The Cornerstone January 2016 Journal of Sustainable...

The Cornerstone

Journal of Sustainable Finance and BankingSM

January 2016 Volume III Issue 1

“Order & Chaos”

Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty … p. 13

Japan’s Corporate Governance Reform: Powerful Driver of Earnings Growth Michael Geraghty… p. 14

Global Sector Research Are YieldCos Looking After Their Investors? Sebastian Vanderzeil, Michael Shavel … p. 15

“Legitimacy” in the Banking Sector Michael Shavel, with Robert D. Lamb, PhD, & Diane Glossman, CFA, Cornerstone Capital Group Global Advisory Council … p. 16

Regional Imperatives Managing Chaos: Legitimacy and Institutional Revision in Argentina Delfina Lopez Freijido, Miguel Ferreyra de Bone, Acrux Partners … p. 24

Reimagining the Private Sector Role Post-Conflict and in Anti-Terrorism Andrew MacLeod, Kings College London … p. 26 Enhanced Analytics Ordering the Unknown Katherine Collins, Honeybee Capital … p. 29

Accelerating Impact Health as a Business Tool Shahnaz Radjy, The Vitality Group, Daniel Malan, University of Stellenbosch Business School … p. 31

Food, Farms and Forests: The Chaos of Fear and High Expectations Julie Lerner, PanXchange … p. 33

Philanthropy, Markets and Transparency Bradford K. Smith, The Foundation Center … p. 36

Sustainable Editorial A Call for Chaos Steven Nelson, The Calhoun School … p. 39

Ordered Chaos in Learning Babur Habib, Entrepreneur … p. 41

Understanding Natural Order and Environmental Chaos via Photography Alexandra Garcia, Int’l League of Conservation Photographers … p. 43

©Lightspring/Shutterstock

CEO’s Letter on Sustainable Finance & Banking

This month in the “Cornerstone Journal of Sustainable Finance & Banking” (JSFB), we ponder the complexity and volatility which has led to an extraordinarily challenging start to 2016. It’s been a season of extremes. Over just a few weeks, global investors have weathered China macro concerns, a commodities price rout buffeting the entire emerging markets complex, a theatrical US Presidential political scene, and a summer-like early winter in the northeastern US which suddenly gave way to bitter-cold and blizzard conditions. Further, the markets are digesting the trajectory of US monetary policy normalization, turmoil in corporate bond markets, and a shifting geopolitical landscape that includes the immediate imperatives of fighting ISIS and the ongoing work to mitigate and adapt to climate change.

In considering the breadth and magnitude of such challenges, we applaud efforts to bring humanity back to the fight for progress. The unusual diplomatic outreach by India’s Modi to Pakistan's Sharif shows that creativity and resolve can work to trump fear. True leadership can fight the status quo. And order can come from chaos.

But such change doesn’t come quickly. So global investors with the insight and resolve to take the long-term view and to selectively, consistently, and methodically put money to work to craft effective investment strategies and portfolios that advance real progress can take look to the pragmatism of Henry Kissinger, who has said that “Order must be cultivated; it cannot be imposed.”

This juxtaposition of Order and Chaos is the theme for this edition of the JSFB. To drive a transformation towards inclusive and regenerative global growth, the capital markets must harness pure creative energy. This is the subject Katherine Collins of Honeybee Capital addresses in an “Enhanced Analytics” article about the aspiration to capture the “unknown unknowns” in our modeling of potential future exogenous shocks to business … by way of artist M.C. Escher: “We adore chaos because we love to produce order.”

This desire to produce order is perhaps most tangible in our approach to overarching geopolitical challenges. In our Regional Imperatives section, we offer the example of Argentina’s efforts to restore an orderly business environment that encourages investment and economic progress without sacrificing stability for all constituents of the economy. This timely piece by Acrux Partners is complemented by a cogent argument presented by Cornerstone Board member Andrew MacLeod to prioritize economic restructuring in the war on terror both post-crisis and in developed countries.

In the more tactical management arena, “Accelerating Impact” contributors Shahnaz Radjy of The Vitality Group and Daniel Malan of University of Stellenbosch recognize that a holistic consideration of human capital as a part of the ‘order of business’ results in better outcomes. Jill

Erika Karp Founder & Chief Executive Officer Cornerstone Capital Inc.

2 / Cornerstone Journal of Sustainable Finance & BankingSM / January 2016

Lerner, CEO of PanXchange, explains that sometimes, establishing order requires tremendous patience and a willingness to accept and value small advancements equally to big wins. And as laid out by Foundation Center’s Bradford K. Smith, the battle for order and common sense in applying all development resources, including philanthropy, requires transparency to optimize efficiency and efficacy.

Lastly, in an ironic reflection of current volatility in both the global markets and the local weather, we hear from important voices in our “Sustainable Editorial” section flipping the concepts of order and chaos. Both Steven Nelson of The Calhoun School and Babur Habib, an entrepreneur focused on K-12 learning, argue in favor of deconstructing our current approach to education in favor of more self-directed and, arguably, more successful outcomes. Alexandra Garcia of the International League of Conservation Photographers highlights the critical role of imagery, rather than words, in furthering our understanding of our natural world’s critical value in supporting human life … and order.

My sincere regards, Erika

Erika Karp Founder and Chief Executive Officer

January 2016 / Cornerstone Journal of Sustainable Finance & BankingSM / 3

Table of Contents CEO’s Letter on Sustainable Finance & Banking 2

Market Summary Overview 5

Market & Global Sector Performance, Monetary Policy & ESG Data 6

Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty, Global Markets Strategist

Cornerstone Capital Group 13

Japan’s Corporate Governance Reform: Powerful Driver of Earnings Growth

Michael Geraghty, Global Markets Strategist Cornerstone Capital Group

14

Global Sector Research Are YieldCos Looking After Their Investors? Sebastian Vanderzeil, Research Analyst

Michael Shavel, Global Thematic Analyst Andy Zheng, Research Associate Cornerstone Capital Group

15

“Legitimacy” in the Banking Sector Michael Shavel, Global Thematic Analyst Cornerstone Capital Group Robert D. Lamb, PhD, Diane Glossman, CFA, Cornerstone Capital Group Global Advisory Council

16

Regional Imperatives

Managing Chaos: Legitimacy and Institutional Revision in Argentina

Delfina Lopez Freijido, Co-founder & Associate Director Miguel Ferreyra de Bone, Advisor, Acrux Partners

24

Reimagining the Private Sector Role Post-Conflict and in Anti-Terrorism

Andrew MacLeod, Visiting Professor Kings College London

26

Enhanced Analytics

Ordering the Unknown Katherine Collins, Founder & CEO, Honeybee Capital 29

Accelerating Impact Health as a Business Tool Shahnaz Radjy, Senior Communications Specialist

The Vitality Group Daniel Malan, Director of the Centre for Corporate Governance in Africa, University of Stellenbosch Business School

31

Food, Farms, Forests: The Chaos of Fear and High Expectations Julie Lerner, Founder & CEO, PanXchange 33

Philanthropy, Markets and Transparency Bradford K. Smith, President, The Foundation Center 36

Sustainable Editorial

A Call for Chaos 39

Ordered Chaos in Learning 41

Understanding Natural Order and Environmental Chaos Via Photography

Steven Nelson, Head of School, The Calhoun School

Babur Habib, Entrepreneur

Alexandra Garcia, Executive Director, International

League of Conservation Photographers 43

Upcoming Events: Global ESG Calendar 45 Cornerstone Capital Group Team 49

JSFB Subscription Form 46 Important Disclosures 52


Market Summary

Overview We’re off and running in 2016, though the New Year has been challenging for investors in risk assets thus far. Stocks registered their worst performance ever for the first two weeks of the year, and the sell-off has shaken investor confidence. Uncertainty around global growth, especially in China, and a collapse in oil prices are the primary drivers of market volatility. There is also concern about the potential damaging effects of deflationary forces on corporate profits, particularly banks with exposure to commodity markets. With earnings season underway, investors are monitoring company-specific and macro developments to assess whether the gyrations in the markets present a buying opportunity or signal trouble ahead.

Over the last month, US equities lost 7.5% on the back of mixed economic data. The NAHB Housing Market Index registered 60 in January, unchanged from December, indicating moderate growth. Negatively impacted by the strong dollar and low commodity prices, the ISM Manufacturing Index reading fell from 48.6 to 48.2, marking the second consecutive month of contraction in the manufacturing sector. Retail sales fell 0.1% in December, while November sales growth was revised higher, from 0.2% to 0.4%. Overall, retail sales in 2015 were up just 2.1%, the weakest year of growth since 2009. On the jobs front, the Labor Department’s December release reported that the economy added 292,000 positions, beating the consensus estimate of 200,000 jobs, while net total employment gains in the prior two months were revised 50,000 higher. Meanwhile, the unemployment rate remained unchanged at 5% and average hourly earnings were essentially flat.

The eurozone economy continues to struggle to gain momentum, despite the new round of easing measures announced in December. Triggered by uncertainty in China, worries about global growth and sliding oil prices, all main indices in Europe fell 10% or more before partially retracing losses over the last month. In response to the market turbulence and sustained low inflation, Mario Draghi signaled on Jan 21 that the European Central Bank may step up its stimulus program as early as March. Meanwhile, Germany’s Ifo Business Climate Index fell to 107.3 in January from

108.6 in December, reflecting weakened sentiment among German businesses.

Elsewhere in developed markets, Japan’s exports fell 8% in December from a year ago, marking the third consecutive month of declines and the biggest drop since September 2012. Disappointing export numbers are largely attributed to weaker demand from China, Japan’s biggest trading partner. The data points to a possible contraction of Japan’s export-reliant economy in the fourth quarter, which may pressure the Bank of Japan to react at its next monetary policy meeting at the end of January.

In emerging markets, China’s Shanghai Composite Index lost 20% in the past month, erasing all of the gains made since last August’s sell-off. Government intervention, including temporarily implementing “circuit breaks” and enlisting a “national team” of institutional investors to buy shares, failed to support stock prices. To curb capital outflow, the PBOC intervened in the offshore currency market by imposing a reserve requirement for offshore renminbi. Furthermore, China reported GDP growth of 6.9% in 2015, the slowest rate in 25 years, and many suspect the actual figure is lower. Along with a collapse in oil prices, the Russian rouble fell to a record low of 85 per USD. Russia’s GDP reportedly shrank 3.7% in 2015, and the IMF expects 2016 to be another year of contraction. The IMF also sharply downgraded its economic outlook for Brazil, forecasting a 3.5% contraction this year. The country is suffering from low commodity prices, high debt and inflation levels, and political instability.

On a one-month trailing basis, the MSCI World Index (a developed market proxy) outperformed the MSCI Emerging Markets Index by approximately 3.5%, while large-cap equities outperformed their small-cap counterparts by 3.5%. From a sector perspective, defensives outperformed cyclicals. In the MSCI ACWI (broad index for both developed and emerging equities), utilities, telecommunication and consumer staples outperformed, while financials, materials and industrials lagged.

