Presentation by Geoffrey Mazullo
-
Upload
tbli-conference -
Category
Economy & Finance
-
view
477 -
download
1
description
Transcript of Presentation by Geoffrey Mazullo
1
August 2003
Partners for Financial Stability (PFS) ProgramGeoffrey Mazullo
Directorwww.pfsprogram.org
TBLI Europe 2007November 15 -16, 2007 – Paris, France
Sustainable Investment in Central and Eastern Europe
Emerging Markets WorkshopThursday, November 15, 2007
14:30 – 16:15Salle Eiffel
2
Questions
1) Although the capital and financial markets in Central and Eastern Europe (CEE) are relatively small, per annum GDP growth in most of the CEE economies is greater than in most old EU Member States. What opportunities exist for sustainable investment in energy, infrastructure, manufacturing, organics, real estate, transportation and other sectors?
How do CEE domestic institutional investors approach SRI?
2) What role does CEE play in European and global SRI instruments?
3
Questions
1) Although the capital and financial markets in Central and Eastern Europe (CEE) are relatively small, per annum GDP growth in most of the CEE economies is greater than in most old EU Member States. What opportunities exist for sustainable investment in energy, infrastructure, manufacturing, organics, real estate, transportation and other sectors?
How do CEE domestic institutional investors approach SRI?
2) What role does CEE play in European and global SRI instruments?
4
Real GDP Growth Rates (Source: Eurostat)
2005 2006 2007* 2007^ 2008*
Bulgaria 6.2% 6.1% 6.1% 6.0% 6.2%
Croatia 3.3% 4.8% 4.8% 4.7% 4.5%
Czech Republic 6.4% 6.4% 4.9% 4.9% 4.9%
Estonia 10.2% 11.2% 8.7% 8.5% 8.2%
Hungary 4.1% 3.9% 2.4% 2.5% 2.6%
Latvia 10.6% 11.9% 9.6% 9.0% 7.9%
Lithuania 7.9% 7.7% 7.3% 6.5% 6.3%
Poland 3.6% 6.1% 6.1% 6.0% 5.5%
Romania 4.1% 7.7% 6.7% 6.0% 6.3%
Slovakia 6.0% 8.3% 8.5% 8.4% 6.5%
Slovenia 4.1% 5.7% 4.3% 4.3% 4.0%
Average 6.0% 7.3% 6.3% 6.1% 5.7%
*Estimate Eurostat
^Estimate EBRD
5
Questions
1) Although the capital and financial markets in Central and Eastern Europe (CEE) are relatively small, per annum GDP growth in most of the CEE economies is greater than in most old EU Member States. What opportunities exist for sustainable investment in energy, infrastructure, manufacturing, real estate, organics, transportation and other sectors?
How do CEE domestic institutional investors approach SRI?
2) What role does CEE play in European and global SRI instruments?
6
Investor Relations Online: Survey of the Websites of the Largest Listed Companies in Central and Eastern Europe (CEE)
In 2001, the PFS Program launched a regional survey to analyze the online disclosure practices of listed companies in eight CEE countries: Investor Relations Online: Survey of Websites of the Largest Listed Companies in Eight CEE Countries. The survey analyzes corporate governance and investor relations information available online on the websites of the largest listed companies (by market capitalization). Since summer 2001, the survey has been conducted semi-annually. Since 2004, each edition of the survey includes a comparison with another peer group; we have compared the largest listed companies in 11 CEE countries with peers in Greece and Turkey (2004); Portugal and Spain (2005); and BRIC and Ukraine (2006 and 2007).
The 13th edition was published on September 4, 2007.
7
Excerpt from Database – August 15, 2007
8
Improved Disclosure – Company Websites
70%
80%
90%
100%
Augu
st- 2007
Febru
ary-
2007
Augu
st- 2006
Febru
ary-
2006
Augu
st- 2005
Febru
ary-
2005
Augu
st- 2004
Febru
ary-
2004
Augu
st- 2003
Febru
ary-
2003
Augu
st- 2002
Febru
ary-
2002
Augu
st- 2001
CEE - 11 (inc. Bulgaria, Croatia, Romania)CEE - 8 (CZ, EE, HU, LT, LV, PL, SI, SK)
Local LanguageWebsite
EnglishLanguageWebsite
9
Survey of Reporting on Corporate Social Responsibility (CSR) by the Largest Listed Companies in Central and Eastern Europe (CEE)
In 2003, the PFS Program launched a second regional survey: Survey of Reporting on Corporate Social Responsibility (CSR) by the Largest Listed Companies in Eight CEE Countries. This survey analyzes companies’ disclosures in English (in the English-language annual report and on the English-language company website) on the following three topics: corporate governance, environmental policy and social policy. Since summer 2003, this survey has also been conducted semi-annually. Since 2004, each edition of the survey includes a comparison with another peer group; we have compared the largest listed companies in 11 CEE countries with peers in Greece and Turkey (2004); Portugal and Spain (2005); and BRIC and Ukraine (2006 and 2007).
