Wealth issue 23 Aug-Sep 2013

ISSUE TWENTY THREE - AUGUST / SEPTEMBER 2013

CLEANER CHINA

The Asian tiger pays the economic price of pollution

IS WATER THE NEW GOLD? Why investing in water is the new big thing

GREEN BANKING

Can banking be green? A new breed of ‘planet smart’ banks say ‘yes’.

ETHICAL VS PROFITABLE Millionaire ‘green’ businessmen on profit and ethics

UAE STARS OF SUSTAINABLE BUSINESS Who are the local green heroes of business?

HIGH-END HYBRIDS Luxury green cars are leading the way in the UAE

LUXURY WELLNESS TRAVEL

Does green pay?

Is environmentally-friendly a good play?

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Dubai Technology and Media Free Zone Authority

Where to go when you’re stressed and burnt-out

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ISSUE TWENTY THREE - AUGUST / SEPTEMBER 2013

EDITOR’S LETTER 06 Opinion

Y

ou may have noticed that this issue has gone green. We’ve taken the world of wealth management and investigated its green side – everything from ethical investment and environment-themed funds to sustainable business and buildings. Why? It came to our attention that words and phrases like corporate social responsibility, low carbon footprint, sustainable sourcing, eco-friendly, and the like, were more often creeping into reports, press releases and announcements from business and finance companies that you might not normally associate with concerning themselves over environmental issues. Green, it seems, is now mainstream and everybody wants to bite the green apple – or at least consider taking a nibble. Much of this has been driven by consumer demand, so says millionaire green businessman Peter Kindersley (pg 34).

Customers are asking for products that are ethically-sourced and produced with minimal environmental damage. Investors are asking for funds focused on renewable energy or resource management. In sum, we all want to grow our wealth but most of us would rather not do so on the back of child labour in Bolivia or destruction of the rain forest in Thailand.

As China has discovered (pg 8), the price of aggressive industrialisation with no thought to environmental concerns includes levels of air pollution that make their cities unihabitable.

Happily, they are now working to reverse this trend. Green is still controversial though. Who decides what’s green? How can a car company end up in an ethical investment fund? See our debate on pg 24.

It’s a brave new green world so come with us and take a closer look…

Follow CPI Financial on Twitter at @cpifinancial

PRIVATE BANKING

08

Cleaner China The Asian tiger strives to curb pollution as it pays the environmental price of aggressive industrialisation.

WEALTH MANAGEMENT

14

Is water the new gold?

With the world facing huge water deficits, the water industry may be a great investment.

20

24

.

The Debate:

Two Financial Advisors take the ‘yay’ or ‘nay’ on whether going green is good for your investment strategy.

26

Green Investment

Trading summary Robin Amlôt summarises the rollercoaster that is gold, oil and currencies.

PREMIUM BANKING

08

18

Making money

out of rubbish

The potential returns on investment in the recycling and energy sector explained.

28

Green banking Can banking be green? A new breed of ‘planet smart’ banks say ‘yes’.

REAL ESTATE

30

Sustainable MENA

real estate

Scarce resources and rapid urbanisation is fuelling the drive to build more sustainable cities.

TRADING

20

Sustainably

Editor, Tamara Pitelen

Robin Amlôt looks at the evolution of ethical investing.

Responsible Investment

What is green or socially responsible investment? How is it measured and how can you compare performance with conventional investment?

24 3

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ISSUE TWENTY THREE - AUGUST / SEPTEMBER 2013

Published by

46

Reading matter The newest business and finance titles to hit a bookshop near you.

This month, Jack: Straight from the gut; Green – Architecture Now, and National Geographic 125 Years.

34 48 Events calendar

BUSINESS

34

36

Ethical vs Profitable Millionaire ‘green’ businessmen discuss how they marry profit and ethics.

UAE stars of

sustainable business

50

The ‘you need to know’ of what’s on in August and September.

That’s a wrap Recent news from the weird and wonderful world of money.

This issue, John Lennon’s first car sold; the top private island billionaires, and staggering prices for Impressionist art.

CSR is the new business buzz word – who are the local green heroes of business?

40

Managing Editor ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 3723 Editor TAMARA PITELEN tamara@cpifinancial.net Tel: +971 4 391 3728 Contributors ADRIAN MAUL JAMES THOMAS ANDREW PRINCE NORBERT RÜCKER KELVIN WONG Sales Director FRED DUBERY fred@cpifinancial.net Tel: +971 4 391 3717 Business Development Manager ALICE MACDONALD alice@cpifinancial.net Tel: +971 4 391 3725

Chief Designer BUENAVENTURA R. JALUAG JR. jun@cpifinancial.net Tel: +971 4 391 3719

High-end Hybrids Luxury green cars available in the UAE.

Senior Designer NEIL VICENTE C. CASTILLO neil@cpifinancial.net +971 4 391 3724

TRAVEL & LEISURE

42

Chief Executive Officer ADAM BROOM adam@cpifinancial.net Tel: +971 4 391 4681

European Consultant JEAN-PHILIPPE MOULIN jpm@cpifinancial.net Tel: +44 19633 4445

MOTORING

Chairman SALEH F. AL AKRABI

42

Luxury wellness travel Stress and burn-out packages are one of the fastest growing travel segments.

45

Finance Manager KARIM MANSOUR karim@cpifinancial.net Tel: +971 4 391 3727 Subscriptions RIZZA RECTO INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682 Registered at the Dubai Media City Head Office P.O. Box 502491, Dubai Media City, U.A.E. Tel: +971 4 391 4681 Fax: +971 4 390 9576

WEALTH Warning!

Remember, if you wish to act on any of the information you read in WEALTH, consider taking independent advice first. WEALTH is written for a general audience and the information contained herein may not be appropriate for your personal circumstances.

Printed by United Printing & Publishing Abu Dhabi, U.A.E. © 2013 CPI Financial. All rights reserved. No part of this publication may be reproduced or used in any form of advertising without the prior permission in writing from the Editor.

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OPINION

First, do no harm…

Robin Amlôt Managing Editor

T

his maxim isn’t quite in the Hippocratic oath but it is one of the precepts of medical ethics and, for a growing number of people, it is also a foundation on which they base their decision-making process regarding investments – seeking to avoid investing in companies which harm the world, its people or its wildlife. The corollary to this is, of course, to be more of an activist and seek out and invest in those companies which make a positive contribution to the world.

In essence the judgement call on whether to invest in a company or any investment structure is being made not solely on financial grounds. There is much talk in the GCC region about the ‘ethical’ nature of Shari’ah-compliant finance.

However, there is no getting away from the fact that Shari’ah-compliant funds are still at the very early stages of their evolution and constitute a very small part of the investing universe. This is not a criticism, merely a statement of financial fact. Indeed, it is true to say that ethical investing overall

still constitutes a relatively small part of the overall investing universe.

However, what may surprise some of you is the fact that the origins of ethical investing in the West are also linked with religion rather than ‘green’ politics. The roots of modern ethical investment may be traced to the 1920s when the Methodist Church in North America decided to invest in the stock market, having previously steered clear, viewing it as a form of gambling (you may believe they should not have changed their minds!).

However, while deciding to invest, the Methodists still wished to exclude certain types of companies, specifically those involved in alcohol or gambling. The Quakers followed, but they were especially keen to avoid weapons manufacture.

Following the commitment of institutional funds, Pax World, a company founded by Methodists, launched the first socially responsible mutual fund for consumers in the US in 1971, with public demand growing partly as a reaction against the Vietnam war.

Across the pond, in the UK, it was another 13 years before the first ethical mutual fund was launched in London. The Friends Provident Stewardship Fund was known in the Square Mile in the 1980s

as the ‘Brazil fund’ – because it was for nuts! Friends’ Provident which had been founded in 1832 to provide life assurance for members of the Society of Friends (the Quakers) launched the Stewardship product range in 1984.

It is, of course, now common to use the term ‘green’ almost interchangeably with ‘ethical’ when talking about investments.

Life is rarely that simple and you’ll find a variety of funds and a variety of shades of green – from light to dark. One would categorise the light green as those funds that simply avoid investing in certain product sectors such as tobacco, gambling, alcohol, etc. As we progress towards the darker shades of the forest, we move from ethical to what some describe as engaged environmental – here a fund manager undertakes to create a dialogue with companies to encourage them to adopt what the fund views as best business practices. In fact, you’ll properly hear the terms ethical and environmental rather less now and the more indigestible mouthful ‘socially responsible investing’ or SRI. Ultimately, does ‘ethical’ investing make sense? That’s a deeply personal question and the answer will depend on your personal views because it truly isn’t just a matter of the financial returns on offer.

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PRIVATE BANKING

Cleaner China – the Asian tiger is striving to curb pollution Smog has pushed environmentalism to the top of China’s political agenda and this new focus has consequences for the whole world, write Julius Baer analysts Norbert Rücker and Kelvin Wong

I A cyclist in Beijing wearing a mouth cap. In January 2013, Beijing pollution levels reached an all time high of above 700. Air pollution kills seven million people globally per year – more than malaria and AIDs combined.

ndustrialisation and urbanisation continue to go hand-in-hand with pollution. China faces environmental challenges that the US, Europe and Japan had to overcome decades ago.

Beijing’s smog issue made headlines at the beginning of the year when air pollution readings climbed to the worst levels ever recorded. Thanks to access to information such as the United States’ embassy air pollution index and lively discussion culture in blogs, air pollution quickly became the hot topic of public debate. According to data from the Ministry of Environmental Protection, the concentration of fine particulates is two to four times above World Health Organisation guidelines for over 100 days per year in the regions of Beijing, Shanghai and Hong Kong.

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PRIVATE BANKING

SOURCES OF MAN-MADE CLIMATE AND AIR POLLUTION Climate pollution

% 100

Air pollution

Land use Agriculture Waste Other energy related sources Transport Buildings Industry Power generation

80 60 40 20 Particles (PM2.5)

VOCs

Carbon monoxide

Sulphur dioxide

Nitrogen oxide

Carbon dioxide

Greenhouse gases

0

indoor and outdoor air pollution kills more than seven million people around the world every year – exceeding the combined death toll of diseases such as malaria or AIDS. According to a recent Financial Times article, air pollution contributed to 1.2 million premature deaths in China in 2010.

China’s issues might be most daunting, but also in the Western world the air is not always as clean as it should be. The same World Health Organisation study, for example, warned Germany that urban air pollution exceeds acceptable levels too often and names diesel-fuelled vehicles as the key culprits. The same holds true for Switzerland.

cont. overleaf

Source: International Energy Agency (climate pollution, global), Environmental Protection Agency (air pollution, only United States), Julius Baer (VOCs: volatile organic compounds)

The key beneficiaries of a ‘Cleaner China’ are “ domestic natural gas players and environmental services companies. Clean energy markets such as wind and solar are set to grow too, but these industries might fall short of the high earnings expectations

”

Air pollution usually is the more tangible sort of pollution compared with soil or water contamination. In some ways, China is following the path taken by the developed countries. London’s Great Smog in the early 1950s was the starting point for environmental regulation in Europe as was air pollution the trigger for the creation of the Environmental Protection Agency in the United States in the early 1970s.

China’s National Development and Reform Commission’s five-year plan (2011-2015) contains comprehensive strategies and indepth measures to curb pollution.

Among other things, the plan calls for higher energy efficiency, more conservation of resources and lower pollution. Last

winter’s smog has pushed environmentalism to the top of the political agenda. Energy use is the key culprit of pollution, and China’s more aggressive tackling of these issues will bear consequences for global energy markets. Similar to the drilling revolution and shale boom in North America or the sharp cost declines of clean energy technologies such as solar panels, China’s measures to rein in pollution enforce the ongoing tectonic shifts on energy markets and the transition towards more sustainable use of the world’s resources.

AIR POLLUTION KILLER A recent study conducted by the World Health Organisation concluded that

CLEANER CHINA – IN A NUTSHELL  Last winter's smog has pushed

environmentalism to the top of China's political agenda. Energy use is the key culprit of pollution, and the more aggressive tackling of these issues will bear consequences for global energy markets.

 More stringent environmental

regulation is negative for coal, and China's growth in demand for coal will likely fall short of previous expectations. Natural gas will play an important role in China's future energy mix, with domestic production and imports expected to surge, not least thanks to the supply boom in North America and East Africa.

 The key beneficiaries of a Cleaner

China are domestic natural gas players and environmental services companies. Clean energy markets such as wind and solar are set to grow too, but these industries might fall short of the high earnings expectations.

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PRIVATE BANKING

cont. from page 9

SOUND ECONOMICS CALLS FOR ENVIRONMENTALISM

Environmentalism is textbook economics.

Pollution entails costs that burden a country’s long-term growth prospects.

Any liberal, free market economy should make sure that polluters bear the costs of their pollution. Otherwise, there is no sustainable economic development.

Contrary to common perception, it is not the liberal, free market philosophy that impedes environmentalism.

Instead, society unfortunately too often concedes to the interests of minority groups. A report recently published by state media estimates that China’s environmental pollution costs $230 billion per year, or about 3.5 per cent of the country’s gross domestic product in 2010.

Similarly, a study by Peking University came to the conclusion that smog causes

WHAT IS AIR POLLUTION?  Carbon dioxide (CO2) occurs with

almost any combustion process; it is the most emitted man-made greenhouse gas and the key contributor to global warming.

