Responsible Investing is a process in which the Environmental, Social and Governance (ESG) criteria are taken into account along with the usual financial criteria.
Part I deals with listed RI (SRI funds and stocks) : Is it a credible alternative against the mainstream ?
Part II deals with microfinance and impact investing
The author, Xavier Heude has been entirely dedicated to the development of Responsible Finance by the mean of promoting Impact Investing, mainly. He is convinced that Private and Institutional investors are growingly interested in putting some part of their money in business activities or projects where they can themselves follow up the financial performance, and last but not least, the social and environmental outcomes generated.
He is Co-founder of meso IMPACT Finance, a Luxembourg-based holding company aimed at taking stakes in financial intermediaries that generate a social and measurable impact.
He is also co-founder of Backbone, an advisory company specialized in the sourcing of projects that generate social / environmental impact. www.backbone.eu.com
Xavier Heude founded also the “PEERS Direct Investment” – a registered trademark in 2011, after having stated for many years, that there are still quite few incentives and operational frameworks and guidelines allowing and encouraging a large public to invest in socially responsible business activities or to support valuable social initiatives.
A network is being built, in order to contribute to expand the mark and get it known worldwide.
Responsible Investing (part II) : what does really make a difference ?Xavier Heude
Responsible Investing is a process in which the Environmental, Social and Governance (ESG) criteria are taken into account along with the usual financial criteria.
Part I deals with listed RI (SRI funds and stocks) : Is it still a credible alternative against the mainstream ?
Part II deals with microfinance and impact investing
The author, Xavier Heude has been entirely dedicated to the development of Responsible Finance by the mean of promoting Impact Investing, mainly. He is convinced that Private and Institutional investors are growingly interested in putting some part of their money in business activities or projects where they can themselves follow up the financial performance, and last but not least, the social and environmental outcomes generated.
He is Co-founder of meso IMPACT Finance, a Luxembourg-based holding company aimed at taking stakes in SMEs that generate a social and environmental (measurable) impact. MIF helps them develop through a financial and extra-financial support (i.e. technical assistance).
He is also co-founder of Backbone, an advisory company specialized in the sourcing of projects that generate social / environmental impact. www.backbone.eu.com
Xavier Heude founded also the “PEERS Direct Investment” – registered trademark in 2011, after having stated for many years, that there are still quite few incentives and operational frameworks and guidelines allowing and encouraging a large public to invest in socially responsible business activities or to support valuable social initiatives.
A network is being built, in order to contribute to expand the mark and get it known worldwide.
This document discusses impact investing, which aims to generate positive social and/or environmental impact alongside financial return. Impact investing is predominantly done through illiquid private market assets like private equity and debt. Key criteria for impact investing include having the intent to create measurable social/environmental impact, measuring actual impact achieved, and proving a direct correlation between the investment and outcomes. The document provides an overview of impact investing strategies and vehicles.
IMPACT INVESTING : Perspectives & Dimensions
If you change the place, you change the future*
This Thought Piece applies an academic model to analyse Impact Investing Perspectives & Dimensions. Motivations, preferences & actions to achieve impact investing goals. Its is a classification over three cultures and their interactions demonstrated in trends & events in the evolution of impact investing.
KEY IDEAS of Impact Investing; Doing Well & Doing Good
Investing for return and societal & environmental impact. Investing 'to do good' implies also doing less harm,
the majority of investment market opportunities.
In this post I focus on the Roots of Impact Investing and its present Dimensions: Exclusive Impact Investing, Inclusive Impact Investing and Grass Root Initiatives.
I present critiques of Exclusive Investing, Exclusive Philanthropy and Impact Investing from opponent favoring Systemic Change and Social Order, and my own perspective based on Technological progress and Transparency trends.
This document discusses impact investing, which aims to generate positive social and environmental impact alongside financial returns. Impact investing opportunities exist across asset classes and sectors that address issues like poverty, health, education, housing, sustainability and the environment. While some impact investments prioritize impact over returns, most aim to achieve market-level returns with acceptable impact. The author believes impact investing can help families and foundations align their capital with their values and make a meaningful difference in the world, while still pursuing appropriate risk-adjusted returns. Ascent's approach focuses on identifying compelling impact investment funds and managers with experience, strong track records and reasonable fees.
The document is a primer for the 2014 Impact Capitalism Summit. It discusses how impact investing portfolios can outperform traditional investing by incorporating environmental, social and governance factors that are knowable but often ignored. It provides evidence that portfolios focused on high-impact companies can achieve lower risk and higher returns than benchmarks. The primer includes articles making the case for impact investing across different asset classes as part of a responsible investment strategy. It also profiles the summit organizers, Watershed Capital Group, and their experience assisting companies with sustainability solutions.
This document provides an overview of corporate social responsibility practices in Southern Africa, noting several trends:
1) Regional exchange is growing as emerging economies partner across borders, while private philanthropy and foundations are also increasing.
2) New approaches like impact investing, social entrepreneurship, and bottom-of-the-pyramid models are being used.
3) Measurement of social and environmental impact is increasingly important, along with stakeholder engagement and evidence-based models.
4) Legislation in areas like Black Economic Empowerment and sustainability reporting have motivated compliance and integrated approaches.
Impact Investing the Performance Realities WhitepaperPhil Zimmerman
Impact investing aims to generate both financial returns and positive social or environmental impact. While impact investing was once thought to require sacrificing returns, advances in impact data and portfolio construction now allow investors to pursue impact goals without compromising risk and return. More investors are demanding impact strategies, driving growth in impact funds and improved reporting from companies. Impact investing now spans asset classes and issues through strategies like ESG integration and positive screening rather than just negative screening.
Responsible Investing (part II) : what does really make a difference ?Xavier Heude
Responsible Investing is a process in which the Environmental, Social and Governance (ESG) criteria are taken into account along with the usual financial criteria.
Part I deals with listed RI (SRI funds and stocks) : Is it still a credible alternative against the mainstream ?
Part II deals with microfinance and impact investing
The author, Xavier Heude has been entirely dedicated to the development of Responsible Finance by the mean of promoting Impact Investing, mainly. He is convinced that Private and Institutional investors are growingly interested in putting some part of their money in business activities or projects where they can themselves follow up the financial performance, and last but not least, the social and environmental outcomes generated.
He is Co-founder of meso IMPACT Finance, a Luxembourg-based holding company aimed at taking stakes in SMEs that generate a social and environmental (measurable) impact. MIF helps them develop through a financial and extra-financial support (i.e. technical assistance).
He is also co-founder of Backbone, an advisory company specialized in the sourcing of projects that generate social / environmental impact. www.backbone.eu.com
Xavier Heude founded also the “PEERS Direct Investment” – registered trademark in 2011, after having stated for many years, that there are still quite few incentives and operational frameworks and guidelines allowing and encouraging a large public to invest in socially responsible business activities or to support valuable social initiatives.
A network is being built, in order to contribute to expand the mark and get it known worldwide.
This document discusses impact investing, which aims to generate positive social and/or environmental impact alongside financial return. Impact investing is predominantly done through illiquid private market assets like private equity and debt. Key criteria for impact investing include having the intent to create measurable social/environmental impact, measuring actual impact achieved, and proving a direct correlation between the investment and outcomes. The document provides an overview of impact investing strategies and vehicles.
IMPACT INVESTING : Perspectives & Dimensions
If you change the place, you change the future*
This Thought Piece applies an academic model to analyse Impact Investing Perspectives & Dimensions. Motivations, preferences & actions to achieve impact investing goals. Its is a classification over three cultures and their interactions demonstrated in trends & events in the evolution of impact investing.
KEY IDEAS of Impact Investing; Doing Well & Doing Good
Investing for return and societal & environmental impact. Investing 'to do good' implies also doing less harm,
the majority of investment market opportunities.
In this post I focus on the Roots of Impact Investing and its present Dimensions: Exclusive Impact Investing, Inclusive Impact Investing and Grass Root Initiatives.
I present critiques of Exclusive Investing, Exclusive Philanthropy and Impact Investing from opponent favoring Systemic Change and Social Order, and my own perspective based on Technological progress and Transparency trends.
This document discusses impact investing, which aims to generate positive social and environmental impact alongside financial returns. Impact investing opportunities exist across asset classes and sectors that address issues like poverty, health, education, housing, sustainability and the environment. While some impact investments prioritize impact over returns, most aim to achieve market-level returns with acceptable impact. The author believes impact investing can help families and foundations align their capital with their values and make a meaningful difference in the world, while still pursuing appropriate risk-adjusted returns. Ascent's approach focuses on identifying compelling impact investment funds and managers with experience, strong track records and reasonable fees.
The document is a primer for the 2014 Impact Capitalism Summit. It discusses how impact investing portfolios can outperform traditional investing by incorporating environmental, social and governance factors that are knowable but often ignored. It provides evidence that portfolios focused on high-impact companies can achieve lower risk and higher returns than benchmarks. The primer includes articles making the case for impact investing across different asset classes as part of a responsible investment strategy. It also profiles the summit organizers, Watershed Capital Group, and their experience assisting companies with sustainability solutions.
This document provides an overview of corporate social responsibility practices in Southern Africa, noting several trends:
1) Regional exchange is growing as emerging economies partner across borders, while private philanthropy and foundations are also increasing.
2) New approaches like impact investing, social entrepreneurship, and bottom-of-the-pyramid models are being used.
3) Measurement of social and environmental impact is increasingly important, along with stakeholder engagement and evidence-based models.
4) Legislation in areas like Black Economic Empowerment and sustainability reporting have motivated compliance and integrated approaches.
Impact Investing the Performance Realities WhitepaperPhil Zimmerman
Impact investing aims to generate both financial returns and positive social or environmental impact. While impact investing was once thought to require sacrificing returns, advances in impact data and portfolio construction now allow investors to pursue impact goals without compromising risk and return. More investors are demanding impact strategies, driving growth in impact funds and improved reporting from companies. Impact investing now spans asset classes and issues through strategies like ESG integration and positive screening rather than just negative screening.
