esg analysis - under researched companies
DESCRIPTION
Keith Olson, Director - Environmental Investment Services Asia Ltd. - People's Republic of ChinaTRANSCRIPT
ESG AnalysisESG AnalysisUnder researched companiesUnder researched companies
Environmental Investment Services Asia Limited
Keith Olson, CFAEISAL 27th May 2010
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• First and only company in Hong Kong specialising in environmental investing
• Well-managed value and growth companies in Asia with significant exposure to the environmental sector and the development of the low carbon economy
• Green Dragon Fund >3 year track record
TBLI: ESG AnalysisTBLI: ESG AnalysisAbout EISALAbout EISAL
Long/Short Equity – Thematic Long Bias
EISAL Advantage
EISAL
PERFORMANCE Primary Focus
PIONEERING Just in Asia
PROFILE Preferred Investor
PROPRIETARY In-House Research
PROFESSIONAL Experienced Team
PASSIONATE This is important
TBLI: ESG AnalysisTBLI: ESG AnalysisUnder researchedUnder researched
3EISAL
TBLI: ESG AnalysisTBLI: ESG AnalysisUnder researchedUnder researched
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“Normal” research is difficult enough
EISAL
Webpages: 111 million 1 million
Analysts: 39 1
• Not as used to dealing with investors• Corporate disclosure
“ESG” analysis is even more difficult• Not used to answering ESG questions
TBLI: ESG AnalysisTBLI: ESG AnalysisManaging expectations for Proprietary ResearchManaging expectations for Proprietary Research
5EISAL
What information do we really need?
• Electricity/water usage, CO2 emissions...
TBLI: ESG AnalysisTBLI: ESG AnalysisManaging expectations for Proprietary ResearchManaging expectations for Proprietary Research
6EISAL
What information do we really need?
• Electricity/water usage, CO2 emissions...
What questions should we ask?
• Targets, reports, officers, verification
TBLI: ESG AnalysisTBLI: ESG AnalysisManaging expectations for Proprietary ResearchManaging expectations for Proprietary Research
What information do we really need?
• Electricity/water usage, CO2 emissions...
What questions should we ask?
• Targets, reports, officers, verification
What key information is more practical to looking for?
• Commitment, best practice, momentum
• Time & manpower intensive
• Costly & not often at board level
TBLI: ESG AnalysisTBLI: ESG AnalysisEngagement with ManagementEngagement with Management
8EISAL
Few minority shareholders will ask ESG questions
• Discuss where we’re coming from...
• Discuss why it’s good for the company
TBLI: ESG AnalysisTBLI: ESG AnalysisEngagement with ManagementEngagement with Management
9EISAL
Few minority shareholders will ask ESG questions
• Discuss where we’re coming from...
• Discuss why it’s good for the company
Questions relevant to the company
• Too small for major international surveys
• ESG vs “environment”
Preferred investor & friendly shareholder
• Information exchange
• Stakeholder wealth
TBLI: ESG AnalysisTBLI: ESG AnalysisBalancing factorsBalancing factors
10EISAL
Taj Mahal – front view
TBLI: ESG AnalysisTBLI: ESG AnalysisBalancing factorsBalancing factors
11EISAL
Taj Mahal – back view
TBLI: ESG AnalysisTBLI: ESG AnalysisBalancing factorsBalancing factors
12EISAL
Disclosure of financial and ESG information
• Transparency is good for reputation
• Sensitivity to cultural differences
Momentum is fundamental
• Management needs to be engaged
• Changes need to be visible
Financials are very important
• Qualitative & quantitative
• Checks & balances
TBLI: ESG AnalysisTBLI: ESG AnalysisOther sources & Key messagesOther sources & Key messages
13EISAL
The global NGO sector now has an annual income of US$8 tr
Source: Oxford Development Abroad
– making it the world’s 8th largest economy....
Under researched companies are very different
ESG disclosure is difficult for small companies
It's the momentum & direction that counts
EISAL
Green Dragon FundGreen Dragon FundThe EISAL AdvantageThe EISAL Advantage
Keith Olson, CFAKeith Olson, [email protected]
Tel.: +852 2877 0088Tel.: +852 2877 0088
www.eisal.com
Thank you! Q&A