Final version edit of TEDxTableMountain 2013 presentation, first speaker for a good day @TEDxTableMtn #TEDxTM2013 @esgarchitect

1. Investing as if the future matters
!
Graham Sinclair
@esgarchitect
!

2. What ESG issues? Mining sector
Annual event of the Principles for Responsible Investment (PRI), a voluntary signatory association of institutional investors and their services providers
representing nominally US$ 25 trillion with over 1,000 signatories. Plenary on Africa and investment at PRI in Person 2013 in Cape Town, South Africa, 1 October
2013. PHOTOCREDIT: Graham Sinclair/SinCo archive 2013
Tracking positive ESG performance by...
Global investors

3. Finding new investment to finance...
Global entrepreneurs
How to invest more money in women and men who are creating their own jobs, and solving societal and environmental challenges. Like this entrepreneur, or
“green” entrepreneur, a metals collector on the streets of Accra, Ghana, May 2011. PHOTOCREDIT: Graham Sinclair/SinCo 2013.

4. !
!
!
!
!
!
SOURCE: Johan Rockstrom: Let the environment guide our development. FILMED JUL 2010 • POSTED AUG 2010 • TEDGlobal 2010.
Joachim de Posada:
“Don't eat the marshmallow!”
TED2009

5. Long term investment is the
“marshmallow test” for adults
SOURCE: Joachim de Posada: “Don't eat the marshmallow!” FILMED FEB 2009 • POSTED MAY 2009 • TED2009

6. Compounding works
...for the long term investor
NOTES: In US$. Assumed monthly real growth rate 0.33% = 4% annual real growth rate. Terminal value @ 31 October 2013:
US$100 = US$ 136,488 from 1 August 1970; US$300 = US$139,151 from 1 May 1990; US$100 uncompounded = US$51,900
from 1 August 1970. SOURCE: Sean Smith/RisCura and Graham Sinclair/SinCo, November 2013.
$35,000
$70,000
$105,000
$140,000
$100 no compounding from August 1970
$300 compounding from May 1990
$100 compounding from August 1970
$51,900
$139,151
August 1980August 1970
October 2013
May 1990 August 2000 August 2010
$0
Investment grows geometrically with compounding.
It takes 3x monthly investment to catch up, over 23 years.

7. Earth pictured in an image taken from edge of the solar system (1.44 billion kilometers) is an image of fragility in a vast galaxy.
NASA's Cassini spacecraft has captured Saturn's rings and our planet Earth and its moon in the same frame Earth, which is 898 million miles (1.44 billion
kilometers) away, appears as a blue dot at center right; the moon can be seen as a fainter protrusion off its right side. The other bright dots nearby are stars. 19 July
2013, the Cassini-Huygens mission is a cooperative project of NASA, the European Space Agency and the Italian Space Agency. Source: NASA/JPL/SSI/CICLOPS
Unless...

8. !
!
!
!
!
!
SOURCE: Johan Rockstrom: Let the environment guide our development. FILMED JUL 2010 • POSTED AUG 2010 • TEDGlobal 2010.
JOHAN ROCKSTRÖM
Let the environment guide our development
TEDGlobal 2010

9. Humans have the engineering to reshape the planet and its societies, directly and indirectly. If we chose to, we could flatten Table Mountain itself.
Pictured: Caterpillar 785C Off Highway Truck. OceanaGold mining truck working the Macraes mine, Otago, New Zealand, 5 September 2009 photographed by
Benchill, copyleft: Multi-license with GFDL and Creative Commons CC-BY-SA-3.0
Carve continents, flatten mountains, change ecosystems
Anthropocene Era

10. Externalities
A cape fur seal pup swims around oblivious to the plastic noose around it¹s neck. The seal is still growing and the plastic trash is not. The seal’s
death is inevitable and painful. Plastic pollution in our seas is a growing problem and this is not an isolated incident. Photographed by Jean Tresfon at
Duiker Island, Hout Bay 2013. Nikon D300 Subal Underwater Housing 2 Sea & Sea Strobes 1/250 F9 ISO400 underwaterimages.co.za
Unintended consequences of investment choices...

