Advance magazine q1 2015

How investors implement ESG >6 Helping pension funds with sustainability

> 11 African outsourcing offers tasty growth

Advance SUSTAINABILITY INVESTING IN FOCUS | FEBRUARY 2015

In cooperation with: 1

ADVANCE | FEBRUARY 2015

Back to the future Launching the Mirai (Japanese for ‘future’), Toyota is the first company to introduce a hydrogen fuel cell car on a relatively large scale. Although the company has been working on hydrogen fuel cell technology since 1992, there are still many hurdles to overcome.

Hydrogen is currently produced mainly from natural gas, but Toyota expects the sustainable production of hydrogen from wind or solar energy to increase substantially in the coming years. Another hiccup is

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the need for hydrogen refueling stations, reason why Toyota initially launched the Mirai in California and Japan, which already have dozens of stations and plan to build more.

In the first month since its launch in Japan, approximately 1,500 orders have been received for the Mirai. As it had planned to sell some 400 units in Japan by the end of 2015, Toyota has announced it will increase production.

COLUMN

CONTENTS 4 Highlights Why robots are on the march in China; a new video shows how resource scarcity is an opportunity as well as a problem; and a surprising statistic

5 The land of ESG confusion The Genesis video clip ‘The land of confusion’ comes to mind when attending ESG events

6 Interview: Helping pension funds ‘do something’ with sustainability SI Client Specialist Lucas van Berkestijn helps pension funds make a step-by-step roadmap to sustainability investing

8 Cover story: How investors implement ESG Robeco asked clients how they tackled the subject – and there are many shades of grey

10 Engagement case study A new engagement tool – a roundtable with companies and investors – helps to clarify needs and expectations

11 African outsourcing offers tasty growth South African brewer SABMiller successfully combines a growth strategy with a high ESG score, says analyst Vera Krückel

Like any other investment process, that of a sustainable investor never ceases to evolve. We are already working on the next steps for 2015.

I am a great believer in a constructive dialogue with companies to help them become more sustainable and provide insight into what we as investors find important. Recently I became a member of the Board of Eumedion, the Dutch platform for institutional investors aiming to improve listed companies’ performance in the fields of corporate governance, environment and social issues. It promotes the dialogue between investors and corporates. So far it was very much focused on equity investors. What I would like to contribute among other things is to show that these topics are just as important to fixed income investors.

Besides this Dutch platform we also participate in various international organizations, such as the International Corporate Governance Network and the Asian Corporate Governance Association.

Markus Reichling explains how Panasonic develops business solutions for sustainability challenges

Robeco has been actively engaging with companies since 2005. This year, one of our focus areas will be to further integrate our engagement efforts into the investment process. Even more so than in the past, our engagement specialists will focus on companies and on issues that are relevant for our portfolio managers, who are also involved in the dialogue. In other words, financial materiality of our engagement themes will become even more important.

RobecoSAM kicked off its 20th anniversary with the publication of the 2015 Sustainability Yearbook. This year’s edition is the culmination of two decades of rigorous research and continuous dialogue with thousands of companies.

Portfolio managers, in turn, will become increasingly explicit on the impact of engagement. In their investment cases, analysts will consistently indicate whether engagement could be useful and what the consequences of our active dialogues have been for their investment recommendations.

12 External perspective

The Yearbook includes an overview of the recent progress that companies have made in reporting on sustainability in a language that resonates with investors. It also explains how we incorporate the information from our Corporate Sustainability Assessment (CSA) into our financial models.

As always, the Sustainability Yearbook provides an overview of the results of RobecoSAM’s annual CSA. The top scoring company in each industry is named the RobecoSAM Industry Leader, and companies listed in the Yearbook are classified into three categories: RobecoSAM Gold, Silver and Bronze Class.

For more details click here >>

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A sustainable investor’s work is never done

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Besides having an active dialogue on sustainability, it becomes more and more important to make ESG integration visible. We will therefore strive to report consistently on our portfolios from a sustainability perspective.

Clients are also increasingly interested to measure and manage ESG impact, such as emissions, water usage and social criteria. RobecoSAM developed a methodology and is able to provide these clients with impact reporting. We are also discussing to develop ‘impact products’.

So there are quite some steps to make. And even then, there will always be something left for next year’s wish list.

EDITH SIERMANN CIO FIXED INCOME AND MANAGER GOVERNANCE & ACTIVE OWNERSHIP

HIGHLIGHTS

Robots are changing the human face of Chinese manufacturing China has long been seen as a nation of factories teeming with workers – but the increased use of robots looks set to change that. Wage growth that has steadily hiked the cost of production in China is leading to greater automation in factories, particularly in eliminating tedious or dangerous work.

“Rising wages in China and declining costs of automation technologies are expected to offer attractive growth opportunities for manufacturers of robotics equipment,” says Bojana Bidovec, Senior Analyst with RobecoSAM’s Smart Materials Strategy.

The statistics bear out the optimism. In 2013, China was the largest market for robots, accounting for 20% of global sales. The low penetration within the country – only 23 robots per 10,000 manufacturing employees in China compared with 330 in Japan, 396 in South Korea, and 141 in the US – offers considerable room for growth in the robotics market.

Put another way, China now has about eight times the number of people in manufacturing compared with the US, but uses approximately

half of the number of robots. Subsequently, China is expected to be a major driver of demand for robots over the next few years.

Indeed, the International Federation of Robotics expects shipments to China to grow 26% per year, or more than double the current rate, until 2017. As a result, robotics manufacturers such as Kuka, ABB, Fanuc and Yaskawa Electric stand to benefit from a growing market.

Part of the reason is China’s competitiveness is being eroded. In 2004, China’s manufacturing wages were only 3% of those in the US, but increased to almost 10% in 2012, and may rise to 50% by 2030, reports say. Adjusting for lower productivity levels in China and other higher competitive impediments such as transportation costs or taxes, the cost advantage of manufacturing in China compared with the US is now less than 5%.

The Chinese government has recognized the benefits of increased automation such as improved safety, quality and resource efficiency, and has set ambitious targets for automation up until 2020.

26 % The expected annual growth rate in sales of robots to China as the country automates millions of factories to remove tedious or dangerous jobs and improve efficiency.

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Being part of the solution, not the problem Use of the world’s resources presents the ultimate conundrum, as supply is limited while demand from rising populations is unlimited. The latest video by RobecoSAM explains how the investment industry can mobilize capital to enable the more efficient use of the world’s diminishing resources.

By investing in the companies that offer solutions rather than contributing to problems, investors can really make a difference, it says. Enlightened airlines, for example, are using lighter, more fuel-efficient aircraft. “At RobecoSAM, we are convinced that such examples of human ingenuity and innovation will enable the global economy to adapt to resource scarcity,” the video says.

RobecoSAM calculates that total potential growth opportunities from such innovative companies may be worth up to USD 2.9 trillion by 2030.

To view the video, click here >>

The land of ESG confusion In the Genesis video clip ‘The land of confusion’, the world is depicted by ‘Spitting Image’ dolls of politicians who go about messing up the world in utter confusion. This video clip vividly comes to mind when attending several ESG events, says Willem Schramade, Sustainability & Valuation Specialist in Robeco’s Global Equity team.

ESG events can be a rather confusing experience, as concepts like ESG and sustainable investing have different meanings to different people. For some, having an exclusion list already seems to count as ESG integration. Others add screening, scoring and voting. Still others – like us – think it is essential to link ESG factors to business models and value drivers and quantify them. Why do we have this confusion and how are we to solve it?

in the S of social, the Japanese seem most interested in the G of governance, reflecting concerns of local stakeholders. Asset class also matters, with fixed income investors mostly focused on limiting risk, while equity investors increasingly recognize the upside potential of ESG factors. Differences between organizations abound as well. Many organizations are only just getting started and take the optimistic view that ESG integration is easily implemented.

