Sustainable Investment Masterclass
Innovations in Sustainable Finance
The One Planet MBA University of Exeter Business School
MBAM 820* Innovations in Sustainable Finance (12)
Professor Graham Sinclair
22 - 25 May 2012
OBJECTIVES - MBA 820* Innovations in Sustainable Finance
The objective of this course is to understand the marketplace for sustainable investment and to provide the basic tools to understand the evolving approaches to making investment decisions integrating environmental, social and governance [ESG] factors. Trillions of Euro are today invested in sustainable investment, but the intention and impacts differ.
The Sustainable Investment Masterclass will help seminar participants to understand the connections between sustainable development and capital markets and the opportunities to positively influence the path toward a low-carbon, low-water, climate resilient and inclusive economy. The course provides an introduction to basic sustainable investment concepts: discusses how sustainable investment works in practice and in theory, as well as the future/s for sustainable investment. The course will put the student in contact with basic theory and standard tools used in the sustainable investment industry to analyze the sustainable investment opportunity of emerging markets. Using the case study approach, the discussion with your classmates should help you learn the skills that will help you use the tools, techniques and concepts that combine to create the ability of the case corporations to move down the path to making the sustainable investment case.
The seminar is attractive to students of finance, investment, strategy, policy and sustainable development. The knowledge and skills obtained in this elective will be built on the students’ previous work in finance, investment and/or sustainability, The seminar case-study method encourages:
1. collaborative learning by working in groups to expand insights and cover more perspective
2. articulate arguments based on facts through presentation of investment conviction
3. enhanced analytical capabilities through expressing opinions based on facts drawn from multiple and sometimes conflicted sources
4. inquiry and academic rigour by applied experiential learning.
This seminar will maximize the real-world exploration and experience of the challenges and opportunities of sustainable investment in 2012.
The Sustainable Investment Masterclass seminar will meet for XX hours during the one-week period of 22 - 25 May 2012.
Our seminar is interactive. We follow the Socratic method of case-based learning from a platform of theoretical basics. We start with the basics of the business of investment management in 2012 and explore the state of sustainable investment. The case method is utilized to provide a participative and realistic forum that enables students to learn about sustainable investment while also developing the skills to use the information.
Seminar sessions will be of the standard seminar type with 20% lecture and 80% student participation through case studies and presentation. Prof. Sinclair will give a short introduction to each topic, outlining the key points to keep in mind, and will provide feedback on the presentations given. See separate PDF re GUIDE TO CASE METHOD APPROACH. The measure of your individual progress in any of the case discussions should not be based on your assessment of whether your ideas were right; but rather on how much you took from the discussion that you didn’t know or understood when you entered the discussion.
1. Unpacking The Asset Management Value Chain
Key components: interactions and reactions
Mapping class function roles to value chain
Making the investment case for sustainability.
2. Describing Sustainable Investment (SI):
Definitions and debates
Examples from institutional investors
Language of sustainable investment.
3. Dynamics Of SI Policies:
Frameworks and toolkits: CDC ESG Toolkit & Actis ESG, IFC E&S, Equator Principles 3
Examples from institutional investors
Examples from emerging markets
Criticisms of SI / ESG
4. Making the Sustainable Investment Case
Expanding on “ESG integration”?
Best practices in ESG integration
Lessons from food & beverage sector
Access to Nutrition Index Project
5. The Role And Challenges For Sustainability Indices
Mechanics of indices
ESG architecture of sustainability indices
Examples: MSCI ESG Index, STOXX Europe, JSE SRI Index, Istanbul Stock Exchange Sustainability Index, Hang Seng Corporate Sustainability Index.
6. Topics In Sustainable Investment
Role of initiatives:
Carbon Disclosure Project (CDP) Water Project, Emerging Markets Disclosure Project (EMDP), Principles for Responsible Investment (PRI), Global Impact Investing Network (GIIN), International Corporate Governance Network (GIIN), Africa Sustainable Investment Forum (AfricaSIF.org), Global Reporting Initiative (GRI), Integrated Reporting Initiative (IRI), Long Finance.
