The Probus Professional Partnership
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The Probus Professional Partnership
From it’s founding in 1995,The Probus Professional Partnership has drawn
together in a single team, long-term recognised experts from financial academia,
ISO technical standards development, environmental investment, financial
markets, climate-change metrics and social-equity disciplines. All these experts
have significant long term experience within Climate Change, Sustainable
Development & Environmetrics. Most of them also have long-term project
experience within UNEP, UNFCCC, UN, World Bank and IMF-related projects;
some have served or do serve upon the Boards of some of these entities.
The team has completed projects across many continents for over 20 years, in
total team members speak 12 languages and has no equal in terms of successful
projects completed.
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Copyright © 2012 Probus Sigma Lda.
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any
form or by any means electronic, mechanical, photocopying, recording or otherwise without the
prior written permission of Probus Sigma Lda.
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Table of Contents
1: Key Professional Biographies
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Chris Yates-Smith
Peter Jeffs
Edwin Aalders
Xavier Hatchondo
Tom Lillandt
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The Probus Partnership retains twenty two highly qualified technicians covering five main
environmental finance risk related disciplines.
2: Brief Biography of Probus Sigma
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Overview
Key Milestones
3: The Value of Credible, Verified ESG Data
4: Sample Client List and Testimonials
Website: www.probus-sigma.com
Contact: cys@probus-sigma.com
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1. Brief Professional Biographies
Chris Yates-Smith
Managing Partner
Chris Yates-Smith pursued a 21-year career within the international aviation industry as
a Senior Aviation Consultant to seven international airlines. His work included new-route
financial risk planning, mergers and acquisitions, financing of new national airlines
(especially in emerging economies), turning cost centres into new revenue streams and
refinancing failing large-scale international airlines.
He retired in 1994 to the Western Cape of South Africa during the first free elections.
Chris lived and worked on a wine farm, where he became well acquainted with the
importance of good agricultural practice, human rights and the need for African
economies to gain more benefit from their natural capital.
Chris cooperated with Société General de Surveillance (SGS) to develop the first Global
Organic Agricultural Standard, and the first international standard to include substantial
requirements for social upliftment as an integral part of the certification process. Chris
and his team played a leading role in the development of technical construction and
funding of most current larger scale international environmental standards. In 1999, the
team moved to the City of London
While based in The City of London, the newly expanded team conducted environmental
investment research with some of the leading international law firms, accountancy
practices and investment institutions. It pioneered the identification of sustainably based
environmental, social and governance (ESG) investment value drivers and the
integration of investment-grade, ISO-verified environmental and social standards into
the global investment markets. The team became known as ’The Virtuous Circle’.
Chris was a member of an expert panel that contributed to the development of the UK
Financial Stewardship Code, and was recently invited to provide specialist knowledge
related to the EU regulation of carbon markets and legislation. This includes the EU
directives applicable to the embedding of ESG factors into the European investment
markets. Chris served on international accreditation panels for several groundbreaking
international standards, ranging from The Global Organic Agricultural Standard, Halal
Standard, GLOBALGAP, and many others. He has served on global expert panels within
the International Sustainable Timber Industry, and on senior supervisory boards for
Société General de Surveillance.
Chris has contributed to UK accountancy reference works related to environmentally
based intellectual property valuation and branding.
In 2005, Chris founded a private environmental metrics, (environmetrics) research group
in Lisbon, which is an international hub of environmental accords and ISO standards
development. He also lectured at Coimbra University. The international ISO-based
environmental-social equity standards to which Chris contributed now facilitate over one
trillion dollars, (USD) in trade. The group recently played a key role in the technical
development of the Verified Carbon Standard, which now holds over 50% of the global
market in carbon offset credits.
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Peter Jeffs
Senior Partner & Project Director
Previously the CEO of a £125Million Private Property Investment Fund, Peter has a solid
long term track record related to large scale complex corporate partnerships extending
across Europe, Japan and The Middle East and most recently with European based hedge
fund managers.
Peter excels in developing Complex Partner programmes that require effective intra and
inter-corporate communication. Peter has served as Head of Capital Markets for Simplex
Consulting, a significant City based consulting group and previously as Business
Devlopment Manager for Syntegra a consulting division of British Telecom where he
evaluated the business viability of projects involving the wholesale financial markets
(investment banks, central institutions, authorities and vendor companies).
Previous projects have included Deutsche Bank, CSFB, UBSW, WestLB, SocGen, Morgan
Stanley and HSBC as Clients. Peter honed his communication skills while working for
Reuters and previous to this was an Officer in The Royal air Force.
