1. law, govt and politics
2. legal issues
3. human rights

2011
Inspiring news on Responsible Investment from GES Investment Services
investing in
a powder keg
“Don’t worry! Tunisia is very safe” says my
self-appointed guide Youssuf.
Swiss breakaway
in cluster race
how to make
collaborative engagement pay off
Sustainable textiles
In 2020
with multiple yield
for the Polish market
Growing field
SRI will be vital
MAG •E •SINE 2011 • 1
Welcome to MAG•E•SINE!
We are delighted to present to you the premier issue of GES Investment Services’ annual magazine. Our aim is to provide investors
with inspiring news on Responsible Investment derived from GES’
work and experiences as well as from partners and others sharing
our dedication to long term, sustainable and responsible investment..
The contents of this issue reflect our extensive ambition with both
the magazine and our business. “To make it a little bit better, everyday” is GES’ mission, referring to investments, companies, our company and the world around us. Our main tool for this is engagement
with companies in order to improve management of Environmental,
Social and Governance (ESG) issues. We do this on behalf of and
sometimes together with our clients, representing €650 billion in assets. A successful example of such a process as well as a practical
checklist for future ones can be found in the article “How to make
collaborative engagement pay off”(page 8).
16
Engagement with another company brought GES to Tunisia shortly
before the dramatic revolution in January 2011. Our impression of
a powder keg was borne out faster than anyone could expect and
highlighted important risk indicators to consider when operating and
investing in similar environments (page 4).
8
Preparing for engagement with companies on the emerging hot topic
Cotton, prompted us to go to Nicaragua and learn from their experiences of adapting a previously fatal industry to more rewarding
organic practices (page 16).
Another industry of increasing concern to responsible investors is
Information Technology, which is rapidly catching up on much more
blamed industry and is already matching the climate emissions from
the airline sector. There are, however, alternative routes to take and
some low-hanging fruits to pick (page 26).
We hope that you will find this inspiring and look forward to meeting
you in the Responsible Investment arena.
Best regards,
GES’ Team
22
2 • MAG •E •SINE 2011
contents
Investing in a powder keg 4
How to make collaborative engagement pay off
8
Standardising stewardship 13
Swiss breakaway in cluster race 14
Growing field with multiple yield 16
High pressure building up over Eastern Europe 22
4
26
In 2020 SRI will be vital for the Polish market 25
Restoring the glory 26
A golden clang in the green noise 30
A window with an Asian view 32
Brilliant investment ideas under incubation 34
GES Investment Services
Kungsgatan 35, 111 56 Stockholm, Sweden
Phone +46 8 787 99 10
GES Investment Services Denmark
Købmagergade 39, 1150 Copenhagen, Denmark
Phone: +45 69 66 99 90
GES Investment Services Poland
Ul. Sikorskiego 27, 65-454 Zielona Gora, Poland
Phone +48 68 320 06 84
GES Investment Services Switzerland
Seefeldstrasse 35, 8008 Zurich, Switzerland
Phone +41 43 535 99 38
www.ges-invest.com
14
MAGESINE is produced by GES Investment Services in cooperation
with AD Reklambyrå. Publisher: Susanne Nyman. Cover: Oiltanker
outside the Tunisian coast. Photo: Flemming Hedén. Print: Centraltryckeriet Linköping, certified according to the official Nordic Ecolabel.
Paper: Tom&Otto Gloss 250 g and Tom&Otto Silk 130 g, both certified
according to the Forest Stewardship Council (FSC).
MAG •E •SINE 2011 • 3
Youssuf guiding to the Parliament building in Tunis, December 6, 2010, only days before the protests started.
investing in a
By Flemming Hedén, Senior Research Analyst at GES Investment Services
Despite generally positive impressions from a study tour to Tunisia in December 2010, my
­lingering concerns about the social situation within the country were manifested more starkly
than most foreigners could have guessed. The dramatic revolution in January 2011 may have come
as a surprise, but several indicators were available to alert astute outsiders to the risks. Routinely
addressing such risks within sustainability management systems poses a critical challenge for
­companies and investors operating in similar environments.
GES Investment Services went to Tunisia in December 2010 in order to better understand the conditions
that companies must operate under there and learn
more about the risks and opportunities for responsible
investors, for instance by visiting and engaging with an
oil company. At that time, there was not that much
reported about the country in international media. For
the many European tourists that went there each year,
4 • MAG •E •SINE 2011
Tunisia was probably best known for sunny beaches
and well kept golf courses. Today, this stands in stark
contrast to the subsequent political developments,
which have been covered by world’s media. Reflecting
upon the impressions from GES’ study tour, offers an
opportunity for companies and investors to identify
and manage the risks associated with a powder keg
business environment like that in Tunisia.
Tunis, December 6, 2010
”Don’t worry! Tunisia is very safe”
says my self-appointed guide Youssuf
as he lures me into deeper and darker
alleys of the Medina, Tunis’ old town.
“Look there’s another policeman. Out
of eleven million people we have one
million police officers”.
It is easy to believe him considering that every street
corner is filled with machine gun carrying uniformed men on guard. I start thinking that maybe
it was not such a good idea to carry around a bunch
of reports from Amnesty International on Tunisian security forces’ human rights violations. But
I decide that the security forces are on my side this
night and continue into the Medina maze. It turns
out to be an exciting mosaic with traces from every Mediterranean culture since the dawn of history.
Recent years have in many ways been positive for Tunisians. The country displays a steady growth and is more
prosperous than its neighbours. Real annual GDP
growth was almost five percent over the last decade
before the financial crisis slowed the economy down.
Now business seems to be booming again. There is a
fresh trade agreement with the European Union. Trade
with Europe as well as other factors have helped put
the income per capita ahead of Thailand but it is still
lagging growth nations such as Brazil. There is a substantial and growing middle class. The income is more
distributed, as measured by the Gini coefficient, than
in for instance the US or Turkey.
After the French gave up the colony in 1956 Tunisia
fell under the rule of Habib Bourguiba who was president until he was pushed out in 1987 by president Ben
Ali. Historically the country has had a strong focus on
social development. President Bourguiba experimented both with socialist and liberal economic systems.
But all the time there was a strong emphasis on education. Compared to neighbouring countries, reforms
have helped women to take a much more active role
in society and women make up a substantial part of
the labour force. Since president Ben Ali took over the
country the economy has opened up somewhat and
continued to grow and diversify.
Even though Islam is the state religion, something that
has united both of Tunisia’s postcolonial presidents is
the tight control of religious expression to ensure that
this is not allowed to become a political force. Mosques
are open and religion is part of daily life but there are
no religious parties and women are seen both with and
without veils. Full covering clothing for women is a
rare sight.
