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Crea%ng a Brighter Future: Investor Day FTTH Council Europe London, United Kingdom February 19, 2013 Michael Jantzi, CEO Sustainaly%cs

Michael jantzi

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Page 1: Michael jantzi

Crea%ng  a  Brighter  Future:  Investor  Day  

FTTH  Council  Europe  London,  United  Kingdom  

February  19,  2013    

Michael  Jantzi,  CEO  Sustainaly%cs  

 

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Why  Sustainaly%cs?  

   I’m  not  an  industry  expert…  

   I  know  capital  markets,  especially  the  RI/ESG  sector  

   I  know  that  the  industry  requires  capital  

   I  believe  that  this  industry  has  a  good  story  to  tell  

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Agenda  

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  Sustainaly%cs  

  What  is  Responsible  Investment?  

  Industry  Story  

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Sustainaly%cs  

Data   E   S   G    Insights  

Environment   Social   Governance  

  We  help  clients  turn  vast  quan%%es  of  environmental,  social  and  governance  (ESG)  informa%on  into  insigh\ul,  value-­‐added  analysis  to  enable  more  informed  investment  and  business  decisions.  

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2012   Best  research  piece  integra%ng    financial  analysis  with  long-­‐term  ESG  factors  

IRRI  Thomson  Extel  Survey  

•  Best  RI  Analysis  Firm  •  Best  Corporate  Governance  

Analyst  •  Best  Environmental  and  Social  

Analyst  •  Best  Sales/Client  Rela%ons    

The  Farsight  Award  

Sustainaly%cs:  What  we  do  Sustainaly%cs  

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Our  Clients  

Our  clients  include…  

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Agenda  

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  Sustainaly%cs  

  What  is  Responsible  Investment?  

  Industry  Story  

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Responsible  Investment  

   What  is  Responsible  Investment?  RI  is  the  integra%on  of  environmental,  social  and  governance  (ESG)  factors  into  

the  tradi%onal  investment  decision-­‐making  process  with  the  primary  purpose  

of  improving  the  (long-­‐term)  risk-­‐return  profile  of  an  investment  por\olio.  

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Responsible  Investment:  Growth  

RI  AUM  15-­‐20%  

Total  Global  AUM  83%  

RI  AUM  9%  

Total  Global  AUM  91%  

RI  AUM  7%  

Total  Global  AUM  93%  

2007   2010   2015  

($30  Trillion  AUM)  

($78  Trillion  AUM)  

($  10  Trillion  AUM)  23.2%  CAGR  

Global  RI  AUM  $5.0  Trillion    

Global  RI  AUM  $9.3  Trillion    

Global  RI  AUM  $26.5  Trillion    

Source:  Robeco  and  Booz  &  Company.  Responsible  Inves-ng:  A  Paradigm  Shi8  –  From  Niche  to  Mainstream.  2009.

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Fiduciary  Responsibility  

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  This  is  a  follow  up  to  the  2005  Freshfields  report  on  Fiduciary  Responsibility,  which  stated  that  integra%ng  ESG  considera%ons  was  permissible  and  arguably  required  in  all  jurisdic%ons.    

  ‘In  tendering  for  investment  mandates,  it  would  be  expected  that  the  investment  consultant  or  asset  manager  would  raise  ESG  considera-ons  as  an  issue  to  be  taken  into  account  and  discussed  with  the  client  even  if  the  pension  fund  had  not  specified  ESG  considera-ons  as  material  to  the  tender.  If  the  investment  consultant  or  asset  manager  fails  to  do  so,  there  is  a  very  real  risk  that  they  will  be  sued  for  negligence  on  the  ground  that  they  failed  to  discharge  their  professional  duty  of  care  to  the  client  by  failing  to  raise  and  take  into  account  ESG  considera-ons.’  

  Provides  guidance  in  the  area  of  integra%on,  engagement  and  both  posi%ve  and  nega%ve  screening  for  trustees.  

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  Deutsche  Bank  Group  reviewed  more  than  100  academic  studies  globally,  then  closely  examined  and  categorized  56  research  papers,  as  well  as  2  literature  reviews  and  4  meta  studies.  

   100%  of  studies  show  that  highly  rated  ESG  

companies  have  lower  cost  of  capital  in  terms  of  debt  (loans  and  bonds)  and  equity  (implied  cost  of  capital).  

