CHALLENGES AND THEFUTURES                      // TITLE OF PRESENTATION GOES HEREOF ES G INVES TMENTIN EMERGING MARKETSBLO...
2TABLE OF CONTENTS                                   // TITLE OF PRESENTATION GOES investment in EM » MARKET OVERVIEW – KE...
MARKET                         OVERVIEW// TITLE OF PRESENTATION GOES HERE               >>>>>>>>>>>>>>
ES G MARKET TREND OVERVIEW                                                              4   Environmental, Social and Gove...
INVESTORAWARENESS>>>>>>>>>>>>>>
6UN P RI» 940 Signatories Globally                                                                                        ...
7CDPCDP signatories are increasing its numbers and assets over time.                                                      ...
8 S ELL-S IDE                                                                                 // TITLE OF PRESENTATION GOE...
9  BUY-S IDE                                                                                              // TITLE OF PRES...
10   ES G DATA AND RES EARCH P ROVIDERThe past two years has seen significant consolidation amongst Tier I ESG research sh...
11   ES G US ER & DATA ANALYS IS Consistent growth in unique users and ESG data in the last 3 quarters                    ...
12 ES G US ERS IN AS IAESG data users in Asian growing markets accounts for 15%                                           ...
13  US ERS BY P OS ITION AND INDUS TRY                                                                                    ...
14ES G DATA ANALYS IS                                                                         // TITLE OF PRESENTATION GOE...
15ES G INVES TMENT S TRATEGY                                                                                        // TIT...
MARKET>>>>>>>>>>>>>>
17GRI REP ORTING                                                                                 // TITLE OF PRESENTATION ...
REGIONAL DIS TRIBUTIONSource: GRI, Sustainability Reporting Statistics 2010                                               ...
19ES G GEOGRAP HIC COVERAGE Coverage increased 3,500 to 5,000 from 2009 to 2011                                           ...
DIS CLOS URE S CORE MAP                                                                          20Large amount of ESG dat...
21RELATION MAPAverage Disclosure Score and # of companies with ESG data                                                   ...
22 MOS T US ED ES G DATA                                                                                                  ...
ADVISERSANDINITIATIVES>>>>>>>>>>>>>>
24    AS S URANCE TO DATA/REP ORT                                                                                         ...
25UN GLOBAL COMPACTSignificant number of non-communicating companies in Asia                                              ...
SUMMARY>>>>>>>>>>>>>>
27S UMMARY - TRENDS IN THE MARKET                                                                                         ...
FURTHERSTEPS>>>>>>>>>>>>>>
29S UP P LY CHAIN RIS KInvestors have started looking into supply chain and relationships                                 ...
30ES G VALUATION MODELInvestors try to quantify ESG performance and apply it to P/L                                       ...
