June 2015 Journal of Sustainable Finance & BankingSM€¦ · Cornerstone Journal of Sustainable...

Journal of Sustainable Finance & BankingSM

June 2015

Volume II Issue 6

Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty … p. 15

Corporate Governance South Africa: A Leader in Corporate Governance Mervyn E. King, IIRC … p. 16

Gauging Governance Globally – Spotlight on South Africa Michael Geraghty … p. 18

Open Source Excellence The Johannesburg Stock Exchange: Integrating Sustainability Siobhan Cleary and Corli Le Roux, JSE … p. 21

Profiting from Trust – Opportunities to (Re-) Define a Positive Social Role for Financial Institutions Chris Coulter, GlobeScan … p. 23

Global Sector Research The Distributed Marketplace John K.S. Wilson, Margarita Pirovska, PhD, and Michael Shavel … p. 27

Regional Imperatives African Commodity Exchanges: Tough Questions about Financial Sustainability Julie Lerner, PanXchange … p. 29

Accelerating Impact Creating a Win-Win Investment in Kenya Taryn Goodman and Charlotte Kaiser, The Nature Conservancy … p. 31

The Bioenergy-Environment-Gender Nexus: How Simple Innovations Can Drive Change Dr. Mary Njenga, World Agroforestry Centre … p. 34

Sustainable Standout PanAfrican Investment Co.: Collaboration in Action in sub-Saharan Africa Dana Reed, PanAfrican Investment Co., LLC … p. 37

Sustainable Editorial Integrated Thinking in South Africa Leigh Roberts, Integrated Reporting Committee of South Africa … p. 40

Ivory Pirates: Funding Terrorism by Plundering Africa’s Natural Resources Buffy Redsecker, SunLight Time Foundation … p. 42 © Pal Teravagimov/Shutterstock

“AFRICA”

Cornerstone Journal of Sustainable Finance & BankingSM / June 2015 / 2

CEO’s Letter on Sustainable Finance & Banking

Erika Karp

Founder & Chief Executive

Officer of Cornerstone Capital

Inc.

This month in the Journal of Sustainable Finance & Banking (JSFB),

global markets continue to monitor progress on many fronts, including the Greek

and British tests of the rigidity of the European Union, the Transpacific

Partnership in a US strategic “pivot” to Asia, and the threats to global

cybersecurity which dominated the annual G7 Summit. While the G7 accord to

decarbonize the global economy is encouraging, it would seem that the papal

encyclical may truly help mobilize forces to achieve the vision for renewable

energy solutions… as it will take technological transformation to get there. All of

these developments unfold as investors get used to more bond market volatility

following an era of ultra-low rates.

And so, in a week where we celebrate the leadership of the private sector with the

Global Compact +15 convening at the UN, we also look for leaders in the

investment community to demand — and invest in — the innovation and

entrepreneurship needed to navigate the volatility and complexity of the global

markets. This month in the JSFB, as we “pivot” to Africa for our theme, we take

inspiration from Nelson Mandela, who said “Courage is not the absence of fear,

but the triumph over it.” We can have the courage to demand the spread of best

practices in corporate governance to address the massive environmental and

social imperatives of our day. We can also take inspiration from South Africa’s

Mervyn E. King, who has led the way to achieving the level of transparency in

corporate financial reporting which can “weave a golden thread” through the

information available to investors. Truly “Integrated Reporting” will help

facilitate the flow of capital to a private sector that can act as a

powerful force for good.

Indeed, as Cornerstone Capital’s Global Markets Strategist Michael Geraghty

highlights, South Africa continues to rank highly in this area along with the

developed markets of Europe and the UK. Another reflection of King’s leadership

can be found in the efforts of the Johannesburg Stock Exchange, featured in our

“Open Source Excellence” section. Authors Siobhan Cleary and Corli Le Roux

recount the implementation of reporting-oriented listing standards and the

introduction of the JSE’s SRI Index, which acts as a “valuable point of

engagement” with issuers.

And this engagement has borne fruit. As Leigh Roberts asserts in her

“Sustainable Editorial,” six years into the practice of integrated reporting in

South Africa it’s become clear that this discipline has helped foster “integrated

thinking” within corporations.

Of course, strong corporate governance, exemplified by enhanced transparency

via integrated reporting, is critical to gaining and maintaining investor trust. Chris

Coulter, co-CEO of GlobeScan, notes that trust is “strategically important” to

organizations—and once lost, extremely difficult to recapture. Trust in financial

institutions, while deeply negative in many regions, is still quite high in Africa—

suggesting a compelling opportunity for the banking sector to play a meaningful

role in continued development on that continent.


Another example of the importance of trust is found in our recent Global Sector

Research report, “Dissecting the Sharing Economy,” which looks at the

distributed marketplace and its transformative potential to create value – but also

its significant challenges, particularly in the areas of governance and social

impact. These new business models are expanding globally and so the lessons

from the likes of Uber and Etsy are worth considering in the African context.

Even as South Africa is a global leader in corporate governance and reporting

standards, we must acknowledge major obstacles faced elsewhere in the region.

As Julie Lerner, CEO of PanXchange, writes in her “Regional Imperatives”

piece, most of the continent is not ready for national commodity exchanges; rather

than “swinging for the fences,” she advocates a bottom-up approach of

empowering smallholders and organizing the cooperative buying of inputs, as well

as establishing market (and physical) infrastructure.

The notion that small steps forward are often more effective than grand schemes

is exemplified in the good work being done by The Nature Conservancy and its

NatureVest subsidiary in “Accelerating Impact.” NatureVest structures

investment opportunities for impact investors to support conservation. Its

“Livestock to Markets” program is a case study in the importance of creative yet

commonsense approaches to balancing the needs of all those who rely on the

Kenyan grasslands for survival.

“Creative yet commonsense” also applies to the work of the World Agroforestry

Centre (ICRAF). Dr. Mary Njenga of ICRAF details how the seemingly simple task

of cooking a meal can be hazardous to the health of those living in poverty. She

demonstrates how simple innovations can yield improved health as well as

economic empowerment of women and educational opportunities for children.

Driving positive change is the ethos of PanAfrican Investment Co., formed

three years ago to focus strictly on investments in Africa. PIC seeks “passionate

social entrepreneurs”, according to CEO Dana Reed, and becomes deeply involved

in their enterprises, helping to facilitate growth while instilling solid operational

and governance practices. PIC is truly a “Sustainable Standout.”

Last but not least, we offer the impassioned voice of Buffy Redsecker, President of

the SunLight Time Foundation, in a “Sustainable Editorial.” Buffy reminds us

of the ongoing plunder of Africa’s natural resources, organized in many cases by

extremist groups such as Boko Haram and al-Shahaab to fund their violent

activities. With illegal natural resource and wildlife exploitation draining billions

of dollars from legitimate economies across the continent and potentially

destabilizing governments, rooting out these crimes may prove as important to

Africa’s future prosperity as any business development initiative.

My sincere regards,

Erika

Erika Karp

Chief Executive Officer


Table of Contents

CEO’s Letter on Sustainable Finance and Banking p.2

Market Summary

Overview p.6

Market & Global Sector Performance, Monetary Policy & ESG Data p.7

Regional and Sector Strategy: Monthly Update Michael Geraghty Global Markets Strategist, Cornerstone Capital Group

p. 15

Corporate Governance

South Africa: A Leader in Corporate Governance Mervyn E. King Chairman, International Integrated

Reporting Council (IIRC)

p.16

Gauging Governance Globally — Spotlight on South Africa

Michael Geraghty Global Markets Strategist, Cornerstone Capital Group

p.18

Open Source Excellence

The Johannesburg Stock Exchange: Integrating Sustainability

Siobhan Cleary Independent Consultant, Former Director of Strategy &

Public Policy, Johannesburg Stock Exchange

p.21

Corli Le Roux Head of SRI Index Operations & Sustainability,

Johannesburg Stock Exchange

Profiting from Trust – Opportunities to (Re-) Define a Positive Social Role for Financial Institutions

Chris Coulter Co-CEO, GlobeScan p.23

Global Sector Research

Dissecting the “Sharing Economy”: Business Opportunities and Risks

John K.S. Wilson Head of Corporate Governance, Engagement & Research

p.27

Margarita Pirovska, PhD Policy & Sustainability Analyst

Michael Shavel, CFA Global Thematic Analyst Cornerstone Capital Group

Regional Imperatives

African Commodity Exchanges: Tough Questions About Financial Sustainability

Julie Lerner Founder & CEO, PanXchange, Inc.

p. 29

Accelerating Impact

Creating a Win-Win Investment in Kenya Taryn Goodman

Charlotte Kaiser

Director of Investment Partnerships

Deputy Managing Director, NatureVest,

The Nature Conservancy

p.31

The Bioenergy-Environment-Gender Nexus: How Simple Innovations Can Drive Change

Dr. Mary Njenga Post-Doctoral Fellow on Bioenergy,

World Agroforestry Centre (ICRAF)

p.34

Sustainable Standout

PanAfrican Investment Co.: Collaboration in Action in sub-Saharan Africa

Dana Reed CEO, PanAfrican Investment Co., LLC

p.37


Sustainable Editorial

Integrated Thinking in South Africa Leigh Roberts, CA (SA) Chairman, Working Group of the Integrated Reporting Committee

of South Africa

p.40

Ivory Pirates: Funding Terrorism by Plundering Africa’s Natural Resources

Buffy Redsecker President & Co-Founder, SunLight Time Foundation p. 42

Upcoming Events

Global ESG Calendar p.45

Journal of Sustainable Finance & Banking Subscription Form

p.46

Articles p.48

Cornerstone Capital Team p.49


Market Summary

Overview

The first half of 2014 is almost in the books and risk

assets continue to outperform on an increasingly

constructive economic outlook. That said, skeptical

investors question the sustainability of the bull

market within the context of impending interest rate

hikes and less compelling valuations.

US equities are slightly off their all-time highs but are

showing resistance in the face of pending US rate

hikes and rising bond yields. From an economic

standpoint, first quarter GDP was revised down to an

annualized rate of -0.2% from the initial estimate of

+0.2% due to the strong dollar impact. Downward

revisions to an already weak consumer spending

number weighed on investor sentiment, though the

second quarter is trending upwards as May retail sales

expanded by 1.2% and the April figure was revised

higher. In addition to improving retail sales, there are

other signs that US economic activity is rebounding in

the second quarter. The NAHB Housing Market Index

increased from 54 in May to 59 in June and the ISM

Manufacturing Index registered 52.8 in May, up from

51.5 in April. Importantly, the May jobs report

revealed the economy added 280,000 new positions,

beating the consensus expectation of 246,000.

European equity markets have retreated from their

April highs as investors lock in profits, though the

improvement in European economic data is helping to

push bond yields and inflation expectations higher.

Notably, the German 10-year bund yield doubled in

the first ten days of June and was briefly above 1%,

though it’s since retraced to 0.86%. Consumer prices

in the euro area rose for the first time this year in May,

up 0.3% YoY. Despite these economic improvements,

Greece and its international creditors remain in

deadlock over its debt crisis. While markets are taking

this issue in stride, a Greek default and/or exit from

the Eurozone could have significant implications for

risk assets.

Elsewhere in developed markets, Japan’s benchmark

Nikkei reached an 18-year high as the country’s

economic condition strengthened. Business

sentiment is strong, as Prime Minister Shinzo Abe has

not only introduced quantitative easing programs, but

also pledged corporate reforms. In addition, the

weaker yen continues to boost Japanese exports and a

revised estimate found that first quarter GDP grew by

an annualized rate of 3.9%, up from 2.4% in the initial

report.

In emerging markets, China’s Shanghai Composite

pulled back 13% and suffered its worst week since the

global financial crisis. That said, the index had gained

more than 150% in the last year. Though some

analysts expect the government to provide additional

monetary stimulus, others question the effectiveness

of more easing and believe that high levels of volatility

are likely to persist.

Elsewhere, Russia’s central bank cut its key interest

rate by 100 basis points to 11.5% in June, marking the

fourth cut of the year. Though year-over-year Russian

consumer prices cooled to 15.6% in early June from

the 13-year high of 16.9% in March, the central bank

noted that future inflationary pressure could limit the

scope of further monetary easing.

On a one-month trailing basis, the MSCI World Index

(a developed market proxy) outperformed the MSCI

Emerging Markets Index by approximately 2.8%,

resulting in a YTD relative outperformance of 0.93%.