Burning coal produces roughly twice as much CO2 than burning natural gas. Coal power plants in the US and China are the largest single sources of greenhouse gas emissions.  Nitrogen oxide (NOx) and volatile organic compounds (VOCs) cause the formation of ground-level ozone prompting respiratory health issues.  Sulphur dioxide (SO2), mercury and other air toxics cause acid rain and other contamination that can be the origin of cancerous diseases.

Coal power plants and ships burning bunker fuel are the largest sources for SO2 and air toxics.

Source: Julius Baer

China is the world's largest market for solar panels.

an economic loss of $1.08 billion per year in the urban regions surrounding Beijing, Shanghai and Hong Kong.

The economic costs, for example, include premature deaths, health costs and reduced productivity. Hong Kong’s mayor has been quite outspoken on the fact that air pollution impedes the immigration of skilled workers, which is a competitive disadvantage in a globalised world. A Deutsche Bank research report took an in-depth look at the economic aspects of China’s pollution issue. The study notes that, without action, pollution would worsen to unbearable levels. However, the usual concerns are that environmentalism involves significant costs for the government (fiscal expenses), for corporations (mandatory investments and new taxes) and for consumers (inflation).

History shows that these costs usually are manageable in the medium term and unlock growth potential in the longer term.1

GAS BEATS COAL

Coal power plants, heavy industry and cars are the main sources of air pollution.

1

Coal power accounts for 70 per cent of electricity production in China. Coal is the dirtiest source of energy and without emission control equipment emits large amounts of sulphur dioxide, particulates and carbon dioxide. Coal power plants are also the source of toxic mercury emissions and radiation.

China’s Ministry of Environmental Protection has tightened emission limits in line with Western world standards for thermal power plants and the most polluting industries, including steel mills, refineries, chemicals and cement, which go into effect by January 2014.

With the measures already undertaken or still under consideration, China’s coal consumption growth should slow going forward.

Natural gas is the alternative to coal.

Burning natural gas emits about half as much carbon dioxide as burning coal and only traces of particulates and other air pollution. The remaining coal power plants in Beijing allegedly will be replaced with natural gas in a few years. Chinese demand for natural gas is expected to soar going forward. China is likely to become a key consumer of the offshore natural gas developments underway along the northern coast of Australia and East Africa, where significant gas resources were found recently. The beneficiaries of tighter environmental regulation should be China-focused shale gas companies as well as the owners of natural gas pipelines and distribution networks.

SMOG AND CLOG

Now that many Chinese are fulfilling their dreams of owning real estate and private cars, they are waking up to the annoyances of modern urban life too: e.g. traffic jams, parking shortages and smog.

Cars no longer offer the convenient and fast commute, and China is seemingly rediscovering the bicycle.

Deutsche Bank, Big bang measures to fight air pollution, 28 February 2013

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PRIVATE BANKING

A woman sweeping a street in Xiahe, China. China’s environmental pollution costs $230 billion per year, or about 3.5 per cent of the country’s gross domestic product in 2010.

Schemes that encourage bike use are popping up across the country. Hangzhou has the world’s largest bicycle rental scheme, with as many as 0.4 million people using the facilities every day. 2 Realistically, these rental schemes are unlikely to derail the growth outlook for car sales in China. Car ownership per capita is still very low compared with Western world standards.

However, China’s growth in demand for oil could fall short of today’s bullish expectations. Natural gas vehicles accounted for 1.4 per cent of global car and truck sales last year, and China is among the fastest-growing markets. China ranks fifth in terms of natural gas vehicles in use, but already owns the world’s second-largest natural gas fuelling stations network. Natural gas vehicles emit far less harmful, smog or ozone-related air 2

Air pollution kills more than seven million “ people around the world every year – exceeding the combined death toll of diseases such as malaria or AIDS

”

pollution than diesel-fuelled trucks or gasoline-powered cars.

To curb urban air pollution, China is not only encouraging natural gas vehicles, but also tightening emission limits. The Ministry of Environmental Protection moved forward the introduction of the more stringent standards, and cars and diesel trucks sold in China will soon have to comply with emission limits comparable to standards in place in Europe. Domestic refiners are being required to invest in equipment to produce cleaner gasoline and

Financial Times, Congestion pushes Chinese on their bikes, 19 April 2013

diesel fuels, and domestic car manufacturers are being forced to equip their cars with the appropriate exhaust catalysts.

Growing Chinese use should continue to support palladium prices, which is a key ingredient in gasoline vehicle exhaust catalysts. The same does not hold true for platinum, which is mostly used for diesel vehicle exhaust catalysts and – given the diesel car dominance in Europe – currently exposed to weak European car sales.

CLEAN ENERGY TARGETS

Earlier this year and after the elections in China, the National Energy Administration surprised with the announcement of rather cont. overleaf

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PRIVATE BANKING

cont. from page 11

The natural beauty of areas like this field full of rapeseed in Luoping, China, will hopefully remain as they are through China's efforts to curb its pollution.

Environmentalism is textbook economics. “ Pollution entails costs that burden a country’s long-term growth prospects. Any liberal, free market economy should make sure that polluters bear the costs of their pollution

”

aggressive targets of hydro (21 gigawatts), wind (18) and solar (9) power plant installations for 2013. By comparison, Switzerland’s power plants have a capacity of roughly 14 gigawatts.

China already is the world’s largest market for wind turbines and solar panels but consensus believes these targets are too ambitious. In general, investments in wind parks and solar power plants provide reasonable returns, and these markets are therefore expected to grow going forward. Chinese companies have been pushing aggressively into global clean energy markets over the past year and are responsible for the large drop in solar panel prices given their investments in technology and manufacturing capacities.

Average feed-in tariffs for wind turbines amount to 6.5 euro cents per kilowatt hour and 12 euro cents per kilowatt hour for solar panels. This is still more expensive than coal, but shows how much the economics of clean energy have improved.

CONCLUSION

Last winter’s smog has pushed environmentalism to the top of China’s political agenda. Energy use is the key culprit of pollution, and the more aggressive tackling of these issues will bear consequences for global energy markets. More stringent environmental regulation is negative for coal and China’s growth in demand for coal will likely fall short of previous expectations.

Natural gas will play an important role

in China’s future energy mix. Moreover, domestic production and imports are expected to surge, not least thanks to the supply boom in North America and East Africa. The key beneficiaries of a ‘Cleaner China’ are domestic natural gas players and environmental services companies.

Clean energy markets such as wind and solar are set to grow too, but these industries might fall short of the high earnings expectations.

This is an edited-for-space version of an article written by Julius Baer analysts Norbert Rücker and Kelvin Wong.

Norbert Rücker, Head of Commodity Research, norbert.ruecker@juliusbaer.com Kelvin Wong, Equity Analyst, kelvin. wong@juliusbaer.com The information and opinions expressed in this publication were produced by Bank Julius Baer & Co. Ltd. as of the date of writing and are subject to change without notice. For more information on the research methodology used by Julius Baer analysts, go to: www.juliusbaer.com/ research-methodology

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PRIVATE BANKING

THEMATIC ‘CLEANER CHINA’ KEY PLAYERS WITHIN THE EQUITIES UNIVERSE Julius Baer analysts give their opinion on the companies most likely to benefit from China’s efforts to clean up its act…

China Resources Gas (CRG) (Buy, price/target: HKD21.05/25.0) CRG has undergone asset restructuring and injections from its parent company China Resources Group since 2008. Now a pure city gas distributor in China, it had 152 city gas projects in 20 provinces by end 2012. Its gas sales volume grew by almost 30 per cent annually between 2010 and 2012. The company aims for 20 per cent growth in gas sales volumes in 2013 and expects 29 per cent annual growth up to 2015. We believe the company will report solid organic growth thanks to its excellent operating history.

Kunlun Energy (Buy, price/target: HKD14.8/18.0) An integrated oil exploration and natural gas distribution company, KE develops midstream and downstream natural gas businesses. It acquired various city gas distribution, CNG, LNG businesses as well as the Shaanxi-Beijing gas pipeline from its parent company, PetroChina (Buy, Price/Target: HKD9.88/12.0). We favour Kunlun Energy because we expect its natural gas pipeline business to remain solid in the coming few years (with over 20 per cent annual growth in earnings expected between 2011 and 2015), supported mainly by a steadily growing utilisation of operating midstream gas pipelines and a growing LNG business.

HKD 30 25 20 15 10 5 0 2008 2009

2010

2011

2012

China Resources Gas

2013

MSCI world

2014 Price target

HKD 20

18

15 10 5 0 2008 2009

2010

2011

Kunlun Energy

Shanghai Electric Group (Buy, price/target: HKD2.82/4.20) A state-owned company with 58 per cent held by Shanghai Electric Corporation (not listed), which, in turn, belongs to the Assets Supervision and Administration Commission of the Shanghai Municipal Government. The company is well positioned to benefit from China’s initiatives to develop clean energy for sustainable economic development. It is the key manufacturer of nuclear technology in China. We believe that gas turbines will become the key earnings driver for the company going forward, with increasing localisation of key components.

HKD 8

Beijing Enterprises Water Group (not covered) A state-owned company, BEWG operates and constructs water services business in 19 provinces in China. As of December 2012, it had 2.1 million tonnes per day capacity in water supply in operation, and more than 4.7 million tonnes per day of wastewater treatment capacity in operation. The company is set to be a beneficiary play on China’s environmental protection and urbanisation policies.

BEWG continues to focus on developing new water projects and leveraging its financial strength to acquire additional projects from the market.

HKD 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2008 2009

China Everbright International (not covered) CEI is held by state-owned China Everbright Holdings and focuses on environmental protection businesses in China such as waste-to-energy, wastewater treatment and other clean energy projects (biomass, landfill gas and solar power). Given the push for environmentalism set by the 12th five-year plan, CEI will seize opportunities in the environmental protection and clean energy industries. Given the solid mid-20 per cent earnings growth over the past years, price-earnings valuations trading in the mid-teens seems attractive for such a growth company.

25

2012

2013

MSCI world

2014 Price target

4.2

6 4 2 0 2008 2009

2010

2011

Shanghai Electric

2010

2012

2011

2012

Beijiing Enterprises Water

HKD 7 6 5 4 3 2 1 0 2008 2009

2010

2013

MSCI world

2011

2014 Price target

2013

2014

MSCI world

2012

China Everbright International

2013

2014

MSCI world

Source: Bloomberg Finance L.P., Julius Baer

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WEALTH MANAGEMENT

Is water the new gold?

The world is facing a water gap as the planet’s resources simply cannot meet the rapidly rising demand from humans. So what should you be doing? Investing in water and related industries.

I

n February this year, Mark McFarland, the Chief Investment Strategist of Wealth Management for Emirates NBD painted a disturbing picture of a future world where there was not enough water to go around.

Oh wait, that’s not sometime in the future. That’s now. It’s just going to get a

lot worse in the next 20 to 30 years.

According to a McKinsey & Co. report from 2005, about 1.1 billion people in that year didn’t have access to clean water and the water gap was – and is - increasing at an accelerating rate.

Speaking at the ENBD 2013 Global Markets Outlook conference in February, McFarland highlighted water and

agriculture as long term investment themes that have arisen out of the double whammy of increasingly scarce finite resources and growing demand from a global population on a fast track to hitting 10 billion by 2050 – up from today’s total of seven billion.

That’s the bad news.

“Nobody talks about it,” said McFarland,

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WEALTH MANAGEMENT

“but there’s a huge deficit in water supply going forward in the next 20 years.”

The not-so-bad news is that costeffective, sustainable solutions are available to close the gap, particularly if governments and business focus on reducing demand rather than trying to generate additional supply.

For investors, the trend means that investment opportunities lie in everything from companies that supply water to companies developing technology to reuse water or reduce its use.

“The largest suppliers of water around the world and the largest reservoirs of fresh water for use in agriculture are Russia, Brazil and Canada. So these are countries you want to be investing in, particularly the water industry,” McFarland said.

“

Nobody talks about it but there’s a huge deficit in water supply going forward in the next 20 years

”

FOR THE LOVE OF MEAT Water combined with agriculture was another theme not to ignore, said McFarland.

“If you’ve got rapid urbanisation; if you’ve got people living in cities where power demand is much higher, and if you’ve got people with higher incomes as the result of economic development, what happens is that they have a much

higher demand for protein products in their diet, rather than carbohydrates. At the beginning of economic development, people eat a lot of barley, a lot of sugar, wheat, etc but as people become richer, they move towards meat.

“So if you think of world population topping out at about 10 billion people by 2050 and the fact that about half the world’s population by 2050 will be middle class – middle class people eat protein, they don’t eat carbohydrates – then the water demand is going to be astronomical.

ANIMAL PLANET

It’s not just human demand for more protein-based food that will create more demand for water, McFarland said.

