presentation by silvio mattanza

EU Policies as Value Drivers in Environmental Technology

Silvio Mattanza - Zegora Investment Management

TBLI Conference - Paris - 16.11.2007

© Zegora Investment Management Ltd - 2007 - All rights reserved

© Zegora Investment Management Ltd. - 2007 - All rights reserved 2

Agenda

• Introduction• The 6th Environmental Action Programme (EAP)• The EAP Today• Opportunities• Conclusions


Zegora Investment Management

• Based in Zurich and founded in 2005• Specialized in environmental technology• Managing the Zegora Environmental Fund, a broad

environmental technology fund• The Fund’s goal is the identification of sector leaders• Focus is put on the actual environmental impact of

companies, less on formal criteria


Public Policy as a Value Driver

TechnologyAvailability

EnvironmentalPressure

Social Pressure

Policy-Making and Implementation

Value Creation


Agenda

• Introduction• The 6th Environmental Action Programme• The EAP Today• Opportunities• Conclusions


The 6th Environment Action Programme

• Framework for the EU’s policy-making 2002-2012• Sets the priorities and guidelines for implementation

of environmental policy• The central concern is to improve the environmental

profile while maintaining the competitive position

«The 6th EAP promotes full integration of environmental protection requirements into all Community policies and actions»


Priorities and Strategies

• The Environment Action Programme is split into four Priority Areas and seven Thematic Strategies

Climate Change

Nature & Biodiversity

Environment & Health

Natural Resources & Waste

SoilMarine En-vironment

Air PesticidesUrban En-vironment

Waste & Recyling

Natural Resources

Priority Areas Thematic Strategies


From Research to Implementation

• Implementation of environmental policy requires completion of lengthy legislative processes

EU Law

Non-Legal Measures

Thematic

Strategy

Implemen-tation

NationalLaw

ResearchEAP


Agenda



Mixed Results of the Mid-Term Review

«Despite the progress made, the magnitude of many environmental challenges is also increa-sing and Europe is not yet on the path towards a genuinely sustainable development.»

• Mid-term review of the EAP concluded in Q2 2007• The EAP is still the right framework to drive progress• The implementation is broadly on track and a

significant number of actions have been taken• However, many environmental pressures are

increasing and the ecological footprint is growing


Status and Outlook

Status Outlook




Climate Change

CO2 and GHG reduced but 2010 Kyoto targets not met

Proposals on ETS beyond 2013 and Carbon Capture

Policies largely in place but biodiversity loss not halted

Finalize marine guidelines and combat illegal logging

Air and water policy in place but lack of implementation

Implement REACH and revise Emission Ceilings Directive

Production and consumption patterns still unsustainable

Propose procurement targets and report on ETAP progress


Agenda



Variety of Available Policy Instruments

Regulatory Market-Based Voluntary

Policy

• Input restrictions• Technology

controls• Output quotas• Emission licenses

• Taxes & Fees• Tradable permits• Deposit-refund

systems• Performance

bonds• Eco Liability• Subsidies

• Eco-design • Eco-labels• Eco Management

and Audit Schemes


Sources of Opportunity

• Concrete business opportunities are mostly created at the national level based on the EU framework

EU Law

Non-Legal Measures

Thematic

Strategy

Implemen-tation

NationalLaw

ResearchEAP


Climate Change




Priority Areas

Opportunities at EU Level

• The Environmental Technologies Action Plan provides concrete technology driven measures across the EAP

Environmental TechnologiesAction Plan and its Instruments

• Performance Targets• Green Procurement • Market Instruments • Mobilization of Financing • Eco-technologies in Developing

Countries


Instruments and Industries (1/3)

Performance Targets

Improve environmental performance through standards

Type Regulatory Market Voluntary

Instruments Caps & Limits

Eco-design

EMAS

Integrated Product Policy

Integrated Pollution Prevention Control

Affected Sectors

Waste, Water, Appliances, Chemicals, Food, Packaging, Industrial Plants, Utilities

Company Examples

Electrolux, BWT, Nokia, Toyota



Green Public Procurement

Leading by example

Type Regulatory

Market Voluntary

Instruments Green purchasing

Life-cycle costing

BAT

EMAS

Affected Sectors

Energy, Infrastructure Services, Construction, Transport, IT Devices, Waste

Company Examples

ABB, Biffa, Veolia, Techem



Market Instruments

Promote the take-up of environmental technologies and allocate cost correctly

Type Regulatory

Market Voluntary

Instruments Tradable permits

Tax incentives

Subsidies

Loans & Bonds

Affected Sectors

Renewables, Energy Efficiency, Transport, Construction, Housing

Company Examples

Vestas, Q-Cells, Rockwool, St. Gobain


Agenda



Conclusions

• The EAP is an EU-wide framework for environmental policy integration

• The EAP is the right thing to do but requires more focus on implementation

• Well implemented policies are able to generate significant value across many industries

