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ESG USA 2010Global trends and US sustainable investingWednesday 23rd June 2010. Hosted by Bloomberg: 731 Lexington, New York, NY 10022

in association with

Hewson Baltzell, RiskMetrics Group • Millicent Budhai, NYC Comptroller’s OfficeSaskia van de Doel, PGGM Investments • Darragh Gallant, Jantzi-Sustainalytics • Peter Grauer, Bloomberg L.P.

Joyce Haboucha, Rockefeller Financial Asset Management • Lisa Hayles, EIRISKara Hurst, Business for Social Responsibility • Neil Johnson, Sustainable Asset Management USA

Adam Kanzer, Domini Social Investments • Erika Karp, UBS Investment Bank John Kehoe, Barroway Topaz Kessler Meltzer & Check, LLP

Cary Krosinsky, Trucost and Columbia University’s Earth Institute • Christopher McKnett, State Street Global AdvisorsMatt Moscardi, Ceres • Anne-Maree O’Connor, New Zealand Superannuation Fund

Russell Read, CEO, C Change Investment • Steve Rive, S&P Indices • Cherie Santos-Wuest, TIAA-CREFPeter de Simone, Social Investment Forum • Cheryl Smith, Social Investment Forum

Stephane Voisin, Crédit Agricole Cheuvreux • Alyson Warhurst, Maplecroft and Warwick Business SchoolHugh Wheelan, Responsible-Investor.com • John Wilcox, Sodali and ShareOwners.org • Lara Yacob, Robeco

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Clean Investor 2010

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This year’s ESG USA conference could not be timelier.

On the heels of financial reform legislation are bills on politicalcontributions and climate change. In addition, the Securities &Exchange Commission (SEC) increasingly is involvingsustainability-minded investors in the process of identifyingissues and suggestions for policy solutions and has issuedfavorable decisions on the filing of shareholders proposals anddisclosures of climate-related risks.

The Restoring American Financial Stability Act response to the credit crisis hasimportant proposals on strengthening investor corporate governance such as proxyaccess and director votes as well as finance and banking stability measures. Whatthese developments will eventually mean for investors and corporates is vital tounderstand.

At the same time, investors globally are seeking to collaborate further on engagingcompanies on environmental, social and governance (ESG) issues. This year’s proxyvoting season was one of the most active ever, with high volumes of proposals onclimate change, diversity, human rights, political contributions, hydraulic fracturing, laborrights, sustainability reporting, water and other hot-button ESG topics.

Investment based on sound ESG principles is gaining serious ground as the UnitedNations Principles for Responsible Investment passes the $20 trillion asset mark.

And ESG-relevant legislation outside of the US is also developing fast, meaning there ismuch to compare, contrast and understand.

As a result, investors and corporations need to be aware of the latest ESG trends andchallenges on both sides of the Atlantic and beyond.

Our thanks go to our associate organizations in putting together this event. The USSocial Investment Forum has been integral in promoting and growing ESG awarenessamongst institutional investors. Bloomberg has also become a major player in ESGinformation by incorporating data into its financial screens.

Thanks also to our sponsors: Robeco, SAM, Eiris, CA Cheuvreux, Jantzi-Sustainalytics,Barroway Topaz Kessler Meltzer & Check, without whom putting on such events wouldnot be possible.

ESG USA 2010 brings together top-level speakers from the US, Europe and otherimportant markets for targeted, practical discussion on pertinent themes of sustainableand responsible investment.

Most importantly, it brings together practitioners from the field to debate, challenge andinvigorate that discussion. Responsible Investor.com welcomes you to this year’sconference.

Hugh Wheelan, Managing Editor

Contents

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Managing Editor: Hugh Wheelan

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Editor: Daniel Brooksbank,

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Publisher: Tony Hay

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Responsible-Investor.com is published by Response Global Media Limited, PO Box 64581, London SW17 1BU, UK

2&3

Conference programme

4

ESG . . . Ever EvolvingHideki Suzuki and Rina Levy, MBA,Bloomberg

6

Responsible investing is worth apremiumStéphane Voisin, CA Cheuvreux

8

How institutional investors can deal withclimate change risks and opportunities Stephanie Feigt, and Michael Riley,SAM

10

Performance Analysis of Two IndianEquity IndicesAlka Banerjee, and Michael Orzano, S&P Indices

12

Speaker Biographies


23 June, 2010

8:15 – 9:00 Registration & Refreshments

9:00 – 9:20 Welcome

Opening Remarks

9:20 – 9:40 Keynote Address: The future of green investment.

9:40 – 10:30 Panel 1: Forging newresponsible ESG approaches ininstitutional investment

10:30 – 11:00 Refreshment break

11:00 – 11:45 Panel 2: The cutting edgeof ESG broker and investment research.

11:45 – 12:30 Panel 3: How are investorstranslating climate change risk andopportunities into their portfolios?

12:30 – 13:45 Lunch

13:45 – 14:00 Keynote Presentation

14:00 – 14:45 Panel 4: The changingshape of US ESG regulation: corporateenvironmental reporting and SECregulation.

Hugh Wheelan, Managing Editor, Responsible-Investor.comCheryl Smith, President, Trillium Asset Management, and Chair,Social Investment Forum

Peter Grauer, Chairman, Bloomberg L.P.

Russell Read, CEO, C Change Investment (Former CIO, CalPERS)

Moderator: Hugh WheelanSaskia van de Doel, Responsible Investment Team, PGGMInvestmentsCherie Santos-Wuest, Portfolio Manager, Corporate Social Real Estateportfolio, TIAA-CREFAnne-Maree O’Connor, Head of Responsible Investment, New Zealand Superannuation Fund

Moderator: Hugh WheelanErika Karp, Head of Global Sector Research, UBS Investment BankStephane Voisin, Head of Sustainability Research,Crédit Agricole CheuvreuxDarragh Gallant, Director of US Operations, Jantzi-Sustainalytics

Moderator: Hugh WheelanRob Berridge, Senior Manager of Investor Programs, CeresNeil Johnson, Head of Americas Global Clients & Marketing,Sustainable Asset Management USASteve Rive, MD Product Development, S&P Indices

John Kehoe, Partner, Barroway Topaz Kessler Meltzer & Check, LLP

Moderator: Hugh WheelanPeter de Simone, Social Investment ForumKara Hurst, Vice President, Business for Social ResponsibilityAdam Kanzer, Managing Director and General Counsel, Domini Social InvestmentsPeter Kinder, RiskMetrics Group

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ESG USA 2010Global trends and US sustainable investingWednesday 23rd June 2010. Hosted by Bloomberg: 731 Lexington, New York, NY 10022

in association with


NB: programme subject to change.

14:45 – 15:30 Panel 5: The latestdevelopments in fund manager ESGintegration

15:30 – 16:00 Refreshment break

16:00 – 16:45 Panel 6: The globalisation ofgovernance and voting and what it meansfor institutional investors

16:45 – 17:30 Panel 7: Big picture panelPost financial crisis: what can investorsdo to make markets and investmentssustainable?

17:30 – 17:40 Chair’s Summary & ClosingRemarks

17:45 – 19:00 Drinks Reception

RI specialists:Joyce Haboucha, Director, Socially Responsible Investment,Rockefeller Financial Asset ManagementCheryl Smith, President, Trillium Asset Management, and Chair,Social Investment ForumBroad product fund managers:Christopher McKnett, Vice President, State Street Global Advisors

Lara Yacob, Senior Engagement Specialist, RobecoJanice Hester Amey, Portfolio Manager Corporate Governance,CalSTRSMillicent Budhai, Director of Corporate Governance,NYC Comptroller’s Office

Moderator: Hugh WheelanAlyson Warhurst, CEO and Founder of Maplecroft, Chair of Strategyand International Development, Warwick Business SchoolJohn Wilcox, Chairman of Sodali, director of ShareOwners.orgCary Krosinsky, VP, Trucost, and Adjunct Professor at ColumbiaUniversity’s Earth InstituteLisa Hayles, Senior Client Relationship Manager, EIRIS

Curtis Ravenel, Global Head Sustainability Initiatives, Bloomberg L.P.

Sponsored by

Co-Sponsors AssociateSponsors

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ESG USA 2010

Entrance to ESG space by Bloomberg and its progress It has been just over a year since Bloomberg began integratingEnvironmental, Social and Governance (ESG) data into our CoreProduct offering. Historically, the research hurdles, sheer effortrequired for data collection and the uneven data availabilityprevented mainstream institutional investors from even attemptingto evaluate company ESG performance. Today, mainstreaminvestors are delivered ESG data alongside traditional financialfundamentals and SRI analysts access the same powerfulBloomberg analytical tools as the large financial institutions.

It is important that mainstream users get to E, S and G data aseasily as they view a company’s income, cash flow and balancesheet statements on the Bloomberg Professional Service. As firmsface tighter scrutiny on issues like environmental disasters, naturalresource management, employee treatment in factory operationsand management structure, it is only natural for investors in thosecompanies to hit ESG<GO> on the Bloomberg terminal to viewrelevant data and run multiple analytics.

Looking at a 60 day snapshot, Bloomberg ESG data sets wereviewed 11.5 million times by over 1,000 users from around theglobe – evidence that interest in ESG as a tool for gleamingadditional insight into company valuation is growing. As thefinancial meltdown of 2008, or the BP spill of 2010 indicate, ESGfactors have a clear role to play in evaluating material risks – andopportunities.

Active data collection As ESG data disclosure remains unregulated and dictated byvarying national laws, data collection efforts have so far yieldedmixed results. Our first phase of ESG research involved majorindices such as MSCI, S&P500, FTSE350 and Nikkei 225. At thebeginning, research efforts stayed within the boundaries of officialand publicly available sources such as corporate websites,sustainability reports, CSR reports, and annual corporategovernance reports. Analysts often found inconsistencies in dataavailable depending on the size of the company, sector, andcountry. Thus data scraping had to go beyond this first layer of

information. Bloomberg then created a sustainability survey basedon GRI indicators, and began contacting company heads ofsustainability and investor relations to address data gaps. In Q1 for2010, the analysts at Bloomberg contacted 650 companies in theUS, Europe and Japan. While the return rate for the BloombergSustainability Survey still remains disappointingly low, the callsreveal that a lack of manpower is the principal barrier to greaterESG disclosure. But dialogue between corporations andBloomberg continues as these efforts are in part educational. Thebetter informed these companies are about how investors applyESG methodology to portfolio analysis, the more forthcoming theywill be in making ESG data available.

Bloomberg to date has reviewed what it deems to be theinvestable universe of some 20,000 of the most capitalized equitiesacross 73 countries. The effort resulted in ESG data for 3,600 (+/)companies. Coverage, however, has grown at approximately 11-12% annually for the past 4 years and is only expected to continuethis growth pattern as more and more companies realize theimportance of greater disclosure. There is still a long way to gobefore company’s management and employees understand howtheir sustainability activities are tied to their company’s balancesheet and bottom line. Companies that do not wait for a regulatedframework will proactively set themselves apart from their peers.

In an effort to increase the number of companies disclosing ESGdata and the quantity of data disclosed per company, Bloombergnow scores companies solely on their ESG data disclosure. TheBloomberg ESG Disclosure Score is principally based on GRIstandards and data points are weighted differently by sector (forexample, omission of # of fatalities would not be significant forretail but would be punitive for Oil & Gas) – giving companies acompelling reason to increase their ESG data collection andreporting efforts. The scoring methodology is completelytransparent on the system and disclosure of all data fieldsBloomberg collects would give a company a perfect score of 100.To date only 8 companies have scores of 70 or better. Even withthe option to improve their disclosure by completing theBloomberg Sustainability Survey, there are no scores above 83.

ESG… Ever Evolving

Hideki Suzuki and Rina Levy, MBA, ESG equity analysts, Bloomberg

Average Disclosure Score by Industry

Utilities (159 securities)

Telecommunications (59 securities)

Technology (182 securities)

Oil & gas (166 securities)

Industrials (787 securities)

Helath Care (142 securities)

Financials (443 securities)

Consumer Services (350 securities)

Consumer Goods (377 securities)

Basic Materials (624 securities)

Minimum MaximumAverage

4.2

7.6

5.1

5.1

1.4

5.1

0.9

2.8

4.2

2.3

32.7

33.2

31.6

30.0

30.7

31.4

28.8

31.6

36.7

25.4

74.1

69.3

67.1

78.7

64.8

74.5

71.0

68.6

78.2

82.4


In Australia, energy consumption disclosurewill soon be a mandated for all localoperations

With SEC interest in ESG reporting and standards increasing, theexpectation is the US regulatory agencies will catch up to theircounterparts in Europe. Japan is also considering mandatorydisclosure of emissions-related information. In Australia, energyconsumption disclosure will soon be a mandated for all localoperations. While such movements are testaments to how relevantcompany sustainability practices are to regulators (and byextension shareholders who’ve aggressively pursued greaterdisclosure) across the globe, international standards on adisclosure framework still need to be adopted.

Bloomberg is working closely with the CDP, Ceres, GRI, UNGC,UN PRI and others to develop a consistent, value addedframework that provides investors with meaningful and actionableinsight into company ESG performance while relieving companymanagement from survey fatigue and duplicative disclosurerequirements.

Japan is also considering mandatorydisclosure of emissions-related information

However difficult gathering the data has been, since the collectionstarted in December 2008; we have seen improved reportingacross the board from corporations. In fact, some companies nowvoluntarily report ESG in their Annual Reports, a clear response tothe integrated reporting call from multiple stakeholders.

Keep Mainstreaming ESGAs the first mainstream financial data vendor to provide ESG, ourgoal is to further integrate ESG into fundamental financial analysis.How will revenue, bottom line, and cost of capital be affected overa given time horizon when variables like material and naturalresource exposure, labor practices and company reputationchange? Are companies seeing opportunities in climate change orare they merely acknowledging it as a potential risk? How areretained earnings, dividend yield, and total return reflected inmanagement pay? Tools for generating ideas, detecting differencesin management structures and resource uses against its peers are

all part of our equity product offering. Many analysts already usesome sort of E, S, or G factors to evaluate companies; mostnotably to find good governance practices. Demand fortransparency on the corporate side is growing. ESG metrics keepimproving as a result, and along with it the ability of equity analyststo see beyond short term financial and technical analysis. We willcontinue to develop tools for those who seek to use ESG incompany valuation, as well as those corporations that see thevalue in ESG management and set out to distinguish themselvesas leaders in the field.

Hideki Suzuki

Hideki Suzuki is an ESG Data Analyst atBloomberg Equity FundamentalsDepartment. Prior to joining Bloomberg LPin 1999 he has interned at the UN-CSD (UNCommission on Sustainable Development)'sNational Information Analysis group for ayear, learning the fundamentals of naturalresource use for sustainable development.

