The Sustainable Investing Spectrum

https://www.youtube.com/watch?time_continue=132&v=rGmxOFYaC2Q
What does the term ESG mean?

Social Governance
Environmental
• diversity disclosures • ethics
• greenhouse gas
• labor relations • board diversity
emissions
• employee health & • shareholder rights
• water use
safety • supply chain
• waste disposal
• community engagement
development
ESG Investing

• ESG Investing is focused on the operations of the company, how they

are performing on environmental, social, governance
Impact Investing

• Impact Investing focuses on the products

and services a company produces

• GIIN definition - ‘investments made into

companies, organizations, and funds with
the intention of generating social and
environmental impact alongside financial
return

• Solutions that people and planet need

ü financing affordable housing

ü community services
ü clean energy
ü environmental protection
 ESG vs Impact Comparison

Higher risk, higher impact

Low risk, market returns, low impact

Source: Calvert Impact Capital

Investing & the UN SDG Connection

• Impact investors are looking to identify and invest in

companies tackling these same issues

• ESG investors are giving their investment funds to the

companies who are making incremental contributions

• Banks are creating sustainable savings accounts which

direct loans to underserved markets, asset managers
are creating SDG engagement funds
It is about more than being “ethical”. It is about being human.

We need to understand where our money goes, then consciously

direct it somewhere better.

Rebecca O'Connor
The ESG Data Ecosystem

Reporting Frameworks Ratings Firms Ratings Reporting

Scoring Methodologies & Inconsistencies

• Lowest score of • Rated BB - bottom end of • ‘Underperformer’ status

any company on its “average” category in the 14th percentile of
S&P 500 its category
ESG Funds – What should I look for?

• Fund size/liquidity (300MM+)

• Trading volume (Highest)

• Performance (5, 10+ year)

• Expense ratio (Below .5%) & no load

• Standard deviation (Lowest)

• Experience (New to ESG or Early Adopter?)

• Portfolio construction methodology, what is

the exclusion method?

• Top 10 holdings
ESG INVESTING TOOLS DEMO
Sustainable Investments – Impact Funds

Impact Funds (Calvert & Capital Impact)

• Investment works like a term-deposit, manager lends your money to
a portfolio of companies (typically in sectors like affordable housing,
education, health, microfinance, renewable energy, sustainable
agriculture)

• Management fees: None

• Expected returns: 1.5 - 4% at terms from 1-15 years

• Impact: Reported annually by fund manager (hospitals built, jobs

created, people educated)
Sustainable Investments – Savings & MPF

Retirement / MPF
HK MPF Retirement Funds - Research showed that only AIA offers a
ESG/Green fund. HSBC, Manulife, Sun Life do not currently.
(Look up on Yahoo Finance Amundi HK Green Planet Fund I (0P00009T92.HK)

Savings/Money Market Account

Standard Chartered launched a sustainable deposit in October 2019 in

Singapore, your deposit is invested in developing countries and Africa
which are typically underserved by commercial banks. Soon to be
available in HK. Half a dozen similar banks offer this in Europe.
US Sustainable Fund Flows
Global Sustainable Fund Assets
Your Next Steps

• Discuss with investment advisor, friends, family about

moving investments to ESG and Impact

• Swap existing equity or bond funds to ESG-themed

versions

• When investing in a company, check ESG score on

Yahoo, MSCI, Morningstar, broker

• Ask your HR/MPF manager about their ESG fund

offering. If they don’t have one, build an employee
coalition and request it!

• Choose your bank wisely, understand how and where

they invest YOUR money.
Inspiring & Educating
Corporations to
Achieve the UN SDGs
About Encompass HK

• Established in December 2018

• Structured as a social enterprise,

donating 60% of all profits to NGO and
community partners

• Created and planned over 40

workshops and experiential-learning
programs
Our Partners
Our Solutions
• Experiential Employee Workshops & Field Trips
- D&I, LGBTQ+, SDGs, Unconscious bias, climate change
- Biodiversity, heritage, geography, beach clean-ups / field trips

• ESG Reporting, Climate Audits & Data Management

• Digital & Event Marketing for Sustainable Brands

- Strategy development
- Social media management
- SEO/SEM
- Event production, creative, staffing
Our Clients
 THANK YOU! Encompasssdg

