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Sustainalytics Reporter August 2014
Issue 21 - August 2014

Global Volunteer Day - August 19, 2014Announcement:

On August 19th, Sustainalytics is organising its second annual, company-wide volunteer day. We planned our volunteer day to coincide with World Humanitarian Day. As a company we were inspired by its simple yet powerful goal: “Do something good, somewhere for someone else.” The theme for this year's voluteer day is poverty alleviation. Thus, each office will be working to address this issue in some small way in their respective communities.

As a result of our activities, all Sustainalytics offices will be closed on Tuesday, August 19, 2014.

Follow the link  to learn more about Global Volunteer Day.


Analysts' Insights

Shadowing Banks: Non-bank Lenders Fill the Lending Gap
by Sophia Burress

Sophia Burress, Junior Analyst, Research ProductsWith the formal banking sector retreating from high-risk lending activities, the shadow banking sector is making a comeback, rekindling concerns about its potential contribution to systemic risk.

Read "Shadowing Banks..."

The Need for Speed: The Risks of High Frequency Trading
by Emily Lambert 

Emily Lambert, Junior Analyst, Research Products

Investors who witnessed the flash crash of May 2010 and the chaos that ensued questioned what could have caused such a drastic event. Could something as small as an algorithmic error create such turmoil? Do we still face these risks today?

Read "The Need for Speed..."

Net Neutrality and the Implications for Free Expression 
by Kyuwon Kim

Kyuwon Kim, Junior Analyst, Research Products

The debate around “net neutrality” is gaining traction in many parts of the world. The threat to the existing and relatively open Internet has provoked opposition, resulting in significant regulatory and reputational risks for Internet service providers.

Read "Net Neutrality..."


Product Spotlight 

Sustainable Bond Services

Sustainable Bond Services

In response to the rapidly growing and evolving, green bond market, Sustainalytics has developed a range of services geared towards helping bond issuers bring their sustainable bonds to market. In consultation with the issuers, Sustainalytics helps them develop a framework that aligns with the Green Bond Principles and provides assurance that the bond proceeds are allocated, managed and reported in a transparent manner.

In recent months Sustainalytics has worked with Lloyds Bank to help it and its clients develop the frameworks for their ESG bond and green loans.

Visit our website to learn more about Sustainable Bond Services or contact our bond services team at sustainablebonds@sustainalytics.com.


Sustainalytics' Perspective

Like a Phoenix from the Ashes? - New Banking Sector Report 

Sector Report: Banks

Sustainalytics has launched its new Sector Reports, offering in-depth analysis of a sector from a two-tiered materiality perspective: (1) Sustainability Impact and (2) Business Impact. The first Sector Report, which focuses on the global banking industry, was shared with clients at the end of July. In it, five material ESG issues are discussed in detail: Business Ethics, Resilience, Responsible Finance, Product Governance, and Human Capital.

A condensed version of Sector Report: Banks will be made publicly available in the fall.

Download the executive summary of the report here.

Air Pollution in China: A Hazy Future?

Air Pollution in China: A Hazy Future?Amid mounting concern about air quality and public health, the Chinese central government has declared a “war on air pollution.” The country’s biggest polluters—namely the energy, utilities, materials, automobiles, capital goods, real estate and transportation sectors—will soon face strict targets to reduce their air emissions of harmful pollutants.

In this report, Sustainalytics assesses the potential impact of stricter air pollution regulations by looking at companies’ regulatory risk exposure and management preparedness. We highlight the companies and industries facing material risks due to the changing regulatory environment as well as those poised to benefit from tighter air emission standards.

Visit our Insights page to download the latest Asia Insight report "Air Pollution in China: A Hazy Future?"

Forced and Slave Labour in the Thai Shrimp Industry

Fishing

The use of forced and slave labour in the Thai shrimp industry is an open secret. But a damning report from The Guardian, implicating the world’s largest aquaculture company and supplier to major brands globally, has forced investors and the broader public took notice. 

