Date post: | 12-Jan-2016 |
Category: |
Documents |
Upload: | berenice-ford |
View: | 213 times |
Download: | 1 times |
1
20, January 2009, Bangkok
James Gifford, PRI Executive DirectorNarina Mnatsakanian, Project Manager, PRI/UNEP FI
Agenda
1. Initiatives mapping
2. Emergence of responsible investment
3. Why is responsible investment relevant for companies?
4. Principles for Responsible Investment
5. Collaborative engagement
6. Global Reporting Initiative
7. Responding to the Crisis
Complimentary initiatives
PRIGlobal
Compact
Investors Companies
Reporting Framework
ESG Disclosure
(GRI, Sustainability Reports)
Emergence of Responsible Investment
First there was:
Traditional negative/positive screened funds
The PRI is a culmination of:
Shareholder engagement
Corporate governance movement
Clean tech and sustainable venture capital
Materiality of ESG issues / enhanced analysis, e.g. Climate change
Systemic issues (response to the crisis)
Access to capital - appropriate ESG disclosure can help companies to get access to funds
Equity pricing– investors integrate material ESG issues it their stock selection
Shareholder engagement – long term investors engage with investee companies on ESG issues
Access to markets, license of operate
Increasing demands for disclosure
Reputation
Why is RI relevant for companies?
ESG issues can impact investor returns especially in the long-term and, therefore, deeper analysis should result in better investment decisions
Companies that manage complex ESG issues well tend to be well managed overall
Strong ESG performance by companies can result in new opportunities and reduced risks
Investors can play an important role in promoting good corporate practice within their portfolio companies
Investor perspective
Major global brokerage firms assessing impact of ESG issues
Investors integrate these findings into their mainstream investment decisions
Brokers with ESG assessment capabilities include – Merrill Lynch, Morgan Stanley, Nomura, RBC Capital
Markets, Société Générale, Standard Chartered, UBS, Vigeo, Wachovia Securities, WestLB, Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs HSBC, ING, Innovest, JPMorgan, ABN AMRO, Citigroup
Factoring of ESG issues into investment decisions
Investors are increasingly considering ESG issues for a larger number of emerging markets companies, including Thailand
Emerging market companies need to become world leaders in CSR reporting and performance
Rising investor expectations
9
PRI is a tool kit for integrating ESG issues into mainstream investment practices and across asset classes
PRI is a forum for discussion and concrete action on long-term risk issues and value drivers
Signatories sign up to six aspirational best practice principles which
reflect a broad and long term understanding of materiality
are grounded within the bounds of fiduciary duty
can be applied across mainstream portfolios
About the PRI
10
“I applaud the leadership of the institutions that have committed themselves to this undertaking, and urge other investors around the world to join this historic effort.” Ban Ki-moonUN Secretary-General
Supported by the Secretary-General
Growth in PRI signatories and AUM
0
50
100
150
200
250
300
350
400
450
500
Apr-0
6
May
-06
Jun-
06
Jul-0
6
Aug-0
6
Sep-0
6
Oct-06
Nov-0
6
Dec-0
6
Jan-
07
Feb-0
7
Mar
-07
Apr-0
7
May
-07
Jun-
07
Jul-0
7
Aug-0
7
Sep-0
7
Oct-07
Nov-0
7
Dec-0
7
Jan-
08
Feb-0
8
Mar
-08
Apr-0
8
May
-08
Jun-
08
Jul-0
8
Aug-0
8
Sep-0
8
Oct-08
Month
Nu
mb
er o
f S
ign
ato
ries
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
AU
M (
$BN
)
Number of signatories by latest sf data AUM
Over 470 signatories, US$18 trillion AUM
12
Signatories include
CalPERS, USA
APG and PGGM, Netherlands
Norwegian Government Pension Fund
British Telecom and USS, UK
Government Employees Pension Fund of South Africa
PREVI, Brazil
Mitsubishi UFJ and Sumitomo Trust, Japan
Government Pension Fund of Thailand
Colonial First State, Fortis Investments, Schroders and HSBC
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 …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.
We aspire to
The Principles
14
PRI Clearinghouse
Standardized reporting on ESG issues
– Signatories are promoting Global Reporting Initiative (GRI)
Enhancing investee company ESG disclosure
– Singatories ask investee companies to disclose performance around social, ethical and environmental issues. Where reporting is inadequate, they actively engage with companies to seek improvement
Principle 3: Corporate disclosure
16
Collaborative engagement
Corporate Governance remains the most common topic for collaboration
Biodiversity Toolkit– a collaboration to assess risks and opportunities relating to biodiversity and ecosystem services in the food, beverage and tobacco sectors in Brazil (e.g. clean water, deforestation, regulated climates)
Singapore and Hong Kong Engagement Initiative – encourages listed companies to enhance their corporate responsibility. Opportunity to be included in the FTSE4Good Index
17
Emerging Markets Disclosure
Project encourages companies in emerging markets to provide better information on their management of ESG issues
Initial countries covered: Brazil, China, India, Russia, South Africa, South Korea
Lead Investors: HSBC; Boston Common Asset Management, Calvert, PREVI, Government Pension Fund of South Africa
Current status: active engagement with companies
18
Seoul Initiative
Seoul Initiative 52 signatories with USD 4.4 trillion AUM launched an initiative to call on 9,000 listed companies to participate in the United Nations Global Compact
Government Pension Fund of Thailand was one of the signatories to this initiative
Investors wrote to over 80 Thai listed companies encouraging them sign to up to the Global Compact. These letters will be followed up by investors
19
Global Reporting Initiative (GRI)
“Transparency, accountability, reporting and sustainability. The GRI network is a meeting place to converge and accelerate these issues”
GRI has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide
This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance
Investors are increasingly asking their investee companies to use GRI as a reporting framework
20
A focus on governance and good corporate practices will help build trust and confidence in markets and ultimately generate better returns for companies and investors
Enhance transparency, accountability and disclosure
Deeper analysis and better risk management by companies and investors
Investors will monitor companies more actively
Investor will engage in public policy dialogue
Collaborative investor action
Responding to the crisis