TVA Utilility Forum - North Amer Sept 2011

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Presentation to 100+ North American utility experts about GRI reporting.

Presentation to 100+ North American utility experts about GRI reporting.

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  • 1. Sustainability Reporting Trends Sustainability Reporting Trends Utility Environmental y Benchmarking Forum September 2011 Mike Wallace Director, Focal Point USA Global Reporting InitiativeVenue, Date wallace@globalreporting.org +1 212 339 0356
  • 2. Why should this matter to y s ou d s a e o you?
  • 3. As a buyer, what information do you expect?When you buy a house, a car, a product or service . . . i What i f Wh t information do you d ti d deserve? ?DoD you want it to be useful & comparable? t t b f l bl ?
  • 4. What is the cu e a s e current situation?
  • 5. Range of Terminology g gy• CSR - Corporate Social Responsibility• CC - Corporate Citizenship p p• SD - Sustainable Development• ES - Environmental Sustainability• BE - Business Ethics• CE - Corporate Ethics• CG -CCorporate Governance t G• ESG - Environmental, Social & Governance• IR - Integrated reporting What is your “Footprint”? Footprint ?
  • 6. WhoWh really cares? ll ?
  • 7. Increasing Stakeholders and Demand Modern Due Diligence
  • 8. 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
  • 9. Signatories to the UN PRI (US)800800+ international signatories PARTIAL LIST OF ASSET OWNERS (200): • AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan • CalPERS CalSTRS C lPERS / C lSTRS • Connecticut Retirement Plans and Trust Funds (CRPTF) • General Board of Pension and Health Benefits United Methodist Church • Illinois State Board of Investments • Los Angeles County Employees Retirement Association (LACERA) • Maryland State Retirement and Pension System • New York City Employees Retirement System / New York State Local Retirement System • SEIU Pension Plans Master Trust • State Universities Retirement System of Illinois • Teachers Retirement System of the City of New York • Universal Health C Care Foundation of C f Connecticut
  • 10. Signatories to the PRI (US)800800+ international signatoriesPARTIAL LIST OF INVESTMENT MANAGERS:• BlackRock• Calvert Investments • Boston Trust• CBRE Investors • Capital Group International• Domini Social Investments • Clear Bridge Advisors• JPMorgan Asset Management • MFS Investment• Kohlberg Kravis Roberts & Co, LLP Management• Krull C K ll & Company • Principal Global Investors• Northern Trust Global Investments • T. Rowe Price• Prudential Real Estate Investors • Tower Capital Asset• Russell Investments Management LP• TD Asset Management Inc.• The Townsend Group• TIAA - CREF
  • 11. Mainstream Involvement
  • 12. How would you conduct y due diligence?Can any of this really be measured?
  • 13. Analysis of Tech SectorAppleA l x x 7.95 CA ‐‐‐Dell x x x x 6.14EMC x 6.86Fujitsu x ‐‐‐HP x x x 7.74Intel x x x x 7.96IBM x x x 7.60 7 60Microsoft x x x x 6.54Toshiba ‐‐‐Based on 2010 information
  • 14. Analysis of Tech Sector 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 67 Maximum 30 10 30 15 30 115 ScoreBased on 2010 information
  • 15. Market Evolution300,000+ data terminalsglobally5,000+ companies andclimbingSustainability Aspects• Emissions• Energy Consumption• Human Rights• Policies• Board Make Up Make-UpBuilt around GRI
