419-420 Freiburg, SAM, Responsible Investment (1)

8/2/2019 419-420 Freiburg, SAM, Responsible Investment (1)

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Sustainable

Responsible Investment


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What is RI? How to Operate it?

The development of RI

UN-Principle for Responsible Investment Equator Principles

Sustainability Reporting for corporations

Outline


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An investment approach for investors to recognize social and

sustainable value as crucial parts in investing decisions.

Choose a corporation with potential to achieve sustainabledevelopment and benefit ALL STAKEHOLDERS

Institutional investors mainly

Mission investing, bottom line investing, ethical investing,

green investing

What is Sustainable responsible

investment? (RI/SRI) ?


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What is Sustainable responsible

investment? (RI/SRI) ?

Investor

Corporation

Financial

Profit

Social

Benefit


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Long-term wealth and value

Encourage corporations to improve their ESG

performance to get funds

Facilitate sustainability management tools

Why Responsible investment?

Financial IndustryHelping Sustainability


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1920s UK retire fundNo investing in tobacco, wine,weapons

1999 Dow Jones Sustainability Index Family

2001 London FTSE4GOOD, focus on human right 2006 UN PRI

2010 AfricaSIT

Today in US fund market 12.2 % , over 260 RI funds

Asia- Over $ 2.5 billion Outperforming non-RI funds

THE DEVELOPMENT OF RI


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HOW DOES RI RUN?

Integrate ESG factors into

quantifiable valuation Long-term social invest premium

Externality

Non-financial/non-material issue

Facilitating

OrganizationUNEP EP WBSCD

Construct ESG rating

principles and Guidelines The UN PRI

EP

Financial Institution ESG into financial analysis ,

company valuation, decision

making

EnterpriseSustainability IndexRI investing product

Platform for

cooperation &

consulting


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HOW DOES RI RUN?

Community InvestingProvides capital for communities that are

underserved by traditional FIs Local service Ex: affordable housing , child care

Micro business

Charity

Low-income individual


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DIRECTING PRINCIPLES

United Nation Principles for Responsible

Investment (PRI)

- Established by Government

Equator Principles (EP)

- Established by Private enterprises


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A voluntary framework for investors to assess portfolios

with ESG consideration

2005, UNEP invited 20 FIs from 12 countries to

participate designing the principles

1010 investment institutions have signed

PRI Initiative

Funds come from subscription fee, government,international organizations and contributors


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Incorporate ESG issues into investment analysis and decision-making processes

Active owners and shareholder engagement

Promote implementation within investment industry

seek appropriate disclosure on ESG issues

Work together to enhance effectiveness

Report the implementation

Benefit Knowledge Reputation Access


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SAMPLE

GUIDELINE


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SAMPLE

GUIDELINE


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A benchmark for determining,assessing and

managing social & environmentalriskinproject

financing

Apply to projects with over $10 million in fund

2003 announced by 9 leading banks

Today 73 EPFIs in 27 countries, accounting for 70%transnational loans in emerging markets

EP steering committee


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protection of human rights and security (use of security

personnel)

cultural property and heritage

Biodiversity use of dangerous substances

labor living standards, health and safety

fire prevention

land acquisition and involuntary resettlement impacts on vulnerable groups

impacts on indigenous

participation of affected parties

pollution prevention

ASSESSMENT

SAMPLE


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IMPLEMENTATION

Categorizing

Apply to suitable benchmarkRisk assessment

To reduce negative impact

Negotiate with affected communitiesAction Plan

Governance

Priority consulting for high-risk projectsCommitment

Committee monitoring independentlyReporting


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SUSTAINABILITY

REPORTING

GRI(Global

Reporting Initiative)

provides all organizations with a

comprehensive sustainability

reporting framework


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WHAT ABOUT TAIWAN?

2009 Fubon Taiwan CSR Mutual Fund

2008 CDP (Carbon Disclosure Project) Taiwan 153

enterprises

Acer sponsoring CDP and promoting RI in Taiwan

2009 Bureau of Labor Insurance

Incorporating RI into investing policy statement


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OTHER TYPES OF RI?

Venture Philanthropy

B Lab

A community and brand for social or eco benefiting

corporations to cooperate and enjoy tax break


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REFLECTION

Industries with HIGH POLLUTION will never try

to adopt?

When maximizing shareholders profitcontradicts public benefits?

How to govern the TRUTH of implementation

as members increase?

What can Taiwan do ?


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Sustainability Investing


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Introduction

Rethinking about Taiwan

Sustainable analysis

Knowledge from practice

Outline


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IntroductionMission and Vision

Sustainable investment

Sustainable network

Walk the talk


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MissionOur mission is to drive sustainability thinking.

to be a leader in translating sustainability foresightinto outstanding investment results.

Vision

Our vision is to set the standard in Sustainability Investing.

SAMs mission and vision


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Along the way to sustainable investment

1995 world's first asset

management company

focusing exclusively

on sustainability investment

2001 SAM

Sustainable Water Strategy

2003 SAM Smart

Energy Strategy

2006

SAM Smart Materials Strategy

Sustainability Services

member of Robeco

2007

SAM Sustainable Healthy Living

Strategy

SAM Sustainable Climate Strategy

2009 ROBECO

Clean Tech Private Equity

2011 SAM SustainableAgribusiness Equities

The Dow Jones Sustainability

Indexes (DJSI)


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Sustainability Investing is

What is Sustainability Investment?

increasingly establishing itself as an effective approach to

generating long- term returns.

Integration sustainability factors into

asset management decisions

Sustainability Themes

Sustainability Core

Sustainability Indexes

Product offers:


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Walk the talk

.

10 Years CO2 neutral

The lighting concept of our new building is designed to save electricity

We reduce the environmental impact to reduce paper usage

We make a best effort to ensure that our suppliers comply

with eco-efficiency standards.

We make an effort to reduce its waste

We encourage use of public transport

Support of sustainable projects


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SAMs competitive advantage

Sustainable analysis

Sustainable criteria

Sustainable scoreSustainability to financial performance

Dow Jones Sustainability Index


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SAMs competitive advantage

value after integrating alphaSAMs competitive advantage

Value created bysustainability

value of traditionalfinancial analysis

company valuew/o sustainability

Alpha

General asset manager

company valuew/o sustainability

SAM


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Companiesthatcaneffectivelymanagerisksandseizeopportunitiesrelatedtosustainabilitytrendsexhibitasuperiorcapacitytoprosperoverthelongrun

Investment philosophy

SAM seeks to identify

companies that both:

1. demonstrate a core ability tomanage sustainability issues2. represent an attractiveinvestment opportunity

SustainabilitycriteriaAnalysis method:

Sustainabilityscore

evaluated in relation to

their industry peers


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Sustainable criteria

identify the sustainability trends that are likely to

have an impact on a companys ability to createshareholder value in the future

In conjunction with its professional network

of industry experts and NGOs, SAM then develops a

number of criteria designed to assess a company's

ability to manage challenges associated with these

trends.

industry-specific assessment

questionnaire, with information submitted directly by

the companies, allowing SAM to identify the leading

and lagging companies within each sector

The assessment is complemented by a media and

stakeholder analysis, which enables analysts to

consider additional information from NGOs and the

media

The CSA is reviewed on an annual basis by an

independent third-party auditing firm.

1

2

3

4

5


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SMssustainabilityscoreslaythefoundationforidentifyingcompanieswithsuperioralphapotential

Alpha from Sustainability


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Results reveal a positive relationship between

sustainability and financial performance

Sustainability to financial performance


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.


