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’360-degrees for Mission’ showcases SRI and impact investment at foundations

onValues has authored a report for the Mistra foundation entitled 360-degrees for Mission: How leading European foundations use their investments to support their mission and the greater good.  The report will allow foundations to learn more about sustainable and responsible investment (SRI) and impact investment, and to take practical steps to implementing these approaches in the management of their capital endowments.

The report highlights eight European foundations that use their investments to advance their mission and still generate strong financial returns.  Detailed case studies on the Church of Sweden, Deutsche Bundesstiftung Umwelt, Dreilinden, Fondation du Luxembourg, Fondazione Cariplo, Fonds 1818, Friends Provident Foundation, and Mistra show both the challenges and the rewards of SRI and impact investing, and provide the reader with direct advice from the personal experience of foundation officers and trustees.

360-degrees for Mission comes at a time of renewed interest in how foundations invest their money.  The report directs readers to the variety of resources that can help foundations establish investment practices that are financially sound and enhance the contribution to their mission.

Download the report
«360-degrees for Mission»

Ivo Knoepfel joins Steering Committee of the Principles for Investors in Inclusive Finance

The past ten years have witnessed a significant growth in microfinance and other financial services targeting the needs of the world's poor. A group of leading investors has publicly endorsed the Principles for Investors in Inclusive Finance (PIIF) committing to fair treatment and protection of the interests of the ultimate clients - low-income households and small and medium-enterprises. This is particularly important given that poorer clients are often disadvantaged by asymmetries in financial knowledge, power, and influence. The Principles were developed in collaboration with Her Royal Highness Princess Máxima, the UN Secretary-General's Special Advocate for Inclusive Finance for Development, with the UN-backed Principles for Responsible Investment and in consultation with Consultative Group to Assist the Poor (CGAP) and several key industry players. Ivo Knoepfel, onValues' Managing Director, was invited to become a member of the Steering Committee that will supervise the implementation of the Principles.

View the PIIF here:
«Principles for Investors in Inclusive Finance»

Sustainable investments in Switzerland reach all-time high according to onValues survey

Forum Nachhaltige Geldanlagen Schweiz and onValues today published the results of the regular survey of the Swiss sustainable investment market per end of December 2010, which includes sustainable assets managed in Switzerland through funds, mandates and structured products. A total of 21 managers reported their assets under management in a range of different sustainable investment styles.

Per end of 2010 the sustainable market reached a new high of 42 billion CHF, which corresponds to an increase of 23% compared to the same value per end of December 2009. On average, net inflow in sustainable funds amounted to approximately 3.6% in the course of 2010. In comparison, the average comparable Swiss fund experienced a net outflow of the same order of magnitude.

Retail/private banking investors have further expanded their majority position in the market (57% of the total market, compared to the 43% of institutional investors). Equity, with its share of 63%, remains the most important asset class having slightly increased its market share compared to last year.

Not much has changed in terms of the use of different sustainable investment approaches, but the use of active proxy voting has notably increased. 44% of respondents reported that they are planning introducing a proxy voting policy that includes sustainability issues for the entire assets managed by their institutions in the coming years.

Download the report
«Sustainable investments in Switzerland 2010»

Responsible investment in commodities

In collaboration with the Swiss Federal Department of Foreign Affairs, the UN PRI and the UN Global Compact, onValues has today published a report focusing on the environmental, social and governance (ESG) issues involved in different types of commodities investments.  The report shows that the issues at stake and available management options for institutional investors vary greatly between investments in commodity derivatives, in physical commodities, in real productive assets or in the equity of public companies.

To successfully navigate this complex landscape, long-term investors should consider the ‹systemic› effects of rapidly growing institutional investment in commodities. The report includes a series of practical recommendations aimed at reducing the risk that derivatives investors impact commodity price levels and volatility. The report is critical of investments in physical commodities: they lead to investors competing with industry in already tight markets, hoarding commodities with no productive use and directly influencing prices. Holdings in productive assets such as farmland, on the other hand, can be managed to a high degree of ESG performance, but require a commensurately high degree of investor expertise, while public equity stakes can be used as the basis for shareholder engagement.

Besides listing a series of possible actions for responsible investors, the report also highlights areas for further research and engagement.

Download the report
«Responsible investment in commodities»

SRI and impact investments at European foundations

On behalf of the Swedish foundation Mistra, onValues has initiated a project aimed at assessing how leading European foundations use sustainable and responsible investments (SRI) and so-called «impact investments» to better align the endowment management to their mission. Research shows that foundations can invest in SRI without negative repercussions on financial returns. Foundations also have the possibility to directly contribute to their missions through the emerging field of impact investments, which aim to create a tangible social return while preserving invested capital.