  • 16. ESG Disclosure ScoreCompany Name  Environmental Disclosure  Social Disclosure Score Governance Disclosure Overall ESG  Score Score Disclosure Score  2010 2009 2010 2009 2010 2009 2010 2009 Apple ‐‐‐ 12.40 ‐‐‐ 8.77 ‐‐‐ 51.79 ‐‐‐ 20.66 CA, Inc. na na 3.51 3.51 46.43 46.43 11.57 11.57 Dell 37.98 37 98 40.31 40 31 29.82 29 82 38.60 38 60 51.79 51 79 57.14 57 14 39.26 39 26 43.80 43 80 EMC ‐‐‐ 54.26 ‐‐‐ 42.11 ‐‐‐ 66.07 ‐‐‐ 54.13 Fujitsu 55.04 55.04 47.37 45.61 57.14 57.14 53.72 53.31 HP ‐‐‐ 44.19 ‐‐‐ 43.86 ‐‐‐ 57.14 ‐‐‐ 47.11 Intel ‐‐‐ 46.51 ‐‐‐ 50.88 ‐‐‐ 75.00 ‐‐‐ 54.13 IBM ‐‐‐ 41.09 41 09 ‐‐‐ 40.35 40 35 ‐‐‐ 51.79 51 79 ‐‐‐ 43.39 43 39 Microsoft 11.63 na 36.84 14.04 57.14 46.43 28.10 14.05 Toshiba 53.49 56.59 36.84 36.84 53.57 51.79 49.59 50.83
  • 17. Environmental Criteria - BloombergCompany Environmental  Total Energy  Total GHG Emission Water Consumption Total Waste Names  Disclosure   Consumption (Th Tonnes)   (Thousands of cubic  (Thousands of metric  Score (Mwh) meters) tons) 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 Apple ‐‐‐ 12.40 ‐‐‐ n/a ‐‐‐ 9542.00 ‐‐‐ n/a ‐‐‐ n/a CA, Inc. CA Inc n/a n/a ‐‐‐ ‐‐‐ n/a n/a ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ Dell 37.98 40.31 676.00 619.90 366.19 406.25 1596.00 1683.00 52.61 100.00 EMC ‐‐‐ 54.26 ‐‐‐ 932.51 ‐‐‐ 386.26 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ Fujitsu 55.04 55.04 6638.90 7713.89 273.00 428.00 23106.00 24569.00 32.44 29.71 HP ‐‐‐ 44.19 ‐‐‐ 4046.00 ‐‐‐ 1951.00 ‐‐‐ 7647.00 ‐‐‐ 124.48 Intel ‐‐‐ 46.51 ‐‐‐ 5110.00 ‐‐‐ n/a ‐‐‐ 30379.32 ‐‐‐ 44.48 IBM ‐‐‐ 41.09 ‐‐‐ 6323.06 ‐‐‐ n/a ‐‐‐ ‐‐‐ ‐‐‐ 87.33Microsoft 11.63 n/a ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐Toshiba 53.49 56.59 15398.33 15856.11 3078.00 3435.00 52930.00 55800.00 2610.00 291.00
  • 18. Social & Governance Criteria - BloombergCompany Social Disclosure Score Governance Disclosure score Name % Employees Community % Independent % Women on Score 2010 Score 2009 Score 2010 Score 2009 Unionized Spending Directors Board ( (Mn $) 2 2 2 2 2010 2009 2010 2009 2010 2009 2010 2009 Apple ‐‐‐ 8.77 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 51.79 ‐‐‐ 85.71 ‐‐‐ ‐‐‐CA, Inc. 3.51 3.51 ‐‐‐ ‐‐‐ n/a n/a 46.43 46.43 88.89 90.00 22.22 20.00 Dell 29.82 38.60 ‐‐‐ ‐‐‐ 27.43 40.89 51.79 57.14 81.82 83.33 ‐‐‐ ‐‐‐ EMC ‐‐‐ 42.11 ‐‐‐ 0.00 ‐‐‐ ‐‐‐ ‐‐‐ 66.07 ‐‐‐ 82.00 ‐‐‐ 9.00 Fujitsu 47.37 45.61 46.97 50.35 50.00 20.00 57.14 57.14 30.00 30.00 10.00 0.00 HP ‐‐‐ 43.86 ‐‐‐ ‐‐‐ n/a 52.20 ‐‐‐ 57.14 ‐‐‐ 90.91 ‐‐‐ 18.19 Intel I t l ‐‐‐ 50.88 50 88 ‐‐‐ ‐‐‐ n/a 100.00 100 00 ‐‐‐ 75.00 75 00 ‐‐‐ 90.91 90 91 ‐‐‐ 27.00 27 00 IBM ‐‐‐ 40.35 ‐‐‐ ‐‐‐ n/a 185.90 ‐‐‐ 51.79 ‐‐‐ 92.86 ‐‐‐ 21.42Microsoft 36.84 14.04 0.00 0.00 687.50 516.90 57.14 46.43 78.00 80.00 22.22 20.00ToshibaT hib 36.84 36 84 36.84 36 84 ‐‐‐ ‐‐‐ 189.00 189 00 3000.00 3000 00 53.57 53 57 51.79 51 79 28.57 28 57 28.57 28 57 0.00 0 00 0.00 0 00
  • 19. Bloomberg Survey“With over 300,000 users, the BloombergProfessional service provides a greatopportunity and platform for you to shareinformation with current and potentiali f ti ith t d t ti linvestors concerning your Sustainability orCorporate Social Responsibility program.”“Our survey is based on the guidingprinciples of the GRI framework.”