CONTACT:                 MIHO KUROS AKI// TITLE OF PRESENTATION GOES HERE
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Miho kurosaki

  1. 1. CHALLENGES AND THEFUTURES // TITLE OF PRESENTATION GOES HEREOF ES G INVES TMENTIN EMERGING MARKETSBLOOMBERG L.P.ESG DATA ANALYSTMIHO KUROSAKI9// 16 // 2010
  2. 2. 2TABLE OF CONTENTS // TITLE OF PRESENTATION GOES investment in EM » MARKET OVERVIEW – KEY PLAYERS » INVESTOR AWARENESS Challenges and Futures of ESG HERE » ESG DATA USERS » DISCLOSURE TREND » FURTHER STEPS
  3. 3. MARKET OVERVIEW// TITLE OF PRESENTATION GOES HERE >>>>>>>>>>>>>>
  4. 4. ES G MARKET TREND OVERVIEW 4 Environmental, Social and Governance data needs are being driven by multiple influencing factors across the globe // TITLE OF PRESENTATION GOES investment in EM Regulatory Exchange ESG guidelines Challenges and Futures of ESG HERE Government reporting guidelines Market Investor Awareness Carbon regulation Peer groups CSR UN PRI ($18+tr); CDP activities ($64 +tr) ESG data disclosure Emerging Market Sell-side ESG Research and SRI fundsCustomer awareness on sustainability Research, Ratings, Advisors and Initiatives Data Providers Sustainability assurance firms CSR Consultants UN Global Compact
  5. 5. INVESTORAWARENESS>>>>>>>>>>>>>>
  6. 6. 6UN P RI» 940 Signatories Globally // TITLE OF PRESENTATION GOES investment in EM» 46 Signatories in Asia Emerging Market» HK is Growing Challenges and Futures of ESG HERE Year on Year change in UNPRIGeographic map of UNPRI signatories in Asiasignatories Vietnam 2 3 Thailand 4 4 South Korea 17 15 Singapore 6 6 Pakistan 1 1 2010 Malaysia 2 2 Indonesia 1 2011 1 India 3 2 Hong Kong 5 10 China 0 2
  7. 7. 7CDPCDP signatories are increasing its numbers and assets over time. // TITLE OF PRESENTATION GOES investment in EM CDP INVESTOR SIGNATORIES 2011 SIGNATORY INVESTOR & ASSETS OVERTIME BREAKDOWN Challenges and Futures of ESG HERE Other; 1% Insurnace; 5% Number of Signatories Assets (US$ trillion) 600 80 70 Banks; 500 Asset 23% Managers; Number of Signatories 60 Assets (US$ trillions) 37% 400 50 300 40 30 200 20 100 Asset 10 Owners; 34% 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: CDP
  8. 8. 8 S ELL-S IDE // TITLE OF PRESENTATION GOES investment in EM SELL-SIDE RESEARCH REPORTS FOCUSED ON SUSTAINABILITY IN EMERGING MARKET Challenges and Futures of ESG HERE Embracing Sustainability Strongest SustainabilityAll rights reserved, Bloomberg Professional Service
  9. 9. 9 BUY-S IDE // TITLE OF PRESENTATION GOES investment in EM SRI funds and Environmentally Friendly funds 93 funds in Asia EM ex AU and JP on Bloomberg Challenges and Futures of ESG HERE Low carbon emissionsAs of 9/2 All rights reserved, Bloomberg Professional Service
  10. 10. 10 ES G DATA AND RES EARCH P ROVIDERThe past two years has seen significant consolidation amongst Tier I ESG research shops andmainstream data providers // TITLE OF PRESENTATION GOES investment in EM Challenges and Futures of ESG HERE North American TR recently ESG acquired Research Asset4 and ESG & Point European RMG Economics firm Carbon, Responsible acquired reflecting a Investment several continued strong ESG trend ofEnvironmental specialist mainstreaminvestment focus Carbon Data & providers Analysis ing New Entity before being acquired themselves by MSCIManages Domini GlobalSocial Index governance research Strong Governance Service
