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Fw: FIGS's Annual Review of Eco-Efficiency Funds




----- Original Message -----
From: "John Ganzi" <jganzi@nc.rr.com>
To: <Undisclosed-Recipient:;>
Sent: Tuesday, November 27, 2001 12:33 PM
Subject: FIGS's Annual Review of Eco-Efficiency Funds


> November 27, 2001
> Re: FIGS's Annual Review of Eco-Efficiency Funds
>
> Dear Stakeholder,
>
> I am pleased to advise you that the 2000 Annual Review of Eco-Efficiency
> Funds is now available, for free, care of The Finance Institute for Global
> Sustainability (FIGS) on the Internet and can be viewed in totality at
> http://www.figsnet.org/documents/verified/figs2000.pdf in Adobe Acrobat
> format.  FIGS, a US based non-advocacy NGO, sees this report as central to
> our core mandate of providing stakeholders with information and
intelligence
> about the relationship between environmental/ sustainability activities
and
> financial performance.  Building on information from last year's report,
the
> 2000 edition provides information on performance and management of
> "eco-efficiency funds" from around the world.  Below you will find the
> report's executive summary and a brief write-up of key findings.
>
> We are especially pleased that the number of funds identified for coverage
> in this year's report has more than doubled from last year.  This is a
> powerful illustration of the growing interest in environmental/sustainable
> finance issues.  We are also pleased that, in the midst of significant
> market downturn, eco-efficiency funds have performed relatively well.  Of
> the 22 funds included in the report that measure themselves against a
> benchmark, 15 outperformed that benchmark.  We think this is a tremendous
> accomplishment and supports the premise that environmental performance can
> offer a competitive advantage.
>
> FIGS continues to expand the services it offers to financiers, NGOs,
> corporations, governments, the media, the academic community, consultants,
> lawyers, foundations, and others.
>
> -   In the next few days FIGS will officially launch the Global Community
of
> practitioners and users of information related to how sustainability and
> finance are intertwined.  As a member of this community, you will receive
an
> email from us on this subject with more specifics about your inclusion in
> this free user service.
>
> -   The electronic library, Cybrary, has also been materially upgraded
from
> both a functionality and substance perspective in the last 60 days, and
now
> includes new search capabilities and more then twice as many documents.
>
> If you would like more information about FIGS, the Cybrary, or the Global
> Community (GC), visit us on the web at www.figsnet.org or me at
> jganzi@figsnet.org or the GC or Cybrary managers at gc@figsnet.org, or
> info@figsnet.org.
>
> We hope you enjoy our publication, which again can be found in its
totality
> at http://www.figsnet.org/documents/verified/figs2000.pdf.
>
> Sincerely,
>
> John Ganzi
> Executive Director, FIGS
> PS The file will require Acrobat reader.  It can be downloaded for free by
> going to http://www.adobe.com.
>
>
> Overview of 2000 Review
>
> At the Finance Institute for Global Sustainability (FIGS), we are
interested
> in providing information that can clarify the relationship between
financial
> opportunity and environmental performance.  This is the primary motive
> behind our Annual Review of Eco-Efficiency Funds.  As we define it,
> eco-efficiency funds are those that offer investment opportunities in
> leading environmental companies AND seek superior financial returns.  In
> contrast, "socially responsible" funds may be willing to accept some
> diminished return for assurance that investments promote a social or
> environmental agenda.
>
> As we all know, the year 2000 saw considerable market downturn,
particularly
> in U.S. technology stocks.  FIGS believes that an investigation of
> eco-efficiency fund performance under these recent conditions may offer
> considerable insights as to the stability of environmental investments.
Of
> 26 different funds that were compared against a benchmark, 19 outperformed
> the market.  This performance certainly adds evidence that environmental
> responsibility can offer competitive advantages in both Bull and Bear
> markets, since this was the first major Bear market that has occurred
since
> eco-efficiency funds first appeared in the market place.  Nevertheless,
FIGS
> strongly cautions against extrapolating from a relatively small collection
> of data.  We believe that the true relationship between environmental
> leadership and financial performance will be revealed only through
continued
> study, an aim we hope to serve through the annual additions of this
report.