Encompass-HK

EncompassHKAsia

www.encompasshk.com warren@encompasshk.com
04
Register for our events:
www.encompasshongkong.eventbrite.hk
Research & Education
https://priacademy.org/ - Impact investing training provided by PRI

https://www.calvertimpactcapital.org/impact-investing-a-short-guide-for-financial-advisors - Calvert,
Guide for Financial Advisors

https://investorplace.com/2019/03/7-stocks-to-buy-with-high-esg-momentum/ - Article explaining

concept of ESG momentum

https://www.youtube.com/watch?v=WBNAsvlnERs - Simple explainer video contrasting impact and

philanthropy

https://www.youtube.com/watch?v=4LPRQaG83Ls&t=473s - 9 minute interview from Nuveen,

explaining ESG and landscape

https://www.youtube.com/watch?time_continue=132&v=rGmxOFYaC2Q - Forbes explainer video

https://www.asyousow.org/proxy-voting-101 - Proxy voting 101 by leading shareholder advocacy

NGO

https://www.mycnote.com/blog/retail-impact-investing-options/ - Detailed review of impact investing

platforms, mostly targeting millennial investors
Research & Education
https://www.morningstar.com/company/esg-investing - Host of downloadable reports from
Morningstar

SOCAP - convenes impact investors, social entrepreneurs, and organizations dedicated to

catalyzing world change through market-based solutions, popular events mostly in USA.

https://assets.rockefellerfoundation.org/app/uploads/20190611164643/FT_Focus-
IMPACT_V10.pdf - global survey of retail investors from the Rockefeller Foundation

https://docs.google.com/document/d/1YEGQHEldR0xc3tFekqGMgoNsrwBLyLNI7hIZriFuCvI/edit#h
eading=h.mhbbqpxs0siq

https://thegiin.org/ - GIIN has several reports and resources

https://www.unglobalcompact.org/docs/issues_doc/Financial_markets/who_cares_who_wins.pdf -
UN Report titled “Who Cares Wins” which was first publication to endorse and define ESG
investing (2005)

https://esg.theasset.com/ - HK based media outlet covering ESG

Just Capital - review their ETF and consumer education

Research & Education
Bernstein Portfolios - https://www.portfolioeinstein.com/william-bernstein-
portfolios/#Performance_of_the_William_Bernstein_portfolios

CNBC January 2020 Guide -

https://www.cnbc.com/2019/12/14/your-complete-guide-to-socially-responsible-investing.html

WSJ ETF Buying Guide -

https://guides.wsj.com/personal-finance/investing/how-to-choose-an-exchange-traded-fund-etf/

7 Different Portfolio types from Forbes -

https://www.forbes.com/sites/simonmoore/2018/07/26/six-expert-investment-portfolios-you-can-
implement-today/#24e2c32874b2

Impact Investing Players -

https://www.faithdriveninvestor.org/blog/2019/7/1/35-players-in-the-impact-investing-industry

ESG Model Portfolios -

https://www.sustainableeconomist.com/model_portfolios
Research & Education
UN Carbon offset platform -
https://offset.climateneutralnow.org/allprojects?specs=261&pagenumber=2

Samples of professional portfolios - https://portfoliocharts.com/portfolios/

Mattrvest (Germany) Webinars on making banks more transparent and sustainable -

https://www.facebook.com/mattrvest/videos/?ref=page_internal

Comprehensive review of sustainable investing landscape for beginners, from M1 Finance –

https://www.m1finance.com/blog/socially-responsible-investing/

FINRA’s comprehensive guide to ESG Investing - https://www.finra.org/investors/insights/esg-

investing-clearing-air-social-impact-financial-products

‘Good Egg’ Awarded Companies UK - http://goodegg.good-with-money.com/good-eggs-awarded/

Abundance Impact Investing Platform UK - https://www.abundanceinvestment.com/how-it-works

ESG Investing makes little impact (CNBC) - https://www.cnbc.com/2020/02/26/chamath-

palihapitiya-esg-investing-is-a-complete-fraud.html
Research & Education
Nordea Bank 27X Impact - https://nordeainvestmagasinet.dk/sites/default/files/inline-files/Regnestykke-baggrund.pdf

Fast Company Best Impact Investing Products - https://www.fastcompany.com/90492172/world-changing-ideas-

awards-2020-impact-investing-finalists-and-honorable-mentions