Presentation by Mizue Tsukushi


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Mizue Tsukushi, President & CEO - The Good Bankers - Japan

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Presentation by Mizue Tsukushi

  1. 1. SRI in Japan Current Status and Future Prospects Mizue Tsukushi Founder & CEO The Good Bankers Co.,Ltd. 25 May 2006
  2. 2. <ul><li>Founded in July 1998 </li></ul><ul><li>President and CEO: Mizue Tsukushi </li></ul><ul><li>Independent investment-advisory company devoted to social investment research </li></ul><ul><li>Company history: </li></ul><ul><ul><li>Aug. 1999: Developed Japan’s first SRI product, the Nikko Eco Fund </li></ul></ul><ul><ul><ul><li>A winner of the 2001 Good Design Award </li></ul></ul></ul><ul><ul><ul><li>Other companies followed in the wake of this success, giving birth to an SRI market in Japan </li></ul></ul></ul><ul><ul><li>Oct. 1999: Began research on an eco fund for Kogin-Daiichi Life Asset Management Co. </li></ul></ul><ul><ul><li>Mar.2000:Became one of the first signatories of UNEP FI in Japan. </li></ul></ul><ul><ul><li>Dec. 2000: Began research on an SRI fund for the Mutual Aid Association for Tokyo Metropolitan Teachers and Officials </li></ul></ul><ul><ul><ul><li>The first tailor-made SRI fund catering to institutional investors in Japan </li></ul></ul></ul><ul><ul><ul><li>In addition to environmental performance, also evaluates social performance (employee treatment, in-house and out-of-house training, social action programs, etc.) </li></ul></ul></ul><ul><ul><li>Jan. 2001: In partnership with the environmental and social issues research team of Zuercher Kantonalbank, the third largest Swiss universal bank, began research on Japanese companies and an analyst training exchange program </li></ul></ul><ul><ul><li>Jan. 2003: Commissioned by the Ethical Investment Research Service, a major British SRI research organization, to conduct research on Japanese companies ( ~ Jan.2005) </li></ul></ul><ul><ul><ul><li>A broad-based SRI study encompassing such items as environmental performance, social performance, corporate governance, and human rights issues </li></ul></ul></ul><ul><ul><li>Feb. 2003: Commissioned by the Mutual Aid Association for Tokyo Metropolitan Teachers and Officials to implement its SRI pension fund </li></ul></ul><ul><ul><li>Jan. 2004: Commissioned by SNS Asset Management of the Netherlands to conduct research on Japanese companies for its global SRI fund </li></ul></ul><ul><ul><ul><li>An asset management company of the SNS Reaal Group, the sixth largest Dutch financial group, and a pioneer in SRI management in the Netherlands </li></ul></ul></ul><ul><ul><ul><li>Clients include numerous institutional investors, such as ASN Bank, the largest Dutch bank specializing in SRI, and public pension funds </li></ul></ul></ul><ul><ul><li>Jun.2004 : Gained the Research mandate from Mitsubishi Tokyo Financial Group for its first SRI Fund </li></ul></ul><ul><ul><li>Dec.2004: Mitsubishi SRI fund ( Family Friendly Fund )starts </li></ul></ul><ul><ul><li>Oct.2005: Mitsubishi SRI fund ( Family Friendly Fund ) became a winner of the 2005 Good Design Award </li></ul></ul><ul><ul><li>Apr.2006:Gained the research mandate from the Tokyo Stock Exchange Co,,LTD. For its custom made SRI Index. </li></ul></ul>Profile of the Good Bankers Co., Ltd.