He then joined Bloomberg as a research assistant in fixed incomeand derivatives pricing group and worked for 6 years before joiningthe Equity Fundamentals Department and worked as a Bankingand Insurance Sector Analyst. Now he works in ESG DataResearch team to develop ESG/ SRI research and data productsfor institutional investors. He is a member of the SustainableInvestment Research Analyst Network. He has a B.A. in Historyand Economics from Fordham University, New York.

Rina Levy

Rina Levy is an ESG analyst working atBloomberg LP. Rina works with both clientsand corporations to improve transparencyand disclosure of environmental, social andgovernance (ESG) data. Prior to joining theESG team Rina worked as a FundamentalAnalyst covering North American Oil & Gascompanies. She is currently a member of

the Sustainable Investment Research Analyst Network (SIRAN)steering committee. SIRAN is a network supporting more than 220analysts who specialize in integrating environmental, social, andgovernance research with investing. She has a B.A. in History inEducation from Rider College and an MBA from Rider University.

With SEC interest in ESG reporting andstandards increasing, the expectation is theUS regulatory agencies will catch up to theircounterparts in Europe

Building on our ESG Research experience and synthesizing many yearsof academic research, we see the need to reframe the question of SRIperformance… We state that environmental and social benefits have anintrinsic value that should be reflected in higher stock prices and,symmetrically, a price to pay for it. If the responsible consumer and theresponsible investor have anything in common, then a price premium isa selling point for a Sustainable and Responsible equity asset.

The SRI premium is a difficult one to identify and assess The quest for a correlation between financial and CSR performance(using accounting based or market based measures) have yieldedmitigated results. The specific subject of risk vs. performance has notbeen thoroughly examined and many studies use risk-adjusted results.The materiality of an ESG issue is therefore neither systematic nor easyto assess. The answer to the so called missing link is so simple, almosttautological, that one can wonder why it is still a question: CSR analysisand ratings alone cannot yield financial results. It has to be combinedand enriched by the expertise of financial analysts dedicated to theirsectors, to understand the financial consequences of CSR policies.

There is of course no free lunch: it is a complex, qualitative andresource consuming process. We also find that the ESG dividendalmost always has a short term cost and sometimes it is difficult to tell ifit will pay in the long run : risks, by definition, may not materialize. Still,ESG issues represent a risk for unprepared companies that has to bediscounted and a business opportunity for a happy few.. - A materialityprotocol to assess Environmental and Social risks Intangible risksanalysis is the right arm of extra-financial research (the left one beingintangible capital analysis, which we detail further). We have developeda holistic methodology to identify the nature of the risks that can bear afinancial materiality and determine how they can be relevant to acompany. This protocol approach in theory meets all environmental,social and public health type of issues. It however does not apply tomost governance ones.

CA Cheuvreux Materiality Protocol1. HARD LAW – Market mechanisms, environmental taxes, banning

Ex: Bonus Malus taxes for cars2. SOFT LAW – New standards, International agreements, European

targets3. LIABILITIES – Risk exclusion, fees increase, antitrust actions, class

actions Ex: Taxes pay back for fiscal evasion4. PHYSICAL – Natural catastrophes, climate stress, damages, social

tensions5. REPUTATION – Brand attraction, boycott6. SOCIOLOGICAL SHIFT – Consumer shift, pricing power: The

strongest drivers?

The analysis of the implementation of a carbon constraint tomitigate and adapt to climate change is emblematic of ourapproach. The objective is to assess the financial impact andeconomic shift on all sectors and companies exposed. As CO2 hasa priced fixed on a market, it is feasible to evaluate the impact ofthe carbon constraint on companies. This cost is far from negligiblefor energy intensive sectors: we evaluate the CO2 costs will reachEUR250bn over 2013-2020 (EUR35bn p.a.). It can significantlyreduce margins, as well as be a source, on a shorter term basis, ofwindfall profits, even for the most energy intensive companies.

A few sectors will bear the bulk of the constraint: electric utilities,heavy industries (steel, cement, pulp and paper), etc.

Most of the time, a company discards higher returns to protect againstsocial and regulatory liabilities: by properly paying taxes in thepharmaceutical industry, or, for heavy industries, by having a lowcarbon energy mix. Those companies have, in this regard, a less riskyprofile, and everything else being equal, display more stable cash flows.

For most sectors and for a few carefully selected issues, ESG topicshave a way to materialize and impact the margins of a company… andeventually its investors.

A premium necessarily means a price for itCan an investor benefit from that insurance premium? Can the CSRlower risk profile be cashed in by SRI funds? As a general rule, trust themarket to put the right price on a stock, and to be specific, on the SRIinsurance premium. We believe CSR performance and SRI fundperformance are two different issues that should be treated separately,and that including them conjointly in a meta analysis makes little sense.

How well a company performs and its attractiveness for the investorare somewhat disconnected questions. All depends on the share price.As Warren Buffet puts it, the magic of the stock market is thatsometimes you can buy a dollar bill for 40 cents. But the opposite mayalso be true! It does not really matter how well a company performs ifyou pay far too much to own the stock.

From Sustainability to Solvency : the premium link Investors should not expect higher returns from SRI : they should expectbetter returns. The financial attraction of SRI is to provide a sustainableand responsible insurance: SRI gives more steady dividends in the longterm and means better solvency. Logically, this should translate into aprice premium and, for the investor, imply lower returns.

Equity investors often resist this logic on the mistaken basis that if CSRperformance, in the real economy, leads to sustaining leadership, thenSRI performance should lead the market one. This confusion, however,disappear as soon as we transfer the logic on the bond market, andour argument, there, is difficult to refute : there is no doubt that acompany with better solvency benefits from lower interest rates. Itwould be quite paradoxical to expect the more virtuous companies topay a higher interest? Should corporate issuers pay an extra fee forbeing more sustainable ?

Credit agencies quietly integrate some ESG factors into theirmethodology, endorsing the principle that positive extra-financialperformance enlarges the "distance to default" of a company andindicates better solvency There is virtuous catch 22 situation behind thereasons why ESG performance leads to Solvency: it is either that thesustainability leaders are the most likely to sustain market leadership,either that only market leaders can afford to implement and achievesustainable objectives. Never mind... in both case it means there is aalso valuable solvency premium attached to SRI investment.

The cost of SRI premium can be optimized with ESG research The optimization of the SRI premium cost relies on the fund manager'sskills to stay ahead of the market: buy cheap and eventually sell high.That is why, on the whole, as beating the market is a zero-sum game:SRI fund performance is in line with its benchmark


ESG USA 2010

Responsible investing is worth a premium

Stéphane Voisin, Head of Sustainable & Responsible Investment, CA Cheuvreux


An insurance policy at low costA strong point of the PRI (Principles for Responsible Investment isthe claim on the capacity of the ESG approach to identify a newtype of potential risks for companies. Those risks might prove tobe even more hurtful for a fund performance if they tend not to betaken into account by traditional financial analysis and commonpractices in the market. Typically, those risks would not bereflected by the beta of a company, (and thus not identified assuch) as they are not correlated with market risks. From thatstandpoint, SRI has been an adequate response, being flexibleenough to answer a growing demand from the community ofinvestors. In fact, a relevant analysis of corporate socialresponsibility can be a sustainable competitive advantage inaddressing a growing set of issues.

Sector approach and financial analysis are necessarystepsRatings provide a basis for comparison between companies ESGperformance. We believeratings and sector approaches arecomplementary and we focus on identifying key issues andindicators on a sector basis. It is in our opinion a necessary stepbefore identifying those companies that are the best positionedto meet these long term issues. But beware of that step: it is acomplex process that resists many attempts of quantification. Forexample, understanding how the CO2 constraint affect the autosector requires crossing many sources of expertise and analysis:to assess the cost and feasibility of the different technical optionsto curb CO2 emissions, understand the advancement andcredibility of projects in place, evaluate the automakers' distanceto the CO2 objective , calculate how it impacts their operationalmargins, estimate their financial flexibility to pursue environmentalefforts, and so on… (more or less 300 extra-financial analysts in

– The potential for regulation and normalization is still highRelevant ESG issues have a strong potential to translate intoregulation. Carbon is theobvious example. Even for CO2, it maybe just the beginning given the challenges of global warming…but the road is long to Copenhagen. The perspective of furtherregulations are strong for a number of sectors / issues: nuclearwaste, waste and recycling, health issues in food, watermanagement, energy efficiency, etc. Once regulation is passed,the ESG issue at stake is factored in the market (see figure 3).

– Reporting initiatives and normalization should be otherdriversNormalization of reporting is recent, from the early 1990's.Emerging first with corporate initiatives, corporations also rely onsector initiatives (chemicals for example, as early asthe 1990’s).

Shareholder activism (Cadbury report in 1992 in the U.K, Enron,Parmalat and Vivendi scandals) has accelerated the access toinformation regarding governance. Since the beginning of the2000's, expectations have also grown with respect toenvironmental issues (climate change among others) and led tosignificant progress in environmental reporting. On the downside, social issues (human resources for example) are the lessdeveloped today.Through initiatives and normalization, andmaybe one day, integration to accounting standards, ESGreporting contributes to the assimilation of SRI by the market.

From risk to valueAccording to the PRI, ESG issues can affect the performance of aninvestment portfolio. PRI signatories recognize that their fiduciary role isto consider ESG issues in the investment process. Going further, KofiAnnan hinted in the PRI declaration that mainstreaming ESG factorsshould lead to a recognition by the market of the potential value ofCSR issues. As part of our analysis, we consider both extra-financialvalue and risks. Mainly, extrafinancial value flows from intangible assetsor capital. Following the initiative of the French observatory onintangible assets, we look at a range of intangible capital, thatcomplements the pure financial analysis.

In practice, the frontier between risk and value analysis is porous. Therelationship between risks and value is complex, as evidenced by theclimate change challenge. The carbon issue has materialized and isclearly priced in by the market. As a result, we now consider carbon, inabsolute term, as a capital, a source of future value. The differencebetween risk and value is thus partly methodological: as risksmaterialize they translate into a premium or discount on the market.

What is worth a social and environmental dividend ?One major investors’ motivations for integrating ESG is to encourageCSR behaviour. It implies either putting pressure to the worstcompanies or encouraging the ones that display best practices. Such amotivation has in our opinion two implications : 1) it stresses the needto meet extra-financial expectations by providing investors with anextra-financial dividend disclosing the ESG performance of thecompanies he invested in, 2) it also recognized the value of suchdividend which reporting is, at this stage, quite a challenge to formalize.Recognizing that social and environmental dividends have a valuedoesn’t necessary means that we are willing to pay for them. But isthere an alternative?

On the contrary, entering the virtuous cycle that encouragescorporations to go one step further on CSR issues and that lead to arecognition by the market of the potential value of ESG issues, ashinted by Kofi Annan, necessary implies some investment in the firstplace. First you sow, then you collect. It is in our opinion thecornerstone of the SRI business development to report on thoseenvironmental and social benefits: quantification and independentauditing are key. Unfortunately these benefits are a lot more complex tomeasure and report on than the financial performance.

Stéphane VOISIN

Stéphane Voisin is Head of SustainabilityResearch at Crédit Agricole Cheuvreux. Heholds an MBA in law and finance and is agraduate of Collège des Hautes ÉtudesEnvironnemetales, supported by ÉcoleCentrale of Paris. Moreover, he teaches"sustainable finance" at the University ofParis-Dauphine. Stéphane Voisin has over 20

years of experience in equity markets. Prior to joining CACheuvreux in 2005 to launch and expand the SRI research service,he was a vice president at JP Morgan (2000-2002) and at Paribas(1997-2000) in London, working in thematic equity investment. Hewas also in charge of the Equity Derivatives business at Barclays(1995-1997) and Natwest (1990-1995). He was a member of thefounding committee of the CAC 40 index and more recently of theLow Carbon 100 index. Stéphane Voisin has authored a number ofSustainability Research reports and articles from both equity marketand sustainability perspectives. He recently contributed to the"Finance and Sustainable Developments" work by Europlace,published by Éditions Economica. Stéphane Voisin has chaired theadvisory and scientific committees of various NGOs onenvironmental and social initiatives.


ESG USA 2010

How institutional investors can deal withclimate change risks and opportunities

Institutional investors have long had the responsibility of considering anarray of relevant risks when making investment decisions on behalf oftheir beneficiaries. Failure to do so could even constitute a breach offiduciary duty. But what happens when the relevant risks change ornew risks are introduced into the investment environment? Certainly, aninstitutional investor’s duty will have to shift to accommodate these newrisks in order to act in the best interests of their beneficiaries. Adaptingthis within institutional investing is, to a large extent, concerned with thefinancial interests of beneficiaries. If a new risk emerges with criticalfinancial and economic consequences for assets and extending toevery corner of the global economy, that risk needs to be activelymanaged by institutional investors.

CLIMATE CHANGE SETS NEW RULESClimate change presents exactly such a risk: one that is changing theinvestment and business environment and should attract the attentionof institutional investors. Climate change has such far-reaching impactsworldwide that it affects every company and industry, and ultimately theglobal economy. The widespread influence of climate changedifferentiates it from other environmental issues that may be local,short-term or only relevant to specific industries. Companies andassets will be affected in a variety of ways, ranging from regulatory andphysical risk to reputational and litigation risk. Significant greenhousegas emitters may have to cope with regulation strict enough to facilitatea reduction in emissions close to eighty percent by 2050, while thephysical impacts of severe weather events and rising sea levels will hitother sectors such as agriculture and insurance. Other implications,such as the likely strain on freshwater systems, will affect entireeconomies and populations. In every case, the risk from climatechange is real and can have a substantial financial impact oncompanies and assets, making it a risk that institutional investors with afiduciary duty should be taking into account. While some institutionalinvestors may have been working under the misconception thatconsidering climate change could violate their fiduciary duty because itmight hurt financial returns, the clear connection between climatechange and financial performance argues the opposite. Beneficiariescan potentially profit from active risk management as asset values aresafeguarded and opportunities are identified that even add value .