Edwin Aalders
Senior Partner
After Edwin Aalders graduated from the Larestein International Agricultural College in
The Netherlands in 1991, he attained an MSc in Forestry from the University of Oxford’s
Oxford Forestry Institute in 1992. He then held senior technical posts within the Sociate
General de Surveilance. Edwin was the first developer of sustainable forestry practices,
designing and initiating certification in this field.
In 2004, Edwin joined Probus Sigma as a Senior Partner, and was then appointed by
Probus to be interim CEO of the Voluntary Carbon Standard (VCS), where he oversaw
and guided the technical development of the VCS. He was also appointed by Probus to
be interim Founder-Director of the International Emissions Trading Association. In both
instances, Probus Sigma was contracted to provide full support staff.
Edwin serves on various significant Boards related to CDM, JI and Voluntary GHG
programmes, in addition to activities related to the monitoring and verification under the
EU ETS.
Edwin is a recognised expert on both the CDM and Voluntary Carbon Standards; he has
broad, in-depth knowledge on climate-change issues, from a practical auditing
experience, and from product development and participation at UNFCCC and interGovernmental-level negotiation.
Edwin was a key speaker on climate-change issues at Davos, and continues to be a
source of expert climate-change knowledge.
With his experience as auditor and programme/business development manager with one
of the world’s leading inspection and certification companies, Edwin has been involved in
the development of leading ISO-based environmental standards that focus on
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sustainable management of natural resources. These include climate change, FSC, MSC,
organics, and EurepGap. Between 1997 and 2002, he successfully developed and
managed the entire SGS Climate Change Programme, which became fundamental to
current validation and verification services of SGS group under the UK ETS, EU ETS and
CDM Mechanism CDM, JI and Voluntary GHG Programmes, as well as activities related to
the monitoring and verification under the EU ETS.
Edwin speaks several languages, has lived and worked in various countries in Europe
and the tropics, and speaks at conferences and seminars in Latin America, Africa and
Asia/Pacific. He is the co-author of several industry reports and white papers, as well as
various technical reference books.
Xavier Hatchondo
Partner
Xavier Hatchondo graduated from the University of British Columbia with a PhD in
Physics. He is also a graduate of the Université Paul Sabatier (Toulouse III), with a
Master’s degree in Astrophysics, and is a Fellow of the GHG Management Institute.
Xavier speaks four languages at technical level – French (mother tongue), English,
Italian and Spanish. He is an environmental standards expert, and has managed several
large-scale, GHG-reduction projects in Asia, South and Central America and Africa. He
has also specialised in reforestation projects in Costa Rica, Senegal, South Korea, India
and Peru. He is a fully qualified lead auditor, competent to assess and audit programmes
and projects such as UNFCCC, CDM, carbon finance, sustainable development and
similar projects and programmes.
Xavier has additional qualifications regarding, ADEME GHG DOUBLE HABILITATION,
2010, ISO
14064 Part 1 and 2, GHG MANAGEMENT INSTITUTE, V/V for GHG
Inventory and Projects, June 2012, CDM-VCS-CAR-RGGI-CARBONFIX, Licence GHGMI.
Xavier was previously Head of Climate Change for a leading global inspection company
and has broad, in-depth experience within the global climate change industry.
Recently, Xavier’s qualifications in Astrophysics have been used with the Probus Financial
Academic Group in developing neural finance technologies to accurately value natural
capital related to contingent liabilities within sovereign debt and bond issuances.
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Tom Lillandt
Partner
Tom Lillandt holds a Master’s Degree in economics and finance from the Swedish School
of Economics and Finance, Helsinki, and advanced qualifications in derivatives and
strategic management accounting.
He speaks Russian, English, Swedish, Spanish, Norwegian, German and Finnish.
As Research Manager with a leading City of London-based environmental finance
research organisation, Tom was tasked with developing niche equity indices with a focus
on corporate sustainability. This included the following:
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Participating in the development of a non-financial risk-rating tool. It is used to
determine a company’s eligibility to be included into the in-house developed
sustainability indices.
Negotiating service contracts and joint ventures with entities in the US and
Europe.
Developing complex analytics with regard to the analysis of global ISO standards
and management systems, such as ISO 14001, ISO 9000, PEFC, FSC, SA 8000,
and ISO 26000.
Conducting historical risk, return and correlation analysis of the in-house
developed indices versus existing conventional and SRI/sustainability indices.
Calculating historical index values for conventional and non-conventional Indices
implementing MS Excel, Reuters 3000Xtra and Bloomberg.
