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GRI Launch of the US external assurance study with G&A Institute & Bloomberg
- 1. GRI Sector Leader Webinar Series Enhancing quantity and quality of reporting The launch of GRI’s US external assurance study Rina Levy, Bloomberg (GRI Sector Leader) rilevy1@bloomberg.net Louis Coppola, G&A Institute (GRI Data Partner) lcoppola@ga-institute.com Mike Wallace, Marjella Alma, GRI Focal Point USA alma@globalreporting.org Venue, Date wallace@globalreporting.org GRI webinar with Bloomberg and G&A Institute, 3 April 2013
- 2. Outline Introduction Mike – GRI US trends in sustainability reporting Louis - G&A Presenter The launch of the US external assurance study Marjella – GRI Presenter The value assurance (data) Rina – Bloomberg Moderator
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- 4. Summing up theState of Sustainability Reporting in the U.S.A. April 3, 2013 Louis D Coppola – Executive Vice President GOVERNANCE & ACCOUNTABILITY INSTITUTE, INC. (GRI Data Partner for the US)
- 7. Our Findings: AboutCorporations and Their Sustainability and Responsibility (“S&R”) Leaders in S&R Enjoy Competitive Advantages Greater access to capital - attracting patient, long- term investors – asset owners using ESG screens Can dramatically lower operating costs Create clear product & service differentiation Reduce regulatory or litigation issues Better enhance and protect their brands, reputation Enjoy share price enhancement vs. peers Improve corporate risk management processes
- 8. Sampling of USReporters
- 9. Growth in USSustainability Reporting 2003 – 25 Reports 2004 – 37 Reports 2005 – 36 Reports 2006 – 45 Reports 2007 – 70 Reports 2008 – 118 Reports 2009 – 141 Reports 2010 – 187 Reports 2011 – 333 Reports – March of last year (358 today) 2012 - ~450 Reports
- 10. Submit Your Reports– PLEASE! Download the Submission Sheet: www.sustainabilityhq.com/reports Send the completed form to reports@ga-institute.com Visit the GRI Global Database database.globalreporting.org
- 11. Trends – CharacteristicsWe See Leadership companies set pace for peers investment peers and sector or industry peers Reporting is becoming “more than annually” Formats are diverse – print, on-line, hybrids “Integrated” reports – pacesetters like Clorox (2nd) Integration of key corporate documents Reports are end of process – GRI Framework provides rigorous process – enhances company operations, marketing, finances, performance Being used like a Six Sigma or TQM process Assurance Slowly Being Acquired by Leaders
- 12. Corporate ESG / SustainabilityReporting Does It Matter? Available at www.ga-institute.com
- 13. S&P 500 Reporters/ Fortune 500 Reporters VS S&P 500 Equal Weighted Index (01/07 – 9/12 5+ Years)
- 14. Are Sustainability ReportersMore Likely to be Included in Leading Indexes? Some Answers: NASDAQ OMX CRD Global Sustainability Index ® (QCRD) Yes Dow Jones Sustainability Index World® Yes Dow Jones Sustainability Index North America® Yes
- 15. NASDAQ OMX CRDGlobal Sustainability Index ® (As of June 30, 2011) 97% are reporting 86% of those use the GRI Framework
- 16. Dow Jones SustainabilityIndex World® (As of September 2012) 98% are reporting 85% of those use the GRI Framework
- 17. Dow Jones SustainabilityIndex North America® (As of September 2012) 85% are reporting 77% of those use the GRI Framework
- 18. What Impact DoesSustainability Reporting have on Selection for Third Party Reputational Lists? Some Answers: Yes for Newsweek Greenest Companies in America® Ranking Top 100 and 500 Yes for CRO 100 Best Corporate Citizens® Yes for Ethisphere’s World’s Most Ethical Companies®
- 19. Newsweek Greenest Companiesin America® GRI Reporters on Average Rank The Highest Not Reporting – Lowest Average Score
- 20. Newsweek Greenest Companiesin America® GRI Reporters on Average – Most Favorable Scores Not Reporting – Lowest Average Score (NOTE: Higher is Favorable except Envtl_Impact)
- 21. CRO 100 BestCorporate Citizens (As of March 2011) 53% are reporting 72% of those use the GRI Framework
- 22. Ethisphere’s 2012 World’sMost Ethical Companies (As of March 2012) 76% are reporting 90% of those use the GRI Framework
- 23. Does Sustainability Reportinghave an impact on Sustainability Ratings and Rankings? Some Answers: Yes for Carbon Disclosure Project (CDP) Disclosure Score + Performance Score Yes for Glass Door Rankings (4 Rankings Analyzed) Yes for CSRHub Company Ratings Yes for BrandLogic/CRD Corporate Sustainability IQ Matrix Yes for Bloomberg ESG Disclosure Score
- 24. Average CDP DisclosureScore 2012 (As of September 2012) GRI and GRI Reference Score Most Favorably
- 25. Average CDP PerformanceScore 2012 (As of September 2012) Most Common GRI Reporting Score is an A
- 26. Glassdoor Ratings (As of July 2012) GRI Reporting Companies Have Happier Employees And More Respected CEOs
- 27. CSRHub Company Ratings (As of June 2012) GRI Reporting Companies Score Higher Across the Board
- 28. Brandlogic Corporate Sustainability IQ Matrix (As of June 2012) The Most Favorable Quadrant - Leaders Is Made up of 100% GRI Reporters
- 29. Average Bloomberg ESGDisclosure Score (As of September 2012) GRI Has the Highest Average Scores & The Top 32 (highest ranking) companies are ALL GRI Reporters
- 30. S&P 500 ReportConclusions GRI Reporting Companies Outperform S&P Index Peers Are Selected More Often For Leading Reputational Lists Get Rated Higher by Sustainability Raters Included More Often In Leading Sustainability Indexes
- 31. Keep up withG&A In 2012 we analyzed over 450 reports for quantitative and qualitative information. Launching our New Awards and Recognition services for corporate consulting clients next week with 3BL Media. Keep up with reporting at www.SustainabilityHQ.com/reporting • Interactive Sort/Search Database • Daily Announcements (also on www.Accountability-Central.com) • Sign up for our Newsletters (also on www.ga-institute.com) • Follow us on Twitter (@gainstitute, @GACRUSAReports, @GACRUKReports, @GACRIEReports) • Like us on Facebook (find the link on www.ga-institute.com) • Join our LinkedIN Group. Proud to help GRI Launch the publication on assurance today
- 32. GOVERNANCE & ACCOUNTABILITYINSTITUTE 215 Park Avenue South, 10th Floor (at Union Square) New York, New York 10003 Tel 646 430 8230 Web www.ga-institute.com Louis Coppola, MBA - Executive Vice President, Technology & GRI Strategies Tel 646.430.8230 x14 - Email lcoppola@ga-institute.com
- 33. Stats & Factsby Rina Levy
- 34. …over time, GRIreporters outperform the benchmark
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- 36. STANDARDIZE DATA? • 50% of GRI compliant companies have a Bloomberg ESG Disclosure Score of 40 and above vs • 3% of those not reporting according to GRI have a score of 40 and above
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- 38. Key objectives GRI Morereports! Better reports!
