TBLI CONFERENCE™ ASIA 2011Workshop 8 – Impact Investing               Impact Investment Efforts                         Iw...
Table of Contents1. Public and Private Money for MDGs (P.2∼ 5)2. SRI & Impact Investing Efforts                           ...
MDGs (Millennium Development Goals)        Goal 1: Eradicate extreme poverty                                          In a...
ODA Trend (10億ドル)  Billion USD35.0              Official Development Assistance by G7                     主要援助国のODA実績の推移(支...
Private money for Social Issues <Background> <Background>     Fiscal condition of each country grows increasingly severe...
Household Financial Assets          Japan                                  United Kingdom                                 ...
Table of Contents1. Public and Private Money for MDGs (P.2∼ 5)2. SRI & Impact Investing Efforts                           ...
Extremely Low in Japan                                                   SRI市場規模 (10億ユーロ)   Billion Euro                  ...
SRI Issues in Japan1.     Inadequate regulation and guideline to promote SRI.2.     Less interests in SRI among labor unio...
New movements in Japan’s SRI1.     Ministry of the Environment Government of Japan,       trying to launch a new guideline...
1. Guideline to promote SRI• Ministry of the Environment approaches to  Japanese financial industry to set up a new  guide...
2. More interest in SRI by Labor Union  ■RENGO ACTION POLICIES 2010-2011  ACTION POLICY 3    Efforts for policies and syst...
3. Social Impact through Investing.                                Private                                                ...
3. Big impact in social development                  Cross-border funding landscape to MFIs          Public donors and    ...
4. Events for Financial LiteracyMay 15 (Sat) – June 13 (Sun), 2010   October 31 (Sun) – November 7 (Sun)                  ...
4. Forums for Financial Literacy                               Website Archives                               http://www.d...
4. Forum for Financial Literacy        Daiwa Africa Forum 2010Date:     July 21st, 2010Venue:    GranTokyo North Tower 18F...
Impact Investing Awareness ■ Do you support Impact Investment?                                           ■ Which of financ...
MDGs & Impact Investment Bonds                                                                                            ...
5. SRI / Impact Investing Bonds  Major Impact Investment Bonds                                        Impact Investment Bo...
5. SRI / Impact Investing FundDaiwa Microfinance FundMajor Characteristics The first microfinance  mutual fund in Japan ...
5. SRI / Impact Investing FundDaiwa Microfinance FundPursuing financial return as well as social return     Taking Curren...
Conclusion1. To achieve MDGs, not only public, but also   private sector money is necessary.2. Socially Responsible Invest...
Contact :Corporate Communication Department                        e-mail:daiwacsr@dsgi.daiwa.co.jp                       ...
Appendix                               24©Daiwa Securities Group Inc.
Our Surrounding Environment【PPP】                                  地球環境             【ESG】                                (P...
Paradigm Shift                  Environment, Resource & Human rights constraint                                           ...
ISO 26000 (Publish in Nov. 2010) From CSR to SR                  Guidance on Social Responsibility, provides harmonized, ...
MFI Interest Yield to borrowers                            50                                                             ...
Myth of Microfinance                              Myth                                            Fact                    ...
Impact Investment Bond Uridashi       Year               Name                          Issuer           Lead Manager     T...
Impact investment bond Private Placement to Regional BanksIssue date           Issuer         Product     Currency    Term...
Highlights of “Impact Investment Bonds”       Vaccine Bonds                                                              M...
Highlights of “Impact Investment Bonds”      Climate Awareness Bonds                                            Poverty Re...
SRI product: Mutual funds     SRI Funds                                ●Daiwa SRI Fund                                   ...
Social Engagement■Participating in the international initiativesGC (UN Global Compact)PRI (Principle for Responsible Inv...
Corporate Citizenship■Real business as a result of partnership with NPO・NGO1)Social Business College(Kopernik)  This is a ...
