From ethical investment screening to extra financial analysis.

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Grégory Schneider-Maunoury, CM - CICSecurities - France

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  • expliquer pourquoi vert et pas de rouge / orange
  • From ethical investment screening to extra financial analysis.

    1. 1. From ethical investment to extra-financial analysis November 2006
    2. 2. <ul><li>1. Ethical screening and CSR rating agencies’ bottlenecks </li></ul><ul><ul><li>Example of agencies’ problems in CSR assessment </li></ul></ul><ul><ul><li>Two major criticisms of agencies </li></ul></ul><ul><ul><li>Overview of CSR rating methodologies </li></ul></ul><ul><li>2. Definition of European methodology for extra-financial analysis </li></ul><ul><ul><li>Three different aims and levels of analysis </li></ul></ul><ul><ul><li>Three pillars of analysis </li></ul></ul>
    3. 3. <ul><li>Ethical screening and CSR rating agencies’ bottlenecks </li></ul><ul><li>The ‘Rashomon factor’: Toyota in 2002 </li></ul><ul><li>Innovest assessment: best in class </li></ul><ul><ul><li>Reduction of use related pollutions (Prius hybrid model) </li></ul></ul><ul><ul><li>Low wastewater reduction (compared to sector average) </li></ul></ul><ul><li>Oekom assessment: worst in class </li></ul><ul><ul><li>Lack of reporting over 5 years </li></ul></ul><ul><ul><li>Some innovative steps: Prius as a window of opportunity </li></ul></ul>
    4. 4. <ul><li>Two major criticisms of CSR rating agencies </li></ul><ul><li>Focus on transparency </li></ul><ul><ul><li>Assessment of corporate disclosure </li></ul></ul><ul><ul><li>… according to the moral/ ethical choices of different investors </li></ul></ul><ul><li>Focus on CSR initiatives </li></ul><ul><ul><li>Analysis not representative of real business </li></ul></ul><ul><ul><li>Strong bias in favour of strongly affected activities </li></ul></ul><ul><li>Ethical screening and CSR rating agencies’ bottlenecks </li></ul>
    5. 5. <ul><li>Ethical screening and CSR rating agencies’ bottlenecks </li></ul>EIRIS, KLD SIRI ETHIBEL VIGEO INNOVEST, SAM-DJSI Source: Schneider-Maunoury, 2006 What do agencies provide? Scenarios Risks/ Opportunities Management System Compliance Performance Processes Practices Activity – Product Object Methods
    6. 6. <ul><li>1. Ethical screening and CSR rating agencies’ bottlenecks </li></ul><ul><ul><li>Example of agencies’ problems in CSR assessment </li></ul></ul><ul><ul><li>Two major criticisms of agencies </li></ul></ul><ul><ul><li>Overview of CSR rating methodologies </li></ul></ul><ul><li>2. Definition of a European methodology for extra-financial analysis </li></ul><ul><ul><li>Three different aims and levels of analysis </li></ul></ul><ul><ul><li>Three pillars of analysis </li></ul></ul>
    7. 7. 2. Definition of a European methodology for extra-financial analysis <ul><li>From ethics to financials: a long way to go? </li></ul><ul><li>=> 3 questions about companies environmental and social issues </li></ul><ul><li>How much transparency? </li></ul><ul><ul><li>Is there disclosure of environmental policy? </li></ul></ul><ul><li>How is operational performance affected? </li></ul><ul><ul><li>Does environmental certification contribute to operational performance? </li></ul></ul><ul><li>What financial consequences in the long run? </li></ul><ul><ul><li>Could land remediation issues imply significant financial reserves in the future? </li></ul></ul>
    8. 8. <ul><li>Identification of measurement and nature of financial impact </li></ul><ul><ul><li>Need for an initial financial framework </li></ul></ul><ul><ul><li>3 consequences on: sales, margin, assets </li></ul></ul><ul><li>Split between moral and economic issues </li></ul><ul><ul><li>‘ Freakonomics’ and SRI </li></ul></ul><ul><li>Reopening the time frame of analysis </li></ul><ul><ul><li>Against short termism </li></ul></ul>2. Definition of a European methodology for extra-financial analysis 3 pillars of a European wide extra-financial analysis
    9. 9. The ESN offer in extra-financial analysis <ul><li>An integrated methodology: </li></ul><ul><li>Financial framing of environmental and social issues </li></ul><ul><li>700 European companies covered </li></ul><ul><li>10 European brokers </li></ul><ul><li>8 Socially Responsible Investment analysts </li></ul>
    10. 10. The ESN offer in extra-financial analysis Banca Akros S.p.A. Viale Eginardo, 29 20149 Milano Italy Phone: +39 02 43 444 389 Fax: +39 02 43 444 302 Equinet Institutional Services Gräfstraße 97 60487 Frankfurt am Main Germany Tel: +49 69 58997 400 Fax:+49 69 58997 299 Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 233 99 97 Caja Madrid Bolsa S.V.B. Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770 Caixa Banco de Investimento Rua Barata Salgueiro, 33-5 1250-042 Lisboa Portugal Phone: +351 21 389 68 00 Fax: +351 21 389 68 98 Egnatia Finance S.A. 8 Dragatsaniou Str. 105 59 Athens Greece Phone: +302 10 32 79 200 Fax: +302 10 32 48 694 CM - CIC Securities Avenue de Provence 6 75441 Paris Cedex 09 France Phone: +33 1 4596 7700 Fax: +33 1 4596 7788 F. van Lanschot Bankiers N.V. Leonardo da Vinciplein 60 5223 DR ‘s-Hertogenbosch Netherlands Phone: +31 73 548 8724 Fax: +31 73 548 8577 NCB Stockbrokers Ltd. 3 George Dock, Dublin 1 Ireland Phone: +353 1 611 5611 Fax: +353 1 611 5781 Mandatum Stockbrokers Ltd. Unioninkatu 22, P.O. Box 66, 00131 Helsinki Finland Phone: +358 10 236 10 Fax: +358 10 236 4755
    11. 11. Questions / Answers <ul><li>Agnès Blazy </li></ul><ul><li>[email_address] </li></ul><ul><li>Marie Luchet </li></ul><ul><li>[email_address] </li></ul><ul><li>Gregory Schneider-Maunoury </li></ul><ul><li>[email_address] </li></ul>

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