Andy Zheng contributed to this article


Market Summary Market and Global Sector Performance

MARKET / INDEX PERFORMANCE

As of 01/25/2016 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B Div. Yield

US Equity Indices

DJIA -8.6 -8.6 -7.9 14.3 2.7 2.9

S&P 500 -7.8 -8.1 -7.1 15.6 2.4 2.4

Nasdaq -9.4 -8.8 -8.6 18.9 3.1 1.3

Russell 2000 -12.1 -12.7 -10.7 21.3 1.6 1.8

MSCI KLD 400 Social -7.5 -7.9 -6.9 16.9 3.0 2.4

Developed International Indices

Euro STOXX 50 -8.7 -12.2 -8.2 12.8 1.3 4.2

in USD -9.9 -13.8 -8.4

FTSE 100 -6.2 -8.4 -6.0 14.7 1.6 4.6

in USD -10.3 -14.8 -9.0

CAC 40 -7.7 -12.3 -7.2 13.5 1.3 4.0

in USD -8.7 -13.8 -7.4

DAX -9.5 -10.0 -9.6 11.9 1.4 3.4

in USD -9.9 -11.6 -10.2

Nikkei 225 -8.7 -9.0 -10.1 16.6 1.5 1.9

in USD -7.3 -7.0 -8.4

ASX 200 -3.7 -5.3 -5.5 15.6 1.7 5.1

in USD -7.4 -8.2 -9.4

Emerging Market Indices

IBOVESPA -13.6 -20.1 -12.3 9.6 0.9 5.4

in USD -16.8 -24.2 -15.6

Shanghai Comp -19.0 -13.9 -17.0 11.9 1.4 2.4

in USD -20.4 -16.9 -18.2

KOSPI -4.8 -7.2 -3.5 10.7 0.9 1.8

in USD -7.0 -11.8 -5.0

SENSEX -5.2 -10.8 -6.2 17.0 2.5 1.7

in USD -7.6 -14.4 -8.5

Bovespa Corp. Sustainability -11.4 -19.1 -10.0 10.7 1.3 4.3

in USD -14.7 -23.2 -13.5


As of 01/25/2016 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B

Global Market Indices

MSCI World -8.1 -9.5 -7.5 15.1 1.9

MSCI All-Country World -8.9 -11.8 -8.1 12.7 1.3

MSCI EAFE -8.8 -11.4 -8.6 14.1 1.4

MSCI Emerging Markets -11.6 -18.0 -10.5 10.7 1.2

DJ Sustainability World Comp -9.3 -11.6 -8.6 13.7 1.6

FTSE4Good Global -8.2 -10.3 -7.7 14.1 1.7

Fixed Income

Barclays US Aggregate 0.8 -0.1 0.9

Commodities Levels

1/25/2016 7/27/2015 1/26/2015

WTI Crude 31.0 51.6 55.1

ICE Brent Crude 31.2 57.6 59.1

NYMEX Natural Gas 2.1 3.2 3.5

Spot Gold 1107 1094 1281

LME 3mth Copper 4443 5361 5665

CBOT Corn 369 413 426

ICE ECX Emission 6.0 8.1 7.0

Currencies Levels

1/25/2016 7/27/2015 1/26/2015

EUR/USD 1.1 1.1 1.1

USD/JPY 118.4 123.3 118.5

GBP/USD 1.4 1.6 1.5

AUD/JPY 82.7 89.6 93.9

DXY Index 99.2 97.2 94.8

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 01/25/2016 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

UtilityTel SvCons StplHealthcareInfo TchCons DiscrMSCI ACWIIndustialsEnergyMaterialFinancals

-15 -10 -5 0 5

UtilityTel SvCons StplHealthcareInfo TchEnergyMSCI ACWICons DiscrIndustialsMaterialFinancals

-15 -10 -5 0 5

Value Blend Growth

Larg

e

-9.1 -7.8 -7.3

Mid -9.5 -9.4 -9.3

Smal

l

-11.7 -12.1 -12.4

Value Blend Growth

Larg

e

-8.2 -7.1 -6.7

Mid -8.6 -8.6 -8.6

Smal

l

-10.2 -10.7 -11.2


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP

As of 01/25/2016

Company name Ticker Industry Mkt Cap (US$ Bn)

Price (Local)

Total Return YTD % (local)

P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E

ESG Disclosure Score

Consumer Disc. Amazon.com AMZN Internet &

Catalog Retail 283.4 604.6 -10.5 111.9 26.4 N/A 16.9

Toyota Motor Corp

7203.JP Automobiles 192.4 6824.0 -8.9 8.8 9.4 3.3 33.5

The Walt Disney Co

DIS Media 158.2 96.4 -8.3 17.1 10.2 1.5 N/A

Home Depot Inc HD Specialty Retail 155.7 122.8 -7.1 23.0 12.8 1.9 27.3

Comcast Corp CMCSA Media 134.1 54.8 -2.4 16.8 7.4 1.8 23.6

Consumer Staples

Nestle NESN.VX Food Products 226.8 72.1 -3.4 21.8 14.5 3.1 55.0

The Procter & Gamble Co

PG Household Products

209.0 76.8 -2.4 20.5 13.3 3.5 46.7

Wal-Mart Stores WMT Food & Staples Retailing

200.5 62.6 2.2 13.7 7.3 3.1 37.8

Anheuser-Busch Inbev

ABI.BB Beverages 195.0 111.9 -2.2 23.9 14.1 3.2 54.1

The Coca-Cola Co

KO Beverages 182.5 42.0 -2.3 21.0 16.9 3.1 33.5

Energy Exxon Mobil XOM Oil, Gas &

Consumable Fuels

313.6 75.3 -3.4 19.6 8.3 3.9 60.2

Petrochina Co 857.HK Oil, Gas & Consumable Fuels

195.4 4.6 -8.7 16.7 6.9 4.2 32.0

Chevron CVX Oil, Gas & Consumable Fuels

155.2 82.5 -8.3 24.4 6.3 5.2 52.3

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

126.1 1373.5 -10.0 12.0 4.3 9.0 58.1

Total Sa FP.FP Oil, Gas & Consumable Fuels

101.8 38.3 -7.3 9.9 4.8 6.4 55.6

Financials Berkshire Hathaway

BRK/B Diversified Financial Services

311.3 126.1 -4.5 18.0 N/A N/A 13.6

Wells Fargo & Co WFC Banks 248.1 48.6 -10.7 11.3 N/A 3.1 17.5

Ind & Comm Bank of China

1398.HK Banks 217.3 4.0 -15.6 4.3 N/A 8.1 32.0

JPMorgan Chase JPM Banks 207.6 56.4 -14.0 9.2 N/A 3.1 42.1

China Construction Bank

939.HK Banks 149.6 4.6 -13.2 4.2 N/A 8.2 31.6


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

As of 01/25/2016


Price (Local)


P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E


Health Care Johnson & Johnson

JNJ Pharmaceuticals 267.5 96.7 -5.9 15.6 10.8 3.1 57.0

Roche Holdings ROG.VX Pharmaceuticals 223.7 263.4 -4.7 18.7 12.5 3.0 50.0

Novartis AG NOVN.VX Pharmaceuticals 217.9 82.5 -5.0 16.1 15.5 3.2 64.0

Pfizer PFE Pharmaceuticals 189.5 30.7 -4.9 14.0 10.0 3.9 42.6

Novo Nordisk NOVOB.DC

Pharmaceuticals 143.3 378.4 -5.4 28.3 18.6 1.3 38.4

Industrials General Electric Co

GE Industrial Conglomerates

266.8 28.3 -9.3 18.8 18.8 3.3 56.2

3M MMM Industrial Conglomerates

85.2 138.4 -8.1 18.0 11.4 3.0 N/A

Boeing BA Aerospace & Defense

83.4 124.5 -13.9 16.8 8.6 3.5 35.1

United Parcel Service

UPS Air Freight & Logistics

79.7 89.5 -7.0 16.9 9.1 3.3 59.9

Siemens SIE.GR Industrial Conglomerates

79.5 83.1 -7.6 12.7 9.4 4.2 53.7

Info Tech Apple AAPL Technology

Hardware, Storage &

558.6 100.7 -4.3 10.6 5.1 2.1 N/A

Google GOOGL Internet Software & Services

505.5 746.0 -4.1 25.7 14.6 N/A 29.8

Microsoft Corp MSFT Software 414.7 51.9 -6.4 18.9 10.9 2.8 35.5

Facebook FB Internet Software & Services

278.8 98.6 -5.8 45.5 24.3 N/A 25.6

Tencent Holdings 700.HK Internet Software & Services

174.2 144.3 -5.4 36.7 26.0 0.2 13.2

Materials BASF BAS.GY Chemicals 61.0 61.3 -13.3 12.3 6.6 4.6 60.3

BHP Billiton Ltd BHP.AU Metals & Mining 53.6 15.3 -14.4 49.9 6.9 15.9 58.7

Saudi Basic Ind. SABIC.AB Chemicals 51.3 64.1 -16.2 12.5 6.3 9.4 32.6

Dow Chemical DOW.US Chemicals 49.3 42.5 -17.4 13.0 7.2 4.3 57.4

Du Pont DD.US Chemicals 47.1 54.1 -18.8 19.6 10.5 2.8 47.9


SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED) As of 01/25/2016


Price (Local)


P/E 2015E

EV/ EBITDA 2015E

Div Yield % 2015E


Telecom China Mobile 941.HK Wireless

Telecommunication Ser

220.1 83.8 -4.3 12.6 4.0 3.5 43.2

AT&T T Diversified Telecommunication

214.4 34.9 2.7 12.9 7.0 5.5 53.5

Verizon VZ Diversified Telecommunication

189.9 46.7 2.2 11.7 6.4 4.8 37.9

Nippon Telegraph

9432.jp Diversified Telecommunication

83.6 4723.0 -2.3 14.8 5.1 2.1 44.6

Vodafone VOD.LN Wireless Telecommunication Ser

82.7 218.2 -1.3 47.4 7.8 5.8 52.7

Utilities National Grid NG/ LN Multi-Utilities 50.3 940.9 0.3 15.6 10.6 5.1 30.6

Duke Energy DUK Electric Utilities 49.4 71.8 0.6 15.7 9.9 4.6 50.2

Nextera Energy NEE.US Electric Utilities 49.0 106.4 2.4 18.8 10.5 2.9 44.5

Iberdrola Sa IBE.SM Electric Utilities 43.4 6.3 -1.6 16.7 8.9 2.5 70.9

Southern Co SO.US Electric Utilities 43.0 47.5 1.5 16.6 10.4 4.6 29.1

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 2015 2016E 2017E 2015 2016E 2017E 2015 2016E 2017E 2015 2016E 2017E United States 2.4 2.4 2.3 0.1 1.6 2.2 0.5 1.3 - 2.3 2.7 - Euro Area 1.5 1.6 1.7 0.0 0.8 1.5 0.1 0.1 - - - - Japan 0.6 1.0 0.6 0.8 0.8 2.0 0.1 0.1 - 0.3 0.6 - UK 2.2 2.2 2.3 0.0 1.0 1.9 0.5 0.9 - 2.0 2.4 - Australia 2.3 2.6 3.0 1.5 2.2 2.5 2.0 1.9 - 2.9 3.1 - China 6.9 6.5 6.3 1.5 1.7 2.0 4.4 4.0 - 3.2 3.1 - Brazil -3.7 -2.8 1.2 9.0 7.4 5.5 14.3 14.7 - - - - **India 7.4 7.4 7.7 6.2 5.0 5.4 6.8 6.5 - 7.6 7.3 -

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

MONETARY POLICY

Jan-16 Jul-15 Jan-15 Monetary Base growth (YoY) -5.3% -0.1% 8.4% M-2 growth (YoY) 6.5% 5.4% 6.1% Money multiplier (M-2/mon base) 3.1 3.0 2.8

3Q15 3Q14 3Q13 Velocity of money (GDP/M-2) 1.5 1.5 1.6

Source: Federal Reserve Bank of St. Louis


KEY ECONOMIC CHARTS

C&I Loan Growth (%) University of Michigan Survey of Consumer Sentiment

Source: Federal Reserve Bank of St. Louis Source: Bloomberg

NFIM Small Business Optimism Index ISM Manufacturing Purchasing Managers Index

Source: Bloomberg Source: Bloomberg

US Treasury Yield Curve US Initial Jobless Claims

Source: Bloomberg Source: Bloomberg

Production Employees Average Hourly Earnings

Source: Federal Reserve Bank of St. Louis

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1975 1980 1985 1990 1995 2000 2005 2010 2015707580859095

100105110

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0.00

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

%

1/25/20167/25/20151/25/2015

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Global Market Strategy

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

No Change in Regional Recommendations. We remain Overweight Japan and North America. In Japan, Consumer Discretionary has the largest weighting; in North America, Information Technology is the largest.

No Change in Sector Recommendations. We remain Overweight three sectors with exposure to global growth: Consumer Discretionary, Information Technology and Financials.

Still Selectively Cyclical. We continue to avoid regions with heavy exposure to commodities, most notably Latin America (Underweight), South Africa and Russia (both ranked Neutral). We remain Neutral on two sectors that are considered defensive — Consumer Staples and Health Care — and we are Underweight Utilities.

Figure 1: Regional Over- and Underweights Figure 2: Sector Over- and Underweights

Source: Cornerstone Capital Group Source: Cornerstone Capital Group

Summary of report originally published January 4, 2016.

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.

©mirexon/Crystal Graphics


Global Market Strategy

Japan’s Corporate Governance Reform: Powerful Driver of Earnings Growth By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group

A Shift in Corporate Priorities. For decades, Japan’s corporations were managed to protect market share, headcount and influence, all at the expense of profits. Today, driven by a shift in corporate priorities, pretax margins are at record highs even as economic growth has been lackluster.

Two Phases of Reform. Even before some recent government initiatives largely aimed at boosting ROEs, a shift in corporate priorities got underway around 2009 and continued until the 2011 earthquake (“Phase 1”). The natural disaster proved to be only a temporary interruption of reforms that resumed in 2012 (“Phase 2”).

The Yen: a Catalyst not a Cause. A key catalyst for reform during Phase 1 was Yen appreciation that undermined the competitiveness of the export sector. In Phase 2, Yen weakness has not been the predominant driver of profitability, as margins of domestic services industries have also surged.

