PRI Asia Environmental Investment Focus

08 January 2009 Designator | author 1

Fortis Investments

ESG. An International Investment Perspective.

Florian Sommer, Head of Sustainability ResearchPRI Workshop, January 2009

Fortis Investments | 2

Contents

About Fortis InvestmentsOur PRI Approach Asian Environmental Investment Perspective


About Fortis Investments


Business OverviewKey Facts & Figures

The asset manager of the Fortis groupFocusing exclusively on investment managementStrictly autonomous

M2 rating awarded by Fitch Ratings (reaffirmed in October 2008)Active investment manager, fundamental research-basedGlobal network of some 40 dedicated investment centresEur 192 billion of assets under managementDiversified client base (retail vs. institutional; by country) and asset mix

1711 Institutional clients 1979 Distribution Partners clients

Over 2000 employeesSolid profitability

*Per September 30 2008


Business OverviewGeographical Operating Model

Global footprint …

…servicing a diversified client base strongly geared to external sources …

…with a well diversified asset mix of top quartile products

BostonNew York

TorontoChicago

AmsterdamBrusselsDüsseldorfFrankfurtGenevaLondonLuxembourgParis

MadridMilanViennaWarsawZurichAthens

AlmatyOsloStockholmHelsinkiCopenhagenSt PetersburgMoscow

BeijingHong Kong

ShanghaiTaipei

Istanbul

Mumbai

JakartaSingapore

MelbourneSydney

Americas Europe Nordics, Russia and CIS

Asia, Middle East, Africa,and Turkey

SeoulTokyo

Sao Paulo

Dubai

Buenos Aires

Santiago


Latin America 2%

Asia Pacific 11%

N. America 7%

Europe 80%

AUM by geography

Business OverviewAssets under management mix

All figures per September 30 2008; the breakdown per asset class is currently an estimation for the combined entity and may be revised

AUM by distribution channel

DistributionPartners 45%

Others 6%

Institutional49%

AUM per asset class

Bonds 31%

Balanced 25%

FoF 2%

Equity 21%

Money Market 14%

Fix Funds 7%


-24.9

-18.2

-30

-25

-20

-15

-10

-5

0

Net asset flow Return effect

Business Overview Assets under management

(*) For ease of comparison, 1999 and 2000 have been re-calculated to take into account a transfer of Group Assets to the in-house insurance companies of Fortis which was effective end Q3 2001 and involved AUM of euro 28.1 billion

Evolution

AU

M in

EU

R b

n

EUR

bn

Asset growth breakdownEnd Q3 2008

69.282.2 79.4 72.7 77.9

87.1105.1

121133

192.4

0

50

100

150

200

250

1999* 2000* 2001 2002 2003 2004 2005 2006 2007 EndQ3

2008


Our PRI Approach


Principles for Responsible Investments (PRI)Fortis Investments Approach

Fortis Investments has signed the PRI in 2007. The Principles are based on the premise that ESG issues can affect investment performance and that the appropriate consideration of these issues is part of delivering superior risk-adjusted returns and is therefore firmly within the bounds of investors’ fiduciary duties.

The investment division of Fortis Investments is made up of 40 autonomous investment centers that are specialised in different asset classes and product areas.

The SRI investment center, supported by the Board / Executive Committee, acts as a centre for excellence in terms of establishing the link between ESG issues and investment consequences, and mainstreaming the PRI principles across Fortis Investments.

InvestmentCentre

InvestmentCentre

InvestmentCentre

InvestmentCentre

Board / Executive Committee Leadership

InvestmentCentre

SRI Investment Centre

PRI Co-ordination


SRI Investment Center

12 sustainable investment experts, from 9 different countries, with 117 years professional experience and fluent in 10 languages.

Truly integrated team combining both sustainability and investment expertise.

Autonomous investment centre based in Frankfurt.

12 sustainable investment experts, from 9 different countries, with 117 years professional experience and fluent in 10 languages.

Truly integrated team combining both sustainability and investment expertise.

Autonomous investment centre based in Frankfurt.


PRI Implementation

Action:Launched an online ESG Portal enabling all investment centres at Fortis Investments to access company ESG analysis. The analysis, compiled by SRI investment centre, helps to identify both ESG related investment risks and opportunities.

Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes

Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.

Action:Integrated specific ESG criteria in the company wide Proxy Voting policy. Improved reporting on ESG related Proxy Voting.


PRI Implementation

Action:Request for appropriate ESG disclosure according to GRI guidelines is integrated in company wide Proxy Voting policy. Selected engagement with companies on ESG disclosure issues.

Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.

