6. unep fi presentation.ukraine. may 2011

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  • The financial crisis was the cause of the current economic downturn However the next crisis could well be an environmental crisis as we face multiple interconnecting environmental problems of energy insecurity, climate change, food shortage, water scarcity etc
  • The financial crisis was the cause of the current economic downturn However the next crisis could well be an environmental crisis as we face multiple interconnecting environmental problems of energy insecurity, climate change, food shortage, water scarcity etc
  • The financial crisis was the cause of the current economic downturn However the next crisis could well be an environmental crisis as we face multiple interconnecting environmental problems of energy insecurity, climate change, food shortage, water scarcity etc
  • Recognition of an environmental crisis is quickly spreading and Green and sustainability issues have started to move from the margins to become main stream issues
  • As a reflection to this trend, policymakers have also favoured a low-carbon recovery as a solution towards the current economic crisis. For the first time, govt around the world have allocated sizeable portions of their fiscal packages to green investments
  • http://atkearney.com/shared_res/pdf/Green_Winners.pdf This is a study which showed that stock price performance of sustainability-focused companies bettered in the current economic downturn.
  • Mission: ALL levels of financial institution operation: Incl: Lending, asset management, insurance
  • UNEP FI has undergone an open recruitment process to select 3.5 UNEP staff and 6 consultants.
  • 6. unep fi presentation.ukraine. may 2011