Recent Catalysts for Enhanced Corporate Governance. Separate from steps by corporations to increase margins, the government has recently promoted initiatives that should improve ROEs to the benefit of shareholders.

Japan remains top ranked in our strategy model. Since its introduction in April 2014, the Cornerstone Capital regional strategy model has been Overweight Japan.

Figure 3: Japan’s Corporate Governance Payoff Pretax Profit Margin and Capacity Utilization in Japan

Source: Ministry of Finance, Ministry of Economy, Trade and Industry, Cornerstone Capital Group

©Zloyel/Crystal Graphics

Summary of report originally published December 16, 2015.


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Global Sector Research Are YieldCos Looking After Their Investors? By Sebastian Vanderzeil, Research Analyst, Michael Shavel, Global Thematic Analyst, Andy Zheng, Research Associate, Cornerstone Capital Group

YieldCos allow investors to gain exposure to a growing renewable energy market. Renewable energy is forecast to grow with strong support from global climate change responses and the US Investment Tax Credit. YieldCos have grown rapidly over the last two years; however, these investments have recently experienced price declines.

A key question for investors now is whether YieldCos’ interests align with their own. YieldCos are complex financial structures and lack transparency on a number of key value drivers. Investors need appropriate governance structures, particularly for managing potential conflicts with their sponsors, to ensure that decisions by the YieldCos align with their interests. We assess the governance structures of a comparable set of YieldCos in this report.

Pattern Energy and Atlantica Yield are more aligned with shareholders compared to Terraform Power/Terraform Global and 8Point3 Energy Partners. All else equal, we consider more alignment as positive for shareholders. Our analysis indicates that several YieldCos are closely controlled by their sponsors, lack independence and may be misaligned with shareholders’ interests.

Going forward, existing YieldCos can adjust their governance structures and investors in YieldCo IPOs should seek better alignment. As a point of reference, Master Limited Partnerships (MLPs) are trialing new structures to improve alignment with their shareholders that act as a guide for YieldCo investors.

Alignment with shareholders

Source: Cornerstone Capital Group

Summary of report published January 13, 2016.

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Global Sector Research

“Legitimacy” in the Banking Sector By Michael Shavel, Global Thematic Analyst, Cornerstone Capital Group, Robert D. Lamb, PhD, and Diane Glossman, CFA, members of Cornerstone Capital Group’s Global Advisory Council

In January 2015, we published a report introducing a framework to enable analysis of the “legitimacy” of an institution by understanding its relationships with stakeholders. We used the banking sector as our test case given the recency of the Global Financial Crisis, but the framework can be applied to any industry or institution. Given this edition’s focus on “Order and Chaos,” we felt it would be relevant to revisit our previous work. This article is an excerpt from the report.

Summary Earnings and valuation uncertainty - In a post Global Financial Crisis world, investors are questioning long-term earnings and valuation prospects for the banking sector. Tougher regulation, particularly on capital, liquidity and structure, are exerting pressure on the traditional banking business and clouding the outlook for investors.

A new framework – To better understand an evolving banking landscape, we offer a new framework based on the concept of “legitimacy”. Our framework is designed to help investors assess the quality of an institution’s relationships, as they convey a willingness to continue to engage with a bank – whether as a customer, shareholder, regulator, employee or community member.

Structure and application – We discuss the key elements of “legitimacy” and outline the steps and structure of the framework. We then provide an illustrative example where we assess the relationship between 1) Wells Fargo’s (WFC) corporate officers and non-management employees and 2) Wells Fargo and its consumer lending clients.

Investment implications – We believe that assessing “legitimacy”, or the quality of a bank’s relationships with key stakeholders, enhances investors’ analysis of factors that influence that bank’s valuation. Our legitimacy framework is not limited to the banking sector and can be applied broadly across other sectors and industries.

Background & Introduction to Legitimacy While investors typically analyze a variety of financial statements and ratios to determine the relative attractiveness of a sector and individual institutions within it, starting from a different viewpoint may illuminate an otherwise less obvious set of opportunities. In this instance, it is the theory of legitimacy.

In a report titled Rethinking Legitimacy and Illegitimacy – A New Approach to Assessing Support and Opposition across Disciplines, Robert D. Lamb

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analyzes the concepts of legitimacy1 and illegitimacy, discusses issues involved in measuring them in the real world, and introduces a new framework for assessing them in situations where the sources and dynamics of support of opposition need to be better understood. 2

The legitimacy framework, developed by Lamb and published by Rowman & Littlefield and the Center for Strategic and International Studies (CSIS), originates in Lamb’s interest in understanding how gangs in Medellin, Colombia governed different neighborhoods. He examines legitimacy and governance where the unit of analysis is a gang instead of a state, and he studies how that affects the patterns of violence in particular neighborhoods. To address this, he designs a general framework that can be applied not just to gangs in Colombia, but to any number of situations where the dynamics of support, opposition and authority needed to be understood.

Lamb’s legitimacy framework is particularly interesting for investors given the need to understand the nature of a company’s stakeholders. Assessing legitimacy is helpful for – and in many cases similar to – assessing an organization’s governance structure. With this in mind, the legitimacy framework is helpful in understanding companies and the sources of friction in their business relationships. The focus of this report is on the global banking sector due to the reputational damage incurred in the Global Financial Crisis, but the framework isn’t sector specific. With modest modifications, it can be applied broadly across other sectors.

On the surface, it is easy to contemplate how detrimental regulatory fights, shareholder suits, high employee turnover, and poor client retention impact a particular bank’s earnings and returns. It would be virtually impossible to miss the differences in standard deviation of these two metrics over a five or ten year period – just eyeballing a long list of banks for business mix and credit acumen. Conducting a detailed analysis that involves quantifying the impact of each of these issues, however, is more difficult.

The legitimacy framework isn’t a silver bullet, but it does provide a way to begin the discussion. It is based on the quality of an institution’s relationships, as they convey a willingness to continue to engage with that bank – whether as a customer, shareholder, regulator, employee or community member. A bank with low quality stakeholder relationships may face more opposition and friction, and therefore more costs to overcome, than one with strong relationships.

Relationships and Long Run Costs Relationships matter to the long-term profitability of any business. Strong customer relationships and stable supplier relationships save on costs of finding new customers and suppliers. A sour relationship with regulators can put an individual company under greater scrutiny or an entire sector at risk of more

1 Legitimacy, according to many fields of study and practice, is something that induces voluntary support. It is therefore an important intellectual resource for decision makers. Because it cannot be observed, however, measuring and assessing legitimacy is difficult. 2 Robert D. Lamb, Rethinking Legitimacy and Illegitimacy: A New Framework for Assessing Support and Opposition across Disciplines (Washington, D.C.: CSIS and Rowman & Littlefield, May 2014), available at http://www.csis.org/publications.


http://www.csis.org/publications

public oversight, increasing costs of doing business. Low worker morale harms productivity and increases turnover, recruitment and training costs. A greater degree of trust between businesses translates into lower costs for monitoring and enforcing business deals. A company with a reputation for harming the environment or local communities is likely to find opposition when expanding into new communities, or might face lawsuits stemming from past harms. Such risks can affect a company’s valuation in a future public offering or private sale. Strong stakeholder relationships can keep a business stable during inevitable rough periods.

These observations apply to the global banking sector as well as any other. Banking has long faced challenges with confidence and trust among its stakeholders, though this problem was magnified by the Global Financial Crisis. In the United States, for example, confidence in the banking sector declined by half after 2008, from 41% to 21 %, recovering to 26% only in 2013, still less than half its 2004 peak. Retail, investment, and commercial banks worldwide have faced similar reputational problems. Risky behaviors and perceptions of breached trust have led to bank closures, tighter regulation, and in some countries prison time for executives.

One should not overstate the case. There is little hard evidence, beyond anecdotes, that poor relationships lead to poor returns on investment. Even banks with serious reputational problems can make money for their investors. However, a bank that manages stakeholder relationships particularly well might, all else equal, have a long-run financial advantage over its competitors. Harmful corporate behavior can trigger opposition from key stakeholders, needlessly increasing costs by having to defend lawsuits, pay fines, sell off assets, and rebrand. Poor relationship management can cost money that could otherwise be capitalized. And corporate leaders capable of managing complex stakeholder relations successfully might well be better managers overall.

For investors, assessing the state of a bank’s stakeholder relationships can help identify potential sources of opposition — and therefore potential costs and risks — as well as potential sources of stability. This information can be useful when deciding which banks have a more promising long-term outlook, all else equal.

The application of legitimacy to investing may be new, but legitimacy has been a topic of study for political theorists, sociologists, psychologists, anthropologists, and military historians for almost as long as those disciplines have existed. It is strongly associated with stability, because when people believe something has legitimacy they tend to voluntarily support it, morally and materially. But because legitimacy is not something that can be easily observed, measuring it has always been a challenge. It is our belief, however, that Lamb’s framework overcomes some of the challenges of previous attempts.

Assessing Support and Opposition

It is sufficient to define legitimacy concisely as a “worthiness of support,” as judged by a particular population (called “referees”). When something is considered legitimate, support is offered voluntarily. Having legitimacy,


therefore, means support does not need to be purchased or coerced. That, in turn, reduces costs associated with sustaining one’s operations. By contrast, illegitimacy is a “worthiness of opposition” that tends to trigger resistance and thereby increase transaction and friction costs.

To see how these ideas apply to the banking sector, consider two fictional retail banks. Trusty Bank has loyal investors, a reputation for excellent customer service, high employee morale and low turnover, a history of cooperating with regulators and auditors, and good relations with community leaders in the neighborhoods its branches serve. Its policies are transparent, it keeps promises and complies with laws and regulations, its managers and staff treat people fairly and with respect, and it is responsive to questions and complaints it receives.

By contrast, Infidelity Bank has faced shareholder lawsuits, consumer complaints, high staff turnover, failed audits, legal fines, and community protests. Its policies are opaque, its staff are occasionally deceptive (at times illegally so), its employees are rude to each other, they discriminate against some of their customers, and the bank is generally unresponsive to complaints unless compelled by legal action or media pressure.

All else equal, which company is better managed? Which is likely to end up spending more money than necessary on legal fees, customer retention, marketing, staff recruitment and training, public relations, scandal management, arbitration, legal settlements, or fines? Which can be trusted to maximize shareholder value with minimal oversight?

In reality, the contrast between how different banks manage relationships with different stakeholders is not usually so stark. Some have happy customers but miserable employees while others face supportive regulators but hostile communities. Their relationships with each stakeholder group might be complicated: investors who make money but feel disrespected, or customers who are pleased with frontline service providers but infuriated by the company’s policies. Even within stakeholder groups there is likely to be a diversity of experience as well. A lower-income community might feel customer service is worse in their branch than it is in a more upscale neighborhood. The relationship with state regulators might be different from that with federal regulators. And individual stakeholders might like everything about the bank except one aspect — unethical behavior in a single division, or a perception that executive compensation and bonuses are excessive — that overshadows everything else and damages the relationship.

Using the framework in Rethinking Legitimacy and Illegitimacy, these complicated relationships can be assessed in a way that untangles stakeholder attitudes and behaviors that are likely to be costly to the bank in the long run – a potential drag on earnings or a threat to stability – from those that arebeneficial and costless.

After identifying the bank to assess, the first step is to identify the particular stakeholder group whose relationship with the bank one wants to better


understand. These could be customers, employees, regulators, investors, community members or activists.

Each relationship then needs to be broken down into three levels and five dimensions. The three levels are individual belief, group behavior, and the bank as a whole.

• Belief. The first level measures the beliefs, opinions, or attitudes ofindividual stakeholders, usually through surveys, focus groups, orinterviews. What are their perceptions of the bank?

• Behavior. The second level measures the behaviors of the stakeholdergroup, using existing data, observation, and documentation. How do theyact toward the bank?

• Bank. The third level measures objective features of the bank, also usingdata, observation, and documentation but in some cases surveys, focusgroups, and interviews of bank representatives as well. What does the bankdo, and what is it like?

At each level, indicators for each of the following five dimensions must be identified:

• Predictable. Can the bank be relied upon to do what it says and whatpeople expect it to do? Is it transparent in how it operates? Are itscommitments credible? [NOTE: Here it is necessary to identify theexpectations, commitments, etc. that are most relevant to the bankingsector specifically, i.e., those that, if not met, could adversely affect therelationship in the future. This is different for every sector.]

• Justifiable. Does the bank act in ways that are consistent with the valuesof its stakeholders and the broader society in which it operates? Is itsbehavior consistent with its own values? [NOTE: Not all stakeholder andsocietal values are relevant to the analysis. Investors who care only aboutprofits will value the bank’s governance differently from investors who careabout social concerns. Therefore, it’s necessary to identify a few key values,the violation of which would be damaging.]

