Delivering a low carbon society –mobilising the finance sector
The 3rd Workshop of Japan-UK Joint Research Project“Roadmap to a Low-Carbon World”
Tokyo, Japan, February 13-15 2008

Emma Howard Boyd, Head of SRI,Director, Jupiter Asset Management

PwC Forward Thinking Programme,January 2008

Agenda Setting the context – a 20 year perspective
 Trends in low-carbon investing– Increase in investment– focus on corporate disclosure– asset owner initiatives

 Importance of sustainability criteria in investment decisions– focus on corporate disclosure– asset owner initiatives– growth of sell-side research The importance of P8
 Concluding remarks
2PwC Forward Thinking Programme,
January 2008

Setting the context – a 20 year perspective

PwC Forward Thinking Programme,

The 3rd Workshop of Japan-UK
January 2008Joint Research ProjectSetting the context – a 20 year perspective

 Over 19 years managing screened green
and socially responsible investment funds
 Delivering long-term performance byinvesting in companies with positive
growth supported by environmental
trends Large, experienced and respected SRI
and Governance Team
 Rigorous SRI research and screening
process

At the forefront of green investing

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PwC Forward Thinking Programme,January 2008

Long-term performance from environmental solutions
Over £695m* FUM in Green & SRI Portfolios
 Product evolution – from negative screens to performance-driven green-themed approach
Fund

Aim

Focus

Jupiter Ecology

GlobalgrowthSix green investment themes (85% of portfolio)
Companies actively managing environmental &social impacts (15% of portfolio)
Full range of negative screens

Jupiter Climate
Change Solutions(SICAV)
5

GlobalgrowthSix green investment themes (100% of portfolio)

PwC Forward Thinking Programme,
January 2008

*Source: Jupiter 31.12.07

Investing for green – our core beliefs
 Three key drivers to growth:– legislation and government support– corporate commitments– longer-term consumer purchasing trends
120

100

Annual Number of Items of EC
Environmental Legislation Adopted

80

60

40

200'6 7 '6 9 '7 1 '7 3 '7 5 '7 7 '7 9 '8 1 '8 3 '8 5 '8 7 '8 9 '9 1 '9 3 '9 5 '9 7 '9 9

Source : Manual of Environmental Policy 05/03

6PwC Forward Thinking Programme,
January 2008'1Trends in low-carbon investing Increase in investment
 Focus on corporate disclosure Asset owner initiatives

PwC Forward Thinking Programme,

The 3rd Workshop of Japan-UKJanuary 2008Joint Research ProjectTrends in low-carbon investing

Growth of UK retail ethical funds - Ethical funds under management reached £5.9bn byend 2007, (£5.0bn, 2006). Total net retail sales for ethical funds for the whole of 2007
reached a record high of £473 million, increase of 3.5 times.1

Growth of European SRI mutual funds - Total SRI fund assets reached €49bn whilenumber of funds grew to 437. Inflows up 43% over year to June 30, 2007.2

Growth in Cleantech venture capital - The European Cleantech sector as a wholeattracted €712m in venture capital in 2007, almost doubling the €317m invested in 2006.3

Growth in global public/private funding of clean energy companies/assets - Theamount of new money invested in clean energy grew to US$117.2 billion last year, up 35
percent from US$86.5 billion in 2006.4

1. http://www.investmentuk.org/statistics/qtrly/2007/q4.asp
2. Figures compiled by Vigeo Italia, the SRI research company and Morningstar, the funds data provider
3. The Library House Quarterly Briefing Q4 2007
4. New Energy Finance

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PwC Forward Thinking Programme,January 2008

Trends in low-carbon investing

9

Carbon Disclosure Project - CDP represents 385 institutional investors with a combined$57.5 trillion of assets under management. On their behalf it seeks information on thebusiness risks and opportunities presented by climate change and greenhouse gas
emissions data from the world's largest companies: 3,000 in 2007.

ABI RI Disclosure Guidelines - updated in Feb 2007, they replace the 2001 SRI
guidelines. They still call on Boards to report on their approach to managing
environmental, social and governance risks, but they aim to help companies understandhow to comply with the Business Review in ways that are useful to investors, without
imposing additional requirements.

PwC Forward Thinking Programme,January 2008

Trends in responsible investingPrinciples for Responsible Investment – (PRI) - Investor initiative in partnership with theUNEP-FI and the UN Global Compact. Framework and a statement of a global standard
developed by representatives of 20 institutional investors from 12 countries in April 2006.
Six overarching principles recognize the direct link between environmental, social andgovernance practices to investment performance and risk. The principles include voluntaryactions related to investment decision-making, active ownership, transparency andcollaboration. By end 2007, over 200 institutional investors signatories representing morethan $11 trillion in assets.
“Historically, Wall Street wanted to disdain environmental, social and governance issues.
In the 1970s, Milton Friedman said ‘the business of business is business…’ That myopic
view doesn’t translate into today’s complex global market. The principles, like our CalSTRS
policies, recognize long-term issues that affect the sustainability of corporate earnings,”
Christopher J. Ailman, CalSTRS Chief Investment Officer. (Nov 1st 2007)

10

Enhanced Analytics Initiative - The EAI is an international collaboration between asset
owners and asset managers Encourages investment research that takes account of theimpact of extra-financial issues on long-term investment. The Initiative represents totalassets under management of €1.85 trillion.
PwC Forward Thinking Programme,January 2008

Importance of sustainability criteria ininvestment decisions
 Focus on corporate disclosure Asset owner initiatives
 Growth of sell-side research

PwC Forward Thinking Programme,
January 2008 Joint Research ProjectThe 3rd Workshop of Japan-UK

Importance of sustainability criteria in investment decisions
Carbon Disclosure Project – “We have used our voting policy to promote improved disclosure ofgreenhouse gas emissions. Morley is a founding member of the Carbon Disclosure Project (CDP). We
engaged with 29 persistently non-responding companies to request CDP adherence. We targetedcompanies based on the potential impact of climate change on their business, as well as the potential
for their business to impact on climate change. We said that if the company did not respond to theCDP, then Morley may withhold support for the report and accounts at future AGMs. Over half of thecompanies that we engaged with provided a full answer to the CDP for the first time: of the 29
companies that we engaged with, 15 provided a full answer, and 3 provided some information.” Morley
Fund Management.

