Sustainability in Asia?

Transcription

1 Association for Sustainable & Responsible Investment In Asia Sustainable Finance in Asia: Challenges and Opportunities Tessa Tennant, Executive Chair 22 nd November 2004, Sao Paulo Sustainability in Asia? If everyone in the world is to have the same standard of living as people in OECD countries, under current systems of production and consumption, then we need at least 3, possibly 5 planet s worth of resources. 57% of the world s population High density regions (red) Low density regions (yellow) Ecological Footprint By Region, 2001 Source: Living Planet, WWF,

2 Energy Footprint By Region, 2001 China Infrastructure Investment km New Trunk Railway 5944 Double-Track Railway 4603 Electrified Railway 5704 New Highways Of which: Express H way Source: Chinese Statistical Communique htm Source: Living Planet, WWF, 2004 Per Capita per annum CO2 Emissions Per Capita (Metric Tonnes Carbon Only) Hong Kong Japan Singapore Taiwan Malaysia South Korea Thailand Philippines Indonesia China Group Average OECD Water Withdrawals By Region, 2001 (estimate) Source: Living Planet, WWF,

3 China s Ecological Footprint Urban population 5% pa, leads to consumption China consumes 20% of global metals demand.. biggest producer and consumer of steel and aluminium and likely to become biggest importer of iron ore in 2003 Shortage commodities: Al, Ni, Fe and Cu Net importer of petroleum for 9 th consecutive year "Investment is the process of foregoing immediate expenditures in order to build a more prosperous future. What kind of future are we now building?" The New Global Investors Robert Monks 2001 Is this the Infrastructure for Low Energy Living? 3

4 Where s the Sustainable Building in Asia s cities? What is SRI Mechanism for supporting sustainable economic development worldwide The facility for investors to be more consistent in their view of the world and the values they hold A risk management tool for reducing beta and enhancing earnings A framework for evaluating market structures and long-term investment policies we re talking Investor Governance SRI in Asia Today HONG KONG: Kingsway Fund Mgmt. + 6 Global SRI funds registered for sale. ASrIA launched 2001 m a r k e t r e s e a r c h released summer 2004 JAPAN: Nikko-Eco US$1 billion in 1 st 6 months..10 other SRI and eco fund providers Yen 70 billion as o f F e b p ro ven market for institutional and r e t a i l i n v e s t o r s SINGAPORE: United Global Unifem UOB Fund, Islamic Fund providers i n c r e a s i n g ; A S r I A Conference July 2004 AUSTRALIA: Developed SRI market 74 retail SRI funds AU$14.3 billion under management rapid g r o w t h s i n c e Pensions active. Several SRI r e s e a r c h h o u s e s Asia inc. Japan US$2.5bn KOREA: 1 SRI fund... Several research providers... G o v t. s u p p o r t... improving CG and corporate reporting... Public interest and shareholder activism... 1st SRI conference in H i g h S R I p o t e n t ia l TAIWAN: 1 global SRI fund registered for sale. First SRI Conference held with ASrIA in

5 SRI in Asian Emerging Markets INDIA: 2 SRI funds.. 1st SRI conference in Sept Vast educated population... a major SRI o p p o r tu n it y... r e t a il financial services taking off, but work to be done MALAYSIA: 1 SRI fund Islamic funds (U SD 756 million )... W e a l t h y e d u c a t e d population... strong retail in vestment culture CHINA: The BIG one!... Govt. sponsored CG initiatives... nascent mutual fund industry and growing retail equity culture... SRI may be 'the angle'for early participation T H A I L A N D : R e t a i l investment culture developing. Desire for modernisation, but with environmental benefits. P o t e n t i a l f o r S R I a s a d ifferen tiated product I N D O N E S I A : L i m i t e d investment by global SRI funds... significant Islamic investment... Big potential for SRI to i n f l u e n c e t h e r e t a i l a n d i n v e s t m e n t d e v e l o p m e n t PHILIPPINES: High envir. and social awareness and active civic sector. Poorly developed savings culture. Strong traditions of c o r p o r a t e p h i l a n t h r o p y SRI Fund Providers in Asia Today Australia 74 funds, incl. AMP Group ANA Friendly Society Australian Ethical BNP Paribas Challenger Group Equity Trustees Glebe Hunter Hall ING Funds IOOF Warrakiri Asset Mgmt Westpac Investment Mgmt Korea Samsung Group Japan 11 funds incl. Asahi Life Asset Mgmt Daiwa Asset Mgmt Mitsui Marine Asset Mgmt Nikko Asset Mgmt UBS Global Asset Mgmt UFJ Partners Asset Mgmt Yasuda Asset Mgmt Hong Kong Kingsway Fund Mgt. Henderson Global Inv. Friends Provident ABN Amro ING Invest. Mgt. UBS Global Asset Mgt. Pioneer Investments Malaysia Maybank Mgt Bhd. 34 Islamic Funds Indonesia Several Islamic Funds Singapore UOB Asset Mgt 2 Islamic Fund Providers Taiwan UBS Global Asset Mgt. India JM Heritage Fund Inheritance India Market catalysts for SRI in Asia Scandals and demographics SRI attracts quality customers Long-term investors not day traders Regular earners Tertiary education Maturing markets everywhere thrive on Better disclosure Consistent oversight More informed choices Global capital and customers 5

6 ABN AMRO Sustainability Report 2003 What Dominates the Asian SRI Agenda? Corporate governance: the headline issue Higher standards for boards and regulators Stewardship of state-owned companies Labor issues are prominent in countries linked to the global supply chain Environment an issue in every country. Watch for high impact sectors: Energy, power, building materials, metal & mining Global investors are looking for: Audited supply chains, ISO14001, codes of conduct Expectations rising for Asian companies Investors'Interests Japan, UK, USA Comparison of Individual Investors'Interests - Ministry of the Environment Survey 2003 Japan USA UK Consumer health and safety Environmental issues Prevention of corruption Labour/management relations Occupational health and safety Stability of employment Equal opportunity Contribution to community Prevention of child labour Others

7 The Potential for SRI in Asia Institutional: SRI and sustainability concepts gaining ground in pensions policy Retail: fast growing domestic economies, active retail investing cultures, classic SRI retail investor characteristics SRI Market Characteristics rising incomes, diversified portfolios, Nikko Eco Fund (Japan): large numbers in caring professions, 90% retail significant female working population, majority women high profile environmental issues, majority first time active religious groups and charities, Unifem-UOB Fund (Singapore): generational push 75% women 75% first time Asian markets have these 75% middle income SRI: Driving Change in Asian Markets Establishing clearer standards of global best practice Opening up new areas of debate about disclosure and country-level versus global norms Bringing investors into a more active dialogue with regulators, policymakers, and the accounting profession Preparing markets for a broader shareholder base and long-term investing Management of long-term risks creates long-term value for companies, investors, and markets ASrIA A focus for investment and financial community activity A member-backed not-for-profit We seek corporate and NGO input as well Research on issues SRI country reports Labor standards in China How Japanese investors are defining SRI issues Pensions in Asia Resources for fund managers and policymakers 7

8 Chinese Section FREE news service hits per day ASrIA Street 8