7. Open questions:
Controversial cases: 1. US$ 100bn Green Climate Fund, 2. What is the Sustainable Investment Case For Fracking?
Way forward: Sustainable investment in 2020
Students are required to actively prepare for and participate in the seminar in 10 ways:
1. SYLLABUS - Read and understand this syllabus – email the Professor with questions/clarifications at firstname.lastname@example.org.
2. READING - Download/print and read/review all required readings
3. SURVEY - Complete the pre-seminar online opinion survey which opens 21 May 2012 and closes Mon 21 May 2012 5PM - see link http://www.surveymonkey.com/s/exeter_MBA_OPL
4. CASE - As individual, prepare 3 slide PPT presentation on the Generation Investment Management case study outlining: key facts, key questions, sustainable investment case, and how you recommend the protagonist/s acts in the given case situation and why [see separate Case Study note].
5. As individual, present 4 slide PPT presentation using slide template [below]:
a. In one country you have an affinity for, e.g. your “home” country, country of birth etc, explain:
i. SLIDE 1: The name of the major stock exchange and performance of the stock market index from 1 Jan 2008 – 31 Dec 2011 – use google.com/finance.
ii. SLIDE 2: List the major ESG issues likely to impact investment over next 10 years – ONE slide.
b. SLIDE 3: Translate the definition of “sustainable investment” used by the IFC -"an umbrella term for all investment techniques that integrate environmental, social and governance (ESG) value-drivers into financial research and investment processes” - into your home language/mother tongue and explain/interpret the direct translation to the class.
c. SLIDE 4: Your biography in format [below]
6. In group, lead 20min seminar discussion on ONE required reading [assigned, see reading list below] as well as preparing THREE multiple choice questions with 4 possible answers including correct answer [use PPT template, attached]. NOTE you are not to master the material, but rather to present the key highlights to kick-off class discussions.
7. In group, prepare and give to the class a 3 slide PPT presentation describing [via comparing and contrasting] how companies reference sustainability indexes / rankings / ratings / prizes / awards in company investor relations webpages of a pair of major food & beverage companies [chosen from this list: Unilever, Nestle, Pepsico, Coca-Cola, Danone, Kraft, Kellogs, General Mills, Britannia Foods, Bunge], pointing out similarities and differences using quotes etc. Sample food & beverage company analyst reports will be made available in class.
8. In group, prepare and give to the class a 3 slide PPT presentation describing [via comparing and contrasting] the sustainable/responsible investment definitions/language/policies of TWO institutional investors [asset owners or asset managers] listed at http://www.unpri.org/signatories/ pointing out similarities and differences, pros and cons of the two institutional investors you review by visiting their PRI-linked webpage/s to explain their approach.
9. In group, using the knowledge and experience gained during the seminar, present 3 slide PPT presentation on the case study outlining: key facts, key questions, ESG factors, and sustainable investment case decision you recommend. It requires students to interpret qualitative and quantitative data and develop short/long-term action plans, including main steps, sorts of information, and output recommendations.
10. Successfully complete the online, open-book 25 question multiple choice quiz.
Graded writing assignments are described below.
Participants will be evaluated on a continuous basis:
• Group participation:
Class participation and presentations/materials scored as a group. Team members may be asked to provide 360-degree reviews on team mates’ throughout the experiential learning exercises.
• Individual participation:
2 writing assignments established by the MBA administration, one completed during the week (short) and a longer paper submitted within 4 weeks of the module.
- PAPER 1: Task 7 (above) - Group assignments 1,000 words 30% Fri 29 Jun 2012
- PAPER 2: Generation case study - Individual assignment 2,500 words 70% Mon 16 Jul 2012.
We will also use class participation and in-class, as well as an open-book 25 question multiple choice quiz to be confirmed with MBA Program Director’s office. Grades will be made available by the Professor to university administration within 48 hours of the close of the required work for grading.
