keio bs 20111005 toru iwai
DESCRIPTION
Impact InvestingTRANSCRIPT
IWAI Toru, October 5, 2011
Social Impacts by Leveraging Financial Capabilities
Keio Business School -Strategic Management with Social Impacts-
©Daiwa Securities Group Inc.1
Table of Contents
1. Role of Financial, Capital Markets & Daiwa Securities Group (P. 2~5)
2. MDGs (Millennium Development Goals) &SRI(Socially Responsible Investment) (P. 7~ 18)
3. CSR & SRI / Impact Investing Productsat Daiwa Securities Group (P. 20~41)
4. Conclusion (P. 42)
Appendix (P. 45 ~50)
This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited.
©Daiwa Securities Group Inc.2
Role of Financial & Capital MarketsSince supply and demand of funds are mostly connected through Financial and Capital Markets, our role is to create a smooth money flow, provide capital as a blood in economy and contribute to a sustainable growth and solving the social issues.
Financial & Capital Markets
©Daiwa Securities Group Inc.3
Members of Daiwa Securities GroupInvestment and Financial Services (Holding company, 58 subsidiaries, 6 equity method affiliated companies)
©Daiwa Securities Group Inc.4
Global Network
Geneva BranchGeneva Branch
Hong KongHong Kong
AustraliaAustralia
LondonLondon
ParisParis
MilanMilan
FrankfurtFrankfurt
Melbourne Melbourne
Hong KongHong Kong
Frankfurt BranchFrankfurt Branch
SingaporeSingapore
SingaporeSingapore
Paris BranchParis Branch
NYNY
London Head OfficeLondon Head Office
Milan BranchMilan Branch
Bahrain BranchBahrain Branch
Seoul BranchSeoul Branch
TaiwanTaiwan
The PhilippinesThe Philippines
Beijing Representative OfficeBeijing Representative Office
Daiwa SSC SecuritiesDaiwa SSC Securities
ManilaManila
ShanghaisShanghais
BeijingBeijing
SeoulSeoul
TaipeiTaipei
Bangkok Rep.Office Bangkok Rep.Office San FranciscoSan Francisco
Dubai BranchDubai Branch
DubaiDubai
MoscowMoscow
MumbaiMumbai BangkokBangkok
Hanoi Rep. OfficeHanoi Rep. Office
HanoiHanoiシャーロットシャーロット
ChicagoChicago
=Development Bank of Philippines has 40% of share
Our company’s stronghold
Special hubs for M&AAcquisition of M&A Advisory Division of Close Brothers and Close Brothers Corporate Finance on Jul. 2009.MadridMadrid BarcelonaBarcelona
LyonLyon
Manchester Manchester
WarsawWarsaw
GenevaGeneva
ZurichZurich
NY Head OfficeNY Head Office
San Francisco BranchSan Francisco Branch
According to the M&A division, another 20% of
investment for partnership
According to the M&A division, another 20% of
investment for partnership
Daiwa Capital Markets America IncDaiwa Capital Markets America Inc
Daiwa Capital Markets Europe LimitedDaiwa Capital Markets Europe Limited
IndiaIndia
Moscow Representative OfficeMoscow Representative Office
Daiwa Capital Markets Asia Holding B.V.Daiwa Capital Markets Asia Holding B.V.
=Merger with Shanghai Securities (Daiwa: 33% of share)BahrainBahrain
Daiwa Securities Trust Company (US)Daiwa Europe Fund Managers (Ireland) LimitedDaiwa Europe Trustees (Ireland) Limited
Overall 26 sites worldwide
©Daiwa Securities Group Inc.5
Valuing Human Resources
Employees are the source of our competitiveness.
Valuing Human Valuing Human Resources Resources
Employees are the source of our competitiveness.
EmployeesEmployees
Earning Sound ProfitsImprove corporate value by developing a healthy business.
Earning Sound ProfitsEarning Sound ProfitsImprove corporate value by developing a healthy business.
ShareholdersShareholders
Building TrustTrust from the clients is the foundation of our business.
Building TrustBuilding TrustTrust from the clients is the foundation of our business.
CustomersCustomers
Contributing to Society Contribute to the community and economic development through finance and capital markets.
Contributing to Society Contributing to Society Contribute to the community and economic development through finance and capital markets.
Society Society
Stakeholders & Corporate Principles
©Daiwa Securities Group Inc.6
1. Role of Financial, Capital Markets & Daiwa Securities Group (P. 2~5)
2. MDGs (Millennium Development Goals) &SRI(Socially Responsible Investment) (P. 7~ 18)
3. CSR & SRI / Impact Investing Productsat Daiwa Securities Group (P. 20~41)
4. Conclusion (P. 42)
Appendix (P. 45 ~50)
This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited.
