Introduction to Fund EcoMarket - the SRI database tool for UK Financial Advisers

1. Julia Dreblow
sriServices.co.uk
October 2012
For use by UK financial services professionals only

2.  Introduction
 What is ‘Fund EcoMarket’
& ‘Panacea Fund
EcoMarket’?
 Why should advisers use
Fund EcoMarket?
 Advice Process
 About sriServices.co.uk

3.  This presentation introduces and
explains Fund EcoMarket – an easy
to use database tool which helps
UK financial advisers identify
clients’ SRI aims and match them
to SRI fund options
 Its purpose is to help advisers offer
Sustainable and Responsible
Investment options more easily
and more often
 This in turn will enable advisers to
make more of growing public
interest in green and ethical issues
and help give more clients access
to funds they may be interested in

4.  UK screened SRI funds c£11bn (from £4
bn 10 years ago) – around 1.5% of retail
investment market according to
EIRIS, 2011.
These figures are dwarfed by institutional
assets...
 Eurosif (2009) estimate £5 trillion across
Europe, of which 92% is institutional
 Worldwide institutional investment
interest has ballooned in recent years eg
UNPRI (United Nations Principles of
Responsible Investment) membership
now exceeds 1000 signatories, with total
assets of over $30 trillion

5.  Simple.
 An easy to use tool that helps advisers to identify
clients ‘SRI Aims’ (with an integral ‘StyleFinder’ fact
find tool) and match them to relevant fund options.
The tool works by clustering all SRI funds into
‘Styles’.
 Comprehensive.
 A database of all retail, onshore, regulated
green, ethical and SRI funds – which also introduces
the major SRI strategies and shows which funds fall
within which SRI Style.
 Unique.
 Compliments exiting tools – this tool ‘gap fills’ – it
does not reproduce existing adviser tools. It fills the
hold in between the wide range of financial tools on
offer and SRI analysis services. It is neutral, non
judgemental , independent – and different.

6. • All retail SRI funds listed* – with
additional ‘Engagement’ options
• Over 400 fund entries (listed by distributer)
• All major retail product areas covered
• Life, Pension, UT/OEIC, IT
• Listed by high level investment sectors
• eg UK Equity, Global
Equities, Mixed, Bond, Income, Europe, Prope
rty, Other
• All major SRI Approaches included
• 7 Styles – across SRI market (with additional
information on newer ‘specialist’ options)
*Source: Capita/Synaptic Research

7.  Traditional Ethical funds primary approach is
clear, strict avoidance of a range of negative ethical
or ‘values based’ activities. They are likely to also
consider environmental and social issues, screening
out companies that do not meet the fund’s negative
criteria. May use international norms or standards. Responsible Engagement
May also have positive criteria but these do not
override the fund’s core negative screens. Sustainability Themed
 Balanced Ethical funds are ethically screened funds Balanced Ethical
that balance the positive and negative aspects of
companies across a range of ethical, social and Environmental Theme
environmental issues. Likely to invest in most
sectors, may favour market leaders or ‘best in sector’ Traditional Ethical
companies. Tend to have fewer absolute negative
exclusions than ‘traditional ethical’ funds. Faith Based
 Faith Based funds invest in line with a specific set of Clean Technology
religious values. This is a small group of funds with
few investment options at present.

8.  Sustainability Themed funds research a range of
issues relating to the sustainability agenda when
considering where to invest. They aim to hold
positive, forward-looking companies, with strong
environmental and social credentials. Fund managers
typically favour companies that are well placed to Responsible Engagement
benefit from regulatory and legislative change.
Sustainability Themed
 Environmentally Themed funds significantly
integrate environmental opportunities and risks into Balanced Ethical
their investment decisions. Environmental funds may
focus on a range of environmental themes or Environmental Theme
specialise in a single issue or resource. Some
environmental funds consider social and ethical issues Traditional Ethical
alongside environmental criteria.
Faith Based
 Clean Technology funds specialise in clean technology
and environmental solutions companies. Fund Clean Technology
managers often focus on environmental markets and
may favour pure-play companies that are well placed
to lead change. These are thematic funds and do not
have ethical screening criteria.

