The rise of the sustainable economy: Size and scale of the global green economy Busting common myths

Transcription

1 The rise of the sustainable economy: Size and scale of the global green economy Busting common myths Fong Yee Chan, FTSE Russell FTSE Russell 1

2 FTSE Russell is not an investment firm and this presentation is not advice about any investment activity. None of the information in this presentation or reference to a FTSE Russell index constitutes an offer to buy or sell, or a promotion of, a security. This presentation is solely for informational purposes. Accordingly, nothing contained in this presentation is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of making any investment through our indexes. FTSE Russell 2

3 LSEG & FTSE Russell Leaders in sustainable finance London Stock Exchange Group Sustainable Stock Exchanges member Green bond issuances on the London market reached c.$11bn in 2017 ESG Reporting Guidance launched 2017 FTSE Russell Innovator in sustainable investment since 2001 Founding member of the UN PRI Comprehensive, global company ESG / GR data coverage History of partnership and collaboration FTSE Russell 3

4 FTSE Russell at the forefront of innovation Smart Sustainability FTSE 4 Good Indexes Carbon Tilt Index Climate Balanced Factor Index TIP Taiwan ESG Index Green Revenues Environmental Markets Indexes ex-fossil Fuels Index ESG Ratings Blossom Japan Index FTSE Russell 4

5 Investing in the Green Economy: Busting Myths Substantial Represents 6% of the market capitalization of global listed companies* Growing Grown as a proportion of the total market, whilst the fossil fuels sector has shrunk Diversified Represents all company sizes; small, mid and large cap Multifaceted Diverse industries and sectors addressing environmental challenges Global Broad geographical coverage with US having the largest exposure Outperforming FTSE Russell s green indexes have outperformed their parent benchmark over the last 5 years** * Based on FTSE Russell s calculations. See FTSE Russell s annual trends report, Investing in the global green economy: busting common myths, May 2018 ** FTSE Russell s broadest green focused indexes outperforming over 5 years to March See slide 9 for details and indexes FTSE Russell 5

6 Substantial investment opportunity ICB Supersectors plus green economy ranked by market capitalization Total Mkt Cap ($trn) Source: FTSE Russell as at December FTSE Russell 6

7 Growing investment opportunity Growth of green economy vs fossil fuel sector 6,2% 12% Green Economy (% of Mkt Cap) 6,0% 5,8% 5,6% 5,4% 5,2% Green economy Fossil Fuels 10% 8% 6% 4% Fossil Fuel Sector (% of Mkt Cap) 5,0% 4,8% 2% 4,6% % Source: FTSE Russell, data as of December Please see the end for important legal disclosures. Green economy size based on a proportion of the total investable market capitalization including FTSE Global Equity Index Series, China Large & Mid Cap A Shares, Russell 3000, UK All Share & Japan All Cap Indexes. FTSE Russell 7

8 Diversified and global investment opportunity Green economy by company size Green economy by country of domicile 23% 16% 62% Large Cap Mid Cap Small Cap 2% 13% 2% 3% 4% 4% 4% 12% 43% United States Japan China Germany Taiwan France United Kingdom Switzerland Canada Other 13% Source: FTSE Russell, data as of December 2017 Company size as defined by FTSE Russell in the FTSE Global Equity Index Series on a region relative basis. FTSE Russell 8

9 Diverse sectorial investment opportunity Green economy by ICB Supersector 2% 2% 2% 1% 3% 3% 3% 3% 5% 33% Industrial Goods & Services Utilities Technology Chemicals Construction & Materials Automobiles & Parts Oil & Gas 7% Basic Resources Personal & Household Goods Food & Beverage 8% 14% 14% Travel & Leisure Health Care Retail Other Source: FTSE Russell, data as of December 2017 FTSE Russell 9

10 Multifaceted investment opportunity Green economy by green sector 2% 5% 5% 4% 3% 40% Energy Management & Efficiency Energy Generation Food & Agriculture Transport Equipment 6% Water Infra & Tech 7% Energy Equipment Environmental Resources 8% Waste Mgmt & Tech 8% 11% Transport Solutions Pollution Control & Prevention Environmental Support & Services Source: FTSE Russell, data as of December 2017 Aggregated sectors, based on largest green sector per company. FTSE Russell 10

11 Outperforming investment opportunity FTSE Russell s broadest green indexes performance relative to broad market benchmark Index (USD) 5 yr performance total returns % Outperformance percentage points FTSE Environmental Opportunities All Share FTSE Environmental Technology 100 (ET100) Benchmark: FTSE Global All Cap FTSE All-World ex Fossil Fuels FTSE All-World ex Coal Benchmark: FTSE All-World FTSE All-World ex CW Climate* Benchmark: FTSE All-World * FTSE Divest-Invest Developed 200* Benchmark: FTSE Developed All Cap* *(GBP) Source: FTSE Russell, data as of March Past performance is no guarantee of future results. Returns shown before the index launch date reflect hypothetical historical performance. Please see the end for important legal disclosures. FTSE Russell 11

12 Investing in the Green Economy: Busting Myths Substantial Represents 6% of the market capitalization of global listed companies* Growing Grown as a proportion of the total market, whilst the fossil fuels sector has shrunk Diversified Represents all company sizes; small, mid and large cap Multifaceted Diverse industries and sectors addressing environmental challenges Global Broad geographical coverage with US having the largest exposure Outperforming FTSE Russell s green indexes have outperformed their parent benchmark over the last 5 years** * Based on FTSE Russell s calculations. See FTSE Russell s annual trends report, Investing in the global green economy: busting common myths, May 2018 ** FTSE Russell s broadest green focused indexes outperforming over 5 years to March See slide 9 for details and indexes FTSE Russell 12

13 Questions? FTSE Russell 13

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