Animal feed and fertiliser will also be huge themes. cont. overleaf

AGGREGATE GAP BETWEEN WATER SUPPLY AND DEMAND BY 2030 6,900km3 2% CAGR 4,500km3

Agriculture 4,500km3

Agriculture 4,500km3 Industry 1,500km3

Basins with deficits 2,800km3

Gap = 40% 4,200km3 Ground water 700km3 Basins with surpluses 100km3

Surface Water 3,500km3

Industry 800km3 Homes 600km3 2009 Source: McKinsey/IFC

Homes 900km3 2030

Existing sustainable water supply

This chart comes from the IFC/ McKinsey report, Charting Our Water Future of January 2010. It illustrates how demand for water withdrawals from nature is expected to grow between 2009 and 2030, and where the required water might be expected to come from. The problem is that many water basins are already in deficit, i.e. more water is withdrawn than is annually recharged. By 2030, the deficit will have grown to 2,700km3/year. The report looks at how this gap can be closed. It suggests that 20 per cent of it may be bridged by improvements in water productivity, in line with what has been historically achieved. A further 20 per cent can come from increased supply, in line with historic trends. The remaining 60 per cent of the water gap will require additional effort, either in terms of conservation or in the development of non-traditional water supplies. See more at: www.globalwaterintel.com cont. overleaf

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cont. from page 15

Populations are “ going to get bigger,

INVEST IN WATER ENERGY

Beef

Burger

Cheese

Millet

Sorghum

Milk

Coffee

Cane Sugar

Barley

Toast

Wheat

Tea

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

Water scarcity is food scarcity (litres per kilo)

 Going from a carbohydrate to protein diet we become more water intensive Source : Virtual Water, Timm Kekeritz

“The agricultural demand for fertiliser as a result of falling crop yields is going to be astronomical. This is going to be a long term secular theme that isn’t going to change; populations aren’t suddenly going to get smaller, unless something catastrophic happens. Populations are going to get bigger, people are going to get richer and as a result of that, you’re going to get a lot more demand for these long term investment themes of water, agriculture, fertiliser, and so on. It’s very important stuff.”

In terms of agriculture, McFarland advises investing in production and fertilisation, particularly potash aka potassium. A bag of fertiliser contains NPK; N stands for nitrogen, which is responsible for strong stem and foliage growth. P is for phosphorus, which aids in healthy root growth and flower and seed production. K stands for potassium, which is responsible for improving overall health and disease resistance.

“What’s happened over the last 15 years or so is that farmers have used an increasingly large amount of nitrogen to try and boost crop yields but what they’ve done is under-used potassium and phosphates." Overusing nitrogen means plants have very little root system so do not get nutrients from the soil.

"In order to get crop yields up, you need to use enhanced amounts of potash – postassium – in order to enhance your yields. “If you’ve got rising populations with rising income levels that require

more protein in their diet, you’re going to have much more demand for crops and agricultural products. Remember that crops are a feed stock for the livestock industry. Soy beans, for example, are very water dependent and the livestock industry in China is highly dependent on soybeans – all those factors tend to push agriculture commodity prices higher.

The result is going to be a very significant increase in the use of potash and supplies of potash around the world are going to be sectors of the world economy that you want to be invested in.”

In sum, long term investment themes of water, agriculture, fertiliser and animal feed offer excellent potential for high returns, McFarland said.

people are going to get richer and as a result of that, you’re going to get a lot more demand for these long term investment themes of water, agriculture, fertiliser, and so on.

”

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Does water pay?

As an example of how a fund focusing totally on water has performed recently, here’s a look at the Pictet-Water-P dy GBP fund. Information is to end-May 2013.

Investment objective: The Pictet-Water-P dy GBP sub-fund seeks capital growth by investing at least two-thirds of its total assets in the shares of companies operating in the water sector worldwide.

The sub-fund favours companies operating in water supply, processing services, water technology and environmental services.

Data source: Pictet Funds

SECTOR BREAKDOWN Water Technology Water Supply & Treatment Environmental Services Cash 1.4%

42.4% 40.7%

15.5%

Data source: Pictet Funds

INVESTMENT OBJECTIVE The sub-fund seeks capital growth by investing at least twothirds of its total assets in the shares of companies operating in the water sector worldwide. The sub-fund favours companies operating in water supply, processing services, water technology and environmental services.

Data source: Pictet Funds

GEOGRAPHICAL BREAKDOWN United States Great Britain 9.6% Brazil 7.4% France 6.0% Switzerland 4.7% China 3.5% Japan 3.4% Canada 3.3% Others 15.6% Cash 1.4%

45.1%

2008

2009

2010

2011 Index

2012 Fund

PERFORMANCE VS. MSCI WORLD

10 LARGEST HOLDINGS

Data source: Pictet Funds

180 160 140 120 100 80 60 40

Source : Pictet Funds

Data source: Pictet Funds

American Water Works Danaher Sabesp Clean Harbors Pennon Group Suez Environnement Aqua America Xylem Roper Industries Severn Trent

INDEXED PERFORMANCE

4.8% 4.3% 3.5% 3.5% 3.3% 3.3% 3.3% 3.3% 3.2% 3.2%

YTD 1 month 3 months 1 year 3 years Since inception

2012 2011 2010 2009

Fund Index Cumulative 16.8% 19.2% 1.62% 2.70% 1.09% 5.73% 20.9% 29.7% 38.7% 38.8% 37.6% 41.3% Fund Index Yearly 10.6% 10.7% -5.92% -4.84% 18.6% 15.3% 10.5% 16.7%

Fund Index Annualised - - - 20.9% 29.7% 11.5% 11.5% 6.60% 7.16% Fund Index May to May 20.9% 29.7% 0.25% -4.84% 14.5% 12.4% 26.2% 26.8%

Data source: Pictet Funds

DIRTY WATER KILLS Fifteen-year-old Rwandan boy Jean Bosco walks four or five times a day to get water for his family. The water he carries home weighs 40 pounds. It comes from a pond contaminated with diseases, his family use it to clean, drink and cook. There are about 800 million people like Jean who do not have access to clean water. Diseases from dirty water and lack of basic sanitation kill more people every year than all forms of violence, including war. That’s why charity: water was started.

Go to: www.charitywater.org

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Making money out of rubbish and saving the planet The potential returns on investment in the recycling and energy sector are explained by James Thomas, Regional Director for Acuma Financial Services

A

fter death and taxes, the other certainty is waste. The world’s population crossed the seven billion mark over a year ago and is only going to grow further. The amount of waste produced by the human race is also growing. This can be quite an unpleasant thought, to consider all this waste, and there are many types of waste, but it has now got to the point where it cannot be ignored any longer.

Indeed, international bodies such as the United Nations have tried to implement various protocols and agreements to bind the world’s nations to a set criteria to try and bring the waste issue under control.

These have had limited success as different countries try to protect their own interests and limit what might be perceived as having a negative effect on their citizens. However, as is often the case, when private enterprise gets involved

suddenly there can be a very positive effect to be seen by trying to ‘go green’.

LOAD OF RUBBISH

One such area is in the recycling and energy recovery sector. Of all the waste that the human population produce, general waste can be one of the most difficult to deal with as well as the most potentially controversial. Often the last we think about our rubbish is when the bin is collected from our home, however, when this is combined with thousands

The UAE economy “ loses AED 1.5 billion

a year due to landfill waste that could be otherwise recycled into useful products

”

of other peoples’ waste, it becomes a huge issue, and when it is dumped in a huge hole in the ground, it becomes a stinking, unsightly blot on the landscape. Due to the waste we are producing these sites are getting bigger, and more are being established to deal with the situation.

One particular solution is a simple one. Rather than pour the waste into the big hole, why not try and do something with it? In many countries, and increasingly so here in the UAE, recycling is growing, with more of what was previously just thrown away, now being reused and recycled. But what if you did this on an industrial scale? That would surely make more sense? And indeed it does. Facilities are being established next to land fill sites,

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so on land that is otherwise worthless, to encourage those who would ordinarily put waste in the ground, to have it processed in the plant instead. The UAE is raising the awareness of the need to recycle, and there are already plans in place to increase the amount of recycling, and this will only continue to grow.

TAXES ON WASTE

In the UK, being part of the European Union, there are directives that have to be met on the amount of waste that is dumped in the ground. To try and control this, the government taxes local authorities on every tonne of waste that is put in the ground. So this is an added incentive to find alternative ways to deal with the waste problem, and the authorities are very keen to be seen to be green, and even more so if the recycling process can save them money.

This is also a big incentive for the recycling plant, as it can be paid to take the rubbish, and then as we will see, be paid again for processing the material.

The first stage of the process sorts out the material that can be easily recycled – things like glass, plastic and metal are removed and sold at the market rate – the second source of income for the process.

The next stage moves what is left into a warm, humid area which is an ideal climate for decomposition to take place, and the resulting compost is then sold to local authorities to use on their municipal land – the third source of income. The nonbiodegradable material that is left is then placed into a special type of incinerator that burns at a very high temperature that does not produce any toxic gases. This burning process produces electricity which not only powers the plant, but the excess power can also be sold back to the national grid.

This whole process is a very effective way to deal with the waste material that the general public produce, and in the UK especially is rapidly growing. These plants are not cheap to build, but with a long term contract from the local authority, they do

“

In Abu Dhabi alone about 12 million tonnes of waste are generated and currently more than 75 per cent of that waste ends up in landfill

”

have a sound footing on which to build their business model.

INVESTING IN WASTE

The process reduces the waste by between 85-90 per cent with all the benefits described above, and is a much more sustainable and efficient way to deal with what was previously viewed as just waste, but can now be seen as a much more valuable commodity. Investors can take part in this process, as there are funds that can be invested into that allow both the large and small investor to take part in, and benefit from this success story.

How do you expose yourself to this trend? There are a number of funds available around the world, one of which is Premier New Earth Solutions Recycling fund, a UK-based fund which has been running since July 2008. The latest performance figures on this fund are a return of 70 per cent over the five years.

Premier has recycling plants across the UK and the company currently processes 425,000 tonnes of waste per annum with plans to grow that figure considerably. The potential for this is huge considering that the UK produces 32 million tonnes of municipal waste of which 75 per cent now ends up in landfill. This is much worse than the European average of 45 per cent and the UK government is aiming to bring its figure in line with the UE average, which is why it has introduced the landfill taxes that have spurred local

councils and authorities to turn to recycling.

Will the UAE follow suit and start building next generation recycling plants?

Almost certainly. The UAE infamously has one of the highest per capita waste generation rates in the world, in Abu Dhabi alone about 12 million tonnes of waste are generated and currently more than 75 per cent of that waste ends up in landfill, according to the Centre of Waste Management in Abu Dhabi.

As far as an environmental disaster, this also constitutes an important lost opportunity for recycling waste and gaining environmental and economic benefits. The Centre of Waste Management in Abu Dhabi estimates that the UAE economy loses AED 1.5 billion a year due to landfill waste that could be otherwise recycled into useful products.

For more information on green and ethical investments, contact marketing@acuma.ae

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Socially Responsible Investment What is ‘green’ or socially responsible investment? How is it measured and how can you compare performance with conventional investment?

E

veryone wants to grow their wealth. We’ve all got retirements to plan for, children to put through university, or dependents for whom to provide.

More people though do not want to grow their wealth or in a way that causes harm to the planet and its inhabitants.

Enter stage left environmentally-themed investment, also known as sustainable

investment, socially responsible investment, green investing, responsible investing, Environment Social and Governance (ESG) investing, missionrelated investing or ethical investing.

In theory it’s simple, in practice it can get extremely complicated. For the purposes of this article, we will call it socially responsible investment (SRI).

This describes an investment strategy of

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funds owned by individuals or institutions, which aims to maximise both financial return and social good.

According to a study called The Investigation of the Current Status of Socially Responsible Investment Indices that was published in the Journal of Economics and International Finance1, SRI investors give preference to companies that uphold values such as sustainable development, environmental protection, consumer rights protection, human rights or biodiversity.

“The socially responsible investors encourage corporations indirectly to increase their commitment to such areas as environmental protection, corporate governance and social good,” the report states.

SRI is a booming market, particularly in the US and Europe. In January 2013, the Global Sustainable Investment Alliance (GSIA) released a report2 on the size and trends within the sustainable investment industry. It found that globally at least $13.6 trillion worth of professionally managed assets incorporate environmental, social and governance (ESG) concerns into their investment selection and management.

This compares to about $80 trillion of total global assets under management3. In 2008, the value of SRI was about $6.5 trillion, implying an increase of more than 100 per cent over five years.

Europe is the largest region with about 65 per cent of the known global sustainable investing assets under management.

Europe, along with the US and Canada, account for 96 per cent of SRI assets.

Which means there’s huge room for growth here in the Middle East.

1

Today ethical “ funds are... attracting

higher quality managers. Those past performance figures may reflect not just poor stock decisions, but poor management quality. Ethical is now mainstream

”

DOES GREEN PAY?

Which is all very interesting but when it comes down to it, how does environmentally themed investing compare with conventional investment when it comes to ROI? In truth, it’s not that easy to tell and anyone with an agenda can make the statistics work either way. For a start, how do you compare like with like? What’s the difference with risk and standard deviation? Which indices should you use?

Who decides the criteria for deciding whether a fund is ‘green’? Plus, are green funds getting the equivalent level of management talent? (Don’t worry, it may be tricky to compare but we’re still going to try, keep reading…)

Back in 2006, Guardian newspaper reporter Patrick Collinson4 wrote, “Another, less quantifiable, aspect about ethical investment is the people now in charge of the funds. Back in 1984, when

Journal of Economics and International Finance Vol. 3 (13), pp. 676–684, 7 November, 2011. Available online at http://www.academicjournals.org/JEIF ISSN 2006-9812 ©2011 Academic Journals 2 Global Sustainable Investment Alliance, www.gsi-alliance.org 3 http://en.wikipedia.org/wiki/Global_assets_under_management 4 Patrick Collinson, The Guardian, Saturday 30 September 2006 http://www. guardian.co.uk/environment/2006/sep/30/fundsbondstrusts.ethicalmoney 5 Eurosif- the European Sustainable Investment Forum, www.eurosif.org

the first ethical fund was launched in Britain, it was regarded with suspicion, and at times outright hostility, among conservative fund management groups.

