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TBLI CONFERENCE™ EUROPE 2014 took place on 28 & 29 October 2014 in Amsterdam, hosted by the VU University Amsterdam. The program included a wide selection of topics high on the agenda for sustainable finance professionals. Among them were trends in impact investing, impact measurement, philanthropy and program-related investing, ESG integration, ESG in fixed income markets, green bonds, shareholder engagement, strategies on fossil fuel investing and managing ESG risks. Reflecting the year's theme for TBLI CONFERENCES, "Connecting the Dots", we had included several workshops held at previous events in Zurich, New York and Oslo so that we can build on their learnings and insights.
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Dr. Hendrik Garz !
TBLI conference, Amsterdam, October 2014
Trends in ESG Integration
We help clients turn vast quantities of environmental, social and
governance information into insightful, value-added analysis to enable
more informed investment decisions ! understand the Value at Risk
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Sustainalytics: What We Do
Global Thematic Research Team
Providing insights on material ESG issues/themes ▪ Sector reports ▪ Key Issues Series ▪ Bottom Up ideas ▪ Empirical/Quantitative Research ▪ Forthcoming: Pharma, Utilities, Transport,
Aerospace & Defense !!
Building up and managing the Sustainalytics Academic Program !▪ Theses support ▪ Collaborations with academics – More than just delivering data ▪ Aim: Gaining insights on ESG integration !
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▪ Offices in Amsterdam (HQ), Boston, Frankfurt, London, New York, Paris, Singapore, Timisoara, and Toronto !
▪ Representation in Bogota, Brussels, Bucharest, and Copenhagen !▪ Over 180 staff (100+
analysts) !▪ Over 250 institutional
clients globally
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Sustainalytics: Where We Are
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Two ‘Impact’ Dimensions
Extraction Raw
Materials
Design & Production
Packaging & Distribution
Use & Maintenance
Re-Use and Recycling
Sustainability Impacts
ESG Macro Trends
Exposure to Sustainability Impacts
= Potential to
cause E&S impacts
Exposure to Business Impacts
= Potential to
cause business impacts
Exposure to Business Impacts
= Potential to cause business impact
Example of Exposure Graph
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● Assessment of E,S,G controversies ● e.g Operations controversies, Environmental supply chain
controversies
Qualitative performance
!● Targets and quantitative commitments, performance metrics ● e.g. Water Intensity, Environmental Fines and Penalties,
Employee Turnover Rate
Quantitative performance
● Disclosure of key ESG issues as part of industry initiatives ● e.g Scope of GHG Reporting, Tax Transparency per country
Disclosure
● Management systems and policies ● e.g Health and Safety Programmes, Programmes/targets for
Hazardous Waste Generation Preparedness
Company ESG Assessment Framework
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New Client Interface (Feb 2015)
Trends in ESG integration
• Trends within the RI community; not looking at overall market growth/mainstreaming
• Degree of ESG integration at the different levels of value creation: frequency, comprehensiveness, and quality/ sophistication of integration
• How far advanced are we? How far do we have to go? • Scale: 0-10; 10 = full integration (E, S, G)
Trends in ESG integration
- 5y Current +5y
Investment policy 2 3 4
Asset Allocation 0 1 2
Manager selection 2 3 4
Alpha generation 2 2 3
• Investment case - qualitative
2 3 4
• Valuation models 1 1 2
Stewardship 3 4 6
Challenges to integration
▪ Data quality/Non-disclosure ▪ Time horizon ▪ Behavioral – Biases – Incentive structures
▪ Beliefs/Convictions about relevance
Amsterdam | Bogotá | Boston | Brussels | Bucharest | Copenhagen | Frankfurt | London | New York City | Paris | Singapore | Timisoara | Toronto
Antonio Celeste Director Institutional Relations, Europe [email protected]
For more information please contact: !Dr. Hendrik Garz Managing Director Thematic Research [email protected]