11. Cartoon depicting opinion of the exclusive nature of global emissions regulations at annual UN FCCC COP negotiations. COP17 was held in
Durban, South Africa November - December 2011. © 2012 Zapiro. All Rights Reserved. Used with permission from www.zapiro.com
Big investors also shape the rules

12. Speaking up
Live in front of video cameras and smartphone equipped audiences live tweeting, representative of NGO the Bench Marks Foundation seen posing
questions to investors and companies the during Global Reporting Initiative stakeholder meeting for launch of South Africa Focal Point at
Johannesburg Stock Exchange, February 2013. PHOTOCREDIT: Graham Sinclair/SinCo archive 2013

13. //ESGonBloomberg
ESG UNIVERSE
ESG data coverage reported by Bloomberg LP, November 2013. 20.8% global coverage based on 10,807 companies of total number of listed companies in
country with an average score of 18.6, includes only companies with active trading status at 5 October 2013. Environmental scores based on 4,379* companies
with an average score of 20.7. Social disclosure scores based on 5,706* companies with an average score of 23.1. Governance disclosure scores based on 9,936*
companies with an average score of 45.7. SOURCE: Bloomberg LP, November 2013.
More ESG data

14. A decade after a brilliant victory atop the iconic Alpe d’Huez inAlpine mountains in France, cyclist Lance Armstrong is tripped of all his titles for doping.
Lance Armstrong, in maglia gialla di leader della classifica generale, all'arrivo dell'8a tappa del Tour de France 2003, Sallanches - L'Alpe d'Huez.13 July 2003.
!
Investment legacy

15. By integrating ESG...
Better performance is possible
!
!
!
NOTES: Assuming US$100 invested from 28 September 2007 thru 31 October 2013. Standard indices. Market Price return, calculated monthly. US$ 16,717,754m
n=1,152 (World n=793; EM n=327; S.A.n=32) at 13 November 2013. Free float market capitalization adjusted. MSCI Global Sustainability Indices represent the
performance of the investment opportunity set (‘ESG beta’) of companies with high ESG ratings relative to their sector peers. They cover both global developed and
the US markets. The indices target the highest ESG-rated companies making up 50% of the adjusted market capitalization in each sector of the underlying index,
subject to the limitation that only companies with an ESG rating of ‘B’ or above are eligible for inclusion. They are reconstituted annually at the May Quarterly Index
Review and rebalanced at the August, November and February Quarterly Index Reviews. SOURCE: MSCI ESG, November 2013.
1%
9%
90%
Relative ESG Index Size
80
160
Sep28,2007
Nov30,2007
Jan31,2008
Mar31,2008
May30,2008
Jul31,2008
Sep30,2008
Nov28,2008
Jan30,2009
Mar31,2009
May29,2009
Jul31,2009
Sep30,2009
Nov30,2009
Jan29,2010
Mar31,2010
May31,2010
Jul30,2010
Sep30,2010
Nov30,2010
Jan31,2011
Mar31,2011
May31,2011
Jul29,2011
Sep30,2011
Nov30,2011
Jan31,2012
Mar30,2012
May31,2012
Jul31,2012
Sep28,2012
Nov30,2012
Jan31,2013
Mar29,2013
May31,2013
Jul31,2013
Sep30,2013
South Africa ESG Index
Emerging Markets ESG Index
World ESG Index

16. A trusted steward: the informal “key guard”
watches over more than US$200,000 worth
of cars for a gratuity at Muizenberg, Cape
Town, South Africa in September 2013.
Informal “key guard” holds keys to expensive cars
left with him while surfers enjoy the ocean
PHOTOCREDIT:
Graham Sinclair/SinCo archive 2013

17. A trusted steward: the informal “key guard”
watches over more than US$200,000 worth
of cars for a gratuity at Muizenberg, Cape
Town, South Africa in September 2013.
Unless you demand it, will investment management can be
a noble profession of trusted stewards
PHOTOCREDIT:
Graham Sinclair/SinCo archive 2013

18. Investing as if the future matters
!
Graham Sinclair
@esgarchitect
!

19. Long term investing as if the future matters!
1. Investment is about saving for the future. The longer you invest, the more
the investment takes advantage of compounding of positive returns, by
keeping costs low and assets diversified across asset classes and regions
over economic cycles. Unless you invest for the longer term...
2. Investment decisions include all material factors that estimate the future
earnings of the firm. That means all financial facts, including environmental,
social and governance (ESG) factors, matter. You need trust in the
investment ecosystems and investment professionals in New York,
Singapore, Dubai, London, or Johannesburg. Unless you demand ESG...

20. Investing as if the future matters
!
Graham Sinclair
@esgarchitect
!
graham.sinclair@sincosinco.com
Linkedin.com/in/grahamsinclair
Skype: graham_sinclair
+27.81.87.87.332 RSA
+1.484.802.9908 USA
+1.802.332.6887 SkypeIn
sustainable investment consulting

21. !
!
www.sincosinco.com
@SinCoESG
info@sincosinco.com
Sustainable
Investment
Consulting
• SinCo - sustainable
investment consulting - is a
specialist sustainable
investment advisory boutique
formed in February 2007. We
have no other focus, we have
no conflicts of interest. We
build investment conviction
and competence for our
clients using ESG factors in
investment ecosystems.
• SinCo has a track record of
building robust answers to
tough questions in
sustainable investment. Our
clients have included
institutional investors, UN
agencies and international
NGOs, think tanks and
foundations and stock
exchanges.
SinCo designs ESG
architecture for long term
sustainable investment
that matters.
Discussing the impact and future of the PRI with Kofi
Annan in The Netherlands, May 2008.
Debating the progress of ESG in Africa and the role of
private equity at the JSE in South Africa, August 2012.
With fellow CSR Africa keynote and sustainability legend,
Gro Harlem Brundtland in Nigeria, May 2012.

22. AfricaSIF.org is a new, strategic step in facilitating investment in Africa that purposefully integrates environmental,
social and governance (ESG) factors.
Africa Sustainable Investment Forum is an independent, Pan-African, not-for-profit network, knowledgebase and
advocate promoting investment in sustainable development across the continent. Launched in June 2010, the
AfricaSIF.org Project is run by volunteers building a network of institutions and individuals promoting sustainable
investment in Africa by investors in public, private and philanthropy sectors across asset classes, countries and
stakeholders from our platform at www.africasif.org.
AfricaSIF.org defines "sustainable investment" as "an approach to investment in any asset class in Africa where
environmental, social and governance (ESG) factors are proactively integrated at any stage of the investment life cycle."
You are invited to join our all-volunteer AfricaSIF.org project leadership team, or sign up as an individual member, or
join your organization as an institutional member from 2014. Join us at africasif.org/support.
22

23. Better performance possible
NOTES: Assuming US$100 invested from 28 September 2007 thru 31 October 2013. Standard indices. Price
return. Calculated monthly. SOURCE: MSCI ESG, November 2013.
1%
9%
90%
World ESG Index
Emerging Markets ESG Index
South Africa ESG IndexNOTES: US$ 16,717,754m n=1,152 (World n=793;
EM n=327; S.A.n=32) at 13 November 2013. Free
float market capitalization adjusted.
SOURCE: MSCI Inc November 2013.
Relative ESG Index Size
Relative ESG Index Performance
0
80
160
Sep28,2007
Nov30,2007
Jan31,2008
Mar31,2008
May30,2008
Jul31,2008
Sep30,2008
Nov28,2008
Jan30,2009
Mar31,2009
May29,2009
Jul31,2009
Sep30,2009
Nov30,2009
Jan29,2010
Mar31,2010
May31,2010
Jul30,2010
Sep30,2010
Nov30,2010
Jan31,2011
Mar31,2011
May31,2011
Jul29,2011
Sep30,2011
Nov30,2011
Jan31,2012
Mar30,2012
May31,2012
Jul31,2012
Sep28,2012
Nov30,2012
Jan31,2013
Mar29,2013
May31,2013
Jul31,2013
Sep30,2013
South Africa ESG Index
Emerging Markets ESG Index
World ESG Index