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INVESTING IN THE FUTURE

sustinvestESG INFoRmaTIoN, aNalyTIcS & INVESTmENT

3INVESTING IN THE FUTURE

ceo message

client Testimonials

Introduction of Sustinvest

What do we offer

Partnership

Sustainable management

Socially Responsible Investment

manpower

milestones

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18ceo message

INVESTING IN THE FUTUREcEo message

Environment, Social and Governance issues have emerged as significant risks and

opportunities in today’s business environment. ESG factors have grown to be as influ-

ential in mid and long-term financial performance of a company as the conventional

business management factors such as operations, marketing, finance and human re-

source management. In fact, a variety of empirical studies have continuously indicated

close and positive correlations between ESG factors and financial performance.

As a think tank, Sustinvest evaluates and analyzes companies’ ESG performance that

is the level of corporate sustainable management. Sustinvest is a leading Korean re-

search institution dedicated to delivering products and services with two imperative

virtues: 1) independent perception from corporate clients and 2) objective expertise

as an evaluator.

As a leader in sustainability, SRI research and analysis in Korea, Sustinvest aims to

achieve three goals: 1) widely spread the concept of Social Responsible Investment,

2) improve sustainability management level of domestic corporations through SRI,

and 3) enhance the sustainable future of Korea along with sustainably well managed

corporations. our in-depth understanding of local perspective of SRI and sustainabil-

ity can bring significant outcome to the future SRI market in Korea and offer positive

influence to the global market.

Sustinvest will constantly develop our comprehensive understanding of SRI, sustain-

ability trends and best practices, and along this journey I would appreciate your

constant interests and support.

ceo, Sustinvest RyU youngjae

4 SUSTINVEST 5INVESTING IN THE FUTURE 5

Opportunities and risks emerged from non-financial performance of corporate such

as responding to climate change, building strategic relationship between corporate

and society and implementing innovative corporate management are now becoming

fundamental factors influencing business investment and decision-making. I believe

that the eSGValueTm model solely developed by Sustinvest is an effective instrument

to systematically analyze ESG data of listed companies.

client Testimonials

Sustinvest has played a significant role in spreading the concept of SRI in Korean

market whilst building its own strength, characteristic and competitive edge in the

domestic market. I strongly believe that both qualitative and quantitative research

conducted by Sustinvest will help to create a society where companies, investors,

environment and human community come together in harmony.

Korea Investment management co.,Ltd.

Equity Investment Team Manager BaEK Jaeyeol

Franklin, Templeton Investments

Equity Investment Team o Hojun

INVESTING IN THE FUTUREclient Testimonials

6 SUSTINVEST 7INVESTING IN THE FUTURE

Sustinvest is the first and leading SRI research & consulting institution established

in Korea. Sustinvest is a think tank that provides actionable information and criti-

cal insight on extra-financial risks and opportunities of companies to enhance the

decision-making process of the investor community. With our own expertise and

eSGValueTm framework solely developed by Sustinvest, Sustinvest evaluates the ESG

performance of the listed companies in Korea. Sustinvest provides eSG analysis and

advisory services to approximately 1.8 billion USD worth of SRI funds based on this

evaluation system, as of December 2011.


ESGValueTm Framework

ESGValueTm

eSGValueTm is the unique evaluation model solely developed by Sustinvest to evalu-

ate and analyze sustainable management performance of a company. This funda-

mental evaluation model evaluates the relationship between value chain and eSG

performance of a company, and leads to deriving risk and opportunity factors related

to corporate sustainability. Sustinvest uses eSGValueTm to systematically approach

the non-financial performance and its impact on corporate activities. ESGValueTm is

significant and exclusive as it has gone further than taking into account the interna-

tional standards on sustainability and other analysis framework of global institutions.

eSGValueTm considers distinctive characteristics of the Korean market and incorpo-

rates these factors and issues in the eSG evaluation process. Based on domestic

ESG related policy analysis, in-depth interviews with academic and field experts and

surveys conducted with security firms, Sustinvest is supported by a comprehensive

set of data to provide accurate and timely information considering issues at both local

and global level. In the coming years, Sustinvest will make ESGValueTm a more accu-

rate evaluation analysis tool for corporate sustainability assessment through incessant

improvements, to ultimately deliver credible, actionable sustainability analysis.