• Equitable. Does the bank treat all stakeholders fairly? Are differences intreatment justified by differences in the stakeholders? [NOTE: In somesituations, acting fairly toward certain groups could damage the bank’srelationship with a majority or elites; this analysis does not necessarily needto assume that liberal values are correct, only that it’s necessary to studyrelevant stakeholders in depth and in context.]

• Accessible. Do the stakeholders have a reliable way to communicate withthe bank, resolve issues, and influence operations or policies (at a levelappropriate to their position)? [NOTE: Again, it is necessary to identifyrelevant indicators: accessible customer service is probably importantwhile customer access to many corporate governance decisions is probablynot. Similarly, the board need not have access to decisions about day-to-day operations barring a unique circumstance.]


• Respectful. Does the bank treat the stakeholders with dignity andrespect? [NOTE: Here is where cultural understanding is completelynecessary.]

The risk of resistance or opposition to a bank’s operations tends to be higher the more the bank acts toward its stakeholders in ways that are unpredictable, unjustifiable, inequitable, inaccessible, or disrespectful. Studying these five dimensions across three levels, therefore, makes it possible to uncover potential sources of risk resulting from poor relationships.

Consistency between dimensions and across levels indicates the presence of legitimacy. If individuals say they consider the bank equitable and behave in ways that reflect such a belief (i.e., referring others in their community), and if the bank itself seems to treat its customers equitably, then there is little reason to be concerned the bank might be at risk, for example, of a discrimination lawsuit (this does not eliminate the risk of frivolous lawsuits, however). Inconsistency, by contrast, identifies a trouble spot. For instance, if individual customers say the bank is accessible but rarely call customer service to resolve an issue, then further investigation may be warranted. Perhaps on-hold times at the call center are unpredictable and occasionally excessive (i.e., the bank is accessible but unpredictable). In itself, that is not a reason to fear a risk to long-term stability. But it does suggest a potential trouble spot that is worth exploring further to determine if a competitive disadvantage exists.

A systematic assessment of the strength and sources of support or opposition can be as simple as a quick study of the five dimensions at the bank level or as comprehensive as an in-depth analysis of the bank’s relationships with all stakeholder groups. The choice depends on the time and resources available to the investor conducting the assessment. The Rethinking Legitimacy framework describes four types of assessments that can be made:

• Rapid. This method uses only the bank-level indicators for the fivedimensions. First, for each of the five dimensions, an investor shouldidentify a set of indicators relevant to this bank’s relationship to thestakeholder group in question. The predictable indicator might include alook at expectations for timeliness, which are likely to differ from countryto country. A culture whose religion forbids the charging of interest willhave different justifiable indicators than others who have no suchprohibitions. Then, using those research methods that are feasible,measure the indicators. Does extended observation suggest that managerstreat employees equitably and respectfully? Do interviews with investorssuggest they have some say over decisions they care about?

For those indicators deemed relevant, it is necessary to identify whether thebank’s performance on each is generally positive, negative, or neutral. (Aneven more sophisticated look would also determine whether they areimproving or deteriorating.) The resulting analysis provides a useful andquickly generated qualitative picture of the bank’s relationship with oneparticular stakeholder group. Any negative indicators, or inconsistenciesbetween indicators, suggest potential problem spots that are worthexploring in greater depth.


• Multilevel. A multilevel assessment begins with a rapid assessment, butthen adds the other two levels to the analysis: group behavior andindividual belief. Just as in the rapid assessment, a set of indicators needsto be identified for each dimension at each level. Indicators for individualbeliefs are reasonably straightforward — and measuring them is not morecomplicated than standard opinion surveys or interview methods. Groupbehaviors take a little more work, because it is necessary to think throughwhat types of behavior would imply an underlying belief.

If employees don’t believe they are appreciated by management, they mighttell that to an interviewer (a belief indicator) and a high turnover rate mightalso be evident (a behavior indicator). This suggests a problem. On theother hand, if employees tell the interviewer they are appreciated bymanagement in the face of high turnover, there is a disconnect betweenbelief and action, and that also suggests a problem worth exploring. Again,negative indicators and inconsistency between indicators (acrossdimensions and across levels) both suggest potential problem spots. (Asimpler multilevel assessment reviews indicators for general support oropposition at just the three levels, without breaking them out bydimensions; see tables on pages 9 & 10).

• Bilateral. A bilateral assessment offers a deeper level of analysis. In effect,it takes a multilevel assessment and reverses the actors, under theconclusion in Rethinking Legitimacy that legitimacy is a two-way street. Inaddition to studying, for instance, investors’ beliefs about the bank, theirbehaviors toward the bank, and the bank’s objective treatment of investors,this assessment studies the bank officials’ beliefs about the investors, theirbehaviors toward the investors, and the investor’s objective treatment ofthe bank’s officials.

There is some obvious overlap in indicators here. But this bilateralapproach offers a much more detailed picture of the relationship andidentifies some potential problem spots that might not be identified in asimple multilateral assessment. One side might have positive feelings aboutthe other side, but the feeling might not be mutual. That is problematic notonly because there is a negative indicator but also because one side seemsoblivious to the problem, which is itself a potential problem.

• Comprehensive. Finally, a comprehensive assessment is a bilateralassessment that is repeated for the rest of the bank’s stakeholders. If themultilevel or bilateral assessment focused on the bank’s relationship withregulators, then a comprehensive assessment would do the same analysisof the bank’s relationships with customers, employees, the community,relevant activists, regulators, and whatever other group whose relationshipcould complicate the bank’s current or future operations.

Each of these four approaches is more labor-intensive than the previous: amultilevel assessment is about three times as labor-intensive as a rapidassessment; a bilateral assessment twice as labor-intensive as a multilevel;and a comprehensive assessment four or five times as labor-intensive as abilateral assessment. A mix is possible; for example, one can do a rapid


assessment for more than one stakeholder group. And for many assessments, it might not be necessary (or possible) to do a comprehensive assessment. The amount of time and resources available limits how much can be done. The risk, however, is that the simpler methods have fewer layers of validation and are therefore more subject to investor bias.

Potential for Additional Applications [In our original report, we applied] our legitimacy framework to the global banking sector in light of the reputational damage incurred by the Global Financial Crisis, but the framework has applications beyond banking. Indeed, our framework can be employed by investors across sectors to evaluate a company’s intangible assets. As noted in our ESG Essentials – A Guide for Investors report, intangible assets constitute a larger proportion of market value than in the past, and this shift from tangible assets to intangible assets introduces more variability and uncertainty into the assessment of overall value to shareholders.

As investors address this issue, they would be keen to consider the legitimacy framework in evaluating intangible assets – specifically those that are dependent on a company’s relationships with stakeholders. Customer relationships, brand names, corporate reputation and management quality are examples of intangible assets that can add or detract significant value based on the perception of legitimacy or illegitimacy, and investors must understand what drives these perceptions.

Directly quantifying the impact of legitimacy is not the goal. Instead, our legitimacy framework will enable investors to identify companies with a stronger capacity to manage relationships and greater prospects for long-term stability.

Michael Shavel is the 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.

Robert D. Lamb, PhD, is an expert on governance, international development, and conflict with an emphasis on analysis of intangibles, complex crises, informal processes, and hybrid political and economic systems. He is a nonresident senior fellow at the Center for Strategic and International Studies, where he previously directed the Program on Crisis, Conflict, and Cooperation, and is a nonresident research scholar at the Center for International and Security Studies at the University of Maryland.

Diane Glossman, CFA, spent 25 years as an investment analyst, working on both the buy- and sell-sides. Over the course of her career, she covered all aspects of banking and financial services industries, with research distinguished by it’s in depth coverage of banking technology and the international operations of US banks (visiting banks in over 60 countries).


http://cornerstonecapinc.com/2014/11/esg-essentials-a-guide-for-investors-3/

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Regional Imperatives

Managing Chaos: Legitimacy and Institutional Revision in Argentina By Delfina Lopez Freijido, Co-founder & Associate Director, & Miguel Ferreyra de Bone, Advisor, Acrux Partners

Argentina is undergoing a complex and profound process of change under new president Mauricio Macri. He has announced a number of transformational initiatives that, if executed properly, should give rise to compelling investment opportunities. The new administration is indeed aiming to establish order in what has been a chaotic business backdrop in this country.

For the current government, these first months of work are all about understanding what was inherited from the previous administration of Cristina Fernández de Kirchner, and about initiating a different type of dialogue with key market players. Managing the transition towards a predictable economic and political environment is key at this stage, but the transformation envisioned by Macri’s government goes well beyond that.

At the Argentinian government offices and ministries, the transition and its daily repercussions are at the top of the agenda, but the teams working on the field are also rather conscious about the fact that the “transition” cannot go on for too long. The work currently underway needs to be aligned with the administration’s long-term goals and campaign promises: reducing poverty levels down to zero, addressing regional economic disparities, reconnecting Argentina with the international political and business communities, and, generally speaking, regaining the country’s past stature.

To achieve order and avoid social chaos, Macri’s administration must demonstrate legitimacy in decision-making. He must follow through on his promises swiftly but without further destabilizing the

economy, which suffers from high inflation and high public deficit. More importantly, he needs to restore the confidence of investors in order to regain access to an important flow of dollars entering Argentina in the form of foreign direct investments, international loans, swaps and debt.

Setting Up a Baseline

The elimination of currency controls and restrictions on the repatriation of dividends, which were in place during Kirchner’s last term, were two critical measures that have set the baseline for investors to start considering the country as an interesting market again. On this topic, Will Landers, Managing Director at BlackRock, highlights that “we still have to make sure that the currency has reached its market equilibrium.”

Furthermore, the end of import controls is particularly helpful in attracting productive foreign investments. In short, an investor can now enter the Argentine market at a competitive exchange rate of 14 pesos per dollar, import the necessary capital goods to ensure the value enhancement in an investment project, and repatriate the dividends

from eventual returns. However, the government still needs to provide potential investors a sense of legal security through reinforcing the application and revision of existing norms, and the creation of new regulation. Current efforts to overcome the country’s default status and to control inflation are key at this stage.

To facilitate this ideal of openness, an Investment Promotion Agency is being created, which aims to provide order, coherence and transparency for investment projects in Argentina. According to the

President Macri visiting a factory. © Presidencia de la Nación.


government, the agency will help to reduce perceptions of risk and transaction costs, and boost competition. Macri’s administration is determined to bolster operations in the capital markets as well, as this year will see a move towards the integration of the stock exchanges. As expressed by Claudio Zuchovicki, the Buenos Aires Stock Exchange Development Manager, his institution is, “already having productive meetings with the National Commission of Securities about this matter.” Integration would also entail catching up with globally accepted financial norms and regulation that enhances good corporate governance, as Juan Cruz Díaz, Managing Director at Cefeidas Group, recently highlighted. In this context, greater transparency and disclosure will be demanded from listed companies.

Despite the fact that Macri’s administration has a clear intention of elevating corporate governance standards and related regulations, it’s yet too soon to see the results. The change of approach on macroeconomic policies and regulations was necessary, but the changes are not yet sufficient to create the ideal environment for Argentina to flourish as an emerging market.

Upcoming Opportunities

Throughout the last decade, restrictive import policies were set to preserve and expand local production, also aiming to replace foreign products that needed to be paid with American dollars; hence, focus on the country’s strategic sectors was lost. Macri has decided to fuse the former Ministry of Industry and the Ministry of Trade into one institution, the Ministry of Production, which will focus on restoring Argentina to competitive strength, prioritizing the technological and innovative components in products and services, their penetration in the international market, the transformation of traditional productive sectors, and the promotion of new value chain dynamics.

There is a consensus among market players and society at large that President Macri has proven strong leadership and technical capacity to launch his project; yet results are still to be seen. Investors will be able to assess the situation as time goes by; the annual salary negotiations with unions will set the tone for what the economic expectations are for 2016. From a governance perspective, the Congressional sessions will determine Macri’s real negotiating power on ensuring stability and progress. Finally, the Brazilian recession, the repercussions of its downgrade to junk status by Fitch, together with the country’s political scandals, will have an impact on what is coming for Argentina, and more broadly for Latin America.

Establishing order has been set as the base from which bigger ideas can be constructed. This conception of the new Argentine reality results in a very interesting opportunity for long-term oriented, responsible investors. The aim is to get into a dynamic where not only the macroeconomic situation is improved, but also innovative, social and institutional assets are elevated again. Despite the challenges, this year provides an important baseline from which to move forward to a prosperous, sustainable Argentina.