Table of Contents
©Daiwa Securities Group Inc.7
Our Surrounding Environment
経済(Profit/Governance)
人間社会(People/Society)
地球環境
(Planet/Environment)
企業・団体(Enterprise)
【【PPPPPP】】 【【ESGESG】】
©Daiwa Securities Group Inc.8
Stakeholder Concerns
Shareholders Customers; Clients
Employees
Stricter c
ustomers
’ view
;
Heighte
ning cus
tomers’
orientatio
n by e
asing t
he re
gulatio
n
Silent shareholders
to active shareholders
From lifetime employment to performance-base;Aiming to be a professional
Strengthening monitoring of the enterprise;Social business
Local Community; Citizens
Stakeholders’ domain to give influence to the organization
Improve S
CM
Business Partners
Climate Change
Climate Change
Global Warming
Global Warming
Governance Governance ComplianceCompliance
Human
Human
Rights
Rights
Pover
ty
Pover
ty
DiversityDiversity
Company
©Daiwa Securities Group Inc.9
Guidance on Social Responsibility, provides harmonized, globally relevant guidance for private and public sector organizations of all types based on international consensus among expert representatives of the main stakeholder groups,.
What will ISO 26000 achieve? It will integrate international expertise on social responsibility –will be a powerful SR tool to assist organizations to move from good intentions to good actions.
Source: ISO Web site . Japan Business Federation Political Sociology Division 2010.6.10「Summary of Result of Copenhagen Conference ISO260000」
ISO 26000 (Publish in Nov. 2010)
1. Accountability 2. Transparency 3. Ethical behavior 4. Respect the interest of stakeholders 5. Respect the rule of law6. Respect the international code of
conduct7. Respect the human rights
7 Code of Conducts
1. Administration of the organization2. Human rights3. Labor practice4. Environment 5. Fair business practice6. Consumer issues7. Community participation and
development
7 Core Subjects
From CSR to SR
©Daiwa Securities Group Inc.10
Paradigm Shift
Sustainability EraSustainability Era
~20th century
<Unlimited Resource>
21st Century~Low Carbon Community
<Limited Resource>
Materially R
ich
Carbon energy Carbon energy replaced animals and replaced animals and manpowermanpower
New/Renewable Energy Era New/Renewable Energy Era (Solar, wind, gravitational energy, (Solar, wind, gravitational energy, biomass) biomass)
Growth Era
ParadigmParadigmShiftShift
Industrial Industrial RevolutionRevolution
Environment, Resource & Human rights constraint Environment, Resource & Human rights constraint
©Daiwa Securities Group Inc.11
(MDGs logos were created by 「Don’t let it be – world poverty」)
Goal 1: Eradicate extreme poverty & hunger Goal 2: Achieve universal primary educationGoal 3: Promote gender equity and empower womenGoal 4: Reduce child mortality ratesGoal 5: Improve maternal healthGoal 6: Combat HIV/AIDS, malaria and other diseasesGoal 7: Ensure environmental sustainabilityGoal 8: Develop a global partnership for development
MDGs (Millennium Development Goals)
Source: The World Bank, “The costs of attaining the millennium development goals.” Summary of World Bank Policy Research Working Paper, “Development Goals: History, Prospects and Costs,” by Shantayanan Devarajan, Margaret J. Miller, and Eric V.Swanson.
In addition to $57 billion of ODA in 1999, another $40-60 billions p.a. are needed to achieve the MDGs .
■Additional fund necessary to; (include double count) (Bil. USD)
Poverty Eradication 39 ~ 54
Education 10 ~ 25
Health care 20 ~ 25
Emvironment 5 ~ 21
©Daiwa Securities Group Inc.12
主要援助国のODA実績の推移(支出純額ベース)
9.39.59.67.7
11.113.1
8.98.99.8
13.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
(暦年)
(10億ドル)
米国
フランスドイツ
英国
日本
カナダ
イタリア
(出典)OECD・DAC(注1)東欧および卒業国向け実績を除く。
ODA Trend
Source: website of Japan’s MOFA
Billion USD
Japan
USA
Official Development Assistance by G7
(CY)
©Daiwa Securities Group Inc.13
No-financial return
Private
Public
Donation
Grant Aid Yen Loan
SRI(e.g.: Microfinance
bond)
Financial return*
Funding type for Development
*Possible for negative return due to exchange fluctuations and credit risk and so on.
©Daiwa Securities Group Inc.14
Private Money for Social Issues
<Background>
Fiscal condition of each country grows increasingly severe (policy makers’ side)
Reflect on the financial crisis (investors’ side)
world’s financial assets = $178 trillion in 2008 (world’s GDP is $58 trillion)
Not only Donations/ODA, but also Investments are required to solve social issues
<Background>
Fiscal condition of each country grows increasingly severe (policy makers’ side)
Reflect on the financial crisis (investors’ side)
worldworld’’s financial assets = $178 trillion in 2008 (worlds financial assets = $178 trillion in 2008 (world’’s GDP is $58 trillion)s GDP is $58 trillion)
Not only Donations/ODA, but also Investments are required to sNot only Donations/ODA, but also Investments are required to solve social issues olve social issues
■ GIIN (Global Impact Investing Network) GIIN is a not-for-profit organization created to “increase the scale and effectiveness of impact investing.”