No one put their top people in charge of what was considered at best an esoteric area.

“Today ethical funds are... attracting higher quality managers. Those past performance figures may reflect not cont. overleaf

GREEN VS CONVENTIONAL How does a sustainably responsible fund of funds compare with a conventional fund of funds over five years? We compare F&C Stewardship International with CGWM Select Affinity…

Sustainable: F&C Stewardship International Cumulative performance of mirror fund at (as at 31/05/2013) Growth since launch: 58.49 per cent 1 Year 26.09 per cent 3 Years 31.02 per cent 5 Years 28.17 per cent Annualised performance of mirror fund (as at 31/05/2013) Growth since launch: 5.82 per cent Standard Deviation 12.91 Conventional: CGWM Select Affinity Cumulative performance of mirror fund at (as at 31/05/2013) Growth since launch: 38.49 per cent 1 Year 16.88 per cent 3 Years 23.61 per cent 5 Years 16.88 per cent Annualised performance of mirror fund (as at 31/05/2013) Growth since launch: 2.73 per cent Standard deviation: 8.42

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cont. from page 21

just poor stock decisions, but poor management quality. Ethical is now mainstream.”

APPLES AND ORANGES

Andrew Prince, Financial Consultant for Acuma Independent Financial Advice, says one way to assess the performance of SRI with conventional investment is through a comparison of two fund of funds. He has chosen the F&C Stewardship International fund of funds by F&C Fund Management to represent Camp Green and the CGWM Select Affinity by Canaccord Genuity Wealth Management for a conventional

“

The socially responsible investors encourage corporations indirectly to increase their commitment to such areas as environmental protection

”

funds comparison.

“Both of these are multi-manager funds,” Prince says. “In other words, the F&C contract invests in the Shroeders Ethical Fund, the Fidelity Ethical Fund, the FP Ethical fund, so it’s a fund of funds.

“The CG Select Affinity is also a fund of funds; it invests in Schroder, Investec, Threadneedle, etc. The reason I picked these two is that they’re a likefor-like basis. They have very similar performance over the one, three and five year periods. On the face of it, the green fund slightly outperforms the conventional one, however, that’s

SRI PERFORMANCE INDEXES From the big boys like the FTSE4Good and Dow Jones Sustainability Indexes to the smaller players like the Korean SRI Index and the Istanbul Stock Exchange Sustainability Index, there are about 120 indexes around the world that chart sustainably responsible stocks.

Again though, these indexes apply varying levels of ‘green’. All exclude alcohol, tobacco, gambling and armaments but other criteria differ between indexes, eg, items like human rights issues, nuclear, violations of animal welfare, genetically modified organisms (GMO), pesticides, abortion and others. The main SRI index series are briefly introduced as follows:

Dow Jones Sustainability Indexes The Dow Jones Sustainability Indexes were launched in 1999 and were the first Global SRI Price Indexes evaluating companies from the perspective of sustainability in the three areas of economics, environment and society. Based on the cooperation of Dow Jones Indexes (United States) and SAM (Sustainable Asset Management, Switzerland), asset managers were provided with benchmarks to manage sustainability portfolios.

FTSE4Good Index Series Launched in 2001, the FTSE4Good Index Series has been designed to objectively measure the performance of companies that meet globally recognised corporate responsibility standards, as provided by the FTSE (Financial Times Stock Exchange) company. It comprises 23 markets covering the Global and European regions, the US, Japan and the UK and over 2,000 potential constituents. The FTSE4Good Index Series is a series of benchmark and tradable indices for responsible investors.

MSCI ESG Indices Series MSCI Inc. (Morgan Stanley Capital International) has its headquarter in New York, with research and commercial offices around the world. It is a leading provider of investment decision support tools worldwide. The MSCI ESG Indices were launched in September 2010, and were used to screen those companies that had better performance with regards to their environmental, social and governance aspects.

OMX GES Sustainability and Ethical Index Series GES Investment Services and NASDAQ OMX (the world’s largest exchange company) calculated an index family of sustainability and ethical indexes on the Nordic markets. These provided investors the opportunity of comparing their yield on responsible investment against a regulated benchmark.

STOXX Sustainability indices and STOXX Global ESG leaders’ Indices The components included in the STOXX Sustainability indices are selected according to a comprehensive analysis provided by Bank Sarasin. Since the late 1980s, it has been integrating the environmental and social aspects into investment. Only those companies which are considered sustainable companies based on this model are eligible for inclusion in the indices.

The Ethibel Sustainability Indexes The Ethibel Sustainability Indexes were first published in June 27, 2002

by ETHIBEL and Vigeo (France) in Belgium and they contain the best-inclass companies with respect to sustainability across sectors and regions in Europe, America and Asia Pacific.

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at the risk of higher volatility. F&C Stewardship has a standard deviation of 12.91 per cent compared to 8.42 per cent for CG Select Affinity.”

So which has performed better? The F&C Stewardship International fund has grown 28.17 per cent over five years to May 2013 while the CGWM Select Affinity has grown 16.88 per cent over the same period.

Green funds tend to be higher risk, Prince says. So in some years, these funds may offer wonderful returns – the New Earth Solutions Recycling Facilities Investment Sub-Funds is one such example, it has returned 75 per cent growth

“

Globally at least $13.6 trillion worth of professionally managed assets incorporate environmental, social and governance (ESG) concerns into their investment selection and management

”

since launch in 2008 – but for anyone to put all their money into this type of fund is sheer madness, Prince says.

“New Earth is a private equity fund that invests investing directly or indirectly in recycling facilities in the UK. It’s ultra high risk, low liquidity and on the face of it good performance but what happens if the UK was to withdraw tax funding? Then it all falls down like a house of cards.”

No matter whether you want to ‘go green’ or grow your wealth on the back of arms, tobacco and pharmaceuticals, the fundamental investment rules remain the same, “asset diversification!” Prince says.

GREEN INVESTMENT PERFORMANCE The performance of the sustainable stocks charted in the Dow Jones Sustainability World Index over 10 years to mid 2013 as well as the conventional stocks listed Dow Jones Global Index. The sustainable family includes global and regional broad market indices, sub-indices excluding alcohol, gambling, tobacco, armaments and firearms and/or adult entertainment, and global and regional blue-chip indices.

DOW JONES SUSTAINABILITY WORLD INDEX (W1SGI) TODAY

DOW JONES GLOBAL INDEX (W1DOW)

5 DAY I MONTH 3 MONTH 1 YEAR 3 YEAR 5 YEAR 10 YEAR

TODAY 5 DAY I MONTH 3 MONTH 1 YEAR 3 YEAR 5 YEAR 10 YEAR

1543.23

336.32

1467.71

320.40

1392.18

304.47

1316.66

288.55

1241.14

17-Jul-1135.90

1165.61

272.62 256.70

1090.09

240.78

1014.56

224.85

939.04

208.93

863.52

193.00

787.99

177.08

712.47

161.16

636.94

145.23

561.42

129.31

485.90 16-Jan-03 W1SGI (10 YEAR)

17-Oct-05

16-Jul-08

16-Apr-11

SMA (50) (SMA = Simple Moving Average)

15-Jan-14

SMA (200)

17-Jul-13 281.11

113.38 16-Jan-03 W1DOW (10 Year)

17-Oct-05

16-Jul-08

16-Apr-11

SMA (50) (SMA = Simple Moving Average)

15-Jan-14

SMA (200)

Sources: The Dow Jones Sustainability Indexes (www.djindexes.com/sustainability/) and the Dow Jones Global Indices (www.djindexes.com/globalfamily/)

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The Green Investment Debate Does going ‘green’ in your investment strategy compromise your return on investment? Or is caring for the planet good for your wallet as well?

Financial advisors James Thomas and Andrew Prince of Acuma take the ‘yay’ and ‘nay’.

YAY - REASONS FOR GREEN

James Thomas argues that leading edge green companies offer a range of profitable investments but ultimately your risk appetite is the key for all investment strategies.

What are ‘green’ investments? These are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the underlying businesses are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices.

For the stock savvy, there are many leading-edge green companies that are traded on the major stock exchanges.

These include start-ups that are developing new methods for creating biofuels or solar panels, and traditional market heavyweights that are expanding their product lines to include environmentally

James Thomas

friendly products, such as General Electric’s development of wind-powered electric generators.

Green investing can also be achieved through exchange-traded funds (ETFs), which mimic the stock indexes made up of green companies. Mutual funds can be another alternative, in which case a professional portfolio manager makes the green asset allocation decisions based on the fund’s prospectus.

Due to individual beliefs on what constitutes a ‘green investment’, exactly

what qualifies as a green investment is a bit of a grey area. Purchasing stock in a business that is an industry leader in terms of employing environmentally conscious business practices in a traditionally ‘ungreen’ industry may be considered a green investment for some, but not for others.

For example, consider an oil company that has the best record for environmental practices. While it is environmentally sound that the company is making the best precautions in preventing any direct damage to the environment through its day-to-day operations of drilling for oil, some people may object to purchasing its stock as a green investment, because burning fossil fuels is the leading contributor of global warming.

Therefore, prospective green investors should research their investments (by checking out a green fund’s prospectus or a stock’s annual filings) to see if an investment includes the types of companies that fit their personal definition of ‘green’.

While you may be happy that the fund or stock meets your requirements, will keeping your conscience clear affect the return that you receive? As with all areas of financial planning, this depends on the level of risk that you are willing to take. There are mainstream funds such as the Friends Provident Stewardship fund, a fund with nearly $600 million invested, which was established in 1984, and has returned 102 per cent in the past 10 years, compared to 111 per cent for the ABI Global Equities index, so going green has not greatly impacted your return.

There are higher risk funds such as the New Earth Solutions fund that is a specialist fund focussing on recycling

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and energy generation in the UK, but has delivered returns in excess of 15 per cent per annum for the past five years, so rewarding investors for the extra risk that they have taken.

In summary, as long as you are aware of what you are investing into, there is no reason that green investing cannot deliver returns that match or even beat conventional assets, all the while you can enjoy that warm feeling that you are actually doing some good for your planet, and making some tidy profits.

Andrew Prince

NAY - GREY IS THE NEW GREEN

Andrew Prince argues that some so-called green funds may deliver decent returns but are they really that green?

Let’s take a look at the hypocrisy surrounding ‘green’ funds and socially acceptable investing. Since the 1980s, the concept of being ‘green’ has gathered pace and I can remember as a child collecting newspapers for recycling. Those who were in the UK in 1976, will no doubt remember the scorching temperatures, hose pipe bans and no consideration given to global warming? Thirty years later it feels like hardly any progress has been made, unless of course we consider the marketing and hype.

I like to think I am socially responsible; gestures such as taking my litter home, recycling packaging and happy to walk the

100 metres rather than take the car BUT, when it comes to growing my money, no such restrictions are imposed.

For one thing, where do you draw the line? Let’s take F&C Stewardship Fund as a prime example.

It was established in 1987 with £375 million under management. Fair to say it has a good track record; however let’s look at two of the top 10 holdings within the fund.

Apple – look at the discord over working conditions for Chinese workers, Toyota – aren’t cars supposed to be one of the biggest causes of ill health?

Both of these companies use lithium ion batteries, the core components of which are mined in South America. What about the hazardous environment and exploitation of the indigenous people of Bolivia? Just so that you can drive your electric car and be green!

Now I have nothing against either of these companies and I drive a Toyota; the point is, ‘where do you draw the green line?’

Tobacco companies may not seem socially responsible and indeed for Muslims, they would be haraam (impermissible investments), but let’s look a little deeper.

British American Tobacco (BAT) has a Social Responsibility in Tobacco Production programme. This sets out their expectations of Good Agricultural Practice in and around the farm. These combine viable tobacco production with positive environmental management; soil and water conservation; appropriate use of agrochemicals; environmental, occupational health and safety standards in tobacco leaf processing and promoting afforestation programmes to enable farmers who require wood for tobacco curing to obtain it from sustainable sources.

It also focuses on other social and economic issues such as eliminating exploitative child labour in the tobacco growing supply chain, human rights, and livelihood and labour standards as well as advocating a holistic approach to the protection and promotion of biodiversity.

Their share price has proven to be a great defensive stock in troubled times and consistently provided a dividend of around four per cent. With interest rates of 0.5 per cent in Sterling terms, these are important considerations for any portfolio.

Would I suggest directly holding BAT stocks?

Absolutely not!

Why? Volatility! As with any focused holding, whether it is direct equities like BAT Shares or a boutique fund like New Earth, there is an increased risk for the amount of return possible.

We all know the story of the tortoise and the hare.

Asset allocation is the key to reducing volatility whilst at the same time, enhancing the overall returns in a portfolio.

A well-diversified portfolio spread over the major asset classes (which can contain elements of ethical and boutique funds) provided it is regularly rebalanced, will reduce volatility enhancing overall returns and allowing you to sleep at night.

James Thomas and Andrew Price work as Financial Advisors for Acuma Independent Financial Advice. For more information on wealth management email marketing@ acuma.ae or go to www.acuma.ae.

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Trading summary Forward guidance – it’s going to be a bumpy ride

GOLD

Gold’s 12-year rally has definitely ended… or has it? The price collapsed from $1,920 per ounce to under $1,200 within the space of 20 months.