Delfina Lopez Freijido is Co-Founder and Associate Director at Acrux Partners. Located in Buenos Aires, she works to grow the company's network in South America with a special focus on enabling policy development for sustainable investment.

Miguel Ferreyra de Bone is one of Acrux Partners’ Advisors. Located in New York, he collaborates by advising on the company’s business strategy in North America and Emerging Markets in Latin America.

Acrux Partners is a strategic consulting firm that works to support the transition to a low-carbon and inclusive economy in South America.


Regional Imperatives Reimagining the Private Sector Role Post-Conflict and in Anti-Terrorism By Andrew MacLeod, Visiting Professor, Kings College London

Imagine if the post-war recovery in Iraq had been implemented differently. Imagine if Iraq had been reconstructed successful? Would Syria look different today — would the Islamic State even exist? Would the terrorist threat be lessened?

It’s the Economy… These questions highlight the old adage used by Bill Clinton, “It’s the economy, stupid.” It is a fundamental truth often ignored in the public debate on how to tackle geopolitical instability: Economic development is key to post-war recovery and the return of stability to economies. The same applies for general development efforts. And private sector involvement is essential to economic development; it is the main driver of poverty alleviation.

When looking at capital flows from OECD to non-OECD economies, over half the capital flows pass through the private sector, around a third through remittances, and the balance through official aid and philanthropy.

Even though the private sector is the key driver of growth — so critical to stability — it plays little role in post-conflict recovery or development planning. Perhaps ironically, the smallest set of stakeholders — aid and philanthropy groups — is often seen as the main driver of reconstruction and granted a big seat at the planning table.

It is time to change the balance of importance given to aid and private sector stakeholders and to recognise where the key engine of growth is.

Distorted Expectations Time frames in post-war recovery and reconstruction seem to have been distorted recently too, and should likewise be changed.

Consider this: When did the last Allied soldiers leave Germany after World War II? Answer: They haven’t. When did the last Allied soldiers leave Japan after World War II? Answer: They haven’t.

In Germany and Japan, the commitment to rebuilding and reconstruction, integration into the world economy, and defense against aggressors (read the Cold War) lasted three generations.

When did the last peacekeepers leave Bosnia? Answer: They haven’t. Western support for peace-building, reconstruction and recovery in Bosnia has already lasted a generation, with no end in sight.

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So why were Western powers so foolhardy as to think that troops could walk in and out of Iraq and Afghanistan successfully in less than a generation, let alone three generations? Why do some people even now think Western powers could get in and out of Syria in a mere five or ten years?

Why have these recent foreign policy efforts not included an active involvement of the private sector in long-term economic planning to bring order from the post-conflict chaos? Capital provision through banks, employment through frontier extractive industries, and the creation of additional economic activity through retail and services were all absent from post-war planning.

Why do many activists think the private sector is the enemy in poverty alleviation and look only to the non-profit sector for solutions?

Imagine if the negative impression many activists have of the private sector were turned around in recognition of the private sector’s role in post-conflict reconstruction, or indeed generalized poverty alleviation through employment. How would businesses’ relationships with local and international communities (and their own staffs) change? Would this be a ‘win-win’ where communities and corporations would both be better off both in the developed and less-developed world?

Imagine if corporations, non-profit and government agencies worked more in alignment. Would aid impact be increased and poverty be alleviated more effectively if government and non-profit interventions led to more effective long-term investment?

The truth is though the private sector is already active in job creation, poverty alleviation and post conflict reconstruction — it is just that they are not given credit for it. Activists see profit as “evil” rather than an enabler of growth, and therefore do not see how the not-for-profit sector should enable well-regulated private sector investment.

Nestlé has been active for many years improving nutrition — and yes expanding its markets. BASF has been helping farm productivity — and expanding its markets. Agco, through brands such as Massey Ferguson, has a specific small farmer product offering aimed at sub-Saharan Africa which sees small-scale farmer productivity improvements — and market expansion for Agco.

Surely a more sensible approach is for the for-profit and not-for-profit sectors work together based on their comparative advantages?

Imagine if the not-for-profit world and the aid sector concentrate on improving legal systems, anti-corruption processes and governance, and counted private sector job creation as a success?

A More Sensible Approach

Think of terrorist attacks over the past few years. Most radical extremist attacks in Western countries have been home-grown. This is where the majority of effort should be placed. At home. But how and where?


A recently publicized MI5 report confirms that most of these home-grown terrorists have not been particularly pious religious fanatics, have often been new converts to religion and come from many different demographics. Religion, according to MI5, is not the major factor. The one common thread in extremist attacks in the West is that home-grown terrorists almost always come from low-paying working-class backgrounds.

MI5 recognizes that ISIS has been a master manipulator of this disenfranchisement that victory in the home-war is more about economics than religion, and indeed that pious religious followers are allies against extremism, not an enemy.

Can the private sector play a role here too?

Since the release of Michael Porter and Mark Krammer’s articles raising the profile of ‘Creating Shared Value’ (CSV) as a concept, more companies are beginning to realize the benefit to profit and asset valuation with a more holistic understand of community relations beyond “Corporate Social Responsibility.” But have the benefits that come from this thinking been maximized?

Both the UK and Australian Governments have recently released reports calling for better alignment between the private sector, aid community and non-profit sector in foreign aid interventions—without fully realizing the same principles can be applied in their own economies. Equally, some leading NGOs are setting aside past antipathy towards the private sector, instead searching for collaborative partnerships.

Can Shared Value thinking be used as a framework for private sector involvement both in post-conflict planning and as a critical tool in lifting people from poverty and reducing the temptation to turn to extremism? Can this opportunity be married with long-term thinking to change the way policy makers address some of the great challenges of this generation?

Kings College London recognizes these gaps and opportunities in post-conflict, post-disaster and general development settings, and is looking to build on Porter’s and Krammer’s work. Kings is establishing a consortium of academics, corporate innovators, engaged foundations and policy experts to lead global thinking around building on shared value and to promote further uptake among the business community. Perhaps our way of thinking will lead to a “new order” in how we address these challenges.

Andrew MacLeod is a former high-level UN official who has in the past negotiated humanitarian access guarantees with fundamentalist and conservative Islamic groups. He is a visiting professor to Kings College London and an Executive Board member of Cornerstone Capital.


Enhanced Analytics

Ordering the Unknown By Katherine Collins, Founder & CEO, Honeybee Capital

Order and chaos – given the choice, humans would usually choose order. Sure, we love to explore, but as we do so we also love to categorize, to organize, to create boxes and silos of knowledge. M.C. Escher summarized these tendencies by noting, “We adore chaos because we love to produce order.”

The Limits of Risk Analysis

Nowhere is this more true than in finance. Over the last 20 years our tools and models have reached ever-higher levels of sophistication and complication, and our understanding of risk has become deeper and more detailed. When I began

my career as a portfolio manager in the early 1990s, conversations with investors were usually creative “what if” discussions of companies and products, and the notion of risk for a fundamental investor was often limited to an examination of top holdings or industry exposures.

By the mid-2000s, many of those discussions had evolved into complicated debates over tracking error and active bets, incomprehensible to anyone outside of our own professional circles. Our tools had improved, and these statistics were helpful, but along the way we may have lost some common sense and connection to the real world in which our investments live.

The advantage to increased order over chaos in investing is clear: we now have better measures of correlated risks, counterparty risks, and all sorts of nuanced relationships that are not obvious from a simple glance at top holdings. However, with all of our detailed reporting and tools, it’s easy to forget one central and uncomfortable truth: these measures are incomplete.

Risk vs. Uncertainty

One of the most vital concepts for every investor to understand is the distinction between risk and uncertainty, which has been examined by a number of leading thinkers over time, from Frank Knight in the early 20th century to Michael Mauboussin in more recent years. The concept of risk covers visible and measureable terrain, the “known unknowns”. When we face a situation where the outcome is unknown but the range of outcomes is known, that’s risk. You can model it, and make reasonable bets based upon the range of possible outcomes.

Uncertainty is trickier; it refers to the “unknown unknowns”. What happens when we don’t know that range of possible outcomes, not because we are lazy or unintelligent, but because they are un-knowable? That’s when we enter the

©Sergey Nivens/Crystal Graphics


realm of uncertainty. Many of the biggest mistakes in investing can be traced to this basic confusion, thinking something is risky and model-able when in fact it is uncertain, with a range of outcomes beyond our models and sometimes even beyond our imaginations. And let’s face it, the realm of uncertainty, with its lack of maps and models, is terrifying.

Evolving Models Hold Promise

Fortunately, new tools and mental models are available to investors. One of the best resources is the growing body of research in complexity science and complexity economics. In a complex adaptive system, the whole cannot be explained by the sum of the parts; there are emergent properties and adaptive responses within the system that shape its own development. Sounds like the stock market, or the economy, right? Leading the way in this research are the Santa Fe Institute (SFI) and the New England Complex Systems Institute, including the work of Brian Arthur and Yaneer Bar-Yam. It’s at SFI that I’ve learned about everything from bitcoin to big data, and the Institute’s motto, “searching for order in the complexity of evolving worlds,” summarizes the quest of many investors.

Another resource is the field of biomimicry, looking to natural systems for patterns, principles, and wisdom that can illuminate other situations. Biological systems and organisms offer a wonderful counterbalance to our more mechanized models of finance, highlighting different ways to think about risk, adaptability, and context. Through my studies and connections with the Biomimicry Group and the Biomimicry Institute, I’ve been able to learn investment lessons from pine cones and sea slugs in a way that is completely independent from — and complementary to — my cherished spreadsheets. The central question biomimicry asks is “what would nature do?” How would this function be performed in the natural world, and what can I learn from it? Asking this seemingly simple question is revolutionary, as it demands that we clarify both what we are seeking and why – fundamental questions that are sometimes skipped-over in our data-intensive world of finance.

Though both of these fields are fairly new, the concepts they rely upon are ancient. The more functional tools developed by complexity science and biomimicry in years to come are sure to provide different, and better, understanding of the blank space that is not addressed by current risk models. With a better understanding of both risk and uncertainty, perhaps we will learn that Carl Jung was right: “In all chaos there is a cosmos, in all disorder a secret order.”

Katherine Collins is Founder and CEO of Honeybee Capital and author of The Nature of Investing. Previously Katherine served at Fidelity Management and Research as head of US Equity Research and Portfolio Manager.


http://santafe.edu/

http://necsi.edu/

http://tuvalu.santafe.edu/%7Ewbarthur/

http://necsi.edu/faculty/bar-yam.html

http://biomimicry.net/

http://biomimicry.org/

Accelerating Impact

Health as a Business Tool By Shahnaz Radjy, The Vitality Group, and Daniel Malan, University of Stellenbosch Business School

Human capital is at the heart of most successful businesses, yet at a time when New Year’s resolutions abound on an individual level — with a majority being health and well-being focused as many of us strive to eat better, exercise more, stop smoking, etc. — too many companies are focused on business as usual as well as how to improve their bottom line, and do not link employee health and well-being with corporate performance. New research suggests this is short-sighted.

Three studies recently published in the Journal of Occupational and Environmental Medicine (JOEM) by workplace health experts including Ray Fabius, Ron Goetzel, and Ron Loeppke among others, found

that companies investing in employee health outperformed their S&P 500 peers by 7-16% per year over more than a decade. These companies were identified based on their receiving evidence-based awards such as the C. Everett Koop Award or the American College of Occupational and Environmental Medicine (ACOEM) Corporate Health Achievement Award, as well as scoring highly on the HERO self-assessment.

The JOEM studies do not prove cause and effect but do confirm a link between best-in-class workplace health programs and improved stock performance. What does this mean, practically speaking? That investing in evidence-based employee health programs is not a bad allocation of resources, and may be a useful proxy for other highly effective business practices as well as good governance.

It also means that boards of directors, shareholders, and investors may have a vested interest in starting to ask questions about employee health and well-being. Companies willing to be transparent about how they are managing their human capital — including identifying and dealing with material risks not limited to occupational safety and health but extending to current day trends such as obesity, diabetes, and cancer — are most likely doing more and better, building a culture of health both within their corporate walls and beyond.

McKesson Corporation – one of the 2015 recipients of the C. Everett Koop Award – conducted analyses on their employee health data with a researcher at Harvard University, demonstrating that:

• In three years, engaged adult participants increased activity levels by 92%.

