Retail Industry Leaders Association (RILA) oct 2011

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Sustainability reporting trends and the retail industry

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Retail Industry Leaders Association (RILA) oct 2011

  1. 1. Sustainability Reporting Trends Retail Industry Leaders Association (RILA) October 12 14 2011 12-14, Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org +1 212 339 0356Venue, Date
  2. 2. What is the cu e a s e current situation?
  3. 3. 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 ?
  4. 4. WhoWh really cares? ll ?
  5. 5. Increasing Stakeholders and Demand Modern Due Diligence
  6. 6. How dH does GRI h l ? help?
  7. 7. 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.
  8. 8. 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.
  9. 9. WhatWh t are we seeing? i ?
  10. 10. 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
  11. 11. GRI Reports by Region 2010* O Oceania i Af i Africa 4% 3% Northern America 14% Europe 45% Latin America 14% Asia 20%
  12. 12. GRI Reports by Sector 2010*300250200150100 50 0
  13. 13. WhoWh are these Reporters? th R t ?
  14. 14. GRI Reports Listhttp://www.globalreporting.org/GRIReports/GRIReportsList/
  15. 15. GRI Reporters(North American Sample)( p )
  16. 16. 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
  17. 17. Reporting Trends p gTextile and Apparel Sector
  18. 18. GRI Reports List ReviewOrganization Country Region SectorTeijin Japan Asia Textiles and ApparelAdidas Germany Europe Textiles and ApparelNike United States of America Northern America Textiles and ApparelPuma Germany Europe Textiles and ApparelInterf ace United States of America Northern America Textiles and ApparelThe Timberland Company United States of America Northern America Textiles and ApparelAksa Akrilik Turkey Asia Textiles and ApparelGrupo Cortef iel Spain Europe Textiles and ApparelTOPKAPI IPLIK SAN. ve TIC. Turkey Asia Textiles and ApparelArt on Stitch Thailand Asia Textiles and ApparelEcologic Designs United States of America Northern America Textiles and ApparelImpahla Clothing South Af rica Af rica Textiles and ApparelLindex Sw eden Europe Textiles and ApparelLiupanshui Minyiyuan Business and China Asia Textiles and ApparelTrade Company Ltd.Shunde Hengf a Knitting Garment China Asia Textiles and ApparelSuzi Products South Af rica Af rica Textiles and ApparelVimal Clothing South Af rica Af rica Textiles and ApparelCentral Textiles Group China Asia Textiles and ApparelDelta Galil Israel Asia Textiles and ApparelLindström Oy Finland Europe Textiles and ApparelDesigual Spain Europe Textiles and ApparelGildan Canada Northern America Textiles and ApparelGoLite LLC United States of America Northern America Textiles and ApparelMarui Group Japan Asia Textiles and ApparelMilteks Turkey Asia Textiles and ApparelPhillips-Van Heusen (PVH) United States of America Northern America Textiles and ApparelSLN Tekstil ve Moda San.Tic.Ltd.Sti. Turkey Asia Textiles and ApparelSree Santhosh Garments (SSG) India Asia Textiles and ApparelSw itcher Sw itzerland Europe Textiles and ApparelTubas Textile Turkey Asia Textiles and ApparelCALIDA Sw itzerland Europe Textiles and ApparelCELTIC ESTORES, S.L Spain Europe Textiles and ApparelHansoll Textile Republic of Korea Asia Textiles and Apparel
  19. 19. GRI Global Reporting by Region p g y g Textile and Apparel Companies Breakdown by Region Retailers B kd R t il Breakdown b R i by Region
  20. 20. Example of Global Reporters
  21. 21. Example of North American Reporters
  22. 22. What does a G Report a GRI epo look like?
  23. 23. “The GRI offers a comprehensiveframework for reporting acompany’s impacts and activities”Nike FY04 Report “We developed this report with reference to the Global Reporting Initiative’s third generation of indicators. Based upon our assessment of Reporting and the GRI criteria, we b li it i believe our reporting achieves B-level application of the GRI.” Nike FY07-09 Report
  24. 24. “...the Global Reporting Initiative (GRI), arguably theworld’s most credible and trusted framework forcorporate responsibility reporting” GoLite Website t ibilit ti ”
