Sustainable and Responsible Investing: Where Are We and Where Do We Go From Here? Brussels, December 3, 2012 EUROSIF – The leading pan-European sustainable investment membership association 1 Proximity to EU domestic markets via national SIFs 2 Multi-stakeholder organisation 3 European focus • Partnership of 8 national SIFs • Supported by about 70 Member Affiliates A multi-stakeholder organisation with around 70 Member Affiliates Eurosif Key Activities Hands-on EU Advocacy Thought Leadership Standard setting/ Terminology Promotion of SRI Member Affiliate Network Servicing Created with the support of: Created with the support of Introduction: No Single Market for SRI Sustainable and Responsible Investment Strategies • Sustainability themed • Best-in-Class and Positive screening • Norms-based screening • Exclusions • ESG Integration • Engagement and voting • Impact investing Simplified Country Perspectives on SRI Country Key SRI practices Regulatory Highlight Select SRI Facts Belgium Norms-based; Best in Class, Exclusions Investment in anti-personnel mines is forbidden (March 2007) BEAMA / Febelfin Initiatives; Strong retail penetration France Best in class / positive screening/ ESG Integration Article 225 (2012) on ESG reporting for Asset Managers; Grenelle II Role of French Employees Savings Plans ESG Integration & Engagement Statement of Invest. Principles (pensions, 2000) Strong PRI signatory base United Kingdom Netherlands UK Stewardship Code (2010) ESG Integration & Engagement, Exclusions Pending legislation to ban investment in cluster munition (2013) Influence of large Pension Funds Top market in most strategies Overview of SRI Strategies Used in Europe Source: Eurosif Growth Compared to Overall Market Source: Eurosif, EFAMA Sustainability themed • Almost doubled since 2009 • Now found in almost all countries surveyed • Demand growing in Holland, Germany, UK, Switzerland Source: Eurosif Exclusions • Covers ~28% of European total AuM • Key drivers: German, Swiss and Dutch markets • Policies covering cluster munitions and anti-personnel mines now cover 48% of Europe’s AuM Source: Eurosif Impact Investing – Space to watch Total size of market is: € 8.75 billion • Institutional and retail investment assets. • Excludes Development finance + community banking deposits Source: Eurosif Breakdown by type of investor Europe Retail Average: 6% (Spain 3%) Relative Decline vs Institutional Source: Eurosif Drivers of SRI Demand Legislative drivers Legislative drivers Red Flag !! Source: Eurosif HNWI remain a key distribution channel for SRI +18% +58% • Increase by ~60% between 2009 and 2011 • Overall European HNWI Wealth increased by 18% Source: Eurosif, 2012 Share of Sustainable Investments in Total HNWI Portfolio • The share of wallet of Sustainable Investments has increased • HNWIs allocating over 50% to SI have doubled (25%) Source: Eurosif, 2012 Attitudes to Sustainable Investments Source: Eurosif, 2012 Thematic and Best-in-Class are popular with HNWI • Positive screening and Sustainability-themed mostly used • Substantial increase of Impact Investing • Strategies often combined in a portfolio (Core-Satellite) Source: Eurosif, 2012 Note: impact investing not directly comparable with previous years Conclusions • All strategies have grown since 2009 (faster than market) • Increasing investor interest for Impact Investing • Institutional investors remain key drivers • Data shows continuous demand by European HNWI • However, general retail demand remains a challenge How can the industry address this? Contact / Follow Eurosif francois@eurosif.org www.twitter.com/eurosif LinkedIn/eurosif http://www.linkedin.com/groups/Eurosif-3290984/about facebook/eurosif Rue du Progrès 331 B- 1030 Bruxelles +32 274 14 35 Registered Office: La Ruche, 84, Quai de Jemmapes, 75010, Paris, France Back-up Sustainability Themes Used (ex. Impact Investing) • Strong domination on environmental issues (energy / climate) • But all themes have experienced growth, indicating that other themes become increasingly attractive (eg. health) Source: Eurosif, 2012 Back-up Impact Investing Approaches Used • Microfinance preferred but less so than with overall market (55%) • Attractiveness of Social Business investments is higher than the overall market (19%) Source: Eurosif, 2012 Motivations for Sustainable & Impact Investing Sustainable Investment Source: Eurosif, 2012 Impact Investing Back-up Barriers to Sustainable & Impact Investing Sustainable Investment Impact Investing Back-up