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Tbli asia20110915 ws8 toru iwai

  1. 1. TBLI CONFERENCE™ ASIA 2011Workshop 8 – Impact Investing Impact Investment Efforts Iwai Toru September 15, 2011
  2. 2. Table of Contents1. Public and Private Money for MDGs (P.2∼ 5)2. SRI & Impact Investing Efforts (P.7∼21)3. Conclusion (P22) Appendix (P24∼34) This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited. 1 ©Daiwa Securities Group Inc.
  3. 3. MDGs (Millennium Development Goals) Goal 1: Eradicate extreme poverty In addition to $57 billion of ODA in & hunger 1999, another $40-60 billions p.a. Goal 2: Achieve universal primary are needed to achieve the MDGs . education Goal 3: Promote gender equity and empower women ■Additional fund necessary to; (include double count) (Bil. USD) Goal 4: Reduce child mortality rates Poverty Eradication 39 ∼ 54 Goal 5: Improve maternal health Education 10 ∼ 25 Goal 6: Combat HIV/AIDS, malaria and other diseases Health care 20 ∼ 25 Goal 7: Ensure environmental Emvironment 5 ∼ 21 sustainability Source: The World Bank, “The costs of attaining the millennium development goals.” Summary of World Goal 8: Develop a global Bank Policy Research Working Paper, “Development partnership for development Goals: History, Prospects and Costs,” by Shantayanan Devarajan, Margaret J. Miller, and Eric V.Swanson.(MDGs logos were created by 「Don’t let it be – world poverty」) 2 ©Daiwa Securities Group Inc.
  4. 4. ODA Trend (10億ドル) Billion USD35.0 Official Development Assistance by G7 主要援助国のODA実績の推移(支出純額ベース) 米国30.0 フラン ス ドイツ25.0 英国 USA 日本20.0 カナダ イタリ ア15.0 13.1 11.1 13.5 Japan10.0 9.8 9.3 8.9 8.9 7.7 9.6 9.5 5.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (出典)OECD・DAC (注1)東欧および卒業国向け実績を除く。 (暦年) Source: website of Japan’s MOFA 3 ©Daiwa Securities Group Inc.
  5. 5. Private money for Social Issues <Background> <Background>   Fiscal condition of each country grows increasingly severe (policy makers’ side) Fiscal condition of each country grows increasingly severe (policy makers’ side)   Reflect on the financial crisis (investors’ side) Reflect on the financial crisis (investors’ side)   world’s financial assets = $178 trillion in 2008 (world’s GDP is $58 trillion) world’s financial assets = $178 trillion in 2008 (world’s GDP is $58 trillion)   Not only Donations/ODA, but also Investments are required to solve social issues Not only Donations/ODA, but also Investments are required to solve social issues■ GIIN (Global Impact Investing Network) GIIN is a not-for-profit organization created to “increase the scaleand effectiveness of impact investing.” It was inaugurated at Clinton Global Initiative in Sep. 2009, to measure growth andincrease of the social investment, ‘Impact Investment’, in which is more direct and has animmediate result compare to conventional SRI. Representative examples of investment products: vaccine bonds of IFFIm, GenerationInvestment Management of Al Gore, former US Vice President. Main investment target: poverty & hunger; global warming; water, food and energy;medical care, health, welfare; community development, education 4©Daiwa Securities Group Inc.
