Integrating Sustainable Investments Across Asset

Classes

TBLI Conference, London

11 November 2011

Dr. Mirjam Staub-Bisang

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„Sustainable Investments for Institutional Investors“

(English version to be published by Wiley in 2012)

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Sustainable investments for institutional investors?

• Sustainable investing means:

taking ESG matters into account when making investment decisions

►Risk reduction►Investment opportunities►Generate sustainable investment returns►Social impact

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Sustainable governments…

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…are better debtors

Quelle: Bank Sarasin

WGBI Australia WGBI Greece WGBI all countries

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Sustainable companies…

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…manage ESG risks betterBP vs peers

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… and profit from market opportunities

Geberit vs peers

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„Green“ real estate…

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…adds financial value

-90%

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Real assets…

• Infrastructure assets• Agricultural land• Timberland

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…generate steady returnsNCREIF Timberland vs World Timber Index vs MSCI World

(2003-2010)

Performance in USD(31.12.2003-31.12.2010)

30

50

70

90

110

130

150

170

190

210

Dez.0

3

Apr.0

4

Aug.0

4

Dez.0

4

Apr.0

5

Aug.0

5

Dez.0

5

Apr.0

6

Aug.0

6

Dez.0

6

Apr.0

7

Aug.0

7

Dez.0

7

Apr.0

8

Aug.0

8

Dez.0

8

Apr.0

9

Aug.0

9

Dez.0

9

Apr.1

0

Aug.1

0

Dez.1

0

MSCI WORLD NCREI F Timberland I ndex World Timber I ndex

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Microfinance investments…

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…diversify portfolios and create a social return

SMX Microfinance Index vs US Libor 3M

90

95

100

105

110

115

120

125

130

135

140

12/ 0

3

6/04

12/ 0

4

6/05

12/ 0

5

6/06

12/ 0

6

6/07

12/ 0

7

6/08

12/ 0

8

6/09

12/ 0

9

6/10

12/ 1

0

6/11

SMX SYMBIOTICS MF INDEX (USD) US LIBOR 3M TR (USD)

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Cleantech Private Equity…GPs in the cleantech space

Source: Macquarie

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…is a growing asset class

Invested capital in cleantech (worldwide, in USD bn)

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Sustainable investment strategies…

• Core strategies– Negative screening– Best-in-Class– Thematic investments

• Broad strategies– ESG integration– Engagement

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…applied across asset classes

Fixed income

Equities Real estate

Real assets

Private equity

Negative screening

Best-in-class

Thematic investments

ESG integration

Engagement

Core Investments

Satellite Investments

•Conventional Investments

•Sustainable Investments

-Renewable Energies

-Water

-Forest

-Microfinance

Core Investments

•Conventional Investments

•Sustainable Investments

-ESG Integration

-Best-in-Class

-Green Bonds

Core Satellite Approach

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Institutional investors have a long-term view…

• Pension funds• Insurance companies• Charitable foundations• Family offices

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…and invest sustainably

• PPGM (NL)• Ontario Teachers‘ Pension Fund (CDN)• PREVI (BR)• Nest Sammelstiftung (CH)• VIC Super (AUS)• Allianz (GER)• Munich Re (GER)• Generali (I)• Aalto University Foundation (FI)• Mistra Foundation (SE)• Lord Fink Family Office (UK)• River Star Foundation (HKG)

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PPGM, Netherlands

• EUR 105bn (12/2010)

• ESG integration• Targeted thematic investments in

sustainable forestry, climate projects, infrastructure and microfinance

• Sustainable Real Estate• Engagement

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Nest Sammelstiftung

• CHF 1bn (12/2010)

• Negative Screening• Best-in-class approach for equities

and bonds• Sustainable real estate• Active shareholder/engagement

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Munich Re

• EUR 196 bn (12/2010)

• ESG-integration for 80% of all equities and bonds are invested based on ESG criteria

• Thematic investments:– Renewable energies: wind and solar parks,

geothermic and biogas infrastructure– Timberland investments

• „Green“ real estate

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EVZ Foundation

• German Foundation with assets of approx. EUR 420mn

• Negative screening for all equities and bonds in line with mission of the foundation – International Labour Organisation (ILO):

no violation of human rights, no forced labour, no child labour

• Investments in microfinance

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River Star Group

• Hong Kong-based family office• Responsible investing strategies

across entire portfolio• Impact investments

– Focus on tangible environmental and social outcomes

– Microfinance– Renewable energies

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Sustainability adds value…

… to investors… to society

The time is now…

…to take on responsibility for the sake of beneficiaries

and society

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„Sustainable Investments for Institutional Investors“ (Wiley 2012)

Questions?