First global sustainability benchmarks

tracks the stock performance of the world's leading companies in terms of

economic, environmental and social criteria

provide an effective engagement platform for companies who want to

adopt sustainable best practices

Index Type Index (examples)

Composite Index Dow Jones Sustainability World Index (DJSI World)

Subset Indexes Dow Jones Sustainability World Developed Index (DJSI World Developed)

Dow Jones Sustainability World 80 Index

Dow Jones Sustainability World ex US Index

Dow Jones Sustainability World Index excluding Alcohol (DJSI World ex. Alcohol)

Customized Indexes Dow Jones Sustainability World Index excluding Australia (DJSI World ex Australia)

Dow Jones Sustainability World Index ex Australia and Tobacco (DJSI World ex

Australia ex Tobacco)


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The objectives of the DJSI World are:

Measure the global stock market performance of the top 10% of the leading

sustainability companies in all sectors

Provide a liquid base for a variety of financial products



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Source Weight(w/ signature from higherauthority )Weight(w/ o signature from higherauthority )

Questionnaire 70 % 50 %

Company documents 20 % 33.3 %

Verification-

-media and stakeholder-contact with company

10 % 16.6 %

Total 100 % 100 %

Questionnaire ResultSustainability scoreweighted sum according to different questions

Scope Score Criterialow 0 No evidence of operational study, no

background info; only case study available

medium 1

Acceptable quality document, including

general strategic statement, management

system , activities related data.

high 2

Good quality document, detailed objective of

strategic and implementation of performance

indicators

Score differentiated by scope of company document

Source of info

Analysis method of DJSI


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Dimension Criteria Weight

Economic Codes of

Conduct/Compliance/

Corruption & Bribery

5.4

Corporate Governance 3

Risk & Crisis

Management

3.6

Industry Specific

Criteria

Industry Specific

Environmen

t

Environmental

Reporting

1.8

Industry Specific

Criteria

Industry Specific

Social Corporate

Citizenship and

Philanthropy

2.4

Labor Practice

Indicators

3

Social Reporting 1.8

Talent Attraction &

Retention

2.4

Industry Specific

Criteria

Industry Specific

Total score is calculated by SAM Information

Management System.Formula:TS=[CLWCRWQUWASQAW+DAWDAS]QVS

TS= Total score

CLW= Weight of source

CRW=Weight of criteria

QUW=Weight of question

QAW=Weight of questionnaire assessment

DAW=Weight of quality document available

DAS=Score of quality document available

AS=Score of answer

QVS=Score of verified questionnaire

DJSI criteria and weight

DJSI---Sustainability score


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DJSI World---annual review

DJSI Sector

Classification

Corporate

Sustainability

Assessment

Sector Ranking

Eligible

CompaniesComponent

Selection

Eligible Sectors

1 2 3 4

5 6


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DJSI World---Ongoing maintenance

mergers

takeovers spin-offs

initial public offerings (IPOs)

Delisting and bankruptcy

continually reviewed for changes to the index composition necessitated by

extraordinary corporate actions


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Reference

Dow Jones Sustainability World Indexes Guide Book. 2011

SAM white paper: Alpha from Sustainability. 2011

--- SAM. 2011

. . 2010

. www.sustainability-index.com
http://www.sustainability-index.com/http://www.sustainability-index.com/http://www.sustainability-index.com/http://www.sustainability-index.com/


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Green city -

Freiburg

Future Leader Teamfor Sustainable Entrepreneurship


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agenda

City Background

Actions

Green Communities

Price and Awards

Rethinking about Taiwan


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City background


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location

History: established in 1091

Population200 thousand Geological Condition

West of Schwarzwald

Plenty of natural resources

Eco-Businessover 2000 firms Value of output

over 650 million

Geological information


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Solar Industry & Research Network

square measure of solar panel over 11000 square meter

7300kWp

Capacity of Solar energy: 36.7kWp/person

Green City construction

kWp 1


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Why green city?