Climate exposure is defined as the potential gains or losses in an investor’s portfolio due to climate change. It encapsulates both climate-related financial risks as well as opportunities. Though climate exposure has many components, it can be divided into three broad subcategories: • Policy and legal exposure: The financial effects of policies designed to mitigate climate change (e.g., carbon pricing schemes) or policies designed to adapt to it (e.g., water management infrastructure and rationing) (Burton, Diringer, and Smith 2006); or litigation or adjudication related to climate change (Massachusetts v. Environmental Protection Agency 2007; Guyatt et al. 2011). • Physical and ecological exposure: The financial implications of changes to earth’s ecosystems. For example: the costs of shorter and warmer winters on the ski industry (Bebb 2015); the financial impacts of hotter weather on agricultural yields; or the economic consequences of severe weather/climatic events (e.g., Hurricane Sandy) that disrupt human economic activity. • Market and economic exposure: Human responses to the aforementioned policy and ecological changes that will reshape businesses, industries, economies, and markets (e.g., growth in clean energy technologies that threaten the fossil fuel industry) (Guyatt et al. 2011).
The document examines whether public pension fund divestment is an effective tactic for achieving social goals. It provides a framework for evaluating divestment proposals, including a technical and public policy report card. As a case study, it applies this framework to New Jersey's divestment from Sudan, giving it an overall grade of B, noting both positive leadership but also flaws in consideration of investor interests and unintended consequences. The document concludes divestment can be effective when combined with other tactics and when proposals carefully consider interests of investors, target specific firms, and are one part of a multi-pronged strategy.
- Socially responsible investing (SRI), now called sustainable and responsible investing (ESG investing), has its origins in the 18th century with the Religious Society of Friends (Quakers) prohibiting members from participating in the slave trade.
- Modern SRI evolved in the 1960s in response to events like the Montgomery Bus Boycott and focused on issues like the Vietnam War, equality, civil rights, and labor.
- Today, ESG investing strategies include negative screening, divestment, shareholder activism, and positive/impact investing and focus on a wide range of environmental, social and governance issues. Major institutions promoting SRI include CERES, UN PRI, and investment firms like Av
Accelerating Impact Impact Investing & Innovative Financing for DevelopmentKarim Harji
The concept of innovative financing is a relatively recent addition to the development lexicon. Edward Jackson, a faculty member at the School of Public Policy and Administration at Carleton University, and Karim Harji, a co-founder and partner at Purpose Capital, will introduce the audience to innovative financing and impact investing through their report, Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry. The AKFC Seminars on Innovative Financing for Development, hosted by Aga Khan Foundation Canada in partnership with Carleton University’s School of Public Policy and Administration.
SA Finance Association Conference 2015: Investor Governance Revisited 160115Colin Habberton
This presentation is a summary of the purpose, process and findings of a pilot study into the decision-making dynamics of institutional investors in South Africa.
The document outlines ICCO-alliance's strategy for fair economic development. The strategy aims to strengthen the socio-economic position of marginalized groups through just and sustainable market mechanisms. It focuses on small producers, workers, entrepreneurs and their households in rural areas. The strategy uses market development, value chain development, and enabling environment approaches. It is implemented through local and international market development, financial services, collaboration with enterprises, and fair climate initiatives using tools like strategic financing, capacity building, brokering, and lobbying. Partners include organizations focused on fair trade, certification, small and medium enterprises, networks, and knowledge institutions. Lessons emphasize applying market rules locally, prioritizing local actors, specializing departments, broadly analyzing
Ways of Utilizing Financial Resources - The “Spectrum”TakeAction
The document discusses the transition of an investment portfolio from a traditional approach focused solely on financial returns to a more socially responsible investing approach that integrates environmental, social and governance (ESG) factors. It outlines changes made across different asset classes to include sustainability index funds, social impact investments, and ESG compliance as part of the investment process. The portfolio is described as being in transition towards fully integrating ESG criteria across the entire portfolio.
Watershed Capital Group is a specialty consulting firm that assists sustainable companies and fund managers. It helps clients raise capital, execute mergers and acquisitions, and evaluate strategic financial options. Watershed's clients include entrepreneurs, companies, and fund managers scaling sustainable solutions. The firm brings over 100 years of combined experience across multiple industries. Partners have expertise in sectors like renewable energy, agriculture, manufacturing, and environmental services. Watershed also maintains one of the broadest networks in sustainable investing through initiatives it has launched. The firm is committed to helping clients succeed and scaling the sustainable economy.
Financing for development - Impact Investmentntorjuela
Impact investing aims to generate both social/environmental impact and financial returns. It includes investments in projects/organizations that provide solutions to challenges in areas like education, health, and renewable energy. Impact is measured using metrics like beneficiaries reached, emissions reductions, and audits. Examples include Emzingo, which supports social enterprises, and Villa Andina, a Peruvian fruit processor that benefits small farmers. While impact investing has potential, measuring impact and scaling projects remain challenges in maximizing development impact.
Fundamentals of Impact Investing - A Finance Matters Workshop - October 2014Finance Matters
The slide deck from Finance Matters' workshop on Fundamentals of Impact Investing held in London in October 2014.
Finance Matters is a London-based social enterprise helping people in finance put sustainability at the heart of their career. Check us out @fncematters, LinkedIn, Facebook or at www.financematters.co.
The document discusses the potential opportunities for hedge funds in impact investing. It defines impact investing as intentionally allocating capital to generate both social/environmental impacts that are measured. While impact investing is still small, institutional and individual investors are increasing commitments annually. The document outlines key considerations for hedge funds considering impact investing, such as defining meaningful impact measures, achieving comparable financial performance to benchmarks, and ensuring fiduciary compliance. It argues that as demand for ESG strategies is growing, impact investing may represent an untapped source of alpha for early adopting hedge funds.
The document discusses responsible investing (RI), which considers environmental, social and governance factors in investment decisions. It provides background on stockholders and their objectives to generate returns. RI aims to achieve social or ethical objectives in addition to financial returns. The document outlines the history and typical processes of RI funds, including commonly used screens to identify companies aligned with environmental and social values. It also discusses indices used to measure RI performance and findings that RI funds do not typically outperform or underperform conventional funds.
The world’s top 100 asset owners (AOs) represent about US$19trn in assets under management. The largest, and potentially most influential, proportion is in Asia—more than a third of the total. Out of the top 20 largest funds, three out of the first five and nearly half of the total are in Asia.
For more insights, please visit: https://eiuperspectives.economist.com/sustainability/sustainable-and-actionable-study-asset-owner-priorities-esg-investing-asia?utm_source=OrganicSocial&utm_medium=Slideshare&utm_campaign=Amundi&utm_content=Slideshare_whitepaper
The document discusses impact investing, which provides both social and financial returns through investments. Impact investing aims to assess performance through more than just financial measures. While the term was coined in 2007, it emerged from interest in assessing capital performance through non-financial lenses as well. The impact investing market includes philanthropic organizations, boutique funds, mainstream institutional investors, and others. Assets under management in impact investing are projected to approach $1 trillion by 2020 according to some estimates, as nearly two-thirds of U.S. pension funds anticipate making such investments. The document raises questions about careers, returns, industry trends, and opportunities in impact investing.
ELEEP Policy Recommendations: Economic and Monetary PolicyELEEP Network
The document summarizes recommendations from a study tour focused on economic and monetary policy in England. It outlines several policy recommendations for building foundations in economics for environmental leaders, understanding absolute environmental limits, looking for alternative progress indicators beyond GDP, promoting diversity in a green economy, redirecting investment to the green economy, decentralizing and democratizing finance, addressing challenges for firms in achieving sustainability, and taking a multi-phase approach to transition.
Big Path Capital assists purpose-driven companies and funds in financial transactions like acquisitions, mergers, and capital raises to ensure their social missions are preserved. They have worked on over 100 deals, more than any other impact investing bank. Big Path represents the largest impact investing network and focuses on assisting companies and funds, hosting events, and providing education to institutional investors on impact investing strategies. The article provides an overview of impact investing and highlights several papers that have helped define and develop the field, showing how impact investing is growing beyond private investments into other asset classes.
Voted Best in Class Impact Reports Smartermoney ReviewShawn Lesser
Big Path Capital is an investment bank that assists purpose-driven companies and funds in financial transactions like acquisitions, mergers, and capital raises to ensure their social missions are preserved. They have worked on over 100 deals, more than any other impact investment bank. Big Path represents the largest impact investing network and focuses on assisting companies and funds, hosting events, and providing education to institutional investors on impact investing. The document provides an overview of Big Path Capital's services and clients as well as their mission to advance businesses that generate social and environmental good alongside financial returns.
Integrating ESG Into Investment Strategy: Risks and Opportunities. Presentati...Graham Sinclair
Presentation by SinCo on sustainable investment in Africa, promoting AfricaSIF.org.
InterContinental HOTEL & RESORTS, Lusaka - ZAMBIA | JANUARY 30 - 31, 2013 Zambia Pension Fund Investment Forum Charting a sustainable retirement and Pension funds Investment strategy
http://www.mncapital-group.com/past-event-detail.php?ref=zambia-pension-fund-investment-forum
This document outlines an organization's methodology for sustainable investment research. Some key points:
1) The methodology aims to separate moral and financial implications of sustainability issues, focus on operational performance over transparency, integrate factors through measurable variables, and identify impacts on financial statements.
2) Products will include an online tool ranking company CSR initiatives, thematic research, sector analyses, and in-depth company reports assessing sustainability risks and business model impacts.
3) Financial impacts of ESG issues are described and examples given of impacts on sales, assets, margins, and the value creation process.
This document discusses socially responsible investment (SRI). It defines SRI as incorporating environmental, social and governance factors into investment decisions, rather than focusing solely on financial factors. It describes various forms of SRI, including SRI funds that select companies meeting financial and non-financial criteria, negative screening funds that exclude certain sectors, shareholder activism, and thematic funds focused on sustainability issues. The objectives of SRI investors are either controlling long-term risks and improving returns, or combining investing with ethical values like excluding tobacco or arms companies. The number of institutional and individual investors using SRI approaches is growing internationally.