  11. 11. 11 ES G US ER & DATA ANALYS IS Consistent growth in unique users and ESG data in the last 3 quarters // TITLE OF PRESENTATION GOES investment in EMNO. OF UNIQUE USERS INCREASED NO. OF FIELDS USED INCREASED Challenges and Futures of ESG HEREBY 48% SINCE 09-2010 BY 150% SINCE 09-2010 No. of Unique Users No. of Fields Used 2,500 30,000,000 2,000 25,000,000 20,000,000 1,500 15,000,000 1,000 No. of Users 10,000,000 500 5,000,000 0 Sep-Oct Nov-Dec Jan-Feb Mar-Apr 0 2010 2010 2011 2011 Sep-Oct Nov-Dec Jan-Feb Mar-Apr 2010 2010 2011 2011 No. of Field UsedSource: Bloomberg Professional Service
  12. 12. 12 ES G US ERS IN AS IAESG data users in Asian growing markets accounts for 15% // TITLE OF PRESENTATION GOES investment in EM UNITED STATES 27% ENGLAND 10% Challenges and Futures of ESG HERE JAPAN 5% SWITZERLAND 4% FRANCE 4% CANADA 4% INDIA 4% HONG KONG 4% SINGAPORE 3% AUSTRALIA 3% GERMANY 3% CHINA 3% 15% in total NETHERLANDS 2% BRAZIL 2% SCOTLAND 2% SPAIN 1% ITALY 1% RUSSIA 1% TAIWAN 1% SOUTH KOREA 1% OTHER 15% Source: Bloomberg Professional Service
  13. 13. 13 US ERS BY P OS ITION AND INDUS TRY // TITLE OF PRESENTATION GOES investment in EM ESG Users by Position ESG Users by Industry Market Challenges and Futures of ESG HERE Executive Data/Techn Officer ology Governme Structurer 4% 2% nt 1% Other Investment Hedge Agencies Investment 6% Banking other Funds 2% Advisors/M Salesperso 2% 3% 5% Universities oney Mgrs n other 3% 25% Banks - 4% Business 4% Manager/S Global upport 6% 6% Banks - Analyst Regional 48% 6% Broker Dealers - PM Regional 10% 22% Trader 7% Risk 7% Corporatio Broker Dealers - ns Global 10% 8% Outsourcin g 9% Source: Bloomberg Professional Service*Market includes China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, Taiwan andThailand
  14. 14. 14ES G DATA ANALYS IS // TITLE OF PRESENTATION GOES investment in EMCorrelation analysis between ESG Disclosure Score and P/E Challenges and Futures of ESG HERE All rights reserved, Bloomberg Professional Service
  15. 15. 15ES G INVES TMENT S TRATEGY // TITLE OF PRESENTATION GOES investment in EM Challenges and Futures of ESG HERESCREENING SAMPLE BEST IN CLASS SAMPLE» Emerging Market » High disclosure score» ESG disclosure Score > 20 » Low employee turnover » Decreasing GHG over period » High independent director Carbon Analysis Tool All rights reserved, Bloomberg Professional Service
  16. 16. MARKET>>>>>>>>>>>>>>
  17. 17. 17GRI REP ORTING // TITLE OF PRESENTATION GOES investment in EM # of Sustainability report is growing Challenges and Futures of ESG HERE Source: GRI, Sustainability Reporting Statistics 2010
  18. 18. REGIONAL DIS TRIBUTIONSource: GRI, Sustainability Reporting Statistics 2010 Challenges and Futures of ESG HERE 18 // TITLE OF PRESENTATION GOES investment in EM
  19. 19. 19ES G GEOGRAP HIC COVERAGE Coverage increased 3,500 to 5,000 from 2009 to 2011 // TITLE OF PRESENTATION GOES investment in EM Challenges and Futures of ESG HERE All rights reserved, Bloomberg Professional Service
  20. 20. DIS CLOS URE S CORE MAP 20Large amount of ESG data is disclosed mostly in EuropeEmerging markets, such as India and China still have room to grow // TITLE OF PRESENTATION GOES investment in EM Challenges and Futures of ESG HERE All rights reserved, Bloomberg Professional Service
  21. 21. 21RELATION MAPAverage Disclosure Score and # of companies with ESG data // TITLE OF PRESENTATION GOES investment in EM 50 45 Challenges and Futures of ESG HERE Philippine 40 South 35 Korea Average Disclosure Score Taiwan Japan 30 25 HK 20 Singapore India 15 China 10 5 0 1 10 100 1000 Number of companies (Logarithmatic)Sphere size: Disclosure Score Source: Bloomberg Professional Service