It was inaugurated at Clinton Global Initiative in Sep. 2009, to measure growth and increase of the social investment, ‘Impact Investment’, in which is more direct and has an immediate result compare to conventional SRI. Representative examples of investment products: vaccine bonds of IFFIm, Generation Investment Management of Al Gore, former US Vice President. Main investment target: poverty & hunger; global warming; water, food and energy; medical care, health, welfare; community development, education
©Daiwa Securities Group Inc.15
17%
32%
18%
3%
30%
55%
7%
7% 4%
27%
Billions of dollars, as of the end of 2009Japan* United Kingdom* Germany* France* United States
(%) (%) (%) (%) (%)Total Financial Assets 15,638 100.0 6,709 100.0 6,688 100.0 5,388 100.0 44,510 100.0
Currency and deposits 8,592 54.9 1,913 28.5 2,560 38.3 1,553 28.8 7,756 17.4Life insurance and pension fund reserves 4,228 27.0 3,615 53.9 2,241 33.5 2,126 39.5 13,191 29.6Shares and other equity 1,104 7.1 744 11.1 523 7.8 879 16.3 13,972 31.4Mutual funds and securitis other than shares 1,047 6.7 218 3.3 1,315 19.7 504 9.4 8,135 18.3Others 668 4.3 218 3.3 49 0.7 327 6.1 1,457 3.3
Total Financial Liabilities 4,085 26.1 2,474 36.9 2,193 32.8 1,864 34.6 14,068 31.6Net Financial Assets 11,553 73.9 4,235 63.1 4,495 67.2 3,524 65.4 30,442 68.4
Deep pocket seeking quality
Primary sources: Japan: Bank of Japan, Flow of Funds Accounts , June 17, 2010 United Kingdom: Office for National Statistics, Financial Statistics No 580, August 2010 Germany: Deutsche Bundesbank, Financial Accounts for Germany 1991 to 2009. France: Banque de France, Financial Accounts and Financial Balance Sheets, June1, 2010. United States: Federal Reserve Statistical Release, Flow of Funds Accounts, June10, 2010.
* converted into US dollars based on the year-end exchange rates of GBPUSD=1.62, EURUSD=1.43, USDJPY=92.90
Household Financial Assets
Japan United Kingdom
Germany
France United States
Currency and deposits Life insurance and pension fund reserves Shares and other equity Mutual funds and securitis other than shares Others
Currency and
deposits
Currency &
deposits
Insurance&
PensionShares
Mutual funds
Others29%
3%3%
54%
11%
20%1%
38%
34%
8%
29%9%
6%
16%
40%
Insurance&
Pension
Shares
Mutual funds
©Daiwa Securities Group Inc.16
Extremely Low in Japan
Source:「European SRI Study 2010」; based on Eurosif publication and SIF-J material,
compiled by Daiwa Securities Group. Exchange rate as of Dec 31, 2009
SRI市場規模
4,986
2,141
40558 4
0
1,000
2,000
3,000
4,000
5,000
6,000
欧州(2009)
米国(2010)
カナダ(2008)
豪州・NZ (2010)
日本(2009)
(10億ユーロ)Billion Euro SRI Market size
Europe US Canada Aus/NZ JPN
©Daiwa Securities Group Inc.17
SRI Issues in Japan
1. Inadequate regulation and guideline to promote SRI.2. Less interests in SRI among labor unions, religious
groups or private organizations which have a mission of social contribution.
3. Weak self-awareness in exercising a big impact on social development through financing and investing.
4. Fewer opportunities in school education that teaches how the investment behavior can have social impact.
5. SRI product and service development & offerings
©Daiwa Securities Group Inc.18
New movements in Japan’s SRI
1. Ministry of the Environment Government of Japan,trying to launch a new guideline like PRI for Japanese financial institutions.
2. Japanese Trade Union Confederation (RENGO), announced “Workers’ Capital Guideline”
3. Acknowledge a big social impact in development through financing and investing.
4. Events and Forums for Financial Literacy 5. SRI / Impact investing products
©Daiwa Securities Group Inc.19
1. Role of Financial, Capital Markets & Daiwa Securities Group (P. 2~5)
2. MDGs (Millennium Development Goals) &SRI(Socially Responsible Investment) (P. 7~ 18)
3. CSR & SRI / Impact Investing Productsat Daiwa Securities Group (P. 20~41)
4. Conclusion (P. 42)
Appendix (P. 45 ~50)
This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited.
Table of Contents
©Daiwa Securities Group Inc.20
CSR at Daiwa Securities Group
1. Daily business 2. Developing & offering SRI/Impact Investing products
-Eco fund; SRI fund; microfinance fund -Vaccine bonds; microfinance bonds, etc.
