Marcella Ungaretti, XP, has heard the argument that ESG research has lost momentum. She thinks it misses the point. "I would distinguish between ESG as a label and ESG as an investment framework. The label may have lost momentum, but the underlying investment issues have not." Climate risk, energy security, resource scarcity, regulation and supply-chain resilience, she argues, are becoming more relevant, and ESG is being absorbed into ordinary analysis: "ESG may be becoming less visible as a label, but more consequential as an analytical framework."
That is how she runs her own coverage. "We apply the same analytical discipline to ESG research that we apply to fundamental equity research: identifying financially material ESG-related drivers and translating them into measurable implications for companies and sectors." On governance, she looks beyond formal compliance: "We assess whether a company's ownership structure, board composition and relationship between management, controlling and minority shareholders create the conditions for effective oversight and sound capital allocation." The end product is meant to be investable: "The goal is to translate ESG-related themes into investable conclusions: measurable financial implications, relevant time horizons, identifiable catalysts and clear downside risks."
What’s the key to standing out as an analyst?
Each analyst needs to understand the distinctive value they bring to investors.
Governance is also what she thinks is most underrated in Brazil, specifically "the growing importance of governance as a forward-looking investment tool." Her concern is timing: "Governance receives considerable attention in Brazil, but it is still too often treated reactively, becoming a priority only after a crisis or high-profile corporate event."
Her sleeper theme for global investors is power. She points to "the economic value of Brazil's relatively clean, abundant and diversified electricity system," which is often weighed against regulatory complexity, infrastructure bottlenecks and a high cost of capital. As electricity demand rises, she asks: "where will capital-intensive industries locate, which companies can secure reliable and competitively priced power, and which infrastructure assets are positioned to benefit from sustained demand growth?" Her conclusion: "investors may still be underestimating the strategic value of Brazil's clean-energy abundance, not simply as a decarbonization advantage, but as a source of long-term competitiveness."
What’s the most important advice for a young analyst?
Identify where you can add the most value, develop that edge consistently and make it meaningful to clients.
Her advice to her younger self is to build an edge early. She would tell herself "to focus early on understanding what makes you distinctive as an analyst: creating your own competitive edge." In her words, "Each analyst needs to understand the distinctive value they bring to investors, and what makes their perspective worth seeking out."