  6. 6. Household Financial Assets Japan United Kingdom France United States 4% 6% 3% 7% 3%3% Others 17% 9% Mutual 11% 29% 29% 18% 7% funds Germany Currency Shares 1% & 16% Mutual 20% deposits Currency funds Insuranc and e& 55% 38% deposits27% Pension 54% 8% 40% Insuranc e& Shares Pension Deep pocket 34% 30% seeking quality 32% Currency and deposits Life insurance and pension fund reserves Shares and other equity Mutual funds and securitis other than shares Others Billions of dollars, as of the end of 2009 Japan* United Kingdom* Germany* France* United States (%) (%) (%) (%) (%) Total Financial Assets 15,638 100.0 6,709 100.0 6,688 100.0 5,388 100.0 44,510 100.0 Currency and deposits 8,592 54.9 1,913 28.5 2,560 38.3 1,553 28.8 7,756 17.4 Life insurance and pension fund reserves 4,228 27.0 3,615 53.9 2,241 33.5 2,126 39.5 13,191 29.6 Shares and other equity 1,104 7.1 744 11.1 523 7.8 879 16.3 13,972 31.4 Mutual funds and securitis other than shares 1,047 6.7 218 3.3 1,315 19.7 504 9.4 8,135 18.3 Others 668 4.3 218 3.3 49 0.7 327 6.1 1,457 3.3 Total Financial Liabilities 4,085 26.1 2,474 36.9 2,193 32.8 1,864 34.6 14,068 31.6 Net Financial Assets 11,553 73.9 4,235 63.1 4,495 67.2 3,524 65.4 30,442 68.4 * converted into US dollars based on the year-end exchange rates of GBPUSD=1.62, EURUSD=1.43, USDJPY=92.90 Primary sources: Japan: Bank of Japan, Flow of Funds Accounts , June 17, 2010 United Kingdom: Office for National Statistics, Financial Statistics No 580, August 2010 Germany: Deutsche Bundesbank, Financial Accounts for Germany 1991 to 2009. France: Banque de France, Financial Accounts and Financial Balance Sheets, June1, 2010. United States: Federal Reserve Statistical Release, Flow of Funds Accounts, June10, 2010. 5 ©Daiwa Securities Group Inc.
  7. 7. Table of Contents1. Public and Private Money for MDGs (P.2∼ 5)2. SRI & Impact Investing Efforts (P.7∼21)3. Conclusion (P22) Appendix (P24∼34) This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited. 6 ©Daiwa Securities Group Inc.
  8. 8. Extremely Low in Japan SRI市場規模 (10億ユーロ) Billion Euro SRI Market size 6,000 4,986 5,000 4,000 3,000 2,141 2,000 1,000 405 58 4 0 Europe 欧州 US 米国 Canada カナダ Aus/NZ 豪州・NZ JPN 日本 (2009) (2010) (2008) (2010) (2009) Source:「European SRI Study 2010」; based on Eurosif publication and SIF-J material, compiled by Daiwa Securities Group. Exchange rate as of Dec 31, 2009 7©Daiwa Securities Group Inc.
  9. 9. SRI Issues in Japan1. Inadequate regulation and guideline to promote SRI.2. Less interests in SRI among labor unions, religious groups or private organizations which have a mission of social contribution.3. Weak self-awareness in exercising a big impact on social development through financing and investing.4. Fewer opportunities in school education that teaches how the investment behavior can have social impact.5. SRI product and service development & offerings 8 ©Daiwa Securities Group Inc.
  10. 10. New movements in Japan’s SRI1. Ministry of the Environment Government of Japan, trying to launch a new guideline like PRI for Japanese financial institutions.2. Japanese Trade Union Confederation (RENGO), announced “Workers’ Capital Guideline”3. Acknowledge a big social impact in development through financing and investing.4. Events and Forums for Financial Literacy5. SRI / Impact investing products 9 ©Daiwa Securities Group Inc.
  11. 11. 1. Guideline to promote SRI• Ministry of the Environment approaches to Japanese financial industry to set up a new guideline for ESG issues• Public private sector engagement in SRI.• Working group meeting participants from commercial bank, insurance, investment banking and brokerage houses 10©Daiwa Securities Group Inc.
  12. 12. 2. More interest in SRI by Labor Union ■RENGO ACTION POLICIES 2010-2011 ACTION POLICY 3 Efforts for policies and systems toward establishing a reliable society based on fairness and solidarity • 30. RENGO will strengthen the influence of trade unions on the operation of workers’ capital (reserves contributed by workers), such as pension funds, and will avoid investment in anti-social and anti-labor funds. To this end, RENGO will formulate a “Guideline for the Operation of Social Pension Reserves” (provisional title) based on the Principles for Responsible Investment of the United Nations. Source Rengo Website http://www.jtuc-rengo.org/about/actionpolicy/a_policy03.html 11 ©Daiwa Securities Group Inc.
