Turning Green into Gold

Friday, 08 Apr 2016

TBLI NORDIC CONFERENCE 2016 will be held in Stockholm at Nasdaq on Sept. 20-21.

We are thrilled that Arvind Narula has agreed to be a keynote speakers. Arvind is an extremely successful entrepreneur who has shown great leadership in developing sustainable agriculture, social enterprise and Impact Investing in Asia.

Here is a recent article about Arvind Narula published in Masala in Thailand.

Turning Green into Gold    

ARvind

For Arvind Narula, building an organic agricultural empire is just one of a list of amazing lifetime accomplishments. By Bruce Scott Published in Masalathai 
If you peruse the aisles of certain grocery stores here in Bangkok — Tops Supermarket and Villa Market for example — then you’ve probably seen Hilltribe Organics free range eggs for sale. However, what you may not know is that this burgeoning business is just one of the many healthy food retail product lines that have sprung forth from the Bangkok- based company known as Urmatt Ltd. And the man behind this enormously successful enterprise is Arvind Narula, who manages to masterfully balance business savvy with social responsibility.
 
For Arvind, going green was in no way a case of simply jumping on the organic bandwagon to cash in on a popular trend. His agricultural operations have been organic for a long, long time. His business model is similarly progressive, and puts a decided emphasis on Corporate Social Responsibility (CSR). A large part of this is ensuring that the farmers who work for him are earning a good wage and not exposing themselves to dangerous chemicals. In turn, this business model has proven so successful that Arvind is now spearheading similar agricultural projects in South America, Africa, and even right next door in Laos, at the invitation of the Laotian government. Operating in such a wide-ranging cosmopolitan milieu comes easily to Arvind, who speaks seven languages and conducts business all over world.
 
He was born in Bangkok, but had moved around extensively by the time he was in his early 20s. “I went to school in Thailand, Singapore, and India,” he recalls, “and then after high school I didn’t think I needed college, so I worked for a year in Japan. Then I came back to Thailand to work for my dad. He had a trading company largely dealing in chemicals, and steel and cement. While on a business trip to Germany a friend of mine took me to see a college in Heidelberg — Schiller International University— at which point it occurred to me that I wasn’t really that smart.”
He enrolled in Schiller soon after and that’s where he met his wife Karen, a German-American. A year later they decided to move together to Paris, where both of them graduated from Schiller International University’s Paris campus with bachelors degrees in business, before moving on to do pursue their Masters in socio-economics at the École pratique des hautes études, also in Paris. During this time period he and Karen embarked on some wonderful, and occasionally frightening, road trip odysseys. “In 1974 we bought a Volkswagen bus and drove from Germany to Agra, in India,” Arvind recounts. “Our route went through Greece, Turkey, Iran, Afghanistan, and Pakistan. The next year we did it again, this time in a VW Beetle that we drove to Tehran. There were lots of adventures. On the first trip someone tried to buy Karen from me at the Khyber Pass, and on the second trip we were held up in Turkey by Turkish soldiers— this was right after the Cypriot war. I sat for 15 minutes with an M16 to my head.” 

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How can investments for development increase in Switzerland?

Tuesday, 05 Jan 2016

Guest Blog Post by Magnus Berg Johansen about Workshop D1 at TBLI CONFERENCE EUROPE 2015 on Development Finance and the role of the Swiss banking sector. The moderator Sabine Döbeli, CEO Swiss Sustainable Finance was joined on the panel by Patrick Elmer: Head Business Development at Blue Orchard, Christian Etzensperger, Head Corporate Development and Strategy at 
ResponsAbility Investments AG, and Andrea Heinzer: CIO and Partner at Obviam AG.
Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

What are the main reasons for capital not to be allocated into development investments? And how come it is so that Switzerland with all its financial capacity does not generate new innovative financial vehicles?
These were some of the questions that were raised during the session that took a closer look at three different financial institutions that generate returns for their shareholder by investing in developing countries.

22645158683 41be54c087 zThe session started off with Patrick Elmer from Blue Orchard discussing the issues of why funds do not find the way into these types of vehicles – because there is enough capital.

Andrea Heinzer from Obviam AG then took over and presented some of the various challenges that exist and hinder more capital movemenet into impact investing.

Lastly, Christian Etzensperger from ResponsAbility demonstrated how a fund can generate an impressive 30 percent growth per year in assets under management, mainly by attracting funding from private sector. The fund is continuously growing, and this is demonstrated with ResponsAbility's plans of opening a new office on the African continent. According to Etzenserger, however, there is still a great need for financing to reach the Sustainable Development Goals (SDG).
He showcased how the emerging markets need an annual SDG financing of USD 4,5tn, while the current assets under management of Swiss banking is at USD 6,7tn. At the same time, the annual transfer cost of the German unification was EUR 100bn. More specifically he showed the need within the various sectors in emerging markets.

