Charlotte mansson

RepRisk, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 1

Charlotte ManssonRepRisk AGPhone +41 43 300 5440Email [email protected]

Can you afford to ignoreenvironmental and social risks?

TBLILondon, November 11, 2010

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 2

Objective of Today

Discuss why ESG Risks are important

Show how you can identify these risks

Provide thoughts on how to manage these risks


RepRisk AG

Global provider of data on environmental and social risks

HQ in Zurich, 18 analysts in Central Asia, Spain, Switzerland, UK, and US

Research Partners in Asia: CSR Asia/Responsible Research, Japan Research

Institute

Founded in 1998 as an environmental risk management consultancy for banks

Launch of RepRisk® service in 2006, company renamed to RepRisk AG in

2010


Selected Clients


Why Environmental and Social Risks Matter

Sinar Mas Group / KitKat

BP

Siemens


BP’s Risks Peaked in 2008 and Materialized in 2010


How can I assess a company’s Environmental, Social, and Corporate Governance (ESG) risk?

1. Company-based information

2. Third-party sources

3. Audit reports


How can I manage exposure to ESG risk (I)?

First approach: Identify most exposed companies, e.g. based on RepRisk

Index

Exclude or underweight riskiest companies (exclude Transocean, etc.)

Factor ESG risk into the valuation of the most exposed companies (how do

risks affect cash flow projections?)


How can I manage exposure to ESG risk (II)?

Second approach: Complement financial analysis with a ESG risk

assessment

Example: Marks & Spencer Group PLCbased on RepRisk:

1) Environment (E)

2 a) Employee Relations (S)2 b) Community Relations (S)

3) Corporate Governance (G)

optional: product-related risks


RepRisk Indicators Are Based on RepRisk Database

Captures environmental, social and reputational risk exposure of companies worldwide

Monitors independent third-party sources, i.e. all major print media, non-governmental

organizations (NGOs), news sites, governmental agencies, blogs, etc.

Covers all major business languages: Chinese, English, French, German, Japanese,

Korean, Portuguese, Russian, and Spanish

Has identified more than 16,000 companies and 3,000 projects

Is updated and growing daily


Scope of Environmental and Social Issues

Note: In particular, all principles of the UN Global Compact are addressed.

* As of May 2010

Fraud*

Tax Evasion*

Anti-competitive Practices*


Print Media

Newsletters

News Websites

Governmental Agencies

“The Web”, Blogs

NGO Websites2nd LevelAnalysts

I

CP

C S

NG

News1st LevelAnalysts

RepRisk front endApproval bySenior Analyst(double check principle)

Global Coverage and Rigid Data Selection

Advanced search algorithms covering Chinese, English, French, German, Japanese, Korean, Portuguese, Russian and Spanish sources worldwide


Companies associated with controversial issuesin over 180 countries

N

C

P

C S

IG

News

15,000 Companies +10 per day

3,000 Projects +2 per day

34 Sectors

2,000 NGOs +2 per day

30 Issues

200 Campaigns +1 per week

2,000 Governmental Organizations +10 per month


The Reputational Risk Index is an indicator of the exposure to environmental, social and reputational risks

RRI calculation based on: relevance of news sources frequency and timing of news, and news content, i.e. severity and novelty

The Peak RRI gives the maximum RRI value in the last 24 months


www.RepRisk.com










Thank you

Charlotte Manssonwww.reprisk.com

Documents

Charlotte mansson