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The Responsibility Researchof oekom research AG

TBLI, Yokohama, May 27/28, 2009

1. Background oekom research2. Research universe and research services3. Bond research

3.1. Research methodology oekom Country Rating3.2. Research methodology oekom Corporate Rating

agenda

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about us

Experience

Expertise

Customized services

Independence

– Corporate & Country Research– universe covers the most important stocks and bonds– highest quality standards

– total staff of 30– experienced and multi-disciplinary team of 22 analysts– Scientific Advisory Board

– partner of various asset managers and inst. investors– clients primarily from AT, CH, DE, DK, FR, IE, IT, JP– advising funds and mandates with a total volume

of EUR 89bn (December 08)

– commercial experience since 1993– independence– spin-off from publishing house ökom

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Highest possible independence of agency and analysts– shareholders who guarantee independence, eg, two catholic orders– registered shares with restricted transferability– rigorous codes of conduct for every analyst– no consulting services for companies which could help them to improve their rating– no financial research, no asset management

Highest quality standards– number of companies covered by an analyst: ≤ 50– high relevance of research through innovative update rhythm– high acceptance of oekom ratings at companies assessed– company wide quality manager– development of an own quality standard in co-operation with the German Association of rating analysts– support of CSRR-QS 2.1 and participation in the audit process

quality leadership

Consistent and stringent rating methodology– consistent and stringent sustainability understanding as the basis of the ratings– comprehensive training of all analysts– industry specific criteria generation– continuous reviews for an ongoing development of criteria and methodology– no outsourcing of significant components of value creation to other service providers

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research universeoekom Corporate Rating– approx. 1,100 international companies– small, mid & large caps

large caps (approx. 825)– all major sectors– indexes covered: MSCI World: 75%

small caps (approx. 175)– focus on companies from industries with a strong link to

sustainable development (potentials)

bonds (approx. 100)– public companies and supranational organisations– other banks and bond issuers

Companies

Countries

oekom Country Rating– 50 countries incl. BRIC, EU, OECD and important newly industrialized countries

oekom Emerging Markets Risk Assessment– Country profiles with focus on social and environmental risks in emerging and developing countries

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Asset managers, banks, investment companiesAllianz Global Investors FranceAGICAMAmpegaGerling InvestmentBaden-Württembergische BankBank für Orden und MissionBank VontobelBankhaus JungholzBankhaus Schelhammer & SchatteraBankInvestBayern LBBayernInvestBNP Paribas Asset ManagementBÖAG Börsen AG Hamburg/HannoverDaiwa Asset ManagementDZ-BankErste SparinvestEuropean InvestorsEvangelische Darlehnsgenossenschaft eGGLS GemeinschaftsbankHSBC InvestmentsHypoVereinsbankKD-Bank

Institutional investorsDeutsche Bundesstiftung UmweltDiocese Gurk-KlagenfurtDiocese LinzDiocese Rottenburg-StuttgartEvangelical Church of Hesse and NassauEvangelical Lutheran Church in BavariaFoundation “Remembrance, Responsibili-ty and Future”Missionszentrale der FranziskanerMunich Re GroupReligious ordersRetraite Additionnelle de la FonctionPublique (RAFP)Pensionskasse NovartisVBV Pensionskasse

Extract from our client list

references

Kepler FondsLandesbank Baden-WürttembergLBBW Asset ManagementLIGA BankMEAGMetzlerMetzler Asset ManagementMorgan StanleyNORDCONNordLBÖkoWorld LuxPioneer InvestmentsProventusRaiffeisen Capital ManagementSal. OppenheimSchwyzer KantonalbankSEB Investsks VermögensverwaltungSparkasse OberösterreichSteyler BankUnicreditVINIS

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relevanceSRI market capital markets

Several years ago, as a consequence, oekom research expanded its researchuniverse to include bond issuers. Non-listed public debt issuers covered include: non-sovereigns: 100 organisations such as national agencies, supranationals,

public financial institutions, private financial institutions(eg, mortgage banks)

sovereigns: 50 countries (OECD, EU, BRIC, relevant Asian countries)

to date research and assetmanagement productsconcentrate on corporateequities

bond market is by far the largest securitiesmarket in the worldmany institutional investors have asubstantial asset allocation in fixed income,eg, insurance companies, pensionschemes, foundations, church investors

many of them are subject to restrictionsregarding the types of investment they mayacquire

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researchBonds (fixed-income securities) are loans to organisations that issue the bonds –including governments, supranational bodies or companies.

sustainability research on bonds focuses on

• performance of the organisation that uses the loan (issuer)• implications of activities financed with the loan (if definable)• underlying assets

SRI activities by clients based on oekomʼs research

• best in class approaches• exclusion of issuers• engagement

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oekom country ratingCoverage

• all OECD countries• all EU members• all BRIC members• most important Asian countries

• Australia • Denmark • Ireland • Mexico • Slovakia

• Austria • Estonia • Israel • Netherlands • Slovenia• Belgium • Finland • Italy • New Zealand • South Africa• Bulgaria • France • Japan • Norway • Spain• Brazil • Germany • Korea, Republic Of • Philippines • Sweden• Canada • Greece • Latvia • Poland • Switzerland