Small cap equities outperformed their large cap

counterparts by 3.3%, widening their YTD relative

outperformance to 3.8%. From a sector perspective,

performance was mixed between cyclicals and

defensives. In the MSCI ACWI (broad index for both

developed and emerging equities), healthcare and

consumer discretionary outperformed, while utilities

and energy staples lagged.

Andy Zheng contributed to this article.


Market Summary

Market and Global Sector Performance

MARKET / INDEX PERFORMANCE

As of 06/23/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B Div. Yield

US Equity Indices

DJIA -0.43 0.57 2.88 16.2 3.1 2.4

S&P 500 -0.02 1.19 4.08 17.9 2.8 2.0

Nasdaq 1.30 2.82 9.48 22.5 3.7 1.1

Russell 2000 3.20 2.28 7.76 28.2 1.9 1.3

Developed International Indices

Euro STOXX 50 -1.87 -1.21 17.27 15.5 1.6 3.4

in USD 3.82 4.65 9.57

FTSE 100 -2.67 -1.77 6.22 16.6 1.9 3.9

in USD 4.12 3.64 8.43

CAC 40 -2.19 0.61 19.82 16.2 1.5 3.3

in USD 3.78 5.32 12.15

DAX -3.00 -4.81 16.88 14.4 1.8 2.9

in USD 2.87 4.44 10.31

Nikkei 225 0.81 4.15 17.97 19.3 1.8 1.6

in USD 1.28 8.75 14.91

ASX 200 -0.92 -4.90 6.53 16.4 1.9 4.5

in USD -0.94 -1.87 2.52

Emerging Market Indices

IBOVESPA -0.67 3.94 8.01 14.5 1.3 3.9

in USD 2.53 0.60 -4.09

Shanghai Comp -3.50 22.00 39.10 18.0 2.1 1.7

in USD 5.37 39.05 40.51

KOSPI -4.24 0.92 7.29 11.1 1.0 1.4

in USD -1.73 8.00 11.57

SENSEX -0.28 -1.24 1.64 16.0 2.8 1.6

in USD -1.09 -6.59 -0.14


As of 06/23/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B Div. Yield

Global Market Indices

MSCI World -1.41 0.89 5.26 17.4 2.2 2.5

MSCI All-Country World -2.21 1.07 2.93 14.7 1.6 3.3

MSCI EAFE -2.50 1.18 8.22 16.0 1.7 3.1

MSCI Emerging Markets -5.79 1.25 2.87 12.6 1.5 2.8

Sustainable Indices

DJ Sustainability World Comp -0.52 1.70 5.54 15.8 2.0 3.0

FTSE4Good Global -0.24 2.29 7.39 12.0 1.5 3.7

MSCI KLD 400 Social -0.57 -0.24 2.87 18.1 3.5 1.9

Bovespa Corp. Sustainability -0.19 1.12 3.80 20.1 1.4 3.5

Fixed Income

Barclays US Aggregate -0.20 -1.29 0.18

Commodities Levels

6/22/2015 12/22/2014 6/23/2014

WTI Crude 59.68 57.29 96.73

ICE Brent Crude 63.45 64.58 108.29

NYMEX Natural Gas 2.734 3.181 4.167

Spot Gold 1184.25 1176.44 1317.52

LME 3mth Copper 5659 6400 6725

CBOT Corn 364.25 429.25 470.25

Currencies Levels

6/22/2015 12/22/2014 6/23/2014

EUR/USD 1.13 1.22 1.36

USD/JPY 123.41 120.05 101.93

GBP/USD 1.58 1.56 1.70

AUD/JPY 95.37 97.62 96.04

DXY Index 94.30 89.77 80.37

Source: Bloomberg, Barclays. Equity Returns: All returns represent total return for stated period. Dividends and coupons are not included

in the DAX and BOVESPA indices. Bond Returns: All returns represent total return for the stated period. Index characteristics: P/E, P/B,

and Dividend Yield are based on Bloomberg consensus estimates for the stated period.


MSCI ACWI SECTOR PERFORMANCE

As of 6/23/2015

1 Month Price Return (%)

Source: Bloomberg. Sector returns are based on GICS

methodology. MSCI ACWI is a free-float weighted equity index

that includes both emerging and developed world markets.

YTD Price Return (%)

Source: Bloomberg. Sector returns are based on GICS

methodology. MSCI ACWI is a free-float weighted equity index

that includes both emerging and developed world markets.

US EQUITY STYLE PERFORMANCE

Style box returns are based on Russell Indices with the exception of the Large-Cap Blend box, which reflects

the S&P 500 Index. All values are cumulative total return for the stated period including the reinvestment of

dividends. The index used from left to right, top to bottom are: Russell 1000 Value Index, S&P 500 Index,

Russell 1000 Growth Index, Russell Midcap Value Index, Russell Midcap Index, Russell Midcap Growth Index,

Russell 2000 Value Index, Russell 2000 Index and Russell 2000 Growth Index.

1 Month

Source: Bloomberg

Year to Date

Source: Bloomberg

Healthcare

Cons Disc

Telecom

Info Tech

MSCI ACWI

Financials

Industrials

MaterialsCons

StaplesEnergy

Utilities

-10 -5 0 5 10 15-5 -4 -3 -2 -1 0

Healthcare

Cons Disc

Telecom

Cons Staples

Info Tech

MSCI ACWI

Industrials

Financials

Materials

Utility

Energy

Value Growth Blend

0.1

2.4

-0.2

0.0

3.3

0.2

0.1

4.2

0.6 Mid

L

arg

e

Sm

all

2.2

3.6

3.4

4.1

7.9

5.5

7.0

12.1

7.5

Value Growth Blend

Sm

all

Larg

e

Mid


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP

As of 6/23/2015

Company name Ticker Industry Mkt Cap (US$ Bn)

Price (Local)

Total Return YTD % (local)

P/E 2015E

EV/EBITDA 2015E

Div Yield % 2015E

Consumer Disc. Toyota Motor Corp 7203.JP Automobiles 234.0 8475.00 13.8 10.8 10.4 2.4

Amazon.com AMZN Internet & Catalog Retail

206.6 443.56 42.9 105.8 22.7 N/A

The Walt Disney Co DIS Media 194.0 114.33 21.4 22.6 13.1 1.0

Comcast Corp CMCSA Media 152.1 60.56 5.3 18.3 8.0 1.7

Home Depot Inc HD Specialty Retail 147.2 113.30 9.1 21.5 12.1 2.1

Consumer Staples Nestle NESN.VX Food Products 243.1 70.50 -0.5 20.9 13.8 3.1

Wal-Mart Stores WMT Food & Staples Retailing

233.5 72.49 -14.5 15.2 7.9 2.7

The Procter & Gamble Co

PG Household Products

216.3 79.73 -11.1 20.1 13.2 3.3

Anheuser-Busch Inbev ABI.BB Beverages 202.3 112.55 22.2 22.9 13.5 2.7

The Coca-Cola Co KO Beverages 175.8 40.34 -2.9 20.1 16.0 3.3

Energy Exxon Mobil XOM Oil, Gas &

Consumable Fuels

353.9 84.65 -7.0 19.8 8.3 3.4

Petrochina Co 857.HK Oil, Gas & Consumable Fuels

323.9 8.86 3.0 21.6 9.3 3.7

Royal Dutch Shell RDSA.LN Oil, Gas & Consumable Fuels

187.6 99.74 -9.3 24.0 6.8 4.3

Chevron CVX Oil, Gas & Consumable Fuels

186.9 1855.50 -11.2 14.8 5.2 6.6

Bp PLC bp/ Oil, Gas & Consumable Fuels

126.1 438.95 10.0 16.9 5.8 6.6

Financials Berkshire Hathaway- CL B

BRK/B Diversified Financial Services

348.1 141.12 -6.0 17.9 N/A N/A

Wells Fargo & Co WFC Banks 298.2 57.91 7.1 13.9 N/A 2.6

Ind & Comm Bank of China

1398.HK Banks 299.3 6.63 17.1 6.7 N/A 4.8

JPMorgan Chase JPM Banks 257.6 69.42 12.4 11.8 N/A 2.5

China Construction Bank

939.HK Banks 239.7 7.40 22.1 6.3 N/A 5.1


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED)

As of 6/23/2015

Company Name Ticker Industry Mkt Cap (US$ Bn)

Price (Local)


P/E 2015E

EV/EBITDA 2015E

Div Yield % 2015E

Health Care Johnson & Johnson JNJ Pharmaceuticals 276.3 99.65 -3.3 16.3 11.0 3.0

Novartis AG NOVN.VX Pharmaceuticals 275.1 96.10 6.9 19.6 18.5 2.7

Roche Holdings ROG.VX Pharmaceuticals 250.0 272.40 4.1 19.2 12.7 2.9

Pfizer PFE Pharmaceuticals 212.4 34.49 12.6 17.0 11.3 3.2

Gilead Sciences GILD Biotechnology 178.9 121.73 29.6 11.4 8.5 1.4

Industrials General Electric Co GE Industrial

Conglomerates 277.4 27.53 10.9 19.7 12.9 3.3

United Tech Corp UTX Aerospace & Defense

102.4 114.98 1.1 16.6 9.9 2.2

3M MMM Industrial Conglomerates

101.2 159.59 -1.7 20.1 12.1 2.6

Boeing BA Aerospace & Defense

99.6 144.01 12.2 16.9 9.3 2.5

Siemens SIE.GR Industrial Conglomerates

95.1 96.56 6.6 15.4 10.8 3.4

Info Tech Apple AAPL Technology

Hardware, Storage &

732.7 127.18 16.2 14.1 7.3 1.6

Microsoft Corp MSFT Software 369.8 45.71 -0.2 17.8 9.5 2.7

Google GOOGL Internet Software & Services

373.9 560.33 5.6 19.8 10.6 N/A

Facebook FB Internet Software & Services

244.9 87.19 11.8 43.9 22.3 N/A

Alibaba BABA Internet Software & Services

210.2 85.29 -17.9 31.6 23.5 N/A

Materials BHP Billiton Ltd BHP.AU Metals & Mining 116.1 28.61 7.1 15.3 6.2 7.4

BASF BAS.GY Chemicals 87.5 85.25 25.8 15.6 8.5 3.3

Rio Tinto RIO.AU Metals & Mining 79.4 56.34 -0.5 17.0 8.0 6.5

Saudi Basic Ind. SABIC.AB Chemicals 80.6 100.71 24.9 15.3 7.6 6.0

DuPont DD Chemicals 62.4 68.95 -5.5 17.5 10.3 2.8


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED)

As of 6/23/2015

Company Name Ticker Industry Mkt Cap (US$ Bn)

Price (Local)


P/E 2015E

EV/EBITDA 2015E

Div Yield % 2015E

Telecom China Mobile 941.HK Wireless

Telecommunication Ser

276.5 104.70 17.2 15.6 5.2 2.8

Verizon VZ Diversified Telecommunication

195.4 47.91 4.8 12.5 6.7 4.6

AT&T T Diversified Telecommunication

187.8 36.17 10.8 14.4 6.7 5.2

Vodafone VOD.LN Wireless Telecommunication Ser

100.5 240.95 11.7 42.3 7.6 5.2

Deutsche Telekom dte.gr Diversified Telecommunication

82.9 16.36 27.2 23.1 6.9 3.1

Utilities National Grid NG/ LN Multi-Utilities 50.4 856.50 -3.7 14.6 10.0 5.6

Duke Energy DUK Electric Utilities 49.7 71.93 -12.1 15.4 9.7 4.4

GDF Suez GSZ.FP Multi-Utilities 48.4 17.79 -6.0 14.9 6.7 5.6

Enel ENEL.IM Electric Utilities 44.4 4.22 18.1 13.1 7.0 3.3

Iberdrola SA ibe.sm Electric Utilities 44.1 6.33 13.0 16.9 9.0 2.5

Source: Bloomberg. The securities in each sector represent the largest companies by market cap in the MSCI ACWI in their respective

sectors. Sector classification is based on GICS methodology. Equity characteristics: P/E, EV/EBITDA and Dividend Yield are based on

Bloomberg consensus estimates for stated period.