THE GLOBAL ECONOMIC CLIMATE IS CHANGINGIn the 2006 Stern Review on the Economics of Climate Change, LordNicholas Stern identifies a clear link between global GDP and theimpact of climate change. He concludes that climate change couldrepresent a significant cost to the economy, with one percent of globalGDP as the required yearly investment to mitigate the effects of climatechange. More importantly perhaps, is that a failure to effectively mitigateclimate change could mean that global GDP would be twenty percentlower in 2050. Climate change will have a clear impact on global GDPone way or another, with effective mitigation likely to be the less costlyoption. When we consider the strong connection between large assetholders, investment returns and the long-term health of the globaleconomy, it seems natural that institutional investors would want tostructure their investment strategies in a way that maximizes long-termglobal GDP growth. Beyond simply safeguarding portfolios against theadverse effects of climate change, asset owners stand to benefit fromthe message in Lord Stern’s research by investing in a way that willhelp mitigate climate change and thereby minimize the adverse impacton the global economy over the long term.

PIONEERS COULD LIKELY PROFITSome institutional investors already actively incorporate climate changerisks into their investment strategies. The Fonds de Réserve pour lesRetraites (FRR), which is part of the French pension system, viewsclimate change as having major implications for the economy and itsportfolio, and is working to incorporate related risks into its strategicasset allocation. The FRR has done an in-depth scenario analysis fordifferent climate change scenarios and their implications for strategicasset allocation. They realize that the set of risks facing investors haschanged, and that something needs to be done about incorporatingthese new risks into investment policies.

ANALYZING THE CARBON FOOTPRINTSInvestors can also plan for climate change risks by looking beyondstrategic asset allocation and into individual asset classes. In manycases, it will be the exposure on a company level or individual assetlevel that will be critical for determining the ultimate exposure to climatechange risk and asset returns. When considering investments withinequities or corporate bond portfolios, allocation can be made to avoidclimate change risk or to potentially profit from opportunities with best-in-class companies or companies proactively positioning their productsand services in the new business environment. Investors will need toanalyze carbon footprints and determine whether companies arefactoring environmental and eco-efficiency concerns directly into theirbusiness strategy. Reporting can be reviewed to see which companiesare actively assessing and disclosing their climate change risks.Investors will then need to decide how to incorporate the specificcompany or asset information into capital allocation to be sure that theyare giving due consideration to climate change risks.

IF LESS BECOMES MOREReducing their exposure to carbon-inefficient companies could be afirst step for institutional investors to implement climate change relatedrisks into their investment processes. The cement industry offers agood example. Producing cement is a CO2-intensive process, butsome companies have been establishing themselves as leaders incarbon efficiency within the industry. The graph below illustrates theprogress Holcim has made in its efforts to reduce the amount of CO2emitted per ton of cement product, which simultaneously reduces itsrelative risk to high carbon costs, reputational risks or other CO2-restrictive legislation. Investors can develop an environmental overlaywhich could be applied to all asset classes or could be implementedon a more class-by-class basis. Thematic funds that manage climaterisk can be considered for equity exposure, while private equityinvestments can be directed to the clean tech sector. Property and realestate investments should consider the environmental profiles ofallocations and be tilted toward areas such as “green buildings” withsuperior energy and water efficiency. Investors should also be sure thatproperty or infrastructure is not overly exposed to the physical impactsof climate change such as flooding or coastal erosion. Adjusting proxyvoting guidelines or working with information and service providers arealso options worth examining. These types of investment strategies canbe effective ways of considering the best interests of beneficiaries bydirectly incorporating into investment strategies the increasing risks anduncertainties brought on by climate change. In the case of large assetowners, it may also be the best way to help mitigate climate changeand boost the long-term health of the global economy and the relatedasset returns.

Stephanie Feigt, Chief Investment Officer, and Michael Riley, Senior Analyst, SAM


ABUNDANT OPPORTUNITIES DUE TO CLIMATE CHANGEWhile policy changes and materializing carbon costs have wreakedhavoc on sectors and companies with heavy CO2emissions, someproducts have been reaping the benefits of incorporating environmentaland eco-efficiency concerns into their design. One such product isgeothermal heat pumps for the heating and cooling of buildings whichuse a system of underground tubing to harness the constant mildtemperature of the earth for temperature control. Products that providesignificant advances in energy efficiency will be first in line to benefitfrom greenhouse gas emission reduction targets, and geothermalsystems are recognized by the US Department of Energy and the EPAas the most environmentally friendly, cost-effective and energy-efficientheating and cooling technology available.

CARBON COSTS CHANGE ECONOMICS OF GEOTHERMALHEAT PUMPSRising carbon costs which make fossil–fuel-based heating and coolingmore expensive simultaneously make the economics of geothermalheat pumps more attractive as energy savings increase. A subsidyfrom the US government covering thirty percent of installation and unitcosts underlines support for these types of technologies. The clearfinancial impact of high energy costs and climate change mitigationpolicy is evident, as North American sales of these products managedto buck the US housing slump. Growth in sales of these products isclearly demonstrated by the growing revenue of a virtual “pure play” inthe segment, Water Furnace Renewable Energy (WFI).

When it comes to managing thematic climate change portfolios, SAMconsiders companies which are active in the fields of climate mitigation,adaptation to climate change and response to global warming withtheir technologies and services. SAM therefore follows a broad-basedapproach to identify companies that appear as though they will benefitfrom the challenges arising from climate change or that will manageclimate change related risks more effectively. Based on its ongoingresearch, SAM integrates climate change issues not only into thematicclimate change strategies, but into all of its equity portfolios (thus alsotaking into account industry sectors that are not normally linked toclimate change, such as banks). We believe that this is an effectiveapproach to deal with climate change related risks and opportunities –especially for institutional investors such as pension funds.

A QUESTION OF COMMON SENSEThe mounting scientific and physical evidence has vaulted climatechange to the top of global political agendas as possibly the greatestlong-term challenge facing the world today. Climate change is alsoemerging as one of the key financial issues impacting the investmentenvironment. The physical and policy risks that climate change bringspermeate the entire global economy and demand an adaptation ofboth business and investment strategies. Institutional investors need toevaluate their portfolios to safeguard their beneficiaries’ interests againstthe resulting change in the risk environment. Fiduciary duty or not, thelink between climate change and long-term investment returns seemsclear, leaving investors to determine for themselves whether the assetsthey select in the interests of their beneficiaries are properly managed interms of climate risk. Or perhaps the issue can be viewed from anotherperspective, and the question can be asked directly to thebeneficiaries. Do they want the people managing their money to beignoring climate change?

Stephanie FeigtStephanie Feigt is SAM’s Chief InvestmentOfficer and Member of the ExecutiveCommittee. Prior to joining SAM, she wasHead of Investment Strategy and a memberof the Investment Committee responsiblefor tactical asset allocation at a SwissPrivate Bank. Stephanie holds a degree in

Economics from the University of Constance and the HumboldtUniversity of Berlin with majors in Capital Markets Theory andStatistics. She is a CFA Charterholder.

Michael RileyMichael Riley is an analyst at SAM in chargeof climate change research and coversprimarily construction and building materialcompanies. Prior to joining SAM he workedas an auditor in the US ad held variousfinancial controlling positions at ABB. Hehas an MBA from the Kelley School of

Business in Indiana, is a Certified Public Accountant (CPA) andCFA Charterholder.

1 A recent study confirmed that pension fund trustees in many jurisdictions have the obligation to consider ESG criteria for their investment strategies. See: “Fiduciary responsibility: Legal andpractical aspects of integrating environmental, social and governance issues into institutional investment. A report by the Asset Management Working Group of the United Nations EnvironmentProgramme Finance Initiative. A follow-up to the AMWG’s 2005 ‘Freshfields Report’”, July 2009, page 14, (http://www.unepfi.org/fileadmin/documents/ fiduciaryII.pdf)

DISCLAIMER This document is not an offering of securities nor is it intended to provide investment advice. It is intended for information purposes only. The views expressed in this commentary reflect those ofthe author as of the date of this commentary. Any such views are subject to change at any time based onmarket and other conditions and SAM and Robeco disclaim any responsibility to updatesuch views. These views may differ from those of other portfolio managersemployed by SAM or its affiliates. Past performance is not an indication of future results. Discussions of specificcompanies,market returns and trends are not intendedto be a forecast of future events or returns. Sustainable Asset Management USA Inc. (“SAM USA” or the “Firm”) is an Investment Adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.SAM is a subsidiary of Robeco Groep, N.V. (“Robeco Group”), a Dutch investment management firm headquartered in Rotterdam, the Netherlands. In connection with providing investment advisoryservices to its clients, SAM USA will utilize the services of certain personnel of SAM Group Holding AG (“SAM”), and Robeco Investment Management, Inc. (“RIM”), each a wholly owned subsidiaryof Robeco Group. © 2009 SAM

780

760

740

720

700

680

660

640

Industry Average

Holcim

References to specific securities are presented to illustrate the example noted aboveand are not to be considered recommendations. SAM products may or may not investin the specific securities identified and described.

1990 2000 2005 2006

Average Gross CO2 Emissions per ton OG Cement Product(Kg CO2/ton of cement), Source: SAM, Proprietary database for corporate sustainability

Geothermal Heat Pumps Success, Housing Failure(in %), Source: SAM, Bloomberg

160

120

80

40

0

-40

-802003 2004 2005 2006 2007 2008

15

40

77 102

170

-59

-30-2

14

7

WFI Sales US Housing Unit Starts


ESG USA 2010

IntroductionThe S&P ESG India Index (“ESG India”) returned +140.41% in2009, far outpacing the +75.8% return for the S&P CNX NiftyIndex (“Nifty”). While the composition and methodologies of thesetwo indices differ in many respects, prior to 2009, theirperformance was much more comparable.

Historical Performance Comparison

S&P ESG S&P CNXYear India Nifty Variance

2005 38.2% 36.3% 1.8%2006 31.1% 39.8% -8.8%2007 65.1% 54.8% 10.3%2008 -51.4% -51.8% 0.4%2009 140.4% 75.8% 64.7%2009Q1 3.0% 2.1% 0.9%2009Q2 68.0% 42.0% 25.9%2009Q3 24.3% 18.5% 5.8%2009Q4 11.8% 2.3% 9.5%

Source: IISL and S&P Indices.

The ESG India outperformed the Nifty in each quarter of 2009. Themajority of the year’s outperformance occurred in the secondquarter, however, when the ESG India beat the Nifty by nearly 26percentage points.

Comparative Sector ExposuresAs of 12/31/2009 As of 12/31/2008

S&P ESG S&P CNX S&P ESG S&P CNX

GICS Sector India NIFTY India NIFTY

Consumer Discretionary 9.9% 3.8% 8.7% 3.0%Consumer Staples 5.3% 6.1% 11.4% 9.1%Energy 3.4% 16.7% 10.2% 18.2%Financials 11.0% 24.2% 14.5% 22.0%Health Care 10.6% 2.4% 7.3% 3.1%Industrials 6.5% 13.2% 6.1% 10.9%Information Technology 21.0% 12.6% 15.3% 11.0%Materials 25.0% 11.1% 18.3% 6.4%Telecomm Services 2.4% 4.0% 3.0% 9.4%Utilities 4.8% 5.9% 5.2% 7.0%Total 100.0% 100.0% 100.0% 100.0%

Source: IISL and S&P Indices. Note: Companies are classified according to theGlobal Industrial Classification Standard (GICS®)

As illustrated above, the ESG India and Nifty have very differentsector exposures. Most notably, the ESG India is relativelyoverweight in Materials and Information Technology and relativelyunderweight in Financials and Energy compared to the Nifty.Likewise, overall sector variation diverged substantially during2009, contributing to the annual performance differential.

These sector imbalances had a major impact on 2009performance as Indian Information Technology and Materialsstocks (as measured by S&P BMI India Sector Indices) performedvery strong relative to the overall market. In fact, the S&P BMI IndiaMaterials Index jumped nearly 177% in 2009 compared to the85% return of the headline S&P BMI India Index. Financials andEnergy stocks, which are more heavily weighted in the Nifty,performed less strongly.

S&P BMI India Sector Index Annual ReturnsYear 2008 2009

Energy -55.3% 71.7%Industrials -68.6% 119.8%Materials -67.8% 76.5%Consumer Disc. -60.1% 132.9%Consumer Staples -14.8% 40.2%Financials -61.7% 83.5%Healthcare -30.9% 75.3%IT -49.9% 136.8%Telecom Services -48.2% -10.1%Utilities -53.2% 63.6%

Source: S&P Indices. Note: S&P Global BMI Sector Indices are based on GICS®.

Performance of Top Constituents As illustrated below, the ESG India’s top holdings posted extremelystrong annual performance in 2009 as each of the top ten stocksreturned more than 140%, and three posted returns in excess of340%. While the top holdings in the Nifty also showed solid annualperformance, only two returned more than 100%, and one stockdeclined for the year.

The largest constituents in the ESG India also generallyoutperformed their industry peers by a wide margin, as measuredby S&P/CNX 500 Industry Indices2. In fact, nine of the ESG India’stop ten constituents outperformed their respective industry indexby an average of 94.2%, while only four of the Nifty’s top tenconstituents outperformed their industry index by an average ofjust 8%. 28 of the 50 constituents of the ESG India outperformedtheir respective peer group industry indices by nearly 76%.

It is important to note that the Nifty, as which is India’s the leadingindex of major Indian companies, is weighted much more heavily inlarger, less volatile stocks. As a result, one would expect the largecap stocks that dominate the Nifty to be less likely to post theoutsized returns experienced by many of the ESG India’s topconstituents during a year of strong performance such as thatexperienced by the Indian equity market in 2009.

Performance Analysis of Two Indian Equity IndicesS&P ESG India Index and S&P CNX Nifty Index

1 Unless stated otherwise, all performance numbers are price returns denominated in Indian Rupees.2 The IISL does not provide sector/industry indices based on GICS®. Instead, IISL uses a single level classification system that organizes companies into 72 separate industries. In order to provide a more accurate comparison to individual

company performance with their specific peer groups, in this portion of the analysis, we have used these industry indices rather than S&P BMI sector indices.

3750

3250

2750

2250

1750

1250

750Dec -04 Jun-05 Dec -05 Jun-06 Dec -06 Jun-07 Dec -07 Jun-08 Dec -08 Jun-09 Dec -09

S&P ESG India

S&P CNX Nifty

Alka Banerjee, Vice President, Global Equities, and Michael Orzano, Associate Director, Global Equities, S&P Indices


An attribution analysis of the ESG India versus the Nifty confirmsthat the ESG India’s higher allocation to Information Technologyand Materials were important drivers of its outperformance of theNifty in 2009. However, the analysis indicates that several otherfactors were also at play, as all sectors with the exception ofEnergy resulted in a positive effect for the ESG India. For example,the ESG India’s relatively lower allocation to TelecommunicationsServices, a sector which performed very poorly in 2009, and thereturns of the ESG India’s Financial stocks also contributedstrongly to the ESG India’s outperformance for the year

ConclusionWhile a more detailed analysis is needed to establish the impact ofcompanies’ ESG standing on stock performance, the followingfacts can be observed: 1) the ESG India outperformed the Nifty bynearly 65% in 2009 and 2) the outperformance was driven bymultiple factors, including variation in sector exposures (mostnotably Materials, Information Technology and TelecommunicationsServices) and very strong performance among the top holdings inthe ESG India relative to peer companies.