  89%  of  studies  show  that  highly  rated  ESG  companies  exhibit  market  based  outperformance.  

  85%  of  studies  show  that  highly  rated  ESG  companies  exhibit  accoun%ng  based  outperformance  .  

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The  Materiality  of  ESG  Issues  

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The  Rise  of  NGO/Business  Partnerships  

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Responsible  Investment:  Risks  and  Opportuni%es  

   Risks  

   Opportuni%es  

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Source: Yahoo Finance and Raj Thamotheram

Texas Refinery Accident

Texas Refinery Accident

Alaska Oil

Spill

Azerbaijan Gas Leak

Violations Of Clean Water Act

Penalties From the

OSHA

Gulf of Mexico Oil Spill Thunder

Horse Accident

Charges for Manipulation

of Gas Market

Grangemouth 2000

The  Value  of  ESG  

"It's  very  dangerous  to  join  up  dots  that  may  not  be  appropriate  to  join  up."    Tony  Hayward  

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Agenda  

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  Sustainaly%cs  

  What  is  Responsible  Investment?  

  Industry  Story  

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A  Good  Story  

   Communica%on  networks  underpin/support  economic  growth  

   Environment  

   Telecommu%ng/teleworking  

   E  commerce  

   Support  of  cleantech/renewables  sector  

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  Vision  is  to  make  solar  simple  and  energy  smart  so  everyone  is  empowered  to  create  a  zero  energy  footprint  for  themselves,  their  home  and  their  business.  

  75,682  inverters  (PV-­‐panels)  are  connected  and  have  produced  651  gWh  in  energy  throughout  their  life%me.  

  Mission  is  to  build  the  world's  finest  networked  energy  system  and  revolu%onize  power  genera%on  on  a  global  scale  -­‐  one  solar  panel,  one  kilowan  hour  at  a  %me.    

Enphase  Energy:  (NASDAQ:  ENPH)  

A  Good  Story:  Cleantech  

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  Offseqng  450  tons  of  CO2.    This  equals  the  CO2  emission  for  three  year’s  of  

the  Drax  power  sta%on,  which  is  UK’s  largest  coal-­‐fired  power  sta%on.  

A  Good  Story:  Cleantech  

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A  Good  Story  

   Communica%on  networks  underpin/support  economic  growth  

   Environment  

   Telecommu%ng/teleworking  

     E  commerce  

   Support  of  cleantech/renewables  sector  

   Social     Telehealth/teleeduca%on  

   Support  for  civil  society  

   In  2011,  the  United  na%ons  took  an  extraordinary  step  by  declaring  that  

internet  access  be  considered  a  human  right.  

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ESG  Issues  and  Ques%ons  

   Environment  

   Produc%on  

   cables  (outdoor,  aerial,  indoor,  home)  

   ac%ve  equipment  (ONT,  OLT)  

   raw  materials  

   Electronic  Product  Environmental  Assessment  Tool  (EPEAT)    /  EnergyStar  

   Transport  

   Deployment  

   Use  –  energy  consump%on,  GHG  emissions  

   Disposal  –  landfill,  incinera%on  

   Restric%on  of  the  use  of  Certain  Hazardous  Substances  (RoHS)  

   Waste  Electric  and  Electronic  Equipment  Direc%ve  (WEEE)    

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ESG  Issues  and  Ques%ons  

   Social     Employment/Labour  -­‐  managing  head  count  reduc%ons  

   Supply  Chain  

     Dodd  Frank  Act  (Sec%on1502)  -­‐  requires  companies  to  ensure  that  their  

mineral  sourcing  prac%ces  are  not  contribu%ng  to  conflict  –  U.S.  SEC  

overseeing  supply  chain  due  diligence  

   OECD  -­‐  Due  Diligence  Guidance  for  Responsible  Supply  Chains  of  

Minerals  from  Conflict-­‐Affected  and  High-­‐Risk  Areas,  which  is  endorsed  by  

the  United  Na%ons  

   Governance     Structural  separa%on  

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The  Outcome  

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The  Outcome  

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Disclaimer  

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Copyright  ©  2013  Sustainaly%cs.  All  rights  reserved.    

No  por%on  of  this  material  may  be  reproduced  in  any  form  without  the  expressed,  wrinen  permission  of  Sustainaly%cs.