Yet, in July alone, gold rallied eight per cent despite India halting imports on 22 July. The prospect of QE3 coming to an end and the increasing attractions of equity are advanced as the bear case while bulls note rising physical demand from central banks and from traditional markets China and India in Q1 together with falling mine production. The bulls and bears are sharply divided. Some are calling gold at $1,000/oz by year-end (not least big name analyst Nouriel Roubini) while others see a rally back up to $1,700. Fasten your seat belts, we’re in for a bumpy ride.

Gold ($/oz)

2013

Jul

Oil Opec Basket ($/bbl)

1/05/2013

1/08/2013

1/07/2013

107 106 105 104 103 102 101 100 99 98

Source: OPEC

Currencies - INR/$

CURRENCIES

A recent survey by the Bank of England shows the USD as the most heavily traded currency in the world with the EUR in second place, followed by the JPY and GBP. No great surprises, really. Also not a surprise but perhaps a welcome relief for some was the news that the UK economy actually grew again in Q2 – an improvement but not good enough to rally sterling. The big change, now that Mark Carney is installed as Governor of the Bank of England, is the introduction of ‘forward guidance’. And the news is… interest rates will be going nowhere in a hurry.

Rupee, rupee, rupee, rupee… do you know what you’re doing to me? (With apologies to the Kaiser Chiefs) So, last we spoke about this, I mentioned analysts were calling the INR to go to 60 to the USD by the end of the year. We got there rather sooner than that! The INR has been in record low territory against the USD touching INR 61.21 to the dollar on 8 July, down about 10 per cent since the start of 2013.

News at the end of June that India’s current account deficit hit a record high 4.8 per cent of gross domestic product in the fiscal year that ended in March, fuelled by rising imports of oil and gold, wasn’t actually as bad as some had expected.

The Reserve Bank of India has cut its economic growth forecast for the year and, in July, moved to raise short-term lending rates to support the currency – a move that seems unlikely to be reserved before Q4 at the earliest.

1,360 1,320

Source: Zawya

OIL

Reuters reports oil outages in Iraq, South Sudan, Libya and Iran are combining to help keep oil prices comfortably in three figures a barrel, partly countering the rise in US shale oil supply and worries about Chinese demand. In fact, July itself appears to have been a bumper month for the North Sea benchmark, Brent crude turned in its biggest monthly rise in 11 months while West Texas Intermediate, the US benchmark, rallied to a 16-month high.

But it’s questionable whether these gains are sustainable. There’s a substantial amount of speculative activity in the oil markets right now and the gains could go as swiftly as they came if thse investors get spooked or, indeed, find something else they want to invest in.

Jun

1,640 1,600 1,560 1,520 1,480 1,440 1,400

60 58 56 54 Jun

Jul

Source: Thompson Reuters

Currencies - GBP/$ 1.56 1.54 1.52 1.50 Jun

Jul

Source: Thompson Reuters

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PREMIUM BANKING

Green banking Can banking be green?

It may seem like an oxymoron but a new breed of ‘planet smart’ banks are changing the face of the sector.

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hen we talk about green or sustainable banking, we’re not talking about your traditional banking behemoths such as HSBC or JP Morgan Chase. Even though even these banks have begun shoehorning various Corporate Social Responsibility initiatives into their usual business practices, their fundamentals remain the same.

It’s the new kids on the block that are setting out to shake up the very foundations of the industry and offer a whole new ‘planet smart’ approach to banking and wealth management.

Who’s part of this new breed? They include the Dutch Triodos Bank, the UK’s Co-operative Bank and Ecology

Building Society, as well as New Resource Bank, Green Bank and First Green Bank in the US. What’s so different about them? They aim to make money work for positive social, environmental and cultural change.

As stated on the Triodos Bank website, the premise is that profit doesn’t need to be at the expense of the world’s most pressing environmental problems. Triodos finances organisations from organic food and farming businesses and pioneering renewable energy enterprises, to recycling companies and nature conservation projects.

One of their clients is millionaire businessman Peter Kindersley, owner of organic beauty brand Neal’s Yard Remedies.

“We invest with Triodos because they’re a sustainable bank and they’re completely different to other types of banks,” Kindersley

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PREMIUM BANKING

said. “They take the money banked with them and use it in sustainable projects, farming, alternative energy, as well as places that are set up to help autistic children. It’s a Dutch bank but it has branches in Germany, the UK, France and it wasn’t badly affected by the recession because it didn’t have any stupid investments.”

NEW BREED

Launched in 2006, San Francisco-based New Resource Bank is another of the new breed; its mission is to achieve environmental and social as well as financial returns.

CEO of New Resource Bank Vincent Siciliano says banking is a way to create a better world.

“Our model is built on three ‘R’s: rethink, rebuild, renew. We believe it’s time for our society to rethink assumptions about success and growth, rebuild our infrastructure and institutions, and renew our sense of purpose.”

In the bank’s 2012 Sustainability Report, Siciliano says, “New Resource has helped award-winning organic food purveyors satisfy rising demand, innovative solar providers expand use of renewable energy, green builders create homes and offices that are models of resource conservation, and nonprofits educate and advocate for sustainability in all its dimensions.

“We view borrowers and depositors as part of our community and see the opportunity to provide banking services and loan funds as the start of a deeper relationship dedicated to positive change.”

BANKING PRODUCTS

As well as new banks, there are also banking-related companies offering green solutions. One of them is Gemalto, an international digital security company that provides banks worldwide with banking solutions. In addition to its usual range of software and services, it has developed a full range of specific products and services for banks wanting a green approach. The suite of green banking tools is built on four key pillars: dematerialisation, alternative materials, sourcing from green suppliers, and end of life.  Dematerialisation: Services that help reduce the paper consumption associated with delivering of post mailing to the end users to activating cards, sharing information with cardholders and providing issuers with reporting solutions.  Alternative materials: green banking cards Gemalto provides banks with biosourced bank cards. Made of PLA, a

plastic substitute using renewable sources such as corn, it can be recycled back to its initial resin over and over again without loss of quality. It is non-petroleum based, biodegradable and compostable, and is also non-toxic if incinerated.  End-of-Life Management Gemalto acts as an intermediary between the client and partner recycling companies. This saves resources by recycling metals and plastics

CONTACTS Gemalto Middle East FZ LLC Dubai Studio City Commercial Building C, Level 1 PO Box 500400 Dubai, United Arab Emirate Tel: + 971 4 3900150 info.dxb@gemalto.com

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REAL ESTATE

Sustainable real estate Scarce resources and rapid urbanisation means building more sustainable cities is fast becoming critical. Happily, going green is also better for your bottom line as energy costs soar and countries around the world up the ante on polluter taxes... with MENA following suit, albeit slowly

T

he impact of rising populations, urbanisation, food and water scarcity, limited natural resources and environmental degradation is beginning to force change in every aspect of human life, including the buildings and cities in which we live, work and play.

According to the United Nations, buildings emit 40 per cent of the world’s greenhouse gases and contribute 40 per cent of solid waste, and use one tenth of the planet’s invaluable water resources.

Recently though, parts of the world are heeding the call to change. By 2020, Singapore aims to have 80 per cent of its building pass the Green Mark test.

In Australia, a carbon pricing tax was

introduced in July 2012. The starting price was established at AUD 23 per tonne of CO2 emitted, with this tax applying to around 500 of Australia’s highest polluters.

However, a recent change of leadership has seen some backtracking.

In the UK, the Energy Act 2011 means that by April 2018, a minimum energy efficiency standard will be required for all rented business and residential premises, potentially deeming any property ‘untradable’ if standards are not met. Letting of any premises below this standard will be unlawful, resulting in potential fines being imposed upon landlords.

In China, its Five Year Plan to 2015 pledges to ensure all new buildings reduce

energy use by 65 per cent while one third of all new buildings are to be ‘green’ by 2020.

“A decade in China is like three generations in other countries,” says Parker White, a Shanghai-based Jones Lang LaSalle sustainability expert for the Asia Pacific.

“Now in tier-one cities, it’s almost expected all Grade A buildings are green. Investors’ mindsets have changed dramatically,” Parker White is quoted as saying in the 10 May 2013 issue of China Daily Asia Weekly.

MENA LAGGING

In June 2013, real estate investment and advisory firm Jones Lang LaSalle released a report called Sustainability in the MENA Real Estate Market - Walking the Talk. The report

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A decade in “ China is like three

generations in other countries... now in tier-one cities, it’s almost expected all Grade A buildings are green. Investors’ mindsets have changed dramatically

”

minimum requirements, with higher levels of sustainable achievement encouraged to promote positive change and competition.

More than 230 developments are currently being rated by the Estidama system.

LEADING LIGHTS

PROFIT AND SUSTAINABILITY

Still though, there is change afoot here. A Dubai building, The Change Initiative, was recently certified LEED Platinum and named the most sustainable building in the world by the Green Buildings Council [see box page 32].

The UAE also has Masdar City, the world’s first zero-carbon city, to develop and showcase the latest green and sustainable technologies.

In 2007, the Abu Dhabi Urban Planning Council (UPC) introduced its green building rating system Estidama – the Arabic word for sustainability.

Estidama is a framework for sustainable design, construction and operation across the Emirate of Abu Dhabi. Every new building and community must adhere to the system’s

Ultimately though, the most effective driver of quick change comes down to financial incentives and disincentives – that is, charging businesses and people for polluting and using resources as well as rewarding them for sustainable practices.

Financial factors are rapidly coming into play. It will soon be too expensive for many businesses to ignore their carbon footprint.

For example, if the UAE introduces fee structures for landfill and carbon tax that follow models in countries like the UK and Australia, it will make financial sense to have a building that is as energy efficient as possible. cont. overleaf...

WHAT IS SUSTAINABLE REAL ESTATE? All three dimensions of sustainability (economic, social and environmental) must be addressed to create truly sustainable buildings and communities.

Different Dimensions of Sustainability

EC

ONOMI C

Innovation Long-term employment Better quality services Products at lower prices Effeciency / productivity

Water Energy

Quality of life / well-being

Waste management

T

Building communities

ONMEN

Health and safety

VIR

Corporate Social Responsibility (CSR)

EN

The report names four factors that lie behind the limited progress on creating sustainable developments in MENA to date:  Lack of legislation to enforce change and introduce new practices in most markets.  Absence of a discernable financial premium.  Subsidised energy, water and waste disposal costs.  Limited awareness of environmental issues.

“The MENA region is characterised by a high use of fossil fuels and greenhouse gas emissions. Water is scarce and is often supplied by oil powered desalination plants, yet we continue to notice an overconsumption of water. The region continues to generate large volumes of waste and remains relatively insensitive to the concept of recycling,” states the Walking the Talk report.

“Alternative methods and approaches to energy reduction, water management and recycling of waste are being developed but are not widely used and continue to face significant barriers to adoption.”

SOCIAL

assesses the region’s response to the global debate surrounding the environmental, economic and social sustainability of the built environment.

The report’s authors, Alan Robertson, MENA CEO for Jones Lang LaSalle and Craig Plumb, Head of Research MENA, state that, “There is growing evidence of the significant advantages that more sustainable real estate confers on developers, occupiers and investors in overseas markets and these advantages are likely to become more widely recognised in the Middle East over the next five years.”

Source: Jones Lang LaSalle

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...cont. from page 31

Overseas evidence shows that green buildings have lower operational costs, higher returns and are more attractive to tenants, states the Jones LaSalle report. “As the awareness of these benefits increases within the Middle East over the next five to 10 years, more sustainable real estate projects are likely to follow.”

Sustainability features include improved insulation, restricting sunlight whilst fully utilising natural light, LED lighting, lighting and ventilation control systems, generation, rooftop planting, high efficiency heating and cooling, rainwater and grey water recycling, etc.

Presently, given the UAE’s harsh climatic conditions, Jones Lang LaSalle estimates that electricity and cooling account for around 40 per cent of the total operating costs for Grade A office buildings in the UAE. However, electricity prices are heavily subsidised, with end users not paying the full cost of production.

“This reduces the financial incentive for both building owners and occupiers to introduce sustainability initiatives to reduce their energy consumption,” states the report.

“While some progress has been made in reducing energy consumption through the various initiatives implemented by developers, owners and occupiers, the high levels of carbon emissions recorded across the MENA region show that more needs to be done.”

The report states that there are two major challenges that need to be faced if these initiatives are to succeed:  Subsidised energy costs act as a barrier to reducing energy consumption.  The absence of zonal metering and the inability to calculate disaggregated levels of energy usage in many buildings presents a serious handicap to energy reduction initiatives. It’s hard to quantify the benefits of something that cannot be easily measured.

It is a similar situation with water, states the report. “As with electricity, the price of water is heavily subsidised in many countries across the Middle East. As result, water prices remain much cheaper in the Middle East compared to more mature markets overseas.”

This is despite the huge challenge faced here with regard to water scarcity, going forward it seems highly unfeasible to continue these subsidies.

PAYING FOR IT

Going forward, residents of MENA will need to be more accountable for their use of resources and governments will need to lead the way in introducing legislation and removing subsidies if natural resources are to be protected.

In the UAE, this could happen quicker than business owners imagine due to the government’s determination to be selected to host Expo 2020.

THE CHANGE INITIATIVE – LEADING THE WAY In June 2013, The Change Initiative, a UAE-based sustainability venture, was awarded the LEED Platinum certification, making it officially the most sustainable building in the world.

Quite a coup for a nation that’s usually recognised as being one of the world’s biggest polluters.

