Sustainability Reporting Trends              “Game Changing Developments”              December 2011              Mike Wal...
What is the cu e  a s e current   situation?
Range of Terminology                g              gy•   CSR   - Corporate Social Responsibility•   CC    - Corporate Citi...
How dH   does GRI h l ?             help?
GRI’s Vision & MissionVisionA sustainable global economy where organizationsmanage their economic, environmental, social a...
The GRI Guidelines    Environmental    • EN 3 - Direct energy consumption by primary       energy source    Labor    • LA ...
WhatWh t are we seeing?               i ?
Corporate Sustainability:A Progress Report  P        R                                                  October 2011      ...
GRI Reports by Region 2010*           O           Oceania                i       Af i                        Africa       ...
GRI Reports by Sector 2010*300250200150100 50  0
WhoWh are these Reporters?       th    R    t ?
GRI Reporters(North American Sample)(                  p )
US Business Roundtable•   ABB                           •   ITT•   Accenture                         Johnson & Johnson    ...
WhoWh really cares?      ll       ?
Increasing Stakeholders and Demand Modern    Due Diligence
Shareholder Initiatives & Coalitions•    Principles for Responsible Investment (PRI) [2006]      – Currently represents ov...
Signatories to the PRI (US)    900+ international signatoriesPARTIAL LIST OF ASSET OWNERS (200):•   AFL CIO Reserve Fund /...
Signatories to the PRI (US)    900+ international signatoriesPARTIAL LIST OF INVESTMENT MANAGERS:•    BlackRock           ...
Mainstream Involvement
Proliferation & Consolidation
How would you conduct           y    due diligence?Can any of this really be      measured?
Sustainability Disclosure Database     http://database.globalreporting.org/                        Research & Benchmarking...
ESG Analysis of Tech SectorApple                        x            x   7.95 CA                                          ...
Technology Hardware  Technology       Software & Services                                            Social               ...
Market Evolution300,000+ data terminalsglobally5,000+ companies andclimbingSustainability Aspects• Emissions• Energy Consu...
Environmental Criteria (2010)Company     Environmental        Total Energy       Total GHG Emission    Water Consumption  ...
Social & Governance (2010)Company                               Social Disclosure Score                                  G...
Sustainability Performance
Sustainability Performance                      Source: Bloomberg
Sustainability PerformanceGRI Reporters Presence:  • 95% of the Dow Jones Sustainability Index  • 78% of th FTSE4G d      ...
GRI Developments & Trends• Government Uptake• Supply Chain• Financial Markets, Private Equity & Exchanges• Integrated Repo...
Global Regulatory Review "More governments are making sustainability "M              t       ki      t i bilit           r...
Business Transparency on        Trafficking and Slavery ActNew US LegislationCalifornia’s Transparency in Supply Chains le...
Supply Chain Ripple          October 14, 2011          “. . . The objective of this contract is           to equip the gov...
Supply Chain Ripple           October 13, 2011           “. . . Microsoft will also            encourage all its suppliers...
Supply Chain Ripple                         Customer              Training       Suppliers                                ...
Mainstream UptakeMay 2010May 2010          January 2011                  January 2011
International Integrated Reporting         Committee (IIRC)             http://theiirc.org
IIRC Participants
Early Adopters of Integrated          Reporting
GRIContinuous IC ti       Improvement                     t
G4 Development ProcessConsensus Based Approach:• Phase I:Call for Sustainability Reporting Topics• Phase II:Registration f...
Thank you              Mike Wallace              Director, Focal Point USA              Global Reporting Initiative       ...
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Measuringsustainabilityperformancejune2011 110628164932 Phpapp02

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90% of Companies Don\’t Do Sustainability Reports in the USA.

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Measuringsustainabilityperformancejune2011 110628164932 Phpapp02