We shall use online, open-book 25 question multiple choice quizzes to affirm student learning and to test understanding regularly during the seminar. In preparing for the seminar multiple choice quiz and the paper/presentation components, one should pay particular attention to the topic of integration or relationships between the topics as you participate in class discussion. Grading for the presentation and/or writing exercise/s is based upon the following criteria:
• Application of the materials to the case/article
• Clear understanding of the material presented
• Support of your arguments with references to the materials, in APA style
• Speaking/writing competency and clarity of your arguments
Your presentation/s and/or report/s, if clear and concise, will merit a “B” for a grade. We expect that you will include additional readings (with properly cited references – see the reference guide) and pertinent web sites. You will have to make an extra effort for an “A.” This may involve posing an original idea, some further research on the topic or other aspects that indicate a truly exceptional effort.
Seminar participants are required to prepare for our shared learning by having completed reading of these materials BEFORE the start of the seminar on each day. Reading materials must be on hand during the seminar. Students are NOT required to master the details of each reading, and will work in teams to cover the material. Students may be split into groups and given a reading and/or case study that they will have work on together and then present interactively to the seminar. Yes, this seminar does not have a short reading list. HOWEVER, unlike in your other courses, you will not be tested on the content of the reading. Instead, you will learn to make arguments and defend them with credible information from your reading.
We use a text book and a small number of readings. Students are NOT required to master the details of each reading, but of course the better prepared the seminar is, the better our shared learning experience will be. Two cases will be covered [university administration will liaise with students on the purchase of the case studies, we recommend you buy and download it yourself]. Please download all these readings and have them available in class every day from the first lecture.
- Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership Cary Krosinsky (ed.) (Wiley Finance, 2011)
- IFC + SinCo Sustainable Investment in Sub-Saharan Africa report, July 2011 http://www.ifc.org/africa/sustainableinvesting
- Eurosif 2010 European Market Study http://www.eurosif.org/publications/sri_studies
- Assessing and Unlocking the Value of Emerging Markets Sustainability Indices (July 2011)
- HOW NOW, GREEN DOW: Is the Dow Jones Sustainability Index worth a damn? BY Grist 14 September 2009 7:12 AM http://www.grist.org/article/2009-09-14-dow-jones-sustainability-index-worth-a-damn/
- CDC's New Toolkit on ESG for Fund Managers www.cdcgroup.com/uploads/esgtoolkitintroduction.pdf and Actis ESG Code www.act.is/ActisPDFs/01271_Actis_ESG_Code.pdf v1.2.pdf http://www.act.is/custom/actis-web/res/editor/Misc/Actis_ESG_Code_English.pdf
- Food and Beverages: Corporate Responsibility, Global Socially Responsible Investment, Equity Research, UBS Investment, 25 October 2005 - (see PDF below in TOOLBOX)
- Unburnable Carbon – Are the world’s financial markets carrying a carbon bubble? Carbon Tracker Initiative, Sep 2011 http://www.carbontracker.org/carbonbubble
- "Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB" 20 October 2010 at the CBD COP10 meeting in Nagoya, Japan http://www.ted.com/talks/pavan_sukhdev_what_s_the_price_of_nature.html
- Financing Sustainability: Insights for Investors, Corporate Executives, and Policymakers [Hardcover] Marco Kerste http://www.amazon.com/Financing-Sustainability-Investors-Executives-Policymakers/dp/9086595596/ref=lh_ni_t
- GMO Quarterly Newsletter April 2011 by Jeremy Grantham (see PDF below in TOOLBOX)
REQUIRED CASE STUDIES
* Generation Investment Management by Sandra J. Sucher, Daniela Beyersdorfer, Ane Damgaard Jensen [Harvard, 2009. http://hbr.org/product/generation-investment-management/an/609057-PDF-ENG – students to purchase online [$7].
* PlanetTran by Lauren H. Cohen, Christopher Malloy, Revision Date: Mar 04, 2010, Publication Date: Oct 01, 2008 Discipline: Finance Source: HBS Premier Case Collection Product number: 209029-PDF-ENG Length: 7p http://cb.hbsp.harvard.edu/cb/product/209029-PDF-ENG
CITATIONS and SOURCING
In accordance with good academic practice expected of graduate students at a leading B-school, you are expected to cite sources in your PPT and/or report/s. All submitted papers/presentations prepared should use the APA Style for citations. There are guides to APA style basics available on the web.
