best practice guideline aimed at increasing knowledge of the Brazilian market and building capacity within the industry on complex and innovative investments, including on Environmental, Social, and Governance (ESG) related opportunities.

The guideline must include but not be limited to:

a. overseas investments aligned with CMN 4661
i. best practices (including risk analysis)
ii. governance
iii. decision making process
iv. building capacity internally
v. other issues to consider such as exchange rate fluctuations
b. use of technology for investment decisions
c. ESG criteria – context, KPIs and benefits
d. specify roles and responsibilities in the industry aligned with CMN 4661

  1. Organize and deliver a three day capacity building workshop aimed at Previc’s collaborators

a. the workshop will be directed to a few departments inside Previc.
b. the workshop must include but not be limited to: Concept and history of foreign investment in Brazil (including ESG criteria); portfolio optimizing vs responsible investments (including ESG); provide extensive explanation on complex investments; biggest risks related to complex investments; responsible investments; green and social bonds; the role of NGOs, the public and private sectors on ESG; analysis of portfolio and strategy taking into consideration ESGs.

  1. Produce a recommendation report that highlights what training and next steps Previc should take to carry on with its Green Finance agenda and inclusion of ESG criteria.

All initiatives using UK technical assistance have to comply with the Gender Equality Act 2014. Bidders should ensure that gender issues and opportunities are addressed in design, prioritisation, delivery and monitoring to ensure compliance.

The candidate will highlight its previous experience on both overseas investment analysis and ESG criteria.

Responsibilities

The awarded contractor will report to the Embassy’s Green Finance Head of Programme. The contractor will be responsible for all the research, including data collection, processing, analysing and reporting. In case of receiving information from the British Embassy, the awarded contractor must agree with the confidentiality of the information as requested.

The contractor should agree to hold an introductory meeting, a final meeting (management presentation) and monthly meetings to share progress, and agree decisions pertinent to the success of the deliverables of the project.

The British Embassy can request possible adjustments in the products (reports) to be delivered and agreed by both parties. The objective is to ensure clarity and a clear understanding of the expectations of both parties. The contractor is responsible to deliver the products mentioned in item 3 in compliance with the timeline and payment method described below.

Timetable and payment scheme

The study should be carried out during the period of August 2018 to December 2018. The details about initial, final and monthly meetings dates are displayed the table below.

The payment scheme contemplates payment by results and deliverables. The first payment will consist of 50% of the total amount of the proposal and will be executed face to the Guideline delivery meeting. The second payment, which will consist of the remaining 50% of the total amount, will be granted after the delivery of the recommendation report. All payments will only be processed once deliverables have been received and fully approved by the Green Finance Team at the British Embassy.

Steps Timeline Payment
Proposal open to application 23 Aug 2018  
Applications end 20 Sep 2018  
Selection Board 26 Sep 2018  
Contract Award 28 Sep 2018  
Kick off meeting first week of Oct 2018  
Guideline delivery meeting week of 12 Nov 2018 first payment (50%)
Workshop delivery last week Nov 2018  
Delivery of recommendation report week of 17 Dec 2018 second payment (50%)

The proposal should be up to £25,000. Any proposals outside this range will be disregarded.

A Selection Board will analyse all proposals received and select the award Contractor. The Board is composed by at least four people from diverse backgrounds such as programme, political and commercial from the British Embassy. The awarded contractor will be notified shortly. The candidates not selected will receive an automatic response.

Sending the proposals

The proposals must include:

  • all elements which will be considered for tender evaluation (more information in Evaluation criteria doc), such as names and curriculum of the technical team of consultant (s) who will undertake the study and suggested methodology and sources to be applied in the research
  • financial proposal of the study considering all charges and fees, in the range presented in item 5 (more information in Schedule of Prices and rates doc).

The parties interested to apply for this work should submit their proposals to brazilgreen.financeteam@fco.gov.uk by 12:00pm 20 September 2018. For any queries during the application time, please forward to brazilgreen.financeteam@fco.gov.uk.

EVALUATION CRITERIA

Please see the evaluation criteria on the document attached.

Published 23 August 2018