Confusion across countries, asset classes and organizations…

Others embarked on ESG integration many years ago and found that it takes hard work and several years to change the methods and mentality of analysts and portfolio managers, and to align the various parts of an organization.

ESG has different meanings per country.

Whereas the French tend to be most interested

...even within organizations Even within organizations, perceptions of ESG can differ dramatically. Connotations and knowledge levels differ within investment teams. Outside the investment departments, people may lack implementation experience.

Top management might have lofty ESG intentions, but no clue how to put them into practice.

Solution: clearer classifications & language The solution lies in developing a clearer language, and a clearer classification of degrees of ESG integration. This starts with checklists, asking what components are present, such as screening; scoring; voting; exclusion; materiality analysis; and adjustment of value drivers.

An even more important question is how these components are applied. Is this a box-ticking exercise or is ESG really integrated in the thinking of analysts and PMs? Having an ESG team without impact on investment decisions is not very meaningful, nor is the use of sustainability scores without interpreting them.

Rather, one should be able to show how ESG factors affect investment decisions.

For example, how does it affect target prices?

These are the type of questions consultants and asset owners should ask asset managers at fund level. Conversely, asset managers should put more effort into clearly answering these questions.

The end of confusion?

The implication: quality is underappreciated

Willem Schramade

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With this confusion within organizations, it is hard to get a clear message across to external parties. This makes it hard to identify leaders and laggards. Shallow attempts can still get away with the ESG integration label, whereas leaders hardly get noticed.

At the end of the Genesis video clip, Ronald Reagan’s Spitting Image puppet starts a nuclear war by pushing the ‘Nuke’ instead of the ‘Nurse’ button. I’m confident we can avoid such total destruction. And ESG integration is not that black and white. But to make investing more sustainable, we will have to make it less confusing.

INTERVIEW

Helping pension funds to ‘do something’ with sustainability Lucas van Berkestijn

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While many institutional investors may have the ambition to integrate sustainability into their investment processes, they often don’t know where to start, struggling to make more concrete steps. “We can help them by making a step-by-step roadmap to implement sustainability investing and keep in control of their progress,” says Lucas van Berkestijn, Sustainability Investing Client Specialist for RobecoSAM.

What drives institutional investors with no experience in sustainability who want to implement it anyway?

“Institutional investors are increasingly aware of the need to align their sustainability investment policy with the long-term interests of their clients.

Beneficiaries, regulators and stakeholders expect them to consider broader responsibilities than mere financial objectives. To do so, they need to be able to analyze the sustainability-related performance, risks and impact of their investments, and communicate them to their stakeholders.”

Which challenges do pension funds face when developing their own sustainability policy?

“It is not straightforward to take concrete steps towards developing, implementing and monitoring a sustainability investing approach that fits a client’s needs. The set of choices varies from exclusion policies to bestin-class approaches, voting and engagement activities or even more advanced strategies, where sustainability is embraced throughout the entire investment approach. Pension funds are faced with an information overload which can have a paralyzing effect.”

“In order to be well equipped to make sound decisions it is important to have a complete overview of the opportunities and implications of sustainability investing, to understand the impact of transitioning from the current investment approach to a more sustainability-driven investment approach and to judge which outcome best fits the ambitions and constraints of your fund.”

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So where do you start?

“A good starting point is to scan your portfolio on sustainability performance and make a ‘journey plan’ to a sustainable investment approach, including the why, what and how of sustainability investing.

First of all, determine why you want it, i.e. what your beliefs are. How can you align sustainability considerations with your investment beliefs and your fiduciary duty?

Then decide what you are going to tackle first. Based on a scan of your portfolio in terms of sustainability performance and risks, decide on one or two priorities to start with.

For example, take a priority asset class or strategy such as global equities or European fixed income, and start developing an implementation process.