Examples Using APA Style: below are some examples of in-text citations and a reference list entry for an electronic source:
In text/PPT source:
• Spangenberg & Greenwald (1999) reported that a one-session experiment was used successfully to study a “socially significant” self-prophecy effect (p.71).
• A one-session experiment was used successfully to study a “socially significant” self-prophecy effect (Spangenberg & Greenwald, 1999, p.71).
Entry in reference list:
• Spangenberg, E. R., & Greenwald, A. G. (1999). Social influence by requesting self-prophecy [Electronic version]. Journal of Consumer Psychology, 8(1), 61-89.
Note the “hanging” paragraph style used for the reference list. All entries are listed in alphabetical order, by author’s last name. Cite dates as follows: (2000) for journals, books, and audiovisual media; (2000, April) for papers presented at meetings and for monthly magazines and newsletters; (2000, April 21) for daily and weekly periodicals, such as newspapers; (n.d.) when no date is available.
MBA Villanova University, 2004
LL.B Howard College School of Law, University of Natal, 1994
Numerous investment and retirement funds industry qualifications over 17 years in pensions and investment industry, specialist in sustainable investment since 2003.
Sustainable investment strategist, ESG investment architect and global project leader, Principal at SinCo since November 2006. Research and advisory engagements model investment architecture integrating environmental, social and governance factors in emerging and frontier markets, especially Africa. Consultant to UNEP Finance Initiative 2007-2008 - Emerging Markets Head at Principles for Responsible Investment [PRI] 2007-2008. Product Manager at KLD Research & Analytics, Inc [now MSCI Riskmetrics ESG] 2005-2006. Pensions consulting and investment banking in southern Africa 1994-2002 with Alexander Forbes, Old Mutual, Nedcor Investment Bank and SEI Investments. Lecturer in Sustainable Finance, CSR Diploma University of Geneva 2008-2011. Visiting Adjunct Professor, University of North Carolina-Chapel Hill, 2007-2009, conducted Sustainable investment masterclasses at leading Business Schools in Europe and USA from 2006-present. Chair of Prudential Assets Working Group of Responsible Investment sub-committee of the Association of Savings and Investment South Africa, 2009-. Co-founder and President of AfricaSIF.org (Africa Sustainable Investment Forum) 2009-current. He is a lifetime member of Net Impact and the Investment Analysts Society of Southern Africa. In 2011, he wrote 3 chapters for Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership (Wiley Finance), December 2011.
Research Or Special Interests:
Sustainable investment. Private Equity. Sustainability Indexes. ESG Architecture in Investment Decisions. Institutional investment decision-making.
More detailed biography at...
Dr Monal ABDEL BAKI
Tue 22 - Fri 25 May 2012
9AM - 12PM [lunch] 1PM - 5PM
120 hours [28 contact + 92 self study]
Educational Aims of the Programme
The MBA is a career development management programme for those with significant post-graduate and relevant experience on which the learning process is designed to build. The main emphasis is on developing the ability to lead (self, others and change) through strategic management, with a strong practical orientation to the curriculum. The One Planet MBA goes further and emphasises the necessity for innovative, responsible and transformative leadership in a changing financial, environmental and social context.
The aim of The One Planet MBA is to equip managers with the knowledge, understanding and skills required to proactively develop and lead profitable, sustainable and socially responsible businesses in a rapidly changing natural, financial, social and global market environment.
By the end of the programme, successful students will:
• Demonstrate a systematic and critical understanding of business organisations, their external context and how they are managed - informed by leading edge research and practice in the field.
• Be ‘planet-minded’ and demonstrate a critical understanding of the scale of current and future environmental and social challenges, the importance of sustainability and the ways in which businesses can respond.
• Demonstrate a global outlook, a sensitivity to different stakeholders and cultural perspectives, and a collaborative mindset.
• Be responsible, adaptable and resilient leaders and change agents: action-oriented and able to deal confidently with complexity, uncertainty and change.