- 39. How does GRIhelp? GRI Mission To make sustainability reporting standard practice by providing guidance and support to organizations.
- 40. 95% of Global250 companies issue sustainability reports – 80% use GRI 4
- 41. The GRI Guidelines– the Inventory GRI Principles: These guide the content and quality of your reporting. Materiality, boundary-setting, inclusiveness, stakeholder engagement etc. GRI reporting elements: 1. Profile Disclosures Strategy, About, Governance. 2. Disclosures on Management Approach EC, EN, LA, HR, SO, PR 3. Performance Indicators EC, EN, LA, HR, SO, PR
- 42. Sustainability Reports inthe USA GRI G3 + G3.1 GRI reference Non-GRI sustainability report US GRI data partner 47 46% growth in absolute number of 23 GRI reports (w/ index) 2010 - 2011 269 187 141 119 71 2007 2008 2009 2010 2011
- 43. Launch of theUS assurance paper Data Partner G&A Data Providers: Bloomberg KPMG
- 44. GRI and assurance •GRI recommends external assurance, but does not endorse particular providers nor approaches. • Report on external assurance: Profile Disclosure 3.13
- 45. GRI’s six keyqualities (G3 GL, pg 38) External assurance should • Be conducted by external party competent in subject + assurance; • Be implemented in a manner that is systematic, documented, evidence-based, and characterized by defined procedures; • Assess whether the report provides a reasonable + balanced presentation of performance; • Utilize parties that come to an independent + impartial conclusion; • Assess the extent to which GRI framework was applied; • results in set of written conclusions that is publicly available.
- 46. Application levels andassurance • Sustainability reports based on G3(.1) Guidelines (w/ an Index) that seek external assurance can be illustrated with a “+” – (A+, B+ C+) when the reporting organization determines the 6 key qualities are met. • During the GRI Application Level Check GRI does not assess whether the external assurance for a report meets the key qualities for assurance identified by GRI, and offers no opinion on whether the “+” is justifiable.
- 47. Key Findings The reportshows that in the USA, only 10 percent (26 out of 269) of GRI-based sustainability reports declared a “+” in 2011.
- 48. Key Findings Most assured(+) reports in the USA in 2011 are Application Level B+.
- 49. Key Findings Some ofthe 26 assured reports contained more than one assurance statement; 30 assurance statements were identified.
- 50. Key Findings The 30assurance statements were performed by different assurance providers: accountancy, engineering or professional service firms.
- 51. Who are thesecompanies?
- 52. Scope of assurance For16 out of the 30 assurance statements, a wide range of sustainability topics were assured. - some engagements only covered KPI’s 7 were performed for GHG emissions only 7 statements were performed on environmental topics (water, carbon and waste)
- 53. Level of assurance Thelevel of assurance was not specified in 11 out of 30 assurance statements
- 54. Standards A third ofassurance statements (= 10 statements for 8 organizations) did not make reference to any assurance standards.
- 55. Who should provideit? Considerations from interviewees: 1) Interviewees looked at what value assurance could provide at a particular stage in the reporting process. 2) Interviewees talked about the rigor and perceived credibility of the external assurance approach and provider.
- 56. Questionnaire • Why & perceived value • Understanding of GRI and of assurance • Composition of team providing assurance • Approach & process • Duration • Presentation of outcomes • Future of assurance
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- 58. On the roleof GRI
- 59. Quote from AICPA AmyPawlicki, from assurance standard developer AICPA, says: “We are very pleased that GRI has conducted this research study to gain a better understanding of third-party verification on GRI -based reports. This research represents an important step in helping the preparers and users of sustainability disclosures better assess the diversity of assurance options available to them.”
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- 61. Data collection onassurance NEW GRI data collection Emphasis on Third party opinions/ assurance/verification database.globalreporting.org
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- 63. More involvement withGRI? In addition to getting started with GRI reporting, you can: • Join the Organizational Stakeholder Program • Become a US Sector Leader • Participate in Working Groups • Participate in Governance Structures
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- 65. Thank you! More information: www.globalreporting.org http://focalpointblog.org/usa http://database.globalreporting.org Venue, Date