Performance Attribution (12/31/2008 – 12/31/2009)S&P/ESG India S&P/CNX Nifty Variation Attribution Analysis

Port. Port. Port. Bench. Bench. Bench. Average Total Contrib.Average Total Contrib. Average Total Contrib. Weight Return To Return Allocation Selection Interaction Total

GICS Sector Weight Return To Return Weight Return To Return Difference Difference Difference Effect Effect Effect Effect

Total 100.0 140.6 140.6 100.0 82.3 82.3 0.0 58.4 58.4 47.2 7.5 3.6 58.4

Consumer Discretionary 8.1 140.6 12.9 3.0 185.0 4.3 5.1 -44.4 8.7 6.0 -0.1 -1.7 4.1

Consumer Staples 4.8 40.1 2.3 5.4 30.5 1.5 -0.6 9.6 0.8 1.1 1.6 0.9 3.6

Energy 3.2 55.5 2.8 22.4 77.8 21.8 -19.2 -22.3 -19.0 -1.1 -12.0 10.6 -2.4

Financials 9.1 134.7 12.7 17.0 76.6 10.4 -7.9 58.1 2.2 2.2 9.1 -3.1 8.2

Health Care 7.0 118.6 6.1 2.3 68.9 1.4 4.7 49.7 4.7 -0.1 1.2 1.4 2.5

Industrials 5.2 85.6 6.1 9.6 110.9 9.1 -4.4 -25.3 -2.9 0.0 -0.6 1.6 0.9

Information Technology 19.0 174.8 33.7 10.1 179.4 13.8 8.9 -4.5 19.9 6.7 0.6 0.8 8.1

Materials 25.5 178.4 43.4 9.1 200.7 13.2 16.3 -22.3 30.2 16.4 -1.0 -4.4 11.0

Telecom Services 2.1 8.0 0.7 8.1 -10.1 -0.3 -5.9 18.0 1.0 7.6 2.7 -0.6 9.8

Utilities 5.5 74.0 6.2 13.0 46.5 7.0 -7.4 27.6 -0.8 4.2 6.1 -2.0 8.4

[Unassigned] 10.5 216.9 13.7 0.0 0.0 0.0 10.5 216.9 13.7 4.3 0.0 0.0 4.3

Source: S&P Indices.Note: Calculations are made using quarterly index holdings. As a result, performance does not exactly match actual reported returns.

Top 10 Constituents as of December 31, 2009

S&P ESG India IISL Industry Weight in Index 2009 Return 2009 Industry ReturnKPIT Cummins Infosystem Ltd. Computer Software 3.7% 367.5% 167.8%Jubilant Organosys Ltd. Chemicals - Organic 3.5% 181.8% 116.9%Dr. Reddy’s Laboratories Ltd. Pharmaceuticals 3.2% 143.5% 73.1%Sesa Goa Ltd. Mining 3.1% 379.2% 178.9%Infosys Technologies Ltd. Computer Software 3.1% 133.1% 167.8%Wipro Ltd. Computer Software 2.9% 190.9% 167.8%Tata Consultancy Services Ltd. Computer Software 2.9% 213.6% 167.8%SRF Ltd. Textiles - Synthetic 2.7% 179.4% 71.7%JSW Steel Ltd. Steel & Steel Products 2.6% 341.2% 240.1%Mahindra & Mahindra Ltd. Autos - 4 Wheelers 2.6% 293.2% 258.5%Reliance Industries Ltd. Refineries 12.7% 77.1% 67.8%Infosys Technologies Ltd. Computer Software 8.2% 133.1% 167.8%Larsen & Toubro Ltd. Engineering 6.7% 116.9% 121.6%ICICI Bank Ltd. Banks 6.5% 95.3% 82.0%Housing Development Finance Corp Ltd. Finance - Housing 4.5% 80.0% 87.5%I T C Ltd. Cigarettes 4.3% 46.3% 47.6%HDFC Bank Ltd. Banks 3.9% 70.4% 82.0%State Bank of India Banks 3.9% 76.2% 82.0%Bharti Airtel Ltd. Telecom Services 2.7% -8.0% -10.2%Oil & Natural Gas Corporation Ltd. Refineries 2.6% 76.4% 67.8%Total 85.9%Source: IISL, S&P Indices and Factset. Note: 2009 industry returns are based on IISL industry classifications.

Disclaimer - Inception of the S&P ESG India Index was January 2008. Performance shown for the S&P ESG India Index is comprised of back-tested performance from December 2004 to December 2007 and actual performance fromJanuary 2008 till December 2009. Indexes are statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent. Such costs would lowerperformance. It is not possible to invest directly in an index. Past performance is no indication of future results.

© 2010 Standard & Poor’s Financial Services LLC is a wholly owned subsidiary of The McGraw-Hill Companies, Inc. All rights reserved. STANDARD & POOR'S and S&P are registered trademarks of The McGraw-Hill Companies, Inc. Thesematerials have been prepared solely for informational purposes based upon information generally available to the public from sources believed to be reliable. Standard & Poor’s makes no representation with respect to the accuracy orcompleteness of these materials, whose content may change without notice. Standard & Poor’s disclaims any and all liability relating to these materials, and makes no express or implied representations or warranties concerning thestatements made in, or omissions from, these materials. No portion of this publication may be reproduced in any format or by any means including electronically or mechanically, by photocopying, recording or by any information storage orretrieval system, or by any other form or manner whatsoever, without the prior written consent of Standard & Poor’s.

Standard & Poor’s does not guarantee the accuracy and/or completeness of the S&P Indices, any data included therein, or any data from which it is based, and Standard & Poor’s shall have no liability for any errors, omissions, orinterruptions therein. Standard & Poor’s makes no warranty, express or implied, as to results to be obtained from the use of the S&P Indices. Standard & Poor’s makes no express or implied warranties, and expressly disclaims all warrantiesof merchantability or fitness for a particular purpose or use with respect to the S&P Indices or any data included therein. Without limiting any of the foregoing, in no event shall Standard & Poor’s have any liability for any special, punitive,indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages. Standard & Poor’s does not sponsor, endorse, sell, or promote any investment fund or other vehicle that is offered by third partiesand that seeks to provide an investment return based on the returns of the S&P Indices. A decision to invest in any such investment fund or other vehicle should not be made in reliance on any of the statements set forth in this document.Prospective investors are advised to make an investment in any such fund or vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that isprepared by or on behalf of the issuer of the investment fund or vehicle. Analytic services and products provided by Standard & Poor’s are the result of separate activities designed to preserve the independence and objectivity of eachanalytic process. Standard & Poor’s has established policies and procedures to maintain the confidentiality of non-public information received during each analytic process.


Annika Andersson, Head of Corporate Governanceand Information, AP4, and chair AP funds EthicalCouncilAnnika Andersson is head of corporate governanceand information at the Fourth National Pension Fund(AP4), one of five buffer funds in the national pensionsystem. AP4’s assets are dominated by listed equitiesand interest-bearing corporate bonds, invested

globally. The fund works actively with corporate governance inSweden and globally.Annika is also chair of the Ethical Council, a collaboration betweenAP1, AP2, AP3 and AP4. The aim of the Ethical Council is to influencecompanies to address environmental and social issues through activedialogue with management, often together with other investors.Annika has a long background as a financial analyst and portfoliomanager.

Alka Banerjee, Vice President of Global Equities,Standard & Poor’sAlka Banerjee is vice president of Global Equities withinStandard & Poor’s Index Services group. Alka isresponsible for the design and methodology governingthese indices. She oversees the creation andmanagement of Standard & Poor’s global indices,focusing on creating new benchmarks for international

equity markets and promoting their use amongst global clients. Alka’s special areas of interest are emerging and frontier markets,Islamic Finance and global REITs, and most recently ESG and carbonefficient indices.Prior to joining Standard & Poor’s in 2000, Alka worked for The Bankof New York where she was responsible for the creation, maintenanceand marketing of The Bank of New York ADR Index. Before coming tothe US, she worked for the State Bank of India for ten years in India.Alka holds a Masters in Economics from Lucknow University in Indiaand an MBA in finance from Pace University, New York.

Rob Berridge, Senior Manager, Investor Programs,CeresRob is a Senior Manager of Investor Programs atCeres, where he leads shareholder engagement withcompanies on climate change, sustainability andgovernance issues, as well as various projects for theInvestor Network on Climate Risk. Prior to Ceres, Robserved as a board member and Vice President of

Green Century Capital Management and as a staff member of USEPA’s Green Lights and Energy Star Programs. He has also worked incommercial lending, as an environmental consultant, and for a start-up hazardous waste recycling firm. Rob has a degree inEnvironmental Studies from Brown University and a Masters inBusiness Administration from the Kellogg School of Management atNorthwestern University.

Millicent Budhai, Director of Corporate Governance, NYCComptroller’s OfficeMillicent Budhai is Director of Corporate Governance in the PensionPolicy Division, Bureau of Asset Management, at the New York CityComptroller’s Office. The Pension Policy Division, on behalf of the fiveNew York City pension funds (the New York City Board of EducationRetirement System, the New York City Fire Department Pension Fund,the New York City Employees’ Retirement System, the New York CityPolice Department Pension Fund and the New York City Teachers’Retirement System), is responsible for the funds’ proxy voting andshareholder activism program. The funds have over $100 billion inassets and together constitute one of the largest public pension fundsystem in the country.The City pension funds have a long history of activism, bothdomestically and internationally, in protecting the long-term financial

interests of their retirees. The funds’ international activism began in the1980’s with the South Africa divestment movement. They collaboratewith other institutional investors and are members of organizations thatsupport global sustainability, including CERES (the Coalition forEnvironmentally Responsible Economies), INCR (the Investor Networkon Climate Risk), and CII (the Council of Institutional Investors) and aresignatories to PRI (the Principles for Responsible Investing).Millicent has worked in the Pension Policy Division since 2004 onenvironmental, social and governance issues. Her responsibilitiesinclude, among others, conducting research, filing proposals andengaging companies on best practices in governance. Prior to thatshe worked in the Bureau of Fiscal and Budget Studies at the NewYork City Comptroller’s Office analyzing issues and policies relating toNew York City’s economy, tax revenues and budget. She holdsBachelor’s (First Class Honors) and Master’s Degrees in Economicsfrom the University of the West Indies, an MBA from Baruch Collegeand completed all but dissertation for a Ph.D. in Economics at NewYork University.

Darren Check, Partner, Barroway Topaz KesslerMeltzer & Check, LLPDarren J. Check, a partner of the firm, concentrateshis practice in the area of securities litigation andinstitutional investor relations. He is a graduate ofFranklin & Marshall College and received his lawdegree from Temple University School of Law. Mr.Check is licensed to practice in Pennsylvania and New

Jersey. Currently, Mr. Check concentrates his time as the firm’sDirector of Institutional Relations and heads up the firm’s PortfolioMonitoring and Business Development departments. He consults withinstitutional investors from around the world regarding their rights andresponsibilities with respect to their investments and taking an activerole in shareholder litigation. Mr. Check assists clients in evaluatingwhat systems they have in place to identify and monitor shareholderand consumer litigation that has an effect on their funds, and alsoassists them in evaluating the strength of such cases and to whatextent they may be affected by the conduct that has been alleged. Hecurrently works with clients in the United States, Canada, theNetherlands, United Kingdom, France, Italy, Sweden, Denmark,Finland, Norway, Germany, Austria, and Switzerland.Mr. Check regularly speaks on the subject of shareholder litigation,corporate governance, investor activism, and recovery of investmentlosses. Mr. Check has spoken at or participated in panel sessions atconferences around the world, including MultiPensions; the EuropeanPension Symposium; the Public Funds Summit; the EuropeanInvestment Roundtable; The Rights & Responsibilities of InstitutionalInvestors; the Corporate Governance & Responsible InvestmentSummit; the Public Funds Roundtable; The Evolving FiduciaryObligations of Pension Plans: Understanding the New Era ofCorporate Governance; the International Foundation for EmployeeBenefit Plans Annual Conference; the Florida Public Pension TrusteesAssociation Annual Conference, the Pennsylvania Association ofPublic Employees Retirement Systems Annual Meeting; and theAustralian Investment Management Summit.Mr. Check has also been actively involved in the precedent settingShell settlement, direct actions against Vivendi and Merck, and theclass action against Bank of America related to its merger with MerrillLynch.

Peter de Simone, Director of Programs, SocialInvestment ForumPeter DeSimone is the director of programs at the SocialInvestment Forum (SIF), the U.S. national nonprofitmembership association for professionals, firms andorganizations dedicated to advancing the practice andgrowth of socially responsible investing (SRI). In his rolethere, he has worked on developing SIF’s policy

ESG USA 2010

speaker biographies


program, including its submission to the SEC on mandatory ESGdisclosure.Before coming to SIF, DeSimone worked on sustainability issues formore than 14 years. He began his career at the Investor ResponsibilityResearch Center (IRRC), where he advised investor clients on thechallenges and opportunities posed by a post-apartheid South Africaand analyzed the contributions investors’ divestment and engagementefforts made in pushing South Africa toward non-racial democracy. In1996, he began investigating sweatshop abuses in companies’ supplychains and coauthored the 1998 landmark study, The SweatshopQuandary, Corporate Responsibility on the Global Frontier. He also hasadvised institutional investors on voting on shareholder resolutionsthroughout his career on a wide range of environmental and socialtopics, including water use, climate change, product toxicity, humanrights and equal employment opportunity.In his last post, DeSimone was head of labor and human rightsresearch at RiskMetrics Group, where he played a key role inestablishing the firm’s first global sustainability product and managingthe direct corporate engagement efforts for a diverse group of clients.He is an honors graduate of The American University with dual majorsin international development studies and economics.

Darragh Gallant, Director of US Operations, Jantzi-SustainalyticsDarragh Gallant is Director of Operations forSustainalytics’ U.S. office. Prior to joining Sustainalytics,Darragh was Director of Marketing and Client Relationsfor KLD Research & Analytics, Inc. in the U.S., whereshe was responsible for client retention and services,and external communication. Darragh has extensive

experience within the responsible investment industry in the U.S.,having also spent more than seven years as an environmental, socialand governance (ESG) research analyst at both KLD and CitizensFunds, a socially responsible mutual fund company. Darragh currentlyserves as co-chair of the Social Investment Forum’s SIRAN workinggroup. Darragh studied Economics and International Affairs at theUniversity of New Hampshire.