  • 20. Sustainability PerformanceGRI Reporters Presence: • 95% of the Dow Jones Sustainability Index • 78% of th FTSE4G d f the FTSE4Good • 70% of the Global 100 • 70% of the NASDAQ OMX CRD Sustainability Index
  • 21. Sustainability Performance Source: Bloomberg
  • 22. NASDAQ OMX Sustainability Index
  • 23. Bloomberg – Reporters vs. Non
  • 24. How dH does GRI h l ? help?
  • 25. GRI’s Vision & MissionVisionA sustainable global economy where organizationsmanage their economic, environmental, social andggovernance p performance and impacts responsibly p p yand report transparently.MissionMi iTo make sustainability reporting standard practice byproviding guidance and support to organizations organizations.
  • 26. The GRI Guidelines Environmental • EN 3 - Direct energy consumption by primary energy source Labor • LA 7 - Rates of injury, occupational diseases, lost days and absenteeism, and number of work related fatalities by region. Human Rights • HR 4 - Total number of incidents of discrimination and actions taken Product Responsibility • PR 6 - Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, ad sponsorship. sponsorship Economic • EC 4 – Significant financial assistance received from government.
  • 27. WhatWh t are we seeing? i ?
  • 28. GRI Reporting Trends2000 Year # of Growth 18181800 US Reporters in 1999 reports rate •Bristol-Myers Squibb 1999 111600 •GM 1491 2000 44 300%1400 •P&G 2001 122 177% •Sunoco1200 2002 139 14% 1116 2003 166 20%1000 2004 274 65% 800 2005 373 36% 709 2006 516 38% 600 516 2007 709 37% 373 2008 1116 58% 400 274 2009 1491 34% 200 139 166 122 2010 1818 22% 44 11 0 586 first-time 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 reporters in 2010 G2 G3
  • 29. GRI Reports by Region 2010* O Oceania i Af i Africa 4% 3% Northern America 14% Europe 45% Latin America 14% Asia 20%
  • 30. GRI Reports by Sector 2010*300250200150100 50 0
  • 31. WhoWh are these Reporters? th R t ?
  • 32. GRI Reports Listhttp://www.globalreporting.org/GRIReports/GRIReportsList/
  • 33. GRI Reporters(North American Sample)( p )
  • 34. US Business Roundtable• ABB • ITT• Accenture Johnson & Johnson April 2009• Abbott Johnson Control• Alcoa Life Technologies Corp• American Electric Power McKesson Corp.• AT&T Merck• CB Richard Ellis Group Inc. p Motorola• CH2MHill Companies, Ltd. NexTera (Formerly FPL)• Chevron Office Depot• Chubb Owens Corning• Citi PepsiCo• Coca-Cola Pfizer• Conoco Philips Praxair• Cummins Proctor & Gamble Co.• Darden Ryder• Deloitte Sara Lee April 2010• Dow Chemical SAP USA• Duke Energy SAS• DuPont Southern Company• Eastman Kodak Co. Siemens Corp• EMC Target Corporation• Exxon Mobil Tyco• Freeport M M F t McMoran UAL Corporation C ti• General Electric Weyerhauser• General Motors Whirlpool Corporation• HSBC Williams• IBM Xerox• International Paper
  • 35. What does GRI look like inaction?Varying Perspectives:- Customer/Consumer- Local Community/Mayor- Peer/Competitor- Employer/EmployeeA unique tour of reporting through the economy
  • 36. Social Responsibility Report Social  Responsibility  p y Report
  • 37. Sustainability JourneyCHW Highlights :1996: “Endorsed CeresPrinciples and committed toannual public reporting”2003: CHW started using GRIG3 Guidelines2010: “An Enduring Mission”the title of their last report
  • 38. Topics Covered: Issues Covered: • E i Environmental I di t t l Indicators • Economic Indicators • Social Indicators • Labor Practices and Decent Work • Human Rights g • Product Responsibility
  • 39. What do they buy?What do they want to know?