Read “Forced Labour and Slavery in the Thai Shrimp Industry

In case you missed it - Drones & Human Rights: Emerging Issues for Investors

Drones & Human Rights: Emerging Issues for Investors

As the use and development of drone technology continues to expand globally, debate over the potential human rights-related violations intensify. In the webinar Sustainalytics' weapons expert Terence Berkleef and human rights specialist Ilse Griek explored the emerging issues and concerns for investors. They also offered potential strategies through which investors can manage their exposure to human rights issues related to the proliferation of drones.

Click here to view all related webinar materials


Inside Sustainalytics

ODIN Fund Management Signs with Sustainalytics 

ODIN Fund Management LogoIn July Odin Fund Management, one of the biggest fund managers in Norway, announced that it is now working with Sustainalytics. The collaboration will allow ODIN to integrate environmental, social and governance data and analysis into its investment processes.  

Follow the link to read ODIN’s full press release.

Sustainalytics Report Maps the Landscape of Responsible Investment in Latin America

SRI in Latin AmericaIn July Sustainalytics released a report, commissioned by the Colombian Securities Exchange, on the responsible investment landscape in Latin America. In addition to being a primer for sustainable and responsible investing, Inversión Responsable y Sostenible: Visión General, Prácticas Actuales y Tendencias (Sustainable and Reponsible Investing: Overview of Current Practices and Direction), also acts as a supporting document for the Colombian Securities Exchange which joined the Sustainable Stock Exchanges Initiative on July 22.

Read the full press release here and click here to download the report.

New Swiss Sustainability Index Launched 

In June, SIX Swiss Exchange launched the SIX Switzerland 25 Index. This new sustainability index is based on the SMI Expanded index and list the 25 companies with the best sustainability scores. SIX Swiss Exchange selected Sustainalytics to provide the scores which determined the index constituents. Eligibility for the index was determined using Sustainalytics' Best-in-Class ratings and will be assessed quarterly. The entire index will be reviewed on an annual basis with the September index rebalancing.

Click here to read SIX Swiss' press release.

Veritas Report, Using Sustainalytics Data, Accepted for PRI Conference

Veritas Investment has produced a report investigating the use of ESG data in improving portfolio performance. In the article, entitled “A Quantitative Approach to Responsible Investment: Using ESG-Mulitfactor Models to Improve Equity Portfolios,” Dr. Andrij Fetsun and Dr. Dirk Söhnholz demonstrate how they analysed ESG criteria to improve equity portfolios. The report has been accepted to the PRI Academic Conference and will be presented along with other research during the conference in September.

Click here to download the academic report.

IN THIS ISSUE

Analysts' Insights

Product Spotlight

Sustainalytics' Perspective

Inside Sustainalytics

Events

Sustainalytics in the Media


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MEET SUSTAINALYTICS IN YOUR REGION

19 August, 2014
Sustainalytics Global Volunteer Day

10 September, 2014
TBLI Conference Nordic - Oslo, Norway

16 September, 2014
CSR Asia - Hong Kong 

22 September, 2014
PRI Academic Network Conference - Montreal, Canada

24 September, 2014
PRI in Person - Montreal, Canada

Visit our website for a full listing of events

View upcoming events in the Toronto Sustainability Speakers Series.


IN THE MEDIA

Las 20 mas: la sostenibilidad como insignia - Semana

Lloyds Bank ESG Bond: strengthening and diversifying the evolving green bond market - Responsible Investor.com

Lloyds Bank goes green and patriotic - Financial Times (subscription required)

L'huile de palme, des vraies questions de performance, au-delà de la transparence - Analyste Financier

Two new sustainability indices launched by Swiss and Canadian exchanges Responsible-Investor.com (paywall)


ABOUT SUSTAINALYTICS

Sustainalytics | Your responsible investment partner

Sustainalytics supports investors around the world with the development and implementation of responsible investment strategies. The firm partners with institutional investors, pension plans, and asset managers that integrate environmental, social and governance information and assessments into their investment decisions.

Headquartered in Amsterdam, Sustainalytics has offices in Boston, Bucharest, Frankfurt, London, New York, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels, and Copenhagen. The firm has 160 staff members, including more than 100 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries.