A European SRI Market Review

London, November, 2012

Created with the support of:

Introduction

Sustainable and Responsible Investment Strategies

• Sustainability themed• Best-in-Class and Positive screening• Norms-based screening• Exclusions• ESG Integration• Engagement and voting• Impact investing (NEW!)

Overview of SRI Strategies Used in Europe

Source: Eurosif, 2012. Excludes Impact Investing

Growth Compared to Overall Market

Source: Eurosif 2012, EFAMA 2012

Sustainability themed

• On the rise again: ~+90% since 2009• Now found in almost all countries surveyed• Key driver: institutional Dutch mandates

Source: Eurosif, 2012

Best-in-Class and Other Positive Screens

• Third fastest growing strategy: +113% since 2009• Steady rise in several markets • Key growth drivers: Sweden and France

Source: Eurosif, 2012

Norms-based Screening

• First measured in 2010 as a distinct strategy• Fastest growing strategy since 2009: +137%• Key drivers: few large players in France, Italy

Source: Eurosif, 2012

Exclusions

• Second fastest growing strategy since 2009: +118%• Covers ~28% of European total AuM• Key drivers: German, Swiss and Dutch markets

Source: Eurosif, 2012

Integration

• Growth since 2009: 14%• Top markets: France, UK, Netherlands• Key drivers for growth: Netherlands, UK

Source: Eurosif, 2012

Engagement / voting

• Growth since 2009: +17%• Key drivers: Netherlands• Top countries: UK, Netherlands, Denmark• Spreading to other markets (Italy, Spain)

Source: Eurosif, 2012

Focus on the UK– Market Breakdown by Strategy

• Dominance of Active Ownership and Integration strategies• UK is a top #3 EU market for sustainability-themed now !

Source: Eurosif, 2012

Focus on the UK– Evolution by Strategy

Source: Eurosif, 2012

• Continuous growth of Integration (see PRI signatories)• Strong growth of norms-based: +86% (space to watch)• Growth in Exclusion number not to be seen as market trend

Drivers of SRI Demand

Legislative drivers

Legislative drivers

Source: Eurosif, 2012

Created with the support of:

Which role for UK Corporate Pension

Plans?

(Extracts)

SRI Policy Adoption by (large) UK Corporate Pension Plans

Source: Eurosif, Corporate Pension Funds and Sustainable Investment, 2011

The CSR Policy of UK Plan Sponsors Is The Second Most Important Input to the SRI Policy

Source: Eurosif, Corporate Pension Funds and Sustainable Investment, 2011

Key Take-Aways

• All strategies have grown since 2009 (faster than market)

• In the UK:• Domination of Engagement /. Voting & ESG Integration• Sustainability-themed less important but top EU market• Watch this space: Norms-based + Impact Investing

• Institutional investors remain key drivers

• The CSR policy of the company can / should play an important role in SRI adoption

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Questions?