GDP / CONSUMER PRICE INFLATION / RATES

Real GDP (% YoY) CPI (% YoY) Official Rates Long Rates

Region/Countries 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E

United States 2.4 2.2 2.8 1.6 0.3 2.2 0.25 0.70 - 2.2 2.6 -

Euro Area 0.9 1.5 1.7 0.4 0.2 1.3 0.05 0.05 - - - -

Japan 0.2 1.0 1.4 2.7 0.8 1.2 0.10 0.10 - 0.4 0.5 -

UK 2.6 2.5 2.4 1.5 0.4 1.6 0.50 0.60 - 2.2 2.1 -

Australia 2.7 2.5 2.8 2.5 1.8 2.7 2.50 1.95 - 3.0 3.0 -

China 7.4 7.0 6.7 2.0 1.5 2.1 5.60 4.80 - 3.7 3.4 -

Brazil 0.1 -1.2 1.0 6.3 8.2 6.0 11.60 13.90 - - - -

**India 5.4 7.4 7.7 7.2 6.2 5.5 8.00 7.10 - 8.1 7.5 -

Source: Bloomberg. Estimates are composite of Bloomberg contributor estimates. *Italicized text represents actual data. ** India fiscal year runs to March 31.

MONETARY POLICY

Jun-15 Dec-14 Jun-14

Monetary Base growth (YoY) -1.4% 8.8% 24.2%

M-2 growth (YoY) 5.6% 6.0% 6.4%

Money multiplier (M-2/mon base) 3.0 2.9 2.9

1Q15 1Q14 1Q13

Velocity of money (GDP/M-2) 1.50 1.54 1.58

Source: Federal Reserve Bank of St. Louis


ESG DISCLOSURE SCORES OF LARGEST ECONOMIES BY 2014 GDP

Composite Environ Social Governance

1. United States 14.5 16.3 16.5 49.1

2. China 18.6 10.3 21.6 42.5

3. Japan 21.0 26.5 21.0 45.1

4. Germany 27.6 31.7 40.1 38.7

5. U.K. 31.3 22.6 36.3 53.6

6. France 39.8 37.1 50.2 56.0

7. Brazil 32.5 30.4 53.7 40.6

8. Italy 33.7 38.8 43.6 43.9

9. India 14.8 14.9 19.3 43.4

10. Russia 17.7 21.9 31.4 39.8

HIGHEST ESG DISCLOSURE SCORES

Composite Environ Social Governance

Spain 41.1 43.5 56.5 49.7

Portugal 40.8 40.6 46.1 51.9

Finland 40.5 37.4 40.5 56.4

France 40.1 37.4 50.4 56.0

Sweden 35.4 28.3 41.9 52.5

Greece 33.3 41.6 47.8 44.8

Brazil 32.5 30.4 53.7 40.6

South Africa 32.4 25.7 44.6 55.0

Denmark 31.6 27.1 40.5 45.3

Britain 31.3 22.4 36.2 53.6


KEY ECONOMIC CHARTS

C&I Loan Growth (%)

Source: Federal Reserve Bank of St. Louis

University of Michigan Survey of Consumer Sentiment

Source: Bloomberg

NFIM Small Business Optimism Index

Source: Bloomberg

ISM Manufacturing Purchasing Managers Index

Source: Bloomberg

US Treasury Yield Curve

Source: Bloomberg

US Initial Jobless Claims

Source: Bloomberg

-30

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% Y

oY

70

75

80

85

90

95

100

105

110

1974

1977

1979

1981

1984

1986

1988

1991

1993

1995

1998

2000

2002

2005

2007

2009

2012

2014

20

30

40

50

60

70

80

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1997

2000

2003

2006

2009

2012

50

60

70

80

90

100

110

120

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

1M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 30Y

%

6/23/2015 12/23/2014 6/23/2014

100

200

300

400

500

600

700

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

(000s)


Global Market Strategy Research

Regional and Sector Strategy: Monthly Update

By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group

Crosscurrents — Although there are no material changes to our regional or

sector recommendations this month, there have been some noteworthy

crosscurrents.

Regional Crosscurrents — Improved optimism about earnings in Europe

ex. the U.K. is offset by valuations that are still relatively unattractive, so that

the region remains Underweight.

Sector Crosscurrents — Similarly, the Underweight Energy sector has also

seen some improvement in earnings optimism, but that has not been enough

to offset the sector’s relatively unattractive valuation.

Food for Thought — The shifting of GICS weights in the MSCI ACWI

benchmark has implications for the materiality of specific ESG issues in sector

strategy at any given point in time.

Figure 1: Regional Rankings Figure 2: Sector Rankings

Source: Cornerstone Capital Group

Summary of a report originally published on June 2, 2015.

Michael Geraghty is the Global Markets Strategist for Cornerstone Capital

Group. He has over three decades of experience in the financial services

industry including working as an investment strategist at UBS and Citi.



South Africa: A Leader in Corporate Governance

By Mervyn E. King, Chairman, International Integrated Reporting Council (IIRC)

After Mr. Nelson Mandela was released from jail in

1990 he would often call me. We had known each

other from before he went to jail. Whenever the

conversation opened with, “How’s my favourite

Judge?” I knew he had plans, and I knew a lot of work

was coming my way. Mr. Mandela and I shared a

vision for enhanced corporate governance, and the

direct result of this vision is that South Africa is now

consistently cited as a global leader in corporate

governance.

So how did we do it? The Institute of Directors in

Southern Africa asked me to form a committee, which

assumed my name. In 1994, the first “King Report on

Corporate Governance” (King I) was issued. It

proposed a new, inclusive approach to governance

that recognized the role and relevance of a company’s

stakeholders. In 2002, King II was released with a

focus on sustainability reporting and risk

management. It had become clear that financial

reporting was critical, but on its own was not

sufficient. By definition, the information was

historical and, to use an automotive analogy, we were

reporting on information letting our users look into

rear view mirrors but driving cars with no

windscreens. At the same time there was pressure on

companies from civil society and other sources to

report on sustainability, ISO standards, carbon

disclosure, governance structures, remuneration and

more. These are also crucial elements for a business to

report on – but cannot be treated in silos.

This pressure led to the thinking in King III, released

in 2009, that as a management runs a company on an

interconnected and interrelated basis through the

resources used and the relationships with its

stakeholders, the company should report on this

basis. At this time others were beginning to think

along the same lines, leading to a meeting at St.

James’s Palace hosted by His Royal Highness The

Prince of Wales in December 2009, at which the

“who’s who” of corporate reporting paved the way for

the evolution of corporate reporting: Integrated

Reporting.

Integrated Reporting weaves a golden thread through

the information of business reports. It links the

information that is relevant to providers of financial

capital into one clear, concise, integrated story that

explains how the range of their key resources and

relationships are creating value over time. Decision-

making and policy formulation are strengthened as a

result of enhanced corporate transparency and

reporting. Through considering the interconnection

between the resources and relationships a business

uses, the dialogue between investors and businesses

naturally shifts to focus on strategy for value creation

over the short, medium and long term.

I am Chairman of the International Integrated

Reporting Council (IIRC), a global coalition of

regulators, investors, companies, standard setters, the

accounting profession and NGOs. The IIRC’s vision is

to align capital allocation and corporate behaviour

with the wider goals of financial stability and

sustainable development through the cycle of

integrated reporting and thinking. It is the global

©Rawpixel/BigStock


authority on Integrated Reporting, striving to be

market-led and evidenced-based, acting as a global

centre of excellence for corporate reporting reform. In

2013, the IIRC issued the International <IR>

Framework.

The Framework was the culmination of three years’

development and consultation. It drew on the

learnings of integrated reports in South Africa, among

other sources. Since 2010 companies listed on the

Johannesburg Stock Exchange (JSE) have been

required to prepare integrated reports because the

principles of King III (which include the preparation

of integrated reports) fall into the Listings

Requirements on an apply or explain basis. Today,

five years on, in South Africa it’s not only the listed

companies that prepare integrated reports – unlisted,

state-owned entities and NGOs prepare integrated

reports as a discipline to ensure good governance and

improved reporting.

The acknowledged benefits of Integrated Reporting to

businesses in South Africa are widespread. There is no

doubt that Integrated Reporting has significantly

spurred integrated thinking in business. A recent

survey by the South African Institute of Chartered

Accountants found that 79% of non-executive

directors included in the survey believe that

integrated thinking has increased the quality of

dialogue with providers of financial capital and other

stakeholders.

And one of acknowledged benefits supported by the

survey is that Integrated Reporting has resulted in

better decision-making and improved internal

management. As others learn of the benefits this

enhanced approach to corporate governance and

reporting has brought to South African businesses,

more and more in other African countries and across

the globe are moving towards Integrated Reporting.

The world is not what it used to be. Business cannot

carry on as we used to carry on. The concept of value

has expanded. Instead of seeing companies as

operating in a financial bubble and viewing value

through a financial lens of future cash flows and net

asset value, stakeholders want to understand how a

company makes its money through all of the resources

and relationships (also known as capitals) it uses or

affects. From an investor perspective, it is no longer

enough to understanding the finances of a business;

one must understand and assess a company’s

strategy, business model, resources and relationships,

and risks and opportunities. A reassessment of our

understanding of value – its parameters and its effects

– is taking place, making sure that business models

sing to the tune of a value creation model fit for the

21st century.

Mervyn E. King is a Senior Counsel and former

Judge of the Supreme Court of South Africa. He is

Chairman of the International Integrated

Reporting Council, Chairman Emeritus of the

Global Reporting Initiative, and a member of the

Private Sector Advisory Group to the World Bank

of Corporate Governance.



Gauging Governance Globally — Spotlight on South Africa

By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group

South Africa is ahead of many countries in terms of corporate governance. Not only

was the country at the forefront of factoring ESG issues into its exchange listing

requirements, it now requires integrated corporate reporting.

Measuring Governance

In a previous global market sector report, Cornerstone Capital Group examined

the significance of governance for country equity valuations using both “top-down”

(governance at the national level) and “bottom up” (governance at the corporate

level) metrics — see Gauging Governance Globally: Macro and Micro Metrics,

September 15, 2014. We highlighted that a multiple regression generated an R-

squared of 0.16 between equity valuation at the country level and four measures of

governance:

The World Economic Forum’s Corporate Governance score.

The World Bank’s Ease of Doing Business Index.

Transparency International’s Corruption Perceptions Index.

The World Bank’s Worldwide Governance Indicators.

©xstock/Shutterstock

Figure 1: The Cornerstone Capital Governance Composite

Source: Cornerstone Capital Group

http://cornerstonecapinc.com/2014/09/gauging-governance-globally/


We then took a weighted average of the four macro governance measures to rank

the eight regions / countries in our regional strategy model in terms of a composite

governance score. The rankings (from best to worst): (i) Australia; (ii) U.K.; (iii)

North America; (iv) Japan; (v) Europe ex the U.K.; (vi) Latin America;

(vii) Emerging Asia; (viii) the Central and Eastern Europe, Middle East and Africa

(CEEMEA) region.

In terms of the CEEMEA region, the country with the largest weight in the MSCI

Emerging Markets EMEA Index is South Africa — a 45% weight as of April 2015.

Other countries with large weightings include Russia (23%), Poland (9%) and

Turkey (8%). Figure 1 illustrates that, if South Africa is treated as a standalone

country, it ranks much higher than either (i) the CEEMEA region as a whole or (ii)

three European countries: Portugal, Spain and Italy.

A few points to note:

The scores for the regions in Figure 1 are based on the weights of the

component countries in the relevant MSCI index. So, even though South

Africa has a much bigger weight (45%) than Russia (23%), the extremely poor

scores for governance in Russia (and the mediocre scores for Poland and

Turkey) mean that the CEEMEA region as a whole ranks last in our governance

composite.

Our governance composite is calculated by weighting the four measures of

governance outlined above. The WEF Corporate Governance rank gets the

heaviest weight given its relatively strong correlation with country P/Es.

Despite its low R-squared, we included The World Bank’s Worldwide

Governance Indicators because a statistical analysis reveals that a four-

variable model is more statistically significant than a three-variable model

(i.e., one that excludes the World Bank Worldwide Governance indicators).

Figure 1 illustrates that South Africa ranks very well for governance at the

corporate level — i.e., the World Economic Forum’s Corporate Governance

score and the World Bank’s Ease of Doing Business Index — but not as well at

the national level i.e., the Corruption Perceptions Index and the World Bank’s

Worldwide Governance Indicators. That South Africa ranks well for

governance at the corporate level is not that surprising.


The Evolution of World Class Corporate Governance in South Africa

Landmark events in the evolution of corporate governance in South Africa were

the King I Report on Corporate Governance in 1994 and the King II Report on

Corporate Governance in 2002 (both named after retired Supreme Court judge

Mervyn E. King (See Professor King’s article in this issue.) While neither of these

reports specified mandatory requirements for companies, their guidelines were

selectively adopted by the Johannesburg Stock Exchange (JSE) as listing

requirements (See “The Johannesburg Stock Exchange: Integrating

Sustainability” article in this issue).

