Esg among asian companies

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ESG Amongst Asian Companies: what is the

state of play?

TBLI Europe November 2011

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Agenda

• EIRIS Overview• Drivers of Responsible Investment in Asia• EIRIS Study –The State of Responsible

Business (Asia)• A look Ahead

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EIRIS & our Partner network• Not-for-profit research organization specializing

in environmental, social and governance research on publicly listed corporations

• 28 years experience in SRI

• Extensive coverage of @ 3,000 companies worldwide, and 7,000 companies on selected criteria.

• Offices in London, Boston & Paris with partners in Cape Town, Seoul, Mexico City, Canberra, Hanover, Madrid & Tel Aviv

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EIRIS & Emerging Market ResearchIssues Company Coverage

ESG ‘Core’ 300 Large Cap Emerging market companies researched on ‘Core’ environmental, social and

governance issues

Compliance with International

norms

Emerging Markets 700+ (Large and mid-cap stocks)

ESG news monitor& Controversial

Weapons

Wider Universe (up to 9,000 companies or custom portfolio reviews)

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EIRIS work in Emerging Markets

• Asia top 30 with HERI• EMDP Research Paper and Engagement • Sustainable Stock Exchanges Initiative• JSE – SRI Index• MSE – Sustainability Index

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Pressing ESG Challenges

Governments Stock Exchanges – Sustainability & increasedDisclosure

‘Scorecards’- CDP :

GlobalInvestor demand

UNPRI, ICGN

Drivers for RI in Emerging Asia

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The Current state of Responsible Business (Asia)

• What’s in the study?– Responsible business snapshot– FTSE All World Developed Index (+ 50 Chinese

companies)– Progress report

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Key issues examined:

EnvironmentalIssues

Social-Stakeholder issues

GovernanceIssues

Environmental Impact

HR & Labour Risk exposure

‘Core’ governance

Management Systems

Human Rights Bribery

Climate Change Supply Chain Issues

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Environmental Performance

• Most likely area for companies to demonstrate strong management strategies

• KPIs include GHG emissions and Water use

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CHN HK SIN KOR JPN

Unmanaged Risk

Some Progress

Good

Excellent

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Climate change

• No companies in Emerging Asia assessed above ‘some progress’

• No Chinese firms disclose any strategy on Climate Change management – worrying as we focused on the most transparent firms!

0%

10%

20%

30%

40%50%

60%

70%

80%

90%

100%

CHN HK SIN KOR JPN

Unmanaged Risk

Some Progress

Good

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Health & Safety

• one quarter of Asian companies demonstrated good health and safety systems

• China had the lowest percentage of companies managing their risk but had the highest percentage of companies making ‘some progress’ 0%

20%

40%

60%

80%

100%

CHN HK SIN KOR JPN

Unmanaged Risk

Some Progress

Good

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Human Rights

• Almost all Asian Companies (90%)had no human rights policy in place (where relevant)

• Pressures driving western firms to address Human rights and their supply chain not as powerful in Asia (civil society) 0%

10%20%30%40%50%60%70%80%90%

100%

CHN HK SIN KOR JPN

Unmanaged Risk

Some Progress

Good

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A Look Ahead• Asian Companies demonstrated far better management

of env issues then social issues but considerable room for improvement across the board

• Biggest drivers of ESG in Asia will continue to come from:– Increased pressure from regulation and policy-

makers (governments)– development of sustainable indices– greater reporting requirements– Investor demand is a weak but a growing driver

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Questions?

Lisa [email protected]: lisa.hayles

T: 207 840-5727M: 07725594513