Sustainability Services

SOLARON

Fact Sheet

Location of on-the-ground Solaron analysts

Vipul Arora, Co-Founder and Managing Director Solaron Sustainability Services Pvt. Ltd.

This is light years ahead of where you were last year and what I have seen before, in terms of a controversies and risk assessment product in the industry.
- Chair of a $250 Billion AUM Pension Fund (identity kept private on request)

We are living in a world that is rapidly increasing its direct and indirect exposure to EM risks and opportunities. However, it is usually difficult to conduct a reliable analysis of risk and return in our portfolios due to non availability of good information from EMs. Over the last five years, while the ESG industry was undergoing a difficult period of consolidation and the global economy was facing a severe recession, Solaron consistently and painstakingly built an exclusive research infrastructure, focusing on 15+ global EMs. As a result, we have been providing a unique information advantage to clients by conducting on-the-ground primary research instead of relying solely on publicly available information. Investors can leverage our local team, EM-focused research methodology and cutting-edge technology tools created over the last five years to invest confidently.

Quick Facts
Research organization based in the Emerging Markets we analyze Headquartered in Bangalore, India Global footprint with operations in 15+ global Emerging Markets across Asia, America, Middle East, Africa and Eastern Europe Technology infrastructure in India, US and Europe 80+ world-class ESG Analysts Private firm, stock held by founders and team members Clients: number of clients in the higher double digits, ranging from Asset managers, Banks, Pension Funds, Impact Investors, NGOs, Industry Associations, Governments, other Research Agencies and Academic Institutions Wide experience in identifying both Emerging Market risks and opportunities for diverse applications in equity, fixed income and sovereign holdings.

Track Record till date:

The best award for any rating and research agency is given by time itself. Here are a few samples of research done by Solaron that bear testimony to the above: s Infosys: India's premier IT firm and a blue-chip stock listed on Nasdaq was given a unique negative outlook by Solaron in May 2010. A risk pointed out in Solaron's report on Infosys materialized on April 15, 2011, and as a result, the stock fell by 10% on that day. Several risks later, the stock was downgraded, starting April 2012, by several financial analysts. s Arab spring: at a UN PRI webinar in August 2011, Solaron's was the only presentation highlighting the significant risk of a regional war in the Middle East. Solaron went on to say that this would create an Oil-supply shock in an already critical global economy. Post this, several governments struggled to find stability, Oil prices increased and various observers renamed Arab spring as Arab winter or Arab summer. s Tata Steel: One of the oldest, most respected and ethical firms in India was found by Solaron to be pursuing an aggressive growth strategy. It had borrowed very heavily from the market to acquire Corus Steel in the UK and Solaron reported that Tata Steel had become an acquisition target due to this transaction. Five months later, in January 2011, Tata Steel went to the Indian market with a large FPO. s Microfinance crises in India: Microfinance was being touted globally as a runaway success. However, it transformed into an asset bubble in India, one of the high growth Microfinance markets. Solaron wrote about this at east six months before the crises appeared. s There are several other case studies that are available on request. Some of these include corruption scandals related to Carrefour in Brazil, Walmart in Mexico and other places, Alstom in Jerusalem Light Rail Project. We highlighted the fact that Alstom was operating the Jerusalem Light Rail project in disputed territory in August 2011. Later, Norwegian Pension Fund excluded Alstom in December 2011 on this and other related factors.

Solaron has received several awards. A few examples:

British Airways Business Opportunity Grant Awards: Solaron was selected as one of the 50 most promising Companies in India, awarded by BA with a Business Opportunity travel grant. This grant provided the Solaron team with 10 roundtrip business-class tickets anywhere in the world and was very helpful as we were building our local research presence and client base globally. Pioneering Spirit: Lufthansa & ET Now: Solaron Co-founder, Vipul Arora was chosen as one of India's top 24 "Pioneering Spirits" for Lufthansa and Economic Times (ET) Now's Pioneering Spirit television series, showcasing business pioneers from across India. Promising Entrepreneur Awards 2010: Solaron was selected as one of the 30 young start-ups by Businessworld India for their "Promising Entrepreneur Awards 2010".

