Transcript ASrIA - Thailand Board of Investment

The Association for Sustainable and Responsible
Investment in Asia
Stock Market Investment for
Sustainability
www.asria.org
Environmental Future for Asia is
still to be decided
• Asia has yet to install 80 percent of the
industrial capacity it will have by
the year 2010.
• New industrial investment in Asia will
dominate total investment during the
next fifteen years, providing a once-ina-lifetime opportunity to shift industry
to clean production.
USAEP Investment & Environment Paper
Introducing ASrIA
SRI promotion
Network
Education
Policy
Development
Research
Womens Division of the
General Board of Global
Ministries of The United
Methodist Church, US
Global
Affiliations
Sponsorship/
Branding
Conferences
4
ASrIA 2002 Plans
Conferences
Annual International Conference in Japan, Singapore
with MAS, Shanghai with ADB, HK, Taiwan, South
Korea, Thailand, Malaysia and India
Research
Incubating an Asian SRI research business, Marketmaking analysis
Outreach and Networking
Teach in for IFA’s and Trustees, Investors Circle
Website
Upgrading with more facilities, CalPERS debate
SRI in Asia Today
What is SRI?
Socially Responsible Investment/
Sustainable & Responsible Investment
Principles:
 Investment based
on a triple bottom
line approach:
– Financial Return
– Environmental
Protection
– Social justice/
ethical objectives
Methodologies:
 Negative screening
 Positive screening
 Shareholder
advocacy/
engagement
 Community
investing
Where are we in Asia today?
 Japan: Nikko-Eco Fund and 10
other SRI choices
 Australia: Developed SRI market
 Asia ex-Japan & Australia:
– ASrIA launch conference HK,Nov01
– ASrIA 2002 conference Japan, Oct.
– Kingsway Fund Management in HK
investing using screening
– Islamic funds in Malaysia, UniFem
Fund in Singapore
– Henderson’s Global Sustainability
Fund launched in June 1998
– Friends Ivory & Sime about to launch
a global SRI fund in Hong Kong
– Singapore, Taiwan, SKorea, India SRI
seminars planned
 Starting to gain
momentum, but a long way
to go…
1
The Business Proposition for SRI
Creditable Performance
Growth Momentum
US$ BN
1992
1993
1994
1995
1996
1997
1998
1999
2000
S&P 500
7.68%
10.08%
1.26%
37.50%
23.07%
33.40%
28.58%
21.04%
-9.11%
Domini Social Equity
12.10%
6.54%
-0.36%
35.17%
21.84%
36.02%
32.99%
22.63%
-15.05%
$2,500
192 Funds
$2,000
$1,500
$1,000
$500
$0
1995
1997
1999
U.S.
US$ MM
$5,000
67 Funds
$4,000
$3,000
$2,000
$1,000
$0
1995
1997
1999
2000
U.K.
Source: UBS Warburg - 1999 US Trends Report, USSIF, EIRIS
 Performance of most SRI funds has been at least in-line with benchmark indices, and some have
outperformed – the DJSGI Asia Index has outperformed the MSCI Pacific and the FTSE Asia Pacific by
27% from 1999 to 2001. INVESTMENT RESTRICTIONS HAVE NOT IMPACTED PERFORMANCE.
 Management teams focused on environmental and social issues tend to be progressive which is reflected
in their business and their stock price
 Despite a large increase in SRI funds over recent years, penetration is still low at 13% in the U.S. and less
than 1% in the U.K., allowing room for significant further growth
2
The Business Proposition in Asia
CHINA: The BIG one!…Govt.
sponsored CG initiatives… nascent
mutual fund industry and growing retail
equity culture…SRI may be ‘the angle’
for early participation
INDIA: Vast educated population….a
major SRI opportunity….but work to be
done…
MALAYSIA & THAILAND: Wealthy,
educated population…active religious
groups… High environmental
awareness among decision-makers..
Retail investment market growing
SINGAPORE: Developed and
sophisticated retail investment market…
significant state participation in equity
investment
KOREA: Corporate
governance a big
theme….retail equity
investment booming!
JAPAN: Nikko-Eco – one of
SRI’s biggest success stories
globally…..a proven market
among one of the world’s
largest elderly populations
TAIWAN: Mutual fund industry
40% CAGR last 17 years with only
16% penetration!... active religious
groups…..environmentally
aware…. a core target market
HONG KONG: Government
increasingly focused on the
environment (SusDev 21)…..interesting
MPF angle…massive charitable
institutions (eg Jockey Club, Kadoorie
Foundation)
Growing populations…high growth mutual fund industries…differentiation opportunity
3
Capital Markets for Sustainability
Financial
Innovation
and Corporate
finance
IPO’s
Debt
Financing
Financial
gatekeepers
Shareholders
as Owners
Listing
Requirements
& Disclosure
Influence on
Corporate
Management
Time
Consistency
4
New Energy Funds
• Inventory of Funds
http://unepfi.net/invent/isef/index.htm
• Global-Asian Clean Energy Services Fund, FondElec
• DKW and FIS launching funds in 2002
and….
• UBS Cancels Carbon Fund citing lack of investor
interest. The fund was to generate greenhouse gas
emission reduction credits under the Kyoto Protocol.
SRI: The Stock Market Solution to SD
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•
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Raises Profile of Role of Investment
Industries of the Future
Sets the Agenda for Corporations
Engagement and Shareholder Voting
MicroFinance and Venture Finance