• Actual opportunities are mostly created at the national level

• The EU framework serves as an ideal guide to identify trends and areas of competitive advantage

Environmental performance equals competitive advantage


Appendix


Selected Links

EU Environment Homepage http://ec.europa.eu/environment/index_en.htm

EAP Homepage http://ec.europa.eu/environment/newprg/index.htm

EU Implementation Network http://ec.europa.eu/environment/impel/index.htm

Environmental Technologies Action Plan

http://ec.europa.eu/environment/etap/policy_en.htm

Ecologic - Institute for International and European Environmental Policy

http://www.ecologic.de/

European Environmental Law Website by the T.M.C. Asser

Instituut

http://www.eel.nl


Zegora Contacts

Company Address

Zegora Investment Management AGWunderlistrasse 478037 ZurichSwitzerland

Phone +41 44 800 80 80

Fax +41 44 800 80 83

Website www.zegora.com

Email [email protected]

Contact Person

Silvio MattanzaEmail: [email protected]


Zegora‘s Management Team

Dr. Kurt A. Lambert, President of the Board of DirectorsFounder of Harcourt Investment Consulting, member of the Advisory Board of the FTSE Hedge Fund Index. Doctor in Economics University of Lausanne, studies at Hofstra and University of Texas.

Benoît Bitschnau, Member of the Board of DirectorsFormer financial consultant with CSAM and corporate auditor with a multinational company. Degree in Economics from University of Lausanne, masters program in finance at the University of Lausanne.

Silvio Mattanza, Managing DirectorFormer technology consultant and contract manager with Accenture specializing in outsourcing of finance and administration processes, law degree from Universities of Zurich and Westminster.


Zegora Environmental Fund - Key Features

• A unique fund focused on companies offering technologies and services that benefit the environment

• Excellent investment case based on increasing importance and awareness of environmental matters

• The performance goal is to deliver superior long-term performance relative to a global equity portfolio

• Global portfolio which is broadly diversified across companies, sectors and industries

• Domiciled in Switzerland and regulated by the Swiss Federal Banking Commission

• Launched in 2006


Why an Environmental Fund?

• High awareness of the importance of the environment

• Trend towards a greater awareness of the supply constraints of our natural resources

• Trend strengthened by increasing global wealth and education levels

• Pressure from governments, authorities and NGOs

• Companies forced to be innovative and adhere to increa-singly tough environmental standards

• Increased requirements to invest in environmental performance

Increasing demand and tremendous opportunitiesFor companies thinking ahead and focused on reducingecological footprints


Balanced Allocation across Industries (1/2)

Primary Categories (total 70%, 5 x 4 companies, 3.50% per company) Environmental benefits are inherent in the normal course of business

Energy Alternative

Secondary Categories (total 20%, 10 companies, 2.0% per company)Realization of benefits requires outstanding environmental performance

WaterWaste & Recycling

Transport Rail

Energy Classic

Environmental

IndustrialFacilityAgriculture & Forestry

Transport Vehicles


Balanced Allocation across Industries (2/2)

Growth CategoriesBoth significant growth potential and substantial environmental benefits

Energy Conservation

Fuel Cells & Hydrogen

Future Energy Pollution Control


Current Fund Performance

Fund MSCI World (EUR) FTSE4Good (EUR)

Inception 14.73% 12.93% 11.94%1 Month -0.43% 0.15% 0.14%YTD 4.06% 1.81% 0.34%

Zegora Environmental FundMSCI WorldFTSE4Good

Total Return in % (EUR as of 31.08.2007)


Risk Measures since Inception

Fund MSCI World (EUR) FTSE4Good (EUR)

Volatility 2.11 1.19 1.04Share Ratio 4.81% 7.47% 7.86%


Why Invest with Zegora?

Our Focus

Zegora Investment Management Ltd. is an independent boutique investment advisor focused solely on environmental, social and economic sustainability. This is our core and only business

Our PeopleThe firm has a committed, experienced and proven team in the asset management space

Our ApproachA truly unique and structured approach allows us to invest in both today‘s and tomorrow‘s environmental leaders


Disclaimer

No Offer or AdviceThe information in this document is not intended to and shall not in any way constitute an invitation to invest in any of the investment products that appear or are mentioned, nor should the information provided be construed as advice of any other type, for example of a financial, fiscal or legal nature. Investments in any products and other transactions referred to in this document must only be made on the basis of the offering document relating to the specific investment (e.g. Prospectus, Key Features or other applicable terms and conditions).

Sales RestrictionsThe products and other transactions described in this document are destined for persons and companies with residence in Switzerland only and may not be available to residents of other countries, in particular to residents of the United States and the United Kingdom.

RiskInvestments can involve significant risks and the value of an investment may go down as well as up. It may not be possible to liquidate the positions in the relevant markets before a loss is sustained. Past performance is not indicative for future results. No assurance can be given that the investment objective of any product will be achieved or that substantial losses will not be suffered.

presentation by silvio mattanza

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