Islamic Finance and Maqasid Al-Shari’ah: Environmental, Social and Governance...Islamic_Finance
The document discusses the opportunities for Islamic finance principles to be applied more broadly to environmental, social and governance (ESG) issues. It outlines how Islamic finance places more emphasis on social responsibility compared to traditional Western business models. The Responsible Finance Institute is launching to help connect the different approaches to responsible finance, such as Islamic finance and sustainable investing, in order to promote common standards and expand their global impact.
Climate exposure is defined as the potential gains or losses in an investor’s portfolio due to climate change. It encapsulates both climate-related financial risks as well as opportunities. Though climate exposure has many components, it can be divided into three broad subcategories: • Policy and legal exposure: The financial effects of policies designed to mitigate climate change (e.g., carbon pricing schemes) or policies designed to adapt to it (e.g., water management infrastructure and rationing) (Burton, Diringer, and Smith 2006); or litigation or adjudication related to climate change (Massachusetts v. Environmental Protection Agency 2007; Guyatt et al. 2011). • Physical and ecological exposure: The financial implications of changes to earth’s ecosystems. For example: the costs of shorter and warmer winters on the ski industry (Bebb 2015); the financial impacts of hotter weather on agricultural yields; or the economic consequences of severe weather/climatic events (e.g., Hurricane Sandy) that disrupt human economic activity. • Market and economic exposure: Human responses to the aforementioned policy and ecological changes that will reshape businesses, industries, economies, and markets (e.g., growth in clean energy technologies that threaten the fossil fuel industry) (Guyatt et al. 2011).
The document examines whether public pension fund divestment is an effective tactic for achieving social goals. It provides a framework for evaluating divestment proposals, including a technical and public policy report card. As a case study, it applies this framework to New Jersey's divestment from Sudan, giving it an overall grade of B, noting both positive leadership but also flaws in consideration of investor interests and unintended consequences. The document concludes divestment can be effective when combined with other tactics and when proposals carefully consider interests of investors, target specific firms, and are one part of a multi-pronged strategy.
- Socially responsible investing (SRI), now called sustainable and responsible investing (ESG investing), has its origins in the 18th century with the Religious Society of Friends (Quakers) prohibiting members from participating in the slave trade.
- Modern SRI evolved in the 1960s in response to events like the Montgomery Bus Boycott and focused on issues like the Vietnam War, equality, civil rights, and labor.
- Today, ESG investing strategies include negative screening, divestment, shareholder activism, and positive/impact investing and focus on a wide range of environmental, social and governance issues. Major institutions promoting SRI include CERES, UN PRI, and investment firms like Av
Accelerating Impact Impact Investing & Innovative Financing for DevelopmentKarim Harji
The concept of innovative financing is a relatively recent addition to the development lexicon. Edward Jackson, a faculty member at the School of Public Policy and Administration at Carleton University, and Karim Harji, a co-founder and partner at Purpose Capital, will introduce the audience to innovative financing and impact investing through their report, Accelerating Impact: Achievements, Challenges and What’s Next in Building the Impact Investing Industry. The AKFC Seminars on Innovative Financing for Development, hosted by Aga Khan Foundation Canada in partnership with Carleton University’s School of Public Policy and Administration.
SA Finance Association Conference 2015: Investor Governance Revisited 160115Colin Habberton
This presentation is a summary of the purpose, process and findings of a pilot study into the decision-making dynamics of institutional investors in South Africa.
The document outlines ICCO-alliance's strategy for fair economic development. The strategy aims to strengthen the socio-economic position of marginalized groups through just and sustainable market mechanisms. It focuses on small producers, workers, entrepreneurs and their households in rural areas. The strategy uses market development, value chain development, and enabling environment approaches. It is implemented through local and international market development, financial services, collaboration with enterprises, and fair climate initiatives using tools like strategic financing, capacity building, brokering, and lobbying. Partners include organizations focused on fair trade, certification, small and medium enterprises, networks, and knowledge institutions. Lessons emphasize applying market rules locally, prioritizing local actors, specializing departments, broadly analyzing
Ways of Utilizing Financial Resources - The “Spectrum”TakeAction
The document discusses the transition of an investment portfolio from a traditional approach focused solely on financial returns to a more socially responsible investing approach that integrates environmental, social and governance (ESG) factors. It outlines changes made across different asset classes to include sustainability index funds, social impact investments, and ESG compliance as part of the investment process. The portfolio is described as being in transition towards fully integrating ESG criteria across the entire portfolio.
Watershed Capital Group is a specialty consulting firm that assists sustainable companies and fund managers. It helps clients raise capital, execute mergers and acquisitions, and evaluate strategic financial options. Watershed's clients include entrepreneurs, companies, and fund managers scaling sustainable solutions. The firm brings over 100 years of combined experience across multiple industries. Partners have expertise in sectors like renewable energy, agriculture, manufacturing, and environmental services. Watershed also maintains one of the broadest networks in sustainable investing through initiatives it has launched. The firm is committed to helping clients succeed and scaling the sustainable economy.
Financing for development - Impact Investmentntorjuela
Impact investing aims to generate both social/environmental impact and financial returns. It includes investments in projects/organizations that provide solutions to challenges in areas like education, health, and renewable energy. Impact is measured using metrics like beneficiaries reached, emissions reductions, and audits. Examples include Emzingo, which supports social enterprises, and Villa Andina, a Peruvian fruit processor that benefits small farmers. While impact investing has potential, measuring impact and scaling projects remain challenges in maximizing development impact.
Fundamentals of Impact Investing - A Finance Matters Workshop - October 2014Finance Matters
The slide deck from Finance Matters' workshop on Fundamentals of Impact Investing held in London in October 2014.
Finance Matters is a London-based social enterprise helping people in finance put sustainability at the heart of their career. Check us out @fncematters, LinkedIn, Facebook or at www.financematters.co.
The document discusses the potential opportunities for hedge funds in impact investing. It defines impact investing as intentionally allocating capital to generate both social/environmental impacts that are measured. While impact investing is still small, institutional and individual investors are increasing commitments annually. The document outlines key considerations for hedge funds considering impact investing, such as defining meaningful impact measures, achieving comparable financial performance to benchmarks, and ensuring fiduciary compliance. It argues that as demand for ESG strategies is growing, impact investing may represent an untapped source of alpha for early adopting hedge funds.
The document discusses responsible investing (RI), which considers environmental, social and governance factors in investment decisions. It provides background on stockholders and their objectives to generate returns. RI aims to achieve social or ethical objectives in addition to financial returns. The document outlines the history and typical processes of RI funds, including commonly used screens to identify companies aligned with environmental and social values. It also discusses indices used to measure RI performance and findings that RI funds do not typically outperform or underperform conventional funds.
The world’s top 100 asset owners (AOs) represent about US$19trn in assets under management. The largest, and potentially most influential, proportion is in Asia—more than a third of the total. Out of the top 20 largest funds, three out of the first five and nearly half of the total are in Asia.
For more insights, please visit: https://eiuperspectives.economist.com/sustainability/sustainable-and-actionable-study-asset-owner-priorities-esg-investing-asia?utm_source=OrganicSocial&utm_medium=Slideshare&utm_campaign=Amundi&utm_content=Slideshare_whitepaper
The document discusses impact investing, which provides both social and financial returns through investments. Impact investing aims to assess performance through more than just financial measures. While the term was coined in 2007, it emerged from interest in assessing capital performance through non-financial lenses as well. The impact investing market includes philanthropic organizations, boutique funds, mainstream institutional investors, and others. Assets under management in impact investing are projected to approach $1 trillion by 2020 according to some estimates, as nearly two-thirds of U.S. pension funds anticipate making such investments. The document raises questions about careers, returns, industry trends, and opportunities in impact investing.
ELEEP Policy Recommendations: Economic and Monetary PolicyELEEP Network
The document summarizes recommendations from a study tour focused on economic and monetary policy in England. It outlines several policy recommendations for building foundations in economics for environmental leaders, understanding absolute environmental limits, looking for alternative progress indicators beyond GDP, promoting diversity in a green economy, redirecting investment to the green economy, decentralizing and democratizing finance, addressing challenges for firms in achieving sustainability, and taking a multi-phase approach to transition.
Big Path Capital assists purpose-driven companies and funds in financial transactions like acquisitions, mergers, and capital raises to ensure their social missions are preserved. They have worked on over 100 deals, more than any other impact investing bank. Big Path represents the largest impact investing network and focuses on assisting companies and funds, hosting events, and providing education to institutional investors on impact investing strategies. The article provides an overview of impact investing and highlights several papers that have helped define and develop the field, showing how impact investing is growing beyond private investments into other asset classes.
Voted Best in Class Impact Reports Smartermoney ReviewShawn Lesser
Big Path Capital is an investment bank that assists purpose-driven companies and funds in financial transactions like acquisitions, mergers, and capital raises to ensure their social missions are preserved. They have worked on over 100 deals, more than any other impact investment bank. Big Path represents the largest impact investing network and focuses on assisting companies and funds, hosting events, and providing education to institutional investors on impact investing. The document provides an overview of Big Path Capital's services and clients as well as their mission to advance businesses that generate social and environmental good alongside financial returns.
Integrating ESG Into Investment Strategy: Risks and Opportunities. Presentati...Graham Sinclair
Presentation by SinCo on sustainable investment in Africa, promoting AfricaSIF.org.
InterContinental HOTEL & RESORTS, Lusaka - ZAMBIA | JANUARY 30 - 31, 2013 Zambia Pension Fund Investment Forum Charting a sustainable retirement and Pension funds Investment strategy
http://www.mncapital-group.com/past-event-detail.php?ref=zambia-pension-fund-investment-forum
This document outlines an organization's methodology for sustainable investment research. Some key points:
1) The methodology aims to separate moral and financial implications of sustainability issues, focus on operational performance over transparency, integrate factors through measurable variables, and identify impacts on financial statements.
2) Products will include an online tool ranking company CSR initiatives, thematic research, sector analyses, and in-depth company reports assessing sustainability risks and business model impacts.
3) Financial impacts of ESG issues are described and examples given of impacts on sales, assets, margins, and the value creation process.
