Australian Ethical Investment

- An alternative review of performance -

Organisational Performance Consultants:

Tripharn Teki, Hout Sok, Peter Enzerink, Shawn Boughey

Who is AEI?

• Founded in 1986 and employing 55 people.

• Environmentally and socially responsible investment.

• AEI provides five retail investment trusts, with approximately 140 individual investments.

• Retail superannuation fund that is valued at approximately $500 million.

Organisational Performance Consultants

• Alternative performance metric compared to current TBL.

• Provide a summary report (2000 wds) and presentation to the Board of Directors of AEI.

• Utilised the Balanced Scorecard Method for measuring performance.

• System, Power and Structural view.

Areas of Performance

• Employee Satisfaction– Consultant – Hout Sok

• Financial Performance– Consultant – Peter Enzerink

• Sustainability Performance– Consultant – Shawn Boughey

Power View

Employee Satisfaction

Environmental Sustainability

Financial Operation

Customer

System View

Employee Satisfaction

Environmental Sustainability

Financial Operation

Customer

AEI

Environment

Employee Satisfaction

0 10 20 30 40 50 60

2005

2006

2007

2008

Very Satisfied

Somewhat Satisfied

Neutral

Somewhat Dissatisfied

Very Dissatisfied

Staff Survey 2005-2008

Employee Satisfaction

7.2

18.5

10.7

0

2

4

6

8

10

12

14

16

18

20

05-06 06-07 07-08

Staff Turnover 2005-2008

Financial Performance

• Publicly listed

• Managed trusts

• Superannuation trusts

Financial Performance

Managed trust performance (April 2009)

– Equities: Ranked 4th of 33 Australian Mid/Small Growth funds

– Balanced: Ranked 5th of 58 Multisector Balanced funds

Table D.2: Superanuation average annual return for 5 years ending June 30, 2007

Balanced GrowthAEI 9.90% 14.80%Typical industry fund 8.2-10.8% 9.5 - 11.5%

Financial Performance

• Funds under management (FUM)

Financial Performance

• Tithing 10% of profit– Major: Bluegreen Films, Medical Students’ Aid Project

– Minor: ACT Eden Monaro Cancer Support Group, Engineers Without Borders, Pedal Power ACT, Child Wise, Asian Women at Work and the Broken Hill & District Hearing Resource Centre

• Climate change

Sustainability Performance

• Investments

• Operations

• Best Practice Role Model

Sustainability Performance

Trevor Pearcy House – New Office Building

ENERGY

Upgraded insulation & exposed internal mass

Natural ventilation with mechanical back-up.

Operable windows, ceiling fans & radiators

Solar hot water

~70% reduction in energy use

Sustainability Performance

Trevor Pearcy House – New Office Building WATER

~75% reduction in water useRainwater captureLow flow urinals (retrofit)AAAA showerheadsDual flush toilets (retrofit)

Sustainability PerformanceEnergy

Energy Used (MJ/Sqm)

0

200

400

600

800

1000

1200

2004-5 2005-6 2006-7

Energy Used (MJ/Sqm)

Sustainability PerformanceWater

Water Used (Kl/FTE Staff)

0

2

4

6

8

10

12

14

2004-5 2005-6 2006-7

Water Used (Kl/FTE Staff)

Sustainability PerformanceWaste

Waste Recycled (%)

76

78

80

82

84

86

88

90

2005-6 2006-7

Waste Recycled (%)

Sustainability Performance

• GRI – Global Reporting Initiative

• Savings in Energy and Water Translate to Financial Performance

• Crucial to maintain leadership in this area

External Validation

• Meet these measures = Meet the strategic goals of AEI.

• Customer Retention and Acquisition.– External validation of AEI performance.– Customers will not invest in a poor performing

organisation.

Recommendations

• Need for specific metrics for Employee Satisfaction.

• Current market volatility and impact on investment.

• Impact of climate change and the effect on investment.

Conclusion

• Performance is in line with market expectation.

• A number of recommendations should be investigated.