3. Enlightening Event for SRI & Impact Investing4. SRI/ESG Research
1. Social Business College (Daiwa Eco Fund)
2. Daiwa SRI Fund Grant Program (Daiwa SRI Fund)
3. Daiwa Securities Group Tsunami Reconstruction Fund
・2010 Signing the UN Global Compact (GC)・2006 Signing the UN Principles for Responsible Investment
by Daiwa Asset Management (PRI)・2004 Signing the UNEP Finance Initiative (UNEP FI) &
Carbon Disclosure Project (CDP)
Non-m
arketM
arket
(WLB, Info disclosure, external appraisal
)
④CSR
Managem
ent
Sustainable Enterprise
Sustainable Society
②Social Engagement
③Corporate Citizenship
①Core Business
ObjectiveCSR Activities (Implementations)
©Daiwa Securities Group Inc.21
①-1.1 Daily business: Retails
Foreign Bond
Mutual Fund
Billion Yen Sales and Distribution Amount by Product Category
¥2.9Trillion(In FY2010)
©Daiwa Securities Group Inc.22
Market DivisionMarket Division
Investment BankingDivision
Investment BankingDivision
Finance; Capital Market
Finance; Finance; Capital Capital MarketMarket
Sales & TradingSales & Trading Investment Investment BankingBanking
InstitutionalInvestors
(Pension asset Management)
InstitutionalInstitutionalInvestors Investors
(Pension asset (Pension asset Management)Management)
Corporate, Financial,
Public InstitutionInternational Organization
Corporate, Corporate, Financial, Financial,
Public InstitutionPublic InstitutionInternational International OrganizationOrganization
ResearchResearch
①-1.2 Daily businessGlobal Market & Investment Bank
©Daiwa Securities Group Inc.23
①-1.3 Daily business: Asset Management
■Planning, Setting up and Operation of Eco Funds and SRI FundsPRI as the signing authority operates after considering the ESG
■ The Japanese government ratified the Convention on Cluster Munitions (Oslo Declaration), which takes effect on August 1, 2010. As an asset management company in the country ratifying the convention, Daiwa Asset Management established the basic principles for investment in, and other actions against, cluster munitions producers, and would like to announce the basic principles as follows:http://www.daiwa-am.co.jp/english/cluster/index.html
Daiwa Asset Management shall not invest in securities issued by cluster munitions producers in active funds. In cases where the active funds hold such securities, Daiwa Asset Management shall immediately sell the securities.
In cases where withdrawal from, or contraction of, the business for producing cluster munitions is proposed at shareholders’ meeting of cluster munitions producers, Daiwa Asset Management shall agree with such shareholders’ proposals.
Financial assets under management approx.¥9.3 trillion as of Mar. 2011)
Implementing SRI
©Daiwa Securities Group Inc.24
Foreign Equities Focus on theenvironmental technology of each
nationCreator:Russel Investment
Formulated:May 1st, 2008(Unlimited term)
As of April 28th, 2011
Basic price:8,560円 Total net asset:143億円
●●Daiwa Eco FundDaiwa Eco Fund●●Daiwa SRI FundDaiwa SRI Fund
①-2.1 SRI Products :Mutual funds
●●Environmental Business Fund for Environmental Business Fund for Next Generation Next Generation
Domestic EquitiesEconomy & Ecology
Creator:Daiwa SB Investment
Formulated:Feb. 27th, 2009
(Redemption date:Feb. 26th, 2014)
As of April 28th, 2011
Basic price:9,840円Total net asset:10.13億円
Domestic Equities
Economy & Ecology
Creator:Daiwa Asset Management
Formulated:March 9th, 2006
(Redemption date:Feb. 22nd, 2016)
As of April 28th, 2011
Basic price:4,814円Total net asset:89.20億円
●●RusselRussel World Environment World Environment
Technology FundTechnology Fund
●●Daiwa Energy Technology FundDaiwa Energy Technology Fund
Domestic Equities
Focus on alternative energy which
global demand is estimated to increase
Creator:Daiwa Asset Management
Formulated:Dec. 25th, 2008
(Redemption date:Jan. 14th, 2014)
As of April 28th, 2011
Basic price:10,127円Total net asset:38.92億円
Domestic Equities
Focus on integrity & transparency of the enterprise
Creator:Daiwa Asset Management
Formulated:May 20th, 2004
(Redemption date:May 9th, 2014)
As of April 28th, 2011
Basic price:6,837円Total net asset:24.73億円
SRI Funds distributed by
Daiwa SecuritiesTotal net asset of 15 products¥92.8Billion
©Daiwa Securities Group Inc.25
■ Major Characteristics
The first microfinance mutual fund in Japan
Minimum investment unit is 1,031 yen, you can pursue both social and financial return
Direct lending in local currency to MFIs (currency risk free to MFIs)
Daiwa Microfinance Fund
©Daiwa Securities Group Inc.26
Source: Daiwa Microfinance Fund prospectus
(available only in Japanese)
*Developing World MarketsLoan users
(BOP
)
Taking Currency risk, Interest rate risk and Credit risk Reducing risks by deversifying portfolio
Pursuing financial return as well as social return
Daiwa Microfinance Fund
■Investment Universe ■Model Portfolio
Reviewed by DWM*300 MFIs
Over 10,000 MFIs
(E) Return
©Daiwa Securities Group Inc.27
①-2.2 SRI Products: Bonds
【 Annual Sales Trends】
(十億円)
29.0Microfinance Bonds2010年9月22日
13.9Latin America Child Education Support Bonds2010年7月15日
11.8Africa Education Bonds2010年8月30日
9.8Ecology Bonds2010年11月12日
8.7Microfinance Bonds2010年6月15日
32.6Ecology Bonds2010年5月21日
60.4Water Bonds2010年4月16日
Sales VolumeName of the ProductsDate of Issuance
(十億円)
Daiwa69%
(Source)Research by Daiwa Securities ※Only for Individual bond (Mar.2008~Mar.2011)
Domestic share of the bonds
Total approx.: 482.4 Billion Yen
Billion YenBillion Yen
Impact Investment Bond Sales Volume at Daiwa Securities
Major Impact Investment Bonds
©Daiwa Securities Group Inc.28
Issuer: IFFImPurpose: Raise funds in the capital markets to accelerate funding available for health and immunization
programmes in 70 of the developing countries around the world.