This document discusses socially responsible investment (SRI). It defines SRI as incorporating environmental, social and governance factors into investment decisions, rather than focusing solely on financial factors. It describes various forms of SRI, including SRI funds that select companies meeting financial and non-financial criteria, negative screening funds that exclude certain sectors, shareholder activism, and thematic funds focused on sustainability issues. The objectives of SRI investors are either controlling long-term risks and improving returns, or combining investing with ethical values like excluding tobacco or arms companies. The number of institutional and individual investors using SRI approaches is growing internationally.
Islamic Finance and Maqasid Al-Shari’ah: Environmental, Social and Governance...Islamic_Finance
The document discusses the opportunities for Islamic finance principles to be applied more broadly to environmental, social and governance (ESG) issues. It outlines how Islamic finance places more emphasis on social responsibility compared to traditional Western business models. The Responsible Finance Institute is launching to help connect the different approaches to responsible finance, such as Islamic finance and sustainable investing, in order to promote common standards and expand their global impact.
The Impact of Sustainable and Responsible InvestmentNia Rock
Sustainable, responsible and impact investors are a force for positive change. They have helped to improve the environmental, social and governance (ESG) practices of publicly and privately traded companies in the United States and around the world, indirectly benefiting countless individuals and communities. They have pursued investment strategies that foster economic development and expand financial services in lower-income communities.
What emerged as a modern, agnostic investment approach, driven largely by the rights movements is now becoming widely accepted by investors globally. 'SRI' assets now under management could reach $34-53 trillion by 2025. Why the shift in investor attitudes and what role can women at board level play to influence the future of socially responsible investments? Read more>> bit.ly/WiF14
Inside out finance issue-Indigo Article Page 14-17Loren Treisman
This is the Bertha Centre for Social Innovation's (University of Cape Town, Graduate School of Business) Magazine Inside:Out. This series looks at innovative financing for social enterprises and includes an article by me on pages 14-17 which explores why Indigo Trust is willing to take high risks across a diverse social portfolio.
This document provides an agenda and information for a conference on measuring and valuing corporate sustainability. The two-day conference will bring together 150 senior professionals from large corporations and financial institutions to discuss how companies can better measure and communicate their sustainability performance and impacts. Speakers will include experts from companies like Tullow Oil, Marks & Spencer, Rio Tinto, and sustainability organizations. Topics will include putting monetary values on sustainability, sector-specific measurement approaches, linking sustainability performance to shareholder value, and using sustainability data in investment decisions. The goal is to facilitate candid discussion and help companies strengthen the business case for sustainability.
Pantheon has a long history of prioritizing ESG and diversity in its business practices. It was an early adopter of the UN Principles for Responsible Investment in 2007 which helped provide a framework for integrating ESG into its investment processes. Pantheon recognizes that ESG factors are important for long term investment performance and managing operational risks. Investor demand has been a major driver in increasing the focus on ESG and diversity across the private equity industry. Pantheon monitors ESG practices across managers it invests in through due diligence questionnaires and risk ratings.
Sustainable and responsible investment (SRI) focuses on long-term investment in companies that have strong environmental, social and governance practices. Investors consider factors like relations with employees, environmental stewardship, product safety and respect for human rights. SRI creates standards for companies to uphold important values while attracting investors. Investors look for companies that consider their impact on communities and the environment, maintain high quality products and services, and have sustainable business models and practices. For companies to attract SRI investment, they must demonstrate strong ESG performance in areas such as reducing emissions, respecting human rights, and giving back to local communities.
What is socially responsible investment?dean771100
Socially responsible investing (SRI) considers environmental, social and governance factors when selecting investments, with the goal of generating financial returns while also creating positive social change. SRI has been practiced for over 30 years and works by investing in companies that positively impact society and the environment in addition to financial performance. Determining what qualifies as socially responsible can vary between individual investors and requires research into how investment managers incorporate ESG factors.
Responsible investment is an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance (ESG) factors, and the long-term health and stability of the market as a whole. It recognises that generating long-term sustainable returns is dependent on stable, well-functioning and well governed social, environmental and economic systems.
It is driven by a growing recognition in the financial community that effective research, analysis and evaluation of ESG issues is a fundamental part of assessing the value and performance of an investment over the medium and longer term, and that this analysis should inform asset allocation, stock selection, portfolio construction, shareholder engagement and voting.
Even though many asset owners have made commitments to responsible investment, the majority have yet to ensure that these are effectively implemented. There are inconsistencies in investment practices in different asset classes, high-level statements on sustainability or environmental, social and governance issues are often missing from investment beliefs, and responsible investment commitments are not embedded in investment mandates.
This creates a multiplier effect throughout the investment market. Weak implementation of responsible investment by individual asset owners sends signals to the investment market as a whole that responsible investment is not a priority for asset owners. In turn, this limits the willingness of investment consultants and investment managers to focus on responsible investment and ESG issues in their products and in their advice.
By implementing their commitments to responsible investment with sufficient scale and depth, asset owners can accelerate the development of responsible investment through the investment chain.
Investing the Rights Way: A Guide for Investors on Business and Human Rights Dr Lendy Spires
This document provides an overview of why human rights should matter to investors. It notes that companies associated with human rights abuses face operational, legal, and reputational risks. Respecting human rights can also benefit companies financially. The fiduciary duties of company managers require them to identify and manage material risks like human rights issues. There is a growing body of research indicating that environmental, social, and governance factors including human rights should be considered in investment decision making. The UN Guiding Principles on Business and Human Rights provide a framework for investors to assess human rights risks across their portfolios and engage with companies on human rights.
Creating Shared Value - the Evolution of Capitalism and Corporate BehaviourcommunityUOW
This document provides an introduction to the concept of shared value, which argues that companies can create economic and social value simultaneously by addressing social problems through their core business strategies. It outlines three ways companies can create shared value: by reconceiving products and markets to meet social needs, reconfiguring value chains to improve social and environmental impacts, and enabling local cluster development. Shared value differs from corporate social responsibility by being integral to profitability rather than discretionary. The implications for governments, civil society organizations, and businesses are that partnerships can create shared value when all parties understand and align with each other's strategies.
Is there any overlap between Corporate Governance and Public Reporting?James AH Campbell
Is there any overlap between Corporate Governance and Public Reporting?
Presentation to the Geological Society of South Africa's 'ESG Inquisition' on 10 August 2021 by James AH Campbell
What is ESG Reporting by Mark Horoszowski, MovingWorlds - July 2022 - Slidesh...Mark Horoszowski
ESG reporting involves companies disclosing environmental, social, and governance impacts and factors to be held accountable. It is growing rapidly due to demands from investors, consumers, employees, and regulators. The document outlines the history and definitions of ESG and CSR reporting. It provides steps for companies to establish an ESG reporting process, including setting goals, metrics, frameworks, and improving disclosure over time.
The document summarizes a roundtable discussion on sustainable and responsible investments (SRI) between various asset owners, asset managers, and consultants. The attendees discussed how the SRI industry has grown and become more mainstream in recent years due to factors like growing climate change concerns, the launch of the Principles for Responsible Investment, and increasing investor initiatives on issues like carbon disclosure. However, adoption of SRI strategies remains limited beyond traditional leaders. Making SRI messaging and frameworks simpler and providing guidance and support to smaller pension funds on implementation were suggested as ways to further advance the integration of environmental, social, and governance issues into investment management.
Impact Shares is creating an ETF platform to direct capital towards specific social issues through indexed funds. They aim to benefit non-profits, investors, and corporations by defining social objectives, measuring impact, and increasing engagement. Impact Shares sees opportunities due to growth in passive investing, values-based strategies, and an upcoming $30 trillion wealth transfer. They are seeking partnerships with leading non-profits to develop social issue indices and seed funding to launch new ETFs focused on issues like health, education, and the environment.
Wd nicole alix - Social impact as a driver or as a base for payment? OECD CFE
This document discusses measuring social impact and the responsibilities of various stakeholders in developing social impact measurement. It addresses why social impact is measured, for whom, and different evaluation methods. It raises questions about measuring impacts that are not easily quantifiable, long-term impacts, and attributing impacts. The document also discusses the responsibilities of methods designers to clarify where social impact measurement is relevant, learn from other experiences, and create a fair, open-source system. Finally, it addresses the responsibilities of public authorities to choose social policies and funding systems, regulate social investment markets, and promote a level playing field.
Draft agenda for an upcoming conference on the key measurements that have meaning in the field of corporate sustainability and how some or all of them can and might be valued by investors, and incorporated into investment decisions
Similar to Responsible Investing (part I) : what does really make a difference ? (20)
Bienestar Financiero al servicio de su jubilación anticipada
Pago de su 🏡
Estudio de sus hijos
Directamente a tu cuenta bancaria
Con Tesorería Auditoria Jurídica comercial
Administración de carteras
Apalancamiento Financiero
Desarrollo de tu marca personal
Acceso a Desarrollo de varias industrias
Cuentas bancarias
Estructuras Físicas en USA y en América Central
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Y mucho más
Link de registro
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Responsible Investing (part I) : what does really make a difference ?
1. 1
Xavier Heude
If you are planning for a year, sow rice
If you are planning for a decade, plant trees
If you are planning for a lifetime, educate people
Chinese proverb
2. 2
TYPOLOGY OF INVESTORS being most interested in sustainable investment
- women (they are more looking for personal values being reflected in investments)
- entrepreneurs
- ultra-wealthy
- younger generation
Huge problem : no set criteria used by industry today to define
‘sustainable’ practices or investments
A third of Global Investing Considered “Sustainable”
3. 3
Conference Paper
Roberts J and Young-Ferris A
'Immature or impossible ? – Making environmental, social and
governance issues calculable for investors‘
Principles for Responsible Investment (PRI) in Person Conference in
partnership with UNEP Finance Initiative and UN Global Compact,
London, United Kingdom, 10th September 2015
4. 4
Thousands of starfish washed ashore
A little girl began throwing them in the water so they wouldn’t die.
‘Don’t bother, dear’ her mother said, ‘it won’t make a difference’
The girl stopped for a moment and looked at the starfish in her hand.
‘It will make a difference to this one’”
5. Part 1 : « Responsible investing » Part 2 : « Impact investing »
“How the SRI industry has failed to respond to
people who want to invest with conscience.”
Paul Hawken (Natural Capital in 2004)
6.