  • 40. Healthcare Supply Chain Disclosure Issues Covered: • Strategy and analysis • Organizational p g profile • Report Parameters • Governance, Commitments & Engagement • Management Approach and Performance Indicators: o Economic disclosure o Environmental di l E i l disclosure o Labor practices and decent work o Human rights o Society o Product Responsibility P d tR ibilitProduct Responsibility P d tR ibilit
  • 41. Product Responsibility - GEPR1 Life cycle stages in which health and safety  Our products & services Partial impacts of products… Environment PR2  Total number of incidents of non‐compliance  Our products & services Partial with regulations… Environment PR3 Type of product and service information  Product Issues are disclosed on a case‐by‐case basis in the various  required by procedures… i db d sections of the Citizenship Report. Due to the complexity of the  ti f th Citi hi R t D t th l it f th business and ongoing litigation related to its range of products and  services, GE does not formally report this indicator.PR4 Total number of incidents of non‐compliance  GE does not report on this metric. with regulations and… PR5  Practices related to customer satisfaction… GE does not release customer satisfaction data for proprietary and  competitive reasons. More on customers can be found in the Our  Customers section.PR6 Programs for adherence to laws, standards and  Operational Excellence Partial voluntary codes related to marketing… voluntary codes related to marketing Our Products & Services Our Products & ServicesPR7 Total number of incidents of non‐compliance… GE does not report on this metricPR8 Total number of substantiated complaints  GE does not report on this metric regarding breaches of customer privacy…PR9 Monetary value of significant fines for non‐ Any significant legal actions and material regulatory fine/settlements  Full compliance with laws and regulations… are disclosed in our public filings. There were no significant fines for non‐compliance with laws and  regulations concerning the provision and use of GE products and  services during 2009
  • 42. Healthcare Supply Chain Disclosure
  • 43. Healthcare Supply Chain Disclosure Product Responsibility 
  • 44. Healthcare Supply Chain Disclosure Issues Covered: • Economic • Environmental • Labor Practices and Decent Work • Human Rights • Society • Product Responsibility
  • 45. Product ResponsibilityPR1 Life cycle stages in which health and safety  Product Sustainability Review impacts of products…PR2  Total number of incidents of non‐compliance  Safety with regulations… with regulations…PR3 Type of product and service information  Clinical Trials required by procedures… Product UsePR4 Total number of incidents of non‐compliance  with regulations and voluntary codes… with regulations and voluntary codesPR5  Practices related to customer satisfaction…PR6 Programs for adherence to laws, standards and  Product Use voluntary codes related to marketing…PR7 Total number of incidents of non‐compliance… Product UsePR8 Total number of substantiated complaints  regarding breaches of customer privacy…PR9 Monetary value of significant fines for non‐ y g Safety y compliance with laws and regulations… Product Use
  • 46. Supply Chain Disclosure – CloroxProduct safetyProduct sustainability
  • 47. Healthcare Supply Chain Disclosure Issues Covered: I C d • Economic Disclosure • Environmental Disclosure • Social Disclosure • Labor Practices and Decent Work • Human Rights • Society • Product Responsibility
  • 48. Product Responsibility - CloroxPR1 Life cycle stages in which health and safety  if l i hi h h l h d f Pg 24‐25 impacts of products… www.cloroxcsr.com/products‐safetyPR2  Total number of incidents of non‐compliance  N/R with regulations…PR3 Type of product and service information  Pg 25 required by procedures… Corporate Responsibility Report 2010PR4 Total number of incidents of non‐compliance  N/R with regulations and voluntary codes…PR5  Practices related to customer satisfaction… Pg 19‐20 Corporate Responsibility Report 2010PR6 Programs for adherence to laws, standards and  Pg 20  voluntary codes related to marketing… Corporate Responsibility Report 2010PR7 Total number of incidents of non‐compliance… N/RPR8 Total number of substantiated complaints  N/R regarding breaches of customer privacy…PR9 Monetary value of significant fines for non‐ N/R compliance with laws and regulations…
