Charlotte mansson


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  • - indicate reputational risk somewhere.
  • Charlotte mansson

    1. 1. Charlotte Mansson RepRisk AG Phone +41 43 300 5440 Email Can you afford to ignore environmental and social risks? TBLI London, November 11, 2010
    2. 2. Objective of Today <ul><li>Discuss why ESG Risks are important </li></ul><ul><li>Show how you can identify these risks </li></ul><ul><li>Provide thoughts on how to manage these risks </li></ul>
    3. 3. RepRisk AG <ul><li>Global provider of data on environmental and social risks </li></ul><ul><li>HQ in Zurich, 18 analysts in Central Asia, Spain, Switzerland, UK, and US </li></ul><ul><li>Research Partners in Asia: CSR Asia/Responsible Research, Japan Research Institute </li></ul><ul><li>Founded in 1998 as an environmental risk management consultancy for banks </li></ul><ul><li>Launch of RepRisk® service in 2006, company renamed to RepRisk AG in 2010 </li></ul>
    4. 4. Selected Clients
    5. 5. Why Environmental and Social Risks Matter <ul><li>Sinar Mas Group / KitKat </li></ul><ul><li>BP </li></ul><ul><li>Siemens </li></ul>
    6. 6. BP’s Risks Peaked in 2008 and Materialized in 2010
    7. 7. How can I assess a company’s Environmental, Social, and Corporate Governance (ESG) risk? <ul><li>Company-based information </li></ul><ul><li>Third-party sources </li></ul><ul><li>Audit reports </li></ul>
    8. 8. How can I manage exposure to ESG risk (I)? <ul><li>First approach: Identify most exposed companies , e.g. based on RepRisk Index </li></ul><ul><li>Exclude or underweight riskiest companies (exclude Transocean, etc.) </li></ul><ul><li>Factor ESG risk into the valuation of the most exposed companies (how do risks affect cash flow projections?) </li></ul>
    9. 9. How can I manage exposure to ESG risk (II)? Second approach: Complement financial analysis with a ESG risk assessment Example: Marks & Spencer Group PLC based on RepRisk: 1) Environment (E) 2 a) Employee Relations (S) 2 b) Community Relations (S) 3) Corporate Governance (G) optional: product-related risks
    10. 10. RepRisk Indicators Are Based on RepRisk Database <ul><li>Captures environmental, social and reputational risk exposure of companies worldwide </li></ul><ul><li>Monitors independent third-party sources, i.e. all major print media, non-governmental organizations (NGOs), news sites, governmental agencies, blogs, etc. </li></ul><ul><li>Covers all major business languages: Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, and Spanish </li></ul><ul><li>Has identified more than 16,000 companies and 3,000 projects </li></ul><ul><li>Is updated and growing daily </li></ul>
    11. 11. Scope of Environmental and Social Issues Note: In particular, all principles of the UN Global Compact are addressed. * As of May 2010 Fraud* Tax Evasion* Anti-competitive Practices*
    12. 12. Print Media Newsletters News Websites Governmental Agencies “ The Web”, Blogs NGO Websites 2nd Level Analysts I C P C S N G News 1st Level Analysts RepRisk front end Approval by Senior Analyst (double check principle) Global Coverage and Rigid Data Selection Advanced search algorithms covering Chinese, English, French, German, Japanese, Korean, Portuguese, Russian and Spanish sources worldwide
    13. 13. Companies associated with controversial issues in over 180 countries N C P C S I G News 15,000 Companies  +10 per day 3,000 Projects  +2 per day 34 Sectors 2,000 NGOs  +2 per day 30 Issues 200 Campaigns  +1 per week 2,000 Governmental Organizations  +10 per month
    14. 14. The Reputational Risk Index is an indicator of the exposure to environmental, social and reputational risks <ul><li>RRI calculation based on: </li></ul><ul><ul><li>relevance of news sources </li></ul></ul><ul><ul><li>frequency and timing of news, and </li></ul></ul><ul><ul><li>news content, i.e. severity and novelty </li></ul></ul><ul><li>The Peak RRI gives the maximum RRI value in the last 24 months </li></ul>
    15. 15.
    16. 24. Thank you Charlotte Mansson