  3. 3. <ul><ul><ul><li>Biography </li></ul></ul></ul><ul><ul><ul><li>Mizue Tsukushi, President and CEO of The Good Bankers Co.,Ltd., is Pioneer in implementing SRI product onto the Japanese market. Former Deputy General Manager of Institution Marketing Dept. of UBS Trust and Banking Co., Ltd. in Tokyo. </li></ul></ul></ul><ul><ul><ul><li>After received the language certificate of the French Civilization Course at the University of Paris in 1979, Ms Tsukushi started her career at Technip, French engineering company and then went on to join TOTAL CFP, French oil major. In 1988, she moved to the financial industry, starting as the Deputy Representative at KREDIET Bank, Belgian bank’s Tokyo office and moving on in 1990 to UBS Trust and Banking as the Marketing Officer in charge of institutional clients, and left in 1998 to set up her own company, The Good bankers Co., Ltd, which was Japan’s first and sole independent SRI advisory company. </li></ul></ul></ul><ul><ul><ul><li>Besides carrying out her challenging job as a CEO, she also enjoys writing for Japanese leading newspapers and magazines in the field of energy, pension industry and country reports, as well as SRI trend domestic and overseas. </li></ul></ul></ul><ul><ul><ul><li>  </li></ul></ul></ul><ul><ul><ul><li>Awards : </li></ul></ul></ul><ul><ul><ul><li>l     Awarded 1 st prize of “Women of the year 2000: Women Entrepreneur Section” for her successful launch of  “ Eco-Fund”, the first environmentally friendly mutual fund in Japan. </li></ul></ul></ul><ul><ul><ul><li>Gained ”Good Design Award 2001” for Nikko Eco Fund </li></ul></ul></ul><ul><ul><ul><li>Commended as a person of merit for Gender Equality of the Cabinet Office by the Prime Minister (2005) </li></ul></ul></ul><ul><ul><ul><li>Gained “Good Design Award 2005” for Mitsubishi UFJ SRI Fund (“Family Friendly”) </li></ul></ul></ul><ul><ul><ul><li>Public Assignments: </li></ul></ul></ul><ul><ul><ul><li>Member of the special advisory committees of Government of Japan for </li></ul></ul></ul><ul><ul><ul><li>- Ministry of the Environment, </li></ul></ul></ul><ul><ul><ul><li>Ministry of Education, Culture, Sports, Science and Technology, </li></ul></ul></ul><ul><ul><ul><li>Ministry of Economy, Trade, and Industry, (~ June 2004 ) </li></ul></ul></ul><ul><ul><ul><li>Member of Japanese National Commission of UNESCO </li></ul></ul></ul><ul><ul><ul><li>The Good Bankers Co., Ltd. is among the first signatories of UNEP financial institution initiative in Japan, along with other two financial institutions in 2000. </li></ul></ul></ul>Mizue Tsukushi
  4. 4. From the dawn to the rise of sun on SRI in Japan <ul><li>Nikko Eco fund </li></ul><ul><ul><li>First SRI product, Launched in August 1999 </li></ul></ul><ul><ul><li>Collaboration: </li></ul></ul><ul><ul><ul><li>Nikko, 3 rd largest brokerage firm group in Japan, and the Good Bankers </li></ul></ul></ul><ul><ul><li>Focuses more on positive than negative screening </li></ul></ul><ul><ul><li>Attracted more then 1 Bio USD in sales in four months </li></ul></ul><ul><ul><li>Women, young and rich new Investors in the first stage of public offering (10 days) </li></ul></ul><ul><ul><ul><li>99%, Individual Investors </li></ul></ul></ul><ul><ul><ul><li>30,000 USD, average purchase amount </li></ul></ul></ul>
  5. 5. Development of SRI Funds in Japan <ul><li>Four Eco Funds followed Nikko Eco Fund in Mar. 2000. </li></ul><ul><li>Stock Market down, </li></ul><ul><li>No other SRI Fund until 2003. </li></ul><ul><li>In Apr. 2006, 23 SRI Mutual Funds provided by Mainstream Finance. </li></ul><ul><li>2.5 Bio. USD of Estimated asset size including commingled Pension account. </li></ul>
  6. 6. Eco Fund Effects to the Corporate Japan <ul><li>ISO14001 </li></ul><ul><ul><li>1999 (Eco Fund was launched) :1,552 </li></ul></ul><ul><ul><li>Mar. 2005 :18,869 </li></ul></ul><ul><ul><ul><li>No.1 in the world </li></ul></ul></ul><ul><li>Sustainable reports </li></ul><ul><ul><li>1999 (Eco Fund was launched) :270 </li></ul></ul><ul><ul><li>Aug. 2005 :780 </li></ul></ul><ul><li>Increase of Environmental Efficiency of the Management </li></ul><ul><li>Advanced position toward global competition </li></ul>
  7. 7. SRI Effects to the Japanese Financial Market <ul><li>Money Flow from Individual Investor </li></ul><ul><ul><li>Only 11.4% of Financial Assets of households ( 13.72 Tri.USD), Equity Investment </li></ul></ul><ul><ul><li>* Mar.2006 Bank of Japan Statistic </li></ul></ul><ul><li>Long term Investment </li></ul><ul><li>Shock Absorber of Stock market Fluctuation </li></ul>
  8. 8. SRI Potential in Japan <ul><li>Key Drivers of SRI growth </li></ul><ul><ul><li>Aging Society, </li></ul></ul><ul><ul><ul><li>Female economic power </li></ul></ul></ul><ul><ul><li>Pension system reform </li></ul></ul><ul><ul><ul><li>to DC plan (401K) </li></ul></ul></ul><ul><ul><li>Institutionalization of SRI </li></ul></ul><ul><ul><ul><li>Religious people, Labor Union, Charity, </li></ul></ul></ul><ul><ul><ul><li>Pension Fund,etc </li></ul></ul></ul><ul><ul><ul><li>Post Bank/Insurance (3.3 Tri.USD of asset size) </li></ul></ul></ul><ul><ul><li>2007 Issue </li></ul></ul><ul><ul><ul><li>Retirement allowance of baby boomers is expected to 455 Bio.USD  ->  SRI ( ? ) </li></ul></ul></ul>
  9. 9. Characteristics and Goals of SRI in Japan <ul><ul><li>Slow Starter </li></ul></ul><ul><ul><li>Quick Learner </li></ul></ul><ul><ul><li>Beneficiary of Late-comers’ Advantage </li></ul></ul><ul><ul><li>World SRI Leader </li></ul></ul>
  10. 10. Growth of Japanese Pension Market
  11. 11. Management of the Good Bankers Co., LTD. TSUKUSHI, Mizue President & CEO Pioneer in implementing SRI products into the Japanese market. Former Deputy General Manager of Institutional Marketing Department, UBS Trust & Banking Co., Ltd. in Tokyo. ASAKURA, Makiko Director Responsible for product development, marketing and research. Formerly account manager at UBS Trust & Banking in charge of relationship management and also head of discretionary fund team at Chase Trust & Banking. ODDOUX, Jacques, Ph.D Director Chemical consultant. Expertise in R&D management, industrial production, sales and licensing. Former Director Advisor in Côte d’Ivoire, R&D Senior Vice President with an international engineering company. KAWAKITA, Hidetaka Advisor, Head of Evaluation Committee Former Director, Managing Finance & Investment Planning Department of Nippon Life Insurance, Tokyo. Director, Nippon Finance Association. Director, The Security Analysts Association of Japan. Director, Japanese Association for Research in Disclosure. Member of The Japanese Society of Insurance Science.
