Approaching Integration from the Investor and the Company Perspective

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A presentation by Sean Gilbert at TBLI CONFERENCE EUROPE 2008.

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  • Approaching Integration from the Investor and the Company Perspective

    1. 1. Reaching Investors with the GRI Guidelines
    2. 2. + Sector Supplement Annexes The GRI reporting framework
    3. 3. Declared use of the GRI Guidelines
    4. 4. Perspectives on Sustainability Reporting <ul><li>The Business Case </li></ul><ul><li>Net Asset Value and Market Value Gap </li></ul><ul><ul><li>Corporate governance </li></ul></ul><ul><ul><li>Intangibles: reputation and brand </li></ul></ul><ul><ul><li>License to operate / public trust </li></ul></ul><ul><ul><li>Cost of capital </li></ul></ul><ul><li>The limits of conventional reporting </li></ul><ul><ul><li>Risks and opportunities </li></ul></ul><ul><li>Integrated value reporting </li></ul><ul><li>The Public Policy Case </li></ul><ul><li>Social and environmental capital </li></ul><ul><ul><li>No free lunch </li></ul></ul><ul><ul><li>“ Joules law”: nothing disappears </li></ul></ul><ul><li>Full cost accounting </li></ul>
    5. 5. Sustainability Matters for Business
    6. 6. How do investors use ESG information? <ul><li>Screening </li></ul><ul><li>Engagement </li></ul><ul><li>Finding alpha </li></ul>
    7. 7. What Gets Integrated? <ul><li>New regulations </li></ul><ul><ul><li>E.g., carbon emissions trading </li></ul></ul><ul><li>New consumer preferences </li></ul><ul><ul><li>E.g., organic foods, hybrid cars </li></ul></ul><ul><li>New market costs </li></ul><ul><ul><li>E.g., increasing cost of fossil fuels </li></ul></ul><ul><li>When it becomes a matter of character and trust </li></ul>
    8. 8. How Does it Get Integrated? <ul><li>Index approaches and adjusting one factor </li></ul><ul><li>Scenarios </li></ul><ul><li>Items with new costs (e.g., carbon emissions, regulatory compliance) </li></ul><ul><li>Quality of Management </li></ul><ul><li>Thematic funds </li></ul>
    9. 9. What conclusions do people draw? <ul><li>Short-term risks (e.g., protests, spills, etc.) </li></ul><ul><li>Quality of management </li></ul><ul><li>The company’s ability to grow over the longer-term </li></ul><ul><li>Emerging or ongoing costs or liabilities (e.g., soil remediation) </li></ul>
    10. 10. How Does a Company See It? Enablers Value Drivers Financial Results ESG Supply Chain Labor Standards Customer Loyalty Sales (Market share) (Pricing premiums)
    11. 11. How Does a Corporate Manager Work? Disaster/Risk New business idea Routine Good Management
    12. 12. The Gap in Today’s Measurement Enablers Value Drivers Financial Results Supply Chain Labor Standards Customer Loyalty Sales (Market share) (Pricing premiums)
    13. 13. The Gap in Today’s Reporting <ul><li>Link to business is not clear </li></ul><ul><li>Priorities are not clear </li></ul><ul><li>Data is not comparable enough </li></ul><ul><li>Different languages for talking about business strategy and sustainability strategy </li></ul><ul><li>Hard to explain why it is good business </li></ul>
    14. 14. Using the G3 to reach investors <ul><li>CEO Statement </li></ul><ul><ul><li>Vision & Strategy </li></ul></ul><ul><ul><li>External trends </li></ul></ul><ul><ul><li>Priorities </li></ul></ul><ul><ul><li>Outlook </li></ul></ul><ul><li>Analysis </li></ul><ul><ul><li>Key risks & oppty </li></ul></ul><ul><ul><li>Targets and results </li></ul></ul><ul><li>Table of data </li></ul><ul><li>Verification statement </li></ul>Strategy & Analysis Full Report
    15. 15. What Can be Measured Financially? Internal Interest Public Interest Financially Quantifiable Qualitative Judgment Carbon Emissions Soil Pollution Liabilities Supply Chain Labor Practices Ecosystem Health Legal fines
    16. 16. … but Analysts Often Work Qualitatively
    17. 17. Please Contact Us! Sean Gilbert [email_address] Ph: +31-20-531-0004 Visit us online at www.globalreporting.org

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