7. In the 1920s (USA, the Methodist Church) : Responsible Investment was originally initiated :
avoid 'sin stocks' in its investment policy
In 1928 (USA) : 1st ethical investment fund, the Pioneer Fund, enabling Christians to keep
"sinful" businesses out of their investment portfolio
One of the most early adopters of SRI : John Wesley (1703-1791), one of the founders of Methodism.
Wesley’s sermon “The Use of Money” outlined his basic tenets of social investing :
- not to harm your neighbor through your business practices
- to avoid industries like tanning and chemical production, which can harm the health of workers
8. By the 1960s :
the financial‐moralist movement had started to spread to continental Europe (churches
and religious groups placed their financial investments in line with their views and principles
Vietnam war : institutional investors involved in ethical discussions, when some companies
were challenged about their involvement in the production of napalm and anti‐personnel
weapons
In the 1980s : a growing number of investors were active with regard to the apartheid policy in
South Africa
In the 1990s : SRI began a new phase of development
social activists
public's broader consciousness of ESG issues (Environment – Social – Governance)
growing perception of social responsibility by governments, corporations and investors
9. In 2005 : the UNO called on some of the world's largest institutional investors to participate
in the development of the UN Principles for Responsible Investment (PRI)
Process, coordinated by UN Global Compact and UNEP‐Finance Initiative
9
In 2011 : the EU has also formally “invited” European asset managers and asset owners
to sign up to the UN PRI – “A renewed EU strategy 2011-2014 for Corporate Social Responsibility”
13. SRI is an investment process :
- in which the Environmental, Social and Governance (ESG) criteria are taken into
account along with the usual financial criteria
- where the voting rights attached to the stock are being exercised to promote CSR
practices
(Robin Edme, co-founder & former Eurosif & French SIF President)
• Most shareholders send corporate management a very simple message : “Make me money.”
• Social investors are sending a new message: “Make me money … but not at the expense of
the planet and its people.”
17. 17
Emphasis on
profit
maximisation
ESG risk
mitigation
(protect value)
ESG factors
integration
(enhance
value ?)
Address
societal
challenges
No trade-off
on return
Address
societal
challenges
Competitive
return being
uncertain
Address
societal
challenges
No
competitive
return
Address
societal
challenges
No financial
return !
Social / environmental impact is measuredESG initiatives are undertaken
and reported
Investment landscapeSource: Social Impact Investment Taskforce
seek a financial return
while pursuing positive social outcomes
target specific and measurable social returns
while producing financial returns
19. 19
• An improved ability to attract and retain better employees
• Competitive advantages in production technology designed to eliminate waste
• More productive workforces
• Higher sales and more loyal customers
• Lower litigation costs
• Enhanced brand value and reputation
• Better risk and crisis management
• Good relations with government and communities
Non-financial considerations can have an impact on financial performance
Responsible investing
21. 21
To which asset types does SRI apply ?
• Securities
• Bonds
• Money market
• Real estate
• Private equity
22. 22
Explicit consideration of environmental, social and governance
factors in the investment decision-making process
Focus on specific or multiple issues related to ESG
Leading or best-performing investments within a universe,
category, or class
Compliance with international standards & norms, covering
ESG factors
Engagement activities and active ownership through voting
Ethical- or values based exclusions (weapons, pornography,
tobacco and animal testing)
Investments made with the intention to generate a social /
environmental impact alongside a financial return
(microfinance, community investing, social business,
entrepreneurship funds)
7 Resp. Invest. Strategies, not mutually exclusive
(a fund can use one or several strategies to select its investments)
“Non-systematic ESG integration”, in which ESG
analysis is made available to mainstream analysts
and fund managers but no formalized process exists
“Explicit and systematic ESG integration”, whereby
investors systematically consider or include ESG analysis
when rating or valuing investments, either voluntarily or
under mandates.
23. 23
Limitations of the study
• 278 asset managers and asset owners - AuM of € 15 trillion (i.e. 81 % of the market)
• figures are largely self-reported
• in the absence of a SRI framework, market players might have different understandings of SRI
Drivers of SRI demand
24. 24
Overview of SRI Strategies in Europe
Compound Annual Growth Rate (CAGR)
Market Growth by Strategy
26. 26
The SRI concept remains unknown to the general public : 66% of respondents
declared they had never heard of SRI before the survey (compared with 67% in 2015)
Only 4% of respondents who own a financial product have been offered SRI products
by their financial institution (compared with 3% last year)
40% of French people consider their financial advisor to be the most appropriate
person to inform them about responsible investment, followed by NGOs and consumer
groups
Almost 1/3 of the people surveyed consider that the existence of a label about savings
products, accredited by the state, could be a determining factor in choosing SRI products
National yearly survey conducted online between August 26th and 29th 2016
with a sample of 1,101 adults 16-75 in France
27. 27
Handicap of SRI
1) Lack of in-depth analysis : too often SRI fund overlook the core-business activities
- the current SRI model seems to be to identify a set of “ethical” issues, then cross-check
them against a list of companies …
- where those issues are found to be significant, or material, for a company, the fund
starts to engage with it
=> instead, funds should start by analysing the core-business activities of companies
=> working from a knowledge of how the business works would provide a better
starting point for engagement with companies
29. 29
« Stratégie d’investissement :
La stratégie d’investissement du FCP s’appuie dans un premier temps sur la définition d’un univers de
valeurs présentant un potentiel de performance financière le plus élevé possible, puis dans un second
temps sur une stratégie de sélection de valeurs qui suivent une politique de développement durable jugée
favorable à l’appréciation du titre sur la durée, telle qu’évaluée selon notre notation interne des piliers
environnement, social et gouvernance..
La philosophie de gestion du FCP vise à investir dans des entreprises qui orientent leurs choix stratégiques
et opérationnels dans l’optique d’un développement durable. Elles viseront ainsi dans la conduite de leur
activité la recherche de performance globale - à la fois économique et financière, sociale-sociétale et
environnementale - dans le respect et la confiance de leurs parties prenantes internes et externes.
Ainsi, les actions seront sélectionnées selon la stratégie décrite ci-après :
- la sélection de l’univers d’investissement repose dans un premier temps sur l’utilisation de filtres
quantitatifs permettant de définir les valeurs qui seront considérées comme admissibles et feront l’objet
d’analyses complémentaires. L’univers des titres dans lequel le FCP est investi porte sur des actions sans
restriction de capitalisations,
- l’utilisation d’analyses externes a pour but d’aider le gérant à orienter sa propre recherche sur un
nombre réduit de titres inclus dans l’univers d’investissement. Le choix des analystes externes fait
également l’objet d’un processus de sélection défini par la société de gestion,
- Les titres ainsi pré-sélectionnés font dans un second temps l’objet d’une analyse qualitative de façon à
sélectionner les sociétés répondant aux meilleurs critères de développement durable. Les actions des
entreprises sont appréciées sur des critères de responsabilité et performance de nature
environnementale (E), sociale-sociétale (S) et de gouvernance d’entreprise (G) »
Prospectus
30. 30
Stratégie d'investissement
.
Dans le cadre de la gestion d'Allianz Citizen Care SRI, la principale source de valeur ajoutée est la
sélection active de titres de sociétés qui offrent le meilleur couple qualités sociétales / qualités financières
possible.
1 - Sélection active de valeurs ISR : Principale et récurrente
En matière d ISR, notre philosophie d’investissement correspond à une démarche de sélection sectorielle
positive (approche « best in class ") et non à ‘ approche d’exclusion propre à l’investissement éthique. La
sélection des meilleurs pratiques en matière de développement durable se matérialise par l’insertion de filtres
supplémentaires et complémentaires à l’analyse financière « classique" des valeurs représentées dans
l’univers d’investissement.
L’évaluation du comportement socialement responsable de l’ entreprise s’ intègre ainsi à l’ analyse
fondamentale et stratégique des valeurs qui reste donc à la base de la sélection de titres au sein des
portefeuilles et permet de conserver le profil risque/rendement d’ une gestion traditionnelle.
L’OPC favorisera des actions répondant à des critères ISR. Ces valeurs sont notées au sein de différentes bases
de données internes et externes à l’OPC. Les 5 critères prépondérants sont les suivants :
Droits de l’homme : il nous est impossible de transiger sur ce thème, nous en avons donc fait un critère
d’exclusion.
Prospectus
31. 31
Comité ISR
L'objectif de ce Comité est la revue et la validation de la liste de valeur ISR.
Cette liste est établie par les gérants spécialistes ISR par consensus. Si un titre fait l'objet d'un désaccord
entre les bases de données externes utilisées sur un ou plusieurs critères, une étude approfondie est
menée au sein du Groupe afin qu'un arbitrage soit fait et intégré dans notre base de données interne.
Sur la base des notes globales obtenues par les valeurs et des analyses menées sur ces " valeurs sensibles "
(valeurs pour lesquelles les bases de données sont en désaccord concernant la notation d'un ou plusieurs
critères), le Comité ISR ajuste sa liste de valeurs lorsque nécessaire.
Gouvernement d’entreprise : il s’agit pour nous d’un critère clef car source de risque financier potentiel.
Politique environnementale et sociale : ce sont des sources de création de valeur potentielles
actuellement peu ou pas exploitées par l’analyse financière traditionnelle.
Ethique : ce critère relève de la responsabilité des entreprises en développement durable en mesurant la
diffusion de leurs avancées en la matière auprès de l’ensemble de leurs parties prenantes (fournisseurs,
clients et régions d’implantation). »
Cette sélection de valeurs s’ intègre dans le cadre d’ une analyse financière classique basée sur l’ analyse
fondamentale, l’ évaluation et la caractérisation des titres.