So what to make of a country that in some aspects
seems to be doing quite well even though most people
are aware that everything is not perfect? There are a lot
of things that can be said about investing and operating in Tunisia and similar environments. I would like
to highlight a few here.
One of many billboards promoting president Ben Ali at Avenue
Bourguiba that later became the centre of protests.
Firstly, stakeholder identification and consultation is
today fundamental in any kind of operating environment and it replaces the old view that legal obedience
is the key to responsible behaviour. Often a company
may have limited ability to address broader social issues
such as revenue transparency, supply chain management or treatment of migrant workers in direct connection to operations. A way around that problem is
to cooperate with and contribute to the many excellent
initiatives that constructively try to solve those issues.
Secondly, it is clearly possible to operate according to
the very high health, safety and environmental standards even in a challenging environment where you
could perhaps expect a more relaxed attitude and regulatory pressure on such issues. We have seen similar
things among supply chains in India and elsewhere.
MAG •E •SINE 2011 • 5
Offshore oil production outside the Tunisian coast.
When you see the site and the operations you realise
that there are processes and management systems in
place that a lot of developed world companies actually
should study and learn from.
We have of course seen the opposite as well but it is
important to realise that emerging market operations,
even low skilled labour operations, can be and in some
cases are being carried out according to world-class
standards. And the good thing is that this is profitable for the investor and appreciated by the employees.
Both the employer and the employee can take pride in
what they do.
Lastly, the human rights situation is a relevant discussion not only in Tunisia but also in many other countries that attract foreign investments. If we roughly
divide the human rights into civil and political rights,
and the economic rights into social and cultural hu6 • MAG •E •SINE 2011
man rights, we are also able to see where progress has
been made and where there are still gaps to fill. From
a human rights perspective these rights are all interrelated, interdependent and indivisible. The western
approach has often been to emphasise the need for
political human rights such as freedom of speech and
the right to free and fair elections. A counterargument
has been that if you do not have anything to eat you
cannot make use of your freedom to speak; therefore
economic, social and cultural rights must come first.
Bearing in mind that it has sometimes taken hundreds
of years to develop the mature democracies that to
many people serve as an ideal for the protection of human rights, you cannot expect a country like Tunisia
to turn into a democracy over night. But if a president
brings so many benefits to a country so that he deserves
hours of prime time TV celebration and omnipresent
portraits on billboards, then why would he need to
Senior Research Analyst Flemming Hedén in one of many narrow shopping streets in the Medina, Tunis’ old town.
censor the Wikipedia article on him? I have been in
several countries with less than perfect human rights
records but I have never before seen such an apparent
need to manifest power through media control and security forces presence.
What has this to do with investors? Foreign investments do influence countries in many positive ways
that are related to social and economical human rights.
Job creation, knowledge transfer and access to health
care are just some examples. These effects should rightly be mentioned when foreign investments’ impacts on
human rights are discussed. But foreign investments
may also contribute to legitimising and cementing the
power of undemocratic regimes where basic human
rights are suppressed. Investors can take credit for benefits they bring but should also recognise where they
have a responsibility for the downsides and address
that responsibility.
Stockholm, March 15, 2011
Since these notes were written, political turmoil has rocked economies not only in the Arab
world but globally as well. One previously
little mentioned story has started to crystallise
clearly. The desire for political rights cannot be
compensated by economic, social and cultural
progress forever. Investors in countries such as
Saudi Arabia and China therefore can continue to rely on high risk investing based on
authoritarian control, or focus on long term
sustainable investing where human rights are
respected and nurtured.
MAG •E •SINE 2011 • 7
How to make collabora
8 • MAG •E •SINE 2011
tive engagement pay off
Instead of excluding companies with poor environmental, social or governance performance, an increasing number of
investors engage with them in order to improve management of these issues. The optimal outcome is that all parties win.
International experiences show that entering the process with this mindset also enhances the chances of reaching this
result. Other vital factors for success are patience, respect and knowledge.
By Susanne Nyman, Communications Director of GES Investment Services
Engagement as a tool for responsible investment became widely recognized in 2006 through the establishment of the UN Principles for Responsible Investment
(PRI), which four years later had been signed by over
800 investment institutions from 45 countries, representing over USD 22 trillion in assets. However, some
players have practised it even longer and their experiences are now very much in demand from the PRI
community.
“It takes time, much more than many realise, to reach
success in an engagement process - on average between
two and three years”, says Magnus Furugård, President
and Managing Director of GES Investment Services,
which launched its Engagement Forum in 2005.
Thus, real examples of successful cases do not come often and even more seldom they are made public. One
such success was announced in April 2010 by GES
and G4S, the international security solutions group,
which has taken an industry lead in improving labour
“We have improved our communication and engagement with key stakeholder groups to ensure that our
strategy is aligned to their needs and … appreciate the
constructive dialogue we have had with GES and their
investor clients during this time.”
Debbie McGrath, G4S Group Communications Director
“We acknowledge G4S and the labour organisations for
their continuous efforts to engage in dialogue and for
reaching an agreement.”
Jeanett Bergan, Head of Responsible Investments, KLP
standards in emerging markets after a long investor
engagement process sparked by a number of labour
disputes.
On behalf of all its clients and together with one,
the Norwegian life insurance company KLP, GES
chose to pursue the case in an engagement process
with the company. In 2008, the company signed an
agreement with the labour organisation UNI and in
spring 2010 it was concluded that the implementation had led to concrete improvements. Both G4S
and UNI publicly acknowledged the significance of
GES’ and investors’ engagement in achieving progress.
“During 2009, G4S made significant progress in
building and implementing its CSR strategy and we
are committed to our long term CSR goals. We have
also improved our communication and engagement
with key stakeholder groups to ensure that our strategy is aligned to their needs and that as our CSR programmes develop, we seek input and advice from those
“Our experience with G4S is that they have been willing to
resolve problems that we have identified… Regarding the
role of investors, they provided critical pressure on G4S leading up to signing the UNI-G4S Global Agreement.”
Alice Dale, Head of UNI Property Services
“This is a very good practical example demonstrating that
active ownership works and creates value for all parties.”
Hanna Roberts, Engagement Director, GES Investment Services
MAG •E •SINE 2011 • 9
around us. We appreciate the constructive dialogue we
have had with GES and their investor clients during
this time,” said Debbie McGrath, G4S Group Communications Director.
investors need to be able to speak with one voice that is
acceptable to all the members or else the collaboration
is not going to succeed,” said John Wilson, Head of
Corporate Governance at TIAA-CREF.
Alice Dale, Head of UNI Property Services, pointed
out some of the distinguishing features for this engagement process: “Our experience with G4S is that they
have been willing to resolve problems that we have
identified in their global business, whereas some of our
other global partners in the security industry have been
less aggressive about working to rectify clearly unacceptable labour practices. In India, in particular, G4S
has stepped up in a way to fundamentally improve
the lives of security guards and the quality of security
services to clients. That said, the pace of rollout in our
global agreement needs to accelerate but we are working on that. Regarding the role of investors, they provided critical pressure on G4S leading up to signing
the UNI-G4S Global Agreement and they continue to
be an important component of corporate social responsibility with every company we deal with in security
and cleaning services worldwide.”
Mark Preisinger, Director of Corporate Governance
at The Coca-Cola Company, had similar experiences
from their company perspective: “A big hurdle to collaborative engagement by investors is a lack of collective focus…The productive way to approach boards
and management is to leave the activist hat at the door
and put on the investor mentality hat…(to show a)
reasonable and objective approach… (and be) willing
to sit and listen to our side.”
From the investor side, KLP expressed appreciation of
G4S’ and UNI’s response to investors’ concern: “We acknowledge G4S and the labour organisations for their
continuous efforts to engage in dialogue and for reaching an agreement. The nature of G4S’ business and
markets of operation is extremely challenging. In this
the labour organisations play an important role in securing international labour rights,” said Jeanett Bergan,
Head of Responsible Investments at KLP.
Hanna Roberts, Engagement Director at GES Investment Services, hoped that the engagement case
could serve as valuable inspiration for others: “This is
a very good practical example demonstrating that active ownership works and creates value for all parties. It
simultaneously improves the company management of
labour relations and reduces shareholder risks.”
This win-win outcome also rendered G4S and GES an
invitation to the PRI in Person Annual Event 2010 in
San Francisco to discuss successful approaches to collaborative engagement. The panel of five experienced
players from both the investor and company side got
the straight forward question by moderator Dr. James
Gifford, Executive Director of the PRI Secretariat:
What works and what does not?
“You need to know why you want to collaborate and
what you want to get out of it…and understand that
10 • MAG •E •SINE 2011
Ann Byrne, CEO of Australian Council of Superannuation Investors (ACSI), put emphasis on preparations and understanding of the company they are engaging with: “Our first part of the conversation is to
talk to them about their business, how their business
is performing, what are the issues that investors should
be thinking about or should be aware of… (This) adds
credibility to our discussion. They see that we are interested in their company, not just a specific issue.”
“One of the most important issues for us is that the
discussions and the engagement that we have is relevant to us as a company,” said Helen Parris, Director
of Investor Relations at G4S. “Particularly some of the
“tick box” exercises we are asked to do are not always
relevant to us. And where we have engagement with
a company like GES, who do a lot of really detailed
thorough analysis of our company, that is much more
fulfilling from our side and much more relevant to our
business. A great example is Sudan – in some of the
questionnaires we have been asked (about the fact) that
we are on an Exclude list because we have a presence
in Sudan, but what we are doing in Sudan is landmine
clearance, a very strong ethical and humanitarian aspect of our business.”
Magnus Furugård, President and Managing Director
of GES Investment Services, stressed the need for patience and long term commitment from investors and
service providers, while at the same time calling for a
larger focus on change rather than just “drinking coffee
with companies” in order to add value to investments,
companies and society. He also identified a growing
trend towards transparent reporting on results, which
would be fair to expect from the investor community
since “that is one of the things we are asking companies
for.”
Checklist
Common framewor
k between collaborat
voice.
ors - speak with on
e
Clarity on the issue
– why is it of conce
rn to investors?
Clear objectives - re
fer to standards/gu
idelines.
Focus on change - n
ot just socialising.
Patience – takes 23 years on average
to change.
Professionalism - k
ee
p
th
e
it with an activist
investor hat on inst
hat.
ead of replacing
Trust – handle con
fidential and sensi
tive issues appropria
Knowledge – a prof
tely.
its operations mak ound understanding for
es it more relevant
the company and
for them to discuss
Respect – listen to
.
th
e
company and inco
the collaboration.
rporate them in
Reasonab
itude and long-term
the compaleny’atts si
de and negotiate. perspective - willing to se
e
Documentation an
d transparency - en
quality.
sures efficiency and
Influence and expe
rtise matter more
than size of the inves
Revaluate IR – ma
tor/s.
n
y
ti
m
board as the IR has
es a better compan
y
communicate these an overview of investor co contact than the
more effectively to
n rns and can
the boardce
.
MAG •E •SINE 2011 • 11
In the subsequent roundtable discussion, Jeanett Bergan, Head of Responsible Investments at KLP also
contributed with a key word – respect: “It is important to have a significant respect for the company and
acknowledge that it is the company that has the real
challenges; they are the ones who has to work hard
to (for example) be in compliance with human rights
in all countries. (You should) not go into the meeting trying to be an expert… it is the company who is
going to know these areas and be dealing with these
challenges. And (you should) not take credit for the
changes because it is actually the company who is doing the changes.”
Compiling all these experiences, quite a long checklist
could be extracted, please see previous page. Or they
could be summarised as Ann Byrne from ACSI did:
“Be clear about what you want, back it up with facts –
and enjoy the conversation.”
The UN Principles for Responsible Investment
The United Nations-backed Principles for Responsible Investment Initiative (PRI) is a network of international investors working together to put the six Principles for Responsible Investment into practice.
The Principles were devised by the investment community and reflect the view that environmental, social
and corporate governance (ESG) issues can affect the performance of investment portfolios and therefore
must be given appropriate consideration by investors if they are to fulfil their fiduciary (or equivalent) duty.
• We will incorporate ESG issues into investment analysis and decision-making processes.
• We will be active owners and incorporate ESG issues into our ownership policies and practices.
• We will seek appropriate disclosure on ESG issues by the entities in which we invest.
• We will promote acceptance and implementation of the Principles within the investment industry.
• We will work together to enhance our effectiveness in implementing the Principles.
• We will each report on our activities and progress towards implementing the Principles.
Each principle is complemented with suggestions for possible actions, where engagement is frequently
listed, please see www.unpri.org for further information.
12 • MAG •E •SINE 2011
By Susanne Nyman, Communications Director of GES Investment Services
While European regulators are taking steps to
address the importance of environmental, social and governance (ESG) factors in company
management and investment, UK-based proxy
voting agency Manifest predicts some of the implications.
The financial crisis has underlined the importance of
underpinning investment strategies with sustainable
investment thinking in financial markets. Already in
some European countries, significant steps have been
taken to improve corporate governance such as The
Norwegian Code of Practice for Corporate Governance, which includes a clear statement of the board’s
responsibility for corporate social responsibility. In
2010, the UK pushed the development further by issuing a voluntary Stewardship Code for institutional investors, which “aims to enhance the quality of engagement between institutional investors and companies to
help improve long-term returns to shareholders and
the efficient exercise of governance responsibilities”.
At the same time, the EU Commission is working on
a regulatory framework for harnessing better stewardship standards.
