Finding value in non-financial reporting

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This presentation was given at the annual meeting of Boston College's Center for Corporate Citizenship (BCCCC) on April 12, 2011.
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Finding value in non-financial reporting

  1. 1. Sustainability Reporting Trends Global Reporting Initiative Finding th V l i N Fi di the Value in Non- Financial Reporting April 2011 Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org +1 212 339 0356
  2. 2. What is non- nonfinancial reporting?
  3. 3. Comes in all shapes & sizes CSR - Corporate Social Responsibility SD - Sustainable Development ES - Environmental Sustainability y BE - Business Ethics CE - Corporate Ethics p CG - Corporate Governance ESG - Environmental, Social & Governance IR - Integrated reporting What is your “Footprint”? Footprint ?© GRI 2011
  4. 4. Who Wh really cares? ll ?© GRI 2011
  5. 5. Increasing Stakeholders andDemandModern DueDiligence© GRI 2011
  6. 6. WhatWh t are we seeing? i ?© GRI 2011
  7. 7. GRI’s Vision & MissionGRI’s VisionA sustainably global economy whereorganizations manage their economic,environmental, social and governanceperformance and impacts responsibly andreport transparently.GRI’s MissionTo make sustainability reporting standardpractice by providing guidance and supportto organizations. © GRI 2011
  8. 8. Fortune 250 Survey October 2008• 80% of Global Fortune 250 companies now release CR data • Doubled since 2005 - up from 37% p • Increasingly driven by economic concerns• 74% of top 100 US companies published corporate responsibility (CR) information in 2008 either as part of their annual financial report or as a separate document• Reasons cited: • 70% cited ethical considerations as primary driver for CR disclosures • 50% cited economic concerns as the leading reason• GRI is used by: • 77% of G250 • 69% of N100 in 22 countries © GRI 2011
  9. 9. GRI Reporting Trends2000 Year # of Growth reports rate 18181800 US Reporters in 1999 1999 11 2000 44 300%1600 •Bristol-Myers Squibb Bristol Myers 1491 2001 122 177%1400 •GM 2002 2003 139 166 14% 20%1200 •P&G 2004 274 65% 1116 •Sunoco S 2005 2006 373 516 36% 38%1000 2007 709 37% 800 2008 1116 58% 709 2009 1491 34% 600 516 2010 1818 22% 373 400 274 • 586 first- 200 139 166 11 44 122 time reporters 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 in 2010. G2 G3 © GRI 2011
  10. 10. GRI Reporters(North American Sample) © GRI 2011
  11. 11. Why should this y matter to you?© GRI 2011
  12. 12. As a buyer what information buyer, do you expect? When you buy a house, acar, a product or service . . . d t i What information do you deserve?Is it useful & comparable?© GRI 2011
  13. 13. Shareholder Initiatives &Coalitions Principles for Responsible Investment (PRI) [2006] Currently represents over $22 Trillion in investment capital 800+ signatories Investor Network on Climate Risk (INCR) [2003] Currently represents over $9 Trillion in investment capital 90+ members Carbon Disclosure Project (CDP) [2002] Currently represents over $71 Trillion in investment capital act on behalf of 551 institutional investors Institutional Investors Group on Climate Change (IIGCC) [2001] Currently represents $6 Trillion in investment capital 70 members Interfaith Center on Corporate Responsibility (ICCR) [1972] Currently represents over $100 Billion 300 members© GRI 2011
  14. 14. GRI Reporters - Databasehttp://www.globalreporting.org/GRIReports/GRIReportsList/ © GRI 2011