• Think and approach management and business problems and opportunities in an integrated, holistic, systematic, innovative and strategic way.
• Be critical and reflective thinkers, and analytically-minded problem-solvers.
• Be effective communicators and influencers.
• Demonstrate effective research and project management skills, and be proactive lifelong learners.
Next steps on deliverables are:
Our capstone presentations on the Generation case are Fri after lunch on video. 3 teams present for 9min 3 slides with 6 min of Q&A (we debrief for 5min after each presentation).
Grading of presentation will cover:
Clarity of argument
Application of concepts, frameworks and methodologies Investment conviction
2. PAPER 1 Group assignments 1,000 words 30% Fri 29 Jun 2012
The short paper due 19 June will be on Task 7.
We have 6 assessed students, who will self-select into 2 teams of 3. "describing [via comparing and contrasting] how companies reference sustainability indexes / rankings / ratings / prizes / awards in company investor relations webpages of a pair of major food & beverage companies [chosen from this list: Unilever, Nestle, Pepsico, Coca-Cola, Danone, Kraft, Kellogs, General Mills, Britannia Foods, Bunge], pointing out similarities and differences using quotes etc. Critically analyze, compare and contrast the ESG factors that are important in the sector, how the firm rates, and if/how the use of reputation, rankings or indexes will allow sustainable investors to make a clear investment case.
3. PAPER 2 INDIVIDUAL Individual assignment 2,500 words 70% Mon 16 Jul 2012.
The long paper will be the Generation Investment case.
INFORMATION FOR MARKERS
“All marks are only indicative, and have no formal standing until moderated by the external examiner(s) and confirmed by the Board of Examiners appointed for that purpose” (TQA Manual)
Each assignment must be marked out of 100%. The pass mark for MBAs is 50%.
Feedback: The feedback sheet must be completed with clear, constructive and detailed comments. Please provide sufficient information to enable the student to understand how they have performed against the specific assessment criteria set for the assignment, including the areas of strength and the areas where they could have improved their mark.
Moderating: A sample of the scripts/assignments must be moderated by a second marker. The sample must be at least 15 scripts, or 10% of the whole, whichever is larger. The sample must include work across the range of marks, including all marginal scripts (i.e. those ending in 9) and all failed scripts. Moderators must add their comments to the back of the feedback sheet, and must initial the scripts/assignments to indicate that moderation has been undertaken.
Where work is team-marked, a process must be in place to ensure the consistency of marking. Either moderation must include all markers, or the team checks for internal consistency early in the marking process. Where a member of staff is new to assessing, it is recommended that an experienced member of faculty double-marks an initial sample, so as to ensure that the marking is appropriate.
Recording of Marks: After moderation, the first marker and moderator must agree the final marks, which are then recorded on the front of the feedback sheet for each student. The Module Mark Sheet (a list of all students taking the module) must also be completed, showing the marks given by the first marker and moderator and the final mark. The mark sheet must be signed by both markers.
In line with the University of Exeter marking policy, we aim to return grades and feedback to students within three weeks.
Please return assignments and marks to the MBA Office by: _______________________________
NB: Marks can ONLY be disclosed to students by the MBA Office. Please do not divulge marks to students or indicate when marks will be available.