To help investors meet the challenges that high quality engagement bring, Manifest and GES Investment
Services have formed a strategic partnership combining specialist research in ESG issues with global proxy
voting services.
“As Europe continues to build as a single economic
force, common standards in stewardship form a part
of harnessing confidence in European investment
markets. The main challenge with any such initiative
at a European level is creating standards that are high
enough to not compromise good standards in Member
States who have led the way thus far, without imposing
unreasonable burden on those for whom such legislation may be new,” says Paul M.S. Hewitt, Business
Development Manager at Manifest.
Paul M.S. Hewitt, Business Development Manager at Manifest
Regardless of the structure of such a framework, he is
convinced that increased transparency demands are to
be expected:
“As an investor, you need to be able to effectively demonstrate that you can walk the talk that the stewardship
debate demands. If you say you are engaging with companies on issues, or voting your shares at a company
meeting, transparency is about demonstrating how you
have done that, and how those activities play a part in
your wider investment processes. It is also about meaningful disclosure, which can sometimes rub up against
the necessarily discrete nature of some long-term engagement activity.”
MAG •E •SINE 2011 • 13
Swiss
breakaway
breakaway
in cluster race
By Patrick Wirth, Managing Director of GES Investment Services Switzerland
Photo Gusti Zollinger Radsportreisen
Last year the Convention on Cluster Munitions finally entered into force
in more than 100 countries after decades of negotiations. However, the
pace of implementing them nationally varies a lot and the road to a cluster bomb free world still seems long. Legal advancement in Switzerland
is accompanied by public pushes in Germany and Austria that challenge
investors to catch up on the leaders.
Aside from banning the use, production or stockpiling of cluster munitions, the Convention on
Cluster Munitions (CCM) also prohibits to “assist,
encourage or induce anyone to engage in any activity” prohibited by the CCM. This paragraph can be
interpreted in various ways and has led to parliamentary activity in different countries, not least in
Germany and Switzerland.
Switzerland is going to adapt the “Federal Law on
War Material” according to the CCM. Direct financing is most likely to be banned and this will
be relevant for larger banks. For indirect financing
it is not yet clear which forms will be addressed
and whether holding equity of cluster munitions
producers abroad should be banned as well or not.
It has become a political football and some parties
argue that it is not justifiable or too costly. It would
not only affect large banks but also any pension
14 • MAG •E •SINE 2011
fund, asset manager or mutual fund provider etc.
The debate is still ongoing and the final outcome
and its implications are not yet clear. However a
strong signal has been sent out and the movement
is gaining momentum. In April 2010, UBS and
Credit Suisse and 26 other Swiss financial institutions were criticised by media after the Cluster
Munition Coalition published a global report.
Subsequently, UBS has communicated that they
have implemented a policy and process to prevent
their actively managed funds to invest in cluster
munitions companies.
In Germany the finance industry is facing similar
pressure, which comes from the society and from
consumer organisations. In January 2011, uproar
started in the German press because of the Riester pension plans (privately funded old age scheme
with state incentives). The consumer organisation
Managing Director Patrick Wirth (to the right) and friends climbing Col de la Madeleine in the French Alps.
“Stiftung Warentest” had asked 112 banks and 62
insurance companies providing Riester products in
Germany about a policy addressing cluster munitions investments and a list of excluded companies.
65 of the 174 financial institutions had provided a
feasible answer. But only 12 institutions are in fact
excluding cluster munitions companies. According
to a poll of the same consumer organisation, 96
percent of private clients having a Riester pension
scheme would endorse a legislative prohibition for
Riester product providers – quite a discrepancy
which is even more alarming because those state
incentives for Riester products are provided by tax
payers.
Austria was a first mover when it comes to destroying any stockpiles of cluster munitions. The
financial institutions however are not yet legally
affected by any national regulations prohibiting
such investments. The press has not yet raised the
issue and pension funds or insurance companies
are somewhat addressing the issue with voluntary
ethical investment guidelines.
The breeding ground for such turmoil is called
double standards. Governments sign and ratify international conventions but shirk full responsibility
when it comes to national legislation.
The good examples are set in other countries.
Belgium, Ireland and Luxembourg have legally
banned investments in cluster munitions. Norway
is another example with the Government Pension
Fund where the Ethical Council (established by
royal decree in 2004) sets ethical guidelines and
bans cluster munitions investments.
MAG •E •SINE 2011 • 15
Sustainable textiles
Growing field
with multiple yield
By Linda Björk, Research Analyst at GES Investment Services
Photo Johan Hallberg
“There are fewer funerals to attend nowadays.” Cotton producer Pablo
Antonio Martinez Uriarte appreciates the tangible human return on
his investment in organic farming, but still awaits the financial.
16 • MAG •E •SINE 2011
Ana Isabel Salazar works for Aprenic and supports the
cotton producers in transforming into organic farming.
MAG •E •SINE 2011 • 17
I
meet the local cotton producer Pablo Antonio
Martinez Uriarte in the middle of harvesting season in the countryside outside Léon in the northwest of Nicaragua. While he is standing in the shade
tying together the bags with cotton, wich was handpicked earlier this morning, he tells me how the generation before had health issues and died from kidney diseases from the pesticides used in the cotton production.
They handled the pesticides without any protection and
even walked barefoot in the soil. “There are fewer funerals to attend nowadays”, he says.
Pablo Antonio Martinez Uriarte has been a member
of Asociación de Productores Ecológicos de Nicaragua (Aprenic) for nine years, an association of organic
farmers that was formed in 1996 by its 150 members
in rural Nicaragua. It takes about three years to obtain a
certification as an organic farmer. Some of the requirements to obtain a certificate are that the producers have
to alternate the crops and only grow cotton every third
year, only use organic fertilisers and they cannot use any
pesticides. They grow cotton during the rainy season in
order to use only rainwater for irrigation.
Cotton cultivation is the most chemical intensive farming in the world today. It occupies barely 2.5 per cent of
the world’s cropland but uses 11 per cent of the world’s
agricultural chemicals. Cotton growers account for 25
per cent of the world consumption of pesticides. The
cultivation of this fibre crop has severe consequences all
over the world and a conversion to more organic plantations would have a positive effect on the environment
and on people’s health. The global organic cotton market
is still in its early days, making up one per cent of the
total harvest. But the market is booming and the share
is expected to increase. Studies show that the exposure
to agricultural chemicals in this industry kills 22,000
people and poison three million people every year. 1
Pablo sees a great advantage with the organic farming
in the health of the workers. He has also noticed that
the soil is much more fertile now and there has been a
recovery of many plants and animals. However, he also
explains that he has made a lot of investments to transform into organic farming but he has not seen the reward in a higher income from his production yet. Pablo
explains that he employs temporary workers that also
harvest other crops, such as almond which pays better.