• Employees who were “medium engaged” or “highly engaged” in theworkplace health and well-being program spent between $916 and $1,238less on medical expenses per employee in 2014 than did “low engaged”



http://www.news-medical.net/news/20151229/Companies-with-outstanding-employee-health-and-wellness-programs-outperform-SP-500-Index.aspx

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https://www.linkedin.com/in/ron-goetzel-6508854

https://www.linkedin.com/in/ron-loeppke-md-0b223841

http://journals.lww.com/joem/Fulltext/2016/01000/The_Stock_Performance_of_C__Everett_Koop_Award.3.aspxhttp:/journals.lww.com/joem/Fulltext/2016/01000/The_Stock_Performance_of_C__Everett_Koop_Award.3.aspx

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http://hero-health.org/scorecard/

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employees in 2012 and 2013. This led to overall savings of $4.7 million in medical costs for McKesson.

• Employees self-reported that their on-the-job performance increased from81.7% in 2012 to 85.3% in 2014. When this increase is converted into dollarsusing a conservative salary-conversion method, total savings was nearly $7million each in 2013 and 2014.

Connecting the dots, this means that investing in employee health and well-being programs has the potential to reduce healthcare costs and increase productivity.

Learning from the environmental movement and the work of the Carbon Disclosure Project as an example, one way to catalyze such transparency is for companies to start voluntarily reporting on employee health (beyond occupational safety and health). This will encourage a shift from seeing healthcare costs as something to manage in a silo to understanding that investing in employee health promotion and chronic disease prevention is a way to tackle the issue upstream. The report “Reporting on Health: A Roadmap for Investors, Companies, and Reporting Platforms” is a step in that direction, providing specific indicators that corporate leaders, investors, and hopefully also existing integrated reporting platforms such as the IIRC, GRI, or SASB, can build on.

Investors, shareholders, board members or corporate leaders understand that taking care of themselves as individuals is necessary to perform optimally and achieve personal goals. Recognizing that health is a cornerstone of good business means that employee health and well-being is also something to ask about and invest in professionally.

Shahnaz Radjy is Senior Communications Specialist at Vitality working with the Chief Health Officer Derek Yach. She leads on their PR, communications, and social media presence, as well as the integrated health metrics reporting project. Daniel Malan is a Senior Lecturer in Ethics and Governance and Director of the Centre for Corporate Governance in Africa at the University of Stellenbosch Business School in South Africa. His focus areas are corporate governance, business ethics and corporate responsibility.


https://www.cdp.net/

https://www.cdp.net/

http://www.thevitalityinstitute.org/healthreporting

http://www.thevitalityinstitute.org/healthreporting

how the lack of traceability yields food ©Josh Yanus/PanXchange security threats and in Asia of how it leads to deforestation.1 And where there is fear, there are hasty and chaotic attempts to address the problems. We are all eager to create double or triple bottom line success stories, but as shrewd businesspeople, we need to slow it down and take a more pragmatic approach. The complexities involved in establishing secure and sustainable food supplies require patience and granular focus, with success measured in small increments. Once we get out of the mad scramble to solve the problems, we’ll begin to see the obstacles that can and must be cleared before we can reach impact at scale.

Accelerating Impact Food, Farms and Forests: The Chaos of Fear and High Expectations By Julie Lerner, Founder and CEO, PanXchange

We have grave concerns in today’s world agricultural commodity markets, and I’m not speaking of trade houses’ shrinking profit margins. There’s fear of a global food shortage and fear that we cannot succeed in the war on poverty. In the West we have constant reminders of

In Africa, agriculture employs half the continent’s population, but its contribution to GDP hovers at an average of 15%.2 Productivity is abysmal despite vast amounts of arable land. Undernourishment persists across the continent. This is a frustrating scenario given the numerous studies that illustrate how improving the livelihoods of smallholder farmers strengthens the agrarian economy, thus reducing poverty and food security concerns.

With this backdrop, one can see the interest and urgency in creating a national or regional exchange as a cure-all for our commodity fears. Its success could

1 http://www.bbc.com/news/science-environment-35198675 2http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/ Africa_Competitiveness_Report_2015.pdf

bring farmers higher incomes and the transparency could help improve regional trade flows, decreasing the reliance on ocean-imported commodities. In the brightest of outcomes, commodity derivative contracts will be formed and outside investors will begin to pour money into the market. Everybody wins.

But our direct experience with PanXchange has illustrated that the race to establish the pre-eminent commodity exchange solution is rife with presently intractable issues.

The Challenges of Creating Order

In August 2015, PanXchange launched PXAfrica, its cloud-based software to facilitate the negotiation and transfer of agricultural commodities from seller to buyer in East Africa. Arguably, this is the weakest link in any supply chain and our goal is to bring efficiencies and transparency to all market participants. We are neither government-sponsored nor donor-funded. As such, we focus solely on creating efficiency and profit opportunities for producers, traders, warehouses and processors.

PXAfrica has met with tremendous success,3 but it is not without its challenges. For instance, there is not enough reliable and economically viable warehousing space for farmers and importers. This forces the majority of stakeholders to take the spot price offered in the market. Also, some buyers insist on receiving a sample even though doing so does not guarantee that the grains weren’t sent from a different farm or even different country. Once we overcome this hurdle,

3 http://uk.reuters.com/article/idUKnCCN799z3D+1c1+MKW20151105


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there will still be a risk of blending en route to the processors. This risk forces the sellers to send an escort on each delivery truck to ensure the product isn’t tampered with en route to the buyer. Moreover, rural communities do not have the equipment to properly ascertain the quality of their crops. This is another vulnerability point that weakens the negotiating power of the smaller farmers, as they must trust the buyer to confirm that, for example, the moisture content of the maize is low enough to earn the EAC Maize 1 grading and subsequent premium price.

These examples should give pause. Per my last article for the JSFB, several entities are attempting to address all these issues in one fell swoop, creating aggregation and storage centers as well as derivative contracts that attract outside investors. This is all fantastic in theory, but thus far, these efforts have proven too costly for the farmers, with unmanageable overhead for the exchange venture.

In East Africa, the task of addressing the harmonization of cross-border standards is achieving real results that could lead to greater economic strength and improved regional food security. Standardized commodity crops could reduce dependence on world market imports and also bring liquidity to markets and efficiency in processing.

PXAfrica uses the East Africa Community (EAC) standards as a foundation for the commodities that our members negotiate. While we would like to require users to trade only these grades for the purpose of liquidity, we know we cannot. One small but specific example of this is Ugandan maize. Maize grown in the western region is shaped differently than maize grown in Kenya which causes processing problems for Kenyan millers. As such, PXA lists “Uganda high quality maize” in addition to EAC Maize 1, 2 and 3. This provision keeps the Ugandan maize in the supply chain as millers can now submit bids with an appropriate discount to adjust for the processing cost.

The majority of the EAC working groups are policy-makers and agronomists who are considering enforcing these quality specifications as mandatory. However, beyond trade policy and climate and soil issues, we have yet to consider the market factors.

4 http://www.theguardian.com/environment/2014/sep/23/un-climate-summit-pledge-forests-new-york-declaration 5 http://news.mongabay.com/2014/05/ag-giant-adm-boosts-greener-palm-oil/

There is no “one-size fits all” solution, and producers and processors could provide many more reasons to resist mandatory quality standards beyond the example explained above.

In terms of traceability, when fires in Indonesia were burning out of control last year, several companies acknowledged the deforestation problem by signing a declaration to save between 4.5bn and 8.8bn tons of carbon emissions per year by 2030.4 Some companies such as ADM and Wilmar went a step further and implemented a zero tolerance policy toward palm oil that originates from newly destroyed rainforests or carbon-rich peat.5 The companies that signed the declaration, such as Cargill, Kellogg, Marks and Spencer’s and Nestlé, have the kind of influence and resources to effect real change. Few could doubt the sincerity of the commitment to address the problem, but again we are faced with the question of how. Even Cargill’s CEO, David MacLennan, notes the challenges of the commitment without local government coordination.6 More specifically, how can we confirm where each batch of palm oil originates?

The economics of food traceability are a global challenge. Is there enough palm oil from acceptable plantations that will supply an oil processor with 100% of their needs? If not, the “pure” oil will be blended with non-certified oils, thus rendering a zero-tolerance policy useless.

Guaranteeing the traceability of a crop from farm to table is usually cost-prohibitive. Food that is fit for direct human consumption is an industrial process that benefits from economies of scale. Thus, until more crop inputs are certifiable, you need to either run the mill at less than capacity to protect the traceability or blend it to protect your operating margin.

I am not an economist nor an agronomist, but as a former commodity trader, I believe this will be the toughest issue to address of those mentioned herein due to the lack of economically viable solutions.

An Orderly Approach Needed

We’ve spent decades trying to solve the problem with broad strokes and mountains of donor dollars, yet

6 http://www.ft.com/cms/s/0/fd3f2d30-6e9c-11e5-8171-ba1968cf791a.html#axzz3x9kFXbTV


http://panxchange.com/african-commodity-exchanges-tough-questions-about-financial-sustainability/

http://panxchange.com/african-commodity-exchanges-tough-questions-about-financial-sustainability/

http://www.theguardian.com/environment/2014/sep/23/un-climate-summit-pledge-forests-new-york-declaration

http://www.theguardian.com/environment/2014/sep/23/un-climate-summit-pledge-forests-new-york-declaration

http://news.mongabay.com/2014/05/ag-giant-adm-boosts-greener-palm-oil/

http://www.ft.com/cms/s/0/fd3f2d30-6e9c-11e5-8171-ba1968cf791a.html%23axzz3x9kFXbTV

http://www.ft.com/cms/s/0/fd3f2d30-6e9c-11e5-8171-ba1968cf791a.html%23axzz3x9kFXbTV

we’re all still here with the same set of problems. The rise in socially responsible investing is a positive development, but to effect real change, we need to slow it down and take an orderly approach to these challenges, breaking them down step-by-step with practical and economically viable actions. What incentives could we create for palm producers in Southeast Asia to reduce deforestation? Who will invest in aggregation and storage facilities for smallholder farmers, yielding greater leverage in their post-harvest pricing? Who can contribute the experienced, on-the-ground manpower to explore the best crop inputs for the widest region without bias?

There’s chaos in fear and it pushes us to make rash decisions hoping for a quick fix for complex issues. We

can address these challenges if we take a systematic and patient approach that also considers the market solution. It may not lead to the big headlines of success next year, but we all know that lasting change is evolutionary.

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 Philanthropy, Markets and Transparency By Bradford K. Smith, President, Foundation Center

Philanthropy is one of the most important, but least understood, features of our market economy. America has more than 87,000 private foundations that collectively control $798 billion in assets and make close to $55 billion in grants each year. Foundations are the result of the grand public policy bargain that makes institutionalized philanthropy possible: wealthy donors are given significant tax incentives to create and maintain private foundations in exchange for providing a demonstrable, long-term contribution to the public good. Part private, part public, philanthropic foundations live in a twilight world in which their desire to have impact while keeping a low profile increasingly collides with growing public expectations for transparency. How this tension is negotiated will be crucial to the future of how private wealth contributes to the public good in America and around the world.

Foundations Matter The assets and giving of foundations might seem relatively insignificant when compared to the hundreds of trillions of dollars flowing through global capital markets. But philanthropic giving, in particular, has a unique advantage when it comes to executing a mission: it is one of the last sources of capital left on earth that is not earmarked. The vast majority of foundations are endowed, and thus free from the pressures of raising money, selling products in a highly competitive marketplace, or chasing after votes to remain in office. They have only to invest their assets and earn a reasonable return in order to pursue their missions. This gives them an enormous degree of freedom to support controversial causes (same-sex marriage), take risks on new discoveries that have the potential to solve world problems (the Green Revolution) or stick with seemingly intractable challenges over the long-term (civil rights in America and the anti-apartheid struggle in South Africa). Many foundations choose not to work on such risky or long-term challenges, but the important thing is that they are free to do so.

The Beginnings of Foundation Transparency In the 1950s, two sets of McCarthy-era Congressional hearings investigated private foundations over their alleged support for “un-American activities.” Believing that the best way to prevent such suspicion in the future was to prove they had nothing to hide, foundation executives led by John W. Gardner, then President of the Carnegie Corporation, created a remarkable institution, called quite simply “Foundation Center,” as a public information service for American philanthropy. In 1956, when Foundation Center opened its doors, that meant some 8,000 paper documents arrayed in file cabinets for public inspection. In 1960, Foundation Center published the first directory of American foundations, which numbered some 4,000; the buzz was all about this giant new institution that dwarfed all the others — The Ford Foundation. In 1999, Foundation Directory Online was launched — the first searchable database of American foundations, with profiles for each institution and detailed information for all of their grants. Today, Foundation Center is the leading source of information on philanthropy worldwide.