The ninth edition of the survey was published on October 9, 2007.
10
Excerpt from Database – September 15, 2007COMPANY : Tallinna Vesi
Website: www.tallinnavesi.ee
Industry Specification: Water supply and wastewater services
Financial Statements prepared in accordance with: IFRS ("Annual Report 2006", page 47).
Primary Countries of Operation: Estonia
Does the company have a stand alone English-language ESG report?
Yes. "Environmental Report 2006". See: http://www.tallinnavesi.ee/files/TV_environmental_report%2004_07(5).pdf
Standards used for ESG report European eco Management and auditing system (EMAS), ISO 9001, ISO 14001.
Year of publication of ESG report 2006
Does the ESG report include an assurance statement? Yes. Assured by DNV Certification Oy/Ab. (see page 63).
Source: Annual Report 2006 Website
Corporate Governance and Reporting
Does the company disclose details on its corporate governance structure?
Yes. See: "Annual Report 2006", pages 70 -
73.
Yes. See: http://www.tallinnavesi.ee/pages.php/02030301, (Investor/Corporate governance/Management board).
http://www.tallinnavesi.ee/pages.php/02030302, (Investor/Corporate governance/Supervisory board). http://www.tallinnavesi.ee/files/Pohikiri%20(ENG)%2006-03-22%20(for%20website).doc, (Investor/Corporate
governance/Articles of Association).
Does the company report on compliance with a Corporate Governance Code?
Yes. See: "Annual Report 2006", pages 66 -
68.
Yes. See: http://www.tallinnavesi.ee/files/Corporate%20Governance.pdf, (Investor/Corporate governance/Corporate governance report).
Does the Company disclose audit relation information?
Yes. See: "Annual Report 2006", page 64, audited by AS Deloitte Audit
Eesti.
Yes. See: http://www.tallinnavesi.ee/pages.php/02030305, (Investor/Corporate governance/Auditor), audited by Deloitte Audit Eesti.
Does the company disclose its policy on shareholder rights? No.Yes. See: http://www.tallinnavesi.ee/files/Pohikiri%20(ENG)%2006-03-22%20(for
%20website).doc, (Investor/Corporate governance/Articles of Association).
Does the company disclose and report on its internal Code of Business Conduct/ Code of Ethics?
No. No.
11
Excerpt from Database – September 15, 2007
0
1
2
3
4
5
6
7
8
9
10
BG CZ EE HR HU LT LV PL RO SI SK
Website
English Language Website - August 2003 English Language Website - April 2004
English Language Website - August 2004 English Language Website - April 2005
English Language Website - September 2005 English Language Website - April 2006
English Language Website - September 2006 English Language Website - April 2007
English Language Website - September 2007
12
Excerpt from Database – September 15, 2007
0
1
2
3
4
5
6
7
8
9
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report
English Language Annual Report 2002 English Language Annual Report 2002/2003English Language Annual Report 2003/04 English Language Annual Report 2004 - April 2005
English Language Annual Report 2004 - September 2005 English Language Annual Report 2005 - April 2006English Language Annual Report 2005 - September 2006 English Language Annual Report 2006 - April 2007English Language Annual Report 2006 - September 2007
13
In addition to conducting its regional surveys, the PFS Program provides PFS Program grants to research institutions in CEE countries to co-finances country surveys that analyze a greater universe of companies and use a more detailed questionnaire.
Between 2002 and 2004, country surveys IR Online and Reporting on CSR were conducted in Czech Republic, Hungary and Poland.
In early March 2007 the Zagreb School of Economics and Management (ZSEM) published third annual editions of two Croatian surveys: IR Online and Reporting on CSR.
On September 20, 2007 Economics Policy Institute (EPI), Sofia, Bulgaria published inaugural Bulgarian surveys.
Program Country Surveys
Co-financed by PFS Program Grants
14
Impact – Improved Disclosure - ESG Reports
BG
CZ
EE
HR
HU
LT
LV
PL RO SI
SK0
1
2
3
4
5
Companies with stand alone English-language ESG report
Companies with a standalone English-languageESG report - September2006Companies with a standalone English-languageESG report -April 2007
Companies with a standalone English-languageESG report - September2007
15
Environmental Policy
1. Does the company state whether it complies with industry-specific, national and/or international regulations regarding environmental standards?
2. Does the company disclose the names of individuals (management and/or board members) or the department responsible for environmental management and compliance?
3. Does the Company report on energy and water use?
4. Does the company report on its environmental performance, including efficient use of resources, emissions and waste?
5. Does the company integrate environmental aspects into its supply chain management policy?
16
Does the company state whether it complies with industry-specific, national and/or international
regulations regarding environmental standards?