  13. 13. 3. Social Impact through Investing. Private SRI Donation (e.g.: Microfinance) Investment can have social impactNo-financial return Financial return* *Possible for negative return due to exchange fluctuations and credit risk and so on. Grant Aid Yen Loan Public 12 ©Daiwa Securities Group Inc.
  14. 14. 3. Big impact in social development Cross-border funding landscape to MFIs Public donors and Private donors and Investors Investors (Multilaterals, Bilaterals, $21.3 billion* (Foundations, Institutional and (2009) DFIs) Individual Investors) $14.6 billion $6.7 billion Microfinance Investment Intermediaries (MIIs) Apex & other Intermediaries (Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy) MFI Loan Portfolio $65.0billion ( MIX、FY2009、1,058MFIs) Source :CGAP Focus Note No. 70 April 2011, Cross-border Funding of Microfinance * Amounts based on data submitted by 61 funders and 90 MIIs. 13 ©Daiwa Securities Group Inc.
  15. 15. 4. Events for Financial LiteracyMay 15 (Sat) – June 13 (Sun), 2010 October 31 (Sun) – November 7 (Sun) @Osaka International Convention Center@Tokyo Mid-Town Design HubHost: Committee for ‘Imagine Host: Junior Chamber International (JCI) Sponsor: Daiwa Securitiesanother Life through the ・ Running a booth at ‘Future Expo’,Products’, CANPAN Center ・ Panelists for sectional meetingSpecial Sponsor: Daiwa Securities 14 ©Daiwa Securities Group Inc.
  16. 16. 4. Forums for Financial Literacy Website Archives http://www.daiwatv.jp/ 15©Daiwa Securities Group Inc.
  17. 17. 4. Forum for Financial Literacy Daiwa Africa Forum 2010Date: July 21st, 2010Venue: GranTokyo North Tower 18F Conference RoomSpeaker: Mr. Thierry de Longuemar, Vice President Finance, African Development Bank (AfDB) Mr. Pierre Van Peteghem, Treasurer, AfDB Dr. Boukary Savadogo, Manager of the Division of Education, Science and Technology, AfDB Dr. Naoyuki Kawahara, Director, NPO Rocinantes Ms. Keiko Sano, Director, East Africa Division 2, Africa Department, Japan International Cooperation Agency Ms. Agnes Chan, the ambassador of the Japan Committee for UNICEF, a pop singer, a television personalityNo. of Audience: 221 16 ©Daiwa Securities Group Inc.
  18. 18. Impact Investing Awareness ■ Do you support Impact Investment? ■ Which of financial return or social return do you care? 0 20 40 60 80 100 120 0 20 40 60 80 100 Yes 賛同する 97 Both 双方 89Strongly Yes 大いに賛同する 31 38 Financial Return 投資リターン No 賛同しない 0 Social社会貢献 return 30 ■ What social problems are you seriously ■ What aspect do you most value when concerned about? 40 0 20 60 80 100 investing?0 20 40 60 80 100 120 Water 水・衛生 79 成長性が見込める Revenue growth 102 貧困・飢餓 Poverty 70 Health 69 CSR strategy 社会性を重視した経営姿勢かどうか 83 医療・保健 Education 教育 56 利益を上げている Profit 64 社会基盤整備Infrastructure 37 Climate Dividend 株主への還元 52 気候変動 33 Change No興味がない interest 17 Scale of operation 事業規模 11 Source: Questionnaire at Impact Investment Forum 2010, September 9th 17 ©Daiwa Securities Group Inc.
  19. 19. MDGs & Impact Investment Bonds d Fun Impact Investment Bond ion e uct i con sunam anc in A tion a fin fric ne str te T uca en MDGs ter ma ro cci Gr e Mic Wa Ed Cli Va Re Goal 1: Eradicate extreme poverty & hunger ◎ ◎ ○ Goal 2: Achieve universal primary education ○ ◎ ○ ○ Goal 3: Promote gender equity and empower women ◎ ○ ○ ○ Goal 4: Reduce child mortality rates ◎ ◎ Goal 5: Improve maternal health ○ Goal 6: Combat HIV/AIDS, malaria and other diseases ◎ ◎ Goal 7: Ensure environmental sustainability ○ ◎ ◎ ◎ Goal 8: Develop a global partnership for development ○ ○ ○ ○ ○ ○ 18©Daiwa Securities Group Inc.