The report resulting from the project will showcase European foundations that have adopted SRI or impact investment strategies in support of their missions. Through detailed case studies and personal interviews with foundation trustees and managers, the report will extract key messages for other foundations considering this process.  Alongside these case studies, the report will convey basic information on the challenges of implementing SRI and impact investing and point to resources for further support.

This is the first report to focus specifically on responsible investment at European foundations and onValues plans to present its findings widely. Further information will be available in spring 2011.

Improving the effectiveness of shareholder engagement – A Mistra workshop

On behalf of the Swedish foundation Mistra, onValues convened – for the sixth consecutive year – leading institutional investors, service providers and academic researchers to assess best-practice in a specific domain of sustainable investing. This year, the workshop focussed on the state-of-the-art of shareholder engagement and on the approaches and techniques used by investors to influence company ESG performance, in view of further improving their effectiveness. The questions addressed during the workshop included the following:

  • What are the key factors that contribute to effective engagement?
  • What can be said about the effectiveness of different forms of ‹delegated› engagement
    (e.g. delegation to service providers, to collaborative initiatives, to asset managers)?
  • How can different engagement approaches be combined to maximise effectiveness
    (‹portfolio approach›)?
  • What can a small asset owner with limited resources do to maximise its impact?

Key lessons learned from the workshop can be found in the summary report below:

Download the report
«Engaging Effectively – Summary»

onValues facilitates investor meetings on shareholder engagement, climate change risks and opportunities, commodities investments

In the coming months, onValues will facilitate a series of meetings at which institutional investors will address emerging issues relevant to their investment management and active ownership strategies:

On 26 August 2010, on behalf of the Swedish Mistra Foundation, onValues will convene a meeting of Scandinavian and international investors focussing on the latest insights in the field of shareholder engagement.

On 28 September 2010, onValues will moderate the plenary panel discussion of the 11th International Sustainability Leadership Symposium in Zurich focussing this year on ‹Financing the Transformation to a Low-Carbon Economy›.

On 6 October 2010, in the context of the annual meeting of the UN Principles for Responsible Investment initiative in San Francisco, onValues will facilitate a session on ‹Responsible investments in commodities› that will discuss the challenges and opportunities of this emerging asset class.

Multi-year project on commodities investments launched

In collaboration with the UN Principles for Responsible Investment secretariat, the UN Global Compact and the Swiss Federal Department of Foreign Affairs, onValues has started a project aimed at assessing environmental, social and governance issues related to this growing investment field and at developing a series of practical recommendations for responsible investors. The project will look at commodities exposure across different asset classes, including direct investments in commodities futures and indirect exposure through equity and real asset holdings (e.g. forest and agricultural land). In a first phase, leading asset owners, asset managers, commodity traders and producers, governmental organisations and NGOs are being interviewed in view of understanding their approach to commodities investments.

Sustainable investments in Switzerland rebound strongly in 2009, reaching a new all-time high

onValues today published the results of the regular survey of the Swiss sustainable investment market per end of December 2009, which includes sustainable assets managed in Switzerland through funds, mandates and structured products. A total of 19 managers reported their assets under management in a range of different sustainable investment styles.

After the decline experienced in 2008 due to the financial crisis, the Swiss sustainable investment market has in 2009 returned to the strong growth pattern observed in previous years. Per end of 2009 the sustainable market had reached and surpassed again the peak volume experienced before the financial crisis. The size of the sustainable market per end of 2009 was 34.1 billion CHF (funds, mandates, structured products), which corresponds to an increase of 63.4% compared to the same value per end of December 2008. If we take sustainable funds only, the assets increased by 54.4%. In comparison, the Swiss fund provider assets under management for comparable fund categories increased by 12.2% in the period December 2008 to December 2009.

Sustainable funds experienced a considerably higher cash inflow than the market average in 2009. Net asset inflow in sustainable funds was approximately 22.9%, compared to 4.5% experienced by the average Swiss fund provider in 2009. Funds account for approximately 55%, mandates for 40% and structured products for 5% of the total sustainable investment market volume, with only small changes in the relative share compared to the previous year. Retail / private banking investors have further expanded their majority position in the market (55.4% of the total market, compared to the 44.6% of institutional investors). Equity with its share of 61.5% remains the most important asset class in the sustainable market, having somewhat reduced its market share in favour of fixed income investments compared to last year.

Download the report
«Sustainable investments in Switzerland 2009»

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