33. 33
Handicap of SRI
2) No (worldwide recognised) label
- the « SRI » terminology is free of use
- no common understanding of what RESPONSIBILITY is and how it is to be applied in
business
34. 34
ELIGIBILITY CRITERIA
To obtain a LuxFLAG Microfinance label :
• have a microfinance portfolio corresponding to at least 50 % of the MIV's total assets
• have at least 25 % of its microfinance portfolio invested in MFIs rated by a microfinance
rating agency recognised by LuxFLAG
• seek a return on investment
To obtain a LuxFLAG Environment label :
• have a portfolio of investments in environment-related sectors corresponding to at least
75 % of the fund's total assets
• screen all of its investments and potential investments on their management of
Environmental, Social and Governance (ESG) responsibilities
• seek a return on investment
A company is considered an environmental company when its turnover in environment
-related sectors corresponds to at least 20 % of its total turnover
LUXEMBOURG FUND LABELLING AGENCY (2006)
35. 35
To obtain a LuxFLAG ESG label :
• describe the ESG strategy and criteria … and how they are integrated in the investment
process
• screen 100 % of the invested portfolio according to one of the ESG strategies and standards
• apply an exclusion policy
• publish the full portfolio at least once a year and be transparent towards investors
30 % of total assets of the portfolio of the fund may be invested in the form of cash or short-
term cash equivalents.
The ESG strategies may include :
- best-in-class strategies
- multiple exclusion strategies
The following ESG strategies, by themselves, are not considered acceptable :
- single exclusion
- engagement & voting strategies
36. 36
To obtain a LuxFLAG Climate label :
• have a portfolio of investments corresponding to 75 % of total assets in investments
related, with a clear and direct link, to mitigation and/or adaptation of climate change or
cross-cutting activities
• describe its Climate Finance objectives (environmental and financial)
• seek a return on investment
• provide evidence that Environmental, Social and Governance (ESG) standards are
incorporated in the investment process
• have a measurement mechanism in place and must provide a report on expected and
realized results through indicators on an annual basis
• provide evidence that an exclusion policy is applied across 100 % of its portfolio
Exclusions (examples) :
- nuclear projects
- hydro-electric projects with a capacity above 20 MW
- large geothermal plants located in protected forest areas and specific
ecosystems
- biofuel projects (biodiesel and ethanol) … unless it can be demonstrated that no
threat to food security, to deforestation, forest degradation
37. Novethic SRI Label, launched in 2009, with the aim to
provide individual investors with a framework for Socially
Responsible Investment (SRI) products offered by
investment managers
Label awarded to open-end funds (pooled funds) whose management systematically
takes into account Environmental, Social and Governance criteria
In order to obtain the Label, the fund manager must detail the fund’s SRI management
approach, provide reporting on the extra-financial characteristics of the fund and disclose
a complete list of portfolio holdings
37
Around 110 funds have received the label
38. 38
Handicap of SRI
3) Fiduciary duty
• A report from the law firm Freshfields Bruckhaus Deringer in 2005 for the asset
management stream of UNEPFI concluded :
« Conventional investment analysis focuses on value, in the sens of financial performance [...]
the links between ESG factors and financial performance are increasingly being recognised.
On that basis, integrating ESG considerations into an investment analysis so as to more
reliably predict financial performance is clearly permissible and is arguably required in all
jurisdictions ».
39. 39
• In the 2009 follow-up to the report, Fiduciary II, it is stated :
« Fiduciairies must recognise that integrating ESG issues into investment and ownership
processes is part of responsible investment, and is necessary to managing risk and evaluating
opportunities for long-term investment ».
Failing to consider all long-term investment value drivers,
including ESG issues, is a failure of fiduciary duty
40. 40
The aims of this Guidance
— make companies more aware of the importance of providing high quality ESG information
— help issuers and investors to navigate the complex landscape of ESG reporting
— enable richer data flows and dialogue on ESG
— support the consolidation of sound global reporting standards
— enable investors to make informed investment decisions
February 2017
41. 41
Definition of “materiality” (International Accounting
Standards Board) :
‘material’ information is that which could, if omitted
or misstated, influence the economic decisions of
readers relying on the financial statements
1) Investor materiality
• Align with what international standards recommend and peer companies
report. This facilitates comparability for investors globally.
• Use tools at your disposal. ESG research and index providers have specific
criteria and identified material themes for different companies and industrial
sectors
• Explicitly link ESG performance, business strategy and financial and
operational performance
ESG reporting priorities
42. 42
2) Investment grade data
• Accuracy: deploy rigorous data collection systems
• Boundaries: align to the fiscal year and business ownership model
• Comparability and consistency: use consistent global standards to facilitate comparability
• Data provision: provide raw as well as normalised data
• Timeliness: provide data to coincide with the annual reporting cycle
• External assurance: consider strengthening the credibility of data by having it assured
• Balance: provide an objective view, including both favourable and unfavourable information
3) ESG reporting standards (ESG frameworks)
• Allow investors to analyse and compare ESG risks across companies and sectors
43. 43
4) Reporting formats
Annual report
• due to length and complexity, companies tend to discuss relatively few ESG issues
• ESG-related content may not fit the flow and structure of the annual report
workaround : publishing methodologies, policies and historical data online
Standalone sustainability report
• approach favoured by many issuers
• does not need to align with the style of the annual report
• raw data, tables and charts best suited to ESG information
Integrated report
• ESG information and data are presented in an integrated manner within the annual report
• model promoted by the International Integrated Reporting Council (IIRC) and aims to offer
5) Regulation and investor communication
• between 2013 and 2016, over 100 new mandatory instruments have been
introduced across 64 countries for ESG reporting
• over 80% of the world’s top economies mandate ESG reporting in some form
44. 44
Factors that would motivate Advisors to recommend Sustainable investments
Industry Survey of Financial Advisors on Sustainable and Impact Investing – June 2012
Project Managed by Calvert Foundation
47. 47
Does Socially Responsible Investing Hurt Investment Returns ?
(09/2012)
Four distinct bodies of research addressed this question :
1) Performance of SRI indices relative to traditional market indices
2) Performance of SRI mutual funds relative to traditional mutual funds and/or market
indices
3) Relative financial performance of hypothetical SRI stock portfolios against
conventional portfolios and indices
4) Tentative to determine if there is a linkage between corporate social responsibility
(CSR) and improved financial performance
Chief finding : socially responsible investing does not result in lower investment returns
50. 50
Reasons why a socially responsible investment strategy
is unlikely to produce superior returns
• No consensus on how to define corporate social responsibility
• Data used to assess a company’s social responsibility is limited and often
flawed + self-reporting
• No consensus on how to define corporate social responsibility or how
to construct a portfolio based on the concept
51. 51
May 1990 : the Domini 400 Social Index (now the FTSE KLD 400 Index)
1st index to measure the performance of a broad universe of socially responsible
stocks in the US.
Since then, a number of other SRI indices have been created :
• 1999 - Dow Jones Sustainability Group Index for global portfolios
• 2000 - Jantzi Social Index (JSI) in Canada
• 2000 - Calvert Social Index in the United States
• 2000 - ECPI Index Family for European and global portfolios
• 2001 - FTSE4Good Index for global portfolios
• 2001 - Dow Jones Sustainability North American Index
• 2001 - ASPI Eurozone Index for European markets
• 2002 - Ethibel Sustainability Index Global
• 2004 - Johannesburg Stock Exchange SRI Index
• 2007 - KLD Global Sustainability Index (GSI)
• 2010 - MCSI North American ESG Total Return (NNASIU) Index
(… non exhaustive …)
SRI indexes
53. 53
Index Methodology
MSCI World Socially Responsible Index is constructed in two stages :
- 1) exclusion of securities of companies involved in nuclear power, tobacco, alcohol, gambling,
military weapons, civilian firearms, GMOs and adult entertainment
-2) MSCI’s Best‐in‐Class selection process is applied to the remaining universe of securities
(targets the securities of the highest ESG rated companies making up 25% of the market capitalization in
each sector and region of the MSCI World Index)
The Index is designed to have similar sector and region representation as the MSCI World Index.
54. 54
Environment-related sectors as defined in a globally recognised classification system such as …
the FTSE Environmental Markets Classification
55. 55
FTSE Environmental Opportunities Index Series
top 100 largest companies
by market capitalisation in the
FTSE Environmental
Opportunities All-Share Index
508 companies 7,710 companies
57. 30 Stock exchanges with Sustainability index
1. Australian Stock exchange 13. Johanesburg Stock Exchange 25. Singapore
Exchange
2. BM&FBOVespa 14. Korea Stock Exchange 26. SIX SWISS
Exchange
3. BME Spanish Exchange 15. London Stock Exchange 27. Taiwan
Exchange
4. Bolsa de comercio de Santiago 16. Moscow Interbank Currency 28. The Stock
Exchange of Thailand
5. Bolsa Mexicana de Valores 17. NASDAQ OMX 29. Tokyo Stock
Exchange
6. BSE 18. NASDAQ OMX Nordic Exchange 30. Toronto Stock
Exchange
7. Borsa Italiana 19. NSE
8. Bursa Malaysia 20. NYSE Euronext
9. Deutsche Borse AG 21. Philippines Stock Exchange
10. HK Exchanges and Clearing 22. Saudi Stock Market
11. Indonesia Stock Exchange 23. Shanghai Stock Exchange
12. Istanbul Stock Exchange 24. Shenzhen Stock Exchange
3/16/2017 57
60. 60
The Morningstar Sustainability Rating™ for Funds
1) Fund’s Portfolio Sustainability Score : measures how well the companies it holds are
managing their ESG risks and opportunities
2-step process
Prerequisite :
at least 50 % of the portfolio’s assets must be in one of the 4,500+ companies
covered by Sustainalytics globally
(because Sustainalytics’ ESG analytics apply at the company level, Morningstar
can score equities and corporate debt found in portfolios)
Asset-weighted average of the company ESG scores with deductions made for
holdings involved in controversial incidents, or the Portfolio Controversy Score
help investors determine the level of sustainability in their portfolios
4,500+ companies with its comprehensive ESG ratings and
10,000+ companies with its controversial incidents indicators
quantitative indicator-driven approach using 60-80
performance indicators per company
Sustainalytics ESG methodology
61. 61
Conclusions :
• the ratings are portfolio-based, not performance-based (should not be the sole
basis for an investment decision )
• Funds that have explicit sustainable or responsible investment mandates represent
only about 2% of the fund universe
• Many investors who are interested in sustainability own conventional funds.
