biodiversity for better business sustainable finance ... 2017/c… · cerin maduray investment...
TRANSCRIPT
© M
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Cerin Maduray
Investment Analyst
Sustainable Finance & Responsible Investment
Date: 25 October 2017
Biodiversity for Better Business
Shorter title Secondary information can go here
XX-XX Month, Year
• Additional information can run
• Underneath if necessary
Contents
Introduction to WWF and our Global Goals
Sustainable Finance in WWF
The Living Planet Fund
Impact Investing and Private Equity
Active Ownership in South African Organised Labour
WWF/Alexander Forbes Investment Questionnaire
Responsible Investment Biodiversity for Better Business
WWF IN SHORT
WWF is in over
100 countries
+100
WWF was founded
In 1961
1961
WWF has over
5,000 staff
worldwide
+5000
WWF has over
5 million supporters
+5M
Responsible Investment Biodiversity for Better Business
OUR MISSION: To stop the degradation of the planet's natural environment and to build a future in which
humans live in harmony with nature, by:
• conserving the world's biological diversity
• ensuring that the use of renewable natural resources is sustainable
• promoting the reduction of pollution and wasteful consumption
WWF: Global Goals
Responsible Investment Biodiversity for Better Business
Wildlife • Goal: The world’s most threatened ecological, economically and culturally important species are
secure in the wild
Oceans • Goal: Productive and resilient ocean ecosystems, sustaining human well being and conserving
biodiversity
Forests • Goal: A world enriched by extensive, resilient forest landscapes benefiting biodiversity, people,
and climate
Freshwater • Goal: Freshwater ecosystems and their services sustain people and nature
Climate and Energy • Goal: By 2030, an equitable and just transition (to a global pathway) that limits warming to 1.5C
degrees and builds a climate resilient future
Food • Goal: Sustainable food systems conserve nature while ensuring food security now and in the
future
Finance in WWF
Cross Cutting Relevance & Impact
Responsible Investment Biodiversity for Better Business
6
WWF Finance Practice Theory of Change
Our objective is to encourage a meaningful shift in Finance to achieve WWF’s Global Goals
Using the framework of risks and opportunities, WWF can:
• influence the financial system to improve integration of environmental risks
• encourage the financial system to deliver greater investment for sustainable development
• use the influence of the finance sector to drive sustainable practices through the rest of the economy
The WWF
Supported
Prescient Living
Planet Fund
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Investment Biodiversity for Better Business
The WWF Supported
Prescient Living Planet
Fund
Aims to deliver sustainable long-term capital growth to its investors within a
framework that integrates environmental principles in the investment portfolio.
Performance objective:
• Deliver competitive investment returns by out performing the strategic fixed
benchmark over rolling five-year periods (CPI+4% target).
Environmental objective:
• Actively manage and integrate principles that enhance the sustainability of the
natural environment over the long term
Responsible Investment Biodiversity for Better Business
The Living Planet Fund: Objective and Implementation
Approach towards optimal E(SG) integration into the Portfolio:
• Pragmatic and realistic
• Respect for and adherence to mandate (competitive risk adjusted returns for
investors)
• Incrementally enhance the E(SG) credibility in our Funds over the long term
Responsible Investment Biodiversity for Better Business
WWF-SA:
Environmental Analysis
Company Environmental data and analytics provided by Trucost
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00
Portfolio
Benchmark
GHG Water Waste L&W Pollutants Air Pollutants NR Usage
6.73%
4.57%
0 5 10 15 20 25 30 35 40 45
Portfolio
Benchmark
CO2e Tonnes/R1mn Revenue
Scope 1 Scope 2
23.60
38.74
Responsible Investment Biodiversity for Better Business
Presentation to Company Name
Impact
Investment
Solutions and
Private Equity
Responsible
Investment Biodiversity for Better Business
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Risk & Return
Business Life Cycle
Source: The Presidents Council
Responsible Investment Biodiversity for Better Business
Africa Environmental Sustainability Private Equity FoF
What is Private Equity?
Classes of Equity that are not quoted
on Stock Markets / unlisted.
