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@GRIAusConf_The Role of Integrated Reporting in Value Creation - Dr Jeanne Ng
 

@GRIAusConf_The Role of Integrated Reporting in Value Creation - Dr Jeanne Ng

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    @GRIAusConf_The Role of Integrated Reporting in Value Creation - Dr Jeanne Ng @GRIAusConf_The Role of Integrated Reporting in Value Creation - Dr Jeanne Ng Presentation Transcript

    • The Role of IntegratedReporting in Value Creation.Chair: Karin Ireton, Director, Group Sustainability Management,Standard Bank Group, South AfricaNelmara Arbex, Deputy Chief Executive, Global Reporting InitiativeMichael Bray, Chair, Better Business Reporting Group, KPMGNathan Fabian, Chief Executive, Investor Group on Climate ChangeDr. Jeanne Ng, Group Environmental Affairs, CLP Holdings LimitedJohn Stanhope, Chairman, Financial Reporting Council’s Integrated ReportingTaskforce; Former Chief Financial Officer, Telstra
    • CLP’s Sustainability Reporting Journey The Australian GRI Conference on  Sustainability & Integrated Reporting 28 March 2012 Dr Jeanne Ng Director – Group Environmental Affairs CLP Holdings Limited
    • CLP’s Sustainability Reporting (2010) Sustainability Report – Online Full Version Annual Report Sustainability Report – Short Accolade: Globe Sustainability Reporting Award 2010Group Environmental Affairs 2
    • CLP’s Sustainability Reporting (2011) Integrated Annual Report Sustainability Report – Online Full VersionGroup Environmental Affairs 3
    • It’s A Journey… ESG Reporting Integrated Reporting Setting 1 2 integrated Setting Setting indicator 3 new ESG targets standards targets & methods Monitoring 4 ESG Monitoring indicators integrated Developing indicators Building & choosing awareness integrated & learning indicators Choosing ESG indicators 2002 2011Group Environmental Affairs 4
    • Sustainability and Integrated Reporting Publish reports and documents to:  reach out to specific stakeholder groups   for specific purposes Hence:  Our Sustainability Report is a voluntary document that  focuses on reaching out to non‐governmental organizations,  academia & students and the general public  to provide an annual performance report primarily on our  environmental and social performance, as well as a bit of our  financial and governance performance  Our Annual Report is a compliance document that  focuses on reaching out to our shareholders/investors, regulators,  lenders, business partners and financial analysts  to provide an annual performance report primarily on our financial  and governance performance, as well as environmental and social  performance that is material to our businessGroup Environmental Affairs 5
    • Objectives Of Piloting The Guidelines Our Integrated Annual Report focuses on investors: Historical focus of our  ESG communications primarily on non‐governmental organizations, general  community/public , very little on shareholders/investors  Help satisfy enlightened investors (small portion), sustainability indices, investor  surveys e.g. CDP  Inform/educate the less enlightened ones (help justify our investments for long  term) Improving our communications to our stakeholders on how we deal with  ESG issues: Although managing ESG risks and opportunities is a part of our  DNA, we need to be better at communicating what, how and why we do  what we do, to secure the trust we currently have with our communities.   Embedding ESG reporting that is material to the business into the Annual Report  can help send the message that ESG is not philanthropy and has a solid business  case Group Environmental Affairs 6
    • Piloting The Guidelines Eliminating one printed document: 9 years of printed sustainability reports.   It is time for an online‐only version of the report targeted for stakeholders  other than investors.  Further improve and strengthen how we integrate ESG considerations into  our daily decision‐making processes : Operationally, we already have  processes in place (like IC sign‐off), but still relatively less cross‐dept  interaction/understanding  We already have the normal AR/SR joint preparation process but the content  and perhaps members of the meetings/discussions will change (maybe more  participants and meetings than before)   Starting to look into linking reporting prep process to the business planning  process  Explore more relevant integrated metrics, e.g. CO2/$EBIDTAGroup Environmental Affairs 7
    • International Integrated Reporting CouncilGroup Environmental Affairs 8
    • International Integrated Reporting CouncilGuiding Principles & Content Elements Guiding Principles Content ElementsGroup Environmental Affairs 9
    • The Guiding Principles‐ Strategic Focus & Future Orientation  Usually already have a vision and strategic objectives & business  plans developed around them  Challenge: being able to communicate them along with the  justification behind them, but without giving away strategically  competitive info   Way forward: identify the risks & opportunities landscape,  particularly with ESG relevance; strike a balance on the level of detail  of the business development plans to be divulged (consult/agree  with internal stakeholders)Group Environmental Affairs 10
    • The Guiding Principles‐ Connectivity of Information  May have all the major pieces of information, but being reported and/or  managed in departmental/functional silos without clear connectivity to  strategic objectives  Challenge: being able to communicate the complexity of the multiple  interrelationships between different types of information & data (vertically  from strategic objectives to planned activities, and horizontally across different  functional areas, e.g. financial implications of emissions levies)   Way forward: increase cross‐departmental understanding & decision‐making  through more discussion/synergy in daily operations (through organizational  structure or process); develop more cross‐functional KPIs (& targets); bring  in/develop communications expertise to improve upon current methods of  communicationsGroup Environmental Affairs 11