Following the publication of the King III Report on Corporate Governance in 2009,

the JSE mandated the disclosure of sustainability information starting in the 2010

financial year and subsequently mandated the disclosure of integrated reporting

starting in 2011.

Companies are mandated to disclose their policies in relation to a series of

ESG issues as well as to report on the actions that they take to achieve the

objectives of their policies. (However, it should be noted that no specific

guidelines have been provided, or standards set, to require disclosure

along a specific set of metrics.)

Integrated reports must describe the value creation process inside an

organization and discuss a company’s impact on stakeholders as well as

the strategies for mitigating any potentially negative impacts on society.

ESG reporting was widespread among many of the large firms in the economy even

before the recently mandated disclosure of sustainability information. Following

the initiatives outlined above, corporate governance is now widely considered to

be world-class in South Africa.

Michael Geraghty is

the Global Markets

Strategist for

Cornerstone Capital

Group. He has over

three decades of

experience in the

financial services

industry including

working as an

investment

strategist at UBS

and Citi.



The Johannesburg Stock Exchange: Integrating Sustainability

By Siobhan Cleary, Consultant and Former Director of Strategy & Public Policy and Corli Le Roux, Head of

SRI Index Operations & Sustainability, Johannesburg Stock Exchange

The Johannesburg Stock Exchange (JSE) has, over

the long term, demonstrated its commitment to

promoting sustainability amongst its listed

companies. This is unsurprising given the exchange’s

operating environment. First, companies operating

in emerging economies cannot focus simply on the

single (financial) bottom line. Issues of stakeholder

engagement, community development and due

regard for environmental considerations are a core

part of their license to operate. This is not to suggest

that companies always conduct themselves

admirably, but the issues are not new. Second,

successive iterations of the King Code of Corporate

Governance (King Code) have served as the

framework for company directors in thinking about

their – increasingly broadly defined – governance

responsibilities. The first King Code was published

in 1994, and the latest version (King III) in 2009.

King III expanded the focus on sustainability that

was introduced in King II, together with a

recommendation that companies produce integrated

reports. King IV is currently under development.

The JSE has taken a multi-pronged approach to

sustainability. In its Listing Requirements, certain

aspects of the King Codes are mandated while

compliance with the remainder of King III is

required on an “apply or explain” basis. This includes

the requirement relating to integrated reporting. In

2004 the JSE also established a Socially Responsible

Investment (SRI) Index. Unlike many other indices

available at the time, the JSE’s index was not an

exclusionary/ethical index but rather one focused on

broader sustainability. The primary reasoning for

this was that because the index was at its core

intended to be about company engagement and

behaviour change, if one excluded companies at the

outset there would be no opportunity to engage them

on sustainability matters. Another differentiating

element of the index is that it is progressive in nature.

The indicators have changed over time and meeting

the index requirements has become ever more

challenging; the assessment of companies against the

index criteria moved from being voluntary to being

automatic; the evaluation of companies against the

index criteria moved from including private

information to relying solely on information in the

public domain. As the exchange does in many other

areas of its business, it established an advisory

committee comprised of representatives from

business, state-owned enterprises, the investment

community, non-governmental organisations,

academia and even trade unions to provide guidance

and input. Finally, the JSE hosts annual “ESG

Investor Briefings,” bringing together top-

performing companies and interested investors.

There are some who have criticized aspects of the SRI

Index and its operation, particularly in relation to

decisions regarding controversial issues or

borderline cases. It is undoubtedly true that a clear

set of unambiguous criteria which leave companies in

no doubt as to whether they are “in or out” would be

more comfortable for companies. But the discretion

retained by the JSE (always with input from the

Advisory Committee) has enabled the exchange to

reflect broader social perspectives through index

© viewapart/CrystalGraphics


inclusion or exclusion decisions, for example

reflecting on labor relations post the Marikana

shootings. The index has also had its fair share of

(often public) criticism from members of the NGO

community who were unhappy about the inclusion of

certain companies in the index. The decisions

occasionally resulted in difficult conversations –

either with listed companies or other stakeholder

groups – and unpleasant media. Despite this, the

exchange’s view was always that such discord meant

companies took the index seriously and that it

stimulated debate on very important issues.

While the index never gained serious traction as an

investment product, the JSE considers it an

enormously successful part of its sustainability

arsenal. Coupled with the Listings Requirements, it

has been a valuable point of engagement with issuers.

Interaction with institutional investors is also

increasing steadily. The index has also added to the

JSE’s credibility as it participates in the broader

sustainability conversation in South Africa and

internationally.

At the time that the JSE launched the index (having

already begun to include elements of the King Code

into the Listings Requirements), it was one of a

handful of exchanges engaging directly with

sustainability issues. For the leadership of the

exchange, the reason for doing this was

straightforward: at their core, exchanges are

intermediaries facilitating the channeling of capital

to its most productive use. Part of the way in which

exchanges do this is by requiring companies to

disclose information that will improve the ability of

investors to make appropriate allocation decisions.

As the definition of what constitutes relevant

information changes over time, exchanges have a role

to play. And ultimately, the more that listed

companies are grappling with these issues, the

greater the likelihood that companies will be listed

for the long-term.

Siobhan Cleary is currently an independent

consultant working on capital market issues,

including contributing research to the UNEP FI

Inquiry into the Design of a Sustainable Financial

System. She is the JSE’s former Director of

Strategy and Public Policy, where her team was

responsible for developing the JSE’s corporate

strategy and policy positions on issues such as

financial market regulation.

Corli Le Roux joined the JSE as Legal Counsel in

August 2001 from the South African Futures

Exchange (SAFEX). She has been responsible for

the development and operation of the JSE’s Socially

Responsible Investment (SRI) Index since inception

of the project and oversees the JSE’s advocacy and

engagement on sustainability issues. She

represents the JSE on various committees covering

sustainability, integrated reporting and

responsible investment, and is currently Vice Chair

of the World Federation of Exchanges’

Sustainability Working Group.

http://www.theguardian.com/world/2015/may/19/marikana-massacre-untold-story-strike-leader-died-workers-rights

http://www.theguardian.com/world/2015/may/19/marikana-massacre-untold-story-strike-leader-died-workers-rights



Profiting from Trust – Opportunities to (Re-) Define a Positive Social Role For Financial Institutions

By Chris Coulter, co-CEO, GlobeScan

Trust is one of the most complex, strategically important assets sought by an

organization. High levels of trust generate favorable responses to the

organization, and create environments where discussion, collaboration and

innovation can thrive.

But not all trust is created equal. Organizations can systematically build,

maintain and evolve what we see as three distinct benefits of trust: brand

equity, reputation equity and employee equity. GlobeScan believes that these

three forms of equity can be found and nurtured across an organization’s

stakeholder network, creating tangible value for the business and for society.

Once lost, however, trust is extremely difficult to recapture.

The need to rebuild trust is particularly acute in the financial services industry.

More than seven years on from the financial crisis, concerns about trust and

confidence in banks and other financial institutions show no sign of

diminishing.

With the latest series of scandals, allegations and billion-dollar fines,

questions are being asked about whether the industry has learned any lessons.

As regulators call on banks to “raise their game” to regain the public’s trust,

we ask what can be learned about the roots of distrust, the opportunities for

rebuilding reputation, and the pathways to get there, as part of our ongoing

global public and stakeholder opinion research.

Crisis of Trust

Evidence of a crisis in trust in business is stark. Research from GlobeScan,

Edelman and others continues to feed the debate about the state of business’s

social license. Our latest 2015 tracking across 22 countries shows very low

levels of trust in global companies, especially compared to other societal

actors, including academic/scientific organizations and NGOs. Net trust in

global companies remains at low levels in many countries around the world

(see Figure 1 on the next page).

Trust varies across a range of different industry sectors, however. GlobeScan’s

research across 24 countries shows the public’s net trust in banks and financial

institutions deep in negative territory, alongside that of oil companies.

Attitudes range from highly positive in Africa and some parts of Asia, to

profoundly negative in Europe and the United States (see Figure 2).

© 3DDock/Shutterstock

https://www.fca.org.uk/news/debating-trust-and-confidence-in-banking-

https://www.fca.org.uk/news/debating-trust-and-confidence-in-banking-

http://www.ft.com/cms/s/0/23fa681c-fe73-11e4-be9f-00144feabdc0.html#slide0

http://www.ft.com/cms/s/0/3389707c-0790-11e5-a58f-00144feabdc0.html#axzz3c0Z4Sgf5

http://www.ft.com/indepth/libor-scandal

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11509720/Banks-must-raise-their-game-to-win-back-public-trust.html

http://www.edelman.com/2015-edelman-trust-barometer/trust-across-industries/financial-services-path-to-building-trust/

http://www.pwc.co.uk/financial-services/financial-services-risk-and-regulation/how-financial-services-lost-its-mojo.jhtml

http://www.globescan.com/expertise/trends/globescan-radar.html

http://www.globescan.com/expertise/trends/globescan-radar.html


Figure 1. Trust in Institutions

Net Trust,* Average of 22 Countries, 2015

Source: GlobeScan

Figure 2. Net Trust* in Industry Sectors

Average of 24 Countries, 2014

Source: GlobeScan


A Bright Spot: Africa!

Africa indeed remains a bright spot for banks and an opportunity to cement

long-term trust in a highly dynamic region of the world.

In a recent interview with Gail Klintworth, Group Customer Director and

Responsible Business Lead at financial services firm Old Mutual plc (which

has a strong presence in South Africa), she mentions that the finance sector

has a positive role to play in socio-economic and environmental development

across Africa. According to Klintworth, the opportunity in Africa is to establish

and define a meaningful societal role, focused on accelerating economic

inclusion, while ensuring that economic development isn’t at the expense of

the environment or people. The potential is huge, but doing it the right way

will be critical to achieving success.

In many parts of Africa, 70-80% of the population is ‘unbanked’, which is

improving via mobile money but not necessarily enabling proper financial

planning. The penetration of personal insurance is only 2% in most countries.

This provides a huge opportunity not only to grow the business, but to make a

positive difference.

Old Mutual plc is one of the largest private investors in infrastructure and

renewables in the region. The company is continuously developing business

through partnerships with NGOs, governments, and economic empowerment

groups. Old Mutual plc aims to be the financial services champion in Africa,

and wants to be recognised as responsible business leaders in

financial services.

Rebuilding trust for banks and financial institutions, especially in Europe and

North America, will require a focus on purpose, governance and transparency.

Indeed, ethics lies at the core of the trust deficit. When we asked people across

the world what issue the banking industry most needs to address, “operating

ethically” rises to the top. While other sectors can be challenged by ethics, the

prominence of ethics as a driver of trust in financial services is unique

compared to the nine other sectors we track, and underscores the importance

for the financial services industry to engage society in a meaningful way.

Pathways to Trust

In our work we use stakeholder research to help define expectations, drivers

of trust and an organization’s optimal societal purpose.

A review of academic literature shows that there are three primary

components of trust – competency, integrity and benevolence. Our research

across a range of industries confirms that these three elements are critical to

build enduring and deep trust with stakeholders.

The structural equation modeling example below (Figure 3) outlines how

pathways to trust are built.

Chris Coulter is the

co-CEO of GlobeScan. A

thought-leader on

reputation, brand

and sustainability, Chris

is a valued advisor to

global leadership

companies and

organizations. Chris

works with leaders in

business, multilateral

organizations and NGOs

to help them better

understand and respond

to shifting stakeholder

expectations, build trust

with key constituencies

and exert greater

influence in shaping the

future.


Figure 3. The Components to Trust

Source: GlobeScan

We can see that strong functional performance (competency) on its own

directly drives trust only minimally. When performance is described through

the lens of being empathetic and supportive (integrity), then trust increases.

If performance is conveyed in this warm, human way and it is also embedded

in a narrative of dedication and purpose (benevolence), we see the maximum

trust payoff.

Getting its house in order by proactively addressing ethical breaches is key to

turning round the financial services industry’s trust crisis. But if banks are

going to move beyond “doing no harm,” they need to take steps to redefine

their role in society and to articulate this effectively.