    1. 1. CSR and Sustainability – business case and what investors request May 2011, Ukraine Name: Wei Peng www.unepfi.org Title: UNEP FI Program Officer, Central and Eastern Europe
    2. 2. Agenda CSR and sustainability issues – in a larger context Why investors and financiers should care What information investors are looking for Associated challenges and opportunities
    3. 4. Environmental, social and governance issues And the list is still expanding…
    4. 6. > USD 432 billion or 15% of financial stimulus packages tagged “ Green/Low Carbon”
    5. 7. Sustainability & Responsibility – a new investment criteria > 800 institutional investors > 25 trillion USD
    6. 8. Sustainability – a new investment criteria “ Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not.” – Chief Executive, CalPERS, the largest public pension fund of U.S.
    7. 9. <ul><li>Dow Jones Sustainability Index - 1999 </li></ul><ul><li>Istanbul Stock Exchange Sustainability Index </li></ul><ul><li>Singapore Stock Exchange - guidelines for sustainability reporting </li></ul><ul><li>Hang Seng corporate sustainability index </li></ul><ul><li>Johannesberg Stock Exchange sustainability index </li></ul><ul><li>Environmental Sustainability Index – Seoul </li></ul><ul><li>Shanghai Stock Exchange – Compulsory disclosure on corporate social responsibility </li></ul><ul><li>Equator Principles – 85% of global project finance volume committed to sustainability-friendly financing </li></ul><ul><li>UNEP FI – 200 financial institutions globally committed to incorporate sustainability in investment decision-making </li></ul><ul><li>… </li></ul>The Global Campaign in the Capital Market and Financial Community
    8. 10. The Global Campaign in the Corporate World <ul><li>Global Reporting Initiative (GRI) – standardizing sustainability reporting </li></ul><ul><li>UN Global Compact : over 8000 corporate member from 130 countries (human rights, labour, environment, anti-corruption) </li></ul><ul><li>Carbon Disclosure Project (CDP) – corporate disclosure on carbon emissions, water and climate change strategies </li></ul><ul><li>World Business Council for Sustainable Development (WBCSD) – business network for sustainable development </li></ul><ul><li>… </li></ul>
    9. 11. How environmental issues transform into material financial risk - The CSN Case
    10. 12. Biggest and oldest steel mill in Brazil Operating in city of Volta Redonda, near Rio, since 1946 between 1946 – 1999, CSN generated a few impacts: * Respiratory problems among local community * Employees contaminated by toxic gases * Polluted river * Waste dumped in inappropriate locations Then in 1999, US$100 million clean-up required by govt. How environmental issues transform into material financial risk - The CSN Case
    11. 13. The Hidden Risks/Liabilities
    12. 14. The Hidden Risks/Liabilities
    13. 15. The Hidden Risks/Liabilities
    14. 16. Reputational risk – corporate brand at stake Banktrack Network – Private finance: a public interest How Does This Affect Financial Institutions?
    15. 18. New Regulators vs Old Regulators Government <ul><li>New Regulators </li></ul><ul><li>Employees </li></ul><ul><li>Suppliers </li></ul><ul><li>Customers </li></ul><ul><li>Local Communities </li></ul><ul><li>Investors </li></ul><ul><li>NGOs </li></ul><ul><li>Media </li></ul>
    16. 19. Sustainability Beats Business As Usual
    17. 20. <ul><li>Key Performance Indicators on sustainability performance for specific sectors, to be identified and agreed between investors and corporations across sector </li></ul><ul><li>Quantitative data on KPIs that allows comparison between corporations, throughout time, and in context of new market development </li></ul><ul><li>Where possible, standardised qualitative data on financially material ESG factors to allow track/evaluation of performance </li></ul><ul><li>Channel to communicate not only with investor relations, but also directly with sustainability functions </li></ul><ul><li>Disclosure not only on past performance, but also on forward-looking vision and strategy which will define future value </li></ul><ul><li>From UNEP FI Publication: translating ESG into sustainable business value – key insights for companies and investors, download at: www.unepfi.org/fileadmin/documents/translatingESG.pdf </li></ul>What Exact Info Are Investors Looking For?
    18. 21. Sample ESG considerations - by sustainability theme <ul><li>Environmental </li></ul><ul><li>Energy use and efficiency; carbon emissions; water use; use of ecosystem services; innovation in environment-friendly products </li></ul><ul><li>Social </li></ul><ul><li>Employees; poverty and community impact; supply chain management </li></ul><ul><li>Governance </li></ul><ul><li>Codes of conduct; accountability; transparency and disclosure; implementation quality and consistency </li></ul>
    19. 22. Sample ESG Considerations by Sector
    20. 23. UNEP FI is a unique public-private partnership between UNEP and over 200 financial institutions worldwide. UNEP Finance Initiative To realise best environmental and sustainability practice at all levels of financial institution operations. UNEP FI Mission
    21. 24. UNEP FI Membership Overview UNEP FI has over 200 members globally, from banking, insurance and investment industries Categorization by Region Categorization by Industry
    22. 26. UNEP FI Scope of Work <ul><li>THEMES </li></ul><ul><li>Climate Change </li></ul><ul><li>Biodiversity </li></ul><ul><li>Water Scarcity </li></ul><ul><li>Human rights </li></ul><ul><li>INDUSTRY FOCUS </li></ul><ul><li>Bank </li></ul><ul><li>Investment </li></ul><ul><li>Insurance </li></ul><ul><li>PRODUCTS AND SERVICES </li></ul><ul><li>Research </li></ul><ul><li>Policy Recommendation </li></ul><ul><li>Training </li></ul><ul><li>Tools </li></ul><ul><li>REGION FOCUS </li></ul><ul><li>Africa </li></ul><ul><li>Latin America </li></ul><ul><li>North America </li></ul><ul><li>Asia-Pacific </li></ul><ul><li>Europe </li></ul>
    23. 27. <ul><li>Research reports and publications </li></ul><ul><li>On cutting-edge sustainability issues, helping FIs identify material risks & opportunities </li></ul><ul><li>Sustainable Finance Training </li></ul><ul><li>Online courses and in-person workshops on Environmental and Social Risk Analysis, Climate Change, Corporate Eco-efficiency, Energy Efficiency Financing </li></ul><ul><li>Tools </li></ul><ul><li>Environmental Risk Briefings, Human Rights Toolkit, Environmental and Social Responsibility Observatory </li></ul><ul><li>Webinars and Experience-Sharing </li></ul><ul><li>On hot topics such as carbon finance and energy efficiency; the Clean Development Mechanism and renewable energy financing. </li></ul><ul><li>Global and regional events </li></ul><ul><li>Biannual Global Roundtable, regional events, expert workshops and roadshows </li></ul>UNEP FI Activities
    24. 28. Selection of UNEP FI Publications
    25. 29. <ul><li>“ It's not a choice between our environment and our economy; </li></ul><ul><li>it's a choice between prosperity and decline.” </li></ul><ul><li>Barack Obama </li></ul>
    26. 30. <ul><li>THANK YOU. </li></ul><ul><li>UNEP FI Central and Eastern Europe Contact: </li></ul><ul><li>Wei Peng </li></ul><ul><li>[email_address] </li></ul><ul><li>+41 22 91 78469 </li></ul><ul><li>www.unepfi.org </li></ul>

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