0
2
4
6
8
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report Website
Excerpt from Database – September 15, 2007
17
Does the company disclose the names of individuals (management and/or board members) or the department responsible for environmental
management and compliance?
0
2
4
6
8
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report Website
Excerpt from Database – September 15, 2007
18
0
2
4
6
8
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report Website
Does the Company report on energy and water use?
Excerpt from Database – September 15, 2007
19
Does the company report on its environmental performance, including efficient use of resources,
emissions and waste?
0
2
4
6
8
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report Website
Excerpt from Database – September 15, 2007
20
Does the company integrate environmental aspects into its supply chain management policy?
0
2
4
6
8
10
BG CZ EE HR HU LT LV PL RO SI SK
Annual Report Website
Excerpt from Database – September 15, 2007
21
Opportunities - Energy
BiofuelsProductionTechnology
Emissions Trading
Energy EfficiencyConsultingTechnology
Hydro
WindSpain claims it is now the second-largest producer of wind
energy in Europe. What is the potential in CEE?
22
Opportunities - Infrastructure
Airports
Internet
Railways and Roads
23
Opportunities - Manufacturing
ISO Certification
Logistics
Supply Chain ManagementConsultingSoftware
24
Opportunities – Organics
Agriculture
Cooperatives
Fair TradeRetail
ISO Certification
25
Opportunities – Real Estate
Energy Efficiency
Green Building
26
Opportunities – Transportation
Air
Railways and Roads
Shipping
27
Opportunities – Other
28
Questions
1) Although the capital and financial markets in Central and Eastern Europe (CEE) are relatively small, per annum GDP growth in most of the CEE economies is greater than in most old EU Member States. What opportunities exist for sustainable investment in energy, infrastructure, manufacturing, organics, real estate, transportation and other sectors?
How do CEE domestic institutional investors approach SRI?
2) What role does CEE play in European and global SRI instruments?
29
CEE Domestic Institutional Investors and SRI
Substantial progress has been made; infrastructure is in place
Corporate governance codes in placeGrowth in ESG reportingPension reform; private pension funds are significant owners
Yet progress remains to be made in many areasProblem with the S in SRI - SocialCost – benefit analysisSize of local markets a barrier to creation of SRI index
Corporate Governance Codes in CEECountry Stock Exchange Corporate Governance Code Publication Initial Version
BulgariaBulgarian Stock
Exchange-SofiaBulgarian National Code For CorporateGovernance 2007
Croatia Zagreb Stock Exchange Code of Corporate Governance 2007
CzechRepublic Prague Stock Exchange
Estonia Tallinn Stock Exchange
Corporate Governance Recommendations of
the Tallinn Stock Exchange 2004
Hungary Budapest Stock Exchange Corporate Governance Recommendations 2004
Latvia Riga Stock Exchange
Corporate Governance Principles and Recommendations on Their Implementation 2005
Lithuania Vilnius Stock Exchange Corporate Governance Code 2004
Poland Warsaw Stock Exchange Best practices in Public Companies 2005 2002
SlovakiaBratislava Stock
Exchange Unified Code of Corporate Governance 13 April 2003
Slovenia Ljubljana Stock Exchange Corporate Governance Code 5 February
200718 March
2004
RomaniaBucharest Stock
Exchange
31
UNDP: lack of civil trust blocks CSR developmentWarsaw, Oct. 15: Lack of civil trust in Poland blocks the development of Corporate Social Responsibility (CSR), according to an UNDP report presented on Monday. According to results of an UNDP study carried out in Poland, only half of the polled firms operating in this country have clearly defined strategies of Corporate Social Responsibility. Corporate Social Responsibility means that in all aspects of operations business is taking into account maximum profit, interests of society, environment protection and satisfaction of customers. According to the report firms in Poland are rarely forced to operate applying CSR, and 20 percent do not conduct any dialogue with employers, customers and social environment. CSR concept is still a novelty for Polish business, PAP was told by president of the Responsible Business Forum. The survey covered a sample of 40 firms employing from five to 250 people.
32
Questions
1) Although the capital and financial markets in Central and Eastern Europe (CEE) are relatively small, per annum GDP growth in most of the CEE economies is greater than in most old EU Member States. What opportunities exist for sustainable investment in energy, infrastructure, manufacturing, organics, real estate, transportation and other sectors?
How do CEE domestic institutional investors approach SRI?
2) What role does CEE play in European and global SRI instruments?
33
What role does CEE play
in European and global SRI instruments?
Unfortunately little if any at this timeLack of awareness about huge improvements in corporate
governance and ESG reporting made in CEESeveral corporate governance codes pre-date codes in old EU
member states(Perceived) lack of engagement of EU institutional investors
on SRI/RI issues in CEE Size of local markets and size of individual companies a
barrier to inclusion in global instruments
However, change is afootIncreased focus on energy and environmental sectors in CEE
34
www.pfsprogram.org