Finally, determine how you will implement the approach and continually evaluate progress. A typical implementation process takes place in steps, starting with exclusions, moving on to themes or a best-in-class investment approach, and then gradually evolves into integrating ESG factors throughout the investment process.”

What can you do to help pension funds in this process?

“We can help in the various stages of sustainability integration, depending on investors’ level of sophistication. We can help them determine the impact of their sustainability beliefs and select the criteria that match with their policy on how to integrate sustainability investing. We do this using our proprietary sustainability assessment (CSA) and scoring of over

3,000 companies, providing a detailed view on each stock, bond or even country sustainability performance. We will help with the implementation of the investment policy in the portfolio, through existing or new solutions and focus on financially material criteria that are practical and easy to implement. If there is a need, we can assist clients running Asset Allocation Scenarios when implementing sustainability or provide Environmental Impact Portfolio Analytics.”

What are your experiences so far?

“We have only just started, but we already had some positive experiences. Last year, for example, we organized a workshop for the board of a Swiss corporate pension fund without any experience in sustainability investing. They wanted ‘something’ with sustainability as they were required to communicate on this to their stakeholders.

In addition to a learning session, which helped them define their beliefs, we scanned their portfolio on sustainability performance and suggested various options for implementation. This gave them a kickstart in their journey to become an active, responsible asset owner.”

‘If there is a need, we can run Asset Allocation Scenarios when implementing sustainability or provide Environmental Impact Portfolio Analytics’

COVER STORY

How investors implement ESG The drive to including sustainability factors into mainstream investing has become unstoppable – but investors approach it in different ways. Robeco recently held a series of roundtables with existing and prospective clients to find out how investment professionals now tackle the subject.

Robeco has been a pioneer of sustainability investing since launching the first sustainable fund in Europe in 1999. ESG factors are now integrated as standard across the entire fixed income and equity ranges.

In tandem with this, the growth of sustainability investing itself has moved away from a focus on ‘save the world’ philosophies to a firm belief in proving the financially materiality of ESG factors. However, the use of ESG in an investment process differs greatly.

This was the main takeaway from roundtables held with institutional and wholesale clients to gauge their views.

“Some view it has a hygiene factor, where they won’t invest in contentious weapons such as cluster bombs, while others think that voting and engagement is sufficient,” says Bas Eestermans, Director of Institutional Relations for Benelux at Robeco.

“Others go further by saying they want to improve the world for future generations using sustainable funds. Some funds also look at

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counterparties and will exclude certain brokers, looking for more sustainable partners, which takes sustainability to the next level. So it’s not just about seeking investment partners… there is a wide spectrum of how sustainability is implemented.”

ACTIAM’S four-pronged approach ACTIAM, the Dutch asset manager with around EUR 50 billion under management, has used sustainability investing principles for a long time. “ESG is the starting point of our investment process and is integrated into the way we invest,” says Florus van Meijl, Head of Allocation & Selection. “It’s not because it’s a ‘green wash’ or it looks good as a marketing tool; we really believe that it is necessary, and that it is our responsibility in looking after money for clients.”

“We have done this since before it became mainstream. Some things you just don’t want to invest in. Even if it isn’t financially material, the lines that we will not cross can include human or labor rights at a company, corruption, or even integrity. It can be a gray

area but we do have an exclusion list on different topics.”

The ESG team at ACTIAM is now headed

by Dennis van der Putten, who pursues a four-pronged approach to ESG. Firstly, certain laws rule out investing in the makers of products such as cluster bombs.

Secondly, he looks for funds that adopt the more common ethical principles such as adherence to the Global Compact or UNPRI. ACTIAM then uses its own focus teams applying ESG specifically to in-house investments such as natural resources; and finally the company engages in impact investing to further the cause generally.

But does it add value?

However, many investors still doubt whether such dedication to ESG adds value on the bottom lines of the companies themselves.