ESG Value

Sustainability analysis

Innovation - Innovation competency- Organization / Process / Product Innovation - climate change Response- Intellectual Property Dispute

External- Int’l Initiative cooperation- Social contribution- Local community Investment

Human Resource management- Sustainable employment- education and Training- Diversity and Fair employment- Working Conditions- Labor Relations and Harmony- employee Health and Safety

Supply chain management- Fair Trade - Green Procurement- Subcontractor evaluation on Social and environmental elements- Win-win cooperation with suppliers

Sales & customer- Fair Marketing- customer Information Protection- customer Satisfaction mgt- Green Marketing

operation- Transportation Improvement- Resource/Energy/Water Productivity- Pollutant and Waste Disposal- Green House Gas mgt- Preparation and Response to environmental Accidents

Governance- Shareholder’s Right- ownership and Transparency- Board Structure & Operation- compensation- Subsidiaries’ Risk

Firm Infrastructure- ceo’s Will- Sustainable mgt Straregy and System- Sustainability Reporting- Stakeholder Communication- ethical mgt System



What do we offer

SRI strategy development for institutional investors

- eSG integration into the investment portfolio

- Developing tailored SRI funds: climate change, governance, engagement, etc.

- SRI index development: sustainability, carbon efficiency, corporate gover-

nance and other SRI related index

SRI advisory Services

- company Research: eSG analysis report for individual companies in Korea

- SRI related policy development

- corporate eSG assessment and Peer Analysis Review

Sustainability Research and analysis Products

- Assurance of corporate sustainability report

Verification Services

Data Provision

- eSG database for investment process, corporate management and policy

making

What do we offer

Sustinvest works with the investor community, corporations and public organizations

to provide customized support for them to achieve their SRI and sustainability man-

agement objectives. We offer services and products with a large degree of flexibility.

8 SUSTINVEST


Sustainalytics is a leading global provider of environmen-

tal, social and governance (eSG) research and analysis,

with nearly 20 years of experience and knowhow in

the Responsible Investment (RI) markets. Sustainalytics provides services for one of

the largest pension funds, PGGM and Triodos Bank. Headquartered in Amsterdam,

the Netherlands, Sustainalytics stretches over six countries: Boston, Frankfurt, Paris,

Toronto and two representative offices worldwide. Over 60 analysts are covering

different sectors, Sustainalytics have eSG database of approximately 2500 companies

around the world. Through such database Sustainalytics provides the best global

insights to investors, financial organizations and various stakeholders.

• Sustainalytics Global Platform

online platform containing eSG information and analysis of over 2,500 global

companies including Korean companies in an easy-to-use interface

• Global Compact Compliance Service

Screening of companies in compliance of UN Global compact, the international

standards of corporate Social Responsibility

• Controversial Weapons Radar

Reviewing involvement of corporations in seven types of weapon-related

controversy such as development, production, maintenance, etc.

• Country Risk Monitor

Evaluating ESG risk level of each country and providing graded information to

clients

• Corporate Sustainability Intelligence

Supporting clients’ business planning by sharing its insights on key information such

as competitor analysis, best practice in each industry, etc. necessary for priority

alignment of sustainability programs

Partnership

SUSTaINalyTIcS www.sustainalytics.com

Partnership

Services

Sustinvest provides the highest quality products and services with the world class partners.

10 SUSTINVEST


As a research firm specialized in environments, Trucost has provid-

ed comprehensive data and advisory services to some of the most

distinguished companies, financial/ investment institutions, govern-

mental agencies for over ten years based on the environmental

impact analysis of about 5,000 companies worldwide. The model

solely developed by Trucost enables it to quantify environmental impact of corporate

activities objectively and transform into financial data in order to compare and assess

the environmental risks of each company. From 2009 Trucost has announced ‘Green

Ranking’ of 500 American companies and 100 global companies with Newsweek.

Sustinvest developed the environmental impact DB of 300 Korean listed companies

with Trucost and based on the data, further developed Carbon Efficiency Index in

2011.

