1. Name Title Jon Duncan - OMIGSA Investing in Sustainability Growth Themes - What to expect from different asset classes Sept 2012

2. AGENDA 1.What is the science telling us? 2.Sustainability themes 3.What to expect from different asset classes 4.How should Trustee’s respond?

3. 1. What is the science telling us? 6.93 bn - 2010 9 to 11 bn by 2050 2.6 bn - 1945 World population from 1800 to 2100 (UN 2004 projections & US Census Bureau historical estimates)

4. 4 Climate change Ocean acidification Stratospheric ozone depletion Global freshwater use Land system change Rate of biodiversity loss Atmospheric aerosol loading Not yet quantified Chemical pollution Not yet quantified Nitrogen cycle (biogeochemical flow boundary) Phosphorus cycle (biogeochemical flow boundary ) Source: 2010 Stockholm Environment Institute - System limits to Growth 1. What is the science telling us?

5. 5 Time Declining resources and ecosystem service Increasing demand for resources and ecosystem service “Living off the earths interest not its capital” 1. What is the science telling us?

6. 6 1. What are the economists saying?

7. 2. Key sustainability themes “Investment is about the future. How the future turns out determines the returns on investments and the volatility of these returns. But, in turn, where capital is allocated helps to determine the type of future we get.”

8. 2. Key sustainability themes What are the key building blocks of a sustainable South African economy? 1.Job Creation 2.Poverty alleviation 3.Education 4.Healthcare 5.Agriculture 6.Public transport 7.Infrastructure 8.Water 9.Renewable energy 10.Affordable housing

9. 4. How should Trustee’s respond? Hard to get direct exposure to sustainability themes, however asset class is key to driving the broader SD agenda ESG lens provides critical insight into downside risk? Engagement and proxy voting is Listed Equity Provides direct exposure to sustainability growth themes Ability to directly influence management Liquidity risk means ESG due diligence is crucial Private Equity Dominant theme for new build Resource efficiency, retrofit cost key to optimisation of existing portfolio’s Property Provides opportunities for alignment with national development objectives Some ability to influence Liquidity risk means ESG due diligence is crucial Fixed Income

10. Level of Influence on Management Exposure to Sustainability Themes Indirect Direct Indirect Direct Private Equity Fixed Income Listed Equity Property 3.What to expect from different asset classes

11. 4. How should Trustee’s respond? Understand the current exposure to ESG risks and opportunities embedded in your portfolio Integrate sustainability outcomes and RI expectations into the Vision, Mission and Investment Policy Statement Align expectations of sustainability outcomes with asset class allocation Reflect expectations around ESG integration and reporting in the investment mandate Be sure to assess RI credentials of your Asset Consultants

12. Take out points Scientists, economists & industry leaders are telling us that sustainability is a mega trend impacting the competitive landscape across all sectors The investments we make today determines the quality of the future we get Trustee’s have a critical role to play in shaping the sustainability of South Africa’s future