Responsible Investment Portfolios Perform as Well or Even Better
October 21, 2009 by admin
Filed under Initiatives
The majority of fund managers has said that responsible investment portfolios have performed the same or better than other investments, according to a recent survey.
A new report, which explores high net worth (HNW) individuals’ perceptions of responsible investment (RI) and its implementation across the wealth management industry, was published recently. The report, “Responsible Investment and Wealth Management: Opportunities for the future”, was put together by RI specialists, EIRIS, and published in association with wealth management newswire, WealthBriefing, and the leading private bank, Kleinwort Benson.
Social Investment Fund Set to Do Good in Low-Income Communities
October 5, 2009 by admin
Filed under Initiatives
Living Cities and Green For All recently announced the Energy Efficiency Opportunity Fund after the closing session of the Clinton Global Initiative’s Annual Meeting. This groundbreaking fund will finance innovative efforts to retrofit homes, businesses and community facilities to achieve greater energy efficiency, while also creating jobs and cutting energy costs for low-income families in the United States. Read more
Investing Responsibly
By Daniel Chandranayagam
While South-East Asia might be slow on the uptake, sustainable and responsible investment (SRI) is fast becoming the financial trend in the West. According to Reuters, fund manager RCM states that such investments ”offer a unique diversifying opportunity”. SRI is an approach designed to pick companies which manage environmental, social and governance (ESG) risks.
As an illustration of this phenomenon, Reuters states that nearly 600 asset owners, investment managers and professional service partners representing a total of USD18 billion have signed up to the Principles for Responsible Investment (PRI), a United Nations-led framework. Read more
First CSR-Oriented Islamic Finance Survey
August 30, 2009 by admin
Filed under Initiatives
A first-of-its-kind Corporate Social Responsibility (CSR) survey on Islamic finance institutions is currently being undertaken by two leading Islamic finance industry service providers, DinarStandard and Dar Al Istithmar. Read more
Rise in Demand for Clean Money
July 31, 2009 by admin
Filed under Interviews
The world’s only dedicated alternative energy and cleantech focused investment bank was recently launched in June 2009. Greentech Capital Advisors, LLC, helmed by Jeffrey A. McDermott, a 25-year banking veteran, focusses on alternative energy space, a dynamic and expanding sector driven by climate change.
The company offers clients a comprehensive set of capabilities across the project finance, private equity, and mergers and acquisitions markets, with a blue chip roster of partners with significant expertise. McDermott, founder of Greentech and former Joint Global Head of UBS Investment Banking, recently gave the CSR Digest an interview via email.
CSRD: What motivated you to form Greentech Capital Advisors?
JM: The alternative energy and cleantech sectors are projected to grow significantly in the next decades, as we work to find more efficient ways to utilise finite resources and to combat climate change. There is currently a significant unmet need for high-quality advisory services for companies and investors in these dynamic sectors. We want to meet this need by providing a dedicated team of experienced bankers, leading domain knowledge and a singular focus on alternative energy and cleantech. Read more
Health Care at $1.75. Is There a Business in Micro Health Insurance?
Courtesy of INSEAD Knowledge
by Grace Segran, Barcelona
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Micro health insurance is in its infancy but it’s expected to take off in the next couple of years, with the financial success of microfinance helping to speed up the process. Yet Johanna Mair, a former doctoral student at INSEAD (PhD 01Jul) who is now an associate professor of strategic management at IESE business school here, says microfinance and micro insurance are two very different processes.
A number of organisations are experimenting with different models, varying from subsidy to non-subsidy schemes and in delivery methods. Experimentation at this stage is extremely important, says Mair.
Grameen Health, for example, has a micro health insurance plan that costs $1.75 a year which covers six members of the family for rudimentary preventive medicine.
With some 100 million euros in funding from the Dutch government to start pilot projects in four countries in sub-Saharan Africa, PharmaAccess Foundation works specifically on the financing side of micro health insurance. They currently subsidise 90-95 per cent of private voluntary health insurance, using local partners as health care providers.
AAR, the largest and oldest HMO (health management organisation) in East Africa, works through a membership programme. As middle men accounted for some 65 per cent of its costs, the organisation became a micro insurance company so that it could come up with its own products to reach the poor.
“Yes, there is an opportunity for business but we have not found the solution or the perfect model yet,” Mair said during Net Impact’s Doing Good, Doing Well 2009 conference held here recently. “We need to address bottleneck issues, learn how to do things better, and identify the kind of model we can scale around the world.”
Micro health insurance and microfinance
Mayte Oosterveld, director community health systems at PharmAccess Foundation, says that unlike microfinance where you can lend part of a loan, you can’t sell one quarter of health insurance or treat only malaria. “We can give someone a $1 loan, but we can’t give a very small, restricted health care insurance.”
“We need to address a basic package and determine what it is that people will buy,” she says.
The difficulty for micro health insurance, she argues, is that it is a new concept for many people. “As they are paying out of their pockets, they ask: ‘Do I have to pay in advance with the risk that if I need treatment in nine months’ time that the clinic is still going to be there? Or do I keep the money in my pocket so that when a family member falls ill, then I have money to pay for treatment?’”
Educating people about micro health insurance and establishing trust with the group you work with is very important, she says. “The one day that the medication isn’t available … they are never going to buy that insurance again. Then you’ve lost them. That’s why it’s so different from microfinance.”
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Microfinance has had its success stories, but the same is not true for microinsurance, especially when there is an emphasis on serving the poor, Matthew Jowett, senior health financing specialist, with the World Health Organisation in Europe told INSEAD Knowledge. “Insurance, in particular health insurance, is a complex product to deliver, involving the assessment of individual health risks, and delivery of services either through the scheme’s own network of facilities or through contracts with a third party.”