Action:Ongoing dialogue with data providers and brokers on specific ESG issues / research requests.Launched tailored ESG investment solutions.


PRI Implementation

Action:Fortis Investments actively participates in a number of networks aimed at delivering the Principles (e.g. PRI Emerging Markets group, Carbon Disclosure Project).Presentations at PRI events in Frankfurt and Asia.

Principle 5: We will work together to enhance our effectiveness in implementing the Principles.

Principle 6: We will each report on our activities and progress towards implementing the Principles.

Action:Framework for understanding ESG investment risks and opportunities outlined on SRI website www.sri.fortis.com. Completed PRI Reporting and Assessment questionnaire.


Asian Environmental Investment Perspective


Rising Food Prices

Social Access & Poverty

Human / Labour Rights

Product Safety

Urbanisation

Demographic Change

Water Scarcity

Air Pollution

GHG Emissions

Natural Resource Depletion

Waste Problem

Eco-Toxicity

Transparency & Disclosure

Shareholder protection

Non compliance with environmental and social regulation

Bribery & Corruption

Sources: Fortis Investments

Environmental, social and governance issues Closely interlinked


Environmental Challenges in Asia …

China is set to overtake the US to become the world’s largest energy consumer soon after 2010, and even earlier is set to become the world’s largest carbon emitter.

India has 16 percent of the world's population, 2.5 percent of the land mass and 4 percent of the world's water resources.

Over 90% of waste in most parts of Asia is still dumped or land filled.

16 of the world’s 20 most polluted cities are in China.

Governments are increasingly concerned that the environmental crisis could lead to social unrest.



… Threathening Economic Growth



Fortis Sustainability RadarSustainability dynamics: Emerging Asia

Sustainability Issues


EMERGING MOMENTUM ESTABLISHED

Gre

enho

use

Gas

es (E

)

Air

Po

llutio

n (E

)

Nan

ote

chno

log

y (E

)

Wat

er S

carc

ity (E

)

Bio

div

ersi

ty (E

)

Fo

od

Cri

sis

(S)

Asb

esto

s (S

)


Fortis Sustainability RadarHow do sustainability issues develop?


Legislation in place

Voluntary Codes

Calls for tighter

legislation

Growing Political/ Media

Attention

Strong Scientific EvidenceSome

Scientific Evidence


Fortis Sustainability Radar™



Fortis Sustainability RadarCompany response

PRODUCTSTRATEGIC

WORSTPRACTICES

BESTPRACTICES

Companies who achieve competitive advantage through

better practices

Companies with a defensive or minimalist approach

Companies with products or services that solve the

problem




PRODUCTSTRATEGIC

WORSTPRACTICES

BESTPRACTICES

Business Response

Sustainability IssuesEMERGING MOMENTUM ESTABLISHED

PARAMETERS ARE NOT CLEAR –

TOO EARLY

PARAMETERS ARE VERY CLEAR –

TOO LATE

SustainableWinners

UnsustainableLosers

INVESTMENTOPPORTUNITY ZONE

Fortis Sustainability RadarThe Investment Opportunity Zone





PRODUCTSTRATEGIC

WORSTPRACTICES

BESTPRACTICES

Business Response


Asian Environmental Strategy


AsianEnvironmental

Strategy



Fortis L Fund Green TigersInvestment Philosophy

The Asian environmental space has so far remained under-researched and under-exploited from an investment point of view.

We take advantage of this by a bottom-up stock picking approach designed to identify companies with the strategies, management and means to become the long-term sustainable winners.

Our aim is to deliver superior long term equity returns by investing mainly in high growth, vibrant companies directly exposed to the demand for sustainable solutions in Asia Pacific



A wealth of opportunitiesRenewable Energy in China set to grow by 20% p.a.


Renewable energy is expanding in China.

Driven by energy security concerns, the climate change challenge, and providing access to energy in remote areas.

Renewable energy sources (including hydropower) are set to account for 10% of total energy consumption by 2010 and further to 15% by 2020.

China’s development plan for renewable energy


A wealth of opportunitiesHighest wind capacity additions in India

Expected growth in different countries

Sources: Goldman Sachs Research, Fortis Investments


Clean Energy Focus AsiaPolicy Infrastructure for Renewable Energy

Feed-in-tariff Tax reductions or credits

Public loans / financing

Renewable Energy Target

IndonesiaIndonesia seeks to generate 5% of its energy from

renewable sources by 2020.

KoreaKorea has a renewable target for electricity generation

of 5% by 2010.

MalaysiaMalaysia seeks to generate 350 MW renewable energy by 2010. Main potential is biomass based on palm oil.