some investors may discover that their funds are not doing well enough on a
sustainability basis and will actively seek out “intentional” ESG funds
2) Morningstar assigns a Morningstar Sustainability Rating, which is the Portfolio
Sustainability Score relative to Morningstar Category peers
Prerequisite :
at least 10 funds in a Morningstar Category must also receive a Portfolio
Sustainability Score
62. 62
Combination of voluntary and regulatory initiatives to promote CSR standards
Such standards can be contained in binding “hard law” instruments, such as national
laws and regulations, or in voluntary non-binding “soft law” instruments
Taking stock of existing CSR standards
Universe of CSR standards can be categorized according to the organization that created them :
• intergovernmental organization standards,
derived from universal principles as recognized
in international declarations and agreements
• multi-stakeholder initiative (MSI) standards
• industry association codes
• individual company codes
Overview of global and local CSR initiatives since 1995
CSR-standards’initiatives
3 major sets of standards
dozen
hundreds
thousands
Quantity
63. 63
Multi-stakeholder initiative standards (ISO, GRI, …) :
“Cross-sectoral partnerships created with a rule-setting purpose, to design and steward
standards for the regulation of market and non-market actors”. These partnerships
contain a mix of civil society, business, labour, consumers and other stakeholders
Industry association codes and individual company codes :
Codes jointly developed by the leading companies within an industry, to address social
and/or environmental aspects of supply chains, etc …
Proliferation of voluntary CSR standards resulting in a number of systemic challenges
related to standard setting and standard implementation
CSR-standards’initiatives
65. 1. incorporate ESG issues into investment analysis and decision-making processes
2. be active owners and incorporate ESG issues into our ownership policies and practices
3. seek appropriate disclosure on ESG issues by the entities in which we invest
4. will promote acceptance and implementation of the Principles within the investment industry
5. work together to enhance our effectiveness in implementing the Principles
6. each report on our activities and progress towards implementing the Principles
2006 – the 6 principles
We will …
(in partnership with UNEP Finance Initiative and the UN Global Compact)
65
69. 69
AccountAbility is a leading global think tank and consultancy
providing innovative solutions to the most critical challenges in
corporate responsibility and sustainable development (1995).
At the core of their work is the AA1000 Series of Standards - principles-based standards
to help organisations become more accountable, responsible and sustainable – 3 key-
principles :
- Inclusivity - people should have a say in the decisions that impact on them
- Materiality - decision makers should identify and be clear about the issues that matter
- Responsiveness - organizations should be transparent about their actions
The AA1000 AccountAbility Principles Standard : provides a framework for an
organisation to identify, prioritise and respond to its sustainability challenges
The AA1000 Assurance Standard : provides a methodology for assurance practitioners
to evaluate the nature and extent to which an organisation adheres to the
AccountAbility Principles
The AA1000 Stakeholder Engagement Standard : provides a framework to help
organisations ensure stakeholder engagement processes are purpose driven, robust
and deliver results.
Intergvtlorganisarionstandards
70. Strategic policy initiative (of the UN Secretary General’s office - 2000) for
businesses that are committed to aligning their operations and strategies
with 10 universally accepted principles in the areas of human rights, labour,
environment and anti-corruption
10.000 participants across 145 countries (out of them, 6000 business participants)
70
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights
Principle 2: make sure that they are not complicit in human rights abuses
Labour
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to
collective bargaining
Principle 4: the elimination of all forms of forced and compulsory labour
Principle 5: the effective abolition of child labour
Principle 6: the elimination of discrimination in respect of employment and occupation
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges
Principle 8: undertake initiatives to promote greater environmental responsibility
Principle 9: encourage the development and diffusion of environmentally friendly technologies
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery
Intergvtlorganisarionstandards
71. 71
The Principles for Social Investment are designed to encourage social investment that is:
Purposeful
The funder is knowledgeable and committed, reasonably assured to play a positive role
and does not negate or unnecessarily duplicate the efforts of other contributors.
Accountable
The funder takes responsibility for the intentional and unintentional effects of their
funding, and embraces the concepts of transparency, self-assessment, and peer
advancement.
Respectful
The funder has due regard for the local customs, traditions, religions, and priorities of
pertinent individuals and groups.
Ethical
The funder engages in reflective and legitimate practices conducted in accordance with
applicable laws and accepted international norms of behaviour.
Guidelines officially launched on 25 June 2010 and referenced in the New York
Declaration at the UN Global Compact Leaders’ Summit.
Intergvtlorganisarionstandards
72. 72
2012 Social Investment Pioneer Awards
Responsible Business
Recognising companies that commit to social, economic, and environmental sustainability while balancing the
interests of diverse stakeholders
Eswaran Brothers Exports, Sri Lanka / Pacific Rubiales Energy Corp, Colombia
Inclusive Business
Recognising companies that deliberately target middle to low-income communities as members of the value chain,
as suppliers, clients and customers
B-BOVID, Ghana / Restaurantes Toks, Mexico
Shared Value
Recognising companies that seek to create social and business value through redesigning products, services and
markets
Small Giants, Australia / Unilever, Indonesia
Social Business
Recognising non-loss, non-dividend cause driven enterprises purposefully created to address broad community
development priorities
SMEFUNDS, Nigeria / BBVA Microfinance Foundation, Spain
Strategic Corporate Philanthropy
Recognising companies that align core business capabilities and commercial objectives with philanthropic intentions
Slightly Different, UK / Ferrovial, Spain
73. The OECD Guidelines and Socially Responsible Investment
for Multinational Enterprises outline what OECD member
governments agree are the basic components of
responsible corporate conduct.
Recommendations addressed by governments to
multinational enterprises that cover a broad range of
corporate activities
Chapter 1 - Concepts and Principles
Chapter 2 - General Policies
Chapter 3 - Disclosure
Chapter 4 - Employment & industrial relations
Chapter 5 - Environment
Chapter 6 - Combating bribery
Chapter 7 - Consumer interests
Chapter 8 - Science & Technology
Chapter 9 - Competition
Chapter 10 - Taxation 73
42 adhering governments
International network of civil society organisations
promoting corporate accountability
Intergvtlorganisarionstandards
74. Independent not-for-profit organization working to drive greenhouse gas
emissions reduction and sustainable water use by business and cities
“The first step towards managing carbon emissions is to measure them because in business what gets
measured gets managed. The Carbon Disclosure Project has played a crucial role in encouraging companies
to take the first steps in that measurement and management path.” - Lord Adair Turner - Chairman, UK
Financial Services Authority
Non-profit organization (2002) initiated as from 1997 by the CERES
(Coalition for Environmentally Responsible Economies, a non-profit coalition of investors,
public pension funds, labor unions, religious and public interest groups, that works in
partnership with companies toward the common goal of corporate environmental
stewardship) … promoting economic, environmental and social
sustainability.
GRI provides all companies and organizations with a comprehensive
sustainability reporting framework that is widely used around the
world
2500 reporters (2011) 74
encouraging companies to publish greenhouse gas emissions reduction targets
and to make year-on-year reductions in those emissions
Intergvtlorganisarionstandards
75. 75
Six Steps to better sustainability governance
Step 1: Ensure that the CEO leads the charge
With any major corporate culture shift or organization change, the CEO’s visible leadership is key. The CEO needs to set the
behavioral example for the organization; if he or she is not taking it seriously, and it shows, no one will. There is simply no
substitute for a passionate and engaged CEO who embraces this commitment in word and action.
Step 2: Incorporate sustainability into the Board agenda
Simply put, a Board is responsible for ratifying strategy, and sustainability is a crucial aspect of strategy. Sustainability should not
only be front and center for all Directors on a Board; it should also be the focus and responsibility of a Sub-Committee of the
Board.
Step 3: “Incentivize” executive leadership and engagement
33% of corporate executives say that lack of incentives tied to sustainability performance is a barrier to capturing potential value
from sustainability. The Board should determine how executive pay can be based on the organization’s performance against
sustainability goals. Many companies have “suddenly” seen more movement after adjusting their bonus structures at the senior
levels.
Step 4: Develop a customized design that fits your organization
A one-size-fits-all approach based solely on what has worked for others is a mistake. The right solutions can be strikingly different
across varying organizational sizes, sectors, regions, and cultures. Don’t rely too heavily on “leading practices” – focus on
designing a structure that works for your organization.
Step 5: Empower the CSO and the Sustainability Office to “make it happen”
A CSO and his or her team can be brilliant; they can be the world’s experts on sustainability and leading change—but if they’re
not given the necessary political capital and access, which requires the visible and vocal backing of the CEO and Board, they will
be limited in their impact.
Step 6: Help all employees understand the implications of sustainability in their roles
Many companies can point to widely understood cultural values that define their organizations—for example, “we have a culture
of safety,” or “we are committed to our customers first”—and it is easy to see these values in employee behavior. Similarly, a
culture of sustainability—one in which employees understand the ESG impacts of their everyday actions, have ESG performance
targets and are evaluated according to those targets—is a necessity for a sustainable organization.