In-depth analysis of industry sector, geographic sector and currency effects on
the price performance, returns and volatility of ESG indices.
Tom worked with Mandatum Life Assurance in Helsinki, Finland, where he was Head of
Operational Risk Management, and then led the Groups Project Management Team.
Subsequently, he worked with Tapiola Life Insurance, managing International Affairs,
later becoming Business Controller, and a member of the extended Executive
Committee.
Tom has been a Partner within the Probus Sigma Professional Partnership for some
years. He is, without doubt, among the world’s most knowledgeable and experienced
long-term environmental finance experts.
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2: Brief Biography of Probus Sigma
PLEASE NOTE: This outline overview document is not intended to be a detailed definitive
credentials document. It is intended only to provide the viewer with an illustration of PSL
competencies.
Overview
Probus Sigma* (Probus) is a privately held, independent professional partnership owned
by its staff and Partners. Probus has no connections to any other entity that may cause
conflict of interest to its clients or prospective clients.
Probus holds a unique position within the global climate change and attendant global
investment community.
Probus began developing technical correlations between environmental conservation,
social equity and risk/financial performance in The City of London more than fifteen
years ago, and is the most experienced company in this field. The partnership has
originated, developed or played a significant role in all current major, global
environmentally ISO-based international private standards. Probus has clear long-term
ESG credentials, and a deep knowledge of what constitutes and underpins ESG-based
investment. No other company can claim a similar heritage.
Probus retains a unique database of more than ten years of incisive research, with
special focus on the past six years of carbon standards and carbon finance development.
It also provides training facilities and founding, funding and incubation for well-known
commercial initiatives related to CO² emissions reduction.
Probus Partners and staff have solid experience in developing global-scale complex
programmes and solutions. The Partners have long-term experience working in difficult
emerging markets and conflict zones; between them, they are fluent (at technical level)
in 12 languages.
Key Milestones 2001 to 2012
The success of the Global Organic Standard, along with the cost reductions and benefits
to emerging market export producers due to the availability of one single global
standard, leads to Chris Yates-Smith’s appointment to the Founding Supervisory Board
of EUREPGAP, (now GLOBALGAP: www.globalgap.org), in 2001. The aim of GLOBALGAP
was to establish one standard for Good Agricultural Practice (GAP), with different product
applications capable of accommodating every sector within global agriculture.
Building on the experience and success of GLOBALGAP, the Global Organic Standard, the
Global Halaal Standard, et al, (see later VCS, etc.), and in response to requests from
investment managers for a greater knowledge of environmentally based investment risk,
Probus opens an office in the City of London. It creates a significant research group
concentrating on the correlation of corporately held ISO-based standards, financial
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Probus Sigma’s website: www.probus-sigma.com
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performance, market volatility and risk. Its unique access to cogent data leads to several
breakthrough advances in the objective correlation between financial performance and
reduced market volatility in companies that implemented certain, ISO-based
management standards and voluntary codes of practice.
• Probus develops proprietary, objectively based methodologies for non-financial risk
rating of standards, standard accreditation and audit processes. (Please note, these are
risk ratings of standards, not companies). The first ESG-based, risk-rated, algorithmdriven indices are produced. Probus develops risk ratings for insurance wraps, enabling
futures trading of carbon offset certificates. It also initiates and leads a City-based
project to design a new ethical trading exchange; business partners include Syntegra,
Aon Insurance and Citi Bank. Probus negotiates a $300 million, Merrill-Lynch-owned and
structured five-year note, based upon ESG principles. Probus also works with the Marine
Stewardship Council to further the interests of sustainable fishing.
Probus is retained by the Forest Stewardship Council, founded by WWF, to advise on
non-conflict of interest global funding mechanisms for environmental stewardship
councils and NGO development of global sustainable timber and aquaculture standards.
In tandem with the financial aspects of environmental stewardship, Probus develops
corporate structuring to enable large NGOs to gain independent revenues via ‘for-profit’
sister companies without impinging upon the impartiality and not-for-profit or charitable
status of the NGO.
• The partnership expands its City of London offices. Probus originates several
developmental partnerships with financial institutions concerned with researching and
developing financial instruments (ETF’s, Funds and Structured Notes), based on
environmental investment themes including carbon funds. These entities include:
Simmons & Simmons (www.simmons-simmons.com), PKF (www.pkf.com ), Syntegra
(www.syntegrainc.com), and Merrill-Lynch (www.ml.com ).
• Probus is retained by the Programme for Endorsement of Forest Certification Schemes
(www.pefc.org). PEFC is the world's largest natural resource certification organisation.
An international non-profit, non-governmental organisation dedicated to promoting
sustainable forestry, PEFC accredits National Sustainable Forestry Schemes under its
International Umbrella Standard.
Key Probus developments include:
a: Devising a strategy to place PEFC as the global leader in sustainable forest
certification.
b: Challenging the UK Government timber procurement policy, which excluded PEFC
certified timber from its traditional £2 billion pound UK market.
c: Providing a full UK specialist team to challenge government policy and re-open the
market to PEFC certified timber. Also provided legal, political and brand management
support, along with London-based office facilities.
d: Providing a specialist interim UK Director of Communications (PEFC/UK).
e: Advising on revisions of PEFC International accreditation procedures that would reopen the UK market to PEFC certified timber. This was achieved.
f: Gaining two expert positions (of four available) on the Global Panel of Timber Experts
(market access and commercial application).
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g: Providing (in 2007) a robust management system to PEFC client. The market was reopened, with new procedures. (In 2008-2009, there was a 400% increase in PEFC
Certification in UK market).
Probus also provides a senior interim manager (Edwin Aalders), as founding Director of
The International Emissions Trading Association (IETA), on behalf of the World Business
Council for Sustainable Development (www.ieta.org), and to act as founding CEO of The
Voluntary Carbon Standard (VCS). (www.v-c-s.org).
Probus provides all founding administrative support functions, (legal, treasury, etc.)
required by both IETA and VCS.
• Probus moves its technical research and development facilities to Portugal, adjacent to
Lisbon, (the recognised European centre for ISO Accords and conferences), in cooperation with University of Coimbra. Chris Yates-Smith lectures on environmental
finance and alternate energy development at University of Coimbra (www.uc.pt).
Probus’ technical research and development facility expands to twenty two specialists,
and continues to provide climate change risk-based technical advisory services to
financial institutions, alternative energy investment due diligence and environmentally
themed investment funds. Probus develops and proves concept of sustainably based,
objective ISO-compliant, third-party verified quantitative metrics within ESG, and
produces a series of ground-breaking indices. Probus also develops legally defensible
fiduciary duty investment aspects into the Sigma algorithm. Probus also completes first
multi-national banking review related to external risk (environmental) analysis.
• Probus begins early-stage development work on the Verified Carbon Standard
(previously known as Voluntary Carbon standard) technical documentation including the
GAP Analysis. Creates and implements Carbon Training modules for a leading Spanishbased, multi-national, alternate-energy developer. Develops an interactive CDM/EB
database for Lloyds Quality Register, begins work on correlation of ISO- based carbon
standards, (mandatory markets and voluntary), and analyses investment risk and due
diligence within differing carbon standards.
Probus pre-empts later value of incisive analytical opportunities by constructing a
sophisticated analytical mechanism to record and identify weaknesses and financial risk
related to the accreditation of Direct Operating Entities (DOEs), which make application
to Probus under the VCS-accreditation scheme that allows accredited entities to certify
large-scale carbon emission-reduction projects.
Probus recognises the inbuilt risks associated with process-driven ISO accreditation and
conventional accountancy audit methodologies, and the weaknesses of non-investment
grade accreditation process.
Probus develops a new direction for devising and accrediting, (licence to authorise
issuance of high-value carbon offset certificates) ISO-based private standards that
facilitate the certification of large-scale projects that have a range of funds, financial
instruments etc., attached to the outcome. Project Investment Grade, (PIG) is launched.
Probus researches and develops new ISO/ESG-based banking standards in response to
BankTrack report (‘Shaping the Future of Sustainable Finance’). Probus also produces an
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early set of proof-of-concept investment indices, based on new PSL proprietary,
objective ESG-ratings methodology.
Probus completes first VCS technical documentation, and creates and implements legally
compliant and regulated treasury function. VCS Team and PSL Team works to create
robust VCS investment grade accreditation documentation platform.
PSL produces incisive reports and analysis regarding ESG risk in multi-national banking
organisations and investment markets.
• Probus creates a large-scale robust VCS validation and verification module, with
emphasis on robust investment-grade verification. PSL also deploys a complete on-line
accreditation application process with treasury function. Probus is appointed to operate
the Global VCS Accreditation and GAP Analysis process on behalf of VCS Association. The
International Accreditation Forum (IAF), while providing excellent standards for general
accreditation functions, is and was devoid of any reference to the importance or
consideration of the substantial investments made under their processes; therefore,
none of the Voluntary GHG Standards accreditation procedures allow for the facilitation
(license to certify offsets), of investment-grade audit.
