ESG Analysis - Under Researched Companies

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Keith Olson, Director - Environmental Investment Services Asia Ltd. - People's Republic of China …

Keith Olson, Director - Environmental Investment Services Asia Ltd. - People's Republic of China

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  • 1. ESG Analysis Under researched companies Environmental Investment Services Asia Limited Keith Olson, CFA EISAL 27 th May 2010
  • 2.
      • First and only company in Hong Kong specialising in environmental investing
      • Well-managed value and growth companies in Asia with significant exposure to the environmental sector and the development of the low carbon economy
      • Green Dragon Fund >3 year track record
    TBLI: ESG Analysis About EISAL Long/Short Equity – Thematic Long Bias EISAL Advantage EISAL PERFORMANCE Primary Focus PIONEERING Just in Asia PROFILE Preferred Investor PROPRIETARY In-House Research PROFESSIONAL Experienced Team PASSIONATE This is important
  • 3. TBLI: ESG Analysis Under researched EISAL
  • 4. TBLI: ESG Analysis Under researched
    • “ Normal” research is difficult enough
    EISAL Webpages: 111 million 1 million Analysts: 39 1
    • Not as used to dealing with investors
    • Corporate disclosure
    • “ ESG” analysis is even more difficult
    • Not used to answering ESG questions
  • 5. TBLI: ESG Analysis Managing expectations for Proprietary Research EISAL
    • What information do we really need?
    • Electricity/water usage, CO 2 emissions...
  • 6. TBLI: ESG Analysis Managing expectations for Proprietary Research EISAL
    • What information do we really need?
    • Electricity/water usage, CO 2 emissions...
    • What questions should we ask?
    • Targets, reports, officers, verification
  • 7. TBLI: ESG Analysis Managing expectations for Proprietary Research
    • What information do we really need?
    • Electricity/water usage, CO 2 emissions...
    • What questions should we ask?
    • Targets, reports, officers, verification
    • What key information is more practical to looking for?
    • Commitment, best practice, momentum
    • Time & manpower intensive
    • Costly & not often at board level
  • 8. TBLI: ESG Analysis Engagement with Management EISAL
    • Few minority shareholders will ask ESG questions
    • Discuss where we’re coming from...
    • Discuss why it’s good for the company
  • 9. TBLI: ESG Analysis Engagement with Management EISAL
    • Few minority shareholders will ask ESG questions
    • Discuss where we’re coming from...
    • Discuss why it’s good for the company
    • Questions relevant to the company
    • Too small for major international surveys
    • ESG vs “environment”
    • Preferred investor & friendly shareholder
    • Information exchange
    • Stakeholder wealth
  • 10. TBLI: ESG Analysis Balancing factors EISAL Taj Mahal – front view
  • 11. TBLI: ESG Analysis Balancing factors EISAL Taj Mahal – back view
  • 12. TBLI: ESG Analysis Balancing factors EISAL
    • Disclosure of financial and ESG information
    • Transparency is good for reputation
    • Sensitivity to cultural differences
    • Momentum is fundamental
    • Management needs to be engaged
    • Changes need to be visible
    • Financials are very important
    • Qualitative & quantitative
    • Checks & balances
  • 13. TBLI: ESG Analysis Other sources & Key messages EISAL The global NGO sector now has an annual income of US$8 tr Source: Oxford Development Abroad – making it the world’s 8th largest economy....
    • Under researched companies are very different
    • ESG disclosure is difficult for small companies
    • It's the momentum & direction that counts
  • 14. Green Dragon Fund The EISAL Advantage Keith Olson, CFA [email_address] Tel.: +852 2877 0088 www.eisal.com Thank you! Q&A