SUSTAINABILITY & LONG TERM INVESTING, THE NEW NORMAL? Jon Duncan

Transcription

1 SUSTAINABILITY & LONG TERM INVESTING, THE NEW NORMAL? Jon Duncan

2 Source WEF

3 THE INTERCONNECTIVITY & IMPACT OF POPULATION 1945 population 2.6bn 2010 population 6.93bn 2050 population 11bn Service delivery challenges Rocketing care costs Youth unemployment Poverty & inequality Conflict / unrest Disease / malnutrition Resource consumption Food insecurity

4 CONTEXT - THE GREAT ACCELERATION ATMOSPHERIC CO 2 CONCENTRATION DAMMING OF RIVERS McDONALD S RESTAURANTS Will Steffen s 2004 Planet Under Pressure

5 Source: Google

6

7 LONG TERM RECORD OF CO 2 CONCENTRATION

8 BEARING SEA ICE CHANGE 29 APRIL APRIL 2018

9 DISTRIBUTION OF FOSSIL FUEL RESERVES BETWEEN STOCK EXCHANGES

10 CONTEXT SUSTAINABILITY Presently it takes the earth 1,5 years to replace the resources & ecosystems services we consume in a year Ecological debt doesn t respond to economic stimulus Sustainability means living off the earths ecological interest not its capital Source : Global Footprint Network

11 CHANGES TO BROADER SYSTEM

12 OUR ROLE

13 APPLYING SUSTAINABILITY TO INVESTMENTS

14 OUR APPROACH 1. ESG Integration We relentlessly pursue investment excellence ESG Retail Funds ESG Labelling of Funds Driving Green Growth We invest alongside our clients AS INVESTED AS YOU ARE We operate as independent Boutiques 5. Thought Leadership We invest for a future that matters

15 1. ESG INTEGRATION Identify relevant ESG issues per company Disclosure to assure clients that material ESG issues are considered Integration of material ESG issues into bull/bear case + valuation + investment decision Collaborate where necessary & drive industry practise Company engagement on specific ESG issues, proxy voting at AGM

16 1.A ESG INTEGRATION

17 1.B ESG INTEGRATION

18 2. ESG BEST IN CLASS INDEX FUNDS RETAIL FOCUS 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% MSCI EM ESG LEADERS INDEX VS MSCI EM INDEX (USD) Since Inception Returns (Annualised) MSCI EM EM ESG 5.03% MSCI EM EM 1.25% Tracking Error 3.64% 69.42% 14.31% -80% Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Source: MSCI (Net Total Returns as of 30 June 2018) Performance prior to 6 June 2013 has been back-tested.

19 3. FUND RATINGS PROVIDING CUSTOMERS WITH CHOICE BUSINESS INVOLVEMENT % Adult Entertainment 1.1 Alcohol 15.3 Civilian Firearms Involvement 1.5 Civilian Firearms Retailer 0.0 Civilian Firearms Producer 1.5 Gambling 6.1 Nuclear Power 0.0 Tobacco 13.0 Weapons 1.8 Controversial Weapons 0.0 Direct Predatory Lending 2.3 Genetic Engineering 4.2 GOVERNANCE Board % 3+ Female Directors 3.6 Controlling Shareholder 27.4 Pay Flag 1.8 Votes Against Pay Practices 13.8 Board Flag 30.6 Lack of Independent Board 0.0 Source: MSCI

20 4. DRIVING GREEN GROWTH IN SA ECONOMY

21 5. THOUGHT LEADERSHIP

22 REGULATORY INFORMATION Old Mutual Investment Group (Pty) Ltd Physical Address: Mutualpark, Jan Smuts Drive, Pinelands, 7405 Telephone number: Old Mutual Investment Group (Pty) Ltd (Reg No 1993/003023/07) is a licensed financial services provider, FSP 604, approved by the Registrar of Financial Services Providers ( to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 37 of Old Mutual Investment Group (Pty) Ltd is a wholly owned subsidiary of Old Mutual Investment Group Holdings (Pty) Ltd and is a member of the Old Mutual Investment Group. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. The investment portfolios may be market-linked or policy based. Investors rights and obligations are set out in the relevant contracts. In respect of pooled, life wrapped products, the underlying assets are owned by Old Mutual Life Assurance Company (South Africa) Limited who may elect to exercise any votes on these underlying assets independently of Old Mutual Investment Group. In respect of these products, no fees or charges will be deducted if the policy is terminated within the first 30 days. Returns on these products depend on the performance of the underlying assets. Disclosures: Personal trading by staff is restricted to ensure that there is no conflict of interest. All directors and those staff who are likely to have access to price sensitive and unpublished information in relation to the Old Mutual Group are further restricted in their dealings in Old Mutual shares. All employees of the Old Mutual Investment Group are remunerated with salaries and standard incentives. Unless disclosed to the client, no commission or incentives are paid by the Old Mutual Investment Group to any persons other than its representatives. All inter-group transactions are done on an arms length basis. We outsource investment administration of our local funds to Curo Fund Services (Pty) Ltd, 35% of which is ownedby the Old Mutual Investment Group. Disclaimer: The contents of this document and, to the extent applicable, the comments by presenters do not constitute advice as defined in FAIS. Although due care has been taken in compiling this document, Old Mutual Investment Group does not warrant the accuracy of the information contained herein and therefore does not accept any liability in respect of any loss you may suffer as a result of your reliance thereon. The processes, policies and business practices described may change from time to time and Old Mutual Investment Group specifically excludes any obligation to communicate such changes to the recipient of this document. This document is not an advertisement and it is not intended for general public distribution. The recipient is advised to assess the information with the assistance of an advisor if necessary, with regard to its compatibility with his/her own circumstances in view of any legal, regulatory, tax and other implications. The information herein does not constitute an offer to sell or a solicitation of an offer to buy any securities. This document is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under applicable law. Old Mutual Investment Group has comprehensive crime and professional indemnity insurance. For more detail, as well as for information on how to contact us and on how to access informationplease visit All images were sourced from Google