9.  Responsible Engagement Responsible Engagement
options are regular or
‘mainstream’ funds, offered Sustainability Themed
by SRI fund managers and
others. They encourage Balanced Ethical
positive change through
dialogue and shareholder / Environmental Theme
investor engagement
strategies. Engagement does Traditional Ethical
not normally directly impact
investment strategy. Faith Based
Clean Technology
SRI Services ‘Styles Directory’ link

10. SRI Styles: diverse motivations and drivers
Different fund styles suit different clients...
Ethical/Personal Values Business/Financial Influences
Responsible Engagement
Sustainability Themed
Faith
Environmental Theme
Balanced Ethical
Fund Manager view of clients’
Clean Technology
‘I want to make money and .....’
SRI aims & motivations:
Traditional Ethical
Reflect personal Combine ethical considerations with Benefit financially from being ‘ahead of
values/beliefs by avoiding business trends to help reduce risk and the curve’ . Want fund manager to focus
unethical industries or benefit from holding more responsible on environmental, social and governance
companies . May want to companies - and encourage positive change. risk /opportunity. Favours well informed
encourage positive progress Investor wants to feel comfortable with companies or sector/market leaders.
and change. responsible, forward looking investment May want to encourage change.
strategy.
www.sriServices.co.uk

11. After logging in you need to :
1. Input your name and your clients
name or reference
nb. this is for your reference only
2. Select fund ‘SRI Style(s)’ from list.
If this is not known ask your client to
complete the integral SRI fact find
questionnaire which will identify their
favoured Style/s
3. Select investment areas of interest
from pre-populated list
eg. UK Equity, Global
Equities, Mixed, Bond, Income, Europe
, Property
4. Select Fund/Product type(s);
Life, Pension, UT/OEIC and/or IT

12. •Fund EcoMarket generates...
•A ‘FundFinder’ list of all relevant
funds from your selected Styles /
Sector / Fund Type combination
•You tick which funds you and your
client are interested in
•Click ‘save’ or ‘print’ to generate
report and to keep for further
research - and for your audit trail
•See website to try it out!
www.FundEcoMarket.co.uk

13.  Helps financial advisers to advise clients better and
meet best practice standards
 Supports TCF & increased professionalism aims ... as
public interest in green/ethical issues is high
 Fits with FSA FG12/15 view that client needs must be
assessed on an individual basis - and areas like this should
not be overlooked
 ISO22222 requires advisers to ask SRI fact find
question, but is not prescriptive about next steps
 Helps advisers offer SRI more easily
 Matches clients needs to fund options
 Highlights different SRI strategies to reduce confusion
 Provides an SRI audit trails
 Can help advisers to develop fund shortlists and
portfolios
 Integrates ESG issues into advice process
 Demonstrates that whole market has been researched (an
RDR requirement)
 Informs fund research by showing SRI funds by asset style
and ESG (Environmental Social and Governance) aspects

14. • Initial SRI Fact Find Question
• Output: Yes / No
Step 1
• Identify SRI Aims
• Output: List of relevant SRI styles and/or SRI issues and approaches of interest
Step 2 to client
• Combine SRI and Regular Fact Find information
Step 3 • Output: List relevant options for further consideration
• Identify preferred options
Step 4 • Output: Shortlist of appropriate SRI fund options
• Recommendations
Step 5 • Output: Agree investment choices

15.  An online service provider
specialising in the SRI market
 Working only in the retail, adviser
market
 Three main links:
 www.sriServices.co.uk – for a wide
range of SRI information for IFA use
 www.FundEcoMarket.co.uk – fund
database tool for advisers only
 http://StyleFinder.FundEcoMarket.co.
uk – a client microsite for advisers to
offer to clients so they can complete
the SRI ‘StyleFinder’ fact find
questionnaire in their own time
 Also available via PanaceaAdviser
Ethical Zone from October 2012

16.  Any queries... please contact me via
 julia@sriservices.co.uk
 07702 563702
Or see...
 www.sriServices.co.uk
For information purposes only.
For use by UK based financial services professionals only.
We are not authorised to offer financial advice.
Please quote source where cited.

17.  2011 – bringing new ideas to life...
 An on-line SRI hub for advisers
 Comprehensive Fund EcoMarket database
 Adviser / retail SRI support & consultancy
 2008 – 2011, included the following...
 SRI Website mark 1
 UKSIF SRI Wrap/Platform report
 Sarah Pennells book
 1989- 2009
 Friends Provident L&P - SRI Marketing
Manager, SRI Development Manager, Senior
IFA Consultant (1996-2008)
 UKSIF – Director, Chair of Retail SubCom &
on 1st NEIW advisory board (2002 – 2009)
 NPI – Broker Consultant (1989-1995), AFPC

18.  To move retail SRI up a Thank you for listening!
gear (or three), by:
 Providing thought
leadership, ideas, enthusiasm ... and
a unique combination of experience
and independence
 Working with advisers, fund
managers and service providers to
unlock the potential of the retail SRI
market
 Providing new services to
compliment existing adviser tools so
that SRI can fit in with advisers
existing ways of working