GE3S is Signatory of UN Principles for Responsible Investment

Q1.What is meant by UNPRI?

United Nations’ Principles for Responsible Investment

UNPRI. Acronym. Definition. UNPRI. United Nations’ Principles for Responsible Investment (New York, NY).

Q2. What is ESG?

Environmental, social and governance (ESG) refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies (return and risk).

Preamble:

During the coming years, we will see an aggressive interest from investors, banks, investment companies, fund managers, mutual funds, private equities, startups and seed funds to a level of action around climate change in many parts of the world.

Our research since Paris Agreement shows the environmental issues will be prominent on the investors and fund managers as well as banks agenda, including how to mobilize business to respond to the risks of climate change.

The Paris Agreement is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016. The agreement’s language was negotiated by representatives of 196 state parties at the 21st Conference of the Parties of the UNFCCC in Le Bourget, near Paris, France, and adopted by consensus on 12 December 2015. As of November 2019, 195 UNFCCC members have signed the agreement, and 187 have become party to it

The Economics and Energy Transition Advisors, which forecast that tighter government climate regulations by 2025 could wipe up to US$2.3 trillion off the value of companies in industries ranging from fossil fuel producers to agriculture and car makers. Most exposed is the fossil fuel sector which could lose one third of its current value, The shift would nevertheless also lead to winners. For example, auto makers heavily invested in electric vehicles and electric utility firms using low-carbon power could more than double their values.

There are 16 asset owners committing to the UN Net Zero Asset Owner Alliance, working towards net zero by 2050. And, we continue to see global investors putting pressure on governments via the Global investor statement to governments on climate action, which has now been signed by 631 investors representing well over USD $37trillion in assets.

The Climate Action 100+ initiative released its 2019 progress report, which underscored how investors are seeking to influence the world’s top emitters when it comes to governance on climate change. The report showed that, while a majority of companies are setting targets on emissions, there is a still a great deal of work to be done, especially in the area of climate lobbying.

Q3. What is the in Sustainable Strategy Deployment Consulting offered by GE3S?

As institutional investors, the responsible duty to act in the best long-term interests of the beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognize that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

Unveiling of the PRI at the New York Stock Exchange in 2006, attended by founding PRI signatories and the former UN Secretary General Kofi Annan.

1. We will incorporate ESG issues into investment analysis and decision-making processes.

2. We will be active owners and incorporate ESG issues into our ownership policies and practices.

3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.

4. We will promote acceptance and implementation of the Principles within the investment industry.

5. We will work together to enhance our effectiveness in implementing the Principles.

6. We will each report on our activities and progress towards implementing the Principles.

The Principles of Responsible Investments has affiliations with the United Nations Sustainable Stock Exchanges (SSE) initiative along with the United Nations Conference on Trade and Development (UNCTAD), the United Nations Environment Programme Finance Initiative (UNEP-FI), and the UN Global Compact.

We enable the banks and investment organizations, fund management, private equities, seed fund and even startups in developing sustainable finance and investment strategies that couple competitive financial returns with wider environmental and social benefits.

In compliance to the compliance requirements of most banks and investment institutions are looking to apply sustainable practices in their investment decisions, processes, and operations.

We enable them to finance projects, businesses, and infrastructure in a way that supports sustainability goals. To support our client work, we undertake research and develop cutting-edge tools to measure and manage sustainability performance.

Hence, we provide the following services:

PRI / ESG Policies and deployment services throughout the related activities of the organization.

Creating ESG policies and regularly reporting on their stewardship and engagement activities. We ensure deployment of ESG-related regulations, key ESG themes to include, guidelines, engagement priorities, and key trends in the field of responsible investment.

PRI / ESG Due Diligence

Innovations research oriented comprehensive knowledge ESG factors relevant to a particular investment may also impact valuations, operations, and strategic priorities. We work with private equity firms and other asset managers throughout the investment due diligence phase to identify material ESG factors, benchmark them against competitors, and identify areas to add value. We use our unique, systems-based approach to help our clients identify the right metrics to prioritize while looking at the wider system in which the portfolio company operates. We also work with our client’s post-acquisition and throughout the ownership life cycle to measure, monitor, and report on ESG metrics.

PRI / ESG Integration

Recognizing that increased financial returns can go hand-in-hand with responsible business, investors are increasingly motivated to incorporate environmental, social, and governance (ESG) factors into portfolio decisions. With impact investing becoming mainstream, many investors are seeking guidance on how to bring ESG factors into their financial models. We provide tailored ESG solutions, which help clients to maximize portfolio performance and capture opportunities to reduce risks through sustainable investments.

PRI /ESG Data Analysis

ESG data can be gathered from a variety of sources, most commonly from corporate disclosures, but relevant information can also be gathered from regulatory filings, news sources, social media, corporate communications, industry / academic research, sustainability organizations, etc. ESG data from alternative sources can be combined with other types of analytical data to drive insights on ESG momentum, which can be consumed in various ways. We work with clients who are seeking ESG integration solutions; in this way, data analysis can enhance and be integrated within a traditional investment process.

PRI Factor Optimization

Active ESG investors have moved past negative screening strategies to achieve their ESG objectives without sacrificing returns. However, the successful integration of ESG factors into an investment strategy requires a detailed understanding and interpretation of ESG data; simply selecting the top ESG performers may not satisfy an investor’s portfolio construction goals or drive impact. Our deep understanding of ESG data methodologies—including their current shortfalls—allows us to overlay our expertise while working with clients to optimize ESG portfolios for custom ESG ideas, themes, or goals.

PRI Engagement Practices

As investors become more sophisticated at ESG integration, they begin to see opportunities for improving the performance of their portfolio companies through engagement on these issues. Engagement could mean focusing on a specific company or participating in broader initiatives. Both require resources, and so investors need to make careful and strategic choices about where to focus their efforts. They also need to be as effective as possible in doing so. We work with clients to determine which engagement activities will be of most value to the firm in both strategic and financial terms. We then assist them to ensure that these engagements produce the desired outcomes. We are very familiar with many of the most important collective engagement initiatives in this area and we can advise our clients on which of them to participate in.

PRI Innovation Research for every customer

The ESG space continues to make great strides as it enters the mainstream. However, it can be challenging to interpret the nuances of different disclosures, materiality frameworks, and ESG metrics and scores. It can also be difficult to understand how ESG relates to corporate practices, as these differ by industry, sector, and market cap. We work with our clients to help them make sense of it all by listening to their ESG goals, leveraging our team’s academic-based approach, and performing customized research to deliver precise solutions.