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The Association for Sustainable and Responsible Investment in Asia

The Association for Sustainable and Responsible Investment in Asia Stock Market Investment for Sustainability www.asria.org. Environmental Future for Asia is still to be decided. Asia has yet to install 80 percent of the industrial capacity it will have by the year 2010.

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The Association for Sustainable and Responsible Investment in Asia

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  1. The Association for Sustainable and Responsible Investment in Asia Stock Market Investment for Sustainability www.asria.org

  2. Environmental Future for Asia is still to be decided • Asia has yet to install 80 percent of the industrial capacity it will have bythe year2010. • New industrial investment in Asia will dominate total investment during the next fifteen years, providing a once-in-a-lifetime opportunity toshift industry to clean production. USAEP Investment & Environment Paper

  3. Introducing ASrIA SRI promotion Network Education Policy Development Research Womens Division of the General Board of Global Ministries of The United Methodist Church, US Global Affiliations Sponsorship/ Branding Conferences 4

  4. ASrIA 2002 Plans Conferences Annual International Conference in Japan, Singapore with MAS, Shanghai with ADB, HK, Taiwan, South Korea, Thailand, Malaysia and India Research Incubating an Asian SRI research business, Market- making analysis Outreach and Networking Teach in for IFA’s and Trustees, Investors Circle Website Upgrading with more facilities, CalPERS debate

  5. SRI in Asia Today What is SRI? Where are we in Asia today? • Japan: Nikko-Eco Fund and 10 other SRI choices • Australia: Developed SRI market • Asia ex-Japan & Australia: • ASrIA launch conference HK,Nov01 • ASrIA 2002 conference Japan, Oct. • Kingsway Fund Management in HK investing using screening • Islamic funds in Malaysia, UniFem Fund in Singapore • Henderson’s Global Sustainability Fund launched in June 1998 • Friends Ivory & Sime about to launch a global SRI fund in Hong Kong • Singapore, Taiwan, SKorea, India SRI seminars planned • Starting to gain momentum, but a long way to go… Socially Responsible Investment/ Sustainable & Responsible Investment Principles: • Investment based on a triple bottom line approach: • Financial Return • Environmental Protection • Social justice/ ethical objectives • Methodologies: • Negative screening • Positive screening • Shareholder advocacy/ engagement • Community investing 1

  6. The Business Proposition for SRI Growth Momentum US$ BN S&P 500 Domini Social Equity 1992 7.68% 12.10% 1993 10.08% 6.54% 1994 1.26% -0.36% 1995 37.50% 35.17% 1996 23.07% 21.84% 1997 33.40% 36.02% 1998 28.58% 32.99% 1999 21.04% 22.63% 2000 -9.11% -15.05% 192 Funds Creditable Performance US$ MM 67 Funds Source: UBS Warburg - 1999 US Trends Report, USSIF, EIRIS • Performance of most SRI funds has been at least in-line with benchmark indices, and some have outperformed – the DJSGI Asia Index has outperformed the MSCI Pacific and the FTSE Asia Pacific by 27% from 1999 to 2001. INVESTMENT RESTRICTIONS HAVE NOT IMPACTED PERFORMANCE. • Management teams focused on environmental and social issues tend to be progressive which is reflected in their business and their stock price • Despite a large increase in SRI funds over recent years, penetration is still low at 13% in the U.S. and less than 1% in the U.K., allowing room for significant further growth 2

  7. The Business Proposition in Asia 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 KOREA: Corporate governance a big theme….retail equity investment booming! JAPAN: Nikko-Eco – one of SRI’s biggest success stories globally…..a proven market among one of the world’s largest elderly populations INDIA: Vast educated population….a major SRI opportunity….but work to be done… • TAIWAN: Mutual fund industry 40% CAGR last 17 years with only 16% penetration!... active religious groups…..environmentally aware…. a core target market MALAYSIA & THAILAND: Wealthy, educated population…active religious groups… High environmental awareness among decision-makers.. Retail investment market growing HONG KONG: Government increasingly focused on the environment (SusDev 21)…..interesting MPF angle…massive charitable institutions (eg Jockey Club, Kadoorie Foundation) SINGAPORE: Developed and sophisticated retail investment market… significant state participation in equity investment Growing populations…high growth mutual fund industries…differentiation opportunity 3

  8. Capital Markets for Sustainability Financial Innovation and Corporate finance IPO’s Debt Financing Financial gatekeepers Listing Requirements & Disclosure Time Consistency Shareholders as Owners Influence on Corporate Management 4

  9. New Energy Funds • Inventory of Funds http://unepfi.net/invent/isef/index.htm • Global-Asian Clean Energy Services Fund, Fond-Elec • DKW and FIS launching funds in 2002 and…. • UBS Cancels Carbon Fund citing lack of investor interest. The fund was to generate greenhouse gas emission reduction credits under the Kyoto Protocol.

  10. SRI: The Stock Market Solution to SD • Raises Profile of Role of Investment • Industries of the Future • Sets the Agenda for Corporations • Engagement and Shareholder Voting • MicroFinance and Venture Finance

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