  20. 20. 5. SRI / Impact Investing Bonds Major Impact Investment Bonds Impact Investment Bond Sales Date of ¥Billion Sales (十億円) ¥Billion Volume at Daiwa Securities Name of the Products Issuance Volume 2010年4月16日 Water Bonds 60.4 【 Annual Sales Trends】 2010年5月21日 Ecology Bonds 32.6 2010年6月15日 Microfinance Bonds 8.7 Latin America Child 2010年7月15日 Education Support 13.9 Bonds 2010年8月30日 Africa Education Bonds 11.8 2010年9月22日 Microfinance Bonds 29.0 2010年11月12日 Ecology Bonds 9.8 Domestic share of the bondsSource:Daiwa DaiwaSecurities ※Only forIndividual bond 69%(Mar.2008-Mar.2011) Total approx.: ¥482.4 Billion ©Daiwa Securities Group Inc. 19
  21. 21. 5. SRI / Impact Investing FundDaiwa Microfinance FundMajor Characteristics The first microfinance mutual fund in Japan Minimum investment unit is 1,031 yen, you can pursue both social and financial return Direct lending in local currency to MFIs (currency risk free to MFIs) 20 ©Daiwa Securities Group Inc.
  22. 22. 5. SRI / Impact Investing FundDaiwa Microfinance FundPursuing financial return as well as social return  Taking Currency risk, Interest rate risk and Credit risk  Reducing risks by deversifying portfolio ■Investment Universe ■Model Portfolio Loan users BOP Reviewed by DWM* 300 MFIs ︵ Over 10,000 MFIs ︶ Source: Daiwa Microfinance Fund prospectus (available only in Japanese) (E) Return *Developing World Markets 21©Daiwa Securities Group Inc.
  23. 23. Conclusion1. To achieve MDGs, not only public, but also private sector money is necessary.2. Socially Responsible Investment, especially Impact Investing is required to contribute MDGs.3. Financial Institutions should implement its mission by leveraging financial capabilities 22©Daiwa Securities Group Inc.
  24. 24. Contact :Corporate Communication Department e-mail:daiwacsr@dsgi.daiwa.co.jp Tel:03-5555-1312 Fax:03-5555-0662 23©Daiwa Securities Group Inc.
  25. 25. Appendix 24©Daiwa Securities Group Inc.
  26. 26. Our Surrounding Environment【PPP】 地球環境 【ESG】 (Planet/Environment) 人間社会(People/Society) 経済 (Profit/Governance) 企業・団体 (Enterprise) 25©Daiwa Securities Group Inc.
  27. 27. Paradigm Shift Environment, Resource & Human rights constraint ParadigmMaterially Rich Sustainability Era Shift a Er h owt Gr Carbon energy New/Renewable Energy EraIndustrial replaced animals and (Solar, wind, gravitational energy,Revolution manpower biomass) ∼20th century 21st Century∼Low Carbon Community <Unlimited Resource> <Limited Resource> 26 ©Daiwa Securities Group Inc.
  28. 28. ISO 26000 (Publish in Nov. 2010) From CSR to SR  Guidance on Social Responsibility, provides harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups,.  What will ISO 26000 achieve? It will integrate international expertise on social responsibility –will be a powerful SR tool to assist organizations to move from good intentions to good actions. 7 Core Subjects 7 Code of Conducts 1. Accountability 1. Administration of the organization 2. Transparency 2. Human rights 3. Ethical behavior 3. Labor practice 4. Respect the interest of stakeholders 4. Environment 5. Respect the rule of law 5. Fair business practice 6. Respect the international code of 6. Consumer issues conduct 7. Community participation and 7. Respect the human rights development Source: ISO Web site . Japan Business Federation Political Sociology Division 2010.6.10「Summary of Result of Copenhagen Conference ISO260000」 27©Daiwa Securities Group Inc.