• Company Environmental Briefing Reports

Providing quantitative and financial assessment of a company’s direct/ indirect

environmental impacts

• Supply Chain Analysis

Supporting clients to develop environmental strategy by analyzing the

environmental impact of a supply chain and finding the fundamental risk factors

• Benchmarking and Peer Analysis

Providing competitor analysis report to help assess the comparable environmental

impact level of a client

• Portfolio Environmental Footprints

Measuring the environmental risk of a portfolio through strategic partnerships

with financial institutions and credit rating agency and developing financial

products related to environments

• Environmental Data Subscription

Providing DB of the environmental performance and relevant financial information

of about 5,000 listed companies

Services

Services

TRUcoST www.trucost.com

Hermes Equity Ownership Service (HEOS) is a com-

prehensive consulting firm on Responsible Investment

(RI) and ownership, providing various services for an

investor to be a responsible shareholder to fulfill the fiduciary duties. As a subsidiary

of Hermes, the global leading company of Responsible Investment and governance

investment strategy, HeoS supports institutional investors to determine the alterna-

tives of maximizing long term shareholder value by engagement, instead of just being

shareholders. HeoS offers advisory service to 23 international clients, over $100

billion of assets under management as of February 2011.

Hermes Equity ownership Service www.hermes.co.uk

Partnership

• Intelligent Voting

conducting shareholder voting rights consulting about 10,000 companies

worldwide and collecting reasons for shareholder voting rights through continuous

communication with companies

• Engagement Service

executing engagement strategy targeted for 450 companies worldwide to initiate

positive changes in corporate governance and general management strategy

• Public Policy

Providing public policy advisory services for policy making and implementing

institutions


Sustainable management is a management strategy that embraces three dimensions

– economic, environmental and social aspects and seeks to integrate them to maxi-

mize the Triple Bottom Line: Economic, Environmental and Social Performance. En-

vironmental, social and governance factors that are newly regulating today’s business

environment allow balancing the three dimensions ultimately leading to sustainable

growth of corporations. Especially as various stakeholders related to a company ap-

pear, ranging from stockholders to employees, suppliers, vendors, consumers, com-

munity, etc. sustainable management aims to communicate and figure out harmony

with all of them.

Triple Bottom line

economy

Society

envir

onm

ent

What is Sustainable management?

Socially Responsible Investment (SRI) refers to an investment strategy reflecting both

the financial and non-financial returns/performance such as ESG factors- Environ-

ments, Society and Governance. While conventional investing focuses on minimizing

risks and maximizing short term returns, SRI pursues sustainable long term returns by

analyzing ESG risk and opportunity factors that critically influence long term growth

of a company and a company’s capability to deal with these factors. The financial insti-

tutions with assets of approximately US$ 30 trillion under management have signed

UN Principle for Responsible Investment (UN PRI) to be signatories, which amounts

to 20% of the global finance market. And it is highly expected that SRI will be the

mainstream investment strategy led by pension funds and institutional investors.

What is SRI? - Socially Responsible Investment

Vision / Pursuit of SRI

* Financial Performance - Profitability / Stability / Growth / Shareholder value

* Sustainability Performance - eSG risk management / opportunity Factor Analysis

Financial Performance

Sustainability Performance

PositiveNegative

PositiveN

egative

Socially Responsible InvestmentSustainable management

TripleBottom

line


KIm Juyoung | Advisory Board

- Analysis & Assessment of Corporate Governance

- LL.m University of chicago

- Representative Lawyer, Hannuri Law Firm

- co-Founder, center for Good corporate Governance

- Research council member, Korea corporate Governance Service

JUNG Seoko | Advisory Board

- methodology Development

- Ph.D., Statistics, Seoul National University

- Professor of Statistics at Hankuk University of Foreign Studies

- Research Council Member, Statistics Center in Catholique de Louvain University, Belgium

Research Council Member, Humboldt-Universitat zu Berlin, Germany

KIm youngguen | Advisory Board

- Investment management

- mA, Business Administration, Seoul National University

- Vise-President, Infinity Investment Advisory Co. Ltd.

- Chief of Investment Analysis Department, KB Investment & Securities Co.,Ltd.

Investment and portfolio management of venture fund

- Securities management of corporate assets

lEE younggu | Advisory Board

- Corporate Accounting & Auditing

- mA, Business Administration, Yonsei University

- cPA, Samil Pricewaterhousecoopers

- Council Member, Seoul Seobu Regional Labor Office

yU Jongyoung | Advisory Board

- Investment Security System Development

- PhD., economics, SungKyunKwan University

- Professor of Logistics Statistics & Information Systems, Yong-In University

- Developed ‘Oasis Investment Information System’ with Samsung Securities Co., Ltd.