PhilippinesMain goal is to increase self-sufficiency to 60% and to double renewable energy capacity to around 5GW by

2013.

SingaporeGovernment focuses on waste to energy, biomass cogeneration, and solar power offering up to 50%

public financing for innovative projects.

TaiwanTaiwan has a target of achieving 10% from renewable

energy by 2010.

Thailand5% of all new capacity must come from renewable sources. Main projects are using biomass, such as

sugar cane and rice husks.



Clean Energy Focus Asia Forecasted solar and wind capacity additions

Solar Energy -Forecasted capacity additions until 2010

Wind Energy -Forecasted capacity additions until 2010

IndonesiaRooftop solar has potential as the island’s geography means

that grid connection is difficult.Total wind potential estimated at just 448 MW. No clear

government guidance or targets available.

Korea628 MW

Government has budgeted W1.9tn for R&D, subsidies, and feed-in tariffs until 2012.

2250 MW (by 2012)Government has budgeted W1.6tn for R&D, subsidies, and

feed-in tariffs until 2012.

MalaysiaEnergy Commission state limited grid connection for solar,

but rooftop programs could be important.Energy Commission state that wind potential is not high due

to low average wind speed.

Philippines But plans to become key manufacturer. Cypress Sunpoweropened a US$ 300 mn plant in 2004.

392 MWDepartment of Energy estimates a total 76,000 MW of

potential wind energy.

SingaporeHas plans to install 50,000 m2 of solar thermal capacity by

2012. Seeks to become a solar manufacturing hub. Wind is not considered a viable source of energy.

Taiwan20 MW

Actively promoting innovate solar PV systems.

2,049 MWStrong potential in Taiwan Strait: Taipower plans a further

546 offshore turbines between 2010 and 2020.

Thailand142 MW

Environmental groups believe Thailand has potential to provide 30% of energy needs from solar by 2020.

52 MWGovernment does not consider wind as priority due to low

wind speeds.



A wealth of opportunitiesRising demand for water infrastructure

China ranks among the 13 lowest countries in the world on its per-capita water resources.

Less than 50% of the Chinese population is connected to sewerage systems.

The government has made the securing of drinking water resources a top priority.

Sources: Fortis Investments, www.china.org.cn, Citi Group, Credit Suisse

Rmb 1trillion to be spent between 2006-10


A wealth of opportunitiesHigh Growth in Water Investment in India

Sources: Fortis Investments, Goldman Sachs

% annual average growth in investment in water & wastewater between 2005 – 2015E.

Growth in India will outpace growth in developed economies more than two-fold.


A wealth of opportunitiesGrowing demand for waste management solutions

China has surpassed the US as the world’s largest waste generator driven by rapid urbanisation and rising GDP per capita.

Annual Municipal Waste Generation has grown 8% pa per capita between 1980-2000 compared to 1% in the US.

Over 90% of waste is still dumped or land filled. In its 11th five year plan the Chinese government states that it plans to invest Rmb 51.6 billion in sold waste treatment pants between 2006-2010. Incineration will play a key role in Chinese waste management strategy.

.



A wealth of opportunitiesChina unveils USD 586 billion stimulus package

Sources: Fortis Investments, FT

In November 2008, China called for “accelerating the transformation of our mode of economic development”.

US$586bn fiscal stimulus package earmarked to boost the economy.

Fully 25% of the total (US$146 billion) is allocated for environmental protection.

Big winners will be water infrastructure, green energy infrastructure, railways,.


– Integrated business model for total wind power solutions

– Annual growth rate ~20%– Strong market position in

growth areas– Built the world’s largest

wind park in Asia

Zhongde Waste

– Well positioned in the market for Waste incineration

– Market seen at ~ 15% cagrfrom now to 2030

– Proprietary technology, high sustainable margins and high ROE compared to peers

– Leading player in both desalination and water treatment

– Proprietary membrane technology

– Superior-quality portfolio of water assets expected to generate strong growth and steady cash flow

– Global player in the field of recovered materials

– Benefits from steady growth on increase of waste recycling volume in Asia

– Growing its overseas operations in Thailand and China

Fortis L Fund Green Tigers

Suzlon Energy

Matsuda Sangyo

Hyflux

Sou

rces

:For

tis In

vest

men

ts


Why Asia Environmental Focus Now

The Asian region is facing growing environmental challenges as a result of population growth, rapid industrialisation, and natural environmental constraints.

Governments across Asia have started to act realising that the growing environmental problem is beginning to undermine economic growth and social stability.

The global climate change debate is adding additional international political pressure. These developments create a whole range of environmental investment opportunities.