Issue date and amount:Mar. 19, 2008 $211 million equivalentFeb. 20, 2009 $437 million equivalentMar. 24, 2010 $338 million equivalent
Highlights of “Impact Investment Bonds”
Vaccine Bonds
Issuer: IFCPurpose: Support microfinance businesses with the purpose
of fostering economic independence by providing small scale financial services to the poor segments.
Issue date and amount:Nov. 20, 2009 $275 million equivalentSep. 22, 2010 $342 million equivalent
Microfinance Bonds
Issuer: IBRD
Purpose: Support projects in the World Bank’s member countries that meet specific criteria for low-carbon project.
Issue date: February 3, 2010Issue amount: $106 million equivalent
Green Bonds
Issuer: ADB
Purpose: Support water project by developing countries inAsia and the Pacific.
Issue date: April 16, 2010 Issue amount: $628 million equivalent
Water Bonds
InvestorsInvestment
in capital market
Financial management
Funding
Support for vaccine securing program
DonatorDonation for up to
20 years
Daiwa Securities joined the panel with GAVI on the 8th plenary session of the Leading Group on Innovative Financing for Development (16-17 Dec 2010, Tokyo)
©Daiwa Securities Group Inc.29
Issuer: EIB
Purpose: Support future lending projects in renewable energy and energy efficiency, both of which
are identified by EIB as key areas for mitigating the effects of climate change.
Issue date and amount:
May. 21, 2010 $393 million equivalentNov. 12, 2010 $118 million equivalent
Climate Awareness Bonds
Microfinance Bonds Education Bonds
Issuer: EBRD
Purpose: Support micro and small enterprises, which are
not catered for by the formal financial sector, with sustainable access to financial services, via a range of financial institutions.
Issue date: June 15, 2010 Issue amount: $96 million equivalent
Issuer: AfDB
Purpose: Finance projects in the field of education and hence foster economic and social growth in African countries.
Issue date: August 30, 2010 Issue amount: $137 million equivalent
Poverty Reduction Bonds
Issuer: IADB
Purpose: Support innovative poverty alleviation programs
in Latin America and the Caribbean, including several conditional cash transfer programs,
such as Oportunidades in Mexico.
Issue date: July 15, 2010 Issue amount: $158 million equivalent
Highlights of “Impact Investment Bonds”
©Daiwa Securities Group Inc.30
MDGs & Impact Investment Bonds
Impact Investment Bond
MDGs
Mic
rofin
ance
Educ
atio
nin
Afri
caVa
ccin
eW
ater
Gre
en
Clim
ate Tsun
ami
Reco
nstru
ctio
n Fu
nd
Goal 1: Eradicate extreme poverty & hunger ◎ ◎ ○
○ ◎ ○ ○
◎ ○ ○ ○
◎ ◎
○
◎ ◎
○ ◎ ◎ ◎
○ ○ ○ ○ ○ ○Goal 8: Develop a global partnership for development
Goal 5: Improve maternal health
Goal 6: Combat HIV/AIDS, malaria and other diseases
Goal 7: Ensure environmental sustainability
Goal 1: Eradicate extreme poverty & hunger
Goal 2: Achieve universal primary education
Goal 3: Promote gender equity and empower women
Goal 4: Reduce child mortality rates
©Daiwa Securities Group Inc.31
①-3.1 Enlightening Event:Investor Forum
Daiwa Africa Forum 2010Date: July 21st, 2010
Venue: GranTokyo North Tower 18F Conference Room
Speaker: Mr. Thierry de Longuemar, Vice President Finance, African Development Bank (AfDB)
Mr. Pierre Van Peteghem, Treasurer, AfDB
Dr. Boukary Savadogo, Manager of the Division of Education, Science and Technology, AfDB
Dr. Naoyuki Kawahara, Director, NPO Rocinantes
Ms. Keiko Sano, Director, East Africa Division 2, Africa Department, Japan International Cooperation Agency
Ms. Agnes Chan, the ambassador of the Japan Committee for UNICEF, a pop singer, a television personality
No. of Audience: 221
©Daiwa Securities Group Inc.32http://www.daiwatv.jp/http://www.daiwatv.jp/
①-3.2 Website Archive
©Daiwa Securities Group Inc.33
Impact Investing Awareness
70
69
33
79
37
56
17
0 20 40 60 80 100
水・衛生
貧困・飢餓
医療・保健
教育
社会基盤整備
気候変動
興味がない
102
83
64
52
11
0 20 40 60 80 100 120
成長性が見込める
社会性を重視した経営姿勢かどうか
利益を上げている
株主への還元
事業規模
89
38
30
0 20 40 60 80 100
双方
投資リターン
社会貢献
97
31
0
0 20 40 60 80 100 120
賛同する
大いに賛同する
賛同しない
■ Which of financial return or social return do you care?