Expert interviews with ESG practitioners:
- Jon Duncan, ESG Analyst, Old Mutual Investment Group South Africa, RSA, Wed 23 May 2PM GMT = 3PM SAST http://za.linkedin.com/pub/jon-duncan/47/403/507
- Gregory Elders, Environmental, Social and Governance Group, Bloomberg LP Wed 23 May 10AM GMT http://uk.linkedin.com/pub/gregory-elders/20/b39/510
- Cornelia Wicki, Junior Manager Sustainability Services, Sustainability Asset Management (SAM) Switzerland, Thu 24 May 10AM GMT = 11AM CET http://ch.linkedin.com/in/corneliawicki
- Tamara Hardegger, Product Manager ESG (Asset4) Thomson Reuters, UK, Thu 24 May 10:45AM GMT http://uk.linkedin.com/in/tamarahardegger
- Olivia Miuru, Rating Associate, B Lab / GIIRS Kenya, Thu 4PM NBO = 2PM GMT http://ke.linkedin.com/pub/olivia-muiru/35/67/696
- Dinah A. Koehler, Sc.D, Senior Research Manager, Sustainability & Climate Change, Deloitte Research, Deloitte Services LP, USA, Thu 24 May 4PM GMT = 11AM EST http://www.linkedin.com/pub/dinah-a-koehler-scd/a/201/63a
- Eva Tiffany Zlotnicka, Associate Director, Global Sustainability at UBS Investment Bank, USA TBC http://www.linkedin.com/in/evazlotnicka
- Lila Preston, Partner, Generation Investment Management LLP, UK, Fri 25 May 9AM http://uk.linkedin.com/pub/lila-preston/0/8b/219
- Martina Macpherson, Vice President Marketing & Commercial Relationships, MSCI, UK Fri 25 May 10AM http://uk.linkedin.com/pub/martina-macpherson/1/93a/1a0
- Ivo Mulder, UNEP Finance Initiative, Programme Officer - Biodiversity, Ecosystem Services, Water, Switzerland, Fri 25 May 12PM http://ch.linkedin.com/in/ivomulder
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Media for B-school http://business-school.exeter.ac.uk/mba/news/media/
Economically speaking http://blogs.exeter.ac.uk/economicallyspeaking/
One Planet MBA student blog http://blogs.exeter.ac.uk/oneplanet/
The Business of Leadership http://blogs.exeter.ac.uk/morgen-witzel/
Relaxed post capstone presentations!
“Graham is one of the best lecturers that I have been fortunate enough to have studied with. His style is uniquely intelligent, sharp and rich. With a wide range of contacts and highly resourceful, the sessions were riveting and especially lively, keeping everyone "on our toes" and stimulating us to learn and improve, to do more and better. I highly recommend Graham as a lecturer and professional, he is a truly outstanding change-agent and catalyser.” - University of Exeter School of Business One Planet MBA candidate 2012
"We were fortunate to have Graham Sinclair teaching the Sustainable Finance module. He gave a powerful closing talk Friday that resonated with and touched many of the students." - University of Exeter School of Business One Planet MBA candidate 2012
"Thank you for the class and all encouragement and suggestions. You're such a strong and powerful convincer. I'm certain that it would help building and developping the OPMBA platform." - University of Exeter School of Business One Planet MBA candidate 2012
“Graham is truly passionate about the work he does as is evident in his lively, informative and creative presentations. He is well-versed in topics ranging from the investment value chain to the complexities of ESG architecture. His talent lies in his ability to use illustrative examples, insights, and experience to engage audiences on the subject of investments. Graham is looking to spread the message about the importance of integrating ESG factors into investment decisions at the individual and institutional level and I have every confidence this message will be heard as a result of his influence in this space.” - MBA candidate, University of Geneva, Switzerland
“Graham taught my Investment Strategies for Sustainability class in December 2007. This 3 day seminar class was well structured and I enjoyed it a lot. It was a nice balance of lecture, real-life business cases and interactive presentations created by students. Graham is a demanding teacher. The extensive amount of reading required for the class is a necessary basis for thinking, discussion and debate in class and is well completed by practical assignments (e.g. company selection for a SRI fund) As a French student with a previous experience in SRI, I learned a lot about the current state and challenges of SRI in North America. Moreover, Graham managed to create a great atmosphere among the students, which also demonstrates his great teaching skills.” - MBA candidate, top ten B-school, USA
“Graham was an exceptional adjunct professor teaching Investments in Sustainability when I met him. He is an exceptionally talented speaker able to keep everyone in the class engaged throughout the 8 hours sessions. Graham has an uncanny ability to take difficult concepts and break them into easy to digest bits. He is refreshingly genuine, incredibly articulate and passionate about his trade.” - MBA candidate, top ten B-school, USA
"I really enjoyed the masterclass that you taught at Exeter and that the information you provided has been very enlightening...the course was extremely beneficial and well conceived." - Masters in Finance candidate, University of Exeter Business School, England