  12. 12. Network <ul><li>Japan Network: we work closely with technical experts, environmental researchers, journalists and NPO in Japan. </li></ul><ul><li>Global Network: we have overseas contacts in Australia, Austria, Belgium, Canada, Chile, Croatia, France, Germany, Holland, Hungary, India, Italy, Luxemburg, the People’s Republic of China, Singapore, South Africa, Switzerland, Turkey, the UK, and the USA. </li></ul><ul><li>Strategic Alliance Partners: for co-research and co-marketing projects </li></ul><ul><ul><li>University of Tokyo, Institute of Industrial Science (Japan) </li></ul></ul><ul><ul><li>Ochanomizu women’s University, Life-World watch Center (Japan) </li></ul></ul><ul><ul><li>Wüppertal Institute for Climate,Environment and Energy (Germany) </li></ul></ul><ul><ul><li>Ethifinance (France) </li></ul></ul><ul><li>Network with International organizations: </li></ul><ul><ul><li>UNEP FI </li></ul></ul><ul><ul><li>Ammnesty International (Corporate Member) </li></ul></ul><ul><ul><li>ASrIA </li></ul></ul>
  13. 13. Research of The Good Bankers <ul><li>Research Subjects: </li></ul><ul><li>- Coverage: 1,000 Japanese companies </li></ul><ul><li>- Scope of research: Full coverage of SRI field, including environmental performance, social performance, and corporate governance </li></ul><ul><li>Research Analysts: </li></ul><ul><li>- Full time: five analysts (two CFA status-Certified Financial Analyst) </li></ul><ul><li>- Part time: three analysts (one CFA status) </li></ul><ul><li>CEO and Evaluation committee supervise the research department. Five full-time research analysts cover both environmental and social research. </li></ul><ul><li>Methodology: </li></ul><ul><li>The Good Bankers conducts the research according to each client’s specific needs and criteria. Typically it analyses the companies using its research process developed by itself, but the criteria differ from a client to another. </li></ul>
  14. 14. Research Process (e.g. Environment) From external experts External advisors Academics SRI community, etc. Additional information from companies Questionnaires Company visits Telephone interviews From disclosed information Environmental reports Sustainability reports Website Annual reports Financial reports, etc. Information acquisition Interviews of external experts Response to incidents and Accidents Collection of new information and trends Media review (daily) Company monitoring Submission of report to client (score card included) Assessment and rating In-house eco database ・ Input of collected information ・ Automatic score calculation by industry Provisional rating by analysts ・ Environmental management system ・ Environmental impact of manufacturing processes ・ Environment-friendliness of products Compilation of environmental report Final rating by assessment committee ・ Quality control of analysis methods and assessment content ・ Relative comparison with competitors ・ Consideration of special factors
  15. 15. The List of Research Items - Environmental Performance - <ul><li>Strategy: Policy and EMS </li></ul><ul><li>Environmental Performance during the Production Process </li></ul><ul><li>Product Design </li></ul><ul><li>Eco-Innovative Edge </li></ul><ul><li>Reporting </li></ul><ul><li>Special Notes and Key Figures </li></ul>
  16. 16. The List of Research Items - Social Performance - <ul><li>Human Rights within the Company </li></ul><ul><li>Human Capital </li></ul><ul><li>Special Notes and Key Figures </li></ul>
  17. 17. The List of Research Items - Corporate governance - <ul><li>Corporate governance Policy </li></ul><ul><ul><li>(The Code of Conduct, Business Ethics) </li></ul></ul><ul><li>Corporate governance System </li></ul>
  18. 18. The List of Research Items <ul><li>Corporate Scandals are monitored daily through checks on media </li></ul>Other Specific Issues <ul><li>Exclusion Criteria (Available on request): Business Activities in Countries of Concern </li></ul>Environmental and Social Corporate Scandals