Peter Michaelis. Fund Manager Morley Fund Management

Transcription

1 Peter Michaelis Fund Manager Morley Fund Management

2 Communicating Corporate Responsibility An investor s perspective

3 Morley Fund Management Institutional fund management arm of the Aviva Group Aviva is the largest general insurance company in the UK and the sixth largest in the world Morley has over 104bn of assets under management, including 32.3 bn of equities, 46.6 bn of fixed income and 11.0 bn of property Over 190 investment professionals Strong record on corporate governance and SRI

4 Key SRI drivers in UK and continental Europe

5 Criticisms of CSR The issues aren t relevant to our business Investors just aren t interested There s no standardisation If I see another questionnaire, I ll...

6 CSR Communication for investors Ethical funds - Tick box, questionnaire approach - Niche market SRI and mainstream funds - Supplementary to traditional company analysis - Large and growing market

7 SRI Research Process Top down Social & Environmental Stage 1 Business Position Management Quality Stage 2 Drivers of Shareholder Value Stage 3 Engagement Process Integrated Sustainable Value Stage 4 Screening (optional) Investment Process VALUATION plus Stage 5

8 Assessing SEE - Company Level Business Position Competitive position Factor Inputs Revenue Assets Management Quality Liabilities Governance Adoption Drivers of Shareholder Value Costs Margins Integration Capital Execution

9 What CSR communication do we want? Communication on Governance SEE issues which are relevant and material Risk management Opportunities on Offer Differentiation from competitors

10 Relevant and Material Align interests of investors, company management and society Investor Relevant Material Business Relevant Financial & Investment Impact Society Relevant SEE Issues Source: Adapted from Sustainability: Executive Roundtable

11 CSR Reporting Sector Energy Retail Pharmaceutical Financial Food producers SEE issues Emissions trading Customers Patent protection Reputation Health concerns SEE issues Regulation Supply Chain Environmental legislation Operational Risks Supply Chain

12 What to include? Direct Short-term Financial Impacts Policy-related Performance Business Peer-baed Norms Stakeholder Behaviour and Concerns Societal Norms Source : Redefining Materiality - Accountability and UK Social Investment Forum:

13 Criticisms of CSR The issues aren t relevant to our business Investors just aren t interested There s no standardisation If I see another questionnaire, I ll...

14 The Future for CSR Communication Integrated with Business Interests Vital to Valuation Addresses Activist Concerns

15 Morley Fund Management is a business name of Morley Fund Management Limited, registered in England No A member of the Norwich Union Marketing Group, members of which are authorised and regulated in the UK by the Financial Services Authority for life assurance, pensions and investments. Registered Office: No. 1 Poultry, London EC2R 8EJ. A member of the Investment Management Association. Morley Fund Management is also a business name of Morley Investment Services Limited and Morley Fund Management International Limited. All are Aviva companies. Contact us at Morley Fund Management, No. 1 Poultry, London EC2R 8EJ.