  1. 1. Sustainability Reporting Trends “Game Changing Developments” December 2011 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. How dH does GRI h l ? help?
  5. 5. 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.
  6. 6. 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.
  7. 7. WhatWh t are we seeing? i ?
  8. 8. Corporate Sustainability:A Progress Report P R October 2011 • Reviewed 3400 companies representing the national leaders  from 34 countries around the world, including the 250 largest  global companies • Ninety‐five percent of the 250 largest companies in the world  (G250 companies) now report on their corporate  (G250 companies) now report on their corporate responsibility (CR) activities, two‐thirds of non‐reporters are  based in the US. • CR reporting has gained ground within the Top 100 companies  in each of the 34 countries surveyed. • The total number of reporting N100 companies increased by  The total number of reporting N100 companies increased by 11 percentage points, to 64 percent in 2011.  • Eighty percent of G250 and 69 percent of N100 companies  are now aligning to GRI reporting standards. li i i d d
  9. 9. GRI Reports by Region 2010* O Oceania i Af i Africa 4% 3% Northern America 14% Europe 45% Latin America 14% Asia 20%
  10. 10. GRI Reports by Sector 2010*300250200150100 50 0
  11. 11. WhoWh are these Reporters? th R t ?
  12. 12. GRI Reporters(North American Sample)( p )
  13. 13. 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
  14. 14. WhoWh really cares? ll ?
  15. 15. Increasing Stakeholders and Demand Modern Due Diligence
  16. 16. Shareholder Initiatives & Coalitions• Principles for Responsible Investment (PRI) [2006] – Currently represents over $30 Trillion in investment capital – 900+ signatories 900+ signatories• Investor Network on Climate Risk (INCR) [2003] – Currently represents over $10 Trillion in investment capital – 100+ members 100+ members• Carbon Disclosure Project (CDP) [2002] – Currently represents over $71 Trillion in investment capital – act on behalf of 550+ institutional investors act on behalf of 550+ 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
  17. 17. Signatories to the PRI (US) 900+ international signatoriesPARTIAL LIST OF ASSET OWNERS (200):• AFL CIO Reserve Fund / AFL CIO Staff Retirement Plan AFL‐CIO Reserve Fund / AFL‐CIO Staff Retirement Plan• CalPERS / CalSTRS• Connecticut Retirement Plans and Trust Funds (CRPTF)• General Board of Pension and Health Benefits United Methodist Church General Board of Pension and Health Benefits United Methodist Ch rch• 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 S• SEIU Pension Plans Master Trust• State Universities Retirement System of Illinois• Teachers Retirement System of the City of New York• Universal Health Care Foundation of Connecticut Universal Health Care Foundation of Connecticut
  18. 18. Signatories to the PRI (US) 900+ international signatoriesPARTIAL LIST OF INVESTMENT MANAGERS:• BlackRock • Boston Trust• Calvert Investments                                    • Capital Group International • CBRE Investors • Clear Bridge Advisors• Domini Social Investments l • MFS Investment Management • JPMorgan Asset Management • Principal Global Investors • Kohlberg Kravis Roberts & Co, LLP • T. Rowe Price• Krull & Company & Company • Tower Capital Asset  To er Capital Asset• Northern Trust Global Investments Management LP• Prudential Real Estate Investors• Russell Investments Russell Investments• TD Asset Management Inc.• The Townsend Group• TIAA ‐ CREF
  19. 19. Mainstream Involvement
  20. 20. Proliferation & Consolidation
  21. 21. How would you conduct y due diligence?Can any of this really be measured?
  22. 22. Sustainability Disclosure Database http://database.globalreporting.org/ Research & Benchmarking  Research & Benchmarking Capabilities • 3,012 Organizations , g • 7,681 Reports • 7,593 GRI Reports 7,593 GRI Reports
  23. 23. ESG Analysis of Tech SectorApple x x 7.95 CA ‐‐‐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 6.54Toshiba ‐‐‐ X Updated 2010
  24. 24. 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)
  25. 25. Market Evolution300,000+ data terminalsglobally5,000+ companies andclimbingSustainability Aspects• Emissions• Energy Consumption• Human Rights• Policies• Board Make Up Make-UpBuilt around GRI
  26. 26. Environmental Criteria (2010)Company 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
  27. 27. Social & Governance (2010)Company 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
  28. 28. Sustainability Performance
  29. 29. Sustainability Performance Source: Bloomberg
  30. 30. 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
  31. 31. GRI Developments & Trends• Government Uptake• Supply Chain• Financial Markets, Private Equity & Exchanges• Integrated Reporting• G4 Development
  32. 32. 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
  33. 33. Business Transparency on Trafficking and Slavery ActNew US LegislationCalifornia’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.
  34. 34. Supply Chain Ripple October 14, 2011 “. . . The objective of this contract is  to equip the government with the  i h ih h skills it requires to complete a GRI  report. The work performed under  this contract shall result in a core  group of GSA personnel developing  expertise in the application of GRI  standards to GSAs operational  environment, application of the GRI  Framework and principles to GSAs  SSPP, and how the agency should  approach its first‐ever GRI  sustainability report..”
  35. 35. Supply Chain Ripple October 13, 2011 “. . . Microsoft will also  encourage all its suppliers  ll it li to consider use of the  reporting guidelines  reporting guidelines provided by the Global  Reporting Initiative. . . .”
  36. 36. Supply Chain Ripple Customer Training Suppliers GRI Stakeholders
  37. 37. Mainstream UptakeMay 2010May 2010 January 2011 January 2011
  38. 38. International Integrated Reporting Committee (IIRC) http://theiirc.org
  39. 39. IIRC Participants
  40. 40. Early Adopters of Integrated  Reporting
  41. 41. GRIContinuous IC ti Improvement t
  42. 42. G4 Development ProcessConsensus Based Approach:• Phase I:Call for Sustainability Reporting Topics• Phase II:Registration for Public Comment Period• Phase III:FIRST - Open Public Comment Period(90-day - through Nov. 24, 2011)• 2012Working Group Development
  43. 43. 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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