Sustainable investment is expanding in both volume and quality of thought. We seek to add to our body of knowledge by sharing ideas with thought-leaders globally and sharpening ideas in salons across the world. Below is some of the material that has moved our thinking thus far. If you have new ideas, have found some interesting writing to share or to report broken links, please email info[at]sincosinco.com. See also
FEATURE ARTICLE: A long time coming, Africa Investor, Sunday, 01 Sep 2013
Capital owners investing in Africa follow different paths. Amidst competing claims of hype versus reality, more investment may be coming soon, and with it an opportunity for responsible investment in Africa. Graham Sinclair surveys the landscape of institutional investment.
Institutional investors no longer dismiss talk of investment in Africa, but are they actually putting money to work? The global value of investment rose to a record high in 2012, increasing 9% to US $62.4 trillion, according to consultancy BCG. For the first time since 2008 it passed the pre-crisis high of $57.2trn in 2007. Less than 1% of that is allocated to portfolio investment in Africa.
FEATURED PUBLICATION Q4 2012: Navigating Muddy Waters (WWF + SinCo, November 2012)
Part 5: Navigating Muddy Waters: investment risks and opportunities from mispricing carbon and water footprints
A report by WWF and SinCo which connects the findings of Parts 1 to 4 of the report series. The report synthesises key findings and provides recommendations on how to address the risks and opportunities to investors that arise from the regulatory shift towards supporting a resource efficient, low carbon, resilient and equitable economy from a carbon and water perspective.
Learn more about the project and download PDF from the Project page at http://www.sincosinco.com/portfolio-climate-risks.php
FEATURED PUBLICATION Q1 2012: Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership (Wiley Finance, 2011)
Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership (Wiley Finance, 2011) [Kindle Edition October 14, 2011; Hardcopy edition 27 December 2011] is edited by Cary Krosinsky, Nick Robins, and Stephen Viederman and includes three chapters by Graham Sinclair on Sustainability Indexes, Private Equity and Frontiers in Africa (with SinCo alumnus, Roselyne Yao). Other authors include Paul Hawken, Dan Esty, Roger Urwin, David Lubin, Rory Sullivan, James Salo, Simon Powell, Curtis Ravenel, J. Jason Mitchell, Mark Trevitt, Lucy Carmody, Matthew Kiernan, Lloyd Kurtz, and more.
The book gives real-world guidance for investment professionals on delivering attractive risk-adjusted and opportunity-directed returns across asset classes and regions. Filled with interviews with leading practitioners, this book weaves a narrated web around best sustainable investment practices, guiding readers specifically on investing their assets and with specific sustainability trends in mind, such as increasing constraints on global resources. The substantial 512 pages and footnotes gives the to the reader a clear road map to success by some of the most respected names in the field; includes interviews with leading practitioners, and clearly explains how to get sustainable investing done.
Evolutions of Sustainable Investing is a practitioner's book specifically laying out how this positive investment philosophy is being practiced, leaving the more negative approaches of socially responsible investing behind. This book is essential for any investor limited by old strategies that disregard a changing world of diminishing resources, an increasing global population as well as the market advantage now being experienced by the most efficient, innovative global companies. It builds on the success of Sustainable Investing: The Art of Long Term Performance (Environmental Markets Insights Series) [Hardcover, Routledge; First Edition edition (November 29, 2008)] by Cary Krosinsky and Nick Robins.
FEATURED PUBLICATION Q4 2011: Dirty Feet: Portfolio Carbon - Risks and opportunities from the carbon intensities of the 40 largest listed companies in South Africa (SinCo + Trucost, January 2012).
Dirty Feet: Portfolio Carbon, describes the exposure to carbon costs of the 40 largest listed companies on the Johannesburg Securities Exchange (FTSE/JSE Top 40 Index), as well as among major pooled equity funds (unit trusts) investing in South Africa. SinCo – the sustainable investment consultants - commissioned Trucost to analyze greenhouse gas (GHG) emissions from the FTSE/JSE Top 40 and to measure the carbon footprints of 10 of the largest South African equity funds (pooled investment funds, known as “unit trusts”) to assess potential financial risk under legislation to introduce carbon pricing in countries including South Africa (S.A.) within the next three years. Findings show that while carbon costs will initially have a limited impact overall, carbon risks could be material for some companies and investors. The companies directly emitted almost 109 million tonnes of GHG emissions, measured in carbon dioxide equivalents (Mt CO2e) globally, which equates to 20% of South Africa’s carbon emissions in 2010. If the companies were to pay the carbon tax rate of R75 (US$8.97) per tonne of CO2e for direct operational emissions globally, carbon costs could amount to almost US$974 million. This would equate to 0.2% of revenue or 1% of earnings before interest, taxation, depreciation or amortization (EBITDA) on average across all 40 companies.
Africa has a lot to lose as the world adapts to climate change but investors in the continent can also have a major role to play in framing the future. Will COP17 in Durban this African summer produce more than just hot air, asks Graham Sinclair and Cecilia Bjerborn.