  25. 25. “In 2005 and 2006, Gap Inc.Participated in the GRI’sworking group to develop anApparel and F tA l d Footwear S tSectorSupplement that wouldintroduce a reportingframework spec c to the a e o specific o eissues in our industry. TheGRI’s new G3 guidelines andthe draft GRI Apparel andfootwear Sector Supplementhelped guide us throughoutthe development of this pReport” GAP 2005 Report
  26. 26. “At Target, we recognize the a ge , e ecog e eGRI index as one of themost credible and widelyused reporting standards,and believe it helps bringfocus to our continued andevolving work as aresponsible corporate p pcitizen” Target Website
  27. 27. “The framework we have used tomeasure and report our results phas been adopted from the GlobalReporting Initiative (GRI) G3Guidelines” HBC Report 2010
  28. 28. How ca you make the o can a e e business case?
  29. 29. 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 ?
  30. 30. 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
  31. 31. 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
  32. 32. Signatories to the UN 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
  33. 33. How would you conduct y due diligence?Can any of this really be measured?
  34. 34. 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
  35. 35. 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
  36. 36. Market Evolution300,000+ data terminalsglobally5,000+ companies andclimbingSustainability Aspects• Emissions• Energy Consumption• Human Rights• Policies• Board Make Up Make-UpBuilt around GRI
  37. 37. 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
  38. 38. Environmental CriteriaCompany 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
  39. 39. Social & GovernanceCompany 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
  40. 40. 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.”
  41. 41. Sustainability Performance Source: Bloomberg
  42. 42. NASDAQ OMX Sustainability Index
  43. 43. Bloomberg – Reporters vs. Non
  44. 44. 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
  45. 45. GRI Developments & Trends• Government Uptake• Supply Chain• Financial Markets, Private Equity & Exchanges• Integrated Reporting• G4 Development
  46. 46. 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
  47. 47. Business Transparency on Trafficking and Slavery ActNew Legislation There are only a few months left before California’s Transparency in Supply Chains legislation goes into effect in January 2012.Who will this affect? The legislation (SB657 for short) impacts all retailers operating in California that generate over 100 million in annual gross receipts receipts.What does it require? It requires “conspicuous” public disclosure of the actions companies are taking to prevent Human Trafficking and modern day slavery in their supply chains.
  48. 48. Supply Chain Ripple Customer Training Suppliers GRI Stakeholders
  49. 49. Mainstream UptakeMay 2010May 2010 January 2011 January 2011
  50. 50. International Integrated Reporting Committee (IIRC) http://theiirc.org
  51. 51. Early Adopters of Integrated Reporting
  52. 52. CoContinuous Improvement: uous p o e e G4 Development
  53. 53. 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)
  54. 54. How can GRI support your efforts?
  55. 55. GRI PublicationsGRI Guidelines & Template:GRI Learning Publications:Research and Development Publications Publications…
  56. 56. GRI Publications• GRI’s research & development publication  series• Linkage documents
  57. 57. Sector SupplementsAvailable: 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 * Under Development
  58. 58. 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
  59. 59. GRI Certified Software & Tools Program • PE International     • SAP                       • S2D2                       • Microsoft                 • EnviroCIP • Enablon • CSRware • CA Inc • Tofuture Oy • CSR Nordic ApS • SRI World Group • Oracle America
  60. 60. Organizational Stakeholders
  61. 61. Thank you Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org +1 212 339 0356 Twitter: M_A_Wallace Linked In: http://www.linkedin.com/in/mikewallace http://www linkedin com/in/mikewallaceVenue, Date

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