“There is no reason to believe that investing in ESG or non-ESG firms gives differing riskadjusted returns. The social return that is gained can be seen as an extra profit,” says Van der Putten.

Expert’s research highlights attitudes to sustainability “The evidence supporting a nexus between performance on ESG issues and financial performance is growing. The combination of fiduciary duty and a wide recognition of the necessity of the sustainability of investments in the long term have meant that environmental, social and corporate governance concerns are now becoming increasingly important in the investment market. Due to this development, the costs of ESG investing do not significantly differ between investors.”

Van der Putten says the growth of ‘green bonds’ is a good example of the dilemma many managers face in trying to be ethical, but also needing to earn money for their beneficiaries.

“The financial yields of green and gray bonds are currently the same. But what will happen when this situation changes? Are you willing to give up some financial yield in order to gain the social benefits? That’s the tough question.”

‘The social return that is gained can be seen as an extra profit’

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Research by Paul Smeets, an expert in behavioral economics, has highlighted the differing attitudes and motivations among investors to sustainability issues. His PhD work, ‘How do social preferences influence the behavior of investors*’ revealed that many investors engaged with ESG for social rather than financial reasons. In writing his thesis he cooperated with Robeco, ASN, Triodos, Loyalis and Deutsche Bank to find out why Dutch private investors were investing in sustainable mutual funds.

“A large group of retail investors expected returns to be lower than those of other mutual funds, but they still wanted to invest in these sustainable funds, because they had an intrinsic social motivation,” says Smeets, assistant professor in Finance at Maastricht University.

“I found these results interesting for two reasons. First, there is no evidence that returns of sustainable funds are actually lower. Second, in portfolio theory the assumption is that investors only look at risk and return, but we found that investors also look at another factor and are prepared to make a trade off with return.”

“The influence of intrinsic social motivation is well documented in other areas. For example, lawyers are less willing to do pro-bono work if they receive a reimbursement. They no longer see it as a form of charity, but as business. I suspect that this phenomenon also has implications for the marketing of sustainable funds. For example, the marketing of micro credit funds might be more effective if, when these are sold, the emphasis is placed on the charitable attributes instead of only on performance.”

Smeets says there are also issues over defining the relevance of sustainability investing to each type of investor. “A company may have an excellent environmental record, but may also use child labor. On the other hand, the definitions relating to ‘sin stocks’ are much clearer, which is why we can already see an impact on prices.” * Paul Smeets, ‘Risk- and Social Preferences of Individual Investors’ (June 2012)

ENGAGEMENT CASE STUDY

Roundtable proves to be an effective new 20 million engagement tool People employed by the global chemical industry

5 Leading chemicals companies invited

Intensifying legislation on toxic chemicals is having a huge impact on chemical companies. Engagement specialist Sylvia van Waveren recently tried out a new engagement tool – a roundtable with the leading chemicals companies – to find out how they are dealing with the issue.

An open discussion Van Waveren, joined by Robeco and RobecoSAM analysts and engagement specialists, invited five companies from the US, Germany, Switzerland and the Netherlands to a roundtable. The objective was to exchange ideas and share experiences related to toxic chemicals. The list of companies invited was based on those which participated in the RobecoSAM Corporate Sustainability Assessment (CSA).

“In our integrated engagement and investment approach, we focus on financially material issues that are directly linked to company profitability. This makes them relevant for investors,” Van Waveren explains.

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The roundtable participants discussed questions such as: ‘How material is the issue of toxic chemicals for chemical companies and their customers?’ and ‘How significant is the phasing out of toxic substances for the company’s profitability?’

Companies hear what investors want…

The companies viewed the roundtable as a great success because they were able to speak freely with their peers, share experiences and hear investors’ concerns. “Our dialogue with companies creates value for them as we clarify shareholders’ expectations and help to strengthen the links between sustainability and financial performance,” says Van Waveren. “It

EUR

3 trillion

Turnover of the chemical industry in 2012

enables them to increase their competitiveness and attract investors with longer-term investment horizons.”