  22. 22. 22 MOS T US ED ES G DATA // TITLE OF PRESENTATION GOES investment in EMTop Data Field Name Most widely used fields are 1 % Independent Directors Governance Fields 2 Size of the Board Challenges and Futures of ESG HERE 3 Board Meeting Attendance % 4 Board Average Age 5 Board Duration Total HITS in Asia 6 ESG Disclosure Score 7 Number of Independent Directors 8 CO2 Intensity DCDP 9 Number of Board Meetings for the Year 4%2% R 10 Verification Type 9% E 11 Environmental Awards Received 32% 12 Number of Employees - CSR 13 Total Energy Consumption 14 % Women in Management 15 CEO Duality 16 Environmental Fines G 17 Number of Environmental Fines 40% S 18 CO2 Intensity per Sales 13% 19 Total CO2 Emissions 20 Community Spending *As of 09/05/2011 Source: Bloomberg Professional Service
  23. 23. ADVISERSANDINITIATIVES>>>>>>>>>>>>>>
  24. 24. 24 AS S URANCE TO DATA/REP ORT // TITLE OF PRESENTATION GOES investment in EM CSR reports with external assurance Externally Assured GRI Reports have higher disclosure score Challenges and Futures of ESG HERE Sector N Y Total Basic Materials 21.68 46.12 24.68 Communications 19.79 44.76 22.86 Consumer, Cyclical 24.94 43.91 26.68 Consumer, Non- 23.20 43.85 25.45 cyclical Diversified 17.78 48.18 21.49 Energy 19.71 48.46 23.84 Financial 20.50 42.35 23.34 Industrial 24.49 44.10 26.29 Technology 23.08 44.56 25.11 Utilities 24.21 45.54 29.86 Grand Total 22.67 44.70 25.27Source: GRI, Sustainability Reporting Statistics 2010 Source: Bloomberg Professional Service
  25. 25. 25UN GLOBAL COMPACTSignificant number of non-communicating companies in Asia // TITLE OF PRESENTATION GOES investment in EM100%90% Challenges and Futures of ESG HERE80%70%60%50%40%30%20%10% 0% China Hong India Indonesia Malaysia Pakistan Philippines Singapore South Thailand Vietnam Kong Korea non-communicating Communicating Source: UN Global Compact , Participants and Stake holders
  26. 26. SUMMARY>>>>>>>>>>>>>>
  27. 27. 27S UMMARY - TRENDS IN THE MARKET // TITLE OF PRESENTATION GOES investment in EMTRENDS IN THE MARKET IMPLICATIONS Challenges and Futures of ESG HERE » Guidelines on ESG reporting in » Number of sustainability reports will be Singapore, India and Hong Kong from growing in emerging markets exchange. » Investment managers as well as asset » Numbers of Investment managers in owners will be seeking best way to Asia became signatories of UNPRI. comply UN PRI assessment. » ESG data users are increasing in Asia. » More demand in ESG data and analytical tools. » Number of sustainability reports are growing. » Leaders in Asia will start looking at the content of the report. Followers will focus » Report content is less in Asia than the on publishing rest of the developed nations. » Having external assurance may improve » Less than 50% of sustainability report the quality of the report have External assurance ///////////////////////////////// /////////////////////////////////
  28. 28. FURTHERSTEPS>>>>>>>>>>>>>>
  29. 29. 29S UP P LY CHAIN RIS KInvestors have started looking into supply chain and relationships // TITLE OF PRESENTATION GOES investment in EMESG performance in Suppliers directly affect company’s reputation as well as financialperformance Challenges and Futures of ESG HERE
  30. 30. 30ES G VALUATION MODELInvestors try to quantify ESG performance and apply it to P/L // TITLE OF PRESENTATION GOES investment in EMvaluation model.We will relate ESG financial profit and loss to the company’s EBIT  How material will the ESG factors be on profitability Challenges and Futures of ESG HERE Source: valuation model (beta), Bloomberg Professional Service
  31. 31. CONTACT: MIHO KUROS AKI// TITLE OF PRESENTATION GOES HERE

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