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The Limits to Transparency Historically, the primary source of the information on foundations has been their 990-PF tax returns, which they are required to file with the IRS. When Foundation Center first gained access to those documents in the 1960s it required opening an office in Washington, DC so that staff could physically visit the IRS and hand-copy information from the forms, which at the time could not even be photographed. Today they are available from the IRS on request, but as image (TIFF) files stored on CD-ROMs, that must be converted to searchable PDFs and optically scanned when possible, so that information from them can be keyed into databases. Filing periods, extensions, bureaucratic delay, and the labor-intensive processing required conspire to make American philanthropy a $798 billion industry that relies on trend data that can be as much as three years old. This is beginning to change, however, with the Government Data Act, which will phase in mandatory electronic filing of Forms 990 by all non-profits and foundations and their public release as machine readable open data by the IRS. In the case of foundations, however, the 990-PF remains a form designed for compliance rather than data collection, and the quality of information it provides ranges from good to extremely poor, with a high volume of mistakes and omissions.

Greater Transparency Is Inevitable When it comes to transparency, what used to be a bilateral relationship between private foundations and government has now become a triangle with the digitally literate public. People expect to be able to get information on virtually everything — government, corporations, stores, products, celebrities, friends, enemies and themselves — instantly through their smartphones, tablets or watches. The modern version of the old motto “trust but verify” has been updated to “trust but Google.” There is no reason that foundations, because they are private and like to have a low profile, should imagine they are somehow exempt. You say your mission is to: “to improve the quality of life for present and future generations”? Great, I’m going to find how you’re doing it! And increasingly, philanthropists who try to fly under the radar get detected: when Sean Parker of Napster and Facebook fame came under criticism for holding a lavish wedding under the canopy of Northern California’s protected Redwoods, he tried to defend

himself with all the good work his foundation was doing. The only problem was, nobody knew he had a foundation because he hadn’t gone to the trouble of telling anyone by creating a website.

Voluntary Transparency Is Growing Foundations are beginning to realize that you can’t make a difference in the world without being more transparent. Having an impact requires fully understanding the problem you are trying to solve, learning what other foundations already know, and identifying foundations with similar interests with whom you can partner to work at scale. None of this is possible unless foundations openly share information about their work, their grants, and lessons learned. More and more foundations are experimenting with social media, open data, open licensing of research, blogging and other forms of transparency, realizing that the knowledge they and their colleagues possess may be as valuable as the money they have to give away. So prevalent is this trend that Foundation Center has devoted a special website to document and share innovations in foundation transparency entitled Glasspockets. Its name comes straight from the testimony of Russell Leffingwell, a Republican Banker and Foundation Trustee, who boldly told his Congressional inquisitors during those McCarthy era hearings mentioned earlier: “We think that the foundation should have glass pockets.”

Two Cheers for LLCs and Impact Investing The two biggest trends in American philanthropy are the rise of Silicon Valley philanthropists and the concept of impact investing. The Facebook billionaires and other tech entrepreneurs are amassing very large fortunes far earlier in their lives than previous generations of philanthropists and are bringing their confidence, innovation and spirit of disruption with them as they decide just how to go about their charitable giving. Many are determined to do it differently than the big, historical foundations like Ford, Rockefeller, or even the much newer mega-foundation, Gates. In fact, much of this cohort questions the very notion of setting up a formal foundation, because they see it as slow, bureaucratic and limited primarily to the making of grants. Mark Zuckerberg and Priscilla Chan made a big splash when they recently announced that they would use 99% of their Facebook shares to create an LLC “... to advance


human potential and promote equality for all children in the next generation.” Though critics immediately pounced on them for using an LLC rather than a traditional foundation for its potential tax advantages, the Zuckerbergs claimed that the real reason was to give them full flexibility to make equity investments, loans and grants to further their vision.

This notion of using equity investments is commonly called impact investing. The appeal is immense: imagine if the $798 billion in foundation endowments and some portion of those trillions in the capital markets could be put to use to save the world while making a profit for investors. This is the classic “win-win” that we all desire and there is clearly something to it. If your charitable mission is to reduce global warming, why not make market-rate, equity investments in alternative energy instead of fossil fuels? It is less clear how impact investing can be applied to some areas of philanthropic focus such as racial discrimination, human rights or bullying, but clearly impact investing is here to stay and an industry is fast developing around it.

For all their promise, there is one important caution when it comes to these new forms of philanthropy and impact investing, and that is their lack of transparency. Traditional foundations are required by government to disclose each and every grant they make to fulfill the requirement to spend the equivalent of 5% of their assets for their charitable purpose each year; LLCs are not. This means that whatever we know about Mark Zuckerberg’s philanthropy going forward will be precisely what he chooses to tell us. The same is true of impact investing, for which the only data trail is we

have today relies on voluntary disclosure by the investors themselves. The irony is that Silicon Valley entrepreneurs, who have amassed enormous fortunes by harvesting data from hundreds of millions of users, and impact investors, who rely on open access to reliable information to make their decisions, should show such little concern when it comes to the transparency of their own efforts to make the world a better place.

If markets functioned perfectly, there would be no poverty, pollution and injustice. But they don't and never will, which is why we need to be compassionate, idealistic, pragmatic, and flexible in using all the tools at our disposal to meet the challenges of our time. That so much poverty persists alongside such massive accumulation of wealth is unacceptable and dangerous for the long-term prospects of our increasingly global society. While philanthropy, made possible by accumulated wealth, is a product of those contradictions, it also has the means and a responsibility to do something about them. Whether it be through traditional foundations, experimentation with LLCs, or impact investing, philanthropy is vital to the future of our market-driven world. And like it has with markets, transparency and the open access to information it provides can only make philanthropy stronger.

Bradford K. Smith is President of Foundation Center, the leading source of information about philanthropy worldwide. Mr. Smith has devoted his entire career to the philanthropic and nonprofit sectors.


Sustainable Editorial A Call for Chaos By Steven Nelson, Head of The Calhoun School

I’m an educator, not a businessperson, but these two professions have much in common. In both education and business, an emphasis on short-term gains often inhibits long-term results. Businesses cater to impatient shareholders and schools cater to impatient politicians. Highly regimented, calcified organizations can stifle creativity and risk-taking in business and education. In both realms we need more chaos and less order.

The roots are common. In the early 20th century, Henry Ford’s approach to automobile manufacturing inspired the orderly routines of “factory-style” education. While assembly lines were clearly effective for building the Model T, children were never a sum of identical mechanical parts.

For more than 100 years, schools have operated on the false assumption that children can be processed and finished for future use by some set of common expectations and practices. We now pay a heavy price, as millions of children never reach the end of the conveyer belt. Our regimented, orderly polices – first No Child Left Behind, then Race to the Top and Common Core, now the Every Student Succeeds Act – have left increasing numbers of kids to fall off the production line, hopes and dreams dashed on the factory floor. It has been an utter debacle.

The rhetoric of education reform is deeply ironic.

Policymakers and politicians cite the need for entrepreneurs and innovators yet drive sterile policies and practices that have children completing worksheets, complying with teachers’ directions, sitting silently, respecting their elders. They say we need problem solvers, then adopt policies that train children to get the answers right on a test, punishing any risk taking or original thinking. They say we need leaders and then design systems that reward kids only when they blindly follow. They say we want visionaries, but don’t have time to hear children’s ideas. They use trite phrases like “think outside the box,” then present children with boxes to check and scold them for coloring outside the lines.

Entrepreneurship, innovation, originality, vision and imagination emerge from lively chaos, not from rigid order. Authority should be questioned. Skepticism should be our educational religion. While a pedantic excursion into chaos theory is neither my intent nor my expertise, it is reasonable to note that “order” is essentially the self-limiting nature of linear processes and “chaos” is the much richer recognition of the complex systems that best characterize human development and most contemporary enterprises.

In a recently completed book I cite several flawed assumptions that drive ineffective practices in schools. Two of them are pertinent to finance and banking as well as other industries:

1. Traditional education is predicated on theassumption that extrinsic structures that reward and punish children, teachers and schools are the optimal motivational milieu.

Extrinsic structures (grades, gold stars, employee bonuses for prescribed behavior, punishment, shaming, etc.) inhibit motivation and drive conformity. Extrinsic structures often create stress, which produces cortisol, which suppresses brain activity. High-stress environments reduce productivity and inhibit creativity, whether in the dorm suite or the executive suite. Yet most schools


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and many employers make unreasonable demands, believing some archaic myth about “no pain, no gain.” Intrinsic motivation drives greater productivity in both education and the workplace.

By contrast, dopamine in the brain facilitates the neural connections that lead to deep understanding in the classroom and novel solutions in the boardroom. Dopamine is produced when people are happy and relatively stress free. Dopamine is a byproduct of real, engaging relationships, not the debilitating competitive cultures seen in too many schools and places of employment.

2. Traditional education is based on theassumption that logical/mathematical and linguistic intelligence (IQ-style intelligence) are primary or sole qualities to be valued and developed in education.

Harvard’s Howard Gardner and others have identified a half dozen other forms of human intelligence. Several are particularly important to enterprise as well as education:

• Visual-spatial intelligence might beobserved in one who perceives order out ofwhat others see as random data or images. Anarchitect is likely to have a high degree of thisintelligence, as is one who easily interpretscharts, graphs or other visual forms of datarepresentation.

• Interpersonal intelligence is the ability torelate well to other people, to function well ina group, to create positive relationships withothers and to be skilled at resolving conflict.

• Naturalistic intelligence is the ability toobserve and understand patterns in thenatural environment.

• Existential intelligence involves anindividual's ability to intuitively understandsocial issues, systems of ethics and othercomplex matters that require a “big picture”view.

The value of these types of intelligence in business should be self-evident, yet they are largely neglected or suppressed in America’s schools. Odd . . . and stupid.

The orderly systems that have characterized education and business for many decades are often described as “rigorous.” It is not mere coincidence that “rigor” is frequently paired with “mortis.” From an enlightened psychological and neurobiological point of view, schools and workplaces should be joyful, relatively stress-free, and aware of the many ways in which humans are intelligent.

Education and enterprise are inextricably connected. Training workers is not the primary purpose of education, but we both want the same thing: confident, skeptical, curious young adults who question standardization, reject mindless conformity and see novel solutions.

The fluid intelligence and intellectual agility required in contemporary times will not arise in highly ordered, traditionally structured schools. Bring on the chaos!

Steve Nelson has been Head of the Calhoun School on Manhattan’s Upper Westside since 1998. Calhoun, founded in 1896 and proudly progressive since the 1970’s, serves 755 children, pre-K through 12th grade. Prior to assuming his current position, Steve served as the president of a performing arts school in Detroit and as an administrator at Vermont Law School and Landmark College.


Sustainable Editorial Ordered Chaos in Learning By Babur Habib, Entrepreneur

Educational experts these days talk about learning by doing, not spoon-feeding information and expecting rote answers in return. We’re in a world where information is readily accessible. What’s more important is how we use this information and what we do with it. This is one of the core skills that is often talked about in context of 21st century learning and what students of today need to succeed in the world of tomorrow. However, our current education system is not set up to promote discovery and independent thinking.

Here is a scenario that Sal Khan (of Khan Academy fame) describes in his 2012 book1: “Picture the stereotype of a perfectly run conventional classroom. Desks are arranged in tidy ranks and rows as on a chessboard. Students deploy their notebooks at parallel slants, their pencils poised in unison, like the bows of a violin section. All eyes are on the teacher looming at the front of the room. Silence reigns but for the first tap of her chalk against the blackboard. It’s a decorous and fitting atmosphere… for a funeral.” Most of us have gone through years of classes like these, and at least in my experience these well-ordered methodologies fail to teach much to the majority of the students.

Now let’s introduce some chaos in this world of learning. First, let’s do away with the age-based classroom. There is no evidence that age-based grouping has a beneficial effect on learning. In fact, it can be argued that pressure of moving on to the next grade hurts the learning process. So now, the classroom is a bigger space than before with students of mixed ages. The younger ones benefiting from the knowledge of the older ones, and the older ones learning by teaching. Next, we remove the restriction of a 45-minute class. There is a chunk of time (let’s say two to three hours at the elementary level) reserved for core skills, and students use it to work towards their weekly goals as they see fit. They can spend all of this time working through math or divide it up to study different subjects. They are free to dig deep into a particular topic that interests them or they can move around if they are bored with just one thing. This brings us to the role of the teacher in this scenario. Instead of acting as the ‘sage on the stage’ delivering a standard lecture to everyone, the teacher serves more as a coach, helping, assisting and identifying where more focus is needed.2

If we were to walk into this room, we’d see students sitting in groups, some discussing history, or literature, others doing math problems either by themselves or in groups, and teachers sitting with some of them helping out or taking part in discussions. To an observer this will look chaotic, and perhaps not conducive to learning. But I believe that this model of individualized

1 Khan, Salman (2012-10-02). The One World Schoolhouse: Education Reimagined (p. 203). Grand Central Publishing. 2 Many experts have talked about this reformatting of the classroom. See Salman Khan’s book: The One World Schoolhouse: Education Reimagined and Tony Wagner’s Creating Innovators: The Making of Young People Who Will Change the World. Another excellent talk is by Sir Ken Robinson: https://www.ted.com/talks/ken_robinson_says_schools_kill_creativity.

