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RESPONSIBLE INVESTING
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 ESG INVESTING
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 ESG REGULATIONS
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 ESG REGULATIONS
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Trustees who disregard the long-term financial risks or opportunities from

ESG will have to justify why this does not hurt their investment returns

UK’s Department for Work and Pensions

Prudent investing should give appropriate consideration to any factor which

may materially affect the sustainable long-term performance of a fund’s
assets, including factors of an environmental, social and governance (ESG)
character.

Regulation 28 of the Pension Funds Act

 ESG PERFORMANCE
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 ESG – EMERGING MARKETS
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 CARBON BUDGET
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 ENVIROMENT
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Paris Agreement <2˚C

Tipping point = 2030!

* Source: Nasa
 SASOL (ENVIROMENT)
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• More emission than Portugal

• Top 100 fossil fuel companies in
the world
• Four workers died during the
past year
• R1.4bn reduction for
rehabilitations costs
 SASOL (ENVIROMENT)
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Cost to society
• Mortality:
• Air pollution caused 7.4% of all deaths in South Africa in 2012*
• The estimated cost is 6% of GDP
• High medical expense
• Productivity losses, therefore, lower economic growth
• Higher tax

Risk to Sasol
• Evolution of electric vehicles
• Green technologies
• Over supply of oil in the world
• Carbon tax
• Lawsuits/penalties

* A recent IGC study indicates that 7.4% of all deaths in South Africa in 2012 were due to
chronic exposure to fine particulate matter PM
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SIBANYE GOLD (SOCIAL)
 BRITISH AMERICAN TOBACCO (SOCIAL)
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 GOVERNANCE
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-97%

-60%

-57%
ESG PORTFOLIO
CONSTRUCTION
 INVESTMENT PROCESS
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 INVESTMENT PROCESS
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 BACK-TESTING OF ESG BENCHMARK
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Please note that it is for illustrative purposes only. Investec used a simplified proxy for the ESG benchmark. They took the spliced Capped
SWIX / SWIX and excluded the shares as indicated on previous slides. They used a monthly return series to keep it simple. It is not exact but it
gives a good idea of what would have happened over the past 10 years. The performance does not include any active management of the
fund.
 DISCLAIMER
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DISCLAIMER: All information used in this presentation and any material referred to herein are subject to copyright and may not be
reproduced or used (other than for information purposes) in any way, unless prior written permission has been granted by Naviga
Solutions (Pty) Ltd the appropriate copyright owner. This presentation is intended for information purposes only and none of the
information contained in this presentation constitutes investment advice or a recommendation, solicitation or offer by Naviga
Solutions to buy or sell any financial product. The information contained in this presentation has been prepared without
consideration of the investment objectives, financial situation or particular needs of any particular recipient. Any transactions
described in this presentation may give rise to substantial risk, including the possible loss of principal value, and are not necessarily
suitable for all investors. This brochure should accordingly not be considered as a substitute for the exercise of your own judgment
or for obtaining independent advice based on your personal preferences and circumstances. Although all precautions have been
made to ensure reliability of data and information contained in this presentation, Naviga Solutions cannot guarantee the reliability
thereof. Past performance referred to in this presentation is not necessarily indicative of future performance. Similarly, forecasts
contained in this presentation involve risks and uncertainties which may result in future performance, outcomes and results which
differ materially from such forecasts. You are accordingly cautioned not to place undue reliance on any historical data, general
information or forecasts used in this presentation. Naviga Solutions accepts no liability whatsoever for any loss, damage (direct or
consequential) or expense suffered by a recipient as a result of undue reliance placed on any information contained in this brochure.
Naviga Solutions is an authorised financial services provider, FSP 381.