He would like to be able to pay the workers more, but
then he needs to get a higher price for the product.
Other major challenges for the cotton industry are the
negative social consequences when workers only have
temporary employment during harvesting season and
have no employment security with long days and low
wages. Child labour within the cotton cultivation is a
problem in many countries. Uzbekistan is one example,
where hundreds of thousands of children are mobilized
by the Uzbek government each year to work in the
country’s cotton fields.
Aprenic is currently being certified by the international
Scientific Certification Systems (SCS), which verifies
the standards in environment aspects but also factors
such as working conditions and salaries. The director of
Aprenic states that this will benefit the producers as they
can enter the fair trade market, which should give them
a higher price for their products. This will hopefully give
Pablo a better return on his investments in the future.
Nicaragua has a sad history of pesticide use in cotton,
fruit and other export crops. Cotton was Nicaragua’s
second biggest export earner in the eighties. It was
cultivated in big farms in monoculture, which made it
vulnerable to insect pest, and massive quantities of toxic
insecticides were used in the process. The pesticides
contributed to health problems for entire generations.
This also made the cotton production financially unviable as the insects became resistant. The farmers applied
chemicals to the extent that pesticides accounted for
approximately 50 per cent of the production costs. Finally, the cotton production almost disappeared in the
beginning of the nineties. During this period some of
the worst pests died out and made way for the organic
cotton production, which is the only cultivation in Nicaragua today.
1
Swedish Environmental Management Council 2011.
18 • MAG •E •SINE 2011
“How are they supposed to support a family on what I
can pay them?” he asks rhetorically.
After having seen the cotton being harvested at Pablo’s
cotton plantation I head south to visit another part of
the production chain in Ciudad Sandino, outside the
capital Managua. Here a women’s sewing cooperative,
The Fair Trade Zone, is producing organic and fair trade
cotton clothing for export to the US and Europe. I am
received by a group of inspiring women telling me how
they arrived without anything to this suburb in 1998,
when Hurricane Mitch had devastated Managua. They
did not have any jobs and decided that they would start
a sewing cooperative. For two years they worked without
salary and borrowed money for cement and construction
material to construct their own building.
“Some left the project and thought that it would not
work, but today we can see that it did”, establishes Maria
Delia Urban Cano.
Another of the women who started the project is
­Veronica Ramona Calero Baquedano. She always
Eva del Socorro Gonzalez (above) works at the sewing cooperative The Fair Trade Zone. Three of its co-owners are Maria Delia Urban Cano,
Veronica Ramona Calero Baquedano and Julia Yadira Vallejos (below to the left). COPROEXNIC, an agricultural export cooperative that buys
cotton from Aprenic, has invested in machines so that they can process the cotton themselves and not send it abroad (below to the right).
MAG •E •SINE 2011 • 19
Raul Zacaraias Martin Machin, general manager of COPROEXNIC, demonstrates the unprocessed organic cotton.
wears a tape measure around her neck; that is her
trademark, the other women tell me. However, this
was not always the case, I learn, when I ask her about
how the work with cooperative has affected her life.
“We are the owners of a cooperative”, says Veronica and
looks proud. “Before I was a housewife and was home
looking after the children with my husband supporting
me. I did not know anything about sewing or about running a business. I have learned so much and today I am
in charge of quality control”.
The story of these women is a different one from that
of the women working in an export processing zone
20 • MAG •E •SINE 2011
in Guatemala that I met a few years ago. They told me
about the death threats and assaults they had received
for having formed a union. The working conditions that
are often reported in these kinds of zones, with long
working days, low wages etc., are not present in The Fair
Trade Zone. When talking to Eva del Socorro Gonzalez, one of the seamstresses employed at the cooperative,
she expresses her content with the working conditions.
Eva has worked for The Fair Trade Zone for three years.
She works reasonable hours and is satisfied with the salary. She tells me that she does not feel the pressure that
the workers in the export processing zones do.
The sewing cooperative has exclusively used fabrics
made of organic cotton from the start. Until now they
have bought it from Peru but they are considering replacing it with fabrics made of cotton from Aprenic.
They see an advantage with keeping as much of the
supply chain in the country as possible. This is also the
idea of Genesis spinning plant, a cooperative of women
and men, which is starting up and will buy local organic cotton and make organic cotton yarn that will
be knitted in Costa Rica or Nicaragua and eventually
made into garments at the women’s sewing cooperative, which would allow the entire vertical production
chain to be kept in Central America.
There is a need for brands and retailers to take responsibility and monitor the long and complex supply chain
of the textile industry. Cultivating and harvesting, preparing, spinning, weaving and sewing are often done
in different countries, which mean long transports and
low traceability. Therefore it is very hopeful to meet
with Pablo and the women from the sewing cooperative and see how their lives have been improved, with
higher social and environmental standards in place.
These initiatives show that it is possible to create a
more sustainable supply chain, from seed to finished
garment.
MAG •E •SINE 2011 • 21
High pressure
building up over eastern Europe
By Martin Pitura, Managing Director of GES Investment Services Poland
Photo Anna Seliga
ESG Rating
H
H
The European market for Responsible Investment is rapidly improving eastwards, reveals
a study from GES Investment Services. Polish and Russian companies are now just as good
as their peers in Austria, Greece and Ireland when it comes to reporting on Environmental,
Social and Governance (ESG) issues. However, they are all still a long way from the top
performers in Sweden and France.
G
ES Investment Services’ Polish branch has
studied ESG reporting of blue chip indexes
in all major European countries including
Central and Eastern Europe – or New Europe, a denomination increasingly preferred in the region. 29 indexes were analysed, each of them comprising 6-40 of
22 • MAG •E •SINE 2011
the largest companies by market capitalisation on each
market, with the exception of the FTSE 100 index
where the 100 largest companies were taken into account. In addition, GES also included the RESPECT
Index (a Polish CSR index) and the mWIG 40 index
(index of midsized Polish companies).
Altogether a total of 746 companies were assessed according to GES Risk Rating criteria, which are based
on international norms for ESG issues. Summing up
the separate E, S and G ratings for each company, five
clusters of ESG performance in Europe could be identified:
E Rating
1 Leaders – OMX Stockholm 30 (Sweden) is
top performer, followed by CAC 40 (France),
AEX 25 (Netherlands), FTSE 100 (UK), DAX
30 (Germany), OMX Helsinki 25 (Finland),
IBEX 35 (Spain) and SLI 30 (Switzerland);
2 Relatively high level – OMX Oslo 20 (Norway), OMX Copenhagen 20 (Denmark), BEL
20 (Belgium), FTSE MIB Index 40 (Italy) and
PSI 20 (Portugal);
3 Slightly less than average – ATX 20 (Aus-
S Rating
tria), ISEQ 20 (Ireland), RESPECT (Poland),
FTSE Athex 20 (Greece), PX 14 (Czech Republic), OMX Russia 15 and WIG 20 (Poland);
4 Below average – BUX 13 (Hungary), SBITOP 6 (Slovenia), mWIG 40 (Poland), OMX
Baltic 10 (Estonia, Latvia and Lithuania) and
the ISE 30 (Turkey);
5 Laggards – CROBEX 25 (Croatia), SOFIX
20 (Bulgaria), BET-XT 25 (Romania) and
BELEX 15 (Republic of Serbia).