>
> As discussed in last year's report, the investment community's interest in
> corporate environmental performance appears to be growing steadily, both
for
> individual and institutional investors.  The financial services industry
> appears to be listening.  Last year only 15 eco-efficiency funds were
> identified in time to be included in the report.  This year we have
included
> 41 funds.  From our consultation with leaders in the financial services
> industry, we expect this number to continue to grow steadily.
>
> We hope that this report will inform, expand, and further stimulate the
> current dialogue on the possible link between environmental and financial
> performance.  In addition to growing awareness, this review can be used as
a
> starting point for investors interested in opportunities offered by
> eco-efficiency funds.
>
> FIGS will produce this report yearly as part of its mission to educate
> corporations, financiers, governments, nonprofits, academics, the media,
and
> the general public around the world on the relationship between
> environmental/sustainability issues and financial performance.  As
> demonstrated with this review, FIGS is interested in environmental factors
> that affect the valuation of a company's financial instruments (e.g.,
stocks
> and bonds).
>
> In addition, FIGS believes that there may be new eco-efficiency funds that
> have not been captured in this year's review and welcomes contact
> information for any eco-efficiency funds not covered.
>
>
>
>
>
>
> Summary of Findings
>
> Interest in eco-efficiency investment opportunities is growing rapidly.
In
> addition to providing information on individual funds, we have identified
> trends concerning the growing community of eco-efficiency mutual funds as
a
> whole.  Divided into several specific topics, these findings are listed
> below.
>
>
> General Information
> All funds are extensively screened for financial performance and for
> environmental performance (although each fund defines these terms
> differently).
>
> Most of the funds are sold to both institutional and individual investors.
>
>
> Interest/Growth in Field
> Interest in eco-efficiency funds continues to grow very rapidly throughout
> the developed world.
> The number of funds continues to grow at approximately 100% per annum.
> With the launch of one new fund in 2000 and another in 2001, Australia has
> joined the collection of countries with eco-efficiency offerings.
> As in previous years, the majority of eco-efficiency funds are housed in
> European countries, for purchase by European investors.
>
>
> Fund Performance
> The majority of the funds covered in this review appear to closely follow
> their respective benchmarks.
> A total of 41 funds were included in this review.  Of the 26 funds
compared
> against a benchmark for 2000, 19 outperformed their benchmark.  The other
15
> funds covered in this review were either too new for meaningful
comparison,
> did not exist in 2000, or did not provide a benchmark indicator.
>
>
> Investment Strategies
> Most of the funds are diversified across many countries and currencies.
The
> majority invest in five to eight of the world's major securities markets:
> the United States, the United Kingdom, Japan, Germany, France,
Switzerland,
> the Netherlands, and Canada.
> Given the wide country diversity of the majority of these funds, foreign
> currency exchange rate fluctuations play a significant factor in a
client's
> choice of investments.  Securities purchased by a fund, therefore, are
often
> influenced by the client's currency of choice.
> The funds tend to be concentrated in 50 companies or less that are
> recognized as environmental leaders.
> The majority of funds focus on investment in large capitalized firms.
> Several funds, however, hold positions in medium-cap firms, which may show
> particularly strong leadership for environmental initiatives.
> Except for the allocation methodology covered by the respective
benchmarks,
> the funds do not appear to have formal or official sector specific
targets.
> The majority of the funds are either primarily or exclusively equity
(i.e.,
> stock) funds.
>
>
> Environmental Criteria
> Most of the funds focus on environmental leaders by industry or sector.
The
> selected investments, usually mainstream companies, are seen as the most
> progressive on environmental issues in their industry but still look at
> financial issues in a traditional manner.
> Some funds also look for environmental/sustainability innovators or
> pioneers, which are firms that appear to be looking for radical new
> approaches.
> Several funds, particularly the newer ones, do not exclude specific
> industries in choosing environmental leaders.  This strategy allows for
> inclusion of some best-in-class companies from "dirty or brown"
industries,
> representing a departure from typical social investment strategies.
> Nevertheless, environmentally conscious investment houses argue that this
> pragmatic approach fosters the needed improvement of many large industries
> upon which national economies depend.
>
>
> Management Factors
> Nearly all of the 41 funds included in this review are actively managed.
> Fee structures vary widely.
> Typically these funds do not publicly report information on their
systematic
> risk.
>
>
>
>