■ Do you support Impact Investing?
■ What social problems are you seriously concerned about?
■ What aspect do you most value when investing?
Yes
Strongly Yes
No
Both
Financial Return
Social return
Water
PovertyHealth
Education
InfrastructureClimate Change
No interest
Revenue growth
Profit
Scale of operation
CSR strategy
Dividend
Source: Questionnaire at Impact Investment Forum 2010, September 9th
©Daiwa Securities Group Inc.34
May 15 (Sat) May 15 (Sat) –– June 13 (Sun), 2010 June 13 (Sun), 2010
@@Tokyo MidTokyo Mid--Town Design HubTown Design HubHost: Host: Committee for Committee for ‘‘Imagine Imagine another Life through the another Life through the ProductsProducts’’, , CANPANCANPAN CenterCenter
Special Sponsor: Special Sponsor: Daiwa SecuritiesDaiwa Securities
October 31 (Sun) October 31 (Sun) –– November 7 (Sun)November 7 (Sun)
@@Osaka International Convention CenterOsaka International Convention Center
Host: Junior Chamber International (JCI)Host: Junior Chamber International (JCI)Sponsor: Daiwa SecuritiesSponsor: Daiwa Securities・・ Running a booth at Running a booth at ‘‘Future ExpoFuture Expo’’, ,
・・ Panelists for sectional meetinganelists for sectional meeting
①-3.3 Event Sponsorship
©Daiwa Securities Group Inc.35
■■Pondering Pondering CSRCSR through dialoguethrough dialoguehttp://www.daiwahttp://www.daiwa--grp.jp/csr/dialoguegrp.jp/csr/dialogue/
In the CSR website, you can find series of dialogue with key figures who play an active role in the front lines of each field.
No. 26 “Cluster Bombs”
<<Recent themes:Recent themes:>>
No. 38No. 38::Tsunami Reconstruction SupportTsunami Reconstruction Support ((20112011年年55月月1212日)日)
-Increasing true self-alliance-
No. 37No. 37::Affordable Energy Saving at Work Place and HomeAffordable Energy Saving at Work Place and Home ((20112011年年44月月2727日)日)
-Smart energy saving by knowing the mechanism of devices and climate-
No. 36No. 36::PovertyPoverty ((20112011年年22月月22日)日)
-’Support’ for young homeless, instead of ‘care’-
No. 35No. 35::Eco RightEco Right (2011年1月27日)
-Through CDM, supporting environmentalpreservation from finances -
NO. 34NO. 34::MicrofinanceMicrofinance (2011年1月26日)
-Aiming at social contribution throughmicrofinance-
NO. 31NO. 31::BiodiversityBiodiversity (2010年9月9日)
-Building an aquarium in the town thatgives a feeling of ‘water’
①-3.4 CSR/SRI DialogueDialogue
June 8,2010
©Daiwa Securities Group Inc.36
“Rethinking Growth”http://www.daiwa-grp.jp/english/csr/publication/100205.html
http://www.dir.co.jp/souken/research/esg/index.html
■ ESG Research by Daiwa Institute of Research
①-4. SRI/ESG Research
■ Selected ESG Research at CSR site
©Daiwa Securities Group Inc.37
② Social Engagement
■Participating in international initiatives GC (UN Global Compact)PRI (Principle for Responsible Investment)UNEP FI (UNEP Finance Initiative)CDP (Carbon Disclosure Project)
■Cooperation with the international organization/NGOGRI (Global Reporting Initiative Japanese Edition)FTSE4Good (Policy Committee Member of the SRI Index)SIF-J(Board Member of Social Investment Forum Japan)
©Daiwa Securities Group Inc.38
■Real business as a result of partnership with NPO・NGO
2)Daiwa SRI Fund Grant Program (Civil Society Initiative Fund)
In order to strengthen the basis of domestic NGOs operating in the field of human security, we support them for personnel expenditure (instead of program cost) aiming at nurturing leaders for the core of the organization. The operation is taken from the outstanding balanceof donation of Daiwa SRI Fund & Daiwa Eco Fund. Since 2006, there have been 24 cases in total with more than 42 million yen of support.
1)Social Business College(Kopernik)
This is a lecture on social entrepreneur for social business practice, held bimonthly since Oct. 2010 (12 lectures in 2 years), for the university students and working persons. The operation is funded by the outstanding balance of donation of Daiwa Eco Fund and contents can be found in the web.
3)Daiwa Securities Group – Tsunami Reconstruction Fund(Asia Community Center 21)
From 2005 (after receiving appeal from the UN), for the next 10 years, we provide support of 10 million yen every year for reconstruction assistance NGOs in devastated areas (India, Sri Lanka, Indonesia) and is used as a source for microfinance and many more.