  29. 29. MFI Interest Yield to borrowers 50 44.3 45 2003 40 2006% of Gross Loan Portfolio 35.1 36 34.5 35 32.6 31.7 30 28.2 28 25.5 24.8 26.1 26.2 25 23.9 20.9 20 15 10 5 0 World Africa EAP ECA LAC MENA South Saurce: OCCASIONAL PAPER No. 15 , February 2009 Asia The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates? Note: Total Interest and Fee Income/Average Total GLP: average of 175 sustainable MIX MFIs, weighted by loan portfolio. 28 ©Daiwa Securities Group Inc.
  30. 30. Myth of Microfinance Myth Fact Customer continue to repay as long as they value the1 Poor people do not repay a loan. service. The greatest incentive for the poor to repay the loan is to access to repeat loans. Poor people can not pay the interest rates The poor willing to pay the cost for quality services.2 necessary to cover the costs to delivering the For the poor, access to the financial service is more service. Poor can not pay the price. important than the price. Economic shock is frequent and diverse for the poor. Credit for consumption purposes should never3 They should prevent selling income generating assets to be provided. coop with these risks by microfinance The borrower or user of MF create opportunity. Only4 Microfinance creates economic opportunity. people with economic opportunity can benefit from credit. Poor people do saving. Saving is more important than5 Poor can not save the money. borrowing for the very poor to manage their future. MFI can reach to the very poorest of the poor Debt financing is not a good development tool for the6 through credit. destitute. There are over 600 Financially self sufficient (FSS) MFIs.7 MFI is donor dependent institutions. FSS is necessary for an MFI to reach large numbers of people Source: Microfinance Distance Learning Course (UNCDF) 29 ©Daiwa Securities Group Inc.
  31. 31. Impact Investment Bond Uridashi Year Name Issuer Lead Manager Tenor Settlement Date in Japan Amount ($mil) Vaccine Bonds IFFIm Daiwa 2y 19-Mar-08 $211 2008 TM World CO2L Bonds World Bank Daiwa 5y3m 27-Jun-08 $25 Vaccine Bonds IFFIm Daiwa 3y 20-Feb-09 $437 Vaccine Bonds IFFIm Mitsubishi UFJ 3y 28-May-09 $144 2009 Vaccine Bonds IFFIm HSBC 4y 25-Jun-09 $132 Microfinance Bonds IFC Daiwa 3y 20-Nov-09 $275 Green Bonds World Bank Daiwa 5y 03-Feb-10 $106 Environmental Support Bonds NIB Nomura 3y 03-Feb-10 $207 Climate Awareness Bonds EIB HSBC 5y 16-Mar-10 $200 Vaccine Bonds IFFIm Daiwa 3y 24-Mar-10 $338 Clean Energy Bonds AfDB Mizuho 4y 30-Mar-10 $78 Water Bond ADB Daiwa 3y 16-Apr-10 $645 Climate Awareness Bonds EIB Daiwa 3y 21-May-10 $368 Clean Energy Bonds AfDB Mizuho 3y6m 28-May-10 $108 Green Bonds Kommunalbanken Norway Nikko 3y 28-May-10 $102 Green Bonds World Bank SBI 5y 09-Jun-10 $6 Microfinance Bonds EBRD Daiwa 3y 15-Jun-10 $96 2010 Green Bonds Kommunalbanken Norway Nikko 3y 29-Jun-10 $47 Vaccine Bonds IFFIm HSBC 10y 29-Jun-10 $102 Poverty Reduction Bonds IADB Daiwa 4y 15-Jul-10 $158 Clean Energy Bonds AfDB HSBC 7y 29-Jul-10 $13 Green Bonds AfDB Nikko 3y 27-Aug-10 $30 Education Bonds AfDB Daiwa 3y 30-Aug-10 $136 Microfinance Bonds IFC Daiwa 3y 22-Sep-10 $342 Clean Energy Bonds AfDB HSBC 4y 30-Sep-10 $237 Clean Energy Bonds AfDB HSBC 6y 29-Oct-10 $13 Clean Energy Bonds AfDB Mizuho 4y 29-Oct-10 $123 Climate Awareness Bonds EIB Daiwa 3y 12-Nov-10 $118 Poverty Reduction Bonds IADB Daiwa 3y 02-Feb-11 $239 Green IFC Bonds IFC Nomura 3y 25-Feb-11 $44 2011 Clean Energy Bonds Kommunalbanken Norway HSBC 4y 29-Mar-11 $83 Vaccine Bonds IFFIm Daiwa 3y 31-Mar-11 $228 Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69% 30©Daiwa Securities Group Inc.
