2. SAM at a Glance
Investment boutique focused exclusively on Sustainability Investing since 1995
Develop and manage investment solutions for institutionals, as well as retail funds
EUR 9.2 billion total assets (30.09.2012)
Joint venture with S&P Dow Jones to power the DJSI (since 1999)
Unique access to companies. In 2012 > 30% of the total world capitalization responded
to SAM sustainability questionnaire
Member of Robeco, with approximately 100 employees in Zurich, Switzerland
Servicing a global and diversified client base
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3. SAM Investment Philosophy
SAM fundamental investment philosophy is based on the premise that overarching
sustainability megatrends such as demographic change, resource scarcity, pollution,
and climate change shape the competitive landscape in which companies operate by
introducing long-term sustainability risks and opportunities.
The impact of sustainability megatrends
-term business and
financial outlook is under-researched,
leading to market inefficiencies, which
give SAM a competitive edge over
mainstream asset managers who do not
consider these sustainability factors.
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4. Global Trends and Public Awareness
The Economist, 26. November 2010 Time, January 2011
Michelle Obama - Newsweek, 22. March 2010
National Geographic, April 2010 Newsweek, 06. June 2011
-Kofi Annan, Former Secretary General of the UN
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6. From Global Trends & Risks to Opportunities
Demographics, Resource Scarcity, Pollution, Climate Change, Scarcity of Arable Land
New Energy & Water Resources Materials & Climate Change Health & Wellness Agribusiness
Efficiency Resource Efficiency Solutions
Clusters Clusters Clusters Clusters Clusters Cluster
Production Factors
Wind Distribution & Basic Materials Transportation Nutrition
Producers
Solar Management Innovative Materials & Reconstruction Health Care Processing/Logistics
Natural Gas Advanced Treatment Technology Building Infrastructure Personal Care Packaged Food &
Power Infrastructure Efficiency & Metering Material Efficiency Agriculture Activity Beverages
Storage Recycling & Waste
Management
Investment Opportunities
5 Source: SAM Research
7. Recognition of Sustainability as Strategically Significant by Firms
Poll among 3000 Executives
70%
Investors?
6 Source: MIT SLOAN Management Review, Winter 2012
8. Holcim Experience with Corporate Sustainability
Integration into
Compliance Reputation Risk Mitigation
Business
TIME & COMPETITIVE ADVANTAGE
Identifying and Brand differentiation, new
Societal license avoiding risk, markets, products &
Regulatory
to operate, identifying services, outperforming
compliance, legal
recognition by opportunities, competitors, maximizing
license to operate
regulators providing societal societal and shareholder
value value
7 Source: Adapted from Holcim Group Support, 2012
9. SAM Definition of Corporate Sustainability
A company s capacity to prosper in a competitive and ever faster changing
global business environment by managing and anticipating current and
future economic, environmental and social risks and opportunities
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10. SAM Corporate Sustainability Assessment
Assessment: ~3000 Companies annually (58 sectors) > 30 trillion $ total MCap
3 dimensions / 20 criteria / 130 questions > 1000 data points/firm
Environmental Dimension Social Dimension
Climate Strategy Talent Attraction & Retention
Water related Risks Human Capital Development
Environmental Management System Occupational Health & Safety
Environmental Performance Stakeholder Engagement
Product Stewardship Human Rights
,,,
E S
E (G)
Economic Dimension
Corporate Governance
Code of Conduct, Compliance
Risk & Crisis Management
Customer Relationship Management
Innovation Management
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11. Integration of Intangible Criteria into Valuation
Economic Criteria Revenues
- Corporate governance Earnings
- Risk & crisis management
- CRM
- ... Costs
Return on
Invested Capital
Financial Valuation
Invested
Environmental Criteria Investments
Capital
- Operational eco-efficiency
- Climate strategy
- Product stewardship
- ... Capital Structure
Weighted Ave.
Social Criteria Risk premium Cost of Capital
- Human capital development
- Stakeholder engagement
- Supply chain management
- .... Liabilities
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12. SAM Research Capabilities
SAM Indexes
Corporate
Methodology
Sustainability
Cooperation with S&P Dow Jones
Development
Assessment Indexes
SAM Asset Management
Theme Equity Strategies
Core Equity Strategies
Clean Tech Private Equity
SAM Research SAM Sustainability Services
Fundamental Company Benchmarking
Industry and Industry Expertise Company Analysis
Sector Studies
Sustainability Expertise and Modeling SAM Publications
Financial Expertise Sector Studies
Sustainability Studies
Robeco
Robeco Products
Sustainability 3rd Party Cooperation
Investment Research Cooperation
Foresight
Recommendations
& Product Cooperation
Insight
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13. What Is ESG / Sustainability Investing? the Elephant in the Room
It raises
alpha!