Investors face a need to take Asia’s diverse nature of environmental challenges and opportunities into account.


Thank you for your attention!

Singapore, Kuala [email protected]

+65 6593 [email protected]

+65 6593 5173

Jakarta [email protected]

+62 212521574

[email protected]

+49 69 70799841


Appendix


Fortis L Fund Green TigersBottom up investment process

Step 1

Sustainability research and idea generation

Leverage of our on-the ground Asian research capabilities

Investable Universe

Have we identified something the mainstream has not?

Step 2

Fundamental analysis (DCF, P/E)

Environmental benefits analysis to identify the pure plays

Risk Factors

Portfolio Construction

Is the team convinced of the investment case?

Step 3

Diversification across region, theme and technology

Review of current holdings, price targets

Review of portfolio risk compositions

FLF Green Tigers

Have we delivered the most attractive risk/return profile?



Fortis L Fund Green TigersDedicated team and local resources

Stewart Armer

Back up Portfolio Manager

Dr. Francois Perrin6 dedicated analysts, diverse background, 70 years of

combined investment experience

SRI Investment Center

More than 100 on-the-ground

investment professionals

China, India, Japan and Australia

5 experts on environmental, regulatory and emerging

market issues

SRI Committee

Global Environmental Capabilities

Local Research NetworkPortfolio Management Team

Portfolio Manager

Unravelled resources and experience for managing the strategy



International SRI Advisory Committee

High level sustainability experts with different areas of focus: science, policymaking, development, governance, global SRI industry, etc.

Provides strategic advice on existing and emerging sustainability themes.

Validates the robustness and integrity of the core SRI process.

High level sustainability experts with different areas of focus: science, policymaking, development, governance, global SRI industry, etc.

Provides strategic advice on existing and emerging sustainability themes.

Validates the robustness and integrity of the core SRI process.

Prof. Karl-Henrik Robert (Chairman)Founder of The Natural StepLeading Scientist on Sustainability System TheorySweden

Robert RubinsteinFounder and Managing Director, TBLI Group SRI Industry Expert; runs the leading SRI industry conference (TBLI) in Europe and AsiaUS

Raymond Van ErmenDirector of European Partners for the Environment, EU Environmental Policy ExpertBelgium

Dr. Maritta Koch-WeserCEO, Global Exchange for Social InvestmentFormer Head of Social Policy of the World Bank. Germany

Prof. Ethan KapsteinProfessor of Sustainable Development, INSEADLeading Sustainable Business Economist US

Cyril LinManaging Director of IFG Development Initiatives, Corporate Governance Expert for Asian countriesChina


Fortis L Fund Green TigersPortfolio Details

Sources: Fortis Investments, 31/12/2008

no „me too“ stocks

clear sector biases

diversified stock bets


Fortis L Fund Green Tigers Performance

Source: Fortis Investments, 31.12.2008 figures

Past performance or achievements are not indicative of current or future performance.

The successful implementation of clean technologies in the region coupled with the increased demand for solutions by region’s economies, will result in a major driver for environmental infrastructure.

High levels of domestic savings and current account balances = funding of infrastructure projects intact

Credit crunch has limited impact as 75% of spending announced and sponsored by government and municipal sectors.

Performance (%) Dec Last 3M Since inc.**

FORTIS L FUND Green Tigers (I) -1,99 -25,47 -36,4775% MSCI AC Asia Pacific ex Japan (NR) + 25% MSCI Japan (NR) -3,04 -20,60 -29,58Excess return 1,05 -4,87 -6,89

Risk indicators (annualised) Since inc.**

Fund volatility (%) n.a.Benchmark volatility (%) n.a.Tracking error (%) n.a.Information ratio n.a.all figures gross of fees (in EUR)* annualised perfo rmance

** inception date : 01/08/2008Past performance or achievements are not indicative of current or future performance.


Fortis L Fund Green TigersThe right time to invest in the newcomers!

Strong business case: Asian countries are responding to the need for immediate solutions to their significant environmental problems. Companies providing renewable energy technologies, energy efficiency improvements, water infrastructure and purification, sustainable forestry products, emissions control technologies will all be part of the answer.

Strong investment case: Social and regulatory factors are falling into alignment, making now an ideal time to invest in Asia’s environmental well-being.

Unique investment universe: Fortis Investments has identified a broad universe including compelling investment opportunities not covered by competitors

Strong performance: Focused on generating solid investment returns through investing in companies that are reacting proactively to the pressing environmental challenges in Asia Pacific

Proven investment process and dedicated investment centre based in Frankfurt leveraging Fortis Investments on-the ground Asian research capability



Fortis L Fund Green TigersFund Details

Name: Fortis L Fund Green Tigers

Reference Index : MSCI Asia Pacific (75%) / MSCI Japan (25%) – Net Return (EUR)

Portfolio management: Stewart Armer

ISIN: LU0374254513 (I-share)

Nationality: Luxembourg

Legal form: Compartment of the Fortis L Fund SICAV

Type: UCITS III

NAV Calculation Agent: FASTNET Luxembourg S.A.

Management fee: 0.80% (I-share)

Launch: 1 August 2008

Fund currency: EUR

Risk Class (0 to 6): 3

Advised Horizon: 10 years

Investor profile: aggressive

The investments in this compartment are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up, and it is possible that investors will not recover their initial outlay.


Why an Environmental Focus Now?Current valuations… and momentum!

Our alpha pool in clean energy, water and waste

Source: Fortis Investments, BloombergPeriod: 01/01/04 – 31/12/08

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1-Jan-04 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08

Clean & Efficient Energy Index (EUR)

Clean Water & Pollution Control Index (EUR)

Resources & Waste Management Index (EUR)

MSCI World ND (EUR)

Solar

Wind Operators

All thematic strategies have substantially outperformed the MSCI World over the past 5 years

Post 2008, valuation ratios at historic lows

– despite long term growth prospects

– despite balance sheets quality and low impairment risk

Catalysts for a repricing– Policy makers clearly moving

towards fiscal policies designed to boost economies, favouring those sectors

– Companies are likely to deliver growth ahead of expectations

– Strongest players will gain market share

648 stocks to choose from!

All thematic strategies have substantially outperformed the MSCI World over the past 5 years

Post 2008, valuation ratios at historic lows

– despite long term growth prospects

– despite balance sheets quality and low impairment risk

Catalysts for a repricing– Policy makers clearly moving

towards fiscal policies designed to boost economies, favouring those sectors

– Companies are likely to deliver growth ahead of expectations

– Strongest players will gain market share

648 stocks to choose from!


Improving our ESG Performance Fortis Investments

Fortis Investments is committed to improve its own ESG performance. In 2007 the company focussed specifically on the environment. A dedicated Greening Committee was set up.

The Greening Committee agreed 8 environmental headline objectives

1. Minimise business travel2. Minimise commuting impact3. Eco-efficient energy management4. Reduce paper consumption and waste recycling5. Greening procurement and facility management6. Embed ‘Greening philosophy’ in company culture7. Healthy spirit in a health body

Each objective is backed up with specific KPIs.


Improving our ESG Performance Fortis Group

Fortis Group is committed to ongoing improvement of its ESG performance under the Corporate Social Responsibility (CSR) umbrella. The CSR team is made up of 12 people and reports directly to the company board.

Fortis Group has agreed the following three year objectives (2007-09):

1. Building on overall strategic themes (sustainable supply chains, climate change, social exclusion)2. Embedding CSR in all parts of the organisation3. Implementation of Carbon Neutrality Programme4. Development and roll out sector policies5. Development of products and services6. Development of a Fortis Human Rights Statement7. Further expansion of Foundation8. Strengthen stakeholder dialogue and communication9. Actively particpate in international debabe on CSR

Further information about these objectives and achieved 2006 milestones can be viewed at www.fortis.com/sustainability


Further InformationPRI Co-ordinator

Florian Sommer

Head of Sustainability Research SRI Investment CentreFortis Investments, Germany

0049 69 [email protected] www.sri.fortis.com


www.sri.fortis.com

This document has been prepared solely for informational purposes and does not constitute 1) an offer to buy or sell or a solicitation of an offer to buy or sell any security or financial instrument mentioned in this document or 2) any investment advice. Any decision to invest in the securities described herein should be made after reviewing the most recent version of the prospectus, which can be obtained free of charge from Fortis Investments*. Moreover, prospective investors should conduct such investigations as the investor deems necessary and should seek their own legal, accounting and tax advice in order to make an independent determination of the suitability and consequences of an investment in the securities. The opinions contained herein are subject to change without notice.

Investors should ensure themselves that they read the last available version of this document.

Past performance or achievements are not indicative of current or future performance. The performance data do not take account of the commissions and costs incurred on the issue and redemption of units.

For more information, please contact [email protected]

Fortis Investments is the trade name for all entities within the group of Fortis Investment Management. This document has been issued by Fortis Investment Management Belgium N.V./S.A. (address : Avenue de l’Astronomie 14, 1210 Brussels, Belgium, RPM/RPR 0882 221 433).

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