1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 8:

Transcript:1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 8::
1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 8: Equity - investing with an ownership stake Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 2 Part I: What is sustainability and why does it matter? Sustainability and the transition challenge Part II: Sustainability’s challenges to corporates Externalities - internalisation Governance and behaviour Coalitions for sustainable finance Strategy and intangibles – changing business models Integrated reporting - metrics and data Part III: Financing sustainability Investing for long-term value creation Equity – investing with an ownership stake Bonds – investing without voting power Banks – new forms of lending Insurance – managing long-term risk Part IV: Epilogue Transition management and integrated thinking Overview of the book Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 3 describe the state of ESG integration into equities and explain how it could improve both financial and non-financial returns explain the link between ESG integrated analysis, understanding of companies, their value drivers, and their investment case explain how and why the societal function of finance can be exercised more thoroughly in a fundamental approach to equity investing than in quant or passive approaches describe the difference between ESG investing and impact investing Learning objectives – chapter 8 Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 4 Basics of equity Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Public equity: $70 trillion 5 Equity valuation Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 6 DCF Equity valuation 7 DCF Equity valuation – changed EBIT 8 Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Why does sustainability matter to equity investing? 9 Relevance of sustainability to equity Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Business models 10 Relevance of sustainability to equity Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 11 Evidence Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 12 ESG integration into equities Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Why? Does it happen? How? 13 ESG integration into fundamental equities Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Steps in the Value driver adjustment (VDA) approach: 14 ESG integration into fundamental equities Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford