global sustainable investment alliance web conference · the global sustainable investment review...

@GlobalSIF

Global Sustainable Investment Alliance

Web Conference:

Global Trends in Responsible Investment

@GlobalSIF

Today’s Speakers:

• Lisa Woll, CEO, US SIF: Forum for Sustainable and Responsible Investment

• Meg Voorhes, Director of Research, US SIF: Forum for Sustainable and Responsible Investment

• Flavia Micilotta, Executive Director, Eurosif

• Simon O’Connor, CEO, Responsible Investment Association Australasia

• Moderated by Simon Howard, Chief Executive, UKSIF

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www.gsi-alliance.org GlobalSustainable InvestmentReview

GlobalSustainable InvestmentReview 2016

Participants can ask questions by typing questions in the question box.

Questions can be sent at all times during the presentations and the Q&A. The questions will be collected and answered during the Q&A. Please make clear to whom your question is addressed.

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Simon HowardChief Executive, [email protected]+4420 7749 9950

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Introduction to GSIA


We are a collaboration of membership-based sustainable investment organizations around the world.

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The GSIA’s mission is to deepen and expand the practice of sustainable, responsible and impact investing through intentional international collaboration.

Our vision is a world where sustainable investment is integrated into financial systems and the investment chain and where all regions of the world have coverage by vigorous membership based institutions that represent and advance the sustainable investment community.

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The full report can be accessed at www.gsi-alliance.org

The Global Sustainable Investment Review is published every two years. This is the third edition of the report.

We are grateful to our sponsor

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1. Report Highlights

2. Regional Highlights• United States• Canada• Europe• Australia and New Zealand• Asia ex-Japan• Japan

3. Q&A

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Program


Meg VoorhesResearch Director, US [email protected]+1-202-872-5362

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Report Highlights


The Global Sustainable Investment Review 2016 collated the results from regional market studies by the sustainable investment forums and research partners in:

• Europe• United States• Canada• Australia and New Zealand• Asia ex-Japan• Japan

The report also looks at the growth of sustainable and impact investing in Latin America and provides a snapshot of developments in the three major African economies: Kenya, Nigeria and South Africa.

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Report Highlights


1. Negative/exclusionary screening: the exclusion from a fund or portfolio of certain sectors, companies or practices based on specific ESG criteria;

2. Positive/best-in-class screening: investment in sectors, companies or projects selected for positive ESG performance relative to industry peers;

3. Norms-based screening: screening of investments against minimum standards of business practice based on international norms;

4. ESG integration: the systematic and explicit inclusion by investment managers of environmental, social and governance factors into financial analysis;

5. Sustainability themed investing: investment in themes or assets specifically related to sustainability (for example clean energy, green technology or sustainable agriculture);

6. Impact/community investing: targeted investments aimed at solving social or environmental problems, and including community investing (where capital is directed to underserved individuals or communities) and financing businesses with a social or environmental purpose;

7. Corporate engagement and shareholder action: the use of shareholder power to influence corporate behavior, including through direct corporate engagement (i.e., communicating with senior management and/or boards of companies), filing or co-filing shareholder proposals, and proxy voting that is guided by comprehensive ESG guidelines.

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Sustainable Investment Strategies

GlobalSustainable InvestmentReview 2016 12

Report Highlights


Report Highlights


Retail Investors

• While institutional investors still dominate the SRI market, with pension funds often comprising the largest percentage of institutional SRI assets, interest by retail investors is growing.

• The relative proportion of retail SRI investments in Canada, Europe and the United States increased from 13% in 2014 to 26% at the start of 2016.

• Over a third of SRI assets in the United States were retail.

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Report Highlights


Lisa WollCEO, US [email protected]+1-202-872-5358

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Regional Highlights


• SRI assets rose 33%, from $6.57 trillion in 2014, to $8.72 trillion in 2016.

• $8.10 trillion is held by institutional investors and money managers applying ESG criteria in investment analysis and portfolio selection.

• $2.56 trillion is held by 176 institutional investors and 49 investment management firms that filed or co-filed resolutions on ESG issues at publicly traded companies.

• Eliminating double counting for assets involved in both strategies yields net total of $8.72 trillion: nearly 22 percent of professionally managed investment assets in the United States.

• ESG integration is most widely used strategy, affecting $5.8 trillion of SRI assets.