Probus expands its Technical Team, continues to improve private ISO-based
accreditation processes, and develops several new climate change-based financial
instruments. It develops a rigorous, secure web-based accreditation system designed to
automate and reduce time costs to Standards’ owners requiring secure data storage and
handling of multi-accreditation applications. In just two years, the VCS Standard
achieves 48% of world voluntary carbon market, based on PSL investment-grade
accreditation module; nearest competitor standard holds 12% (NGO initiative).
• Probus enters into a research partnership with the University of Nice Sophia-Antipolis,
Sfax University Business School, and two leading economics professors specialising in
neural finance technologies. (The professors had already developed an algorithm related
to forecasting natural disaster, political risk and whole-country environmental risks.)
These technologies were developed for the re-insurance markets and the IMF. Probus
has contributed five years of ESG research data, resulting in development of a single
algorithm that accurately measures and forecasts environmentally based investment
metrics through the chain. Current research includes the pricing of natural capital and
measuring underlying natural capital liabilities within sovereign funds and bond
issuances.
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Probus joins The International Institute of Environmental Metrics and initiates the
development of the pricing of Natural Capital.
Probus initiates research into EU Defence Procurement sustainability metrics.
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3: The Value of Credible, Verified ESG Data
During the years of preparation for the launch of the VCS Standard, Probus recognised
an opportunity to gather factual data. In early 2006, Probus commissioned installation of
a sophisticated research data management system that was custom built to correlate
and identify trends in both the accreditation applicant failure to provide assurance of
competency, weaknesses in the construction of ISO-based private standards with an
investible end product and identification of potential inadequacies regarding ESG risk.
The emergence of ESG as an investment tool needs to be clearly distinguished from the
field of Socially Responsible Investment (SRI), and similar terminology.
The fundamental distinguishing feature between these two approaches is motivation.
Whereas SRI is essentially motivated by ethical imperatives and aims to actively shape
the market, ESG integration is motivated by economic imperatives and is a risk-analytics
tool aimed at capturing the effects of ESG governance considerations on the riskadjusted return of portfolios. In this regard, ESG integration is a more tangible and
effective method of addressing such issues given conventional investment practice,
which relies heavily on quantitative measures and standardised benchmarks.
Without doubt, Probus is the sole entity with the unusual opportunity to recognise trends
in the application of ISO-based standards that, with the addition of Investment Grade
modules, provide a credible and solid investment platform.
4: Sample Client List and Testimonials
Much of Probus Sigma’s work is bound by strict confidentiality agreements, most of
which preclude disclosure of client’s names. Probus originates new products for these
companies who, in turn, wish to ensure it is their brand, and not Probus’, that is
paramount.
During the research and development stage of the objective measurement of ESG
portfolio risk, Probus developed the Sigma ISO/ESG Tool. It provides three levels of
corporate objective/predictive ESG-risk rating, based upon ISO international standards
and methodologies. Following three years of intensive study and testing, the product was
exposed to a selection of financial institutions. Reactions included the following:
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MN Services: “This is the best concept I have seen in the market.”
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Shell Pension Fund: “Maybe I should run my whole portfolio using this
concept.”
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Euronext: “Index outperforms and has a lower volatility than all indices.”
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Marine Stewardship Council: “This is the Holy Grail of sustainability.”
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Euronext: “Index performs better than almost all conventional indices.”
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ABN Amro: “Extensive study of the Sigma Methodology has showed a positive
correlation with share price performance.”
The research and development of investment-grade standards construction,
accreditation and GAP analysis allied to a client-driven requirement to reduce lead times
and deployment cost, led to the development of a proprietary system. Utilising state-of
the-art IT-based systems resulted in an average overall reduction in time cost of 40%
and, equally important, a customer-satisfaction level far beyond the industry norm.
Please read the following comments:
Jerry Seager, Programme Manager, VCS Association
“Probus Sigma has been a first-rate partner: its deep knowledge and experience of
environmental standards, together with the technical expertise and dedication of the
team, have been invaluable to VCS Association.”
Ronna Newton, Perry Johnson International
“What could have been a painful and stressful undertaking was lessened by your teams’
professionalism. A company is only as good as the people it has on staff, and from what
I can see your company is truly blessed.”
Eric Krupp, TUV-Nord Cer
“I would really like to thank you very much for your efforts and especially the efforts of
the Probus Sigma team regarding our case. We are deeply grateful that you took so
much of the hard work out of assessing our application.”
ENDS
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