Peter Grauer, Chairman, Bloomberg L.P.Peter T. Grauer is Chairman of Bloomberg L.P., theglobal financial media company that was founded in1981. He has been a member of the BloombergBoard since October 1996 and was named Chairmanof the Board in March 2001 succeeding Michael R.Bloomberg. Mr. Grauer joined Bloomberg full time inhis executive capacities in March 2002. Prior to this,

he was a Managing Director of Donaldson, Lufkin & Jenrette from1992 to 2000 when DLJ was acquired by Credit Suisse First Boston.He served as a Managing Director and Senior Partner of CSFBPrivate Equity until March 2002. Mr. Grauer is a founder of DLJMerchant Banking Partners and DLJ Investment Partners. Mr. Grauergraduated from the University of North Carolina in 1968 and theHarvard University Graduate School of Business, Program forManagement Development in 1975. Mr. Grauer serves as leaddirector of Davita, Inc. (NYSE: DVA), a healthcare services companybased in California, and has been on the board of directors of overtwenty-five public and private companies. He is also a member of theBusiness Council and serves on its Executive Committee.Mr. Grauer is President of the Board of Trustees of the Inner CityScholarship Fund in New York City, Chairman Emeritus of the Boardof Directors of The Big Apple Circus and Chairman of the ExternalAdvisory Board of the Undergraduate Honors Program and theJohnson Center for Undergraduate Excellence at the University ofNorth Carolina at Chapel Hill. He is also a member of the Universityof North Carolina at Chapel Hill National Development Council andthe University of North Carolina at Chapel Hill Foundation Board,President of the Pomfret School Board of Trustees and a member of

the Board of the USA Cycling Development Foundation, a member ofthe Board of the Prostate Cancer Foundation and a trustee ofRockefeller University. Mr. Grauer has served as the President of theBoard of Trustees of the Irvington Institute for ImmunologicalResearch and as a trustee of Greenwich Academy, a private girlsschool in Greenwich, Connecticut. He is a recent recipient of thePapal Order of Merit. Mr. Grauer is married and resides in Greenwich,Connecticut. He and his wife Laurie have three daughters.

Joyce Haboucha, Director, Socially ResponsibleInvestment Group, Rockefeller Financial AssetManagementFarha-Joyce Haboucha, CFA, is the Portfolio Manager ofthe Libra Fund, Director of Socially ResponsiveInvestments within the Investment Group and aManaging Director of Rockefeller Asset Management.Before joining Rockefeller Asset Management, she spent

ten years as a Senior Portfolio Manager and Co-Director of SociallyResponsive Investment Services at Neuberger & Berman. She also waswith Manufacturers Hanover Trust as a Vice President and Group Headof the Personal Trust Investment, Private Banking and Securities Division,and served at Union Trust Company as a Senior Investment Officer,Portfolio Manager, and Manager of Research. Joyce is past Chairman ofthe Social Venture Network and serves on the Advisory Committee forthe Socially Responsible Investment Fund of the Haas Business Schoolat the University of California at Berkley, the Advisory board of the HeronFoundation’s Community investment Index and the InternationalCorporate Governance Network working group on Non-FinancialReporting. For 16 years, until 2008, she served on the investmentCommittee of the United Methodist Church. She has also served on theboards of FTSE4GOOD USA Advisory Committee and several non-profitorganizations, and over the years has been active in environmental andwomen’s issues. Joyce holds a B.A. from Columbia University.

Lisa Hayles, Head of Client Services (North America),EIRISLisa Hayles is Head of Client Services (North America)at EIRIS. Founded in 1983, EIRIS provides research oncorporate environmental, social, governance (ESG) andother ethical performance indicators to more than 150institutional investors around the world. EIRIS’ clientsrange from those who use our research for stock

selection or exclusion, to pension funds and other institutional investorsapplying an engagement or sustainability overlay to their investmentstrategy.In her current role, Lisa supports institutional fund managers and pensionfunds in North America seeking to implement a variety of RI strategies intheir investment processes. She also serves as a resource person on RIissues to several independent investment committees. She joined EIRISin November 2003 and previously worked at the Social InvestmentOrganization in Toronto, Canada where she was assistant director. Lisaholds degrees from the University of Toronto and the University ofGuelph in Canada and Université de Toulouse Le Mirail in France.

Janice Hester Amey, Portfolio Manager Corporate Governance,CalSTRSJanice Hester Amey is a Portfolio Manager in the CorporateGovernance group at the California State Teachers’ RetirementSystem (CalSTRS). CalSTRS is a public pension fund established forthe benefit of the California public school teachers over 90 years ago,in 1913. CalSTRS serves over 833,000 members, retirees andbeneficiaries. CalSTRS is a defined benefit plan.As of April 30, 2010, the fund has approximately $138 billion inassets; Canadian, domestic and international public equitiesrepresent about 65%. The remainder is allocated to fixed income,real estate, and alternative investments. U.S. Equity represents a littleunder 42% of this allocation, while non-U.S. Equity represents slightly


under 22%. Currently CalSTRS has long-term target allocations of20% to Fixed Income, 9% to Alternative Investments and 11% toReal Estate. Janice is responsible for the day-to-day managementand the development of policies and guidelines relative to therelational investment managers and corporate governance. Janice is a graduate of Trinity College in Hartford, attended AlbanyLaw School and has done extensive coursework in the Masters inEconomics program at Trinity. Janice has over 20 years of experiencein the investments area, almost equally split between the public andprivate sectors. CalSTRS’ Corporate Governance guidelines andmost recently reported fiscal year domestic proxy votes can be foundon the fund’s web site at www.calstrs.com.

Kara Hurst, Vice President, Business for SocialResponsibilityKara plays a crucial role in BSR’s global expansion byoverseeing offices on the East Coast of the UnitedStates as well as BSR’s Conference and Researchteams. A skilled CSR practitioner, Kara’s areas ofexpertise include corporate transparency, responsiblesupply chain management, management structures,

CSR and public policy, and industry collaboration. Since joining BSR, Kara has developed and led several industrypractices, including pharmaceuticals and biotechnology, media andentertainment, and information communications technology. She alsoled BSR’s work on social entrepreneurship and co-founded andfacilitated several groundbreaking industry initiatives, including theElectronic Industry Citizenship Coalition and the PharmaceuticalSupply Chain Initiative. In addition to her senior management role, Kara continues to overseeBSR’s work in the travel and tourism and media sectors and leadsour partnership with GE, including work on strategy, reporting, policydevelopment, and issues management. Additional clients includeAmerican Express, Cisco, Dell, Disney, Google, Hilton, Pfizer,Starwood, and Time Warner. Prior to joining BSR, Kara worked in Silicon Valley as the executivedirector of Open Voice, an East Palo Alto public-private venture that usesweb-based media to develop and empower communities. Kara has alsoworked in politics, for former San Francisco Mayor Willie Brown and thelate U.S. Senator Daniel Patrick Moynihan. Kara holds an M.A. in PublicPolicy from the University of California, Berkeley, and a B.A. fromBarnard College of Columbia University. She is the co-author of arecently published children’s book on pro-bono service and volunteering.In 2009, she was named an Aspen Institute Ideas Festival Fellow.

Neil Johnson, Head of Americas Global Clients &Marketing, Sustainable Asset Management USAMr. Johnson is Head of Americas for SAM USA, leadingthe business development and client service efforts,based in New York City. Prior to joining SAM, he was aDirector of Sales for Credit Suisse, joining in 2005. Mr.Johnson has also worked with AIG Investments andNeuberger Berman as asset management sales

representative. He began his career in the financial services industry in1987 as a financial consultant to institutional investors with SEI andHamilton & Company. He began his career with IBM as an applicationprogrammer and large computer systems sales representative. Mr.Johnson graduated from Union College and earned his CFA in 1991.

Adam Kanzer, Managing Director and GeneralCounsel, Domini Social InvestmentsAdam Kanzer is Managing Director and GeneralCounsel of Domini Social Investments and Chief LegalOfficer of the Domini Funds. His responsibilities includedirecting Domini’s shareholder advocacy department,where for more than ten years he has led numerousdialogues with corporations on a wide range of social

and environmental issues. In June 2009, Mr. Kanzer was named to the Securities and ExchangeCommission’s Investor Advisory Committee, representing “socialinvestors.” In 2008, he was named to Directorship magazine’sDirectorship 100, the magazine’s listing of the most influential peopleon corporate governance and in the boardroom. He served for twoyears as co-chair of the Contract Supplier Working Group at theInterfaith Center on Corporate Responsibility, focusing on improvingworking conditions in corporate global supply chains. He currentlyserves on the board of the Global Network Initiative, a multi-stakeholder initiative designed to address threats to freedom ofexpression and privacy rights on the Internet and othercommunication technologies, and on the public policy committee ofthe Social Investment Forum. He is the author of “Putting HumanRights on the Agenda: The Use of Shareholder Proposals to AddressCorporate Human Rights Performance”, a chapter in Finance for aBetter World: The Shift to Sustainability (Palgrave Macmillan, April2009). Prior to joining Domini in 1998, Mr. Kanzer was a litigator for four and ahalf years with the firm of Cahill Gordon & Reindel in New York City. InOctober 1997, Mr. Kanzer volunteered as an international observer ofthe South African Truth and Reconciliation Commission. He holds aB.A. in political science from the University of Pennsylvania and a J.D.from Columbia Law School.

Erika Karp, Managing Director, Head of Global SectorResearch, UBS Investment BankErika is a Managing Director and the Head of GlobalSector Research for UBS Investment Bank. Sheserves as Chair of the Global Investment ReviewCommittee, managing the UBS Global SectorResearch effort encompassing analysts andstrategists around the world. Erika is a member of the

UBS Research Managing Board, the Americas Equity BusinessCommittee, and was appointed to the IB Board in 2007. Additionally,Erika represents UBS Investment Bank Research on behalf of theUBS Wealth Management Investment Office in Zurich. Formerly, inher capacity as the Global Head of Research Product Management,Erika was responsible for developing the UBS family of equityresearch products and processes. She created and oversees thetrademarked UBS “Q-Series” global research initiative which hasbeen profiled in publications including Investment Dealer’s Digest,Euromoney, Thomson Extel and the Enhanced Analytics Initiative.Other trademarked recognized research includes the “UBS GlobalI/O”, the “Global Portfolio Manager’s Spotlight”, “CompellingAnalogies”, and the “Global Bear”. Erika is among the first winners ofthe UBS Investment Bank Leadership Award established in 2006.Erika is a member of the founding UBS Executive Diversity Council.She has been noted as a driving force behind the UBS diversityagenda through her efforts for the All Bar None women’s network,her recruiting and mentoring, and as the business champion behindthe creation of UBS Pride, the GLBT employee network. She hasserved on the National Board of GLSEN, and been honored for herwork in the community, including recognition by the YWCA-NYCAcademy of Women Leaders. Ms. Karp is a member of the ForeignPolicy Association, 100 Women in Hedge Funds, the SocialInvestment Forum and a frequent guest speaker at both Wharton andColumbia on issues concerning the evolution of investment research,entrepreneurial selling, and diversity in the workplace. Prior to joiningUBS in 1999, Erika worked at Credit Suisse First Boston for eightyears, most recently as a director in Institutional Equity Sales. Shebegan her career as an account representative for IBM Corp., andholds an M.B.A. from Columbia University and a B.S. in Economicsfrom the Wharton School, University of Pennsylvania. Erika lives onthe Upper West Side of Manhattan with her partner Sari and theirthree young daughters.

speaker biographies

ESG USA 2010


Peter Kinder, RiskMetrics GroupPeter Kinder co-founded KLD Research & Analytics,Inc. in 1988, in Boston, Mass., and served as itspresident and board chair until its sale to Risk MetricsGroup in 2009. He remains a consultant to MSCI, Inc.on socially responsible investment.During his tenure at KLD, Mr. Kinder helped create thefirst index to gauge the performance of socially

screened portfolios – the KLD 400 which marked its 20th anniversaryin 2010. By 2009, KLD’s index family numbered over 20. Thecompany also developed the first electronic and then the first on-linesocial investment research platform Research coverage grew from650 US companies to over 3000 global companies.Mr. Kinder has co-authored three books in his field: Ethical Investing(1984); The Social Investment Alamanac (1992); and Investing forGood (1993). He writes and blogs regularly focusing on legal issuesaffecting SRI, the evolving nature of the corporation, fiduciary dutiesand the passing scene. He has spoken at events on four continents.Mr. Kinder serves on the boards of The Capital Institute and of theCenter for Political Accountability, the finance advisory committee ofthe Wallace Global Fund, a private foundation, the President’s Councilof CERES and the Marlboro College MBA Program Circle of Advisers.Mr. Kinder has served two terms on the board of the U.S. SocialInvestment Forum, the SRI trade organization, one as vice chair. KLDwas a co-founder of the Sustainable Investment Research InternationalGroup (SiRi) and Mr. Kinder served on its board. He was a co-founderand principal (1997-2000) of Domini Social Investments, LLC.From 1973 to 1988, Mr. Kinder practiced law, first as an assistantattorney general in Ohio, then in Boston as a staff lawyer for afoundation and finally in private practice. He specialized inadministrative law and corporate regulation.Mr. Kinder received an A.B. in History from Princeton University in1970 and was awarded a J.D. from Ohio State University in 1973,both with honors. He was admitted to the bar in Ohio (1973), theDistrict of Columbia (1977), Massachusetts (1978) and the SupremeCourt of the United States (1978).