The Change Initiative scored 107 points out of a maximum of 110 on the LEED sustainability guidelines, breaking the previous record of 104 points earned by an Australian building. Points are awarded for sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation in design.

Founded by entrepreneur Gundeep Singh, The Change Initiative is a one-stop destination specialising in solutions that reduce human impact on the environment and promote sustainable development.

It offers integrated products and solutions from leading brands and multinational firms around the world that operate in the sustainability space such as Phillips, Schneider, Vitra, Ecover, 3M, Akzonobel and IBM. Some of the best-selling consumer products are Ecover (environmentally friendly cleaning detergents), organic and sustainable foods, and Bokashi compost bins.

What is a green building? The World Green Building Council defines it as follows. “A green building uses less energy, water and natural resources, creates less waste and is healthier for the people living inside compared to a standard building.”

The Change Initiative Al Barsha 1, Sheikh Zayed Road, near Ibis Hotel, PO Box 114706, Dubai, UAE Phone: 800-TCI (824) Email: info@tci-mail.com www.thechangeinitiative.com

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Sustainability is one of the three major themes of Dubai’s bid (along with mobility and opportunity) and the city has used its bid as a means of increasing awareness of the need to create more sustainable communities, through strict environmental controls and the latest green technologies.

The Expo site is being designed to generate more than 50 per cent of its total power requirement from solar panels within the project itself and would be a showcase for the application of best practice from existing initiatives in the region such as Masdar. The Government’s strong public commitment is likely to ensure that major strides will be taken towards a more sustainable future over the next seven years.

To get a digital PDF of the Jones Lang LaSalle report Sustainability in the MENA Real Estate Market - Walking the Talk, go to www. joneslanglasalle-mena.com

There is growing evidence of the significant “ advantages that more sustainable real estate confers on developers, occupiers and investors in overseas markets and these advantages are likely to become more widely recognised in the Middle East over the next five years

”

UAE SUSTAINABILITY STARS

Abu Dhabi Islamic Bank The new twin 14-storey headquarters building of Abu Dhabi Islamic Bank (ADIB), which is due to open soon, will be one of the first in the UAE capital to meet the LEED Gold standards.

ADIB, which is promoting an ethical and socially responsible agenda, commissioned a design for its 600,000 sq ft building that is expected to realise energy savings of over 20 per cent compared to conventional designs, and reduce water consumption by 47 per cent.

UAE-approved green building standards and achieved LEED Gold certification. It is designed to use 30 per cent less water compared to conventional buildings by using recycled wastewater for irrigation and installing water-conserving fixtures. The building façade is designed to decrease heat in the interior spaces, thereby reducing the energy required to cool the building in the hot summer months.

Other features include erosion and sedimentation control; bike racks; solar roofing materials; great water efficiency; reduced energy consumption and increased energy conservation; the right materials and resources (including use of recycled materials and targeted use of locally-sourced materials and certified wood).

Standard Chartered Tower, Dubai The $140 million new Standard Chartered Tower office in Downtown Dubai meets the

Majid Al Futtaim (MAF) properties MAF is pursuing green building certification for its existing assets (e.g. Earthcheck for

In addition to the biggest stars of sustainability in the UAE such as The Change Initiative and Masdar City, many other companies are also stepping up to the plate…

hotels and LEED EBOM for Mirdif City Centre, MAF Tower 2 and Bahrain Kempinksi).

It’s launching Majid Al Futtaim Properties Green Star Rating system for sustainable retail fit-outs and setting like-for-like reduction targets for energy, water and waste for all our asset types (these will be assessed at the end of 2013).

MAF is also investing AED 25 million to improve the energy and water efficiency of our assets.

Pacific Controls HQ, Techno Park, Dubai First Platinum rated building in the Middle East and 16th in the world.

Some of the green features of the building:  Soil erosion measures  Water efficient equipment  Solar-thermal air conditioning  High-efficiency chillers  Materials with high recycled content

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walks this talk is Peter Kindersley, owner of British organic natural health and beauty products company, Neal’s Yard Remedies.

Before buying Neal’s Yard, Kindersley was one half of the successful educational books publisher, Dorling & Kindersley.

According to Kindersley, businesses that don’t get on board the sustainable train will be left behind.

GREEN BUSINESS PAYS

Sustainable vs Profitable Greening your business could be great for your bottom line. WEALTH spoke to millionaire businessmen Peter Kindersley of Neal’s Yard Remedies and Gundeep Singh of The Change Initiative about mixing profitability with sustainability

S

ustainability and going green has seeped into every corner of our world. In just a decade we’ve seen initiatives such as ethical investment, energy efficiency, carbon tax, renewable energy and more go from slightly whacko notions promoted by hippies to mainstream business concepts adopted by some of the world’s largest companies, including Unilever, Toyota, and GlaxoSmithKline.

The world is changing. According to a 2013 report by Euromonitor International called Sustainability and the New Normal for Natural Resources, states, “Today, green concerns have an impact on the purchasing decisions of almost all consumers from the

‘casual green’ – who purchase private label green products and place sustainability behind convenience or price or quality, to deep green consumers who demand that every aspect of a product is green.

“Regulatory and consumer demands for sustainable goods and services will continue to intensify pressures on business – no matter which way prices go. A highly developed Corporate Social Responsibility policy is a necessity today and ticking one or two boxes is no longer enough, sustainability must be embedded into every aspect of the supply chain from suppliers through to transport and disposal.”

One millionaire businessman who

“Organic is growing worldwide,” Kindersley said in an interview with WEALTH magazine. “In places like China, it’s quadrupled in the last four years. In the US it’s growing very strongly and South America too. In Australia, there’s huge growth.

“So it’s happening; people are beginning to say, ‘we want natural products and we also know an organic vegetable or piece of fruit has more nutrients in it because it hasn’t been force fed.’”

According to Green America’s 2013 Small Business Sustainability Report, the US organic food segment grew 238 per cent, while the overall food market grew 33 per cent, from 2002 to 2011. The organic products segment (excluding food) grew 400 per cent, while the equivalent overall non-food market grew 33 per cent, from 2003 to 2011.

Use of renewable energy grew 456 per cent, while use of energy from non-renewable fuels fell 3.2 per cent, from 2002 to 2011.

The green building segment grew 1,700 per cent, while the overall construction market contracted 17 per cent, from 2006 to 2011.

PAINFUL SHIFT

Still though, don’t think you just have to say ‘I’m green’ to have customers queuing up at your door, says Gundeep Singh, Founder of The Change Initiative in Dubai.

“The very nature of business is to make a profit so it’s hard to align a sustainable business with a regular business. We call our business ‘sommercial’ – a socially responsible commercial business. The idea is not to become a Proctor and Gamble but rather to become an organisation that can sustain itself and prove to

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the world that sustainable practices can work then maybe the next generation can pick it up from there and make it better.”

Running a business with genuine sustainable values is not easy, says Singh.

“You cannot treat it as a profitable business to start with, at best you aim for break-even and that has serious ramifications in terms of the relationship with shareholders because shareholders are attuned to returns so you have to balance that relationship and it’s not an easy path. If a new entrepreneur enters that fray, there are significant challenges.

“Sustainability cannot be considered a hugely profitable venture, if you try to trick people with green-washing you might get away with it but if you truly follow the rules then everything today means you have to invest into the future, that’s what sustainability is all about.

Entrepreneurs “ should not go in

believing everyone wants green goods and there’s going to be a queue of people waiting outside their door

”

“If people are going to be entrepreneurial, they should know they will face significant challenges in terms of capital draw downs and shareholder requirements about returns that may be severely mitigated and not easy to manage long term. This is something I’ve learnt with my shareholders even though I have one part of the equity as shares.

“Entrepreneurs should not go in believing everyone wants green goods and there’s going to be a queue of people waiting outside their door.

There are some very concerned people, yes, and there is a larger population that’s very interested in being more eco-friendly but that shift, that inertia to move away from buying something just because it’s cheaper into something that’s

more sustainable and healthier is not an easy shift, it takes time.”

ECO CONSUMER POWER

One of the biggest drivers of the shift to sustainable business and growth is the consumer, says Kindersley. Consumers are voting with their wallets and for green businesses, there’s a type of shopper who is often the difference between you making a profit and not making a profit, Kindersley says.

“They’re maybe 10 per cent, they’re beginning and they’re also the people who get on the websites, create the information; they’re the vocal people. With everybody moving into social media, be it Twitter, Facebook or Instagram, there’s this massive wave online.

“There was a massive backlash in the UK because Tescos, Sainsbury’s and all of the big supermarkets lifted a ban on the use of neonicotinoids, which is the pesticide that we’ve been campaigning against because it’s been killing the world’s honeybees in vast numbers.”

The one supermarket that said it would keep the ban on neo-nicotinoids in place was Waitrose, Kindersley said. “So Waitrose had thousands of people write to them saying, ‘I’m now going to be shopping with you.’.'”

It was the same with the recent horse meat scandal, Kindersley said.

“It all makes people more suspicious of what they’re buying, ‘Is it tested on animals? Has it got horsemeat in it?’ The internet has been a huge driver , you get pressure groups like 38 degrees and Awaaz, so it’s not going to go away.

Information is power and I think it’s inevitable that companies will be forced down this road.”

“As a sustainable, ethical business, for us saying ‘no’ is an incredibly positive statement.

We say no GMO, no synthetic fragrances, no parabens, no phthalates and no sulfates.

Our end customer can trust that we’ve sourced ethically and looked after the farmers.

There’s no doubt, this is the future. Unless we find ways of doing things that are more sustainable, we’re going to screw up our environment, we’re going to run out of food and other resources. Take deforestation, that’s been a fantastic own goal in terms of

killing ourselves with carbon monoxide and destroying a huge portion of forest on this planet. Keep that up and the whole system collapses, not immediately it takes time.”

TAKING YOUR BUSINESS DOWN THE SUSTAINABLE PATH If you’d like your business to be more sustainable but you don’t know where to start, here are some tips from owner of Neal’s Yard Remedies Peter Kindersley…

Look at your energy consumption first, especially here in the UAE. Also look at where you’re sourcing your raw materials from. Where are you getting your products from and how much destruction do they cause? Palm oil for instance, is one of the very big issues, it’s caused massive deforestation. Make sure your palm oil is from a sustainable organic supplier.

If you don’t know where to start, get advice from an organisation like Forum for the Future, they’re an amazing resource who work with businesses wanting to step towards sustainability but aren’t sure how. They bring a consultant in to look at business process, the outgoings, shipping, energy, outsourcing… then they come back to you with a plan. They work with companies as diverse as Unilever, GlaxoSmithKline, Shell Foundation, Bupa, Marks and Spencers, etc.

Sustainable business consultants Global www.forumforthefuture.org UAE-based www.farnek.com www.istidama.com www.sustainablesquare.com

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BUSINESS

The UAE stars of sustainable business Phrases like Corporate Social Responsibility and Sustainable Business have the corporate world all abuzz and companies throughout the Middle East are heeding the call – who are the stars of sustainability in the region?

E

ighty-three per cent of companies in the Middle East say that Corporate Social Responsibility (CSR) has become more important in the last two years. About 78 per cent of companies in the Middle East employ a CSR/ Sustainability policy. This is according to a survey done this year by Mercer, a human resources consulting firm, that was announced at the CSR Summit 2013 in Dubai in May. Cameron Hannah, Mercer Senior Partner India, Middle East, Turkey and Africa, said, “We found 41 per cent of participants indicated that CSR is reported directly to the CEO, which demonstrates the importance of CSR as an emerging business issue.”

The survey, which treated CSR and sustainability together, interviewed 41 companies in the Middle East, with highest participation from UAE, Saudi Arabia and Turkey.

A key finding of the survey was the importance of longer-term, sustainable

initiatives for companies. In the Middle East, 82 per cent indicated Employee Health and Wellness as the top core area of CSR/Sustainability initiatives, followed by Community-based Development (74 per cent) and Environmental Affairs (68 per cent).

So, which local companies are changing the way they do business?

THE CHANGE INITIATIVE (TCI)

Founded by Gundeep Singh, TCI in Al Barsha is your local sustainable department store but its mission is so much more than that; TCI is aiming to change the very foundations of how business is done by shifting the goal posts on the world’s consumption habits.

“Economic growth is a fallacy,” says Singh.

“If you look at the economic fundamentals today, growth is driven by resource sufficiency and resource efficiency is driven by availability of resources [but] resources are finite and as the population grows there will be a tipping point where resource paucity will drive resource efficiencies.

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Even today in certain areas there is resource efficiency because there is a lack of resources, and it’s only a matter of time before humanity learns because either you change or change happens to you.

The problem says Singh is that the current supply chain is not geared to supply sustainable goods or solutions.

“Whether you talk about Walmart or Carrefour or whoever, they’re all designed around cheap goods that are delivered very quickly and are not replaceable. If you adopt the current supply chain, you will be asking a wolf in sheep’s clothing to dance with the sheep. So you have to create another brand altogether, that’s how TCI came together.”

TCI is an ambitious project that has already seen AED 42 million invested in the Dubai premises and operations. Not to mention the many more millions spent on extensions of the brand. TCI has a distribution arm called Direct to Home and another called Ecover distribution.

Ecover is a range of eco-friendly household cleaning products that are delivered direct to home at a cheaper price than the cheapest supermarket-bought detergents - premium products at low cost. TCI also own Method, a biodegradable home cleaning products company – bought in 2012 for $206 million – as well as Blu Homes, which manufactures homes that can be built in a day and Aquaver, which does water solutions.