Products and Services

Quick Facts
Revenue: Solaron is privately held and does not publish financial accounts publicly. Our turnover has grown in the range of 50% year-on-year over the last five years, and we expect to grow at the same pace over the next five. We are the largest EM ESG research provider by revenue globally. Strong track record of highlighting risks and opportunities coming from Emerging Markets into global portfolios. Several case studies are available, please ask for more details. Coverage of 65+ sectors as per GICS classification Emerging Market coverage of 850+ large cap stocks across 21 EMs as per leading Global EM Indices; additional coverage available on demand Coverage of Global stocks on their exposure to Emerging Markets exceeds 4,000 stocks as per the leading All World indices; additional coverage available on demand and increasing daily on client requests Four web-based products available to review risk ratings of companies and adynamic tracking of their risk events on a daily basis. Each product offers a company-specific view as well as portfolio assessments and reports to review the entire health of your portfolio

Data: Traditional ESG Research agencies provide data only from public sources (annual reports, company press releases etc.). Solaron's EM data product delivers a higher coverage of data points on EM companies by sourcing data from more sources. All the data is verified before publishing. Clients can receive value-added data in a form and structure that allows for both qualitative and quantitative assessment with equal ease. Controversial News and Risk Alerts: Solaron's product of online news and risk alerts delivers live updates on company- and topic-specific controversies and risk events that are material enough for Investors to watch out for. Solaron's offering sources this information from three different levels: (1) widely available public information, (2) local language media outlets, and (3) proprietary stakeholder-sourced information through the Solaron network. Screening Services: Solaron provides portfolio- or company-specific screening for involvement in positively or negatively viewed topics according to the client's requirements. Our most popular screens include Portfolio screening for EM risks and recently, for landmine and cluster bombs. Sustainability Analysis: We take pride in providing meaningful sustainability analysis, rating and reports, based on our proprietary Best-in-Context research approach. Solaron's rating reports combine the power of all our products, bringing them together in a meaningful and reliable assessment that has, more often than not, stood the test of time, as observed in several case studies till date. Customized Research: Maintaining the investigative nature of our proprietary approach, we provide thorough analysis according to any research approach required. We are happy to customize our research to your specific requirements. We have done interesting work related to the application of ESG to fixed Income portfolios. Engagement, Advisory, Consulting and Training Services: Our extensive experience in sustainability analysis has taught us the best practices across companies, sectors and diverse markets. We are proud to share this information and insight in the form of engagement support, advisory, consulting and training services with stakeholders of all shapes and sizes.

About Solaron:
Solaron is the leading provider of ESG research services by revenue, team size and client base to investors, with a focus on Emerging Market risks and opportunities. From 15 analysts in 2007, Solaron has grown to an 80+ strong team, based on the ground in 15+ global Emerging Markets. With a sharp focus on Emerging Markets (EMs) and a rigorous research methodology created specifically to deliver actionable insights in EMs, Solaron has been serving small, medium and large Institutional Investors and other stakeholders over the last five years.

Research Capabilities statement:

Solarons risk analysis work focuses on two types of risks:
risks in local EM based firms, sectors, markets, regions or countries risks in Large Multinational firms operating in EMs, exposed to EMs due to supply chain or consumer market exposure. This risk usually goes ignored as global Investors tend to believe they are invested in the developed world stocks only but most developed world companies these days are exposed to significant EM risks in a web of highly complex supply chain and consumer market linkages.

Research Capabilities

Opportunity assessment experience tends to focus on unlisted firms, due diligence for acquisitions, third party verification, potential partner evaluation, sector or theme oriented investment opportunities, bottom up fundamental analysis before large stock purchases.

In addition, Solaron has significant experience in several areas as outlined below:

Experience in Index Creation: Access to Medicine, F.B. Heron Foundation Community Investment Index, and Confederation of Indian Industry - Centre of Excellence for Sustainable Development Index of top 100 companies in India. Extensive Background in Data Collection: Since its inception in 2007, Solaron offered EM and global research support to more than 10 ESG firms globally. Solaron adopted research methodologies and protocols of these diverse research organizations and implemented different proprietary research frameworks while following preestablished quality control and assessment mechanisms. Skill and Experience in Company ratings and reports: Solaron began operations as a research partner to Innovest Strategic Value advisors and supported their sophisticated sustainability analysis and profile writing effort. Later, Solaron developed its own Best in Context rating approach to emphasize gaps between company policy and performance in the context of emerging economies. Access to Local Language News: Solaron has access to a vast network of local language media outlets and leverages the extensive language abilities of Solaron's global team to identify several news / risk events that have missed the attention of popular English language press. Over time, our clients have found this to be a source of significant information advantage especially in products like controversy assessment, negative and positive screening and UN Global Compact violations. Stakeholder-based Research Skills and network: Solaron has built a strong network of stakeholder contacts in 15+ emerging markets over the last 5 years. These include 200+ industry experts and 3000+ NGOs. In addition, the emphasis on primary research in our methodology has trained our analyst team to seek out and process stakeholder input while ensuring accuracy, reliability and accountability. Most stakeholder based information is verifiable and wherever allowed by client budgets, statistically significant. We do not rely on individual opinions and shy away from privileged information.

For more information about Solaron product & services, please contact vipul@solaron.in

Solaron is a proud signatory to the United Nation Principles for Responsible Investment (UNPRI) www.solaronworld.com Asia: Africa: Europe: America: Middle East: Russia info@solaron.in