    • The Guiding Principles‐ Responsiveness & Stakeholder Inclusiveness  Current social media channels has changed the rate and level of  sophistication at which stakeholders expectations are evolving  Challenge: being able to communicate accurate facts and our  challenges in a manner to build trust   Way forward: continue sharing our failures and challenges and  exploring/developing solutions together (empower our stakeholders  with the right knowledge so that they can make the right decisions to  support us in developing a more sustainable future for everyone) Group Environmental Affairs 12
    • The Guiding Principles‐ Conciseness, Reliability & Materiality  Keeping in mind the objective to communicate to different stakeholder  groups in order to manage their changing expectations  Challenge: increasing dilemma of targeting multiple stakeholder groups  with increasing and evolving reporting scope requirements but using  more concise documents  Way forward: focus the integrated report on our shareholders (&  continue with different documents to target different stakeholder  groups so that we can address the topics most material to the relevant  stakeholder groups in a timely and concise manner) Group Environmental Affairs 13
    • Getting Started Overview Of The 7 Stages (Process Components) 1. Identifying your starting point 2. Planning your exploration 3. Engaging with stakeholders 4. Identifying report content 5. Assessing systems 6. Preparing the report 7. Continuing with your exploration Some are interlinked or progressed in parallel Some may be in a different order depending on company and/or  from year to year Group Environmental Affairs 14
    • Progress on the 7 Stages/Process Components Year 1: 1. Planning your exploration 2. Identifying your starting point All stages 3. Identifying report content Engaging with 4. Preparing the report stakeholders -External 5. Continuing with your  -Internal exploration by gathering  lessons learned In year 1, securing senior management support comes first in the  exploration stage both in terms of budget, authoritative commitment  & agreed timeline Engaging stakeholders runs parallel throughout all stages Group Environmental Affairs 15
    • Progress on the 7 Stages/Process Components Year 1: Year 2: 1. Planning your exploration 1. Identifying your starting point 2. Identifying your starting point 2. Planning your exploration 3. Identifying report content 3. Identifying report content 4. Preparing the report 4. Assessing systems 5. Continuing with your  5. Preparing the report exploration by gathering  6. Continuing with your  lessons learned exploration by gathering  lessons learned In year 2, identifying starting point from previous year’s lessons  learned was a natural first step and looking at assessing/developing  systems for reporting cycle began Group Environmental Affairs 16
    • Group Environmental Affairs 17
    • Why Do We Report?Our Values…  Company values to honor our commitments to our stakeholdersGroup Environmental Affairs 18
    • Why Do We Report? Reporting Drive Engage Performance Stakeholders Reporting contributes to risk management, e.g. regulatory compliance, reduce  exposure to regulatory risks and enhances corporate reputationGroup Environmental Affairs 19
    • Why Do We Report? Enhanced public awareness  increases pressure to improve  performance and transparency Drive Engage Performance Stakeholders Example: • Increasing number of external surveys, questionnaires and queries (mostly  relating to socially responsible investments) are benchmarking us and are  increasing scrutiny of our performance and transparencyGroup Environmental Affairs 20
    • Responding To External SurveysCLP provides environmental performance metrics to a number of  international surveys • Listed on DJSI Asia Pacific since March 2009. • The only HK company on DJSI Asia Pacific 40 Group Environmental Affairs 21
    • Why Do We Report? Example:Making a commitment  • Climate Vision 2050 targets public increases  pressure to deliver Makes sure everyone in the  Drive company is on the same  Performance page on our policies,  practices & goals Creates opportunity to  Examples: align systems, policies &  • Group Flue Gas Desulphurisation  Policypractices across the Group • ISO14001 Certification Policy Group Environmental Affairs 22
    • Awards and recognition helps Why Do We Report? communicate our  achievements and influence  our brand & reputation Stakeholders play an  important role in helping  2011 Examples: us set the rules and  • Listed on the  directions for our  DJSI Asia Pacific  operations. They  40 • Listed amongst  influence our brand  CDP Top  reputation and  Engage disclosure  regulatory compliance scores (6th) for  requirements.  Stakeholders Asia ex‐Japan  Global 500  companies Examples: • Study of Wind Energy Resources  Communications, support and  over HK, by the Environmental  collaboration with stakeholders can help  Central Facility (ENVF) of HKUST build a better foundation for reasonable  • Sustainable Energy Curriculum, for  compliance requirements HK secondary schoolsGroup Environmental Affairs 23
    • Why Do We Report?If you don’t report, sometimes someone else will guess your  emissions… Made massive errors in reporting CO2 emissions from Castle Peak (and other CLP facilities) “ So far, out of the 50,000 plants listed only one meaningful discrepancy has been identified: China Light and Power (CLP)… informed us that its massive Castle Peak power plant...emitted significantly less CO2 than the CARMA estimate... CLP presented audited records to support this assertion and the CARMA team quickly made adjustments.” Unfortunately, retractions are rare and damage already done..Group Environmental Affairs 24
    • Towards Reporting of Integrated Metrics Desired  Principles     Existing  Economic  Social Value Resource Use Environmental  Etc.? Measures Value ImpactDevelop & Use  Units of  #employees / Metrics Linking  Output unit of output ESG that is  Material to  $Profit CO2 / $ profit Business  Performance $Costs Etc.? Developing Integrated Indicators Material To Business/Company Some examples….. Group Environmental Affairs 25