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Responsible Investment Banking

Thursday, 07 Jan 2016

Guest Blog Post by William Maize about the Workshop "Responsible Investment Banking" at TBLI CONFERENCE EUROPE 2015 in Zurich. The moderator, Karen Wendt: Editor at Responsible Investment Banking was joined on the panel by Britta Rendlen: Head of Sustainable Finance at WWF Switzerland, Olivier Jaeggi: Managing Partner ECOFACT AG, Rene Nicolodi: Head of Equities & Themes at Zurcher Kantonalbank, Pierin Menzli: Head of Sustainable Investment Research, Bank of J. Safra Sarasin, and Arthur Wood, Founding Partner at Total Impact Capital.
Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

When you hear the words “Investment Banking”, does the word “Responsible” come to mind? I had never contemplated these themes to be complementary. Time to change my mind?

23173967312 f2daac2130 zKaren Wendt got the talk started with a question for Britta Rendlen of WWF Switzerland: If an alien were to study how humans made investments on earth, what would they say? Britta’s response cut to the point; “current economic growth utilizes resources at a rate of 1.5 earths. If growth continues at the same rate, resource consumption will reach a rate of 3 planets by 2030. Any intelligent alien life would say; “hey this is just not sustainable.”

Next to speak was Olivier Jaeggi, who rebutted our alien investor friends by suggesting that big banks are trying to address this resource-use issue and questioning if secondary banks, institutional and smaller asset managers are really doing enough. Most big banks now recognize the reputational risks associated with breaching an accord by the high commissioner of human rights suggesting that the provision of minimal human rights and other social requirements apply even with minority ownership.

Rene Nicolodi explained that Environmental, Social, Governance standards and guidelines (ESG) are not only followed for regulatory requirement, but because clients demand it. ESG metrics also provide greater insight about investment risk and opportunities compared with a traditional investment process. “It is simply the right way to look a business models and analyze companies for long-term sustainability.”

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What's in a Name? Deconstructing the meaning and intention of impact investing

Tuesday, 12 Jan 2016

Guest Blog Post by Sarah Stephen, PhD Candidate at University of Lausanne, about the impact Sarah Stepheninvesting debate at TBLI CONFERENCE EUROPE 2015 in Zurich. Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

Most of us are familiar with "responsible investing", the mainstream investment philosophy in which investments are made according to social, environmental, or governance criteria. Such investments are supposedly more than $10 trillion of assets globally, a far cry from its former state when this was practiced by niche actors. Although Impact Investing is often categorised under such investments, Arthur Wood, Founding Partner of Total Impact Capital, considers this as being distinct: "In Impact Investing, you are saying can we design financial tools that have a specific social purpose".

This term "Impact Investing" was floating above the discussions amongst the 190 delegates at the TBLI ConferenceTM Europe 2015 in Zurich. Although newer among the family of alternative strategies, Impact Investing has been rapidly growing - in fact, Arthur Wood states that the rate is 17% Arthur Wood, Founding Partner at Total Impact Capitalper annum. Growth notwithstanding, practitioners at the event were polarised on the very meaning of the term (evocative of the weather: dry and sunny on the first day, blustery and pouring on the second!), with many being averse to placing this strategy within boundaries.

This motivated me to embark on a semantic analysis, including an Impact Investing 101. As investors, we need a clearer idea of the population encompassed by the term so that we are aware of what we are signing up for and the ramifications of our decisions. As those providing investment opportunities, we have to be cognisant of this preference of investors so that the products are designed accordingly.

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Impact Investing - From Buzz to Reality?

Thursday, 07 Jan 2016

Guest Blog Post by William Maize about the plenary roundtable discussion on "Impact Investing - From Buzz to Reality?" at TBLI CONFERENCE EUROPE 2015 in Zurich. The moderator, Julia Balandina: Founder & Managing Director at JBJ Consulting, was joined on the panel by Hadewych Kuiper: Commerical Director at Triodos Investment Management, Dominique Habegger: Head Institutional Assets at du Pury Pictet Turrettini & Cie SA, Tenke Zoltani: Director Impact Investing at UBS, and Philippe Bernard-Treille: Investment Officer at European Investment Fund.
Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

Julia Balandina Jaquier engaged the audience from the get-go, asking three questions that helped set the stage for the roundtable and earned the attention of everyone in the room. The first asked for the author of this great quote; “It is urgent that governments throughout 22986913200 6001d41b89 zthe world commit themselves to developing an international framework capable of promoting a market of high impact investments, and thus to combating an economy which excludes and discards.” About one third of the attendees stood up for each option, A) David Cameron, B) Pope Francis, and C) Bono. Myself, well I was in the Pope’s camp on this one, being a fan of his recent Laudato Si and guessing that the keywords ‘excludes and discards’ just may have been his. Correct! Maybe a lucky guess, but ending up three for three helped me feel at ease as the roundtable began.

