Source: Adapted from Social Ventures Hong Kong, Virtue Ventures Social Enterprises Socially-Driven Businesses Pure Commerc...
Responsible Investing Source: Dow Jones Sustainability Indexes <ul><li>RI asset under management is expected to grow from ...
Portfolio snapshot - Before <ul><li>consisted of mainly cash and traditional investments.  ESG compliance was not part of ...
Portfolio snapshot - After <ul><li>…  in transition towards ESG integration into entire portfolio </li></ul>ESG approach b...
Social Enterprises Socially-Driven Businesses Pure Commercial Businesses Charities/ Non-Profits <ul><li>Grants/Donations <...
Principles of Responsible Investing (“PRI”) Source: www.unpri.org Asset Owners Investment Managers Service Providers Gover...
Principles of Responsible Investing (“PRI”) (continued) <ul><li>As institutional investors, we have a duty to act in the  ...
<ul><li>“ Capitalism takes a narrow view of human nature, assuming that people are one-dimensional beings concerned only w...
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Ways of Utilizing Financial Resources - The “Spectrum”

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Presentation by Bonny Landers, River Star Foundation (Hong Kong), at the Take Action! 2010 Impact Investing Conference in Boston.

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Ways of Utilizing Financial Resources - The “Spectrum”

  1. 1. Source: Adapted from Social Ventures Hong Kong, Virtue Ventures Social Enterprises Socially-Driven Businesses Pure Commercial Businesses Charities/ Non-Profit <ul><li>Grants/donations </li></ul><ul><li>Social returns only </li></ul><ul><li>“ Patient capital” - e.g. venture capital, loans (below market/forgivable/ long repayment) </li></ul><ul><li>Social impact and return of principal to allow “recyling” of dollars </li></ul><ul><li>Equity/debt - e.g. SRI funds </li></ul><ul><li>Financial returns and social and/or environmental impact (i.e. double/triple bottom line) </li></ul><ul><li>Equity/debt </li></ul><ul><li>Seeking highest possible financial returns (single bottom line) </li></ul>Ways of Utilizing Financial Resources - The “Spectrum”
  2. 2. Responsible Investing Source: Dow Jones Sustainability Indexes <ul><li>RI asset under management is expected to grow from USD5 trillion in 2007 to around USD26.5 trillion in 2015 globally, accounting for 10-20% of total AUM </li></ul>
  3. 3. Portfolio snapshot - Before <ul><li>consisted of mainly cash and traditional investments. ESG compliance was not part of the mandate. </li></ul>Traditional approach by asset class <ul><li>ESG issues were not considered as part of the investment process </li></ul><ul><li>No social impact investments </li></ul><ul><li>Focused on traditional asset classes in equities, fixed income with emphasis on desired financial returns only </li></ul>
  4. 4. Portfolio snapshot - After <ul><li>… in transition towards ESG integration into entire portfolio </li></ul>ESG approach by asset class <ul><li>Equity: sustainability index funds and theme based funds (e.g. environmental, responsible consumption) (migrated) </li></ul><ul><li>Fixed income: sustainability bond index (migrated) </li></ul><ul><li>Social impact investments: micro credit fund; private equity into social enterprises (ongoing) </li></ul><ul><li>Commodities: precious/industrial metals funds; agricultural commodities (evaluating) </li></ul><ul><li>Real estate: sustainable “green” property fund/assets (evaluating) </li></ul><ul><li>Private equity/hedge fund: pre-existing, not termed out </li></ul><ul><li>*** Diversification *** </li></ul>
  5. 5. Social Enterprises Socially-Driven Businesses Pure Commercial Businesses Charities/ Non-Profits <ul><li>Grants/Donations </li></ul><ul><li>“ Patient capital” </li></ul><ul><li>Recycling of dollars </li></ul><ul><li>Double/Triple bottom line focus </li></ul><ul><li>Market rate financial returns </li></ul><ul><li>Investments that are screened through ESG lens </li></ul>Dexia Micro-Credit Fund (managed by Blue Orchard) Dexia Sustainable World Bond Fund SEB Ethical Global Index Fund First State Global Emerging Markets Sustainability Fund Acumen Capital Markets Fund Significant Investments/Grants to-date
  6. 6. Principles of Responsible Investing (“PRI”) Source: www.unpri.org Asset Owners Investment Managers Service Providers Government Pension Fund of Thailand <ul><li>PRI was launched in April 2006 by the then UN Secretary-General Kofi Annan in New York </li></ul><ul><li>32 institutional investors representing USD2 trillion in assets signed on Launch Day </li></ul><ul><li>Today there are over 700 signatories representing ~ USD20 trillion in assets </li></ul>
  7. 7. Principles of Responsible Investing (“PRI”) (continued) <ul><li>As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognise that applying these Principles may better align investors with broader objectives of society . Therefore, where consistent with our fiduciary responsibilities, we commit to the following: </li></ul><ul><li>1. We will incorporate ESG issues into investment analysis and decision-making processes. </li></ul><ul><li>2. We will be active owners and incorporate ESG issues into our ownership policies and practices . </li></ul><ul><li>3. We will seek appropriate disclosure on ESG issues by the entities in which we invest. </li></ul><ul><li>4. We will promote acceptance and implementation of the Principles within the investment industry. </li></ul><ul><li>5. We will work together to enhance our effectiveness in implementing the Principles. </li></ul><ul><li>6. We will each report our activities and progress towards implementing the Principles. </li></ul>Source: www.unpri.org
  8. 8. <ul><li>“ Capitalism takes a narrow view of human nature, assuming that people are one-dimensional beings concerned only with the pursuit of maximum profit. The concept of the free market, as generally understood, is based on this one-dimensional human being.” </li></ul><ul><li> Muhammad Yunus, Founder of Grameen Bank </li></ul><ul><li>“ In the real marketplace of life, each one of us has the individual freedom to use our economic power in accordance with our values. We can deliver the benefits of robust free markets without abrogating ethical business practices in fair trade, in human rights, in safe products, and in microfinance lending.” </li></ul><ul><li>Jonathan Lewis, CEO of MicroCredit Enterprises </li></ul>

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