The journey to purpose starts and ends with engagement – with customers,

employees and governments to be sure, but also with civil society and

communities. Banks are not the first institutions to face a trust deficit and they

won’t be the last. There is a clear opportunity to learn from other sectors about

how they have proactively addressed their trust challenges, and to apply the

three factors of competency, integrity and benevolence in equal measure.


Global Sector Research

Dissecting the “Sharing Economy”: Business Model Opportunities and Risks

By John K.S. Wilson, Margarita Pirovska, PhD, & Michael Shavel, CFA, Cornerstone Capital Group

Redefining “sharing economy.” A “distributed marketplace company”

(DMC) develops and manages an automated platform that enables self-

organized, usually ad hoc transactions between two independent parties, a

user/consumer and a provider, in order to use otherwise slack resources.

Between Uber’s $50 billion valuation, Etsy’s IPO and the large venture capital

infusions into Airbnb, DMCs have clearly attracted investor interest, as well as

scrutiny.

A matter of trust. A core component of a DMC’s value lies in its ability to

gain the support of stakeholders—not only customers and providers, but also

incumbents, suppliers, communities, regulators and investors—and facilitate

relationships among them. As DMCs grow, one of their primary challenges is

maintaining the trust of these disparate stakeholders.

Where is trust at risk? We have identified the salient characteristics of

DMCs; all of these companies sit somewhere on the continuum for each

characteristic. Assessing where a company lands on the continuum can

highlight the opportunities and risks presented by its business model.

A closer look at Uber. Uber continues to grow quickly and many in the

media speculate that the firm will go public. Meanwhile, the company faces

regulatory risk because it has riled its traditional taxi-service competitors as

well as local governments. We look at the economic implications for Uber

should regulatory or social pressure require it to change its pay model. As it

stands currently, we calculate that there is no significant pay advantage for

Uber drivers relative to taxi/limousine drivers, which would pose a risk to

Uber if it had to adhere to stricter regulations.

Executive summary

Between Uber’s $50 billion valuation, Etsy’s IPO and the large venture capital

infusions into Airbnb, the “sharing economy” is transitioning from a social

movement to a large-scale commercial business model. As more technology-

driven sharing enterprises inevitably go public (or expand via large private

equity infusions), investors will need consistent ways to evaluate not just the

financial prospects of a company, but also whether its business model will be

sustainable as it matures. In this report we lay out a methodology that can be

used to do so.

We call companies that have shifted beyond the original socially focused ethos

of the sharing economy to become more profit-oriented “distributed

©lightkeeper/BigStock


marketplace companies” (DMCs). We define DMCs as companies that develop

and manage an automated platform which enables self-organized, usually ad

hoc transactions between two independent parties, a user/consumer and a

provider, in order to use an otherwise slack resource. A DMC is a more

formalized version of a “peer to peer” network.

While they may be classified as technology companies for the purposes of

fundamental analysis, DMCs enable commercial transactions in such diverse

sectors as transportation, apparel, hospitality, the arts and household goods

and services. Moreover, a key component of their value lies in DMCs’ ability to

gain the support of stakeholders and facilitate relationships among them.

These companies will prosper based not only on financial performance, but

also on the creation and maintenance of trust with stakeholders--customers

and providers, but also competitors, suppliers, communities and regulators.

As DMCs grow, the interests of these indirect stakeholders take on greater

importance. The way in which a DMC addresses the concerns of these other

stakeholders may ultimately determine whether its business model proves

sustainable over the long term.

DMCs may create greater employment and less expensive consumption

opportunities, as well as more efficient and environmentally friendly use of

physical capital. On the other hand, the decentralized nature of DMCs may

also entail the circumvention of consumer and worker protections as well as

safety standards, or may exacerbate income inequality. Creating and

maintaining trust, a key component of the sharing economy, depends in part

on avoiding the perception that some stakeholders are benefiting at the

expense of others.

What questions should investors be asking?

Given the diversity of business models within the sharing economy, the right

questions will depend upon the specific company under consideration. We

have created a taxonomy to identify the salient characteristics and key

relationships in the distributed marketplace, and to help evaluate the risks and

opportunities associated with each business. Companies can have a mix of

characteristics, any of which can present a particular opportunity or risk. In

all cases, the analysis comes down to who benefits and how, who might be

harmed and how, and what stakeholders other than the provider and

consumer may be affected.

This is an excerpt from our full-length report dated June 9, 2015.

John K.S. Wilson is the

Head of Corporate

Governance, Engagement &

Research at Cornerstone

Capital Group. John has

over 16 years of experience

in socially responsible

investing and corporate

governance. An Adjunct

Assistant Professor at

Columbia Business School,

John is also a member of the

Advisory Council to the

Sustainability Accounting

Standards Board.

Margarita Pirovska, PhD,

is the Policy & Sustainability

Analyst at Cornerstone

Capital Group. She has over

12 years of experience in

international energy

markets and sustainable

business, working for GDF

SUEZ, the International

Energy Agency, and Gaz de

France.

Michael Shavel, CFA,

is a Global Thematic

Analyst at Cornerstone

Capital Group. Prior to

joining the firm, Michael

was a Research Analyst

on the Global Growth

and Thematic team at

Alliance Bernstein. He

holds a B.S. in Finance

from Rutgers University

and is a CFA

Charterholder.


Regional Imperatives

African Commodity Exchanges: Tough Questions About Financial

Sustainability

By Julie Lerner, Founder & CEO, PanXchange

Author’s note:

On the heels of a successful pilot, August will mark my third trip to Kenya and the live launch of PanXchange ’s

web-based software. Our platform facilitates the negotiation of East African grains between farmers and

commercial buyers. I am not an expert on East African politics, nor on the specific challenges of the smallholder

farmer. The following, however, is based on my commodity market knowledge, experiences both as a founder

of a start-up and angel investor, as well as extensive research on building liquidity.

Three things we know about Africa: 1) Improving

agrarian economies dramatically reduces poverty and

improves a nation’s overall economic strength; 2) East

Africa is the hottest place on the globe for agriculture-

based profit opportunities; and 3) As we watch the

South African Exchange (JSE/SAFEX) continue to

flourish, the political interest in replicating a

successful futures and derivatives exchange is at an

all-time high.

Yet according to a recent Bloomberg article, the

Ethiopian Commodity Exchange (ECX) “is one of at

least eight commodity exchanges started in sub-

Saharan Africa over the past two decades with the aim

of improving food security for local populations.

Many have failed, and only South Africa’s is thriving

without government support.”1

The article continues, “Trading floors have flopped in

Zambia, Uganda, Nigeria, Zimbabwe, and Kenya.

Each one, analysts say, suffered from the same flaw: a

top-down approach that’s better at attracting foreign

aid than at improving farming practices and

developing transportation and communications

networks.”

I concur with the conclusion, yet I think it’s missing

one other critical component. Specifically, does a

national exchange make good business sense? If an

exchange needs government support (and likely

international aid funding) to keep it alive, does it

1 Bjerga, Alan, and William Davidson. "Trading Floors Can't Feed

Africa." Bloomberg.com. Bloomberg, 2 Apr. 2015. Web. 21 June

2015.

provide any benefit to the nation’s economy and the

well being of its populace?

South Africa’s Success

There is no doubt that the JSE/SAFEX exchange is the

continent’s biggest commodity success story. It was

launched in 1996, midway through the post-apartheid

decade, just when the government deregulated the

market. According to a 2009 UNCTAD study2, South

Africa also had these attributes:

High level of trust and cooperation amongst

industry;

Government commitment to respect the pricing

mechanism;

2 Report of the UNCTAD Study Group on Emerging Commodity Exchanges Development Impacts of Commodity Exchanges in Emerging Markets 2009, p.146

© oldandsolo/flickr


A broad-based approach to market development,

incorporating futures, spot and financing

instruments;

Strong existing warehouse and logistics

infrastructure;

Development of a robust delivery mechanism

integrated with financing solutions;

Emphasis on education.

Yet East and West Africa don’t have most of these

drivers. Without them, unfortunately, attempts to

synthetically replicate the JSE don’t make good

business sense. It is too much to build given the lack

of infrastructure in nations to the north. What’s

missing is the focus on 1) what it takes to connect

smallholder farmers to the market, and 2) growth

strategies that are realistically attainable and

financially sound. Look again at the six drivers above.

Each one is essential to building a strong foundation

— and each is a massive undertaking on its own.

Keys to Success in a Developing Nation

The first task is to flip the equation from a top-down

political approach to one that’s bottom-up. Similarly,

we need to break down the far-reaching goals of

international aid, then look at a commodity exchanges

from a business perspective:

Who is your customer and what problem are

you trying to solve? Addressing the needs of the

smallholder and how to get their crops to market has

a completely different set of issues than a national

exchange that needs a critical mass for liquidity.

Are your goals reasonable? These entities are

attempting to build an entire supply chain, yet they

could and should be broken down in at least two or

three different stages. You can’t have a robust

derivatives market if the underlying physical market

is broken.Are your numbers sound? Reasonable

fees for your target market? How many users are

needed to reach the break-even point? What is the

addressable market for the derivatives? Is it enough

for liquidity and to break even? I assume this question

is the toughest to address from a top-down approach,

as these nations simply do not have enough players for

a financially sustainable exchange.

Conclusion

No one wins if we swing for the fences. International

aid should focus on empowering smallholders

through education and helping organize the

cooperative buying of inputs and marketing post-

production. Governments should focus on

agricultural infrastructure — both the physical

infrastructure (roads, ports, etc.) but also market

structure – so that an efficient procedure will make

contracts more enforceable for freer movement of

goods, including support of standardized contract

terms and quality specifications.

If we focus on building a strong foundation, we can

empower the smallholders and improve the agrarian

economy. Once we get to that point, perhaps a

national exchange will become economically viable.

Julie Lerner is the Founder and CEO of

PanXchange, Inc., a web-based negotiation and

trading platform for physical commodities. She has

deep experience in regional and international

agricultural and energy markets. Geographically,

her area of expertise covers US, Europe, Latin

America and East Africa. Ms. Lerner currently

specializes in bringing liquidity and efficiencies to

thin and/or nascent markets.


Accelerating Impact

Creating a Win-Win Investment in Kenya

By Taryn Goodman , Director of Investment Partnerships and Charlotte Kaiser, Deputy Managing

Director, NatureVest, the Nature Conservancy

The Nature Conservancy has spent the last 64 years conserving the lands and

waters on which all life depends. Working in all 50 states and more than 35

countries, the Conservancy seeks solutions that balance human well-being

and natural resource preservation. This need for balance is acutely felt in the

northern rangelands of Kenya, where the pastoralist Samburu and Masai

tribes herd their cattle alongside dwindling herds of elephants, rhinos and

lions.

The grasslands of Kenya are important to the survival of both humans and

wildlife. Unfortunately, the increasing populations of pastoralist tribes and

their cattle threaten the area’s natural equilibrium. Overgrazing by cattle,

sheep and goats in addition to climate change has resulted in desertification,

the reduction of land available as wildlife habitat, and poaching due to

decreased incomes.

To enable pastoralists and wildlife to flourish together, The Nature

Conservancy has been working with the Northern Rangelands Trust (NRT)

for over a decade to engage with local community conservancies to counteract

the degradation of these important grasslands. By demonstrating how

sustainable grazing practices can improve grassland health and carrying

capacity for both cattle and wildlife, and by encouraging herders to adopt

rotational grazing, grass banking and other practices, NRT has made

conservation relevant to tribesmen who count their wealth by heads of cattle

owned.

Historically, this work was supported through grants to NRT from individuals

and institutions. These gifts supported educational campaigns that showed

the benefits of sustainable grazing and enabled its adoption. Through this

work, NRT noticed a market failure: the pastoralists had no access to markets

to sell their cattle. This led to reduced incomes, as herders would trek their

cattle for up to four days in order to sell them to a middleman, who would

offer low prices for the animals – which had lost substantial weight during

the trek. It also meant that herders overstocked their herds, never knowing

when they would have access to a market.

Opportunity for Heightened Impact

NRT realized an opportunity to create a local market for cattle purchases and,

in 2009, launched its Livestock to Markets (LTM) program. In conservancies

where herders use sustainable grazing practices and achieve specific

conservation targets, LTM brings access to markets. Herders who once were

© Diana_Robinson/Flickr


forced to trek their animals for many days in order to sell just one or two cows

to a middleman can now sell their animals for a fair market price on

scheduled market days within their own communities, when LTM buys

several hundred animals from many dozens of households. The cattle are

then fattened for an additional 15 months, which improves the grade of beef

and allows the program to obtain higher prices in the Nairobi meat market.