According to Martin Pitura, Managing Director of
GES Investment Services Poland, the results reveal
some very interesting and surprising news for investors:
G Rating
“While the top indexes take a clear lead, the crowd
around average rating offers an interesting forecast
about the development in the rest of Europe. Indexes
from New Europe are close to catching up on ESG reporting with indexes coming from Austria, Greece and
Ireland, and the Polish RESPECT index even slightly
exceeds the Greek FTSE Athex 20 index. It should also
be noted that the gap between the third and fourth cluster is quite small, especially for the indexes from Hungary and Slovenia.”
MAG •E •SINE 2011 • 23
Splitting the results for E, S and G shows that the
Corporate Governance pillar in some indexes in New
Europe is quite competitive. The difference between
the best performing index in Europe, FTSE 100, and
the best performing indexes in New Europe, WIG
20 and RESPECT, is not that large. The difference in
Environmental and Social performance between New
Europe and the rest of Europe is however quite large.
“This is something that New Europe is working on and
the improvement during the last ten years has been
quite good. Our estimation is that the current leaders
in New Europe were on the same level ten years ago
as the current laggards in Europe are today. For the
coming years, we expect to see that companies from
New Europe continue to improve their ESG reporting,
which will make them more attractive for investors”,
predicts Martin Pitura.
Average ESG
2,500
2,000
1,500
1,000
0,500
0,000
24 • MAG •E •SINE 2011
Best performers on the Environmental pillar are companies present on OMX Stockholm 30 (Sweden), followed by CAC 40 (France) and DAX 30 (Germany).
OMX Stockholm 30 is also the top performer on the
Social pillar, followed again by CAC 40 but with IBEX
35 (Spain) in third place. On the Corporate Governance pillar, the leading companies can be found on
FTSE 100 (UK), SLI 30 (Switzerland) and AEX 25
(Netherlands).
In 2020 SRI will be vital for
the Polish market
By Martin Pitura, Managing Director of GES Investment Services Poland
5 questions to Rafał Matusiak, President of the Board, TFI SKOK, a Poland-based investment
fund company that in 2010 launched Poland’s first equity fund based on Environmental, Social
and Governance (ESG) criteria.
1. Why did you start the fund
SKOK FIO Etyczny 2?
First of all, we believe that the most effective business
is an honest business. Ethical funds aim their capital
towards those issuers who, in their activities, follow
the rules of corporate social responsibility and ethics,
thus creating a solid ground for a stable growth of
their companies. The launch of ethical funds is also a
continuation of the initiatives we undertook six years
ago. The so-called industry exclusions, being a significant element of analyses conducted on a larger scale
in the field of ethical funds, were already included in
our first fund “SKOK FIO Rynku Pieniężnego”.
2. What response has it received?
The number of investors who has decided to entrust their assets to the TFI SKOK’s ethical funds
is gradually increasing and has so far resulted in
assets worth PLN 60 million in both our funds.
3. Do you have plans for further initiatives
within SRI?
We are actively engaged in other ventures in this field
and are committed to continue in the future as well,
however at this stage it is too early to give more details on this issue.
4. What are the biggest challenges for you to
continue within SRI?
The biggest challenge for us is building SRI awareness in the Polish society. I am sure that the Polish
have matured to gradually abandon the idea of gaining profit at any price and are ready to change their
business perspective. Both academic environments
and government administration should participate in
the awareness building process among Poles. Financial institutions should also be active in this area in
order not only to regain the trust they lost during the
crisis but also to prevent such a loss in the future.
5. What would you predict will be the status of
SRI in Poland in 2020?
Rafał Matusiak, President of the Board, TFI SKOK.
There is no reason why SRI in Poland could not be
of primary importance as it is in other countries in
Western Europe, in the United States or Canada.
Although it is impossible to predict the scale of this
phenomenon in the next ten years, I am convinced it
will be a vital part of the financial services market in
Poland.
MAG •E •SINE 2011 • 25
By Susanne Nyman, Communications Director of GES Investment Services
Illustration and photo Dan Larsson
Information Technology has not become the environmental
savior for business and society that was predicted. On the
contrary, it is rapidly catching up on much more blamed industry and is already matching the climate emissions from
the airline sector. But there are alternative routes to take
along a computer’s life cycle that could help straighten IT’s
environmental halo.
26 • MAG •E •SINE 2011
MAG •E •SINE 2011 • 27
The high speed of IT development
poses enormous opportunities to
make a substantial contribution to
a better environment within a short
time – but also to just as quickly
deteriorate it, says Håkan Nordin, author of “Green IT – from
problem to possibility”. He runs
the Swedish environmental consultancy Miljökompassen and has
a background as a chemist as well
as a Greenpeace campaigner in the
80’s. There he gained a minor halo
himself, bringing the international
pulp and paper industry round to
chlorine free bleaching. Setting
aside the heroic comparison, he
prefers to do another:
Håkan Nordin, author of “Green IT”
“It took five years to change such
large-scale processes in an industry where each digester unit costs
a hundred million Euros. A similar
change within the IT sector would
PRODUCTION
• 22 kilos of chemicals and 1,500 litres of water are required for the production of one computer.
• Many of the chemicals may cause cancer or affect the central nervous system, the immune
­system, brain, kidneys, fertility etc.
• Production from new raw material compared to recycled material causes 5 times more of
­acidifying emissions, 7 times more of CO2 and 12 times more of volatile hydrocarbons.
•
•
•
•
•
28 • MAG •E •SINE 2011
Buy a computer free from heavy metals and halogenated flame-retardants.
Buy an eco labelled computer.
Buy a computer that weighs less and is smaller.
Buy a computer made with recycled plastic.
Lease a computer from a company that takes life cycle responsibility.
probably not take more than five
months. This means that it could
quickly go green and good. And
this is precisely what is needed in
order to save our common planet.
Unfortunately, rapidly wrong is
more significative for the IT sector’s environmental development
so far.”