The upshot
Oosterveld doesn’t think there is a business yet at this stage. “Everything needs to improve significantly before that can happen. The education system, doctors and nurses, delivery, pharmaceuticals.”
The Grameen Health initiative does show, however, micro health insurance schemes can virtually be self-financing, if not fully self-financing, says Jowett. “It seems that this is achieved by covering only small risks, that is, low-cost care in primary clinics, having low operating costs, for example labour, and achieving scale in terms of membership. This in itself is a major achievement – generating a profit, however, would be far more problematic.”
Most schemes targeting the poor are likely to either require subsidies, a focus on limited, perhaps smaller risks (such as only primary health care, and not hospital care), or will have to make enrolment compulsory, or semi-compulsory (for example, a scheme would need a minimum number of people in a group agreeing to join). Jowett concludes that micro health insurance does not appear to provide the same opportunities as microfinance does in harnessing the business sector to deliver on socially-oriented goals.◊
The Doing Good, Doing Well conference was held in Barcelona February 27-28, 2009.
Organised by IESE´s Responsible Business Club (an affiliate of Net Impact), the conference attracts professionals and students from around the globe.
First Exclusively Green Investment Bank
July 13, 2009 by admin
Filed under Initiatives
Greentech Capital Advisors, LLC, the only dedicated alternative energy and cleantech focused investment bank, today formally launched the firm, announcing a unique and significant set of capabilities and senior professionals.
The firm’s singular focus on the alternative energy space, a dynamic and expanding sector driven by climate change, fills the need for a pure-play advisory firm dedicated to alternative energy and cleantech companies.
Jeffrey A. McDermott, a 25-year banking veteran and former Joint Global Head of UBS Investment Banking and founder of Greentech Capital Advisors said, “For these companies to thrive, and for America to transition to a cleaner and more energy efficient economy, there is a need for a dedicated team of experienced bankers. Alternative energy and cleantech companies need bankers with deep industry knowledge, a wide array of product skills, and relationships with large industrial, power and utility companies who are the ultimate customers, strategic partners and consolidators for these companies. Our comprehensive expertise and unique composition of experts will help clients grow and succeed.”
Richard L. Kauffman, Chief Executive Officer of Good Energies, Inc, a leading global investor in renewable energy and energy efficiency industries, said, “After many years, the renewable energy sector is finally growing up. The sector needs capital and good advice.”
Greentech Capital Advisors offers clients a comprehensive set of capabilities across the project finance, private equity, and mergers and acquisitions markets, with a blue chip roster of partners with significant expertise in each of these areas:
Robert A. Schultz, Chief Operating Officer, with an over 20 year track record of building and managing infrastructure. He is a former MD and COO at Morgan Stanley Fund Services.
Timothy F. Vincent has joined to lead the firm’s project finance business. Prior to joining, he was at Goldman Sachs as a Managing Director covering Infrastructure clients and previously he was a Managing Director and Joint Head of Project Finance in North America for BNP Paribas.
Vincent said, “Developers and investors in today’s alternative energy sector are having difficulty navigating an unprecedented market disruption in the project finance debt markets. Greentech Capital Advisors is well-positioned to help clients secure cost-effective funding from a variety of sources to ensure the long-term viability of their projects.”
Michael J. Molnar has joined Greentech Capital Advisors from Goldman Sachs, where he was the lead equity research analyst on the US alternative energy and coal sectors.
Molnar said, “The alternative energy sector is challenging given the uncertain and dynamic nature of the industry drivers. Thinking about value creation in an era of volatile fossil fuel prices, varying new technology cost curves, differing regional regulations, changing government policies and uncertain financing potential is very complex. At Greentech Capital Advisors, our industry knowledge, experience and analytics are the foundation from which we add value to our clients.”
Craig J. Wellen has joined the firm, having over a decade’s experience as a power and utility sector banker, most recently as a senior banker at Citi. While at Citi, Craig was responsible for originating and executing strategic M&A transactions and capital raisings for numerous North American utilities, infrastructure funds and multinational energy companies.
“Current initiatives to control climate change and greenhouse gas emissions represent a fundamental policy shift that will reshape the power and utility sector,” said Wellen. “We look forward to working closely with our power and utility clients to understand the implications of this transformative change and to identify related business opportunities that will enhance shareholder value.”
R. Andrew de Pass, founder and former head of Citi’s Sustainable Development Investments (“SDI”), has joined Greentech Capital Advisors as a Senior Advisor and will be responsible for developing and leading the firm’s private equity investing business. Olav Junttila, who worked as an investment principal with Andrew at SDI, has also joined the firm.
“We believe Greentech Capital Advisors will be uniquely positioned to build a successful growth private equity investing business given the combination of the firm’s deep sector knowledge with our extensive investing experience and relationships. We intend to invest alongside our clients to help them achieve their goals,” de Pass said. “In addition, we will augment the advisory practice by sharing our hands-on experience as private equity investors in the alternative energy and cleantech sectors.”
About Greentech Capital Advisors:
Greentech Capital Advisors provides financial advisory services, including buy-side and sell-side M&A, exclusive sale transactions, restructurings, private placements and project finance advisory to companies engaged in alternative energy, energy efficiency, transmission and distribution infrastructure, sustainable materials and products, waste management, recycling and water efficiency. The firm’s dedicated focus enables us to develop deep industry knowledge and provide thoughtful and thorough advice. For additional information, please visit www.greentechca.com.◊