Cary Krosinsky, VP, Trucost, and Adjunct Professor atColumbia University’s Earth InstituteCo-edited & wrote Sustainable Investing: the Art ofLong Term Performance, along with Nick Robins ofHSBC, including contributions from numerous otherleading players in the field, published in late 2008 byEarthscan. A subsequent paper was released at the UNPRI Academic conference in Ottawa

http://www.unpri.org/academic09/agenda.php. A follow-uppractitioner’s guide/textbook as regards how to best practically investin a sustainable manner is in the works for Wiley Publishing to becalled The Future of Investing.Teaching and overseeing coursework at the University of Maryland’sSmith School of Business and Columbia University as regardsSustainability & Investing.Senior representative for Trucost in North America, where we maintainthe world’s most comprehensive database of the environmental impactsof companies. This data is used by cities, municipalities, universities,public & private companies, consultancies, fund managers & assetowners looking to understand and manage these impacts. Trucost’sinvolvement with Newsweek on Green Rankings has been wellreceived, and ongoing projects include carbon footprinting andreduction services for the City of London, numerous global fundmanagers, US universities, as well as building carbon efficient emergingmarkets indices for the IFC and S&P and much more.Prior to this, was a member of CapitalBridge’s managementcommittee (2003-2008), providing leadership on investor relationsservices, and related data and analytics.An original member of the 70 person Expert Group that created the UN’sPrinciples for Responsible Investment (PRI), which has been

committed to by over US$18 Trillion worth of asset managers and owners.Originally worked with Trucost on their award winning 2006 UK TrustCarbon Footprint study, as well as the IFC-sponsored Carbon CountsAsia 2007 report, issued at the December 2007 UN meetings in Bali,and have written and spoken publicly as a leading interpreter of equityownership & the environment on CNBC, for the Wall Street Journal,GreenBiz.com and more.Built and managed the world’s first complete global equity ownershipdatabase for Technimetrics (1989-2001), and provided strategicadvice regarding globalizing databases to Citywatch (2001-2003) andothers with international ambitions. • BA Hofstra University/University of Pennsylvania 1984, Computer

Science/Philosophy• Expert Group, United Nations Principles For Responsible

Investment (UN PRI)• Advisory Board, Association of Climate Change Officers (ACCO)• Founder Director, InvestorWatch• Member, Circle of Advisers, Marlboro College Sustainability MBA

Program• Advisor, Dwight Hall SRI Fund, Yale University

Christopher McKnett, Vice President, State StreetGlobal AdvisorsChris McKnett is a Vice President of Boston-basedState Street Global Advisors. He is the ProductEngineer for the firms’ global Environmental, Social andGovernance (ESG) investment business. Chris worksacross asset classes and investment teams tochampion sustainable and responsible investment on

behalf of SSgA and its clients. His primary responsibilities includeproducing thought leadership, product management, analyzing markettrends, and business strategy. Before his current role at SSgA, Chris headed business developmentfor KLD Indexes, a unit of KLD Research & Analytics, Inc. Chris beganworking in the investment management industry in 1999.He earned his Bachelors of Science in Business Administration fromthe University of Connecticut and his MBA from the Daniels College ofBusiness at the University of Denver. Chris is a Fellow Alum of TheAspen Institute Business & Society Program.

Curtis Ravenel, Global Head Sustainability Initiatives,Bloomberg L.P.Curtis Ravenel leads Bloomberg’s global sustainabilityinitiatives - a Chairman’s Office effort and the result ofhis 2006 Bloomberg Global Leadership Forumproposal. The program aggressively integratessustainability considerations into all firm operations andleverages the BLOOMBERG PROFESSIONAL Service

to evaluate sustainability-related investment risks and opportunities forits 300,000 customers. Curtis has worked for Bloomberg in multipleroles. He was the Financial Controller for Asia managing accounting,tax, treasury and audit services for 23 legal entities with combinedannual revenues exceeding $1 billion USD. This was preceded byvarious roles in the Capital Planning and Financial Analysis Groups.Prior to his work with Bloomberg, L.P., Curtis co-managed a small realestate development group, founded a micro-brewery and worked withthe Recycling Advisory Council in Washington, DC conducting Full CostAccounting and Life Cycle Analysis work. Curtis earned an MBA fromColumbia Business School and a BA in History from Davidson College.About Bloomberg’s CommitmentWith 11,500 employees in 140+ offices around the globe, Bloombergrecognizes that carbon emissions have global environmental, social andeconomic implications. As a progressive company, they are committed toaddressing them through a combination of actions: reducingconsumption, buying renewable products and services, helping to setstandards, encouraging disclosure and promoting clean technologies. Asthe premier financial information provider for banks, corporations,


governments and others, they are leveraging their distribution platform toprovide environmental, social and governance data to improvetransparency, liquidity and asset valuations.

Anne-Maree O’Connor, Head of ResponsibleInvestment, New Zealand Superannuation FundAnne-Maree O’Connor is the Head of ResponsibleInvestment for the Guardians of New ZealandSuperannuation (Guardians) and plays a key role in thedevelopment and implementation of the Guardiansresponsible investment and corporate governancepolicies.

Prior to joining the Fund, Anne-Maree was the Managing Director ofCoreRatings, a leading European rating agency for independentinvestment analyses of corporate responsibility and governance risks.She moved back to New Zealand after 20 years in Europe.Anne-Maree held various positions in the field of corporate responsibilityand responsible investment including Associate Director, SRI at MorleyFund Management, Head of SRI Research at Henderson GlobalInvestors and Head of Corporate Responsibility Ratings at Det NorskeVeritas.She has a MSc from the University College of Wales, a BSc fromMassey University and the UK Investment Management Certificate.

Russell Read, CEO, C Change Investment (FormerCIO, CalPERS)Prior to founding C Change Investments in 2008, Dr.Read served as Chief Investment Officer for America’slargest pension fund, the California Public Employees’Retirement System (CalPERS). During his tenure, heredirected the portfolio toward international and naturalresources opportunities, introduced its Commodities

and Infrastructure investment programs, re-established and enhancedits Forestland investment program, and established its cleantechnology and environmental investment efforts as the leader amonginstitutional investors.Dr. Read is also a founding member of the P8 Group, representing theworld’s eighth largest pension systems, coordinating towards scalablegreen investment solutions and has provided testimony to institutionalinvestors, the press, state legislators, federal regulators, the USTreasury, the US Congress, the US Senate, and the United Nations onhow to invest effectively while protecting and enhancing theenvironment. He was recognized by SmartMoney in 2007 in its Power30 list of the most influential people in business and finance and byInstitutional Investor in 2008 as #35 on its list of the 75 most effectivechief executives.Dr. Read received his B.A. in Statistics and his M.B.A. in Finance andInternational Business both from the University of Chicago. He receivedhis masters degree in Economics and his doctorate in PoliticalEconomy from Stanford University. He is also a Chartered FinancialAnalyst (CFA), a Chartered Life Underwriter (C.L.U.), and a CharteredFinancial Consultant (Ch.F.C.).

Cherie Santos-Wuest, Portfolio Manager, CorporateSocial Real Estate portfolio, TIAA-CREFCherie Santos-Wuest is a Director in TIAA-CREF’sGlobal Social and Community Investments groupwithin TIAA-CREF Asset Management. Ms. Santos-Wuest is responsible for managing the company’sCorporate Social Real Estate Investment Program,both investing for and managing the Program’s $500+

million debt and equity portfolio and the newly-launched GreenBuilding Technology Program.Ms. Santos-Wuest assumed her current role in 2007 after serving as aDirector in TIAA’s Global Private Markets group, responsible for largeloan origination for the commercial mortgage team, where shemanaged and originated over $1.2 billion in debt investments invarious territories within the United States and Canada. Since joining

TIAA in 2002, Ms. Santos-Wuest has also worked within TIAA’s CMBSand Acquisitions groups. Prior to joining TIAA-CREF, she spent 12years working in national corporate real estate firms and internationalarchitectural design firms.In connection with her investments work at TIAA-CREF, Ms. Santos-Wuest serves on several advisory committees of Real Estate funds inwhich TIAA is invested. She is Vice Chairman on the Board ofDirectors for Impact Community Capital, a for-profit corporation thatstructures and manages insurance company investments financingaffordable housing, community facilities, economic development, andother socially responsive investments in communities within Californiaand nationally. Ms. Santos-Wuest is also a Full Member in the UrbanLand Institute (ULI), an organization dedicated to providing leadershipin the responsible use of land and in creating and sustaining thrivingcommunities worldwide, where she serves as Vice-Chair at Large forthe RPI Product Council. She is active on the Institute for ResponsibleInvestment, Wall Street Without Walls, and the WX New YorkWomen’s Executive Real Estate, and has spoken on numerous panelsand seminars on urban revitalization, sustainability and pension fundinvestments across the country.Ms. Santos-Wuest holds a B.S. in Architecture from the University ofVirginia, a Master of Architecture degree from Yale University and aMaster of Science in Real Estate Development from MIT.

Cheryl Smith, President, Trillium Asset Management,and Chair, Social Investment ForumCheryl Smith is Chair of the Board of the SocialInvestment Forum, President and Senior PortfolioManager at Trillium Asset Management Corporation(“Trillium”), an employee-owned investmentmanagement company solely devoted to sociallyresponsible investment.

At Trillium, she is additionally Deputy Chief Compliance Officer. Afterbeginning her career as Assistant Professor of Economics at theUniversity of Denver, Ms. Smith began her investment managementcareer at Trillium Asset Management in 1987. In 1992 she joinedUnited States Trust Company in Boston (now known as Walden AssetManagement) as Vice President and portfolio manager, before rejoiningTrillium Asset Management in the fall of 1997. Ms. Smith serves on the Steering Committee for the Initiative forResponsible Investment and on the Board of the Episcopal DivinitySchool in Cambridge, MA. She is a former Board member andAdvisory Board member of Resist! Ms. Smith is a Chartered FinancialAnalyst charterholder, and a member of the CFA Institute, BSAS, andthe American Economic Association. She holds a B.S.F.S. degreefrom Georgetown University School of Foreign Service, and earned M.A., M. Phil., and Ph.D. degrees in Economics from Yale University. Shehas spoken on numerous occasions on integrating environmental,social, and governance criteria into the management of investmentportfolios.

Saskia van de Doel, Responsible Investment Team,PGGM InvestmentsSaskia van den Dool-Gietman joined PGGM’sResponsible Investment team in 2008. At PGGM she isresponsible for the Human Rights engagementprogramme. She has a background in consultancy inthe area of Sustainable Development and CorporateSocial Responsibility. For PricewaterhouseCoopers’

(PwC) Global Sustainability Solutions Saskia has worked in London,Amsterdam and Buenos Aires to advise multinational corporations and(non) governmental organisations, focussing on projects related tostakeholder engagement en corporate sustainability reporting. Beforejoining PwC, Saskia worked for Origin, a Dutch IT company, preparingits first stakeholder report. Saskia holds an MSc in Policy andOrganisation Studies.

ESG USA 2010

speaker biographies


Stephane Voisin, Head of Sustainability Research,Crédit Agricole CheuvreuxStéphane Voisin is Head of Sustainability Research atCrédit Agricole Cheuvreux. He holds an MBA in lawand finance and is a graduate of Collège des HautesÉtudes Environnemetales, supported by École Centraleof Paris. Moreover, he teaches “sustainable finance” atthe University of Paris-Dauphine. Stéphane Voisin has

over 20 years of experience in equity markets. Prior to joining CACheuvreux in 2005 to launch and expand the SRI research service, hewas a vice president at JP Morgan (2000-2002) and at Paribas (1997-2000) in London, working in thematic equity investment. He was alsoin charge of the Equity Derivatives business at Barclays (1995-1997)and Natwest (1990-1995). He was a member of the foundingcommittee of the CAC 40 index and more recently of the Low Carbon100 index. Stéphane Voisin has authored a number of SustainabilityResearch reports and articles from both equity market andsustainability perspectives. He recently contributed to the "Financeand Sustainable Developments" work by Europlace, published byÉditions Economica. Stéphane Voisin has chaired the advisory andscientific committees of various NGOs on environmental and socialinitiatives.

Alyson Warhurst, CEO and Founder of Maplecroft,Chair of Strategy and International Development,Warwick Business SchoolChair of Strategy and International Development,Warwick Business School (1999 to 2009) andHonorary Professor from 2010. CEO and Founder ofMaplecroft (the global risk advisory firm and issuemapping specialist). Inaugural winner of the Faculty

Pioneer “Beyond Grey Pinstripes Award” (called by the FT the“Business School Oscars”). Faculty of World Economic Forum (2000to present). Member of Clinton Global Initiative. Board Director,Transparency International UK. Member of UN Human Rights WorkingGroup. Adviser at Board level to global companies and organizations.Regular winner of the “Outstanding Teacher Award”. Writer of severalbooks and more than one hundred articles on sustainability, risk andresponsibility. Business Week columnist and speaker on topicsincluding: human rights, ethical supply chains, global risks, corporatereputation and CSR. Committed to education and knowledgedissemination about roles and responsibilities of business in society.

Hugh Wheelan, Managing Editor, Responsible-Investor.comHugh has written on investment, corporate andsustainability issues for national newspapers includingThe Observer and The Financial Times. He won the respected Aon Consulting award forEuropean Pensions and Investment Journalist of theYear in 2006. From 2004 to 2007 he was Paris

Correspondent and prior to that Fund Management Editor at FinancialNews. Prior to that he was Political and Economic advisor to Irene Khan,secretary general of Amnesty International. From 1997 to 2003 he worked at Investment & Pensions Europe (IPE)magazine where he held the position of Deputy Editor, launch Editorof IPE Real Estate and launch Editor of IPE.com.Hugh trained in journalism as a reporter on the Peterborough Herald &Post and worked part time for the Liverpool Echo.

John Wilcox, Chairman of Sodali, director ofShareOwners.orgJohn C. Wilcox is Chairman of Sodali Ltd, a globalconsultancy providing advice and transactional servicesto listed companies in Europe, Asia, Latin America andother emerging markets.From 2005 to 2008 he served as Senior Vice Presidentand Head of Corporate Governance at TIAA-CREF, one

of the world’s largest private pension systems. Prior to joining TIAA-CREF he was chairman of Georgeson & Company, Inc, the U.S. proxyand investor relations firm. During his career he has specialized incorporate governance, corporate control transactions, capital marketsregulation, director education, cross-border voting and investorcommunication, combining working knowledge of both the corporateand the shareholder perspective.Mr. Wilcox’s memberships include: the Society of CorporateSecretaries and Governance Professionals and its Securities LawCommittee; the National Investor Relations Institute; the American BarAssociation - Committee on Corporate Laws; the National Associationof Corporate Directors - NY Chapter Advisory Board; the InternationalCorporate Governance Network, where he served on the Board ofGovernors and chairs the Committee on Cross-Border VotingPractices; the Council of Institutional Investors; the Aspen InstituteCorporate Values Strategy Group; the Committee for EconomicDevelopment - Subcommittee on Corporate Governance and CapitalMarkets. He serves on the Board of Trustees of the Woodrow WilsonNational Fellowship Foundation and Bennington College. His articles have appeared in The London Financial Times, The NewYork Times, The New York Law Journal, The American Lawyer,Insights, Pensions & Investments, The Corporate Governance Advisor,Directors & Boards, wallstreetlawyer.com and other books andpublications. He has testified before Congress and regulatory agencieson matters relating to securities regulation and is on the faculty of avariety of director education programs. He speaks frequently beforeprofessional groups. Mr. Wilcox received a B.A. from Harvard College,where he was a member of Phi Beta Kappa, an M.A. from theUniversity of California, Berkeley, where he studied as a WoodrowWilson Fellow, a J.D. from Harvard Law School and an LL.M degreefrom New York University Graduate School of Law. He is a member ofthe American and New York Bar Associations.