As displayed in the graph below, IT
is today part of most of the major
environmental problems, like climate change, toxic pollution and
illegal waste dumping. The latter
problems are linked to the beginning and end of IT equipment’s
lifecycle, while the first problem
is primarily generated during the
usage phase. This is the part of the
life cycle that each individual IT
consumer has most power to influence and where any IT relying and
environmentally and financially
conscious company should take
immediate action as there are some
really low hanging fruits ready to
pick, says Håkan Nordin:
“A computer’s climate emissions
can be reduced by at least 50 percent just by turning it off when it is
not used. Keeping it clean from unnecessary programs that start automatically and employing profound
energy saving functions, are other
simple and profitable measures that
will pay off right away in both the
carbon dioxide (CO2) and financial
accounts.”
However, in order to be part of the
overall solution instead of the problems, IT relying companies also
have to address the other phases
of the life cycle. That would mean
to put tougher requirements on
purchase of equipment and take
USE
larger responsibility for it when it is
worn-out. Or you could hire someone to do it for you, like Acento, the
first and only company in the world
offering green leasing of computers
(see article on next page).
“Any way you do it - make sure
to measure,” advises Håkan Nordin. “Being able to concretise the
impact of your actions stimulates
motivation. How much CO2 does
printing fewer copies save, how
many trees, how much money? In
that way, everyone involved can
share the glory. You might think
that your small savings are negligible but if you sum up all negligible environmental effects from the
world’s two billion PCs, it results
in a not negligible problem. And
thus, small measures like yours are
an important part of the solution.”
WASTE
• The IT sector accounts for 2 % of global climate emissions, just as much as airlines, and is expected to
double until 2020.
• Every hour that a computer is on without being of any
use, 42 grams of CO2 are generated.
• 73 % of a computer screen’s CO2 emissions during a life
cycle are generated from use.
• The lifespan of a computer has shortened from 6 to
2 years. In Europe, electronic waste is the part of
household waste that increases most.
• Use fast operating systems and efficient energy saving
functions. Improves working environment as well as
general environmental impact.
• Clear from unnecessary programs that start automatically. Can save 75 kilos of CO2 per year.
• Turn off the computer when it is not used.
• Replace computers less often.
• Reuse by passing it on to a user with less advanced
demands.
• Recycle at a waste centre certified for handling electronic waste in accordance with the EU Directive.
• 75 % of the EU’s electronic waste is illegally dumped,
mostly in Ghana, India and China, where poor
people, often children, hazardously and inefficiently
recycle while polluting locally and globally.
MAG •E •SINE 2011 • 29
A golden clang in
noise
the
By Susanne Nyman, Communications Director of GES Investment Services
“All IT producers market themselves with an environmental profile, but most commitments are
very shallow and it is merely a lot of green noise. Considering the extensive and increasing impact of the industry, it will eventually be forced to take life cycle responsibility for their products.
Until then, we attempt to pitch a tone for a practical solution,” says Dag Erik Storberget, Partner
and Senior Director of Norwegian technology financing company Acento, which is the first and
only in the world offering green leasing of IT.
30 • MAG •E •SINE 2011
A
nd it has resonated well: Acento’s pilot contract in 2008 with the Norwegian royal court
has been a door opener to more than 70 Nordic clients, both public and private. To also open their
minds, Dag Erik Storberget usually presents some of
the uncomfortable facts that woke his own awareness
is that a large printer or copier emits more CO2 than an
average Norwegian car within a four-year cycle. Summing up all IT equipment in Norway, it ­accounts for 2
million tons of CO2 per year, which is even more than
the 1,7 million tons from StatoilHydro’s very criticised
Mongstad refinery”, says Dag Erik Storberget.
The green solution Acento offers is Leasing with Life
Cycle Responsibility. The client is equipped with new
computers certified by TCO, the toughest certification
system in the market. After three years, Acento’s partner Circle-IT picks up the equipment, erases all data
and issues a data erasure certificate (Blancco). Then
Acento leases it out for further two years to another
client with less advanced demands, typically smaller
companies and public enterprises like schools. This is
a measure with significant potential since reuse is very
rare in the Nordic market, claims Dag Erik Storberget.
“In general we tend to think we are such advanced IT
users but in fact we have very different levels of needs
and not all of us require the most advanced computers.
Unfortunately, the large IT producers are not interested in marketing reused equipment so today there is a
larger demand for this than we can meet.“
Dag Erik Storberget, Senior Director of Acento
and dedication after seeing Al Gore’s movie on global
warming and exploring for business opportunities to
fight this:
• The global IT industry accounts for two percent of
the world’s carbon dioxide (CO2) emissions, the same
amount as from the aviation industry. However, the
latter is decreasing while IT emissions are increasing.
Until 2020 they are predicted to double, thereby becoming among the biggest greenhouse gas emitters.
• 75 percent of EU’s electronic waste is illegally
dumped in Ghana, China and India. Poor people,
including many children, burn the equipment in order to separate precious metals from plastic. A very
hazardous and ineffective process which only recovers about 20 percent of the material, compared to
80-90 percent in legal recycling. The toxic smoke
contains dioxins and heavy metals that pollute locally and globally, since they are transported as far as
to the Arctic via rain and snow.
“Most IT relying companies do not regard their IT
equipment as environmentally hazardous. But the truth
When the equipment no longer is suitable for remarketing, Acento destructs hard discs and ships the
hardware for recycling at a local WEEE Value Center,
which is certified to recycle all categories of electronic
waste in accordance with the EU Directive on this.
Finally, Acento makes the whole leasing contract climate neutral by buying CO2 quotas via My Climate,
a non-profit foundation that was recently pointed out
as one of the world’s four best climate quotas providers. The income they get from trading CO2 quotas are
invested in ”Gold Standard” projects earmarked for
real emission reduction. Acento has so far bought over
2,500 tons of CO2 quotas and contributed to three
concrete projects: a biomass power plant in India, a
biogas plant in Nepal and a wind farm in Madagascar.
Despite Acento’s competition advantage of being, to
their knowledge, alone in the world tackling IT’s environmental problems this way, Dag Erik Storberget
hopes to hopes to see more activity due to the serious
situation. And he has a good idea on how to trigger
the market:
“Include energy consumption in the IT budget, that
would make more IT directors focus on environment.”
MAG •E •SINE 2011 • 31
A window with
By Susanne Nyman,
Communications Director of GES Investment Services
The conditions for responsible investment in the AsiaPacific region have changed profoundly during the
last decade. The rise of emerging markets and particularly China requires new perspectives than those
prevalent in the industry, claims Mark Bytheway,
Founder and Chief Executive Officer of Sustainable
Investment Research Institute (SIRIS).
Mark Bytheway, CEO of SIRIS
Established in Melbourne in 2000 with an Asia-Pacific
­focus on Environmental, Social and Governance (ESG)
­issues, SIRIS has had its window open to the region longer
than most research groups.