It shuns
vice! It
It has
impact! creates
returns!
It
lowers
It reduces
communicates!
volatility
risks!
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14. Defining Objectives & Core Beliefs: Sustainability Investing
Framework
Investment Policy
Risk Management & Reporting
A) Financial B) Communication
Alpha Fulfill fiduciary duty
Lower volatility Produce ESG report
Asset Allocation
Less drawdown Meet UNPRI
Better return/risk profile Assume responsibility
as shareholder
C) Ethical D) Impact
Avoid controversial industries Promote Sustainability Themes
Quantify/demonstrate ESG impact
Avoid negative headlines Create socio-economic impact
Avoid reputational risk Proxy voting
Dialogue and Engagement
Manager Procurement & Monitoring
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15. Sustainability Investing Solution Set
Reporting & Communication
Risk Management
Active Ownership
Equity Real Assets
Themes Real Estate
Timber / Forestry
ESG Integration
Indexes
Low Vol / Beta Commodities
Emerging Markets
Fundamental & Quantitative Hedge Funds
Equity & Credit
Fixed Income
Sovereign Private Equity
Credit Clean Tech / Growth
Emerging Markets Infrastructure
Asset Allocation & Manager Procurement
Investment Policy
Governance
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16. A) Financial Perspective: Sustainability Research as Added Value for Investors
SAM sustainability data is likely to have predictive power for stock-selection, reflected in the positive
information ratio (0.5) of the portfolio consisting of sustainability leaders
Added value is generated by selecting sustainability leaders and avoiding sustainability laggards
Value creation tends to be consistent and stable for the entire time period
Source: SAM
15 The graph does not represent returns of an actual portfolio. It depicts returns of sustainability investments as rated by SAM. Results are shown gross of fees. Results would be
reduced by application of fees and expenses incurred in the management of the account. Returns shown do not represent the results of actual trading but were achieved by
retroactive application f a model with the benefit of hindsight. If the strategy had been in existence during this time periods, actual results could have been different, and
potentially lower than the hypothetical results that are presented.
17. A) Financial Perspective: Out-performance of Sustainability Leaders (Harvard)
Evolution of the stock price performance of $1 invested in Evolution of $1 of assets invested in the 90 component Low
the 90 component Market Capitalization-weighted portfolios and High- Sustainability portfolios based on Return-on-Assets
Leading Sustainability Companies out-performed significantly over the long term
Sustainability Leaders out-performed on ROE and ROA during the time period
Low sustainability: adopted sustainability more recently
High sustainability: adopted sustainability policies early on (i.e. in the early 1990s when CSR was still at nascent stage)
VW = value-weighted (Market Capitalization Weighted)
EW = equal-weighted
Source: Eccles, R. J., Ioannou, I., and Serafeim, G. 2011 The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance. Harvard
16 Business School Working Paper. Past Performance is not an indication of future results. The graph does not represent returns of an actual portfolio. It depicts
returns of sustainability investments as rated by SAM. Results are shown gross of fees. Results would be reduced by application of fees and expenses incurred in
the management of the account. Securities are chosen based on sustainability assessment questionnaires submitted by the issuers.
18. B) Communication Perspective: External Reporting and/or Internal Monitoring
CalPERS first stand alone Sustainable Sustainability is Essential is one of PPGM s
Investment Report in 2012 investment beliefs. PGGM publishes a RI AR
Its RI Policy is based on six pillars:
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19. C) Ethical Perspective: Defining an Exclusion Approach
Avoiding or selecting companies or sectors that engage in a variety of activities, such as:
Socially Constructive
Labor welfare and rights
Socially Destructive
Diversity and inclusion
Weapons
Risk Management
Tobacco
Pornography
Environmentally Constructive
Alcohol
Supply clean/potable water
Sustainable global food supply
Environmentally Destructive
Sustainable energy supply
Oil extraction
Mining
Economic Impact
Corporate Citizenship &
Economically Destructive
philanthropy
Gambling
Transparency
Stakeholder engagement
Avoiding companies with single negative incidents in the area of E, S or G
Avoiding companies that refuse to enter into engagement discussions with shareholders
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