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Why We Need to Develop Corporate Sustainability? Pensri Suteerasarn, The Listed Companies Association

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This presentation was part of the ProSPER.Net Leadership Programme 2017 'Building Transformational Leadership Towards the SDGs'

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Why We Need to Develop Corporate Sustainability? Pensri Suteerasarn, The Listed Companies Association

  1. 1. Why we need to develop corporate sustainability? Pensri Suteerasarn President Thai Listed Companies Association July 1, 2017
  2. 2. Greenpeace calls on Thai Union to reject fishing practices that abuse human rights & the environment; company responds
  3. 3. Author: Thai Union …[w]e welcome the work that Greenpeace is undertaking to drive change and improve sustainability through global tuna supply chains…We take issue, however, with some of the claims that Greenpeace is making about Thai Union and its operations. Despite reports, we have policies in place that strictly prohibit the purposeful capture of sharks and the abhorrent practice of shark-finning, and ensure that all of our operations comply with every national and international legal requirement…Through our Business Ethics and Labor Code of Conduct, we uphold strict policies ensuring that anyone employed by Thai Union or within our supply chains is treated with respect; we strive to comply with every law – both national and international - to protect human rights…
  4. 4. Costco and CP Foods face lawsuit over alleged slavery in prawn supply chain 19 August 2015, The Guardian “Legal claim filed in California seeks injunction against US retailer to prevent sale of prawns produced by Thai supplier unless labelled a product tainted by slavery” Human trafficking for forced labour and slavery has become endemic in the Thai fishing sector, a Guardian investigation found last year
  5. 5. Corporate sustainability performance is connected to financial performance?
  6. 6. What percentage of investors do you think would say that a company’s sustainability performance is materially important to their investment decision-making?
  7. 7. Nine in 10 respondents, all professional investors, agreed – at least “to some extent” – with the following statement: “A company’s good sustainability performance is materially important for investors when making investment decisions.”
  8. 8. What is sustainable investing? How does it differ from socially responsible investing? We define sustainable investing as fully integrating environmental, social and governance factors — what we call ESG factors — into investment management. CEO of Pax World Management and the Pax World Funds sustainable investment platform Joseph Keefe
  9. 9. What metrics do you use to assess a company’s sustainability? We look at all kinds of key performance indicators. Under environment, we’ll look at companies’ emissions, disclosures, recycling, energy efficiency, energy use, their carbon footprint and on and on.
  10. 10. Under social issues, we’ll look at whether there are human rights or labor problems in [a company’s] global supply chain. We’ll look at how companies treat women and what they’re doing about gender and equality.
  11. 11. Under governance, we’ll look at CEO compensation, whether there are conflicts between shareholders’ interests and management’s interest, and so forth.
  12. 12. What are the non financial information? The term “nonfinancial information” is often used to refer to data on environmental issues, but in reality it covers a much broader area.
  13. 13. in the marketplace outside of accounting, the term nonfinancial information is used more broadly. Nonfinancial information involves issues related to: sustainability; corporate responsibility; environmental, social and governance (ESG); ethics; human capital; and environment, health and safety (EH&S). Source : The road to reliable nonfinancial reporting, EY
  14. 14. Key challenges The challenges of NFR, and performance management generally, depend on the maturity of the organization: • Starters are just commencing with nonfinancial performance management, typically facing challenges related to definitions, data collection, governance and organizational competence. • Front-runners are advanced users of nonfinancial information, typically facing challenges related to reporting complex supply chain disclosures (e.g., Scope 3 supply chain emissions) and developing the systems and information necessary to enable a practitioner to perform a reasonable assurance engagement. • In between the two are those in the middle-of-the-pack, who are striving to further hone their NFR capabilities. Source : The road to reliable nonfinancial reporting, EY
  15. 15. Common pitfalls Companies face a number of common pitfalls that can impact their ability to develop reliable NFR, including: • Reliance on one individual • Undocumented processes/controls • Making commitments without clearly defining how they will be measured • Internal control environments • Limited formal governance structure over reporting oversight and approvals • Lack of generally accepted estimation methodologies • Lack of baselines and baseline management • Use of unexplained jargon • Boundaries that are unclear and/or inconsistent with financial reporting • Undisclosed uncertainties in data (i.e., the degree of estimation uncertainty in the estimates being made) Source : The road to reliable nonfinancial reporting, EY

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