  • 49. Johnson Controls Reporting
  • 50. Johnson Controls Sustainability Journey Highlights: • 2004: Johnson Controls issued their first Sustainability Report using GRI Guidelines • 2005-2009: The issued several Business and Sustainability Reports p • 2010:”Business and Sustainability” the name of their last report • 2011: Next report coming soon
  • 51. GRI IndexHighlights:• Economic• Environmental• L b P ti Labor Practices and D d Decent t Work• Human Rights• Society• Product Responsibility
  • 52. Johnson Controls: Product ResponsibilityCustomer Health and Safety PR1 Life cycle stages in which health and safety impacts of  Life cycle stages in which health and safety impacts of Product Safety Assess  Product Safety Assess products…PR2  Total number of incidents of non‐compliance with  Product Health & Safety Non‐compliance  regulations…Product and Service Labeling Product and Service LabelingPR3 Type of product and service information required by  Product Information Labeling  procedures…PR4 Total number of incidents of non‐compliance with  Labeling Non‐compliance  regulations and… PR5  Practices related to customer satisfaction… Customer Satisfaction Marketing Communications PR6 Programs for adherence to laws, standards and  Marketing Law Programs  voluntary codes related to marketing…PR7 Total number of incidents of non‐compliance… Marketing Non‐compliance Customer Privacy PR8 Total number of substantiated complaints regarding  Customer Privacy Breach  breaches of customer privacy…Compliance PR9 Monetary value of significant fines for non‐ Total Non‐compliance Fines  compliance with laws and regulations…
  • 53. GRI Developments & Trends• Government Uptake• Supply Chain• Financial Markets, Private Equity & Exchanges• Integrated Reporting• G4 Development
  • 54. Global Regulatory Review "More governments are making sustainability "M t ki t i bilit reporting mandatory.“• 142 regulatory instruments addressingsustainability reporting exist in over 30countries• 65% are classified as mandatory, the restvoluntary• United States • WH CEQ - EO 13514 • USPS, US Army, etc…. • GSA • Department of State • SEC
  • 55. US Postal Service
  • 56. US Army
  • 57. Supply Chain Ripple Customer Training Suppliers GRI Stakeholders
  • 58. Mainstream UptakeMay 2010May 2010 January 2011 January 2011
  • 59. International Integrated Reporting Committee (IIRC) http://theiirc.org
  • 60. Early Adopters of Integrated Reporting
  • 61. CoContinuous Improvement: uous p o e e G4 Development
  • 62. G4 Development ProcessConsensus Based Approach:• Call for Sustainability ReportingTopics (closed)• Registration for Public Comment gPeriod (closed)• Open Public Comment Period (90-day - through Nov. 24, 2011)
  • 63. How can GRI support your efforts?
  • 64. GRI Publications GRI Guidelines & Template: GRI Learning Publications:• Research and Development Publications…
  • 65. GRI Publications• GRI’s research & development publication  series• Linkage documents
  • 66. Sector SupplementsAvailable: Under Development: Pilot Version: Electric Utilities Airport Operators Automotive Financial Services Construction & Real  Logistics and  Estate Transportation Food Processing Event Organizers Public Agency Mining & Metals Media Telecommunications NGO Oil & Gas Apparel and Footwear
  • 67. Certified Training Partners g Over 60 certified training partners globally Over 60 certified training partners globally Over 5000 people trained  North America Partners North America Partnerswww.brownflynn.com http://isosgroup.com/ www.leadcanada.net
  • 68. GRI Certified Software & Tools Program • PE International     • SAP                       • S2D2                       • Microsoft                 • EnviroCIP • Enablon • CSRware • CA Inc
  • 69. Organizational Stakeholders
  • 70. GRI Regional Representation Brazil, Australia, India, China & US 2009 2010 2009 2007 2009
  • 71. Thank you Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org +1 212 339 0356 Twitter: M A Wallace M_A_Wallace Linked In: http://www.linkedin.com/in/mikewallaceVenue, Date