76. 76
ISO 26000 – Social responsibility
Voluntary guidance on social responsibility (no requirements,
and therefore will not be for use as a certification standard like
ISO 9001:2000 and ISO 14001:2004)
Pan-European network (institutional investors, financial service providers,
academic institutes, research associations, trade unions and NGOs) and
think-tank whose mission is to develop Sustainability through European
Financial Markets. 90 affiliates
Mutli-stakeholders’intiatives
77. 77
European SRI Transparency Code (November 2004) :
Launched with support from the European Commission with the aim to create
more clarity on the principles and processes of SRI mutual funds :
As of December 2012, more than 500 funds from over 50 signatories have
adopted the Code. This compares with a total of 884 SRI funds publicly
distributed in Europe
TWO KEY MOTIVATIONS UNDERPIN THIS CODE
1. The opportunity for retail SRI funds to clarify their SRI approach to investors and other
stakeholders in an easily accessible and comparable format
2. Proactively strengthen a self-regulation that contributes to the development and
promotion of SRI funds by setting up a common framework for transparency best
practices
78. 78
Several goals direct GSIA’s work :
1) to deepen the impact and visibility of GSIA members at the global level and to communicate
about the distinctive role in national, regional and international arenas
2) to enhance the synergies between GSIA members
3) to undertake initiatives that would benefit from global coordination, and to enable GSIA
members to support and supplement each other’s work where cross-border (regional and
international) collaboration is needed or occurring
4) to enable GSIA members to be strong, effective and productive within their regional and
national markets
5) to provide advice and support, where possible, to local and regional sustainable investment
organizations
Mission : deepen the impact and visibility of sustainable investment
organizations at the global level
Vision : a world where sustainable investment is integrated into financial
systems and the investment chain and where all regions of the world
have coverage by vigorous membership based institutions that represent
and advance the sustainable investment community
(collaboration of 7 of the largest sustainable investment
membership organizations in the world)
79. Global network of civil society organisations (Friends of the Earth, Rainforest Action Network,
WWF …) and individuals tracking the operations of the private financial sector (commercial
banks, investors, insurance companies, pension funds) and its effect on people and the planet
The Collevecchio Declaration (Jan. 2003) - endorsed by more than 200 organisations –
provides a vision for a sustainable finance sector
Benchmark by which civil society will measure the banking sector’s commitment to
sustainable development :
1. Commitment to sustainability
2. Commitment to ‘do no harm’
3. Commitment to responsibility
4. Commitment to accountability
5. Commitment to transparency
6. Commitment to sustainable markets and governance
79
Mutli-stakeholders’intiatives
80. 80
Not for profit body founded in 1995 (London) which has evolved into a global
membership organisation of over 600 leaders in corporate governance in 50 countries,
with institutional investors representing assets under management of around $18 trillion
Raise standards of corporate governance worldwide
Guidelines for companies to integrate non-financial information better into business reporting :
- businesses should be selective about the non-financial indicators
- make sure that information given to investors is directly linked to strategy
- must show that they understand how their relationships with staff, customers and suppliers,
for example, affect financial performance indicators such as sales, cash flow and share price
“Few companies at the moment can explain how managing non-financial issues helps them
achieve current and future financial goals”
“Investor demand for non-financial performance information about companies has to date
been limited. Companies have little reason to do this if investors aren’t pressuring them.”
– Frank Curtiss, chairman of the ICGN (2009)
Mutli-stakeholders’intiatives
81. 81
The International Integrated Reporting Council (IIRC) is leading the development of a
global framework for Integrated Reporting.
It is a powerful, international cross section of leaders from the corporate, investment,
accounting, securities, regulatory, academic and standard-setting sectors as well as
civil society
Mission statement
To create a globally accepted integrated reporting framework which brings together
financial, environmental, social and governance information in a clear, concise,
consistent and comparable format.
The aim is to help with the development of more comprehensive and comprehensible
information about organisations, prospective as well as retrospective, to meet the
needs of a more sustainable, global economy.
New approach to corporate reporting that demonstrates the linkages between an
organization’s strategy, governance and financial performance and the social,
environmental and economic context within which it operates.
by reinforcing these connections … Integrated Reporting can help business to
take more sustainable decisions and enable investors and other stakeholders to
understand how an organization is really performing …
Mutli-stakeholders’intiatives
83. Credit risk management framework for
determining, assessing and managing
environmental and social risk in project finance
transactions.
76 signatories
83
… seeking ways to assess and manage the
environmental and social risks associated with the
Project Finance sector
Launched in 2003 and initially adopted by 10
global financial institutions (ABN AMRO Bank, N.V.,
Barclays plc, Citi, Crédit Lyonnais, Credit Suisse First
Boston, HVB Group, Rabobank Group, The Royal
Bank of Scotland, WestLB AG, and Westpac
Banking Corporation).
84. 84
Leading European expert in the assessment of companies and
organisations with regard to their practices and performance on
environmental, social and governance (“ESG”) issues
- Evaluate the level of commitment shown by organisations towards all CSR
or sustainable development goals
- Identify any risks incurred by the company or organisation in this area
- Evaluate their level of management
0ne of the world's leading rating agencies and provides the
crucial head start in the segment of sustainable investment
Development of innovative investment strategies that combine
sustainability research with a high rate of return, for institutional
investors and financial service providers
85. 85
A Social Impact Bond is essentially a public-private partnership, funding
effective social services through a performance-based contract
Almost 60 projects linked to Social Impact Bonds have been launched in
15 countries (as of June 2016) which raised over 200 million USD in capital
86. The first experiment (2010) : how to reduce recidivism rates among males in England ?
Partnership UK-government / private investors
Goal : to address re-incarceration rates at the Peterborough prison
of 3,000 short-term prisoners
Private investors (17 foundations and charitable trusts ) provided
approximately $8 million to a consortium of 6 organizations
specialized on rehabilitation of former prisoners through access to
housing, training and employment, medical services, benefits and
financial advice, and family support.
Government engagement : to repay the investors if the 12 month reconviction rates drop by 10 % in 4 years …
or stay above 7.5 % for 7 years.
2014 : reoffender rates dropped by only 8.4 % (the project did not yield a payout in 2014)
On track to pay investors in 2016 … ?
87. Rikers Island Social Impact Bond Payment Schedule
First social impact bond in the U.S. (2012) : recidivism
Goldman Sachs pledged $9.6 million to the Adolescent Behavioral Learning Experience (ABLE) Program
Goal : reduce incarceration rates at Rikers Island in New York City through behavioral therapy.
Return : capital investment returned … if the number of jail days avoided by young men is at least - 10 % in 4 years
A $7.2 million grant provided by Bloomberg Philanthropies guarantees a large portion of the investment
88. 88
• youth employment (Japan)
• care of the elderly (Japan)
• support for children in care and at-risk children and a reduction in the need for
out-of-home care (Australia)
• helping school drop outs into employment (Germany, India)
• juvenile justice (USA)
• early childhood education (USA)
• teen pregnancy prevention (USA)
90. 90
GBP core components
1. Use of proceeds – measuring green impact
• fully directed towards ‘Green Projects’
2. Process for project evaluation and selection
• transparent in the eligibility of projects …how they will meet critical environmental objectives
3. Management of proceeds
• transparent track on net proceeds, through segregated sub-account, sub-portfolio, etc …
• audit recommended as an additional level of robustness
4. Reporting
• annual report on use of proceeds … including amounts allocated ; impacts achieved / expected
• recommendation to use an external reviewer … such as consultant review, verification,
certification, and/or rating
Any type of bond instrument where the proceeds
will be exclusively applied to finance or re-finance
in part or in full new and/or existing Green Projects
1st stock exchange in the world
100 % dedicated to green
financial instruments
93. 93
- importance of chief executive leadership and tone from the top
Leadership Skills for a Sustainable Economy :
Define the mindset, behaviour and new management skills required for sustainability
that should be expected from
boards and senior management teams, operational managers, customer-facing staff
and all employees
nominations for committees and Boards need to be more proactive in requiring basic
knowledge and experience of improving ESG performance
headhunters asked to find new board members should be screening for ESG awareness
sustainability and what it means for the Board must be part of induction and continuous
professional development for Board members
accredited training programmes supporting change
94. Lack of standardisation / guidance
large variety of approaches and definitions on the industry’s side
very different preferences on the investors’ side
European Fund Classification (EFC) : …developed by EFAMA to facilitate a
transparent comparison of investment funds
offers fund-providers the possibility of flagging that their funds follow
a socially responsible investment strategy
Need for more transparency : client reporting, communication of investment approaches
and selection methods
would help investors distinguish between different SRI offerings and allow them to
make more informed decisions
94
95. The EU should:
• support self-regulatory initiatives on transparency of SRI
• recognise SRI as an incentive that can help encourage corporate responsibility of investee
companies and sustainable development
• endorse SRI in the management of EU state ‐owned or controlled funds and investment
schemes
• encourage institutional asset owners (particularly public pension funds and other public
institutional investors) to be transparent about whether they adopt SRI practices or not
• encourage better and more standardised disclosure of ESG information by investee
companies which would facilitate investment managers investing assets on behalf of clients
who want to invest in SRI products
The Key Investor Information Document (KIID) and other issuing
documents – such as the prospectus for a fund – should indicate that
the investment policy follows certain SRI
standards
95
96. 96
What could an investor look like in 2030?
Investors are likely to be more investors located in different places, with different needs, social,
political and economic attitudes, lifestyles and income patterns
Sovereign wealth funds are likely to play an even greater role
Investors are likely to need to increase their level of engagement with the industry.
A greater proportion of the population will probably need to manage their finances more actively to take
control of their financial future
NEEDS
PROFILE
Investors are likely to assign increased value to trusted brands, particularly as awareness of
issues such as data security, confidentiality and privacy increases
Simplicity, transparency, honesty and integrity are likely to be regarded as more important buying criteria
Investors will probably want less risk and more certainty. As a result, they are likely to expect better
solutions to their individual needs and may also want to ‘lock down’ value earlier in a product lifecycle
24/7 connectivity and access to relevant and timely information via a wide variety of media types will
increasingly be expected as the norm
97. 97
BEHAVIOUR
Multitasking and time scarcity is likely to continue to escalate, prompting more investors to
look for time-saving solutions, single point of access and aggregation across a range of
providers
Investors are likely to be more willing to consider non-traditional alternatives to ‘traditional’
savings and retirement products
98. The 10 Commandments of Sustainable
Investment
1. Make sure you or your money managers have access to top-quality, company-specific research
on sustainability risks and opportunities
2. Make sure that they actually use it.
3. Do not use sustainability research in isolation, without combining it with more traditional
fundamental and/or quantitative investment research.
4. Do not expect perfection from your investee companies.
5. Do not presume that all sustainability factors – or even any of them – are relevant to all
investment decisions, in all industry sectors, all of the time. They’re not.
6. Do not assume that each of the “4 Pillars” (Environment, Human Capital, Stakeholder Capital, and
Strategic Governance) is equally relevant to a particular company. They probably aren’t.
7. Do not assume that the relative financial importance of each of the 4 Pillars will remain constant
over time. They won’t.
8. Do not apply a double standard to the financial performance of your “sustainability-enhanced”
portfolios.
9. Do adopt a long-term investment horizon.
10.Do challenge your advisors and money managers.
98
Adapted from INVESTING IN A SUSTAINABLE WORLD: Why GREEN Is the New Color of Money on Wall Street by Matthew J. Kiernan,
Ph.D. (AMACOM 2008)