©Austin Children’s Museum


https://www.ted.com/talks/ken_robinson_says_schools_kill_creativity

learning enables students to understand and retain more knowledge than the very orderly classroom of today.

Let’s take this further and introduce project-based learning into the mix. Instead of students spending all their time with books or online, a big part of their day should be spent in doing hands-on projects individually as well as in teams. This is taking ordered chaos to another level, where now you not only have to figure out the answers for yourself, but deal with things that don’t work exactly as you planned and teammates who may not see the problem and the solution as you envision. Welcome to the real world, where chaos is an integral part of all that you do. A learning environment of “ordered chaos” will prepare students with 21st century skills such as effective communication, collaboration, leading by influence, initiative and entrepreneurship.

Moving from an ordered classroom to environments that are built on ordered chaos is one of the essential ingredients in changing how students will learn effectively now and in the future.

Babur Habib is an experienced tech entrepreneur with a passion for building innovative products and businesses. He's currently working on reimagining K-12 education by launching a school system with a focus on 21st century learning skills.


Sustainable Editorial Understanding Natural Order and Environmental Chaos via Photography By Alexandra Garcia, Executive Director, International League of Conservation Photographers

Last December, world, corporate, and environmental leaders from around the globe met in Paris for COP21. Together, they sought to create some sense of order amidst the chaos humans have engendered because of our dependence on fossil fuels with an agreement that lays the groundwork for international cooperation on addressing and mitigating against climate change. As aspirational as this document is, I believe that its long-term successful implementation will be in great part due to the contributions of conservation photographers from around the world who strive tirelessly to document the state of our planet. How can this be?

Well, we know for a fact that the average person is not going to wade through dense reports analyzing years of rising CO2 levels. Because let’s face it, though they are critical for providing scientific proof of climate change, they are not exactly thrilling reading for most of us. And yet, successful conservation depends on humans changing their behavior, and change at a scale large enough

to have any real impact on climate change is going to take action by millions of everyday people – folks like you and me who aren’t likely to read those reports.

So how can we best educate global audiences about the chaos we are imposing on the beautiful, complex, and inherent order of nature? Whether on the web, television, or in print – it is only through still and video imagery that people can best understand what is happening to our planet.

This is where the International League of Conservation Photographers comes in. Our league comprises an elite international cadre of wildlife, nature and culture photographers, each of whom has demonstrated a deep commitment to saving the special species and places that grace our

planet. We believe that the best way to understand the extent of desecration of forests by clear-cutting in places like southwest Oregon is through an extraordinary aerial image. Similarly it is only through macro photography, an

Rusty-patched bumble bee (Bombus affinis) on a Joe Pye weed (Eutrochium sp). Without close examination, one might assume that all bees perform the same functions, when in fact, each species has a distinct role. Vanishing Species Campaign with the Endangered Species Coalition. ©Clay Bolt/iLCP.

Clear cuts in the Rogue River area of Oregon. O&C Lands Expedition with Pew Charitable Trusts. ©Garth Lenz/iLCP


extreme close-up technique, that we can show the fragile interdependence between the tiny and highly threatened rusty-patched bumblebee and the plants that depend on it for pollination. Whether at vast or minuscule scale, the natural world relies on a system that has taken millennia to develop, and photography is one of the best tools to help us appreciate the important role of each creature and place in it.

Of course, our photographers also point their lenses to the beautiful order of nature as it exists in places that we have not yet damaged or that have been protected through sound conservation practices. Who of us could imagine the fantastical beauty of mangroves below the water’s surface? After all, most of us will never snorkel amongst their tangled roots to witness the incubation of thousands of baby fish or how mangroves protect seashore communities from the ravages of violent tropical storms.

iLCP is best known for our Conservation Photography Expeditions, which we undertake with local, national and international conservation organizations to

produce images that fully capture the threats and opportunities faced by communities whose environments and cultural traditions are in peril from activities like mining, clear-cutting, poaching, overfishing, or any other behavior that is ruled by a basic disregard for the fundamental order that exists in the natural world. Our partners use these images to communicate the need and value of their efforts to donors, funders, beneficiaries, local communities, and the general public.

There is no doubt that politicians and policy makers must lay the groundwork to enable all of us to cope with, adapt, and address human impact on a large scale. In the end, however, it is everyday people who are going to have care enough to do the heavy lifting. But, as it is really hard for most of us to care about something we don’t know – and we can’t know everything firsthand—we must rely on images to help us grasp what is at stake, whether in our immediate neighborhood or somewhere on the other side of the world.

iLCP ensures that conservation imagery can be used to inspire caring and even more importantly, action. We do so not only through our Expeditions, but also with our Image Licensing Services and with WiLDSPEAK, an annual symposium in Washington, DC, which explores how extraordinary visual media can contribute to impactful science communications and positive conservation outcomes.

Alexandra Garcia is Executive Director of the International League of Conservation Photographers.

Mangrove tree underwater. Danajon Bank, Philippines Expedition with Project Seahorse and the London Zoological Society. ©Michael Ready/iLCP.


http://conservationphotographers.org/our-images/

http://conservationphotographers.org/our-images/

http://www.wildspeak.org/

Upcoming Events Global ESG Calendar

Date/Time Event Location Information

1.20.16 – 1.23.16 The Annual EcoFarm Conference Asilomar Conference Grounds Pacific Cove, CA

http://www.eco-farm.org

1.20.16 – 1.23.16 World Economic Forum – Annual Meeting

Davos, Switzerland http://www.weforum.org/events/world-economic-forum-annual-meeting-2016

1.25.16 – 1.27.16 Cleantech Forum – San Francisco Parc 55 Hotel San Francisco, CA

http://events.cleantech.com/cleantech-forum-sf

1.25.16 – 1.27.16 Ecotourism and Sustainable Conference – ESTC America

University of South Florida Tampa, FL

http://www.ecotourismconference.org

1.27.16 2016 Investor Summit on Climate Risk, “Advancing the Clean Trillion”

United Nations New York, NY

http://www.ceres.org/investor-network/investor-summit/agenda

2.1.16 – 2.5.16 Education for Sustainability, Transformative Learning and the Earth Charter

San Jose Costa Rica

http://bit.ly/earthcharterfeb2016

2.9.16 – 2.11.16 Wind Power Finance and Investment Summit

Ranch Bernardo Inn San Diego, CA

http://www.infocastinc.com/events/wind-finance-investment

2.18.16 – 2.19.16 Net Positive – Energy and Water Conference

Manchester Grand Hyatt San Diego, CA

http://www.netpositiveconference.org

2.20.16 – 2.22.16 Wisdom 2.0 Conference Marriot Marquis Hotel San Francisco, CA

http://www.wisdom2conference.com

2.23.16 – 2.25.16 GreenBiz Forum 2016 JW Marriott Camelback Inn Resort & Spa Scottsdale, AZ

http://www.greenbiz.com/event/2016/02/23/greenbiz-forum-2016

3.2.16 – 3.4.16 GLOBE 2016 – International Environmental Business Summit Cornerstone Speaking Event

Vancouver, BC Canada

www.globeseries.com

3.8.16 – 3.9.16 The 11th Annual Women’s Leadership Conference

Hyatt Regency Hotel Rosebank, Johannesburg South Africa

http://welead.co.za/womans-leadership-conference

3.14.16 The 15th Annual Wall Street Green Summit Cornerstone Speaking Event

Columbia University Club New York, NY

http://www.wsgts.com

3.15.16 – 3.16.16 2016 Women’s Empowerment Principles Annual Event Cornerstone Speaking Event

United Nations New York, NY

http://weprinciples.org/Site/

3.22.16 3rd Geneva Summit on Sustainable Finance

International Conference Centre Geneva, Switzerland

http://www.geneva-summit-on-sustainable-finance.ch

3.30.16 – 3.31.16 2nd Annual ESG, SRI & Impact Investing Summit Cornerstone Speaking Event

Princeton Club, New York, NY

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


http://www.eco-farm.org/



http://www.ecotourismconference.org/

http://bit.ly/earthcharterfeb2016



http://www.netpositiveconference.org/

http://www.wisdom2conference.com/

http://www.globeseries.com/



http://www.wsgts.com/

http://www.geneva-summit-on-sustainable-finance.ch/

http://www.geneva-summit-on-sustainable-finance.ch/

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Recent Articles from Cornerstone Capital Group

Cornerstone Journal of Sustainable Finance & Banking – December 2015 Cornerstone Journal of Sustainable Finance & Banking – November 2015 Cornerstone Journal of Sustainable Finance & Banking – October 2015 Cornerstone Journal of Sustainable Finance & Banking – September 2015 Cornerstone Journal of Sustainable Finance & Banking – Summer 2015 Cornerstone Journal of Sustainable Finance & Banking – June 2015 Cornerstone Journal of Sustainable Finance & Banking – May 2015 Cornerstone Journal of Sustainable Finance & Banking – April 2015 Cornerstone Journal of Sustainable Finance & Banking – March 2015 Cornerstone Journal of Sustainable Finance & Banking – February 2015 Cornerstone Journal of Sustainable Finance & Banking – January 2015 Cornerstone Journal of Sustainable Finance & Banking – November 2014 Cornerstone Journal of Sustainable Finance & Banking – October 2014 Cornerstone Journal of Sustainable Finance & Banking – September 2014 Cornerstone Journal of Sustainable Finance & Banking – Summer 2014 Cornerstone Journal of Sustainable Finance & Banking – June 2014 Cornerstone Journal of Sustainable Finance & Banking – May 2014 Cornerstone Journal of Sustainable Finance & Banking – April 2014 Cornerstone Journal of Sustainable Finance & Banking – March 2014 Cornerstone Journal of Sustainable Finance & Banking – February 2014 Cornerstone Journal of Sustainable Finance & Banking – January 2014 Cornerstone Journal of Sustainable Finance & Banking – December 2013 Cornerstone Journal of Sustainable Finance & Banking – November 2013 Cornerstone Journal of Sustainable Finance & Banking – October 2013 Inaugural Edition The Guardian: “An Entrepreneur without an Exit Strategy” – November 2015 http://www.theguardian.com/dnv-gl-partner-zone/2015/nov/09/an-entrepreneur-without-an-exit-strategy Forbes: “Managing ‘Stakeholder Interaction’ For Better Business Strategy” – August 2015 http://www.forbes.com/sites/dinamedland/2015/08/16/managing-stakeholder-interaction-for-better-business-strategy/ The Economist: “Revisiting the Wealth of Nations: The Seas” by Erika Karp – March 2015 http://www.economistinsights.com/opinion/revisiting-wealth-nations-seas Forbes: “The Power to Convene” by Erika Karp – December 2012 http://www.forbes.com/sites/85broads/2012/12/10/the-power-to-convene/ Forbes: “Sustainable Capitalism…If Not Now, Then When?” by Erika Karp – November 2012 http://www.forbes.com/sites/85broads/2012/11/08/sustainable-capitalism-if-not-now-then-when/ Forbes: “Could Sustainability by Unsustainable?” by Erika Karp – September 2012 http://www.forbes.com/sites/85broads/2012/09/26/could-sustainability-be-unsustainable/?utmsource=allactivity&utm_medium=rss&utm_campaign=20120926 Wharton Magazine: “The Clients of my Clients....Sustainable Selling” by Erika Karp – July 2012 whartonmagazine.com/blog/sustaining-selling-success/ Harvard Business Review | HBR Blog Network "Why Go it Alone in Community Development?" by Andrew MacLeod – June 2012 http://blogs.hbr.org/2012/06/why-go-it-alone-in-community-d/ Forbes: “Sustainable Investing and Moments of Truth” by Erika Karp – March 2012 http://www.forbes.com/sites/85broads/2012/03/28/sustainable-investing-and-moments-of-truth/ Forbes: “Superheroes of Capitalism” by Erika Karp – January 2012 http://www.forbes.com/sites/85broads/2012/01/13/superheroes-of-capitalism/


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http://www.forbes.com/sites/85broads/2012/03/28/sustainable-investing-and-moments-of-truth/

http://www.forbes.com/sites/85broads/2012/01/13/superheroes-of-capitalism/

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