TBLI CONFERENCE™ EUROPE 2014 - Sustainable Agriculture - Peter van der Werf - Robeco

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"Engaging with Food & Agri companies is key to feeding the nine billion sustainably" Robeco is a strong proponent of sustainability investing and has set up the Governance and Active Ownership team at RobecoSAM to engage with corporates on financially material sustainability issues. We define sustainability investing as a long-term, systematic approach that integrates environmental, social and governance considerations into traditional financial analysis, enabling us to fully understand a companys ability to create value. Firms that embrace sustainability are in our view more likely to be successful over the long term than those that do not. The Food & Agri sector is exposed to a large number of social risks and at the same time provides ample opportunities to create impact for investors. To ensure sustainable production of food products to feed the nine billion in 2050 RobecoSAM engages with 18 companies from plantations, traders, manufacturers to retailers in our portfolios. Our global commodity ESG risk assessment revealed issues on human rights, labour standards, deforestation and water risk. In addition we identified opportunities for companies to create impact on living wage and smallholder capacity building. TBLI CONFERENCE EUROPE 2014 took place on 28 & 29 October 2014 in Amsterdam, hosted by the VU University Amsterdam. The program included a wide selection of topics high on the agenda for sustainable finance professionals. Among them were trends in impact investing, impact measurement, philanthropy and program-related investing, ESG integration, ESG in fixed income markets, green bonds, shareholder engagement, strategies on fossil fuel investing and managing ESG risks. Reflecting the year's theme for TBLI CONFERENCES, "Connecting the Dots", we had included several workshops held at previous events in Zurich, New York and Oslo so that we can build on their learnings and insights.

Transcript

  • 1. TBLI 28 October 2014 Peter van der WerfSustainable agriculture: Engaging for change

2. Sustainability Investing: Robecos integrated approach2Governance and Active OwnershipPortfolio ManagersSustainability Investing (SI) ResearchFinancially Material ThemesESG IntegrationRobecoSAM Corporate Sustainability Assessment (CSA)SI Company ProfilesEngagement & VotingOur focus on identifying long-term sustainability factors forms the basis for the selection of financially material engagement themesEngagement activities are fully integrated with Portfolio Management and Sustainability Investing Research 3. Sustainability Investing: Current Robeco figuresSI in figures (31/12/2013)Assets in sustainability theme fundsEUR 3.1 billionAssets for which ESG integration has been implementedEUR 112.3 billionAssets under dialogueEUR 53.7 billionAssets under votingEUR 37.6 billionNote: Robeco total AUM: EUR 205 billion These figures make Robeco one of the largest SI asset managers globallyFull transparency on ESG integration per fund on our factsheets We offer engagement services for our funds and for asset owners as an engagement overlay service3 4. Social issues in the Food & Agri supply chainEngagement process:Research with commodity consultant AidEnvironmentThree year engagement periodIntensive dialogue with 18 companiesSupply chain perspectiveGoal is investing in sustainable mainstream agricultural business4Ten commodities:Palm oilSoyCocoaSugarCoffeeTeaCottonHazelnutMalt BarleyDairy 5. Engagement with a supply chain perspectiveFive objectives for engagement:Human RightsLabour StandardsSustainable Agricultural PracticesLiving WageSmallholder Capacity Building518 companies in four tiers of the supply chainPlantations: Cosan, GAR, Olam International, WilmarTraders: ABF, ADM, Bunge, Noble GroupFood manufacturers: Coca-Cola, Heineken, Mondelez, Nestle, SABMiller, UnileverRetailers: Ahold, Carrefour, Metro, Tesco 6. Palm oil plantation: Olam International67,000 ha of palm oil plantation under development in GabonIssues with High Conservation Value forest and RAMSAR wetlands in 112,000 ha concession from the governmentDialogue with head of sustainability and manager GabonDiscussed how the company deals with the sustainable agricultural practicesReceived update on planning for RSPO certificationEncouraged the company to increase smallholders inclusion in their operations 7. Commodity trading company: Associated British Foods7Active through division AB Agri in soy trading for animal feedIssues with human rights in several soy sourcing regions (Brazil, Paraguay) and labour standards in generalDialogue with head of sustainability AB Agri and corporate secretary ABFDiscussed how the company deals with labour standards in the supply chain and sustainability of soy for animal feedDiscussed the value of RTRS certificationEncouraged the company to more prominently use the supplier code of conduct to improve labour standards at their suppliers 8. Food & Beverage company: Coca Cola8Sourcing of sugar from BrazilCoca Cola has committed to sustainably source major commodities such as sugar, coffee and teaSpecific issues with water stewardship, both in operations and in the supply chainDialogue with head of water management and head of global workplace rightsDiscussed how the company can work with its suppliers to decrease the water footprint of its raw materialsEncouraged the company to take a leadership role in the food & beverage sector regarding water stewardship and protection of human rights in the supply chain 9. Retail company: Ahold9Retailers have a complex sourcing profile, we engage with Ahold on overall supply chain risk assessment and risk managementSpecial focus on coffee, dairy and hazelnutDiscuss labour standards, both in the supply chain and at Ahold subsidiary Giant Carlisle in the USDialogue with head of sustainabilityDiscuss how the company can work towards meeting its sustainable sourcing targetsEncouraged the company to take a leadership role in the retail sector regarding supply chain management 10. Contribute to feeding the nine billion in 205010Robeco aims to invest in sustainable mainstream agribusiness by:Preventing recurring issues with human rights violationsDriving production with respect for employeesDemanding sustainable agricultural production without deforestation and loss of biodiversityEncouraging development of a living wage approach throughout the supply chainMoving companies towards smallholder inclusion where feasible in the agricultural supply chain of commodities 11. DisclaimerImportant legal information: RobecoSAM is a registered trade mark and trade name of Robeco Groep N.V. (The Netherlands) and hereinafter referred to as the RobecoSAM-Brand. The RobecoSAM-Brand is allowedly being used by Robeco Institutional Asset Management B.V. (The Netherlands) as well as by RobecoSAM AG (Switzerland). Both legal entities are responsible for their own activities or publications related to the RobecoSAM-Brand. For the sake of clarity we would like to state that the team members of RobecoSAM AGs Governance & Active Ownership department are based in the Netherlands and employed directly by Robeco Institutional Asset Management B.V. Important legal information: 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 2014 Robeco all rights reserved. Robeco Institutional Asset Management B.V. (trade register number: 24123167) has a license of the Netherlands Authority for the Financial Markets (AFM) in Amsterdam. Robeco Institutional Asset Management B.V. (Robeco) Coolsingel 120 3011 AG, Rotterdam The Netherlands www.robecosam.com info@robecosam.com11

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