In the brackets are the name of NGO/NPO
③ Corporate Citizenship
©Daiwa Securities Group Inc.39
●Enforcing leaving the office by 19:00 → Efficiency at work “Work hard, Live hard”
④-1. CSR Management - Work-life Balance
●Work-life balance promotion committee
●Female Executives (2 Board Members; 3 Executive Officers, 11 Branch Heads)
● ‘Child-rearing break’ until 3 years old, exceeding the statutory period●「Day-care expenses subsidy system」
●Newly created: 「Wedding preparation vacation」「Family-day vacation」
●「Professional Return Plan」・「Changing of Work Location System」
●Distributing 「Guidebook for Childcare」
●Work-life balance promotion intranet site for employees 「Daiwa WLB Station」
■Creating a working environment that fit the life stage
●Implementing 「Office visit for family members」
©Daiwa Securities Group Inc.40
④-2. CSR Management - Disclosure
←Posting pictures of employees’baby. Employee asa stakeholder(CSR promotion )
CSR Report
©Daiwa Securities Group Inc.41
④-3. CSR Management - External Appraisal
■Evaluation on CSR in general SRI index constituent
■Ranking for Work Place
Dow Jones Sustainability Indexes (13 consecutive years)
FTSE4Good Index (6 consecutive years)
NIKKEI Most Famous Companies for Job Seekers (2009)Rank 5 for Financial Institution (Rank 1 for Securities Industry)
NIKKEI Woman (2011) Best 100 Companies with friendly working environment for women Rank 1 for Financial Institution (Rank 3 for general category)
©Daiwa Securities Group Inc.42
Conclusion
1. A financial institution has a social calling to serve as a mediator between asset management and fund raising for public and private sectors.
2. While acknowledging environment, social and governance issues, harmony amongst various stakeholders is required to develop a sustainable community in the 21st century onwards.
3. Daiwa Securities Group is implementing its mission by leveraging financial capabilities
©Daiwa Securities Group Inc.43
Contact :Corporate Communication Departmente-mail:[email protected]
Tel:03-5555-1312 Fax:03-5555-0662
©Daiwa Securities Group Inc.44
Table of Contents
1. Role of Financial, Capital Markets & Daiwa Securities Group (P. 2~5)
2. MDGs (Millennium Development Goals) &SRI(Socially Responsible Investment) (P. 7~ 17)
3. CSR & SRI / Impact Investing Productsat Daiwa Securities Group (P. 19~40)
4. Conclusion (P. 41)
Appendix (P. 44 ~49)
This document has been prepared by Daiwa Securities Group (Daiwa) based on information, the sources of which are believed by Daiwa to be reliable, but Daiwa makes no representation nor warranty as to the accuracy or completeness of such information. Recipients of this document must make their own decisions on whether or not to adopt the recommendations discussed in this document, based upon their specific situations and objectives. Any use, disclosure, distribution, dissemination, copying, or reproduction of this document without prior written consent from Daiwa is prohibited.
©Daiwa Securities Group Inc.45
①-2.3 Impact Investment Bond UridashiYear Name Issuer Lead Manager Tenor Settlement Date in Japan Amount ($mil)
Vaccine Bonds IFFIm Daiwa 2y 19-Mar-08 $211World CO2LTM Bonds World Bank Daiwa 5y3m 27-Jun-08 $25
Vaccine Bonds IFFIm Daiwa 3y 20-Feb-09 $437Vaccine Bonds IFFIm Mitsubishi UFJ 3y 28-May-09 $144Vaccine Bonds IFFIm HSBC 4y 25-Jun-09 $132
Microfinance Bonds IFC Daiwa 3y 20-Nov-09 $275Green Bonds World Bank Daiwa 5y 03-Feb-10 $106
Environmental Support Bonds NIB Nomura 3y 03-Feb-10 $207Climate Awareness Bonds EIB HSBC 5y 16-Mar-10 $200
Vaccine Bonds IFFIm Daiwa 3y 24-Mar-10 $338Clean Energy Bonds AfDB Mizuho 4y 30-Mar-10 $78
Water Bond ADB Daiwa 3y 16-Apr-10 $645Climate Awareness Bonds EIB Daiwa 3y 21-May-10 $368
Clean Energy Bonds AfDB Mizuho 3y6m 28-May-10 $108Green Bonds Kommunalbanken Norway Nikko 3y 28-May-10 $102Green Bonds World Bank SBI 5y 09-Jun-10 $6
Microfinance Bonds EBRD Daiwa 3y 15-Jun-10 $96Green Bonds Kommunalbanken Norway Nikko 3y 29-Jun-10 $47
Vaccine Bonds IFFIm HSBC 10y 29-Jun-10 $102Poverty Reduction Bonds IADB Daiwa 4y 15-Jul-10 $158
Clean Energy Bonds AfDB HSBC 7y 29-Jul-10 $13Green Bonds AfDB Nikko 3y 27-Aug-10 $30