“Since SIRIS commenced operations, we have witnessed a
move from ESG research ostensibly requested by and produced for niche SRI funds to that sought for inclusion in
mainstream investment process. This development is partly
a consequence of the increasing profile of the UN Principles for Responsible Investment (PRI) and its widening
adoption among investors, but also by the rise of emerging
markets and particularly China. Their rapid economic development and extensive government ownership of listed
companies bring specific challenges, especially with respect
to disclosure to foreign investors, who often have a different perspective and expectations of higher levels of disclosure,” says Mark Bytheway.
For SIRIS, this has meant that their process has become
more focused on analysis of ESG investment risks and
32 • MAG •E •SINE 2011
an Asian view
opportunities and the materiality of these. Partnering with
Europe-based GES Investment Services from early on, they
have now extended their partnership to provide local expertise for analysis of and engagement with Asian companies on
ESG issues. A task that poses special challenges and requirements, in particular when seeking to apply values and perspectives derived from different (western) cultures, explains
Mark Bytheway:
“From an ESG point of view, Asia reflects a range of substantially differing environments, cultures and legal and political systems and structures. This means that there is a consequent assortment of differing drivers, including company
ownership and governance, but also differing economic
development and wealth generation aspirations for the consideration and expression of ESG factors. To address these
challenges and opportunities requires a considerable understanding of the differences. When analysing companies for
western investors, the process also requires an understanding behind western investment aims and objectives.”
In order to match these requirements, SIRIS focuses entirely on Asia-Pacific regional analysis and employs Asian
language speaking analysts who bring experiences gained
from working in the region. Many of SIRIS’ analysts are
nationals of countries for which they provide analytical
coverage.
In addition to enabling GES to source Asian information for its global services, SIRIS’ Asia
specific data
is also being made available in the GES database. This
has further benefits for GES’ engagement based services,
where SIRIS regional presence and local expertise enhance GES’ company dialogue and engagement process
both through easier access to companies but also through
provision of a local context to the issues.
“Issues of increasing concern from investors in the region
are disclosure generally, but also environmental impacts
arising from rapid and massive economic development
including particularly, emissions to air/greenhouse gases, water and reductions to arable land and deforestation, arising from population growth and rising wealth
and consumption,” says Mark Bytheway.
MAG •E •SINE 2011 • 33
Brilliant investment ideas
under incubation
34 • MAG •E •SINE 2011
D
uring the autumn 2010, I had the chance to
get a closer look at some golden eggs in the
portfolio of a German cleantech fund. Companies with a sustainable solution to some of the environmental challenges we have in the world. Most fun
was probably to drive the advanced electrical sports
car, Tesla, developed and produced in Silicon Valley,
California. Silent, fast, powerful and easy to drive.
Recently launched on the Nasdaq with great success.
Now Tesla is planning to present a family car in 2012
with the similar technology as in the sports car, thereby entering a larger market.
In New York City I had the pleasure to meet with Ron
Gonen, CEO and co-founder of RecycleBank, who
has developed a clever system to diminish household
waste that would otherwise have been transported a long distance to wastelands. A microchip in
each recycling bin measures the quantity of recyclables and rewards the conscientious consumer
with points that can be used for payment next
time he/she goes shopping. It saves money for
citizens as well as for cities all over the United
States as well as in Europe, making this a fast growing
global company.
At an investor seminar in Monaco arranged by German finance group Allianz, I met Kresse Wessling,
one of the founders of Elvis & Kresse. They create
life-style accessories by re-engineering otherwise useless waste. The pioneering Fire-Hose range, among
them beautiful bags, is made exclusively from decommissioned British fire brigade hoses, which were
otherwise destined for landfill. Their products have
made it all the way to the luxury department store
Harrods, Vogue Magazine, 10 Downing Street and
an official birthday exhibition for the British Queen.
Next planned destination is the stock exchange.
For a long time we have seen small businesses with a
sustainable business concept like the ones mentioned
above and hoped that they will grow and become a
star in the market. Like Nasdaq-listed Whole Foods,
the world’s largest retailer of natural and organic foods
with more than 300 stores throughout North America
and the United Kingdom.
strategies, trying to find sustainable solutions, sustainable products, tested, decided to stop, too early, not
right…but now they are finding their way to a strategy for sustainable businesses. And suddenly there
might be golden eggs to find for responsible institutional investors looking for opportunities.
Carmakers are in hard competition to solve the unsustainable transportation system. Toyota’s large success
with its pioneering hybrid vehicle has set an example
that has been followed by e.g. Honda, Lincoln and
Ford. Nissan, Chevrolet and Mitsubishi are coming
along with an electrical car; a solution that lowers the
operating cost and provides comfortable silent driving. Meanwhile BMW, SAAB and Volvo invest in
eco-fuel.
Retail companies Adidas, H&M, The Gap and
Marks & Spencer are investing in Better Cotton Initiative, a cooperation with WWF and
environmental agencies. Thousands of cotton
farmers in India and Pakistan learn how to reduce the use of chemicals and water while at the
same time be productive and earn more. H&M says it
has a two-part strategy: to increase efforts on organic
cotton and improve conventional cotton growing.
Dow Chemicals investments in solar roof shingles
that was originally devised for outer space solar panels
will now enter the conventional solar panel market.
General Electric and Siemens are strong players in the
global wind market and aim at a similar position when
it comes to energy storage, energy efficiency and smart
grids. Samsung Electronics has the target to become
the most eco-friendly company by 2013 and will invest 4.3 billion US dollars to develop sustainable products.
All of these may eventually become sustainable companies and profitable opportunity investments. Others
might be rough diamonds for an active investor.
Magnus Furugård
President and Managing Director
GES Investment Services
We have been wondering if the old blue chip companies ever will really understand and take action. But
something new is in the air now and they are suddenly
changing rather fast. They have been working on their
MAG •E •SINE 2011 • 35
GES Investment Services is Northern Europe’s leading analysis house for
Responsible Investment. We add proven value to €650 billion of investment
worldwide by evaluating and engaging with companies in order to improve
management of Environmental, Social and Governance (ESG) issues. Our
services are based on international ESG guidelines and certified according
to the European Voluntary Quality Standard. We apply common references to
objectively assess companies in all markets around the world. For this, our
independence is absolutely vital. GES Investment Services offers solutions
covering global universes. We have offices in Sweden, Denmark, Poland and
Switzerland, as well as business partnerships with Manifest in the UK and SIRIS in Australia.
Kungsgatan 35, 111 56 Stockholm, Sweden Phone +46 8 787 99 10
Købmagergade 39, 1150 Copenhagen, Denmark Phone: +45 69 66 99 90
Ul. Sikorskiego 27, 65-454 Zielona Gora, Poland Phone +48 68 320 06 84
Seefeldstrasse 35, 8008 Zurich, Switzerland Phone +41 43 535 99 38
www.ges-invest.com
36 • MAG •E •SINE 2011