An investor initiative in partnership with UNEP FI and the UN Global Compact

Treasury Asia Asset Management and
the UN Principles for Responsible Investment

In November 2009, Treasury Asia Asset Management (TAAM) became a signatory to the UN Principles for Responsible Investment (www.unpri.org) and is now in the process of formally adopting these principles, and incorporating them into our overall environment, social and governance (ESG) framework.

The Principles

The UNPRI was launched in April 2006, with the Principles for Responsible Investment being in essence principles for global best practice for responsible investment. While the principles are voluntary and aspirational, signatories are strongly encouraged to:

• Incorporate ESG issues into investment analysis and decision-making process.
• Be active owners and incorporate ESG issues into our ownership policies and practices.
• Seek appropriate disclosure on ESG issues by the entities in which we invest.
• Promote acceptance and implementation of the Principles within the investment industry.
• Work together to enhance our effectiveness in implementing the Principles.
• Report on our activities and progress in implementing the Principles.

TAAM’s Approach to the Principles and ESG factors

TAAM specialises in investing in Asian equities. Asia is the historically well known manufacturing hub of the world, at risk with regards to many ESG principles. We believe ESG factors are improving across the Asian region. Listed companies, broking firms and independent research firms are now focussing more research and resources on ESG issues and reporting these on to institutional investors. We view this as a positive step. Additionally, many Asian companies that we invest in recognise the importance of ESG and incorporate this into their business model.

Within the TAAM investment process, we had already incorporated a corporate governance score into our fundamental research of Asian companies. Going forward, the investment analysts are required to focus more on sustainability of the company’s business, inherent to this analysis, with issues of ESG factors particularly important to TAAM’s investment approach.

As well as our own internal ESG research of Asian companies, TAAM has recently subscribed to Responsible Research who is an independent provider of Asian ESG research targeted at institutional investors. Responsible Research provide TAAM with specialised resources and further research capabilities when assessing a companies ability to deliver superior returns and assessing any risks to earnings that may not be captured in the traditional financial records of a company. Responsible Research is a signatory to the UNPRI and is committed to working with their clients to understand and incorporate ESG factors into their investment decision making process.

We believe this approach represents a large commitment to incorporate ESG factors into our investment philosophy and process. We strongly believe that applying these principles will lead to a better long term financial landscape and as a result a long term benefit to society in general.