Charlotte mansson

RepRisk, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 1

Charlotte ManssonRepRisk AGPhone +41 43 300 5440Email Mansson@reprisk.com

Can you afford to ignoreenvironmental and social risks?

TBLILondon, November 11, 2010

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 2

Objective of Today

Discuss why ESG Risks are important

Show how you can identify these risks

Provide thoughts on how to manage these risks

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 3

RepRisk AG

Global provider of data on environmental and social risks

HQ in Zurich, 18 analysts in Central Asia, Spain, Switzerland, UK, and US

Research Partners in Asia: CSR Asia/Responsible Research, Japan Research

Institute

Founded in 1998 as an environmental risk management consultancy for banks

Launch of RepRisk® service in 2006, company renamed to RepRisk AG in

2010

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 4

Selected Clients

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 5

Why Environmental and Social Risks Matter

Sinar Mas Group / KitKat

BP

Siemens

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 6

BP’s Risks Peaked in 2008 and Materialized in 2010

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 7

How can I assess a company’s Environmental, Social, and Corporate Governance (ESG) risk?

1. Company-based information

2. Third-party sources

3. Audit reports

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 8

How can I manage exposure to ESG risk (I)?

First approach: Identify most exposed companies, e.g. based on RepRisk

Index

Exclude or underweight riskiest companies (exclude Transocean, etc.)

Factor ESG risk into the valuation of the most exposed companies (how do

risks affect cash flow projections?)

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 9

How can I manage exposure to ESG risk (II)?

Second approach: Complement financial analysis with a ESG risk

assessment

Example: Marks & Spencer Group PLCbased on RepRisk:

1) Environment (E)

2 a) Employee Relations (S)2 b) Community Relations (S)

3) Corporate Governance (G)

optional: product-related risks

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 10

RepRisk Indicators Are Based on RepRisk Database

Captures environmental, social and reputational risk exposure of companies worldwide

Monitors independent third-party sources, i.e. all major print media, non-governmental

organizations (NGOs), news sites, governmental agencies, blogs, etc.

Covers all major business languages: Chinese, English, French, German, Japanese,

Korean, Portuguese, Russian, and Spanish

Has identified more than 16,000 companies and 3,000 projects

Is updated and growing daily

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 11

Scope of Environmental and Social Issues

Note: In particular, all principles of the UN Global Compact are addressed.

* As of May 2010

Fraud*

Tax Evasion*

Anti-competitive Practices*

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 12

Print Media

Newsletters

News Websites

Governmental Agencies

“The Web”, Blogs

NGO Websites2nd LevelAnalysts

I

CP

C S

NG

News1st LevelAnalysts

RepRisk front endApproval bySenior Analyst(double check principle)

Global Coverage and Rigid Data Selection

Advanced search algorithms covering Chinese, English, French, German, Japanese, Korean, Portuguese, Russian and Spanish sources worldwide

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 13

Companies associated with controversial issuesin over 180 countries

N

C

P

C S

IG

News

15,000 Companies +10 per day

3,000 Projects +2 per day

34 Sectors

2,000 NGOs +2 per day

30 Issues

200 Campaigns +1 per week

2,000 Governmental Organizations +10 per month

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 14

The Reputational Risk Index is an indicator of the exposure to environmental, social and reputational risks

RRI calculation based on: relevance of news sources frequency and timing of news, and news content, i.e. severity and novelty

The Peak RRI gives the maximum RRI value in the last 24 months

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 15

www.RepRisk.com

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 16

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 17

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 18

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 19

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 20

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 21

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 22

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 23

RepRisk AG, Zurich, Switzerland (www.reprisk.com). RepRisk® is a registered trademark. 24

Thank you

Charlotte Manssonwww.reprisk.com