0 20, January 2009, Bangkok James Gifford, PRI Executive Director Narina Mnatsakanian, Project Manager, PRI/UNEP FI.

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20, January 2009, Bangkok

James Gifford, PRI Executive DirectorNarina Mnatsakanian, Project Manager, PRI/UNEP FI

Agenda

1. Initiatives mapping

2. Emergence of responsible investment

3. Why is responsible investment relevant for companies?

4. Principles for Responsible Investment

5. Collaborative engagement

6. Global Reporting Initiative

7. Responding to the Crisis

Complimentary initiatives

PRIGlobal

Compact

Investors Companies

Reporting Framework

ESG Disclosure

(GRI, Sustainability Reports)

Emergence of Responsible Investment

First there was:

Traditional negative/positive screened funds

The PRI is a culmination of:

Shareholder engagement

Corporate governance movement

Clean tech and sustainable venture capital

Materiality of ESG issues / enhanced analysis, e.g. Climate change

Systemic issues (response to the crisis)

Access to capital - appropriate ESG disclosure can help companies to get access to funds

Equity pricing– investors integrate material ESG issues it their stock selection

Shareholder engagement – long term investors engage with investee companies on ESG issues

Access to markets, license of operate

Increasing demands for disclosure

Reputation

Why is RI relevant for companies?

ESG issues can impact investor returns especially in the long-term and, therefore, deeper analysis should result in better investment decisions

Companies that manage complex ESG issues well tend to be well managed overall

Strong ESG performance by companies can result in new opportunities and reduced risks

Investors can play an important role in promoting good corporate practice within their portfolio companies

Investor perspective

Major global brokerage firms assessing impact of ESG issues

Investors integrate these findings into their mainstream investment decisions

Brokers with ESG assessment capabilities include – Merrill Lynch, Morgan Stanley, Nomura, RBC Capital

Markets, Société Générale, Standard Chartered, UBS, Vigeo, Wachovia Securities, WestLB, Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs HSBC, ING, Innovest, JPMorgan, ABN AMRO, Citigroup

Factoring of ESG issues into investment decisions

Investors are increasingly considering ESG issues for a larger number of emerging markets companies, including Thailand

Emerging market companies need to become world leaders in CSR reporting and performance

Rising investor expectations

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PRI is a tool kit for integrating ESG issues into mainstream investment practices and across asset classes

PRI is a forum for discussion and concrete action on long-term risk issues and value drivers

Signatories sign up to six aspirational best practice principles which

reflect a broad and long term understanding of materiality

are grounded within the bounds of fiduciary duty

can be applied across mainstream portfolios

About the PRI

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“I applaud the leadership of the institutions that have committed themselves to this undertaking, and urge other investors around the world to join this historic effort.” Ban Ki-moonUN Secretary-General

Supported by the Secretary-General

Growth in PRI signatories and AUM

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07

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08

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Number of signatories by latest sf data AUM

Over 470 signatories, US$18 trillion AUM

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Signatories include

CalPERS, USA

APG and PGGM, Netherlands

Norwegian Government Pension Fund

British Telecom and USS, UK

Government Employees Pension Fund of South Africa

PREVI, Brazil

Mitsubishi UFJ and Sumitomo Trust, Japan

Government Pension Fund of Thailand

Colonial First State, Fortis Investments, Schroders and HSBC

1 …incorporate ESG issues into investment analysis and decision-making processes.

2 …be active owners and incorporate ESG issues into our ownership policies and practices.

3 …seek appropriate disclosure on ESG issues by the entities in which we invest.

4 …promote acceptance and implementation of the Principles within the investment industry.

5 …work together to enhance our effectiveness in implementing the Principles.

6 …each report on our activities and progress towards implementing the Principles.

We aspire to

The Principles

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PRI Clearinghouse

Standardized reporting on ESG issues

– Signatories are promoting Global Reporting Initiative (GRI)

Enhancing investee company ESG disclosure

– Singatories ask investee companies to disclose performance around social, ethical and environmental issues. Where reporting is inadequate, they actively engage with companies to seek improvement

Principle 3: Corporate disclosure

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Collaborative engagement

Corporate Governance remains the most common topic for collaboration

Biodiversity Toolkit– a collaboration to assess risks and opportunities relating to biodiversity and ecosystem services in the food, beverage and tobacco sectors in Brazil (e.g. clean water, deforestation, regulated climates)

Singapore and Hong Kong Engagement Initiative – encourages listed companies to enhance their corporate responsibility. Opportunity to be included in the FTSE4Good Index

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Emerging Markets Disclosure

Project encourages companies in emerging markets to provide better information on their management of ESG issues

Initial countries covered: Brazil, China, India, Russia, South Africa, South Korea

Lead Investors: HSBC; Boston Common Asset Management, Calvert, PREVI, Government Pension Fund of South Africa

Current status: active engagement with companies

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Seoul Initiative

Seoul Initiative 52 signatories with USD 4.4 trillion AUM launched an initiative to call on 9,000 listed companies to participate in the United Nations Global Compact

Government Pension Fund of Thailand was one of the signatories to this initiative

Investors wrote to over 80 Thai listed companies encouraging them sign to up to the Global Compact. These letters will be followed up by investors

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Global Reporting Initiative (GRI)

“Transparency, accountability, reporting and sustainability. The GRI network is a meeting place to converge and accelerate these issues”

GRI has pioneered the development of the world’s most widely used sustainability reporting framework and is committed to its continuous improvement and application worldwide

This framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance

Investors are increasingly asking their investee companies to use GRI as a reporting framework

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A focus on governance and good corporate practices will help build trust and confidence in markets and ultimately generate better returns for companies and investors

Enhance transparency, accountability and disclosure

Deeper analysis and better risk management by companies and investors

Investors will monitor companies more actively

Investor will engage in public policy dialogue

Collaborative investor action

Responding to the crisis

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Web: www.unpri.org

Email: [email protected]