• China • Hungary • Lithuania • Portugal • Thailand• Croatia • Iceland • Luxembourg • Romania • Turkey• Cyprus • India • Malaysia • Russian Federation • United Kingdom• Czech Republic • Indonesia • Malta • Singapore • United States

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fundamentals

Pressure - State - Response(OECD)

7 Freedoms(UNDP)

Social Rating Environmental Rating

oekom Country Rating150 criteria

Validated by scientific experts

Trustworthy sources of information

Used by our clients since 2001

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pressure - state - response model

PRESSURE RESPONSESTATE

Environmentalimpacts

Human activities

Energy

Transport

Agriculture

Forestry

Urbanisation

Institutionalcapacity and

politicsEconomic and

environmental agents

Institutions

Internationalconventions

Legislation

Application

Environmentalsystems

State of the environmentand natural resources

Air

Water

Soil

Living resources

Pressure

Resources

Information

Response

Response by the state (decisions - actions)

Information

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seven freedoms

7 Freedoms(UNDP)

Freedom fromdiscrimination

Freedom from want Freedom of thoughtand speech

Freedom from fearFreedom to develop

and realise oneʼshuman potential

Freedom frominjustice and

violations of the ruleof law

Freedom for decentwork - withoutexploitation

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sources of information

Systematic use of information that isregularly updated and availablethrough publications and databases.

Direct contact via telephone or e-mailis conducted only occasionally if datais ambiguous or if more backgroundinformation is necessary.

Supranational organisationseg: UNDP; WHO; OECD; ILO; World Bank

Public authoritieseg: US State Department;German Foreign Affairs Department

Non-governmental organisationseg: Amnesty International;International Confederation of Free Trade Unions;Transparency International;Stockholm International Peace Research Institute;Germanwatch

National databases (public authorities, nationalNGOs)eg: Environmental Department of Iceland

Only if information for a criterionis not published for an individualcountry by the sources mentionedabove.

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sources of informationClimate Change

Partnership with internationally recognised NGO Germanwatchregarding the exclusive use of information by oekom research on:

• the national and international climate policy (qualitative)• trends of CO2 emissions in various sectors (quantitative)• comparison of target and actual CO2 emissions (quantitative)

Data is taken from Germanwatchʼs Climate Protection Index

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rating structure

Social Rating

EnvironmentalRating

50%

50%

40%

40%

10%

20%

20%

70%

oekom Country Rating

Institutional Capacity and Politics

Environmental Systems

Environmental Stresses

Institutional Capacity and Politics

Human and Social Conditions

Infrastructure

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rating structurecategory

subjects

indikators

criteria

Human and Social Conditions

Institutional Capacity and Politics

Participation in internationaltreaties

Public spending

Non-governmental institutions

Political system and basic rights

Political stability

Corruption and money laundering

Political system

Freedom of assembly

Free elections

Separation of powers

Content (ie, quality of policies,measures etc.)

Coverage (ie, scope of thepolicies, measures etc.)

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rating model

• Grade: rating result on a twelve-point scale which ranges from A+ to D-• Score: rating result on a percentage scale, with 100% being the best score

• Qualitative criteria are rated on the basis of best practices.• Quantitative criteria are rated on the basis of absolute values (in comparison to other states) and trends.

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assessment of criteria

min. and max. valueamong all countries

absolute value

indicator assessedlatest yearavailable

Assessment of quantitative data

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assessment of criteriaFREEDOM OF PRESS

The law authorizes the Government to restrict freedom of speech and of the press and in practice the Governmentcontinues to restrict these freedoms severely and systematically.

The Constitution provides for freedom of speech and freedom of the press; however, the Government at times restrictsthese rights in practice. Journalists face violence and intimidation from police, soldiers, and government officials.

The Constitution provides for freedom of speech and of the press; however, while the Government generally respectsthese provisions, reports of government pressure on the media and journalists continue.

The law provides for freedom of speech and of the press, and the Government generally respects these rights in practice.In some instances, allegations of violence against journalists have been made against state governments. TheGovernment limits access to the Internet and restricts academic freedom.

The Constitution provides for freedom of speech and of the press, and the Government generally respected these rights inpractice. Legal restrictions on free speech nevertheless remain in force.

The law provides for freedom of the press, and the Government generally respects this right in practice. However, thecurrent and previous Governments have been criticized for influencing editorial and personnel decisions of state-ownedmedia.

The law provides for freedom of the press, and the Government respects this right in practice.

......

A+

D+

D-

C

B+

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oekom country rating

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oekom country rating

oekom Country Rating

D- D D+ C– C C+ B– B B+ A– A A+

NorwaySwedenFinland

...Germany

...UK...

Japan

Korea...

USA...

Singapore...

ChinaIndia

D- D D+ C– C C+ B– B B+ A– A A+

...

D- D D+ C– C C+ B– B B+ A– A A+AAA

Standard & Poors Credit Rating

AA A BBB BB B CCC CC C D

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performanceCorrelation between Standard & Poorsʼ Sovereign Credit Rating

and oekom researchʼs Country Rating

significance level: 1%correlation coefficient (Pearson) > 0.8

oekom Country Rating

S&PSovereignCreditRating

USA

Germany

Russia

Hungary

Turkey

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oekom research AGGoethestr. 28D-80336 Munich, GermanyTel: +49 89 54 41 84-90Fax: +49 89 54 41 84-99Email: info@oekom-research.comWeb: www.oekom-research.com

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