Julia kochetygova

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<ul><li> 1. Agenda Role of the ESG Indices in impact investing ESG Indices space and variety Index philosophy and selection of parameters Relevance versus reliability (S&amp;P Approach)PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 1 </li> <li> 2. Why ESG Indices? ESG index investing is a viable option for active passive investors who want to make an impact They can generate enhanced financial returns Simultaneously promote corporate citizenship It is a relatively simple, cost-effective and objective tool Moreover, as market participants incorporate the ESG information, the impact on returns will increase going forward The indices also provide investors with a powerful engagement platformPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 2 </li> <li> 3. Rapid Expansion of ESG Indices Globally Launches of emerging markets sustainability indices1 (Total number = 19**) 26GlobalESG Indexfamilies 8regionalESG Indexfamilies 35+country specicESG indices* *See some examples in the Appendix Source: Esty Environmental Partners Research **See full list in the Appendix InvestmentsintoESGIndicesarerapidlygrowing,butsEllsmall:lessthan $40billion,or0.5%oftheesEmatedAUMsofpassivelymanagedfundsPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 3 </li> <li> 4. Sustainability Index Market Challenges:the Leaky Pipe While Sustainability Indices have the potential to deliver value to investors, market challenges along the value chain can cause value to leak out Sustainability Indices Value Chain Index Investors providers ESG data providers Companies 1 2 3 4 Potential Investor Value Investor Investor Investor Sustainability Data Sourcing Data Analysis Intent &amp; Index Value Framework Communication and Metrics Market ChallengesSource: Esty Environmental Partners Research, S&amp;P IndicesPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 4 </li> <li> 5. ESG Indices Philosophies &amp; Technologies VariousApproaches Negative Selecting Tilting screening sectoral based on Composite Best-in- analytical Various Perspectives ESG Normalizing Class criteria within industries or IncorporaEngfactoranalysisor Ethical not not InvestorsneedtocarefullydierenEate betweenphilosophiesofvariousESGindicesin Environmental ordertochoosetheonecapturingtangible factorsthatreallyleadtosustainable performance!PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 5 </li> <li> 6. ESG Parameters Dilemma: Relevance vs. Reliability ESGParametersmeasurethecompaniesperformanceintheareasof: Social Environment Governance Responsibility Weights Weights Weights ESGScore Typeof Relevance Reliability Measurability Parameter Performance High Low Low/Moderate Policies Moderate Moderate Moderate Disclosure Low/Moderate High High 6PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. </li> <li> 7. What Relevance of Parameters Means Capturing ability to mitigate risks Unveiling growth potential Financial ProductinnovaEon Legal Labor ProducEvity ReputaEonal Resource eciency OperaEonal Brand recogniE onPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 7 </li> <li> 8. Relevance: S&amp;P ESG India Historical PerformanceSource: S&amp;P Indices and India Index Services &amp; Products. Data as of May 31, 2011. Charts are provided for illustrative purposes only.This chart may reflect hypothetical historical performance. Please see the Performance Disclosure at the end of this document for moreinformation regarding the inherent limitations associated with back-tested performance.PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 8 </li> <li> 9. Relevance: S&amp;P/Hawkamah ESG Historical PerformanceSource: S&amp;P Indices and India Index Services &amp; Products. Data as of May 31, 2011. Charts are provided for illustrative purposes only. Thischart may reflect hypothetical historical performance. Please see the Performance Disclosure at the end of this document for moreinformation regarding the inherent limitations associated with back-tested performance. PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 9 </li> <li> 10. Relevance: Transparency and Market Value 7 2 R = 0.18 6 5 P/B Ratio 4 3 2 1 0 20% 30% 40% 50% 60% 70% 80% 90% T&amp;D Score Source: Standard &amp; Poors Transparency &amp; Disclosure Study of Russian Companies, 2009 Transparency &amp; Disclosure (T&amp;D) of ESG parameters measure the level of awareness which markets and companies possess on important issues. Information for analysis is obtained from public sources such as annual reports and other disclosures R2 - Determination CoefficientPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 10 </li> <li> 11. Examples of Parameters: Environment Parameter Typeof Relevan Reliabili Measur Parameter ce ty ability Amountofwasteproduced,in Performance 3 12 2 relaEontorevenue Amountofenvironment Performance 3 1 2 relatedR&amp;Dexpensesperyear VoluntaryreducEon Policies 2 2 2 requirementsforgasemissions andwastedisposal Disclosureofabsoluteand Disclosure 1 3 3 relaEvenumbersofGHG emissionsandotherpolluEons 3 = High; 2 = Moderate; 1 Low The methodology is the property of S&amp;P Indices, Standard &amp; Poors and will be published along with the launch of the S&amp;P ESG Global BMI Index seriesPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of Standard &amp; Poors. 11 </li> <li> 12. Examples of Parameters: Social Parameter Typeof Relevanc Reliabili Measur Parameter e ty abilityWhetherthecompanys Performance 3 12 2acEviEesgenerateposiEveexternaliEesforthecommunityRatesofinjury,occupaEonal Performance 3 1 2diseasesandotherworkrelatedfataliEesProceduresinplacetoreceive, Policies 2 2 2recordandaddressstakeholderdemandsDisclosureofratesofaccidents Disclosure 1 3 3andprofessionaldiseases 3 = High; 2 = Moderate; 1 Low The methodology is the property of S&amp;P Indices, Standard &amp; Poors and will be published along with the launch of the S&amp;P ESG Global BMI Index seriesPROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approva...</li></ul>