Education Bonds AfDB Daiwa 3y 30-Aug-10 $136Microfinance Bonds IFC Daiwa 3y 22-Sep-10 $342Clean Energy Bonds AfDB HSBC 4y 30-Sep-10 $237Clean Energy Bonds AfDB HSBC 6y 29-Oct-10 $13Clean Energy Bonds AfDB Mizuho 4y 29-Oct-10 $123
Climate Awareness Bonds EIB Daiwa 3y 12-Nov-10 $118Poverty Reduction Bonds IADB Daiwa 3y 02-Feb-11 $239
Green IFC Bonds IFC Nomura 3y 25-Feb-11 $44Clean Energy Bonds Kommunalbanken Norway HSBC 4y 29-Mar-11 $83
Vaccine Bonds IFFIm Daiwa 3y 31-Mar-11 $228
2010
2011
2008
2009
Total $5,338 mil / Daiwa’s arrangements $ 3,721 / Daiwa’s market share 69%
©Daiwa Securities Group Inc.46
①-2.4 Impact investment bond Private Placement to Regional Banks
DaiwaOgaki Kyoritsu Bank$10mil5 yearUSDGreen BondWorld Bank6/14/2011
DaiwaMusashino Bank$10mil5 yearUSDGreen BondWorld Bank4/14/2011
DaiwaOita bank$10mil5 yearUSDGreen BondWorld Bank3/17/2011
DaiwaHokuyo Bank$10mil5 yearUSDGreen BondWorld Bank2/18/2011
DaiwaNanto Bank$20mil5 yearUSDGreen BondWorld Bank2/24/2011
DaiwaKagoshima Bank$10mil5 yearUSDWater BondAsian Development Bank6/30/2011
JP MorganSan-in Godo Bank$30mil5 yearUSDGreen BondWorld Bank2/17/2011
DaiwaPublic company$12mil5 yearUSDEducation BondAfrican Development Bank8/19/2010
DaiwaNishi-Nippon City Bank$30mil5 yearUSDWater BondAsian Development
Bank1/25/2011
5.25 year
5 year
5 year
10 year
5 year
5 year
5 year
5 year
TermTerm
JP MorganAichi Bank$30milUSDGreen BondWorld Bank1/25/2011
DaiwaDaishi Bank$10milUSDGreen BondWorld Bank1/20/2011
DaiwaFukui Bank$10milUSDGreen BondWorld Bank1/20/2011
DaiwaKagawa Bank$5milUSDGreen BondWorld Bank1/18/2011
DaiwaKiyo Bank$10milUSDGreen BondWorld Bank12/21/2010
DaiwaIwate bank$10milUSDGreen BondWorld Bank11/30/2010
JP MorganSan-in Godo BankA$30milAUDGreen BondWorld Bank11/16/2010
JP MorganIyo Bank$50milUSDGreen BondWorld Bank9/1/2010
Lead managerLead managerinvestorinvestorAmountAmountCurrencyCurrencyProductProductIssuerIssuerIssue dateIssue date
©Daiwa Securities Group Inc.47
MFI Interest Yield to borrowers
35.1
28
44.3
25.5
34.536
26.128.2
23.9
32.6
20.9
31.7
24.826.2
0
5
10
15
20
25
30
35
40
45
50
World Africa EAP ECA LAC MENA SouthAsia
% o
f G
ross
Loan
Port
folio
2003
2006
Saurce: OCCASIONAL PAPER No. 15 , February 2009 The New Moneylenders: Are the Poor Being Exploited by High Microcredit Interest Rates?Note: Total Interest and Fee Income/Average Total GLP: average of 175 sustainable MIX MFIs, weighted by loan portfolio.
©Daiwa Securities Group Inc.48
MFI Loan Portfolio $65.0billion ( MIX、FY2009、1,058MFIs)
Source :CGAP Focus Note No. 70 April 2011, Cross-border Funding of Microfinance* Amounts based on data submitted by 61 funders and 90 MIIs.
$21.3 billion* (2009)
Cross-border funding to MFIs
Public donors and Investors
(Multilaterals, Bilaterals, DFIs)
$14.6 billionMicrofinanceInvestment
Intermediaries(MIIs)
Private donors and Investors(Foundations,
Institutional andIndividual Investors)
$6.7 billion
Apex & other Intermediaries
(Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy)
©Daiwa Securities Group Inc.49
Myth of Microfinance
Myth Fact
1 Poor people do not repay a loan.Customer continue to repay as long as they value theservice. The greatest incentive for the poor to repay theloan is to access to repeat loans.
2Poor people can not pay the interest ratesnecessary to cover the costs to delivering theservice. Poor can not pay the price.
The poor willing to pay the cost for quality services.For the poor, access to the financial service is moreimportant than the price.
3 Credit for consumption purposes should neverbe provided.
Economic shock is frequent and diverse for the poor.They should prevent selling income generating assets tocoop with these risks by microfinance
4 Microfinance creates economic opportunity. The borrower or user of MF create opportunity. Onlypeople with economic opportunity can benefit from credit.
5 Poor can not save the money. Poor people do saving. Saving is more important thanborrowing for the very poor to manage their future.
6 MFI can reach to the very poorest of the poorthrough credit.
Debt financing is not a good development tool for thedestitute.
7 MFI is donor dependent institutions.There are over 600 Financially self sufficient (FSS) MFIs.FSS is necessary for an MFI to reach large numbers ofpeople
Source: Microfinance Distance Learning Course (UNCDF)
©Daiwa Securities Group Inc.50