9. csr ukraine 31 may 2011_ethix sri advisors
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9. csr ukraine 31 may 2011_ethix sri advisors 9. csr ukraine 31 may 2011_ethix sri advisors Presentation Transcript

  • Value of corporate responsibility:The investor perspectiveCSR-Ukraine EventUlrika Hasselgren, Ethix SRI AdvisorsKyiv 31 May 2011
  • Ethix SRI Advisors • Trusted advisor to institutional investors in the area of sustainable and responsible investment (SRI) • Help investors with policy development, company research and portfolio monitoring, engagement and company dialogue, and communication • Pioneers with norm-based screening (2000) and SRI concept for emerging markets (2005). Established research methodologies and SRI tools • International team from 10 countries, speaking more than 15 languages. Documented competence within human rights, environment, labour standards, corruption. Documented expertise of global arms industry • Based in Stockholm, Helsinki and London, Ethix serves more than 120 investors in Belgium, Denmark, Finland, France, Luxembourg, the Netherlands, Norway, Sweden and the UK with estimated assets under its advice exceeding €300bn • Private company established in 1999CSR-Ukraine Event 31 Mayto sign UN PRI First Nordic advisor 2011 Board member Eurosif, founding board member Dansif and Finsif, board member Swesif at the Paris launch in 2006
  • What is SRI?CSR-Ukraine Event 31 May 2011
  • SRI is… 406 000 000CSR-Ukraine Event 31 May 2011
  • SRI is … Water ESG Alternative UN PRI Investment Sustainable Investment Best-in-class Labour Cluster standards munitions Integration CSR Human rights Ethical investment Positive Exclusion Engagement Scoring UN Global Compact Sustainable Corporate Norm-Based Forestry governance Environment Tobacco & MicrofinanceCSR-Ukraine Event 31 May 2011 Alcohol
  • SRI is … Sustainable and ResponsibleInvestment Water ESG Alternative UN PRI Investment Sustainable SRI brings together all of the Cluster Labour Best-in-class Investment strategies used to combine munitions standards investors’ financial objectivesEthical Human rights Integration CSR with their concerns about environmental, investment Positive social and governance Scoring issues Exclusion Engagement (ESG) UN Global Compact Sustainable Corporate Norm-Based Forestry governance Environment Tobacco & MicrofinanceCSR-Ukraine Event 31 May 2011 Alcohol
  • How big is SRI?CSR-Ukraine Event 31 May 2011
  • ”… Total SRI capital estimated to €5tn as of Dec09 – significant jump from €2.7tn as of Dec 07 – a growth of 87%...”CSR-Ukraine Event 31 May 2011
  • SRI market in EuropeTotal SRI capital estimated to €5000 billion as of 31 Dec 2009 6000 5000 4000 3000 2000 1000 0 2002 2005 2007 2010Source: Eurosif European SRI Survey 2010CSR-Ukraine Event 31 May 2011
  • Share of capital in EuropeTotal SRI capital estimated to €5000 billion as of 31 Dec 2009 ”Core SRI” ”Broad SRI” 1000 3000 2828 868 2000 1514 500 986 1000 148 145 35 0 0 Norm-/ Best-in- Thematic Other Single Active Integration values class funds positive exclusion ownership based selection screeningSource: Eurosif European SRI Survey 2010CSR-Ukraine Event 31 May 2011
  • ”Core” and ”Broad” share of total / country% of AUM ES Integration FR leads to large ”Broad” IT SRI markets in UK France, UK and BE Spain PL EU 25% 75% NL DK Nordic and SE FI German speaking NO countries’ SRI markets DE are characterized as AT ”Core” CH 0% 20% 40% 60% 80% 100% ”Core SRI” ”Broad SRI”Source: Eurosif European SRI Survey 2010CSR-Ukraine Event 31 May 2011
  • Main SRI investors Public pension funds or reserve funds 12% Corporate / occupational pension funds Religious institutions & charities 20% NGOs & foundations Public authorities & governments 64% 0% Universities, academics 1% 1% 2% Insurance companies & MutualsSource: Eurosif European SRI Survey 2010CSR-Ukraine Event 31 May 2011
  • What is driving SRI?CSR-Ukraine Event 31 May 2011
  • Market drivers in the next 3 years 1 2 Demand from International initiatives institutional investors (UN PRI etc) Drivers for SRI demand 3 4 External pressure Demand from (media, NGOs, unions) retail marketSource: Eurosif European SRI Survey 2010CSR-Ukraine Event 31 May 2011
  • External pressure…CSR-Ukraine Event 31 May 2011
  • Value vs. ValuesCSR-Ukraine Event 31 May 2011
  • SRI has implications depending on approachIllustrative example 100% 90% Left to invest! 80% Zimbabwe Embryonic stem cell research 70% Fast food 60% Sudan Exploitative consumer debt 50% Anti-christian organisations 40% Nuclear Power Iraq 30% Conventional weapons 20% Abortion 10% Burma Child labour 0% Pornography ABC weaponsCSR-Ukraine Event 31 May 2011 Alcohol Tobacco
  • How do investors use CR information?CSR-Ukraine Event 31 May 2011
  • Corporate responsibility – from aninvestor’s perspective Governance and management Social Risks & opportunities Environmental dimension dimension Ethical dimensionCSR-Ukraine Event 31 May 2011
  • How do investors use CR information?Example: Governance of Environmental andSocial factors Responsibility 100% Company 80% Sector average 60% Reporting Policy 40% 20% 0% Strategy RisksCSR-Ukraine Event 31 May 2011 Targets
  • How do investors use CR information?Example: Risk management • Respect for Human Rights • Respect for Civil Liberties • Respect for Political Rights • Discrimination Based on Race, Sex, Disability, Language, or Social Status • Workers Rights • Environment • War/Conflicts/Acts of Terrorism • Human RightsCSR-Ukraine Event 31 May 2011
  • How do investors use CR information?Example: Management of GHG emissions• Robust research is vital for companies and investors seeking to deal effectively with the risks and opportunities presented by climate change.• Most companies are still developing the management systems and competencies necessary to effectively reduce their GHG emissions. This is a critically important finding and challenges some of our assumptions• Key conclusions: 1. Ensure that the companies in which we invest are well run. They should have appropriate climate change governance systems and robust risk assessment processes, and should be able to demonstrate that they are managing and reducing their GHG emissions; 2. Work with policy makers to establish measures that provide incentives to reduce GHG emissions.CSR-Ukraine Event 31 May 2011
  • It’s not a manifest for saving the planet, it’s a tool for better managing risk Charles Cronin CFA Institute Centre for Financial Market Integrity, EMEACSR-Ukraine Event 31 May 2011
  • Value of corporate responsibility:The investor perspective “Investment in good quality management teams with the vision, and the ability, to manage successfully the environmental, social and governance risks and opportunities facing their companies.” David Gait, First State InvestmentCSR-Ukraine Event 31 May 2011
  • Thank you for your attention! ulrika.hasselgren@ethix.seCSR-Ukraine Event 31 May 2011