Social Responsible Investment and its spinoffs; Benefits to

Members

Facilitator: Mothobi SeseliPanellists: Themba Mfeka, Dave Crawford & Aubrey Matshiqi

Date: Tuesday, 20th August 2013, 11h25 – 11h55

What is it ? Sustainable investing

This represents an amalgamation of different terms that have evolved over the past 30 years, including socially responsible investing and responsible investing.

An investment approach that takes into account actual returns balanced against externalities (unpriced costs or benefits).

What about fiduciary obligation – what constitutes fiduciary duty – to include concerns about intergenerational fairness? Finding balance between short and long term considerations.

As at January 2013, there is a combined US$ 13.6 trillion** in seven regions incorporating ESG into investment selection and management, which is 21.8% of the funds under management in the regions surveyed.

(**Source: GSIR 2012)

Why ?

What is triggering this thinking or this approach now?

What will impact investment performance generation in the medium to long term.

Structural shifts - changing economies around the world, changing politics and capital markets, global deleveraging, climate change, impacts of increasing scarcity of resources; population growth (current 7 billion people in the world to increase to about 9 billion in the next few decades) amongst other variables.

Materiality of these shifts.

Climate change example

How do you give effect to this approach

There are different strategies of sustainable investing, which list is not exhaustive;

Screening of investments (negative/positive/ norms based screening - against minimum standards of business practice-based on international normsCorporate engagement or shareholder actionusing shareholder power to change corporate behaviourESG factor integrationIncorporating environmental social and governance factors into financial analysisSustainability themed investing Such as investment in themes or assets related to sustainability such as green technology Impact / community investing Targeted investments aimed at solving social or environmental problems.

Breakdown by type of strategyGlobal empirical evidence

What are the spinoffs for members

What are the benefits for members from this approach What are the challenges?

Discussion and Questions