  32. 32. Impact investment bond Private Placement to Regional BanksIssue date Issuer Product Currency Term Amount investor Lead manager African Development8/19/2010 Education Bond USD 5 year $12mil Public company Daiwa Bank 9/1/2010 World Bank Green Bond USD 5 year $50mil Iyo Bank JP Morgan11/16/2010 World Bank Green Bond AUD 5 year A$30mil San-in Godo Bank JP Morgan11/30/2010 World Bank Green Bond USD 5 year $10mil Iwate bank Daiwa12/21/2010 World Bank Green Bond USD 5 year $10mil Kiyo Bank Daiwa1/18/2011 World Bank Green Bond USD 10 year $5mil Kagawa Bank Daiwa1/20/2011 World Bank Green Bond USD 5 year $10mil Fukui Bank Daiwa1/20/2011 World Bank Green Bond USD 5 year $10mil Daishi Bank Daiwa1/25/2011 World Bank Green Bond USD 5.25 year $30mil Aichi Bank JP Morgan Asian Development Nishi-Nippon City1/25/2011 Water Bond USD 5 year $30mil Daiwa Bank Bank2/17/2011 World Bank Green Bond USD 5 year $30mil San-in Godo Bank JP Morgan2/18/2011 World Bank Green Bond USD 5 year $10mil Hokuyo Bank Daiwa2/24/2011 World Bank Green Bond USD 5 year $20mil Nanto Bank Daiwa3/17/2011 World Bank Green Bond USD 5 year $10mil Oita bank Daiwa4/14/2011 World Bank Green Bond USD 5 year $10mil Musashino Bank Daiwa6/14/2011 World Bank Green Bond USD 5 year $10mil Ogaki Kyoritsu Bank Daiwa Asian Development6/30/2011 Water Bond USD 5 year $10mil Kagoshima Bank Daiwa 31 ©Daiwa Securities GroupBank Inc.
  33. 33. Highlights of “Impact Investment Bonds” Vaccine Bonds Microfinance Bonds Issuer: IFFIm Issuer: IFC Purpose: Raise funds in the capital markets to Purpose: Support microfinance businesses with the purpose accelerate funding available for health and immunization of fostering economic independence by providing programmes in 70 of the developing countries small scale financial services to the poor segments. around the world. Issue date and amount: Issue date and amount: Mar. 19, 2008 $211 million equivalent Nov. 20, 2009 $275 million equivalent Feb. 20, 2009 $437 million equivalent Sep. 22, 2010 $342 million equivalent Mar. 24, 2010 $338 million equivalent Green Bonds Issuer: IBRD Support for vaccine Purpose: Support projects in the World Bank’s member Financial securing program countries that meet specific criteria for low-carbon management project. Issue date: February 3, 2010 Funding Investors Donator Issue amount: $106 million equivalent Investment Donation for up to in capital market 20 years Water BondsDaiwa Securities joined the panel with GAVI on the 8th plenary session of Issuer: ADBthe Leading Group on Innovative Financing for Development (16-17 Dec2010, Tokyo) Purpose: Support water project by developing countries in Asia and the Pacific. Issue date: April 16, 2010 Issue amount: $628 million equivalent 32 ©Daiwa Securities Group Inc.