  15. 15. ESG Analysis of Tech SectorApple pp x x 7.95CA ---Dell x x x x 6.14EMC x 6.86 6 86Fujitsu x ---HP x x x 7.74Intel x x x x 7.96IBM x x x 7.60Microsoft x x x x 6.54 6 54Toshiba --- X Updated 2010 © GRI 2011
  16. 16. Technology Hardware Technology Software & Services Social Corporate Overall 2010 Company Environment Governance ESG Score Leadership d hi Employees l Stakeholders k h ld Apple 28 3 11 7 14 63 CA, Inc. 25 4 14 16 9 68 Dell 27 8 16 8 21 80 EMC 26 5 19 12 14 76 Fujitsu 13 7 10 10 18 58 HP 26 8 16 10 25 85 Intel n/a n/a n/a n/a n/a n/a IBM 24 9 20 12 20 85 Microsoft 29 7 15 17 15 83 Toshiba 19 7 13 10 18 67Maximum score 30 10 30 15 30 115 (possible) © GRI 2011
  17. 17. Market Evolution300,000+ subscribersglobally3,500+ companies andclimbingESG Aspects•Emissions•Energy Consumption•Human Rights•Policies•Board Make Up Board Make-UpBuilt around GRI © GRI 2011
  18. 18. How do they compare? (FY2008) ESG Total Energy Community % Total GHG Total WasteCompany Disclosure Consumption spending Independent (‘000 tonnes) (‘000 tonnes) Score (‘000 Mwh) (mln US$) directors Apple 37.96 130.00 247 2.2 --- 87.50%CA, Inc. 40.28 --- --- --- 5.26 91.67% Dell 53.24 528.54 --- 90.66 26.40 83.33% EMC 44.91 371.62 727.51 --- --- 81.82% Fujitsu 45.83 ---- 13798 33.95 --- 20.00% HP 45.83 1713 --- 91.83 46.20 90.00% Intel 66.20 3500 5643 83.80 102 83.33% IBM 52.31 2500 6598 103.13 179.30 91.67%Microsoft 43.06 257.7 192.79 --- 865.20 80.00% NEC 59.26 1980 --- 48.00 7.90 33.33%Toshiba 51.39 3510 16138 281.52 --- 28.57%© GRI 2011
  19. 19. Why should this y matter to you?© GRI 2011
  20. 20. NASDAQ OMX Sustainability Index© GRI 2011
  21. 21. 100% 120% 140% 160% 180% 60% 80% 0-Jan-00 12-Feb-04 25-Mar-04 6-May-04 17-Jun-04© GRI 2011 29-Jul-04 9-Sep-04 21-Oct-04 2-Dec-04 13-Jan-05 24-Feb-05 7-Apr-05 19-May-05 30-Jun-05 11-Aug-05 22-Sep-05 3-Nov-05 15-Dec-05 26-Jan-06 9-Mar-06 20-Apr-06 1-Jun-06 13-Jul-06 DOW JONES SUSTAINABILITY INDEX 24-Aug-06 5-Oct-06 16-Nov-06 28-Dec-06 8-Feb-07 22-Mar-07 3-May-07 14-Jun-07 26-Jul-07 6-Sep-07 18-Oct-07 29-Nov-07 10-Jan-08 21-Feb-08 3-Apr-08 15-May-08 26-Jun-08 7-Aug-08 18-Sep-08 30-Oct-08 11-Dec-08 22-Jan-09 5-Mar-09 DOW JONES INDUSTRIAL AVERAGE 16-Apr-09 28-May-09 9-Jul-09 20-Aug-09 1-Oct-09 12-Nov-09 Dow Jones – Ind. Avg. vs. SI Source: Bloomberg 24-Dec-09
  22. 22. Bloomberg – Reporters vs. Non © GRI 2011
  23. 23. How else can you find value?Supply ChainFinancial Markets, Private Equity & ExchangesIntegrated ReportingGovernment UptakeG4 Development © GRI 2011
  24. 24. Supply Chain Ripple Customer Training Suppliers GRI Stakeholders© GRI 2011
  25. 25. Mainstream Uptake (May 14, 2010) © GRI 2011
  26. 26. Mainstream Uptake (Jan 31, 2011)© GRI 2011
  27. 27. International IntegratedReporting Committee (IIRC) http://theiirc.org© GRI 2011
  28. 28. Early Adopters of IntegratedReporting © GRI 2011
  29. 29. Global Regulatory Review "More governments are making sustainability reporting mandatory.“• 142 regulatory i t l t instruments taddressing sustainabilityreporting exist in the 30 p gcountries• 65 percent of the standardsare classified as mandatory, therest are considered voluntary © GRI 2011
  30. 30. What b t Wh t about G4?© GRI 2011
  31. 31. Global Reporting Initiative Thank youMike WallaceDirector, Focal Point USAGlobal Reporting Initiativewallace@globalreporting.orgwallace@globalreporting org+1 212 339 0356

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