- mBA, Ashridge Business School

- Research council member, Sustainability management Forum of the ministry of Knowledge economy

Research Director, Korea Sustainability Investing Forum

Appraisal Board member, commission on Shared Growth for Large corporations and Small and

medium enterprises

Panel committee member, Public enterprise Performance evaluation

- Professional experience at Hyundai Securities co., Ltd., Dongbang Peregrine Securities co., Ltd., SK

Securities Co., Ltd., Meritz Securities Co., Ltd.

- Book Published

Korean Socially Responsible Investment (2010)

- Book Translated

Socially Responsible Investment: A Global Revolution (2007)

RyU youngjae | ceo

RyU myungjae | chief Research Director

- Corporate Innovations & Business Process Assessment

- mA, mIT Sloan School of management

- Books Translated

Improving Performance: How to Manage the White Space on the Organization Chart (2009)

IT Governance: How Top Performers manage IT Decision Rights for Superior Results (2006)

yaNG Inmok | executive Director

- environmental management Assessment

- ceo, THe· eco

- mA, environmental engineering, Stevens Institute of Technology

- Asia executive Director, Two Tomorrows

- Senior Panel of environmental management System

Verification Panel of Greenhouse Gas Emission & AA1000

- Books Published

Green ocean (2009)

environmental management Report (2006)

manpower

manpower

Sustinvest has an ESG expert Group with global outlook and local expertise



milestones

2011

2010

2009

· Published ‘2011 Sustinvest Annual Assessment report’ for 400 domestic listed companies

· Launched Carbon Efficiency Index with FnGuide, Trucost * FnGuide, Trucost

· econometric assessment of corporate Social Responsibility of companies investing in Vietnam * KoTRA

· Launched ‘2011 JoongAng Green Ranking’ of 100 Korean companies * JoongAng Daily

· Assurance of Hyundai mobis Sustainability report in partnership with Two Tomorrow

· co-assurance of KT Sustainability report

· management of entrusted SRI-type Korea Teacher’s Pension Fund, SRI fund management strategy consultation

and evaluation * Franklin Templeton investments

· “Hanwha SRI Fund of 100 years corporations” development consultation and evaluation

* Hanwha Asset management co.

· Strategic partnership with,

- Sustainalytics, the world famous eSG research company * Sustainalytics

- HERMES Equity Ownership Service, British company specialized in Responsible Investment * HeoS

2008· management of entrusted SRI-type national pension fund, SRI fund management

strategy consultation and evaluation * Korea Investment Trust management co.

· management of entrusted SRI-type national pension fund, SRI(climate change)

fund management strategy consultation and evaluation

* midas International Asset management

· “Better Corporate Equity Governance Fund” development consultation and

evaluation * Korea Investment Trust management co

· Published “Korea SRI Report” in corporation with Korea Sustainability Investing

Forum

· Participation in “Analysis sustainability of Korea’s 100 corporations” as a consultative

body * Kyunghyang Newspaper

· Enacted as a research think tank for research project entitled “Trends of global SRI

& activation in Korea” * The ministry of Knowledge economy

· Published eSG Individual company Analyst Report of major Korean companies * english and Korean

· environmental impact assessment and diagnosis, * KT including its subsidiaries

· Development of Homin Index, reasonable fair-trade between large and small/medium company assessment

model * The Small & Medium Business Administration

· Developed environment impact database of 250 Korean companies in corporation with Trucost

· Provided Environmental impact data and training for KAIST College of Business Graduate School of Finance &

Accounting Trucost

· Participated in developing content of Sustainable management Portal

* Business Institute for Sustainable Development

· Participation in the assurance of Hyundai motors Sustainability Report

· management of entrusted SRI-type National Pension Fund, SRI(Governance) fund management strategy

consultation and evaluation * Franklin Templeton investments

· cSR Analysis report of Korea’s top 10 corporations * The Konrad-Adenauer-Stiftung

· Comparative study of Korean, Chinese and Japanese SRI * UN Global compact

· Participated in sustainable management stakeholder advisory council * Hyundai motor company

· Strategic Partnership with,

- Trucost, British company specialized in environmental assessment * Trucost

2007· Development of eSGValueTm, a corporate sustainability assessment model

solely developed by Sustinvest

· member of UN PRI

· Developed Sustainable management Training program for employees

* Hyundai Engineering & Construction

2006· company established

milestones

add 3rd fl. HJ Bldg 837-7 Yeoksam Gangnam Seoul 135-080, Korea

Tel +82 2 569 2760, 4~5 Fax +82 2 569 2728 Email [email protected] Home www.sustinvest.com


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