Sustainable and Responsible Investing: Where Are We and Where Do We Go From Here?

Sustainable and Responsible Investing:

Where Are We and Where Do We Go From Here?

Brussels, December 3, 2012

EUROSIF – The leading pan-European sustainable investment membership association

Proximity to EU domestic markets via national SIFs

1

Multi-stakeholder organisation

2

European focus

3

• Partnership of 8 national SIFs• Supported by about 70 Member Affiliates

A multi-stakeholder organisation with around 70 Member Affiliates

Eurosif Key Activities

Promotion of SRIMember Affiliate Network Servicing

Created with the support of:

Created with the support of

Introduction: No Single Market for SRI

Simplified Country Perspectives on SRI

Country Key SRI practices Regulatory Highlight Select SRI FactsBelgium Norms-based; Best in

Class, ExclusionsInvestment in anti-personnel mines is forbidden (March 2007)

BEAMA / Febelfin Initiatives; Strong retail penetration

France Best in class / positive screening/ ESG Integration

Article 225 (2012) on ESG reporting for Asset Managers; Grenelle II

Role of French Employees Savings Plans

United Kingdom

ESG Integration & Engagement

Statement of Invest. Principles (pensions, 2000)

UK Stewardship Code (2010)

Strong PRI signatory base

Netherlands

ESG Integration & Engagement, Exclusions

Pending legislation to ban investment in cluster munition (2013)

Influence of large Pension Funds

Top market in most strategies

Overview of SRI Strategies Used in Europe

Source: Eurosif

Growth Compared to Overall Market

Source: Eurosif, EFAMA

Sustainability themed

• Almost doubled since 2009• Now found in almost all countries surveyed• Demand growing in Holland, Germany, UK, Switzerland

Source: Eurosif

Exclusions

• Covers ~28% of European total AuM• Key drivers: German, Swiss and Dutch markets• Policies covering cluster munitions and anti-personnel

mines now cover 48% of Europe’s AuMSource: Eurosif

Impact Investing – Space to watch

• Institutional and retail investment assets. • Excludes Development finance + community

banking deposits

Total size of market is:€ 8.75 billion

Source: Eurosif

Breakdown by type of investor

Europe Retail Average: 6% (Spain 3%)Relative Decline vs Institutional

Source: Eurosif

Drivers of SRI Demand

Legislative drivers

Legislative drivers

Source: Eurosif

Red Flag !!

HNWI remain a key distribution channel for SRI

• Increase by ~60% between 2009 and 2011• Overall European HNWI Wealth increased by 18%

Source: Eurosif, 2012

+58%

+18%

Share of Sustainable Investments in Total HNWI Portfolio

Source: Eurosif, 2012

• The share of wallet of Sustainable Investments has increased• HNWIs allocating over 50% to SI have doubled (25%)

Attitudes to Sustainable Investments

Source: Eurosif, 2012

Source: Eurosif, 2012 Note: impact investing not directly comparable with previous years

Thematic and Best-in-Class are popular with HNWI

• Positive screening and Sustainability-themed mostly used• Substantial increase of Impact Investing• Strategies often combined in a portfolio (Core-Satellite)

Conclusions

• All strategies have grown since 2009 (faster than market)

• Increasing investor interest for Impact Investing

• Institutional investors remain key drivers

• Data shows continuous demand by European HNWI

• However, general retail demand remains a challenge

How can the industry address this?

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Sustainability Themes Used (ex. Impact Investing)

• Strong domination on environmental issues (energy / climate)

• But all themes have experienced growth, indicating that other themes become increasingly attractive (eg. health)

Source: Eurosif, 2012

Back-up

Impact Investing Approaches Used

• Microfinance preferred but less so than with overall market (55%)

• Attractiveness of Social Business investments is higher than the overall market (19%)

Source: Eurosif, 2012

Back-up

Motivations for Sustainable & Impact Investing

Source: Eurosif, 2012

Sustainable Investment Impact Investing

Back-up

Sustainable Investment

Barriers to Sustainable & Impact Investing

Impact Investing

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