from ethical investment screening to extra financial analysis
DESCRIPTION
Grégory Schneider-Maunoury, CM - CICSecurities - FranceTRANSCRIPT
November 20061
November 2006
From ethical investment to extra-financial analysis
November 20062
► 1. Ethical screening and CSR rating agencies’ bottlenecks Example of agencies’ problems in CSR assessment
Two major criticisms of agencies
Overview of CSR rating methodologies
► 2. Definition of European methodology for extra-financial analysis
Three different aims and levels of analysis
Three pillars of analysis
November 20063
1. Ethical screening and CSR rating agencies’ bottlenecks
The ‘Rashomon factor’: Toyota in 2002
► Innovest assessment: best in class Reduction of use related pollutions (Prius hybrid model)
Low wastewater reduction (compared to sector average)
► Oekom assessment: worst in class Lack of reporting over 5 years
Some innovative steps: Prius as a window of opportunity
November 20064
Two major criticisms of CSR rating agencies
► Focus on transparency Assessment of corporate disclosure
… according to the moral/ ethical choices of different investors
► Focus on CSR initiatives Analysis not representative of real business
Strong bias in favour of strongly affected activities
1. Ethical screening and CSR rating agencies’ bottlenecks
November 20065
ObjectMethods
Activity – Product
Practices Processes Performance
Compliance
Management System
Risks/Opportunities
Scenarios
EIRIS, KLDSIRI
ETHIBELVIGEO
INNOVEST,SAM-DJSI
Source: Schneider-Maunoury, 2006
What do agencies provide?
1. Ethical screening and CSR rating agencies’ bottlenecks
November 20066
► 1. Ethical screening and CSR rating agencies’ bottlenecks Example of agencies’ problems in CSR assessment
Two major criticisms of agencies
Overview of CSR rating methodologies
► 2. Definition of a European methodology for extra-financial analysis Three different aims and levels of analysis
Three pillars of analysis
November 20067
2. Definition of a European methodology for extra-financial analysis
From ethics to financials: a long way to go?
=> 3 questions about companies environmental and social issues
► How much transparency? Is there disclosure of environmental policy?
► How is operational performance affected? Does environmental certification contribute to operational
performance?
► What financial consequences in the long run? Could land remediation issues imply significant financial
reserves in the future?
November 20068
► Identification of measurement and nature of financial impact Need for an initial financial framework 3 consequences on: sales, margin, assets
► Split between moral and economic issues ‘Freakonomics’ and SRI
► Reopening the time frame of analysis Against short termism
3 pillars of a European wide extra-financial analysis
2. Definition of a European methodology for extra-financial analysis
November 20069
The ESN offer in extra-financial analysis
► An integrated methodology: Financial framing of environmental and social
issues
► 700 European companies covered
► 10 European brokers
► 8 Socially Responsible Investment analysts
November 200610
Banca Akros S.p.A.Viale Eginardo, 29
20149 MilanoItaly
Phone: +39 02 43 444 389Fax: +39 02 43 444 302
Equinet Institutional ServicesGräfstraße 97
60487 Frankfurt am MainGermany
Tel: +49 69 58997 400Fax:+49 69 58997 299
Bank DegroofRue de I’Industrie 44
1040 BrusselsBelgium
Phone: +32 2 287 91 16
Fax: +32 2 233 99 97
Caja Madrid Bolsa S.V.B.Serrano, 39
28001 MadridSpain
Phone: +34 91 436 7813Fax: +34 91 577 3770
Caixa Banco de InvestimentoRua Barata Salgueiro, 33-5
1250-042 LisboaPortugal
Phone: +351 21 389 68 00Fax: +351 21 389 68 98
Egnatia Finance S.A.8 Dragatsaniou Str.
105 59 AthensGreece
Phone: +302 10 32 79 200Fax: +302 10 32 48 694
CM - CIC SecuritiesAvenue de Provence 675441 Paris Cedex 09
FrancePhone: +33 1 4596 7700
Fax: +33 1 4596 7788
F. van Lanschot Bankiers N.V.Leonardo da Vinciplein 605223 DR ‘s-Hertogenbosch
NetherlandsPhone: +31 73 548 8724
Fax: +31 73 548 8577NCB Stockbrokers Ltd.
3 George Dock,Dublin 1Ireland
Phone: +353 1 611 5611Fax: +353 1 611 5781
Mandatum Stockbrokers Ltd.Unioninkatu 22, P.O. Box 66,
00131 Helsinki Finland
Phone: +358 10 236 10Fax: +358 10 236 4755
The ESN offer in extra-financial analysis
November 200611
Questions / Answers
Agnès [email protected]
Marie [email protected]
Gregory [email protected]