… and investors gain unique insights into an industry “At the same time the roundtable was also valuable for us as investors,” Van Waveren continues. “It provided unique insights and helped us to gain in-depth knowledge about an industry, how it deals with risks and how opportunities are seized. We will continue to hold roundtables like this one in the future,” Van Waveren concludes. “It has proved to be a useful engagement tool in our search for issues that are relevant for corporate profitability.”

SABMiller: African sourcing offers tasty growth SABMiller combines an African growth strategy with a high ESG score, says analyst Vera Krückel of the Robeco Global Equity team.

The South African group is the world’s secondlargest brewer in terms of revenue, after Anheuser-Busch InBev, and it is also a major Coca-Cola bottler. Its brands include Fosters, Grolsch and Miller Brewing Company. Africa is important to SABMiller; not just its home market where it generates 17% of its turnover, but also the rest of Africa (15% of revenue).

Its markets include Tanzania, Mozambique, Zambia and since recently, Nigeria.

Vera Krückel is the consumer staples analyst of the Robeco Global Equity team, which in total has 11 sector analysts and portfolio managers.

SABMiller is part of the investment portfolio.

The incorporation of ESG factors into investment cases is very important to the team. SABMiller scores well on these criteria, especially because of its close cooperation with local farmers.

Low cost strategy leads to growth SABMiller makes beer more affordable to people by brewing it from cheaper local crops, says Krückel. “In the last few years the company has launched new brands such ‘Impala’ cassava beer. By doing so, it needs to import less expensive European ingredients such as barley malt. Instead, the company sources locally and uses cheap ingredients such as cassava, which are widely available in Africa.”

This low-cost-strategy allows SABMiller to take market share from homebrew beer, she adds.

“This enables them to achieve high top-end growth. In South Africa, volumes are increasing by around 1-4% a year, and in the rest of Africa, this figure is around 7-9%.”

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The company also benefits from Africa’s rising population and increased urbanization, she says. “SABMiller is a demographics play for investors. The company has a broad portfolio of brands for different segments of the population. SABMiller has low-end brands which offer volume and introduce people to the concept of commercial beers, but they also sell high-margin premium beers.”

ESG incorporated in investment decisions SABMiller scores well on ESG factors because of its cooperation with local small-scale farmers, says Krückel. “It is a win-win situation for both.

It allows SABMiller to cut transportation costs, while these farmers find a willing buyer for their crops.”

“Within RobecoSAM we have analysts who make an ESG profile per sector and per company. For example, they look at reducing the use of water in the brewing process.

Subsequently our engagement specialists reach out to these companies to discuss further improvements,” she says.

Engagement specialist Peter van der Werf explains how this works with SABMiller: “We collaborate with other institutional investors on the PRI Water risk in the agricultural sector working group and collectively engage with SAB Miller, with Robeco leading on this dialogue.”

SABMiller is a best practice in terms of water management in the brewery sector, he says. “It has dedicated significant resources to establish its water footprint and improve water efficiency

in the production process. We now encourage them to also improve water efficiency in the production of raw materials from their suppliers.”

These ESG factors and engagement results are then integrated in Krückel’s investment case.

ESG factors can directly influence the value of a company, she says. “A reduction in waste can cut costs and innovation can increase revenues. Per sector we have criteria that look at the materiality or importance and impact per issue.”

The Robeco Global Equity approach to ESG is different from other investors, she concludes.

“Many just tend to focus on screening and exclusion. Often, the connection to business models and valuation tends to be missing.

Our approach includes all stages of the of the investment process.”

Room to raise margins Besides top-line growth, there is room to raise gross margins, says Krückel. “SABMiller has pricing power in Africa, because their market share is high, which gives them the flexibility to raise margins in the future. Another way to raise margins is to increase volumes. Breweries have high fixed costs and any increase in volumes to cover these costs directly contributes to gross margins.”