• Developments to watch: DOL fiduciary guidance, renewable energy finance18

Report Highlights: United States


• Assets managed using one or more responsible investment strategies increased from $729.0 billion to $1.09 trillion in two years, a 49 percent increase.

• The dominant sustainable investing strategy in 2016 was ESG integration ($1.05 trillion), followed by corporate engagement and shareholder action ($862.1 billion).

• The top three engagement issues were: executive compensation, greenhouse gas emissions and supply chain management.

• Impact investing continues to be a small but important category of SRI: Canadian impact investment assets now stand at $6.7 billion, growing 123 percent since 2014.

• Developments to watch: new reporting requirements under Ontario’s Pension Benefits Act; other provinces may adopt similar provisions

Regional Hihlights – Canada

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Report Highlights: Canada


Flavia MicilottaExecutive Director, [email protected]+32(0)27432948

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Regional Highlights


• Total assets committed to SRI grew 12 percent between 2014 and 2016, from $10.7 trillion to $12.0 trillion.

• Exclusionary screens remain the top strategy at $11.06 trillion, up 48% from 2014.

• Norms-based screening is the second biggest strategy: $5.55 trillion, up 40% from 2014.

• Engagement and voting is third, with $4.65 trillion in assets and 30% growth.

• Although the assets remain small at $107.2 billion, impact investing appears to be the most dynamic approach for investors in Europe.

• Developments to watch: Increasing acceptance that reviewing ESG factors is part of fiduciary duty; High-Level Expert Group on Sustainable Finance

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Report Highlights: Europe


The largest European markets are• France - €3.1trn • Germany - €1.8trn • UK - €1.6trn

Country Biggest style (excluding exclusions)

Austria Best-in-class

Belgium ESG Integration

Denmark Norms-based screening

Finland Norms-based screening

France Norms-based screening

Germany Engagement and voting

Italy Norms-based screening

Netherlands Norms-based screening

Poland Sustainability themed

Spain Norms-based screening

Sweden Engagement and voting

Switzerland ESG Integration

UK Engagement and voting


Simon O’ConnorCEO, Responsible Investment Association [email protected]+61401360500

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Regional Highlights


• Responsible investment assets managed by asset managers, super funds, banks and advisors in Australia and New Zealand grew substantially, both at retail levels and institutional levels, across all responsible investment strategies.

• In both countries combined, sustainable investment assets have grown 248 % since 2014 to reach $515.7 billion.

• Australia’s “core” responsible investment funds (incorporating screening, sustainability themed investing or impact/community investing) outperformed across most fund categories and time horizons.

• Developments to watch: Recently revised guidelines of the Australian stock exchange require listed companies to report on material exposure to sustainability risk; New Zealand’s exchange may adopt similar policy.

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Report Highlights: Australia & New Zealand


• Sustainable investment assets grew 16% from 2014 to 2016, to reach $52.1 billion.

• Excluding Sharia-compliant funds, total sustainable investment assets total $34.2 billion.

• The most common strategies are ESG integration, representing $24.5 billion of assets, and negative/exclusionary screening, with $18.8 billion in assets.

• The fastest growing strategies are sustainability themed investments (up 198%), and negative/exclusionary screening (up 14%).

• Developments to watch: China’s growing interest in green finance and its policy commitments to curtail carbon emissions.

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Report Highlights: Asia ex-Japan


Sustainable investment assets grew from $7.0 billion in 2014 to $473.6 billion in 2016, with corporate engagement as top strategy, involving $289.6 billion in assets.

Factors behind this dramatic growth:

• Until recently, JSIF’s reporting was limited to publicly available data on SRI investment trusts and social impact bonds. However, in 2015, JSIF undertook a survey for the first time of institutional asset owners.

• Policies and codes that promote sustainable investing:• 2/2014: Stewardship Code encourages institutional investors to participate in

constructive engagement with portfolio companies. • 6/2015: Corporate Governance Code sets rules on whistle-blowing, disclosure

and stakeholders’ rights.

Developments to watch: the world’s largest pension fund, the Japanese Government Pension Investment Fund, has become a PRI signatory.

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Report Highlights: Japan


Participants can ask questions by typing in their questions in the question box.

Questions?

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Questions

GSIA website:www.gsi-alliance.org

Thank you!Please send any questions to:

Ellie Stewart at [email protected]

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