ABI RI Disclosure Guidelines integrated within Corporate Governance Voting and Engagement
Policies - The ABI urges companies to focus on providing forward-looking information, establishing aclear policy for risk management, publishing Key Performance Indicators and a breakdown bybusiness segment where appropriate, and describing how they actually handle environmental, socialand governance risks of particular significance to the business.
New to 2007 version - The guidelines now include a recommendation that companies should state intheir remuneration reports: “whether the remuneration committee is able to consider corporate
performance on environmental, social and corporate governance (ESG) issues when setting
remuneration of executive directors. If the report states that the committee has no suchdiscretion, then a reason should be provided for its absence”.

12PwC Forward Thinking Programme,
January 2008

Importance of sustainability criteria in investment decisions
UNEP FI / UKSIF report - Responsible Investment in Focus: How leading public pension funds
are meeting the challenge provides examples of some of how responsible investment hasadvanced in recent years. Fifteen in-depth case studies cover public pension funds across fivecontinents, with assets ranging from $33m to $460bn. (Apr 2007)

PRI Progress Report - 88% of investment manager signatories to the PRI are conducting atleast some shareholder engagement on ESG issues, while 82% of asset owners are doing so.
(July 2007)

FairPensions - The Fund Manager Responsibility Survey by FairPensions reveals that 75% of
the top 20 fund managers do not disclose responsible investor policies that addressenvironmental and social issues, such as climate change and human rights, as well as
corporate governance matters. (Oct 2007)

FairPensions - A report by FairPensions has found that although leading pension funds now
recognise the financial benefits of managing potential environmental, social and governance(ESG) risks in their portfolios, pension funds of many well-known companies still appear to beneglecting issues such as climate change and human rights. The report assessed the UK's 20
largest pension funds, which together have 4 million members and are worth £292bn.
(Dec 2007)

13PwC Forward Thinking Programme,January 2008

Importance of sustainability criteria in investment decisions

Enhanced Analytics Initiative - assessed reports from a total of 25 Research Providers(research undertaken Nov 2006-Apr 2007). The following institutions evaluated asproviding the best analysis of extra-financial issues and will be eligible for EAI
commissions in the latter half of 2007:
CA Cheuvreux · Citigroup · JPMorgan · Merrill Lynch· Morgan Stanley · Oddo Securities · Société Générale



Latest Evaluation - characterised by a number of emerging trends and themes:– increasingly sophisticated analysis of related risks and opportunities– integration – no longer the exclusive domain of specialist SRI analysts– sectors covered include those where new regulations are expected to impact – eg.
automobiles, utilities– issues, such as workplace health and safety, community relations, human rights issues,rarely covered in the research

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PwC Forward Thinking Programme,
January 2008

The importance of P8

PwC Forward Thinking Programme,
The 3rd Workshop of Japan-UK
January 2008 Joint Research Project

The importance of P8

P8 Initiative - Led by University of Cambridge Programme for Industry (CPI) and thePrince of Wales’s Business & the Environment Programme (BEP)Meeting of leaders from the world’s largest public pension funds - representing over
$2 trillion assets

Unique role of public pension funds - long-term focus, exposed to the economic andhuman health consequences of climate change

Future focus– International public policy development– Climate risk and opportunities– Capital flows into climate solutions– active engagement with investee companies and assets on climate risks and opportunities.

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PwC Forward Thinking Programme,
January 2008

Concluding remarks

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PwC Forward Thinking Programme,
January 2008

Call to action18

Climate change needs an urgent responseConcerted action now makes economic sense

Shift to a low-carbon economy will create significant investment opportunities



Investors need a clear signal of where policy is going

Governments should set credible long term goals consistent with business cycles

PwC Forward Thinking Programme,
January 2008

AppendicesWebsites

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PwC Forward Thinking Programme,
January 2008

Websites New Energy Finance - www.newenergyfinance.com
 Carbon Disclosure Project - www.cdproject.net
 Association of British Insurers Disclosure Guidelines - www.abi.org.uk
 Principles for Responsible Investment - www.unpri.org
 Enhanced Analytics Initiative - www.enhancedanalytics.com
 United Nations Environment Programme Finance Initiative - www.unepfi.org
 UK Social Investment Forum - www.uksif.org
 FairPensions - www.fairpensions.org.uk

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PwC Forward Thinking Programme,January 2008

WARNING

Jupiter Unit Trust Managers Limited ("JUTM") and Jupiter Asset Management Limited ("JAM") areboth registered in England and Wales (nos 2009040 and 2036243). Their registered address is 1
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This presentation is intended for UK based investment professionals only and not for the benefit ofother persons. However any one attending the presentation or who has the opportunity to view theaccompanying slides should bear in mind that the value of an investment in a unit trust and theincome from it can go down as well as up. It may be affected by exchange rate variations and you
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PwC Forward Thinking Programme,
January 2008