Julia asked the four panel members to describe the major trends in impact investing seen over the past five years. Hadewych Kuiper with Triodos thought that people have become aware; they want to invest money in a world in which they want to live in. This has helped create the demand for new impact investment offerings. For Dominique Habegger, the entry of big institutional investors into the impact space was an exciting development. Tenke agreed, suggesting that the entry of UBS into the market is proof of mainstream interest. Philippe identified that many PE and VC funds are being raised and expressed concern for making these equitable in the long term.

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Three ways to approach investing in sustainable agriculture

Tuesday, 05 Jan 2016

Guest Blog Post by Magnus Berg Johansen about Workshop C2 at TBLI CONFERENCE EUROPE 2015 on investing in sustainable agriculture. The panelists included Tanja Havemann: Director & Founder Clarmondial GmbH, Peter van der Werf: Engagement Specialist at Robeco Institutional Asset Management, Arnold Lau: Senior Vice President at Iroquois Valley Farms LLC, and Martin Poulsen: Partner at The Moringa Partnership.
Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

What is the best way of investing in sustainable agriculture? Is it possible to merge profits and organic farming? Can one by adding certain components to the business model increase output? These were some of the questions that were raised during the session that tried to TBLI EUR15 Workshop C2 1showcase how one could approach sustainable agriculture.

The session started off with Tanja Havement stressing the importance of agriculture when it comes to the CO2-challenge, employment in emerging markets and for gender equality.

Arnold Lau from Iroquois, a fund focused on incentivizing mid-size farmers in the US to grow organically,  then took the floor as the first presenter. He started of stressing the fact that only 1 prosent of the farming done in the US currently is done organically.

The market is very much a nice, but the demand is growing strongly due to consumer  interest. As the cost is higher, the market share remains low and this thus hold back any economics of scale.

Lau said that many find organic farming a fad and that it is too risky. But at the same time he is excited with the fact that the management of 70 percent of US farms will shift generations during the next 10 years.

What is more, one of the main hurdles to rapid expansion in this area is because organic farming does not pay off immidiately but when done continuously for many years it is the most productive approach – mainly because the land becomes richer year after year. Eg. the moisture is better remined in the ground.

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Impact Investing in Emerging Markets - What have we learned?

Tuesday, 05 Jan 2016

Guest Blog Post by Nada El Ahwal about a workshop (Session A2) at TBLI CONFERENCE EUROPE 2015 about Impact Investing in Emerging Markets, and the lessons learned. The moderator, Gudrun Timm, Partner at Carpe Diem Partners, was joined on the panel by Charles-Antoine Janssen: Managing Partner KOIS Invest, Dirk Elsen: Director Emerging Markets Triodos Investment Management, Karsten Fuelster: Country Manager Germany, Austria, Switzerland at IFC, and Fabio Sofia: Executive Director Symbiotics Group.
Views and opinions are that of the writer and are not the official views of TBLI CONFERENCE.

A group of passionate impact investors sat round the same panel to exchange insights in what could be the trickiest part of an already TBLI EUR 15 Workshop A2tricky space: investing for social impact in emerging economies. Noting the stark differences in business practices, demographics, and regulatory conditions between emerging and developed markets, the investors shed light on the intricacies of simultaneously employing capital and driving social change in countries like India and Bolivia.

Charles-Antoine Janssen, the managing partner at KOIS Invest, an asset fund management firm, opened a lively discussion by asserting that India, as an example, was the perfect place for an investor to genuinely add value. “The workforce potential is amazing, recruits in India are working to provide a better life prospects for their families, and exhibit huge entrepreneurship and willingness to work” he adds, this creates an unparalleled potential to combine social return with financial gains.

Soon into the session, moderator Gudrun Timm, MD and partner at Carpe Diem Partners, posed an alarming statistic that capital outflows from emerging economies reached 1 trillion USD in 2015 (according to the IIC). Fabio Sophia, the executive director of Symbiotics Group affirmed, “the scary thing about this figure is that this is capital that is not invested in emerging markets, despite the huge growth potential that we can all recognize. This is a huge concern in terms of development and opportunity.” Certainly, fleeing capital highlights the political economy challenges of emerging markets, where investors look for developed markets for reasonably risk-adjusted returns.  

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