  34. 34. Highlights of “Impact Investment Bonds” Climate Awareness Bonds Poverty Reduction BondsIssuer: EIB Issuer: IADBPurpose: Support future lending projects in renewable Purpose: Support innovative poverty alleviation energy and energy efficiency, both of which programsare identified by EIB as key areas for mitigating in Latin America and the Caribbean, includingthe effects of climate change. several conditional cash transfer programs,Issue date and amount: such as Oportunidades in Mexico. May. 21, 2010 $393 million equivalent Issue date: July 15, 2010 Nov. 12, 2010 $118 million equivalent Issue amount: $158 million equivalent Microfinance Bonds Education BondsIssuer: EBRD Issuer: AfDBPurpose: Support micro and small enterprises, which Purpose: Finance projects in the field of education andare hence foster economic and social growth in not catered for by the formal financial sector, African countries. with sustainable access to financial services, Issue date: August 30, 2010 via a range of financial institutions. Issue amount: $137 million equivalentIssue date: June 15, 2010Issue amount: $96 million equivalent 33©Daiwa Securities Group Inc.
  35. 35. SRI product: Mutual funds SRI Funds ●Daiwa SRI Fund Domestic Equities ●Daiwa Eco Fund Domestic Equities distributed by Focus on integrity & Economy & Ecology transparency of the enterprise Daiwa Securities Creator:Daiwa Asset Management Creator:Daiwa Asset Management Formulated:March 9th, 2006 Total net asset Formulated:May 20th, 2004 (Redemption date:Feb. 22nd, 2016) (Redemption date:May 9th, 2014) As of April 28th, 2011 of 15 products As of April 28th, 2011 Basic price:4,814円 ¥92.8Billion Basic price:6,837円 Total net asset:24.73億円 Total net asset:89.20億円●Russell World Environment ●Daiwa Energy Technology Fund ●Environmental Business Fund for Technology Fund Next Generation Domestic Equities Foreign Equities Focus on the Domestic Equities environmental technology of each Focus on alternative energy Economy & Ecology which nation global demand is estimated to increase Creator:Russell Investment Creator:Daiwa SB Investment Creator:Daiwa Asset Formulated:May 1st, 2008 Management Formulated:Feb. 27th, 2009 (Unlimited term) Formulated:Dec. 25th, 2008 (Redemption date:Feb. 26th, 2014)As of April 28th, 2011 (Redemption date:Jan. 14th, 2014) As of April 28th, 2011Basic price:8,560円 Total net asset:143 As of April 28th, 2011 Basic price:9,840円億円 Total net asset:10.13億円 Basic price:10,127円 34 ©Daiwa Securities Group Inc. Total net asset:38.92億円
  36. 36. Social Engagement■Participating in the international initiativesGC (UN Global Compact)PRI (Principle for Responsible Investment)UNEP FI (UNEP Finance Initiative)CDP (Carbon Disclosure Project)■Cooperation with the internationalorganization/NGOGRI (Global Reporting Initiative Japanese Edition)FTSE4Good (Policy Committee Member of the SRI Index)SIF-J(Board Member of Social Investment Forum Japan) 35©Daiwa Securities Group Inc.
  37. 37. Corporate Citizenship■Real business as a result of partnership with NPO・NGO1)Social Business College(Kopernik) This is a lecture by social entrepreneur for social business practice, held bimonthly since Oct. 2010 (12 lectures in 2 years), for the university students and working persons. The operation is funded by the outstanding balance of donation of Daiwa Eco Fund and contents can be found in the web.2)Daiwa SRI Fund Grant Program (Civil Society Initiative Fund) In order to strengthen the basis of domestic NGOs operating in the field of human security, we support them for personnel expenditure (instead of program cost) aiming at nurturing leaders for the core of the organization. The operation is taken from the outstanding balance of donation of Daiwa SRI Fund & Daiwa Eco Fund. Since 2006, there have been 24 cases in total with more than 42 million yen of support.3)Daiwa Securities Group – Tsunami Reconstruction Fund (Asia Community Center 21) From 2005 (after receiving appeal from the UN), for the next 10 years, we provide support of 10 million yen every year for reconstruction assistance NGOs in devastated areas (India, Sri Lanka, Indonesia) and is used as a source for microfinance and many more. In the brackets are the name of NGO/NPO 36 ©Daiwa Securities Group Inc.
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