She is optimistic about the future of the company. “The Africa exposure is high. The relatively low consumption of commercial beer per capita in the region will allow SABMiller to continue to grow.”

EXTERNAL PERSPECTIVE

‘Sustainable business solutions are the best way to link regular investments with ESG’ MARKUS REICHLING PANASONIC Markus Reichling is the European General Manager for Environmental Affairs at Panasonic, the Japanese electronics manufacturer and leading developer of sustainable products.

How do you develop solutions for sustainability challenges?

“Panasonic’s ‘Basic Management Objective’, formulated in 1929 and still valid today, defines our responsibility to “devote ourselves to the progress and development of society and the well-being of people through our business activities”. This means we continuously analyze and consider how our future products and solutions may also contribute to overcome the key sustainability challenges, globally as well as regionally.

In practice, we apply a cross-pollination approach. Different business divisions continuously discuss how their technologies and solutions can be synergized to offer even higher value or can be applied in different contexts and industries to customers than selling them only in one area.

For example, we have adapted ‘inverter technology’ to deliver energysaving features in a wide range of totally different products ranging from washing machines and refrigerators to air conditioners and many others.”

atmosphere they like, with the best available energy efficiency. However, consumers still play the main role in influencing the success of sustainable innovations. Without demand from the market, even the best technology cannot contribute to solve our sustainability challenges.”

If all your components are counted, you make at least 15,000 products: what use do you make of recycling?

“We’re very much engaged in recycling technology, often taking used materials back into our own production processes. Panasonic recently developed a new technology to efficiently separate plastics containing critical chemical substances from those which are allowed to be reused for new electronic products. Selling this to other recycling facilities is another sustainable business solution.”

Do your investors demand use of ESG? Can technology produce solutions to overcome the environmental burdens from consumerism?

“We see many cases in our company of how technology offers solutions towards increasing resource efficiency while fully meeting customers’ expectations. For example, consumers still strongly demand incandescent bulbs, even though they are already prohibited for sale in Europe due to their high power consumption. For several years, the lighting industry could not offer energy-saving lamp technology which had the same style and color of light as these former ‘energy killers’. With our new ‘Nostalgic Clear’ LED light bulb, consumers can now get both the product and warm

“Of course, the main focus of our investors is still on financial results and forecasts, business strategies, corporate structure, etc. Nevertheless, we also get more and more ESG-related questions, particularly from longterm investors, such as referring to corporate governance, and sometimes even concrete issues such as battery recycling and conflict minerals. The Panasonic business is actually changing from products that become more and more sustainable to inventing and promoting products and solutions that are sustainable per se. Overall, the Panasonic approach is to offer ‘sustainable business solutions’ which is – in my opinion – the best way to link regular investments with ESG aspects.”

Important Information This document has been issued by Robeco Institutional Asset Management B.V. (trade register number: 24123167), which has a license of the Netherlands Authority of the Financial Markets in Amsterdam, and RobecoSAM AG (trade register number: CH-020.3.025.346-2), which has a license of the Swiss Financial Market Supervisory Authority FINMA in Berne. Robeco’s engagement process starts with thematic research by an external consultant focusing on companies within a specific sector. Chinese walls exist between Robeco’s engagement activities and RobecoSAM’s activities related to the RobecoSAM questionnaire. These Chinese walls ensure that confidential information from the RobecoSAM questionnaire will not be used for Robeco’s engagement activities. The details given on this page do not constitute an offer. They are given for information purposes only. No liability is assumed for the correctness and accuracy of the details given. Copyright © 2015 Robeco – all rights reserved.

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Robeco Coolsingel 120, 3011 AG Rotterdam, The Netherlands editors-advance@robeco.nl, http://www.robeco.com/professionals/insights/ sustainability-investing/index.jsp RobecoSAM Josefstrasse 218, 8005 Zurich, Switzerland info@robecosam.com, www.robecosam.com