Frontier and emerging markets, perhaps most threatened by climate change, have a lot to play for in moulding the rules in Durban this year. A year after the successful hosting of the World Cup, Africa’s busiest port city is host to the major UN conference on emissions policy and trading, the United Nations Framework Convention on Climate Change (UN FCCC) Conference of Parties (COP) 17. This annual meeting is mandated to develop a global framework that reflects the costs - and opportunities - of negative externalities on the political economy and environment. > Learn more http://www.africainvestor.com/article.asp?id=9549
FEATURED PUBLICATION Q4 2011: GUEST COLUMN Trends in Private Equity in Africa: Increased Commitments and Integration of (ESG) Factors in 2012, Debevoise & Plimpton Private Equity Report, Fall 2011
"Private equity investors are beginning to look beyond the BRIC countries. Over the last decade, over $10 billion of private equity financing has been raised for investment in sub-Saharan Africa. In our Guest Column, Graham Sinclair, a Principal of SinCo and President of the Africa Sustainable Investment Forum, discusses the requirement to integrate so-called ESG (environmental, social and governance) factors into African investments, as well as recent changes to local regulations allowing African pension funds to increase allocations to private equity investment."
FEATURED PUBLICATION Q3 2011: Sustainable Investment in Sub-Saharan Africa: Investment practitioner views of sustainable investment in private equity and asset management in South Africa, Nigeria, and Kenya (IFC, July 2011).
Authored by SinCo's Graham Sinclair with Roselyne Yao, this is the sixth in a series of reports commissioned by IFC on the topic of sustainable investment (SI) in emerging economies – and the first with a specific focus on private equity (PE). The report aims to determine the current state and trajectory of SI in South Africa, Nigeria, and Kenya, and provides recommendations to stimulate sustainable investment over the next five years.
The IFC-SinCo report was released on 19 July 2011 in collaboration with the Government Employees Pension Fund (GEPF) in South Africa and the pensions representative body, the Principal Officers Association, (POA) adjacent the launch of the Code for Responsible Investment in South Africa (CRISA) in Sandton, South Africa. A series of seminars and workshops are planned in Africa and major investment centers in 2011/12 to develop on the five recommendations to strategically grow sustainable investment in Africa through 2020.
CLICK > Project page at sincosinco.com/siinssa
FEATURED PUBLICATION Q2 2011: The State of Sustainable Investment in Key Emerging Markets (IFC, May 2011)
The State of Sustainable Investment in Key Emerging Markets IFC's Advisory Services team seeks to influence, support, and enable capital allocation and portfolio management processes, using IFC's own investment practices as a model. This high-level compilation sought to aggregate data from different analysis methods into some form that we would learn from. Since 2009, IFC has produced a series of sustainable investment country reports covering major emerging capital markets attracting global portfolio investors: Brazil, India, China, Sub-Saharan Africa, the Middle East and North Africa (MENA), and Turkey.
"The State of Sustainable Investment in Key Emerging Markets" provides a snapshot of the findings of these country reports and seeks to identify common themes and trends across and highlight crucial differences among these markets.Graham Sinclair contributed the Africa section and input to the overall themes, with the South Africa based on SinCo analysis of SinCo+RisCura data.
FEATURED PUBLICATION Q2 2010: Translating ESG into sustainable business value: Key insights for companies and investors (WBCSD/UNEPFI, March 2010)
A joint publication by: Markets & Valuation Work Stream, The Business Role Focus Area, World Business Council for Sustainable Development & and The Asset Management Working Group, United Nations Environment Programme Finance Initiative. Translating ESG outlines the findings and key insights of a series of global workshops between business, investors and stakeholders about the environmental, social and governance (ESG) and sustainability aspects of company performance evaluation. These workshops build on the learnings of the WBCSD, UNEP FI and key stakeholders from their work on ESG and sustainability reporting and disclosure, and responsible investment through the years.
The report is based on a series of UNEP FI-WBCSD workshops held globally in 2008, as well as key events in 2009. These provided a platform for companies and investors to collectively address barriers within capital market valuation processes that inhibit the proper disclosure and assessment of corporate ESG performance—underpinning the materiality of ESG factors to long-term, sustainable business value and to the performance of investment portfolios. Business leaders and investors can use the report as a tool to advance the integration of ESG factors into corporate and investment decision-making, and to continue discussing the needed evolution towards more holistic and realistic capital market valuation processes.
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FEATURED PUBLICATION Q4 2009: Linking Shareholder And Natural Value. Managing biodiversity and ecosystem services risk in companies with an agricultural supply chain (October 2009)
Each year, it is estimated that we are losing ecosystem services, with an annual value equivalent to around € 50 billion, from land-based ecosystems alone. This loss has important implications for the long-term
viability of the businesses dependent on these services, in particular those with agricultural supply chains. As Biodiversity and Ecosystem Services (BES) decline, this is increasingly translating to business risk and opportunity linked to reputation risk, security of supply and legal compliance9. Our survey of 31 companies in the food, beverage and tobacco sectors painted a picture of early stage response, of pilot projects, developing but incompletely applied management tools and reactive rather than proactive management.
Companies differed in their approaches, a number showed innovative and forward thinking practices. Even these failed to demonstrate comprehensively applied risk assessment processes. Hence, risks may not be managed and opportunities to build shareholder value missed. Written by Grigg, A., Cullen, Z., Foxall, J., and Strumpf, R. (October 2009) for Fauna & Flora International, United Nations Environment Programme Finance Initiative and Fundação Getulio Vargas.