As a result of the LTM program, hundreds of thousands of acres of grasslands

are better able to support not only cattle but also the elephants, rhinos, zebras

and other species that call them home. At the same time, the LTM program

has created tremendous social benefits for the local communities.

Pastoralists’ incomes have improved substantially thanks to higher prices on

cattle. And each animal sold through the LTM program carries a levy that

goes back to the community conservancy to fund investments in wildlife

guards to prevent poaching, in eco-tourism lodges, and in community

facilities like clinics and schools.

NRT initially launched the LTM program with a $1 million grant. Over seven

years, this capital enabled the purchase of 7,000 cattle, provided almost $1.5

million of income to pastoralist families and funneled more than $80,000 in

revenue to the community conservancies. However, similar to many social

enterprises, the LTM program’s growth was limited by a lack of available

philanthropic capital. This also limited its conservation and social outcomes.

Creative Financing to the Rescue

In 2014 The Nature Conservancy launched NatureVest, a program focused on

developing the market for impact investing in conservation. NatureVest’s

deal team works with TNC colleagues and other partners to source and

structure investment opportunities for impact investors to support

conservation outcomes while earning a financial return. NatureVest and

TNC-Africa saw in LTM the potential for a high-impact conservation

investment. Working with an individual impact investor, NatureVest

structured a tiered $7 million investment to grow Livestock to Markets into a

sustainable social enterprise. To facilitate this, NRT created a new for-profit

subsidiary, NRT-Trading (NRT-T).

The $7 million investment is structured as a combination of debt and equity,

and is sourced from a single investor, the Peter Hawkins Dobberpuhl

Foundation. The Foundation made a $3.5 million program-related

investment (PRI) loan to TNC, which has been on-lent to NRT-T. Due to the

nascent stage of the company, the loan earns 0% over 7 years. The proceeds

of the loan are being used for working capital to scale up the livestock

purchases, growing from 1,000 cows per year to 10,000 cows per year.

Instead of reaching just five conservancies managing 760,000 acres, the debt-

funded program will reach 19 conservancies managing 1.2 million acres of

grasslands.


A follow-on $3.5 million equity investment from TNC-Africa will support

capital expenses such as a new abattoir, trucks and fencing to further support

the LTM expansion. The equity is financed by a gift to TNC-Africa from the

Dobberpuhl Foundation, which sought to create capacity for TNC to provide

market discipline to NRT-T. This structure has allowed us to work with NRT-

T to set an enterprise valuation, facilitating NRT-T’s efforts to raise additional

equity for new enterprises. And if we choose to exit at the end of our 10-year

term, we can recycle the capital to support future work in Africa. In addition

to capital, the Conservancy has also provided technical assistance and

relationships to NRT-T, introducing the organization to potential investors in

Kenya and the US.

Through this investment, The Nature Conservancy and its NatureVest

program learned three important things:

Optimize for risk, return, and impact. The Dobberpuhl Foundation

explicitly structured a $7 million commitment to the LTM program as half

loan, half gift to TNC to invest as equity, with the intent that TNC receive

a return on the equity portion of its investment to reinvest in other

projects. While the program has a proven track record of over half a

decade, a brand-new social enterprise is a risky business. A 0% loan for

working capital will allow the program to grow and manage execution risk

without also needing to manage debt service. The equity investment will

minimize the debt burden and provide the capital needed for expansion –

all while allowing TNC to use its returns to increase its impact.

Capital alone isn’t the answer. Ensuring that high-impact

investments in developing countries are successful over the long term

requires tremendous resources, the cost of which is rarely supported

through that first deal. TNC-Africa provided business guidance as well as

a volunteer interim CEO for NRT-T in its critical first year. Further, by

using its network, TNC Africa has been able to engage new potential

investors for NRT-T.

The solution must be holistic. Focusing on a conservation outcome

alone would not have generated the intended outcomes. By creating a

solution that spoke to the needs of the herders, the communities, and the

wildlife, TNC was able to balance all interests, enabling greater adoption

and ultimately, success.

In March 2014, the Livestock to Markets program bought 234 head of cattle

from a single conservancy. Six months later, the program purchased more

than 950 animals from 4 different conservancies, benefitting over 2,500

people. At the same time, over the past two years, elephant poaching in the

NRT region is down 38%. By focusing on holistic investments that create

social and conservation outcomes, the Conservancy has been able to ensure

both humans and wildlife can thrive.

Taryn Goodman is a

Director at NatureVest,

the Nature Conservancy’s

impact investing group

focused on conservation

finance, where she is

responsible for

structuring and

managing external

investment

partnerships. She earned

a Bachelor of Science

degree from Cornell

University and an MBA

from Cornell University’s

Johnson School of

Management.

Charlotte Kaiser is the

Deputy Managing

Director for NatureVest’s

deal team, where she

leads devevlopment of

pipeline of projects to

support investment in

conservation. A former

community development

banker, Charlotte holds a

BA from Harvard

University in

Environmental Science &

Public Policy, a Masters

in Environmental Science

from the Yale School of

Forestry &

Environmental Studies,

and an MBA from the

Yale School of

Management.


Accelerating Impact

The Bioenergy-Environment-Gender Nexus:

How Simple Innovations Can Drive Change

By Dr. Mary Njenga, post-doctoral fellow on bioenergy, World Agroforestry Centre (ICRAF)

The seemingly simple task of cooking a meal poses

significant health risks for those living in poverty. In

sub-Saharan Africa this is certainly the case. However,

the techniques to mitigate these health risks exist—

they just need to be scaled up.

The World Agroforestry Centre (ICRAF), through its

regional offices in Cameroon, India, Indonesia, Kenya

and Peru, aims to do just that. ICRAF carries out

research and development of tree-based bioenergy

innovations that are socially responsible, ecologically

sustainable and economically viable—some of which

are presented in this article. The Centre is building out

capacity of farmers and scientists, communicating

their experiences and contributing to policy

development.

The Problem with Cooking

Cooking-related health risks take a number of forms:

Poor households that can’t afford to purchase

woodfuel (charcoal or firewood) sometimes use

unsafe sources of fuel such as plastic bottles and

old shoes.

The use of woodfuel itself generates smoke, often

exacerbated by inefficient cooking stoves and

poor ventilation. It is common to find women and

children coughing, sneezing and suffering from

headaches in smoky kitchens, where they spend a

lot of time. More serious complications such as

bronchitis, lung cancer, asthma and tuberculosis

have also been linked to prolonged exposure to

smoke while indoors.1 Household air pollution

1 “Fuel for life–household energy and health,” World Health Organization, 2006 2 Lim S.S., et al, “A comparative risk assessment of burden of disease and attributable to 67 risk factors and risk factor clusters in 21 regions, 1990–2010: a systematic analysis for the Global Burden of Disease Study 2010.” Lancet, 2012: 380, 2224–60. 3 Malmberg C. C., “Case Study on the Role of Women in Rural Transport: Access of Women to Domestic Facilities.” Sub-Saharan

causes 4.3 million deaths annually and is a

leading cause of mortality in women and

children.2

Further, the collection of firewood is tiring and

time-consuming, limiting women’s productivity

and detracting from educational opportunities for

girls. A study in Zambia showed that women spent

800 hours per year collecting firewood.3 A

different study in Uganda revealed a distance of

8-12 km is covered in the process, involving 4-6

hours per trip. With 4-6 loads per person, per

week, approximately 830-1870 hours per year are

spent collecting firewood.4 These figures may

actually have increased since these studies were

done, as firewood is becoming increasingly

scarce.

Collecting firewood can also be dangerous,

exposing those performing the chore to the risk of

rape or animal attack.

Africa Transport Policy Program, World Bank and Economic Commission for Africa Working Paper 11. World Bank, 1994. 4 Agea G., Kirangwa D. Waiswa D. and Okia C., “Household Firewood Consumption and its Dynamics in Kalisizo Sub-County, Central Uganda.” Ethnobotanical Leaflets 14: 841-855, 2010

Photos courtesy of ICRAF


Innovative Solutions

Agroforestry, organic fuel briquettes and improved

cook stoves are some of the innovations that could

significantly improve access to affordable and cleaner

cooking energy for the poor while empowering

women and allowing children more time for studies

and leisure.

Agroforestry

Intercropping trees with crops or pasture or setting

aside some space for a woodlot makes firewood and

charcoal more accessible. Most of the firewood

collected from farms comes from tree prunings.

At Kibugu village in Embu County, Kenya, for

instance, over 70% of households source firewood

from the pruning of trees planted on tea and coffee

farms, and this significantly reduces the time and

money spent on cooking energy (Mahmoud et al.,

forthcoming study). Further, short-rotation forestry,

where farmers grow trees that form coppices easily

and harvest wood on a rotating basis of about five

years (depending on tree or shrub species), would not

only supply firewood and charcoal for domestic use

but could generate income from sales of the surplus

for domestic and industrial use.

Fuel briquettes from organic by-products

Fuel briquettes are a local innovation that provides a

cheap and clean source of cooking energy. They are

used in homes, hotels, chicken hatcheries, for drying

tea, and in many other ways. Fuel briquettes are

cheap, as they are made from by-products from other

production processes. They produce low emissions

with no soot, burn more evenly than many other fuels,

and last much longer.

Fuel briquettes are made by compacting dry organic

by-products such as charcoal dust, sawdust, animal

dung, grass, maize cob, coconut shells, sugarcane

bagasse, or banana peelings, and are used like

charcoal or firewood. Carbonizing organic by-

products before producing the briquettes enhances

5 Njenga M., et al. “Implications of charcoal briquette produced by local communities on livelihoods and environment in Nairobi, Kenya.” International Journal of Renewable Energy Development (IJRED). 2 (1) 19-29, 2013. Available online.

the quality of briquettes intended for cooking in

houses.

By using these organic fuel briquettes, households

reduce their expenditures on cooking energy, women

and youth gain employment opportunities and

generate income from the sale of briquettes, and trees

are saved. In Nairobi’s Kibera area—the largest slum

in Africa—70% of households within a radius of 250

meters from a briquette production site use fuel

briquettes for cooking and those who produce them

save 70% of income spent on cooking energy while

those who bought them save 30%.5 In war-torn

Mogadishu, Somalia, disabled women are also able to

generate income from the sale of briquettes. When

briquettes are used for drying tea, for example, there

is a reduction in energy costs, boosting profits to

farmers.

Efficient cook stoves

http://www.ijred.com/index.php/ijred/article/view/88/pdf. ISSN 2252-4940

Photo courtesy of ICRAF

https://www.youtube.com/watch?v=8k90l5mVvfQ

https://www.youtube.com/watch?v=8k90l5mVvfQ

http://www.ijred.com/index.php/ijred/article/view/88/pdf


One of the more novel innovations that could reduce

the burden of sourcing firewood, reduce spending on

cooking fuel, save trees, and improve kitchen air

quality is a domestic gasifier. Fuel in gasifiers burns in

four stages: drying, pyrolyzation (carbonization);

gasification; combustion. The gasifier produces

charcoal during cooking that, if harvested, can be used

for further cooking or as biochar for soil amendment.

The gaseous fuel burns more cleanly than solid fuels

like firewood. Some of the improved cook stoves made

from clay have an open space with a door under the

cooking pots that keeps chicken warm. The next step

in developing the gasifier cook stove is to meet social

needs such as heating space and allowing people to sit

around the fire, which promotes social cohesion.6

Conclusions

Efforts to alleviate poverty and to empower women

could be accelerated by scaling up best practices in

agroforestry and organic waste recycling for energy

and by continuing to develop efficient cook stoves.

Further research is required to understand the social,

economic and environmental factors influencing the

adoption of innovations in these communities, and

how to adapt solutions according to local need.

Agroforestry can make a difference in alleviating

energy poverty while sustaining social and ecological

systems, while also contributing to the empowerment

of women.

Dr. Mary Njenga is a post-doctoral fellow on

bioenergy at the World Agroforestry Centre

(ICRAF) based in Nairobi, Kenya. She is a member

of the Board of Directors of Women Organizing for

Change in Agriculture and Natural Resource

Management (WOCAN). Mary is also a visiting

lecturer at Wangari Maathai Institute for Peace and

Environmental Studies, University of Nairobi,

researching and training on the bioenergy-

environment-gender nexus. Mary has over 15 years’

experience in research and development on urban

agriculture, community-based natural resource

management, environment, bioenergy and gender.