As humanity, we’ve created a highly consumerist society, Singh says. “The world’s current economic systems run on the need for us all to consume stuff – this is the foundation of how our world works.

“We’re destroying the ecosystem and the entire support structure of humanity and we’re doing it faster than we can replenish it, so I think we have to start somewhere and my approach was to say, ‘if consumerism is ok then what is the best way to consume?’As opposed to saying, ‘consumerism is bad, go and live in a tree; you’re the most horrible person on the planet.’

“Let’s assume that what humanity is doing what they’re doing, you can’t change

CEO of du Osman Sultan at the launch of du wellness initiative, Every Step Counts.

that completely so let’s find better ways of making it happen. And during the journey we will learn better ways and if you learn better ways there will be a time when maybe humanity is far more sustainable than they are today.” www.thechangeinitiative.com

DU

Every Step Counts is the new national wellness initiative launched by telecommunications company du in a bid to help reverse the UAE’s statistics on Funded by the Abu Dhabi government, the Port Victoria Wind Farm in the Republic of Seychelles accounts for eight per cent of Mahé Island’s energy capacity – the main island of Seychelles.

health – statistics that include amongst the highest rates of diabetes and obesity in the world.

Osman Sultan, CEO of du, said, “We believe it is our moral obligation to be the catalyst of positive change which contributes to the welfare of the UAE... Every Step Counts is our way of adding life to life, by inspiring every man, woman and child living in the UAE to take responsibility for their health, to start living a healthier lifestyle fuelled by positive energy today. This is our commitment to our customers and community, and our contribution to a more sustainable way of living.”

The company is starting with its own staff. du employees are invited to sign up for a health campaign where their weight and fitness will be evaluated every three months. They get free use of the company gym and pool as well as healthy food options in the cafeteria. www.du.ae/en/about/Every-step-counts

MASDAR

Backed by the Mubadala Development Company PJSC, the strategic investment company of the government of Abu Dhabi, Masdar is Abu Dhabi’s renewable energy company advancing the development, commercialisation and deployment of clean energy technologies and solutions. cont. overleaf...

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BUSINESS

...cont. from page 37

In June, Masdar and the Abu Dhabi Fund for Development (ADFD) launched a six-megawatt, eight-turbine wind farm in the Republic of Seychelles. The clean energy generated by this project – the first renewable energy project in the Seychelles – will displace 5,500 tonnes of carbon dioxide annually, power more than 2,100 homes and save 1.6 million litres of fuel per year.

Seychelles currently relies on expensive diesel generators to meet its electricity demand. Being an island country, wind power generation presents a viable solution to meet a national target of 15 per cent energy from renewable sources by 2030.

Masdar is developing numerous other renewable energy projects to improve energy access in the developing world.

Notable projects include:

consumption so far. Currently, six Dubai hotels received the ‘Earth Check Silver’ certification, one received ‘Earth Check Bronze’ and another hotel is in the process to get LEED certification. http://majidalfuttaimproperties.com

GE MIDDLE EAST

In a renewable energy initiative that could help address the growing demand for electricity in Lebanon, the country is rolling out the first of its kind landfill gasto-energy (LFGTE) project in Naameh, near Beirut, using GE’s ecomagination qualified Jenbacher gas engine technology.

The on-site power project will be powered by one of GE’s Jenbacher J312 landfill gas engines and potentially generate 637 kilowatts of renewable electricity. This

“

We found 41 per cent of participants indicated that CSR is reported directly to the CEO, which demonstrates the importance of CSR as an emerging business issue

”

 A 15-megawatt solar photovoltaic power plant in the Islamic Republic of Mauritania, which accounts for 10 percent of the country’s energy capacity;  A project in Afghanistan will supply 600 residences with off-grid solar PV systems; and  A 500-kilowatt solar photovoltaic power plant on the island of Vava’u in the Kingdom of Tonga. www.masdar.ae

MAJID AL FUTTAIM PROPERTIES

According to Ibrahim Al Zubi, Head of CSR for Majid Al Futtaim Properties, the company has invested more than AED 8 million to improve its energy efficiency and reduce the environmental impact of its hotels through smart design. This has resulted in a 15 per cent reduction in energy and 14 per cent in water

project also will eliminate the equivalent of about 12,400 tons of carbon dioxide (CO2) - the amount of emissions produced by about 6,100 cars per year. www.ecomagination.com

UNILEVER

One of the world’s leading suppliers of food, home and personal care products, Unilever CEO Paul Polman is leading the way for the world’s corporates into sustainability. He said, “In a world where temperatures are rising, energy is costing more, sanitation is worsening and food supply is less secure, companies can no longer sit on the sidelines waiting for governments to take action. We have to see ourselves as part of the solution to these problems. In Unilever, we believe that our future success depends upon being able to decouple our growth from our environmental footprint, while at the same time increasing our positive social impacts.”

Arijit Ghose, Managing Director of Unilever Gulf Arijit Ghose.

In this region, the Unilever MENA Sustainable Living Plan was launched in 2011, the aim is to double its profits while reducing its carbon footprint by half.

Among Unilever’s global commitments and sustainable actions:  Became a founding member of the Roundtable on Sustainable Palm Oil (RSPO) in 2004 – a multi-stakeholder initiative set up in cooperation with WWF. The aim of the Roundtable is to move towards an industry-wide approach to sustainability in palm oil cultivation.  Biggest single buyer of Green Palm certificates globally. Sixty-four percent of the company’s palm oil was purchased from sustainable sources, in the form of Green Palm certificates.  Committed itself to buy all its palm oil from traceable sources by 2020, creating the capacity to trace every ounce of certified oil back to its home plantation.  Currently in advanced discussions with the Indonesian government for investing over $130 million in a large processing plant for palm oil derivatives in Sumatra, leading to cutbacks on transport, less spending, and easier tracing of the sources of the palm oil used. www.unilever.com/sustainable-living

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M O TO R I N G

Luxury green cars in the UAE

Adrian Maul investigates the luxury market for electric and hybrid cars in the UAE

G

lobally, air pollution kills seven million people per annum much of which is contributed by greenhouse gas emissions from petrol engines.

Here in the UAE, air pollution is responsible for an estimated 850 deaths a year, according to a study commissioned by the Environment Agency Abu Dhabi.

[October 2009, The National] The UAE authorities understand the issues with air pollution and the Government is taking steps to minimise the problems by monitoring air pollution and introducing legislation to cut emissions. In future, this region could follow the footsteps of countries by introducing aggressive measures to cut the nation’s carbon footprint – we could be witnessing the beginnings of the demise of

the traditional petrol powered car.

In the UAE, it’s the luxury end of the car market that is leading the way on green cars. A number of high-end hybrid vehicles are available for purchase, which is in stark comparison to the mass market. None of the popular electric and hybrid cars such as the Toyota Prius or Tesla, that are now a common sight on the roads in the US and UK, are available here. Why? Three main reasons, the low cost of petrol here is a disincentive to going green, also there is little recharge infrastructure.

Apart from one recharge point at DIFC, there is nowhere for electric or hybrid car owners to ‘fill up’ therefore an electric car owner in the UAE would need to live in a villa where they have garaging and power points. In addition, the local car dealers have not invested in the staff and equipment necessary to service

electric and hybrid vehicles. The only car manufacturers who are offering their customers full maintenance and servicing for green cars are Porsche, Fisker Karma and Lexus.

PORSCHE

The UAE winner – no other manufacturer is pushing the green envelope in the UAE as much as Porsche.

Managing Director Porsche Middle East & Africa FZE George Wills said, “We have always believed that our customers should have access to the entire model range, including our hybrid offers. We don’t follow the general trend, we want to set it. It is important to start building up the awareness and confidence in customers for hybrid models in this region; only through this, the general acceptance will increase.”

The Porsche Panamera S E-Hybrid is one of the high-end luxury ‘green’ cars now available in the UAE.

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M O TO R I N G

In the UAE, Porsche offers the Cayenne S Hybrid, Panamera S Hybrid and Panamera S E-Hybrid. The world’s first plug-in hybrid in the luxury class, the Panamera S E-Hybrid’s fuel consumption is 3.1 litres per 100km and reaches a speed of up to 135 km/h in pure electric drive mode. This year will also see the unveiling of the 918 Spyder, the first ever hybrid super sports car with a total of 887 hp combined from three engines, an acceleration from 0 to 100 km/h in less than 2.8 seconds and an average consumption of a mere 3.3 litres per 100 kilometres.

Buy it: Panamera S Hybrid AED 485,000 (petrol equivalent is AED 462,000) Cayenne S Hybrid AED 326,000 (petrol equivalent is AED 307,000) Contact: Porsche Centre Dubai Al Nabooda Automobiles LLC Shk. Zayed Road - 1st Interchange Tel: +971 4 321 3911 www.porsche.com

DID YOU KNOW? Ferdinand Porsche invented the world’s first hybrid? Here he is at the wheel of one of his 1903 Lohner-Porsche hybrid touring cars.

LEXUS

Offers two hybrids in the UAE market, the RX450 and the LS600.

Buy one: RX450 AED 270,000 (petrol equivalent AED 249,000) LS600 AED 570,000 (petrol equivalent AED 494,000) Tel: 800 LEXUS (53987) www.lexus.ae

FISKER KARMA

The world’s first luxury hybrid, the Karma is designed by Henrik Fisker, a car designer who has given the world iconic cars like the Aston Martin DB9 and the BMW Z8 Roadster. Unfortunately, things have come unstuck for Fisker and his company looks headed for bankruptcy, which means buyer beware.

Buy one: Depending on the chosen

interior trims, accessories and paint combinations, the Fisker Karma will retail in the UAE for between AED 500,000 and AED 560,000. Customers can contact 800 FISKER (800 347537) Showroom location: Marsa Plaza, Dubai Festival City.

Email: fisker.uae@alfuttaim.ae www.fiskerme.com

It is important to start building up the “ awareness and confidence in customers for hybrid models in this region; only through this, the general acceptance will increase

”

HYBRID SUPERCAR –MCLAREN P1 The world’s first plug-in hybrid supercar, the limited-edition McLaren P1 is priced from just over $1 million (AED 3.7 million). Local GCC retailers are Al Ghassan Motors in the Kingdoms of Bahrain and Saudi

Arabia; Al Habtoor Motors in the UAE; Al Wajba Establishment in Qatar, and Ali Alghanim and Sons Automotive in Kuwait. All retailer contact details can be found at www.cars.mclaren.com

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LIFESTYLE & TRAVEL

Wellness Travel

Kamalaya in Koh Samui, Thailand specialises in helping people suffering burnout from stressful corporate life.

Stress and burn-out retreats are one of the fastestgrowing sectors of travel. So where do you go when you need to recharge and distress?

M

odern, corporate life is stressful. Most of us who live in cities and work in offices spend too many hours sat in front of computers. We work late into the evening and even when we’re not in the office, we’re fielding the constantly pinging emails and messages that come in on our mobile phones. We grab over-processed junk food, we don’t get fresh air or exercise, and we spend our

lives breathing recycled air and sitting under fluorescent lighting. Deadlines really are killing us.

According to Karina Stewart, the cofounder of Kamalaya, a wellness sanctuary and holistic spa in Koh Samui, Thailand, this is why one of the fastest growing sectors of travel is wellness and, within the wellness sphere, retreats offering packages that focus specifically on stress is seeing a marked increase.

MODERN STRESS

Along with her husband John, Karina opened the doors at Kamalaya in 2005.

The idea was to combine healing therapies from the East and West to offer a unique approach to complete wellbeing. One of Kamalaya’s most popular programmes is Stress and Burn-out. Customised to the needs of the individual, it involves a combination of therapies, nutrition, and personal guidance to deal with the

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symptoms and underlying causes of adrenal burn-out.

“We have seen a marked increase in the last three years in the number of guests booking into Kamalaya to do one of our Stress and Burn-out programmes. Stress affects everyone; whether it’s a busy professional, a young parent managing a family, a couple going through relationship issues or an older person adapting to retirement… life throws situations at us which we can find stressful.”

A certain amount of stress is normal, says Karina. It’s abnormal stress that can be highly debilitating and lead to conditions such as anxiety, panic, insomnia or depression. But this isn’t just the big trauma events in life, in fact long-term constant low grade stress can be much more detrimental.

“In today’s technology and internetdriven world everything moves much faster, the pace we live our lives is quicker, economic pressures are greater and with 24/7 mobile and internet connection there is often little or no boundary between work and home life,” says Karina.

“As a result, people have less ‘down

People now realise “ that a luxurious lifestyle means nothing if you don’t have sufficient health to enjoy it

”

time’ for themselves and this constant over-stimulation can lead to increasing levels of stress that are not reset by the natural rhythm of evenings, weekends and holidays without work-related interruptions. This isn’t a localised phenomenon either, people come from all over the world to take part in our stress programmes including Europe, US, Middle East, Asia and Australia.

“In many Western countries, gone are the days of excess and indulgence that came with the attainment of high disposable incomes; people now realise that a luxurious lifestyle means nothing if you don’t have sufficient health to enjoy it. Interestingly, we do see a difference between markets in their approach to

health, for example (and this is a very general overview), the Europeans are the biggest detoxers, guests from the Middle East and Australia often come on a Healthy Lifestyle programme to address weight or fitness, and the whole world comes to de-stress!