1970 Oil Crisis

Awareness on limitation of oil supply

1975 Plan of building a Nuclear power

plant in Wyhl

Anti-Nuclear Activity

1985- Conscious on

green city


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actions


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toward Sustainable economy

Development on Solar Industry

Awaken of peoples conscious throught Campaigns and events

Waste Management

Transportation

Eco-Tourism

Plan of Sustainable City

Commitments of Citizens


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actions

Policy

buildingsCitizens


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Chemobyl Nuclear Disaster in the Soviet Union (1986) Policy of New Energy

Petrochemical/Nuclear Power Renewable energy

Goals CO2 emission in 2010 25 less than 1992 Weight of renewable energy used: over 10%

Subsidyfrom the governmentinstallation on solarpanel 3-4% loan subsidy for 10-20 years

solar power buy-back for 20 years

policy


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House that can earn money Solar house

Electricity Output: 1/2 3/4 more than the average need for each house

Excess power buy-back from electron company

Encourage the use of renewable power Price of solar power

Cost 0.12/kWh if purchased from local electricity company(NT$5)

Citizens can sell 1kWh for 0.457NT$20)

Price of the house

buildings


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Concept of energy conservation

In order to reduce CO2 emission

Sharing of electric applications

Private car public transportation

Ride-sharing

Postman:

Ride bikes to deliver letters

Citizens

Vauban


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Established General Traffic and Transport Plan

Content Environment friendly in transport constructions

Goal Reduce traffic, promote the use of bike & publictransports modern urban light railway system

approx. 420 kmlong network of cycle tracks and lanes

9,000 bicycle parking racks local center concept

gives priority to basic shopping

facilities in the immediate

neighborhood

transportation


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between 1982 and 1999 volume of cycling (out of the total inner-city traffic volume)

15% 27%

local public transport 11%

18%

volume of car journeys38% 32%

Achievements in Transportation


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Handling and Sorting Charge rubbish handling fees

Sort rubbish into 7 colors

returnable container principle

80% of paper used are recycled financial incentives

discounts for collective waste disposal schemes

and for people who compost their green waste.

Treatment of non-recyclable waste incinerated in tREA, 20 km south of Freiburg

Heat supplies electricity to 25,000 households

energy generated from the fermentation of organicwaste covers 2% of Freiburgs electricity needs.

Waste management

l f l


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throwaway

sustainable consumer

behavior

ASF(waste disposal and urban sanitationcompany )

Organize eoo-system courses andguided tours for elementaryschoolchildren

Goals of waste planning

disposal

recycling

avoidance


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Green Communities

S l i S hli b


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Construction finished in 2000 & 2005

Building concepts:

utilize in energy, protection of ecosystem, architectural design

150 plus energy house within the community

Use local building material

High building cost, but

Income by selling electricity per household5000/year

8

Solar power community-Schlierberg

S i bl i V b


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Developed from old military barracks

Building concepts:

utilize in energy, protection of ecosystem, architectural design

Achievements in eco-buildings

Energy consumption of the community

- 30% below Germany average.

Cogeneration facility

(80%,20%, CO260%)

Electricity used 65% self-generate Promotion of ride-sharing, carless

living environment.

Sustainable community-Vauban

P i d A d


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in 1992, chosen as Germanys Environment Capital

honored with more awards in environmentalprotection and solar engineering : the European Public transport Award

the German Solar Prize

federal prizes for sustainability in urban development

top place in the Sustainable Community competition

Price and Awards

R thi ki b t t i


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Rethinking about taiwan

f


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Green City Freiburg. Retrieved time: 2012/03/02.Retrieved from http://www.freiburg.de/index.html

Freiburg Green City Brochure. . Retrieved time:2012/03/02. Retrieved from

http://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdf

2007202007

2007-2012/03/02http://www.materialsnet.com.tw/DocSearch.aspx

references
http://www.freiburg.de/index.htmlhttp://www.freiburg.de/index.htmlhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.materialsnet.com.tw/DocSearch.aspxhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.fwtm.freiburg.de/servlet/PB/show/1199617_l2/GreenCity_E.pdfhttp://www.freiburg.de/index.htmlhttp://www.freiburg.de/index.htmlhttp://www.freiburg.de/index.html

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419-420 Freiburg, SAM, Responsible Investment (1)

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