Lara Yacob, Senior Engagement Specialist, RobecoLara Yacob is a seasoned professional in the field ofenvironmental management and human rights. Laracurrently works for Robeco as a senior engagementspecialist on human rights and water managementissues in the Responsible Investing division. As a SeniorEngagement Specialist, Lara is responsible for enteringinto constructive dialogues with invested companies on

human rights and water issues. Prior to her joining Robeco she workedfor the Ministry of Research and Innovation and the Ministry ofEnvironment (Canada) as a policy advisor, her areas of responsibilitywere developing innovation policy, commercializing clean technologycompanies and climate change reporting. Lara also worked with theUnited Nations Development Program for over 5 years as a programspecialist in the area of water governance, access and benefit sharingfrom biodiversity conservation and scientific and technical cooperationamong countries of the global south with a strong focus on genderand human rights as they applied to these focus areas. Before that,Lara worked as an environmental consultant on land remediation andconservation issues. Lara has earned a B.Sc. in Biology (Genetics), aM.Sc. in Biology and M.A.’s International Development Studies andUrban Planning, and is currently completing a Ph.D. in Geographyfocusing on water management.

Protecting Rights Worldwide

Barroway Topaz Kessler Meltzer & Check, LLP, with overeighty attorneys, is one of the largest firms specializing inthe prosecution of complex class action litigation. Since thefirm’s founding, Barroway Topaz has developed a worldwidereputation for excellence in the areas of shareholder, ERISA,consumer and antitrust litigation. The firm proudly notes thatit has recovered billions of dollars on behalf of its clients andthe classes they represent.

Barroway Topaz’s shareholder litigation practice focuses on theprosecution of securities fraud claims brought against publiccompanies as well as their officers, directors, and advisors. Witha large and sophisticated client base, Barroway Topaz has beenat the forefront of successfully representing investors, and inparticular, institutional investors, as plaintiffs in various typesof securities actions. In addition, Barroway Topaz has been aleader in implementing important corporategovernance reformsdesigned to protect shareholder rights, improve shareholdervalue and prevent corporate mismanagement.

Barroway Topaz also dedicates a large portion of its practiceto complex litigation on behalf of consumers as well as publicand private entities, including municipalities, state agencies,and multi-employer welfare funds. Barroway Topaz’s consumerprotection efforts are nationwide in scope and include consumerfraud and antitrust practice groups.

280 King of Prussia Road, Radnor, Pennsylvania 19087

Phone: 610-667-7706 • Facsimile: 610-667-7056

[email protected]

580 California Street, Suite 1750, San Francisco, CA 94104

Phone: 415-400-3000 • Facsimile: 415-400-3001

[email protected]

www.btkmc.com

Attorneys at Law

Protecting Rights Worldwide

• Portfolio Monitoring Service

• Shareholder Litigation

• Helping Fulfill Fiduciary Obligations

• Corporate Governance

Attorneys at Law

www.btkmc.com

Leading Research

Global Execution

Local Presence

www.cheuvreux.com - June 2010

EUROPE

January 2010

Disclosures available on www.cheuvreux.comwww.cheuvreux.com

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Carbon Research

Copenhagen: 2020 vision hanging

in the balance

� The Copenhagen challenge: finding a successor to Kyoto

The issue at stake in Copenhagen is to reach a global political agreement oncountry emission reduction targets for 2020 and financing, which would pavethe way for a post-Kyoto legally-binding treaty in 2010, with a view toensuring continuity with the Kyoto Protocol commitments that end in 2012.

� The outcome remains uncertain

Although recent newsflow has been positive we highlight that most of thestumbling blocks are yet to be removed. There is a lack of consensusbetween developed and emerging countries on the burden sharing of theglobal emission reduction effort and of public financing for climate changemitigation and adaptation. We draw up different scenarios.

� Clean tech in China, the main beneficiary of a deal

Carbon finance is the main accomplishment of the Kyoto Protocol. It hasbeen used to boost the IRR of 158GW of clean projects in emergingcountries, but is now hampered by lack of post-2012 visibility. The CPHsummit and further talks are expected to provide visibility on and potentiallyunlock carbon finance potential by 2020E (8x higher than in 2008 in a bluesky scenario). Public financing would be the icing on the cake. In our view,among emerging countries, Chinese greentech projects are likely to remainthe main receptacle of carbon finance. This should help that country achievenewly stated 2020 carbon reduction objectives.

� EU toughening of carbon constraint: not automatic

On the risk side, if no global carbon scheme is agreed for the aviation sector,the EU will continue with its plans to include aviation in the EU carbonmarket. With regard to EU energy-intensive industries and the CO2 price, wehighlight that the full EU legislative process will be required for it to switch toa 30% reduction target. The impact on CO2 prices should therefore remainlimited in the short term, in our view.

� Conceding 1°C: a growing adaptation play

We estimate that aggregated emission reduction targets by 2020 fall short ofthe +2°C climate stabilisation pathway. This raises the need for adaptationactions. The rise in sea level issue may be one of the first to materialise, asgovernments anticipate the risk and launch coastal protection projects.

� Investment recommendations

On the risk side, we believe that airlines and shipping sectors are at risk ofhigher carbon costs in the future. On the opportunity side, we highlightBoskalis Westminster as a play on adaptation, while Andritz, Centrotherm,Aixtron or ABB can be played for their exposure to China's green marketpotential.

Erwan CréhaletCarbon [email protected](33) 01 41 89 75 18

EUROPE

January 2010


SE

CT

OR

RE

PO

RT

Insurance

Surfacing: fundamental value

� H1 2010: distressed stocks & consolidation theme

We consider the insurance sector to be fundamentally inexpensivegiven the strong recovery in solvency, and improvement in ERM andprofitability. In our view, there are two conditions for a re-rating inplace:1) more uniform and transparent reporting; and 2) rebuiltvisibility on earning growth. Our market scenario for 2010 is theopposite to that for 2009 i.e. an increase until March andconsolidation thereafter. We think that distressed stocks andconsolidation are the themes to be played in the first phase. Duringthe second phase, we recommend growth stocks or groups withbusiness models that are not correlated to the macro environment.

� Several opportunities at current levels

Our sector Top Picks list includes Vienna Insurance Group and AprilGroup, as we believe that their growth prospects are not priced in.We are also buyers of AXA for the way in which it has taken itsstrategy in hand (reducing exposure to mature markets andinvesting in emerging markets). Lastly, we are confident in SNSReaal's ability to restore its profitability and repay aid from the Stateand foundations. On the negative side, we are still sceptical aboutthe ability of Allianz (3/Underperform) to regain lost market share innon-life and improve its group combined ratios in 2010. Generali(3/Underperform) is also facing difficulties in the Italian P&C market.The group's 50% premium in terms of P/E (2010E and 2011E) and20% premium to 2009E EV are not justified.

� Visibility in earnings recovery

The market is currently focused on the sharp deterioration of theclaims situation with regard to P&C. We believe that this will beoffset in the short term by the improving situation in savingsactivities. Insurers are likely to benefit in 2010 from ongoingproductivity efforts and from the hardening of insurance rates. On anaggregate basis, we expect earnings to increase threefold in 2009vs. 2008, with a further 40% rise year-on-year in 2010. Ourprojection for 2010E remains 40% below the cycle-peak in 2007.

� The light at the end of the tunnel is IFRS IV phase II

Solvency is no longer an over-riding topic and in some cases, suchas reinsurance, reported shareholders' equity is now at the samelevel as at end 2007. This contrasts with the European regulator'sgoal of boosting shareholders' equity in the industry by 30-40%, inline with Solvency II. We believe that insurers will refuse to followsuch a line but they will still continue to streamline their balancesheets and reduce financial leverage, which is still too high for majorinsurers.

EUROPE

22 February 2010


E-QUANTstocks & sectors

No. 24

Title

� The model has started the year in good form: the long-only version outperformed by 56bp in Januaryand the long/short posted an absolute performanceof 2.6%.

� Equity markets remain prisoner of the behaviour of Financials, whose profit momentum is not weakening.

� We present a new methodology for building a portfolio based on our long-short model. With animproved risk-reward profile.

Tristan Abet Nicolas Tremel Christopher Potts+33 1 41 89 74 59 +44 207 621 66 42 + 44 206 621 66 [email protected] [email protected] [email protected]

FRANCE

Novembre 2009

Avertissements consultables sur www.cheuvreux.com

TH

EM

AT

ICR

EP

OR

T

www.cheuvreux.com

Changements deprofil

� Arkema

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Carole Rozen Emmanuel Fourret Analyste financier Analyste [email protected] [email protected](33) 01 41 89 73 18 (33) 01 41 89 75 06

Axelle Meslay-Ricour Mourad LahmidiAnalyste financier Analyste [email protected] [email protected](33) 01 41 89 73 28 (33) 01 41 89 75 29

TOP RANKING RESEARCHWith a broad coverage of stocks and very exacting requirements in terms of stock picking, CA Cheuvreuxprovides institutional investors with one of the most comprehensive research offers on the market.

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As a leading european full-service broker within the Crédit Agricole group, CA Cheuvreux offers its clients extensive, high value-added services in Equity Research, Sales and Execution.CA Cheuvreux’s specialists are located close to clients and offer in-depth, value-added expertise out of its 15 offices worldwide. With 110 analysts and economists it proposes one of the largest product ranges including highly-regarded Economics & Strategy analysis, pioneering SRI researchand complete thematic and sector research.

A key player in Execution Services, CA Cheuvreux provides its institutional clients with access to90 European, North American, Middle Eastern, Asian and South Africa markets.

RESEARCHCompanies, Sectors, Countries, Economics & Strategy, Small & Mid Caps, SRI, Quantitative research.No. 1 Most Award Winning Broker in DevelopedEurope for the quality of its recommendations (Starmine 2010)

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No. 3 Pan-European Equity Sales (Thomson Extel 2009)

90 sales people o/w 45 pan-European

CORPORATE ACCESSConferences, Roadshows, Investor visits

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10 annual conferences: Paris, London, Frankfurt, New York

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Offering brokerage service to European listed companies, private equity funds and family holdings, CA Cheuvreux’s corporate brokerage team is an independent department that guarantees clients full confidentiality for their orders and strategies.

RETAIL BROKERAGECA Cheuvreux also places its market expertise at the service of the Crédit Agricole and LCL retail networks through a full range of research and executive services.

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EuropeAustria, Belgium, Bulgaria *, Cyprus *, Czech Republic *, Denmark, Finland, France, Germany, Greece, Hungary *, Ireland, Italy, Netherlands, Norway, Poland *, Portugal, Romania *, Spain, Sweden, Switzerland, Turkey, United Kingdom

MTFs & Dark PoolsBATS, BATS Dark, Chi-Delta, Chi-X, Euro Millennium, Nasdaq OMX, Neuro Dark, NYSE ARCA Europe, SWX-Europe, SmartPool, Turquoise, Turquoise Dark, Xetra Mid Point

AmericasCanada (2 exchanges + 1 dark pool)

United States (11 exchanges, 3 ADFs & 22 dark pools)

Asia Pacific **Australia, Hong Kong, Japan (2 exchanges), New Zealand, Singapore

Middle East and Africa *Abu Dhabi, Bahrain, Dubai (2 exchanges), Kuwait, Oman, Qatar, Saudi Arabia, South Africa * Via Third Party ** Via CLSA

CONTACTS

EXECUTIVE COMMITTEE_____________________________________________________________________________________________________________________

Jean-Claude BASSIENChairman & Chief Executive Officer

+33 1 41 89 79 60

[email protected]

Bertrand PATILLETExecutive Vice President

+33 1 41 89 79 54

[email protected]

Front office staff

110 Analysts & economists

90 Sales

120 Sales-trading & execution

Total headcount

760Offices

11 Europe

2 US

1 Middle East

1 Asia

–––––––––––––––––––––––––––––––––––––––––––––––––––––– INSTITUTIONAL BROKERAGE–––––––––––––––––––––––––––––––––––––––––––––––––––––

ResearchEconomics & Strategy Christopher POTTS +44 207 621 66 40 [email protected]

Europe Bruno RENARD +33 1 41 89 73 17 brenard@cheuvreux com

SRI Stéphane VOISIN +33 1 41 89 74 69 [email protected]

EEMEA Simon QUIJANO-EVANS +43 1 227 12 70 20 [email protected]

Small & Mid Caps Carole ROZEN +33 1 41 89 73 18 [email protected]

SalesContinental Europe / French clients Thierry ANCONA +33 1 41 89 74 31 [email protected]

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Western Europe product

Austria Eduard BERGER +43 1 227 12 71 00 [email protected]

Benelux Derk SIERTSEMA +31 20 573 06 60 [email protected]

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Germany Sebastian KÜLPS +49 69 47 897 254 [email protected]

Greece Andrea DAL NEGRO +44 207 621 52 66 [email protected]

Italy Giancarlo CASTELLI +44 207 621 51 65 [email protected]

Nordic countries Sean LINDSAY +44 207 621 52 95 [email protected]

Spain Alfonso HIGUERO +34 91 495 16 16 [email protected]

Switzerland Thierry FERRIERE +41 44 218 17 21 [email protected]

Emerging markets product

EEMEA & Russia Andrea DAL NEGRO +44 207 621 52 66 [email protected]

Eastern & Central Europe Eduard BERGER +43 1 227 12 71 00 [email protected]

ETF product Thierry ANCONA +33 1 41 89 74 31 [email protected]

EXECUTION SERVICESCoordination Ian PEACOCK +44 207 621 51 44 [email protected]

Sales Trading

Continental Europe / French clients Patricia RANUNKEL +33 1 41 89 74 95 [email protected]

UK clients Joe MASON +44 207 621 5182 [email protected]

US clients Nicklas JOHANSON +44 207 621 5188 [email protected]

DMA, Algorithms, CFD/TRS

Europe Jon CARP +44 207 621 5244 [email protected]

US John PALAZZO +1 212 492 88 45 [email protected]

Portfolio trading Seema ARORA +44 207 621 52 92 [email protected]

––––CORPORATE BROKERAGE–––– –––––––––RETAIL BROKERAGE –––––––– ––––––––––––––––MARKETING–––––––––––––––

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www.eiris.org

Global research for responsible investment EIRIS is a leading global provider of independent research into the environmental, social,governance (ESG) and ethical performance of companies. With over 25 years’ experience of conducting research and promoting responsible investment strategies, EIRIS now provides services to more than 100 asset owners and asset managers worldwide.

