Sustainable Asset Management join the FT Ethical Investment Conference

One Southwark Bridge Road is the prestigious headquarters of the London Financial Times and in this building, as part of National Ethical Investment Week, the FT held their own Sustainable and Ethical Investment Conference.

Gary Crates, Business Development Director of Sustainable Asset Management, spoke exclusively about the forestry investment sector. Other speakers on the day including Sir Ronald Cohen, Chairman of Big Society Capital and the Portland Trust; James Cameron, Non-executive Chairman of Climate Change Capital; and James Stacey, Partner at Earth Capital Partners LLP. A wide variety of technical issues were covered from legislative practices through to emotional “buy-in”, as were a diverse number of opportunities and attitudes.

Although the majority of speakers agreed that financial return was key to investors, with ethical investments return could also be calculated on more than just a pure fiscal basis, for example measuring the return to the environment, society and poverty alleviation. However, the optimum investments are those which are both sustainable and ethical but also return average or above average performance to their clients, literally a win–win. Gary Crates explained how Sustainable Asset Management (SAM), in partnership with specialist agro-forestry company Asia Plantation Capital (APC), was able to target higher level performance using niche forestry products such as Aquilaria, Agarwood and Oud; engaging the delegates with an impressive slide show of actual plantations, a fascinating Story of Oud. With serious investors and industry specialists gathered numbers were also called for to justify the claims and these were duly provided; six million trees planted including 1.5 million as Agarwood; just 7 years from planting to harvest for Agarwood; US$400 million of agro-forestry assets under management (APC); high value markets for end products of Agarwood including distilled Oud oil, applications in Traditional Chinese Medicine, nutritional supplements, even Agarwood Tea using leaves from the younger trees. As for the value of Oud oil itself, the mention of a probable US$50,000 for just one litre bottle caused delegates to sit bolt upright in their chairs.

Gary Crates explained that these numbers, the re-shaping of the APC business and the important cultural significance of Agarwood and Oud in the Middle East has recently led to an initial US$100m placement deal with private equity firm Greenstone Equity Partners in Dubai.

This day was also about sustainability, a topic both SAM and APC are passionate about. Agarwood plantations in Thailand are located in clusters to maximise the economic advantage to local communities. The increase in employment is improving standards of living, keeping families together by reducing the need for parents to work in cities away from their families. Sound forest management practices are bringing scrub land and disused plantations back into production. Drainage channels, “klongs”, irrigation and flood prevention schemes often extend beyond the plantations and into nearby villages. A patent pending organic inoculation system, to induce agarwood yield in the Aquilaria trees, also minimises the risk of soil contamination and helps maximise the yield of Oud oil. Finally he mentioned certification, for the analysts gathered in the room Gary confirmed that APC Agarwood is certified by CITES, the Convention on International Trade in Endangered Species.

Fortunately delegates will have post-conference access to Gary’s presentation and a short video placed online and can digest all the complex information at their leisure.

Asked by the FT for his thoughts on the conference Gary responded “I have listened to a range of inspiring speakers illustrating how sustainable and ethical investments are becoming mainstream, all having great stories to tell. I was humbled by the level of interest shown in Sustainable Asset Management and what is one specific niche tree, the Aquilaria. This proves that not only are we doing something right for the financial community, but that we can extend the good we are doing in rural communities in Southeast Asia.”

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