6 Njenga, M., et al., Keeping healthy and saving trees: “Cooking with a gasifier saves fuel and time, reduces smoke and produces charcoal for other uses.” Miti, The Tree Business Magazine for Africa. Issue No.26 April-June 2015, 37-39.


Sustainable Standout

PanAfrican Investment Co: Collaboration in Action in sub-Saharan Africa

By Dana Reed, Chief Executive Officer, PanAfrican Investment Co., LLC

PanAfrican Investment Company was founded in

2012 by Ronald Lauder and Richard Parsons with the

mission of investing in businesses that provide strong

financial and social returns. Below, some of our high-

level thoughts and lessons learned.

African economies are grabbing headlines and

overtaking the BRIC countries as the hottest emerging

investment markets.

As Brazil, Russia, India and China grow into more

mature states, frontier investors are setting their

sights on the exciting opportunities Africa has to offer.

Since our inception three years ago we’ve strictly

invested in Africa, and we are seeing deals and capital

inflows abound. Our mission statement has been

prescient: “As PIC invests, Africa profits.” And we are

indeed profiting — in more ways than one.

Our firm, PanAfrican Investment Co. (PIC), was born

of the idea that capital put to good use in African

nations will produce good returns. Good returns for

us aren’t just financial, they are social, too.

We believe this is an important tenet of our

investment policy because in an emerging

marketplace such as sub-Saharan Africa, issues

traditionally considered “externalities,” such as

healthcare, education, access to food, corruption, and

human rights issues, aren’t really externalities — they

are intrinsic business issues tethered to productivity

and profits. Our founders, Ronald Lauder and

Richard Parsons, saw this tethering when they began

researching the potential to invest in Rwanda years

ago. That research gelled into our first formal fund

under PIC’s umbrella.

Why the Need for SRI in Africa?

As mentioned above, progress in “externalities” go

part and parcel with business progress. Without

healthcare, there is no labor force. Without education,

there are no business leaders. Without sustainable

agriculture, there is no proper diet to be had and

productivity wanes. Without corporate governance

and fair labor, corruption emerges. And human rights

abuses vanquish hopes and dreams for all. All of these

factors need to be considered when investing in

emerging economies like sub-Saharan Africa. In

addressing these issues with collaborative capital,

investment opportunities with attractive market rate

returns (or above) present themselves.

Opportunities & Lessons Learned

To be sure, investing in Africa is rife with challenges

and obstacles to go along with its opportunities. At the

micro level, infrastructure can be poor and business

management, accounting, and financial reporting

often must be honed to be in sync with US standards. We actually see this as an opportunity: The more

time we spend with our portfolio companies

standardizing their corporate reporting and

procedures, the more

©Bardocz Peter/Shutterstock

http://www.shutterstock.com/gallery-1608659p1.html


likely it is they will have an easier time raising their

next round of financing, allowing us to realize the

value we’ve helped to create.

At the macro level, conversations about investor fears

often involve words like corruption and geopolitical

risk. PIC factors in these concerns into its broader

approach to investing. We won’t, for example, be

involved in a large, politically tied and historically

contentious extractive industry like mining. In our

experience, the SMEs and the regions we target

(relatively politically stable, e.g. Kenya, Rwanda) are

generally under the radar of the words that scare away

investors. And where there is fear, there is

opportunity.

Further, many preconceived notions about investing

in Africa are simply without merit — for example, deal

flow. Some observers believe it is difficult to find and

attract solid investment opportunities. We find the

opposite to be true: our pipeline has continued to

grow with ever more attractive deals. The continent

abounds in entrepreneurs who need capital to fund

their SMEs. Due diligence, too, is often thought to be

challenging given the geographic reality that many

businesses operate in remote areas, or places lacking

basic phone or Internet service. Again, we have not

found this to be true. While our team has had to work

harder to conduct due diligence because of these

challenges, the rewards of evaluating a business from

the ground up have been worth it.

That said, we have learned that having a permanent

presence on the ground provides intangible and

tangible benefits to the investment process. It is

important to spend the time and resources on the

ground to figure out who’s doing what and where. To

that end, PIC will open an office in East Africa in early

2016. Having a footprint on the ground helps ideas

spawn, facilitates introductions and partnerships,

allows for ongoing monitoring of existing

investments, and speeds up the due diligence process.

Paths to Success: Hands-On Management

Our focus on management, operations, and

networking continues to be critical to our success. As

private investors, we seek passionate social

entrepreneurs with innovative products, designs,

and/or services. We are active shareholders who get

involved in every aspect of the businesses our

entrepreneurs run — from serving as human

resources to help build the right management team,

to sitting alongside the entrepreneurs to build their

financial and operating models, to helping to market

their products or services. PIC does anything it takes

to partner with these entrepreneurs in order to create

shareholder value alongside socially responsible

business practices.

Take for example, Mobius Motors, founded by award-

winning entrepreneur Joel Jackson. Mobius designs,

manufactures and sells durable, affordable vehicles

that are specifically made for Africa's terrain. PIC led

the Series A round for the company and obtained a

board seat. Mobius stands to employ more than

1,000 Kenyans for production work and to create

another 2,000 jobs for servicing and parts.

The impact goes further than job creation. Being on

the ground as often as we are allows us to see beyond

the headlines. For instance, while we read about all of

the large infrastructure projects being done, we know

that once outside of the big cities there are dirt roads

that make it difficult to maneuver on a sunny day

with the four-door imported cars being driven today

— not to mention navigating these roads when it

rains. Beyond job growth, this company is mobilizing

people that need to get to the market or elsewhere for

their livelihood by locally manufacturing cars

designed specifically for Africa’s terrain. PIC’s capital

allowed the company to produce its first 50 cars, of

which 37 have already been sold.

We view ourselves as partners with the entrepreneurs

in whom we invest. With Joel, we have lent our

Rolodex to help facilitate introductions to licensing

regulators and banks in an effort to provide financing

for these cars. We are actively helping to prepare the

company for its upcoming Series B financing, and are

also making several introductions to potential new

investors.

Or take biNu, a small company operating throughout

Africa that has developed what we believe is a big


piece of technology. biNu can turn regular/feature

mobile phones into “smart” phones, allowing news,

books or even fun apps like Facebook to be

downloaded.

While services and infrastructure may be scant in

many developing African countries, mobile phones

are not. Connecting people to the outside world and in

turn to information was a great goal and a powerful

proposition for us. As a further layer, we were able to

introduce biNu to African Ministers of Education and

Technology, all of whom are in need of more books in

classrooms, and face the cost-prohibitive challenge of

getting deadwood books into classrooms. biNu

provides an alternative via handheld devices.

We believe education is critically important to the

growth and investment thesis of emerging economies.

To that end we have invested in Bridge International

Academies, a low-cost private school operator in

Kenya, set to expand its operations further into East

Africa and soon to enter West Africa. Bridge is

receiving a great amount of press lately due to the

recent $10 million investment by Facebook’s Mark

Zuckerberg, and management reports that it expects

to go public in 2017.

Paths of success like these are what we seek and

celebrate. Connecting the dots for us isn’t just about

portfolio management logistics, it’s about cross-

marketing products and contacts to help people and

create new possibilities. Mostly we look to invest in

SMEs that stand to create job growth throughout the

healthcare, education, manufacturing and technology

sectors, but we are always broadening our horizons.

We have to do so. Africa is diverse, dynamic and big.

There is a plethora of investment opportunities.

Success will take more than money and investments,

however. It has to be linked to positive social change.

We’re seeing both, and Africa is prospering and our

portfolio is prospering. That’s increasingly headline-

worthy news. As PIC invests, Africa profits.

Dana Reed is the Chief Executive Officer of

PanAfrican Investment Co. LLC, a private

investment firm founded by Ronald Lauder and Richard Parsons that catalyzes positive social

impact across sectors in sub-Saharan Africa while

seeking target returns of 25-30%. PIC is based in

New York.



Integrated Thinking in South Africa

By Leigh Roberts, Chairman of the Working Group of the Integrated Reporting Committee of South Africa

After six years of integrated reporting by listed companies in South Africa, it’s

clear that many of the benefits enjoyed are internal to the company. This is

because the process of preparing integrated reports has helped embed

integrated thinking.

Companies in South Africa cite the “external” benefits of integrated reporting

as improved dialogue with stakeholders, better alignment of external and

internal reports, and an improvement in balanced reporting and

transparency.

Many of the other benefits espoused relate to how the company is managed.

Companies talk about increased awareness of the impact of key resources and

relationships on financial performance and the company’s future, the focused

integration of KPIs relating to the management of key resources and

relationships, the breaking down of internal silos and promotion of sharing

of information, and a broader understanding of the business model and its

components.

These benefits are pretty much what integrated thinking is all about.

The International <IR> Framework1 contains an official definition for

integrated thinking. In essence, integrated thinking is where the key

relationships and resources are considered in the decision-making and

management of the business, with the awareness that financial performance

and business viability are dependent on the good relationships with key

stakeholders and the future availability of the resources relied upon.

In today’s connected world with its complexity of interdependencies and

trade-offs, a company needs broader information to make more informed

decisions. A recent survey of South African executives and non-executive

directors of the biggest listed companies to assess the benefits of integrated

thinking revealed there had been improved decision-making at the board and

management levels as a result of the enhanced information available. Other

benefits were improved governance processes and improved risk

management.2

One of the drivers of integrated thinking within South African companies has

been integrated reporting. When asked the question, companies invariably

say that integrated reporting has helped embed integrated thinking, with

some adding that the impact has been significant. Despite six years of

reporting, though, the companies are at various levels of integrated thinking.

At a recent meeting of top CFOs, one said he is happy with the degree of

1 International <IR> Framework, 2014, International Integrated Reporting Council, www.integratedreporting.org 2 Integrated Thinking: An exploratory survey, 2015, South African Institute of Chartered Accountants, www.integratedreportingsa.org

© NY Studio/Shutterstock

http://www.integratedreporting.org/

http://www.integratedreportingsa.org/


integrated thinking, while another confessed they had only achieved a “fair

degree”.

The mindset and system changes required for integrated thinking can take

time – it is a journey. A prime factor in the speed of the journey is whether or

not there is a champion: a strong and enlightened chairman, a chief executive

who voices integrated thinking as the way he or she runs the business, or a

strategy director who understands the importance of having mutually

beneficial relationships with key stakeholders in this connected world.

Embedding integrated thinking should happen at three levels: the board,

senior management, and staff members. The board sets the holistic strategy

that encompasses the key resources and relationships over the short, medium

and long term; senior management implements the strategy and is measured

and remunerated against it; and staff members are incentivised to carry out

the strategy in the daily operations of the company.

The challenges cited by South African companies in embedding integrated

thinking include overcoming silo mentality, the need to improve the

reliability of non-financial information reporting systems, and inappropriate

KPIs and remuneration which are often set primarily against financial

targets.3 Companies have invested time and resources in getting their non-

financial systems on a par with financial systems, with some setting up cross-

functional teams to enhance integration and eliminate silos.

On the issue of whether a company can prepare an integrated report without

having embedded integrated thinking …. The King Code of Governance for

South Africa (King III), released in 2009, required listed companies to

prepare integrated reports (the principles of King III fell into the Listings

Requirements of the Johannesburg Stock Exchange on an “apply or explain”

basis). For some companies this involved a first-time articulation of the

business model and its components and widened the range of risks.

Importantly, the process got boards involved in setting strategy and direction

– hence achieving the first of the three required levels of integrated thinking.

The South African experience shows that the integrated report can be a

significant catalyst for integrated thinking.

3 Integrated Thinking: An exploratory survey, 2015, South African Institute of Chartered Accountants, www.integratedreportingsa.org

Leigh Roberts, CA(SA),

is Chairman of the

Working Group of the

Integrated Reporting

Committee of South

Africa, the co-author

with Mervyn E. King of

“Integrate: Doing

Business in the 21st

Century (Juta),” and

presenter of the

“Integrated Reporting

Made Simple” series.

http://www.integratedreportingsa.org/

http://www.businessdaytv.co.za/shows/integratedreporting/2014/08/19/integrated-reporting-made-simple-part-1

http://www.businessdaytv.co.za/shows/integratedreporting/2014/08/19/integrated-reporting-made-simple-part-1



Ivory Pirates: Funding Terrorism by Plundering Africa’s Natural

Resources

By Buffy Redsecker, President & Co-Founder, SunLight Time Foundation

When delving into the complex economic evolution

taking place across Africa, one would be remiss to

omit a discussion of the blatant thievery of the

continent’s natural resources, including wildlife.