WWF in
partnership with
Fair Tree Capital
Multi-Sector
Environmental
Fund of Funds
Provide competitive long term financial
returns and environmental
sustainability impact.
Responsible Investment Biodiversity for Better Business
Africa PE FoF
Impact Sector focus
Renewable Energy
Sustainable Agriculture
Sustainable Forestry
Water and Food
Security
Biodiversity Conservation
Clean Tech & Infrastructure
Description
Sustainable agriculture is the production of food, fibre or other plant and
animal products, using farming techniques that are sustainable and ensure the safeguarding of high quality supply of
agricultural products.
Description
Sustainable forestry specifically targets the long
term viability of the palm oil, timber, pulp and
paper sectors. Sustainable Forest Management is the usage and application of
the standards of the Forestry Stewardship
Council (FSC), globally recognised as the most
credible forest certification system.
Description
Food Security is about maintaining sustainable
food systems while simultaneously working
towards long term environmental
sustainability. Water security is defined as the
capacity of a population to safeguard sustainable
access to adequate quantities of acceptable
quality water for sustaining livelihoods.
Description
Protection, rehabilitation and conservation of
ecosystems, wildlife and other species
and preserving genetic diversity, and ensuring the
sustainable utilization of species
and ecosystems.
Description
Any process, product or service that reduces
negative environmental impacts through
significant energy efficiency improvements,
the sustainable use of resources, or
environmental protection activities. Infrastructure including property, fixed investment, materials.
Description
Energy derived from resources that are
constantly replenished or infinite; Renewable
energy technologies can harness renewable
energy to produce power with almost no pollution or
emissions.
Responsible Investment Biodiversity for Better Business
Defining Impact Investing
What is Impact Investing?
Investments made into companies,
organizations, and funds with the
intention to generate social and
environmental impact alongside a
financial return (GIIN)
Research has shown that a
access to affordable funding is
1 of the top factors inhibiting
growth for Small Business
For investors very often the risk
return profile makes investment
into small businesses
unsuitable
Responsible Investment Biodiversity for Better Business
Defining Impact Investing
What is Impact Investing?
Investments made into companies,
organizations, and funds with the
intention to generate social and
environmental impact alongside a
financial return (GIIN)
Research has shown that a
access to affordable funding is
1 of the top factors inhibiting
growth for Small Business
For investors very often the risk
return profile makes investment
into small businesses
unsuitable
Responsible Investment Biodiversity for Better Business
The Green Outcomes Fund impact investment initiative
Responsible Investment Biodiversity for Better Business
The World Bank’s Climate Technology Program (CTP), together with University of
Cape Town GSB’s Bertha Centre for Social Innovation and Entrepreneurship, WWF-
South Africa and GreenCape is pioneering an innovative, outcome-based funding
mechanism, the Green Outcomes Fund (GOF)
The aim is to mobilize investments into promising green small and growing business
(SGBs) that contribute to environmental and social outcomes across the Southern
African region.
Responsible Investment Biodiversity for Better Business
•The Green Outcomes Fund (GOF) is an innovative green mechanism that has an
objective to mobilize investment into Small & Growing Green Businesses (SGBs) that
deliver on pre-agreed identified environmental outcomes.
•Environmental outcomes include impact areas such as climate mitigation, water
management, waste management and green job creation; specific outcome metrics will be
pre-agreed and verified.
•GOF offers funders (grant and investors) a unique and quality solution, through which the
growth and development of green SBG’s can be supported to enhance Sustainable
Development Goals (SGB’s).
•The GOF provides outcomes-based funding to the impact investment industry for
investment in green SGB’s in the Southern African region.
•Impact Investors and allocators invests at lower risk and greater efficiency which leads to the
development of a robust green impact investment industry in the Southern African region.
The Green Outcomes Fund
impact investment initiative
The Green Outcomes Fund :
Example outcomes
Responsible Investment Biodiversity for Better Business
Green outcomes can be the payment triggers for the recipient funds
These outcomes should be measurable and verifiable
Energy
Energy Generation
(kWh)
Energy Efficiency (kWh)
Persons reached by Clean Energy (
number of people)
Waste
Waste to Landfill Avoided (tonnes)
Waste recycled/reused
(tonnes)
Avoided Waste Incinerated (tonnes)
Chemical Recovery (tonnes)
Water
Water Use Reduction
(m3/yr)
Water Productivity (ltrs/unit of product)
Water Sourced from an Alternative Resource (m3)
Other
Carbon Sequestered (CO2-
eq)
Green Sector Direct Jobs
Green Sector Indirect Jobs
+ Scope for additional
Active Ownership
through
Organised
Labour in South
Africa
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Investment Biodiversity for Better Business
Responsible Investment Through Active
Ownership in South African Organised
Labour
Responsible
Investment Biodiversity for Better Business
• GEPF is one of the largest
pension funds in the country
• Collectively members have
significant shareholdings in
listed South African companies
• By exercising their voting
rights/shareholder rights they
can influence management
policy at the highest level
• Labour Union Trustees on
behalf of their members can
get specific ESG issues onto
the agenda
Responsible Investment Through Active
Ownership in South African Organised
Labour
Responsible
Investment Biodiversity for Better Business
Water Management
Executive
Remuneration
Black Ownership
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XX-XX Month, Year
• Additional information can run
• Underneath if necessary
The WWF & Alexander Forbes Inv.
Partnership
Responsible Investment Biodiversity for Better Business
AFI & WWF Partnership
• Since the start of 2015, Alexander Forbes Investments and the WWF-SA have been
working in collaboration to drive an environmental sustainability agenda within the
investment industry.
• The partnership provides a unique opportunity to assist asset managers in their
consideration of environmental issues.
• Our partnership led to the launch of an Environmental Sustainability Questionnaire
in 2016.
• The framework was designed to highlight critical areas of focus from an
environmental perspective and through this enhance the quality and content of
environmental discussions between mainstream asset owners and the companies
they invest in.
• A framework to assist mainstream asset owners in the investment decision making
process
Responsible Investment Biodiversity for Better Business
WWF/AFI Env. Questionnaire:
Snapshot and Background
• An industry level environmental framework for investment professionals
• Tool to understand and engage with companies on “E” risks
• Set of 25 Questions covering 7 critical areas:
Environmental critical areas covered
1. Env. Governance
2. Water consumption & management
3. Supply chain management & consumption
4. Waste Management & pollution
5. Fossil fuel, energy and emissions
6. Renewable Energy
7. Industry specific: Mining & Energy.
Responsible Investment Biodiversity for Better Business
AFI/WWF Partnership
Companies reached and covered
0
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2
3
4
5
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9
Number of Questionnaires per Covered Company
• 32 of SA’s largest listed companies
• Over R8trn in value
• Over 75% of the value of the ALSI
Responsible Investment Biodiversity for Better Business
2016 AFI/WWF Partnership:
Response Analysis
• 14 Co’s with low/medium levels of Environmental Governance
• 2 Co’s without Environmental Reporting/Disclosure
• 13 Co’s did not disclose or measure Water Consumption
• 3 Co’s did not disclose their CO2eq Consumption
• 3 Co’s did not have Supply Chain Tracking and Tracing Procedures
• 2 Co’s with potential risks of Acid Mine Drainage
• Many inconsistent and blank responses to key questions
Responsible Investment Biodiversity for Better Business
2016 AFI/WWF Partnership
The Follow Up
• AFI & WWF responded to AM’s in January 2017 based on our analysis and
findings
• AM’s responded to our letters
• AM’s engaged with company management ito. big E Risks
• Clarified their responses
• Filled in missing critical info
• Responses show high level of engagement
• Companies show a willingness to improve their Env. Management
Responsible Investment Biodiversity for Better Business
© 2010, WWF. All photographs used in this presentation are copyright protected and courtesy of the WWF-Canon Global Photo Network and the respective photographers.
Our objective is to encourage a meaningful shift in Finance to achieve WWF’s Global Goals