The study, entitled "Carbon Counts Asia 2007: Carbon Footprints of Asian Investment Funds" finds that investors in Asian Equity funds are therefore more exposed to carbon risks, but that there are opportunities to reduce the carbon intensity of Asian equity funds by some 30 per cent without suffering loss in performance. The study was launched during the UN Climate Change Conference in Bali in December 2007.
The theme of the fourth annual Who Cares Wins conference was New Frontiers in Emerging Markets Investments. During discussions, it was pointed out that financial and risk impacts from environmental, social and governance issues are particularly relevant when it comes to emerging market investments. In a speech given at the conference, IFC's Environment and Social Development department director, Rachel Kyte, emphasized this point, saying that "IFC firmly believes that environmental and social issues are inextricably linked in emerging markets, and that an economic expression of those issues in terms of both risk and opportunities is inevitable."
IFC's Banking on Sustainability report shows evidence of the potential benefits of adopting sustainability as a business strategy. It also shows a dramatic shift in banks' awareness of these benefits. Banks can tap vast benefits by reassessing their business practices and engaging in sustainability-oriented risk management and product development. IFC has pioneered new business models — for example in sustainable energy and banking to underserved groups — and is helping pave the way for other banks in emerging markets.
The Who Cares Wins conference, which gathers every year different actors from the investment chain, examined in 2006 the communication of environmental, social and governance (ESG) issues between companies and investors. A major challenge remains the fact that ESG issues are not easily quantifiable and therefore tend to be put aside by mainstream financial analysts who do not know how to enter them in their valuation models.
There is growing evidence that businesses can meet the demands of the commercial marketplace and still be environmentally and socially responsible. They can also become better prospects for investors as a result. This is demonstrated in IFC's new study "The Promise of Private Equity" through five case studies drawn from the portfolio of private equity funds in which IFC is an investor. The study shows how environmental and social sustainability was integrated successfully into core competencies and sound business management, thereby contributing directly to increased profits and better business performance.
Taking Stock report focuses on identifying the key investment themes which investors should be evaluating in order to analyze environmental, social and governance (ESG) issues relevant to the largest and highest impact sectors in Asia. It aims to identify a specifically Asian investment dynamic, based on both risks and opportunities. The report is specifically oriented to fund management and institutional investors in Asia, to provide an introduction to the most material ESG related investment issues effecting the most broadly held listed companies in each sector. Taking Stock provides a fresh and investor relevant model for assessing and presenting the materiality of ESG issues.
What do these three have in common: rising oil prices, rising carbon credits prices and companies' increased interest in emerging markets? "Who Cares Wins: One Year On", a joint IFC and Global Compact report on financial institutions' initiatives in 2005, indicates that these three global trends have led investors to pay greater attention to environmental, social and corporate governance issues.
The Who Cares Wins conference in 2005 first brought together institutional investors, asset managers, buy-side and sell-side research analysts, global consultants and government bodies and regulators to examine the role of environmental, social and governance (ESG) value drivers in asset management and financial research. There was a remarkable degree of agreement among participants that ESG factors play an important role in the context of longer-term investment.
This report looks at the role of the financial sector in Africa in promoting sustainability and identifies a number of innovations demonstrating sustainability banking in different countries in Africa. Together, these provide a clear indication of change in the financial sector from the more traditional defensive and narrow risk management approach, to being more proactive, and promoting competitive sustainability advantage.
Published and publicly endorsed by 20 financial institutions with combined assets under management of over US$6 trillion, this report developed guidelines and recommendations on how to better integrate environmental, social and governance (ESG) issues in asset management, securities brokerage services and associated research functions. The focus of the report is a series of recommendations, targeting different financial sector actors, which taken together seek to address the central issue of integrating ESG value drivers into financial market research, analysis and investment.
This report provides the first comprehensive review of socially responsible investment (SRI) in emerging markets. Commissioned by the IFC, the report is intended primarily for development finance professionals, but is also of interest to social investors. It surveys the current status of SRI in emerging markets, assesses its growth potential, and recommends steps that could help catalyze that potential.
The purpose of this set of reports is to provide up-to-date and comprehensive information on the status of socially responsible investing (SRI) in seven of Asia's emerging markets and, through this work, to advise on potential next steps for further developing SRI in Asia. The reports are directed at both global SRI investors and local investors, as well as other stakeholders interested in sustainable investment in Asia. The reports, which have been sponsored by the IFC, cover the following countries: China, India, Indonesia, Malaysia, Philippines, South Korea and Thailand.
"Beyond Risk" is a casebook on sustainability in the emerging markets financial sector. It documents how the sector has increasingly integrated environmental issues into day-to-day operations. As such it is an invaluable aid to understanding how these financial institutions have managed environmental risk and used environmental management as a tool for identifying new business opportunities. The casebook is based on case studies, in-depth interviews and research from the popular series of Competitive Environmental Advantage workshops that have been developed and run by IFC since 1996.