EIRIS provides investors with data points that can be integrated into their analysis and investmentmanagement processes in a flexible and easy way. We offer invaluable expertise on what constitutes good ESG practices, who are the leaders and laggards, and what are the pertinent issues in any given sector, drawing on a wealth of experience and knowledge built over 25 years.

Our research focuses on the risks and exposure of companies in key ESG areas, and how companies are responding. EIRIS works with clients to create their own ESG ratings and rankings, to engage with companies and to create specific funds for their clients. EIRIS has a multinational team of over 50 staff in London, together with offices in Boston and Paris.

EIRIS Products and services

EIRIS Portfolio Manager EIRIS offers a range of responsible investment products and services for investors, including our flagship product EIRIS Portfolio Manager (EPM) . EPM is a comprehensive and flexible tooldesigned to support a range of different ethical, sustainable and responsible investment approaches. Using EPM investors can analyse, filter and sort information on companies according toa wide range of ESG indicators. Data is available on all companies in the FTSE All-World Developed index and the majority of companies listed on the MSCI World Index. Investors use EPM to:

� Spot specific issues within a company for engagement or shareholder activism � Create a best-in-class ranking of stocks for investment � Identify stocks that contravene a particular investment policy � Integrate environmental and social performance with ‘core’ governance concerns, or to combine

one or more of the above approaches � Generate tailored company profiles detailing ESG and ethical issues and key news stories

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impact and strategies to respond to climate change

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www.eiris.org

Convention Watch Enables investors to identify companies accused of breaching the spirit of international conventions on human rights, labour standards, the environment, corruption and anti-personnel landmines, and to access detailed reports on the companies’ responses.

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sustainability of sovereign entities � Helps investors distinguish and rank countries according to environmental, social and

governance factors

ESG News Monitor EIRIS conducts regular searches for news items relating to the ESG performance of around 3,000 companies worldwide. EIRIS identifies stories relating to serious or systemic human rightsviolations; serious violations of individuals’ rights in situations of war or conflict; severe environmental damage; gross corruption and other particularly serious violations of fundamentalethical norms. The news monitor includes a summary of each story and an index system for tracking all stories for easy reference.

Our research

EIRIS collects consistent, comparable data on over 80 different ESG research areas, including board practice, bribery & corruption, managing environmental and climate change impacts, human rights and supply chain labour standards.

EIRIS also monitors company involvement in activities such as alcohol and tobacco production, genetic engineering, military involvement and the manufacture of controversial weapons or gambling, for investors wishing to implement an ethical screening approach. EIRIS has ainternational team of over 50 staff in London, together with offices in Boston and Paris. The EIRIS network includes research organisations in Australia, France, Israel, Germany, Spain & SouthKorean, and now covers over 3,000 companies globally.

Contact us

For more information on EIRIS and our products and services for investors please contact our client team on +44 (0)20 7840 5727, [email protected]

EIRIS London 80-84 Bondway SW8 1SFUnited Kingdom

EIRIS Boston8 Faneuil Hall Market 3rd Floor, MA 02109 USA

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SAMShortPortrait

WINDMILLSNew generations of turbines enable the optimalexploitation of variable winds in urban areas.

Based on its Corporate Sustainability Assessment, SAM has compiled

one of the world's largest sustainability databases and analyzes over

1,000 listed companies annually. SAM’s proprietary research and sus-

tainability data are fully integrated into our offering.

SAM is a member of Robeco, which was established in 1929 and of-

fers a broad range of investment products and services worldwide.

SAM was founded in 1995, is headquartered in Zurich and employs over

100 professionals. As of June 30, 2009, SAM’s total assets amount

to EUR 8.9 billion.

SAM in Brief

SAM is an investment boutique focused exclusively on Sustainability

Investing. The firm’s offering comprises asset management, indexes

and clean tech private equity. Its asset management capabilities in-

clude a range of single-theme, multi-theme and core sustainability in-

vestment strategies catering to institutional asset owners and finan-

cial intermediaries in Europe, the United States, Asia-Pacific and the

Middle East. Through its index activities, SAM has partnered with Dow

Jones Indexes and STOXX Limited for the publication and licensing of

the globally recognized Dow Jones Sustainability Indexes (DJSI) as well

as customized sustainability benchmarks. Furthermore, SAM is the cen-

ter of expertise for clean tech private equity within Robeco.

Sustainability Investing

Corporate Sustainability is a business approach that creates long-term share-

holder value by embracing potential opportunities and managing risks deriving

from economic, environmental and social developments. Sustainability In-

vesting is an investment approach that enhances traditional valuation models

by integrating extra-financial criteria which affect shareholder value.

«SAM integrates sustainability trends and criteria into traditionalfinancial valuation methodology. Our aim is to offer our customersinvestment solutions with superior risk/return profiles.»Stephanie Feigt, Chief Investment Officer SAM

SOCIALDIMENSION

Corporate CitizenshipLabor Practice Indicators

Human Capital DevelopmentSocial Reporting

Talent Attraction & Retention

ENVIRONMENTALDIMENSION

Eco-EfficiencyEnvironmental Reporting

SAMCORPORATE

SUSTAINABILITYASSESSMENT

ECONOMICDIMENSION

Codes of ConductCompliance

Corruption & BriberyCorporate Governance

Risk & Crisis Management

Member of

Based on global sustainability trends, SAM has identified «Sustain-

ability Themes» such as Water, Energy, Resource Efficiency, Climate

Change and Healthy Living. These investment themes are translated

into thematic-oriented portfolios which often contain a high por-

tion of small and midsized companies with attractive valuations. The

focus lies on companies that develop and market innovative pro-

ducts and services accompanying the emergence of new sectors

that are expected to experience above-average growth. As such,

sustainability theme investing offers investors attractive return po-

tential.

SAMsustainability investing

Research approach

Sustainability Themes

and thus the potential for shareholder value creation. SAM’s latest

in-house empirical analysis confirms that Sustainability Investing can

deliver alpha to investors (see chart).

SAM’s approach is based on the premise that sustainability trends im-

pact company share prices. Such trends remain underresearched and

allow SAM, with its proprietary methodology, to gain an information

advantage over mainstream asset managers.

Since its establishment in 1995, SAM has focused on identifying, in-

terpreting and quantifying the sustainability criteria that are relevant

to shareholder value creation. This Corporate Sustainability Assess-

ment enables SAM to measure the ability of companies to embrace

change by seizing opportunities and by managing risks that macro-

economic and sustainability developments impose on each industry.

By leveraging its comprehensive database, SAM is ideally positioned

to identify companies leading their peers in terms of sustainability

Sustainability Core

the two. The assessment of companies results in sustainability

scores. These scores are integrated into SAM’s valuation model

to determine the fair value of companies. This strategy aims to

generate outperformance versus global or regional standard bench-

marks by investing in the most sustainable and attractively priced

companies.

For «Sustainability Core» strategies, SAM starts its stock selection

with a global analysis of the most relevant sustainability trends and

studies how economic, environmental and social challenges in-

fluence sectors, regions and corporations. These sustainability chal-

lenges are translated into actual assessment criteria, representing

either a risk or an opportunity to the company, or a combination of

SUSTAINABILITY CAN OUTPERFORMCumulative Log Outperformance in %

Portfolio 1 – SustainabilityLeaders (Top 20%)Portfolio 5 – SustainabilityLaggards (Bottom 20%)

Benchmark: Companies rated onthe basis of the SAM CorporateSustainabilty Assessments

Metric: Total sustainabilityscore (economic, environmentaland social criteria)

Source: SAMPast performance is noindication of future results.

15

10

5

0

-5

-10

-152008200720062005200420032002

SAM Sustainable Asset Management USA Inc.909 Third Avenue · New York, NY 10022Phone +1 212 908 0188 · Fax +1 212 908 [email protected] · www.robecoinvest.com

Important legal information: The details given on these pages do not constitute an offer. They are given for information purposes only. No liability is assumed for the correctnessand accuracy of the details given. Copyright © 2010 SAM – all rights reserved.

BLOOMBERGSM Homepage:SPXI <GO>

For more information visit:

www.indices.standardandpoors.com

S&P Thought Leadership and Research

is available at: www.indexresearch.

standardandpoors.com

About the IndexThe S&P U.S. Carbon Efficient Index addresses the investment community’s increasing concern

with environmental issues by offering a broad, U.S. market index that not only comprises

companies with relatively low carbon emissions, but also seeks to track the return of the S&P

500.

S&P Custom Indices:[email protected]

Contact Us:

[email protected]

New York +1.212.438.2046

Toronto +1.416.507.3200

London +44.20.7176.8888

Tokyo +813.4550.8463

Beijing +86.10.6569.2919

Sydney +61.2.9255.9870

Standard & Poor’s does not sponsor,

endorse, sell or promote any S&P

index-based investment product.

See what others don’t,so you can do what others can’t.

The S&P U.S. Carbon Efficient Index is composed of a subset

of constituents in the S&P 500 with a relatively low Carbon

Footprint while maintaining at least 50% of the original weight

representation for every GICS® sector in the S&P 500. The

Carbon Footprint is calculated by Trucost Plc and is defined

by the company’s annual greenhouse gas (GHG) emissions

assessment, expressed as tons of carbon dioxide equivalent

(CO2e) divided by annual revenues.

Index Methodology

The S&P U.S. Carbon Efficient Index constituents must be

members of the S&P 500. In addition, all companies must

go through a two fold screening process, the first focusing

on Carbon Footprints and the second on constituent list

optimization with respect to the S&P 500.

• GICS Sector Weight. The 100 equities with the highest

Carbon Footprints that do not reduce an individual Global

Industry Classification (GICS) sector weight of the S&P

500 by more than 50% are excluded. If the next equity to

be excluded takes the sector reduction beyond the 50%

threshold, but not more than 55%, that equity will be

excluded. If the next equity to be excluded is in a sector

which has already exceeded the 50% reduction threshold, or

takes the sector reduction beyond 55%, it remains eligible

for inclusion.

• Optimization. Once the initial stock selection is complete,

the qualifying constituents are optimized using Northfield

Information Service’s optimization and risk model data to

generate a list of companies, with assigned weights, that

seek to minimize tracking error versus the S&P 500. This

may result in the removal of companies where the weight is

de minimis.

Index Construction

The S&P U.S. Carbon Efficient Index is a modified-capitalization

weighted index based originally on float-adjusted common

shares outstanding. The index constituents, of which there

are no more than 375, and their weights are modified at each

rebalancing to reflect an optimization process seeking to track

the S&P 500. Rebalancing occurs quarterly after the market

close on the third Friday of March, June, September, and

December. At each rebalancing reference date, S&P 500 index

constituent level data used in the rebalancing process will

include index shares that were announced as part of the S&P

500 quarterly share rebalancing.

• Shares Outstanding. The shares counted for the sector

weightings criteria and used as inputs in the optimization

model are shares outstanding. This count is float-adjusted to

reflect only shares available to the general market.

• Carbon Footprint. Carbon Footprints are updated annually,

approximately eight months following the individual

company’s fiscal year end. Any updates to a company’s

Carbon Footprint will be applied to the screening process at

the next rebalancing.

Complete details of the methodology employed by S&P,

including the criteria for index additions and removals, policy

statements, and research papers are available on the Web site

at www.indices.standardandpoors.com.

S&P U.S. Carbon Efficient IndexEquity Indices |

S&P U.S. Carbon Efficient IndexEquityy Indicess |

Indexx Performance 55 Yearr Historicall Performance

S&P S&P

U.S.. CE 500

Returns 1 Month 2.52% 1.93%

3 Month 6.12% 6.04%

YTD 26.70% 26.46%

Annualized 1 Year 26.70% 26.46%

Returns 3 Years -6.00% -5.63%

Annualized 3 Years

Riskk Std Dev 20.18% 19.91%

Sharpee Ratio 3 Years -0.3060 -0.2935

Correlation 3 Years 0.9987

Annuall Carbonn Footprintt Comparison Topp 100 Companiess Byy Weight

S&PP U.S.. CE S&PP 500

Country Company Weight Weight GICS®

Sector

USA Microsoft Corp 2.44% 2.37% Information Technology

USA Chevron Corp 2.44% 1.56% Energy

USA Procter & Gamble 2.29% 1.78% Consumer Staples

USA AT&T Inc 2.00% 1.67% Telecommunication Services

USA Johnson & Johnson 1.95% 1.79% Health Care

USA Apple Inc. 1.95% 1.91% Information Technology

USA Intl Business Machines Corp 1.94% 1.73% Information Technology

USA JP Morgan Chase & Co 1.83% 1.65% Financials

USA General Electric Co 1.68% 1.62% Industrials

USA Pfizer Inc 1.67% 1.48% Health Care

Tickers Sectorr Breakdown Sectorr Weightt Comparisons

S&P U.S. Carbon Efficient Index S&PP U.S. S&P

Price Return Carbonn Efficient 500

BLOOMBERGSMSPGRCUU Consumer Discretionary 10.1% 9.6%

Reuters .SPGRCUU Consumer Staples 9.7% 11.4%

Total Return Energy 10.4% 11.5%

BLOOMBERGSMSPGRCUUT Financials 15.0% 14.4%

Reuters .SPGRCUUT Health Care 13.4% 12.6%

Net Total Return Industrials 8.5% 10.2%

BLOOMBERGSMSPGRCUUN Information Technology 21.4% 19.9%

Reuters .SPGRCUUN Materials 2.9% 3.6%

Telecommunication Services 4.1% 3.2%

Utilities 4.7% 3.7%

Standard & Poor's assumes no responsibility for the accuracy or completeness of the above data and disclaims all express or implied warranties in connection therewith.

S&P U.S. Carbon Efficient Index S&P/IFCI Carbon Efficient Index

(GHG Emission Figure / Annual Revenues)

Decemberr 31,, 2009

Measures the performance of

companies with relatively low carbon

emissions, while seeking to closely

track the return of the S&P 500.

The Index inception date is Sept 17,

2004 at a level of 100. Levels prior to

Mar 9, 2009 are pro-forma.

S&P Equity Indices

S&P Carbon Efficient Index Series

60

80

100

120

140

160

Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09

S&P U.S. Carbon Efficient Index

S&P 500

Industrials

8.5%

Energy

10.4%

Financials

15.0%

Cons Disc

10.1%

Info Tech

21.4%

Cons Staples

9.7%

Telecom Svc

4.1%

Utilities

4.7%

Health Care

13.4%

Materials

2.9%

0

50

100

150

200

250

300

350

400

450

2004 2005 2006 2007 2008

S&P U.S. Carbon Efficient S&P 500

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