LIFE CHANGE

The question is, can a week or two at a holistic wellness retreat like Kamalaya make a long term impact on someone’s life if they still have to go home to the long working hours, poor diet, and so on? Or is it akin to bandaging up a wounded soldier and sending him back into battle.

The key, says Karina, is ensuring that people are given tips and lifestyle advice to take away that can help them when they go back home into their everyday lives.

“Kamalaya believes in a very sustainable approach to wellbeing – it’s not about quick fixes but it is about becoming aware of and understanding our natural ways of being, our habits and patterns of behaviour that may contribute to stress.

“Very often we create our own stress – we may have unrealistic expectations of cont. overleaf

A few of the activities on offer at Kamalaya Wellness Sanctuary and Spa in Thailand.

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Wellness travel is one of the fastest growing segments of the tourism market. cont. from page 43

ourselves or of others, or over-promise or try to do too many things for too many people, or perhaps we are dissatisfied with the cards life has dealt us.

“Personal mentoring forms a key part of the stress programmes and our experts work with guests to help identify the root causes of stress, and give tools and tips to help manage and dissolve the feelings associated with stress in certain situations.

By becoming aware of unhelpful patterns and behaviours, we recognise these feelings as they occur, change our responses to them and support the return to a balanced state, the ‘healing’ response.”

Nutritious food, time out, meditation, natural therapies, spa treatments and appropriate exercise are some of the approaches to wellness now available at retreats worldwide.

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Recharge and reboot Ok, so where in the world can you go for some in depth restoration and rejuvenation? Here’s a starting point...

KAMALAYA, KOH SAMUI, THAILAND

Kamalaya offers four programmes addressing stress on various levels. There’s the Relax and Renew programme, a gentle introduction to a wellness holiday that’s designed for people in need of the time and place to step back from busy lives to recover balance, de-stress and replenish

depleted energy levels. There’s the Balance and Revitalise programme, a more intensive package recommended for people who are really beginning to feel the effects of adrenal burnout – this comprehensive programme includes personal consultations in Naturopathic Lifestyle, Nutrition and Stress Management as well as nutritional and herbal supplements and remedies to support recovery as well as recommendations for the longer-term.

Diet and nutrition also forms a fundamental part of Kamalaya’s healing

philosophy. Wellness experts advise guests on what they should be eating and why, as well as things they should eliminate from their diets. Kamalaya’s award-winning cuisine is based on an ancient Ayurvedic principle which states that, “When diet is wrong, medicine is of no use and when diet is right, medicine is of no need.”

COMO SHAMBHALA ESTATE, BALI, INDONESIA

CHIVA SOM, GULF OF THAILAND

THE CHATEAU, MALAYSIA

Located near Ubud, Bali, COMO Shambhala Estate is a ‘Retreat for Change’ with resident experts including a yoga teacher, Ayurvedic doctor and nutritionist.

The holistic, 360-degree approach offers signature massage therapies and beauty treatments. A state-of-the-art gym and outdoor activities such as hiking and climbing make the most of the breathtaking natural location. Cuisine is nutritionally balanced. The residences, suites and villas suit independent guests, couples or families.

Holistic Health at Chiva-Som provides the opportunity to diagnose your emotional, spiritual and physical wellbeing as well as your lifestyle. The specialist practitioners include doctors, nurses, naturopaths and therapists as well as specialist visiting consultants, all of whom have a commitment to providing a holistic solution to your health needs.

Set in seven acres of lush tropical gardens, Chiva Som offers 70 treatment rooms, a kinesis studio, gym, watsu pool, flotation pool, large outdoor swimming pool, bathing pavilion with kneipp bath, sauna, steam, jacuzzi, and indoor swimming pool.

Chiva-Som is located in the Royal city of Hua Hin on the Gulf of Thailand, 185 kilometres south of Bangkok.

An organic wellness destination spa resort, the Chateau itself is modeled on a medieval castle in Alsace, France. This spa haven embraces holistic ideas and relaxing principles on the path to wellness. It is located at Berjaya Hills, about 45 minutes drive from Kuala Lumpur city centre.

The Chateau uses only the finest organic Voya spa products, organic amenities, towels, linen and more. Voya is a range of organic spa products certified by both the US Department of Agriculture (USDA) and the Soil Association that maintain youthfulness while protecting the earth.

All rooms at the Chateau are non-smoking and no children are allowed in the resort.

Wellness sanctuary and spa with a holistic healing programmes on detox, de-stress, weight-loss, sleep enhancement and renewal.

Luxury holistic wellness retreat combining modern science with ancient healing.

Email: CSestate@comoshambhala.com www.comohotels.com/ comoshambhalaestate

Celebrating 15 years in business, Chiva Som was one of the originals in wellbeing travel.

Tel: +66 (0) 3253 6536 www.chivasom.com

Tel. +66 (0) 77 429 800 Email: info@kamalaya.com www.kamalaya.com

A child-free organic wellness spa that combines luxury and healing.

www.thechateau.com.my

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L I F E S T Y L E& TRAVEL LIFESTYLE

Reading matter A look at some of the newest business and wealth titles to hit a book shelf near you.

National Geographic 125 Years: Legendary Photographs, Adventures, and Discoveries that Changed the World

Jack: Straight from the Gut

By Jack Welch / AED 49 One of the greatest corporate leaders of the 20th century. John Francis ‘Jack’ Welch, Jr. is an American business executive, author and chemical engineer. He was chairman and CEO of General Electric between 1981 and 2001. During his tenure at GE, the company’s value rose 4000 per cent thanks to his uncanny instincts.

When Welch first became CEO of General Electric in 1981 the company was worth $12 billion. Twenty years later it is worth a total of $280 billion. But Welch was more than just the leader of the most successful business in the world.

He revolutionised GE’s entire corporate culture with his distinctive, highly personal management style: the individual appreciation of each of his 500 managers, the commitment to an informal but driven work style and the encouragement of candour were all part of the Welch approach.

In this book, Welch shares his greatest victories, his most valuable experiences, and even his most devastating failures in a passionate memoir that reveals his most important secrets to success - in business and in life. www.straightfromthegut.com

By Mark Collins Jenkins / AED 175 From its earliest days as a scientific club to its growth into one of the world’s largest geographic organisations, the National Geographic 125 Years book taps key voices from the forefront of ocean and space exploration, climate science, archaeology, mountaineering, and other disciplines, to see where we are heading.

Under the themes of Earth, Sea, and Sky, author Mark Collins Jenkins focuses on great leaps forward that dramatically changed our understanding of the planet, from summiting Everest to landing on the moon to discovering Titanic. Sidebars feature Jared Diamond, Sylvia Earle, Buzz Aldrin, Bob Ballard, Jane Goodall and more, contributing thoughts on exploration, key frontiers in research, and enduring mysteries. Characters like Egyptian archaeologist Zahi Hawass discusses whether there’s anything left to be discovered in the Valley of the Kings; Paleontologist Paul Sereno discusses creating a dinosaur from DNA; while Geography Professor Jared Diamond ponders when society faces the next ‘collapse’.

Green – Architecture Now

By Philip Jodidio / AED 176 These days, green is the name of the game. There has never been so much interest in the ecological impact of buildings as there is today. This is not a negligible fact in the struggle to control pollution and in the search for responsible and sustainable methods of construction. Buildings are among the heaviest consumers of natural resources and account for a significant portion of the greenhouse gas emissions that affect climate change. With global warming now a significant international political issue, architecture is on the brink of major changes, where style and matters of aesthetics are placed in a secondary position behind issues of sustainability. At a certain time, ‘green’ buildings were ugly and complicated affairs but this is no longer the case as Jodidio’s book demonstrates. Featuring well-known architects from Tadao Ando to Thom Mayne as well as the potential stars of tomorrow.

All these books can be purchased at Jashanmal Books, go to www.jashanmalbooks.com for more information.

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Put it in your diary...

AUGUST / SEPTEMBER 2013

PUBLIC HOLIDAYS AND OCCASIO

23-25 September

NS

POWER + WATER MIDDLE EAST 2013

8 August

An event for power and water-related products and services. The event creates opportunities for investment in Abu Dhabi and the Middle East region by bringing together developers, manufacturers, buyers and service providers.

Venue: ADNEC - Halls 3 and 4 and Conference Room B www.powerandwaterme.com

EID AL FITR

(dates may vary dependent on sighting of the new moon) The first day of the Islamic month of Shawwal, Eid al Fitr marks the end of Ramadan, the month of fasting and prayer. Many Muslims attend communal prayers, listen to a khutba (sermon) and give zakat al-fitr (charity in the form of food) during Eid al-Fitr.

23-25 September

ARABIAN WATER AND POWER FORUM

Power and water are two of the biggest issues shaping Middle East development. The forum brings key stakeholders to determine best practices in optimising demand and supply management for sustainable growth and gather intelligence about upcoming projects and tenders to help win new contracts.

Venue: Address Hotel, Dubai Marina www.cwcawpf.com 3-5 September

GULF SOL 2013

The first dedicated solar technologies exhibition in the UAE. With the Middle East as a growth area for solar, huge investment across the MENA and Gulf into renewable energy have created opportunities for those connected with solar and PV technology.

Venue: Dubai World Trade Centre www.gulfsol.com 16-19 September

SIBOS 2013 DUBAI

30 September to 2 October

IRAQ MEGA PROJECTS

Uniting the value chain to deliver Iraqi oil and gas projects and a showcase for products, services and technologies.

Venue: Dubai International Convention & Exhibition Centre www.cwcimp.com

LO OK IN G AH EA D

An annual conference, exhibition and networking event for the financial industry, Sibos is a business forum for debate and collaboration in payments, securities, cash management and trade.

Venue: Dubai World Trade Centre www.sibos.com 24 September

THE GULF INTELLIGENCE ENERGY MARKETS FORUM

The business of energy is changing fast: new energy regions are emerging with unique challenges; oil benchmarks are in transition, and oil-indexed gas prices may soon be extinct. GIEMF is about the trading, storing, refining, marketing and shipping of energy. Confirmed speakers include Iraq’s Deputy Prime Minister for Energy Affairs HE Hussain alShahristani and Saudi Arabia’s Oil Minister HE Ali Al Naimi.

Venue: Armani Hotel, Burj Khalifa, Dubai www.thegulfintelligence.com

24 October

ARABIA CORPORATE SOCIAL RESPONSIBILITY AWARDS 2013

Driving Sustainability through Corporate Citizenship is the theme of this year’s Arabia CSR Awards, an event that celebrates corporate citizens of the Middle East and North Africa and recognises passion for sustainable and responsible business.

Venue: The Address Downtown Dubai Hotel, Dubai www.arabiacsrnetwork.com

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LAST WORD

That’s a Wrap A look back at some of the recent news related to money that made you laugh, gasp, sigh, or shake your head in disbelief…

JOHN LENNON’S RECYCLED CAR

If you read in the last issue of WEALTH magazine about the upcoming sale of John Lennon’s first motor car, a blue Ferrari, let us now inform you that the ex-Beatle’s first ride sold at auction for £360,000 (AED 2.017 million) at the Goodwood Festival of Speed in Sussex, reported the Daily Star. This is way beyond the expected sale price of between £180,000 and £220,000. The 152mph Ferrari 330GT was bought by Lennon for £6,500 (AED 36,400), which means it sold for 55 times its original price.

The classic car has been fully restored and comes with letters from Lennon who kept it for two years.

A Sotheby’s employee poses with Claude Monet’s artwork Le Palais Contarini, which sold for £19.7 million in June.

ART ATTACK

Le Palais Contarini, a 1908 oil-on-canvas painted by French Impressionist Claude Monet during a three-month visit to Venice in 1908, was sold in June for a whopping £19.7 million ($30.5 million/ AED 110.3 million). The painting was part of a 71-lot Impressionist and Modern Artworks auction at Sotheby’s that raised £105.9 million ($165 million/ AED 600 million).

GROUNDBREAKING CINEMA WATCH

Designed to resemble an antique photo or cinema camera, the new Cinema Watch from the Konstantin Chaykin Manufacture contains the first animation complication in a mechanical watch. Unveiled in April at Baselworld 2013, this unique Cinema Watch, commemorates Eadweard Muybridge who created the first ever series of consecutive photographs of a running horse, capturing each movement precisely. In 1879 Muybridge invented the zoopraxiscope to show these photographs in a rapid sequence which created the illusion of a moving racehorse.

The zoopraxiscope was the prototype of what the brothers Lumière would name a cinématographe camera 20 years later.

The watch contains an animation function showing a small movie of a galloping horse and rider in a small window at six o’clock.

TOP BILLIONAIRE ISLAND OWNERS

Who are the top five wealthiest owners of expensive private islands valued at $10 million and above?

Taking top spot is Lawrence Ellison (aka Larry Ellison), cofounder and CEO of technology giant Oracle, who owns the 90,240 acre Hawaiian island of Lanai which he bought in June 2012 from US businessman David Murdock. Lanai Island is home to two resorts, about 500 homes and two championship golf courses.

Others in the list include Bernard Arnault, the French luxury business titan who owns the 133-acre Indigo Island; Google CEO Larry Page who owns the 30-acre Eustatia Island in the British Virgin Islands; Paul Allen, Microsoft co-founder of Vulcan Inc., owner of the 292-acre Allan island off Washington State in the US; and Russian oligarch Roman Abramovich, who owns New Holland Island off St Petersburg, Russia. For the full list, visit www.wealthx.com

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