Wildlife poaching and illegal natural resource

exploitation not only decimate species and

ecosystems, but also drains billions of dollars from

legitimate economies across the African continent.

This destabilizes governments and threatens the rule

of law, which is crucial to financial investment,

economic growth and the societal benefits that come

with security, including education (see below).

Figure 1: The extent of environmental crime compared to the total envelope of official development assistance, and the total value of ecosystems

Estimated environmental crime may exceed the total envelope of Official Development Assistance (the aid of advanced economies to developing countries).

Source: UNEP, Dead Planet, Living Planet (2010) and The Environmental Crime Crisis (2014). 1

1 http://www.unep.org/pdf/RRAecosystems_screen.pdf and http://www.unep.org/unea/docs/RRAcrimecrisis.pdf

From gold in Darfur to mineral mining and

deforestation in Virunga National Park in the

Democratic Republic of Congo (DRC), Africa’s natural

resources are being pillaged at unparalleled rates to

fund terrorist groups across the globe. Elephants,

rhinos, and other wildlife are dying at the hands of

The People’s Liberation Army, in the DRC; Boko

Haram, in Nigeria; and al-Shabaab, the Somali

Islamist group behind the West Gate Mall attack in

Nairobi that killed 68 people. Each of these groups has

been designated a “Foreign Terrorist Organization” by

the US State Department. Each is funded, in large

part, by selling resources stolen from the people of

Africa. Al-Shabaab’s income from illegal ivory sales

alone is estimated at $600,000 per month.

These groups are stealing from the world as well. The

illegal wildlife trade is one of the most lucrative of the

black markets in the world today, after drugs, arms

and human trafficking. Despite its size, it is only a

fraction of the natural resource larceny taking place in

Africa and across our planet. The United Nations

Environment Program estimates the global trade in

illicit flora and fauna to be as much as 23 billion

© Alan Chung

http://www.unep.org/pdf/RRAecosystems_screen.pdf

http://www.unep.org/unea/docs/RRAcrimecrisis.pdf


dollars annually.2 The price of ivory has risen to an

estimated $2,000 per kilogram while the same

amount of rhino horn can sell for up to $90,000,

making it more expensive than cocaine or platinum.3

This lucrative market drives the murder of one

elephant every 15 minutes; 96 elephants are poached

each day. At this rate, the iconic species will be extinct

by 2026.

It is an established fact that elephants, rhinos and

other charismatic mega fauna are worth more alive

than dead (see Figure 2). All citizens share this

communal communal wealth, and many African

nations rely heavily on eco-tourism, which is driven

by the existence and protection of these animals and

their environments. Examples include Rwanda’s

mountain gorilla tourism, as well as safaris in

Botswana, Kenya, Namibia, South Africa and

Tanzania, to name a few. Angola, a country devastated

by a civil war notable for the vast acreage left covered

in land mines, is struggling to build infrastructure to

create its own tourist economy. As the mines are

cleared, elephants are returning to their traditional

territories.

2 http://www.unep.org/unea/docs/RRAcrimecrisis.pdf 3 http://www.scientificamerican.com/article/how-to-stop-the-illegal-wildlife-trade-from-funding-terrorist-groups/ and http://www.washingtonpost.com/apps/g/page/national/the-horn-and-ivory-trade/1163/

We in the West like to point to China as the culprit in

the decimation of elephants and rhinos in Africa, and

while Asia has a seemingly insatiable appetite for

these items; the US plays a large role in this global

trade. From sales on Craigslist to the dark underbelly

of organized crime (see the US vs. Michael Slattery,

EDNY) the US is a source country, a distribution point

and an important transit hub for illegally trafficked

wildlife and wildlife parts. The Endangered Species

Act, its numerous amendments, as well as the US

Department of the Interior’s Director’s Order number

210 has loopholes that are easily exploited.4

The African Wildlife Foundation (AWF), an

organization established by big game hunters, which

has traditionally supported the sustainable harvest of

wildlife as part of their conservation strategy, has

changed their position regarding endangered species.

As expressed by Patrick Bergen, CEO of AWF, “I think

the message we need to send during this time of crisis

is that we have to completely stop all human induced

mortality on endangered species and you can’t send a

mixed message about that. This needs to be a

universal message.”5

4 http://www.fws.gov/international/travel-and-trade/ivory-ban-questions-and-answers.html 5 The author notes that while the African Elephant is not currently listed as endangered on the IUCN’s Red List, there is great fear that this will change fast if the poaching is not stopped. http://www.cites.org/eng/prog/etis/index.php

Figure 2: Is an elephant worth more dead than alive?

Source: “Dead or Alive? Valuing an elephant.” (iworry.org, 2013)

http://www.unep.org/unea/docs/RRAcrimecrisis.pdf

http://www.scientificamerican.com/article/how-to-stop-the-illegal-wildlife-trade-from-funding-terrorist-groups/

http://www.scientificamerican.com/article/how-to-stop-the-illegal-wildlife-trade-from-funding-terrorist-groups/

http://www.washingtonpost.com/apps/g/page/national/the-horn-and-ivory-trade/1163/

http://www.washingtonpost.com/apps/g/page/national/the-horn-and-ivory-trade/1163/

http://www.fws.gov/international/travel-and-trade/ivory-ban-questions-and-answers.html

http://www.fws.gov/international/travel-and-trade/ivory-ban-questions-and-answers.html

http://www.cites.org/eng/prog/etis/index.php


It is time to close the trophy hunting loophole in the

Endangered Species Act. The NRA’s position that gun

handles have traditionally been made of ivory & that

big game hunting is a gun rights issue is not a

defensible position when these animals face

extinction and their decimation is funding terrorism.

There is hope, however. Besides AWF, there are many

organizations working with governments

internationally to stop the poachers, seize contraband,

and stem the demand. WildAid, a US-based NGO, is

working in China and Vietnam to curb demand for

exotic flora and fauna with great success. Their

campaign to stop the consumption of shark fin soup

has resulted in Chinese national legislation that

prohibits government officials from consuming or

purchasing shark fin soup. Demand for shark fin has

dropped up to 70% since the ban in 2013, and up to

82% in certain cities (see Figure 3). Building on their

work in Asia, WildAid is rolling out campaigns in the

US and in Africa about ivory and rhino horn this

year. Stopping (or reducing) the demand for a

product, will reduce the supply.

When we buy ivory, even when it’s sold as “legal,”

“antique,” “fossilized,” “faux,” or “oxbone” (a popular

way around the bots crawling eBay and Etsy to

enforce the bans both companies have implemented

on ivory), we are funding the very terrorists that

threaten the US. That’s a very serious piece of

hypocrisy and we can do better. Capitalism must land

on the side of profit, and the long-term profit in this

dangerous situation will be the survival of these iconic

species, the stabilization of governments and the

elimination of this primary source of revenue for

terrorists.

Figure 3: Why regulation enforcement matters: the

contrast between the shark fin ban in China and

current loopholes in ivory trade restrictions worldwide

Source: WildAid, “Evidence of declines in shark fin demand” (2014) and “Elephant Action League” (2012).6

6 http://www.wildaid.org/news/shark-fin-demand-china-down-report-finds and http://elephantleague.org/project/africas-white-gold-of-jihad-al-shabaab-and-conflict-ivory/

Buffy Redsecker is the President and Co-Founder of

the SunLight Time Foundation. In addition, she is the

director of the SunLight Fund, sits on the board of the

International League of Conservation Photographers

(iLCP) and is an advisory council member for the

African Wildlife Foundation (AWF).

http://www.wildaid.org/news/shark-fin-demand-china-down-report-finds

http://www.wildaid.org/news/shark-fin-demand-china-down-report-finds

http://elephantleague.org/project/africas-white-gold-of-jihad-al-shabaab-and-conflict-ivory/

http://elephantleague.org/project/africas-white-gold-of-jihad-al-shabaab-and-conflict-ivory/


Upcoming Events

Global ESG Calendar

Date/Time Event Location Information

6.25.15 UN General Assembly - GC+15:

Business as a Force for Good

Cornerstone Speaking Event

United Nations

New York, NY

https://www.unglobalcompact.org/NewsA

ndEvents/global_compact_15.html

6.25.15 The Private Debt Investment Summit The Princeton Club

New York, NY

https://www.frallc.com/calendar.aspx

6.29.15-6.30.15 Fifth Annual Responsible Extractives

Summit

Hilton Tower Bridge Hotel

London, UK

http://events.ethicalcorp.com/extractives/

6.29.15-7.1.15 The Green Sports Alliance 2015 Summit McCormick Place West

Chicago, IL

http://greensportssummit.org/

7.9.15-7.12.15 ResourceGeneration’s Transformative

Leadership Institute

Highlander Center

New Market, TN

http://www.resourcegeneration.org

7.12.15 4th Annual Impact Investing Conference

Cornerstone Speaking Event

Sheraton Denver Downtown

Hotel

Denver, CO

http://www.fa-mag/conferences/impact-

investing

7.13.15 2015 Basic Compliance and Ethics

Academy

Marriot Hotel

Singapore

http://www.corporatecompliance.org/acad

emies

7.15.15-7.16.15 New England Capitalism Summit The Nantucket Hotel &

Resort

Nantucket, MA

http://www.impactcapitalismne.com

8.4.15-8.6.15 The 2015 ACEEE Summer Study on

Energy Efficiency in Industry

Hyatt Regency Hotel

Buffalo, NY

http://www.aceee.org

8.8.15-8.13.15 AREDAY Conference – Racing Climate

Change: Green Bridge to China and the

Road to Paris

Westin Aspen Snowmass

Lodge

Aspen, CO

http://www.areday.net

8.14.15-8.16.15 Regenerative Investing Workshop –

Investing for People, Planet & Profit

The Omega Institute

Rhinebeck, NY

http://www.eomega.org/workshops/regen

erative-investing#-workshop-description-

block

8.24.15-8.28.15 Climate Hike—Glacier National Park Glacier National Park

West Glacier, MT

http://www.climateride.org/events

8.25.15-8.27.15 Sustainable Brands – SB15 Rio Windsor Barra Hotel

Rio de Janeiro, Brazil

http://www.events.sustainablebrands.com

/sb15rio/

8.26.15 The Annual Women in Green Forum TreePeople Conference

Center

Coldwater Canyon Park

Los Angeles, CA

http://www.womeningreenforum.com

9.15.15-9.16.15 The Water Expo—Empowering WATER

in the Americas

Miami Airport Convention

Center

Miami, FL

http://www.thewaterexpo.com

http://greensportssummit.org/

http://www.resourcegeneration.org/

http://www.fa-mag/conferences/impact-investing

http://www.fa-mag/conferences/impact-investing

http://www.corporatecompliance.org/academies

http://www.corporatecompliance.org/academies

http://www.impactcapitalismne.com/

http://www.aceee.org/

http://www.areday.net/

http://www.eomega.org/workshops/regenerative-investing#-workshop-description-block



http://www.climateride.org/events

http://www.events.sustainablebrands.com/sb15rio/

http://www.events.sustainablebrands.com/sb15rio/

http://www.womeningreenforum.com/

http://www.thewaterexpo.com/


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Recent Articles from Cornerstone Capital Group

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Forbes: “Superheroes of Capitalism: Part II - The Women” by Erika Karp – January 2012

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Craig Metrick

Director, Manager Due Diligence and Thematic Research

[email protected]

Ariane de Vienne

Managing Director, CCIM

[email protected]

Urs Weber

Senior Portfolio Manager

[email protected]

Michael Geraghty

Global Markets Strategist

[email protected]

Margarita Pirovska, PhD

Policy & Sustainability Analyst

[email protected]

Andy Zheng

Research Associate

[email protected]

Michael Shavel, CFA

Global Thematic Analyst

[email protected]

Sebastian Vanderzeil

Research Analyst

[email protected]

Betsy Emerson

Head of Research Operations

[email protected]

Karen Benezra

Head of Strategic Marketing & Communications

[email protected]

Tanya Khotin

Head of Institutional Business Development

[email protected]

Alice Petrofsky

Executive Director, Institutional Business Development

[email protected]

Mauricio Barbeiro

Head of Latin America Business Development

[email protected]

Juan Lois

Director, Business Development

[email protected]

Matthew Daly

Director, Client Services

[email protected]

Kara McGouran

Assistant to the CEO

[email protected]























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June 2015 Journal of Sustainable Finance & BankingSM€¦ · Cornerstone Journal of Sustainable...

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