Slides from the launch of the Environmental reporting handbook, which offers companies ideas about what reporting environmental information under the EU Non-Financial Reporting Directive could look like in practice. The handbook uses real-life examples of annual reports to demonstrate reporting under each requirement of Directive and to show what constitutes good practice. Download the handbook from http://cdsb.net/nfrhandbook

1. September 16 | Tweet @CDSBGlobal
EU Non-Financial Reporting Directive
How companies make the most out of it!
Download from cdsb.net/NFRHandbook

2. September 16 | Tweet @CDSBGlobal
Introductions
EU Non-Financial Reporting Directive – How companies make the most out of it! 2
Michael Zimonyi
Policy & External Affairs Manager
CDSB
michael.zimonyi@cdsb.net
Luke Blower
Senior Technical Officer
CDSB
luke.blower@cdsb.net
Marie-Camille Attard
Account Manager, Supply Chain
CDP Europe
marie-camille.attard@cdp.net

3. September 16 | Tweet @CDSBGlobal
EU environmental
reporting handbook
What could environmental reporting in line with
the Non-Financial Reporting Directive look like?
v1.0, September 2016
www.cdsb.net/NFR
Agenda
1. Introduction to CDSB
2. The Non-Financial Reporting Directive
3. Case studies
4. Deep dive: supply chain & science-
based targets
5. Next steps
6. Q&A
EU Non-Financial Reporting Directive – How companies make the most out of it! 3
Please send us your questions using the chat function
cdsb.net/NFRhandbook

4. September 16 | Tweet @CDSBGlobal
Climate Disclosure Standards Board
EU Non-Financial Reporting Directive – How companies make the most out of it! 4

5. September 16 | Tweet @CDSBGlobal
To provide decision-useful
environmental information to
markets via the mainstream
corporate report

6. September 16 | Tweet @CDSBGlobal
What is the CDSB Framework?
EU Non-Financial Reporting Directive – How companies make the most out of it! 6
Reporting environmental information in the annual report
Environmental information
(CDP, GRI, SASB, ISO 26000, UNGC CEO Water Mandate)
CDSB
Framework
Annual Report / Integrated Report
(MD&A, Form 10-K/20-F, Lagebericht, Form 56-1)
Non-financial information
Connector
Financial information

7. September 16 | Tweet @CDSBGlobal
The CDSB Framework
• 7 guiding principles
• 12 reporting requirements
• Detailed guidance on climate, forests, water
• Alignment with CDP, GRI, SASB and others to support
inclusion in mainstream reports
• Covers all the environmental related requirements prescribed
by current and upcoming legislation (e.g.: EU Non-Financial
Reporting Directive)
EU Non-Financial Reporting Directive – How companies make the most out of it! 7
for reporting environmental information & natural capital
cdsb.net/framework

8. September 16 | Tweet @CDSBGlobal
Introduction to
the Directive
Michael Zimonyi
Policy & External Affairs Manager
Climate Disclosure Standards Board

9. September 16 | Tweet @CDSBGlobal
The Directive
• Amends the Accounting Directive 2013/34/EU
• Member States to transpose by 6th Dec 2016
• Transpositions vary
• Report on implementation by 6th Dec 2018,
possibly accompanied by legislative proposals
• Guidance by 6th December 2016
• European Commission review in 2018
• FSB Task Force on Climate-related Financial
Disclosures may have impact
EU Non-Financial Reporting Directive – How companies make the most out of it! 9
Directive 2014/95/EU on the disclosure of non- financial and diversity information
Source: David Bertho/flickr

10. September 16 | Tweet @CDSBGlobal
The Directive
Who?
“large undertakings or parent undertakings of
a group exceeding on their balance sheet ... [an]
... average number of 500 employees during the
financial year”.
Where?
• Management report;
• Consolidated management report for
corporate groups; or
• Separate report corresponding to same
financial year – not recommended.
EU Non-Financial Reporting Directive – How companies make the most out of it! 10
Requirements in practice
Source: HayleyCartwright/flickr

11. September 16 | Tweet @CDSBGlobal
The Directive
What?
• For financial years starting on 1 January 2017.
What?
• business model;
• policies pursued by the group, including due diligence
processes implemented;
• the outcome of those policies;
• the principal risks linked to the group’s operations … which are
likely to cause adverse impacts …, and how the group
manages those risks;
• non-financial KPIs.
EU Non-Financial Reporting Directive – How companies make the most out of it! 11
Requirements in practice

12. September 16 | Tweet @CDSBGlobal
The Directive
Where the group does not pursue
policies in relation to one or more
of those matters, the consolidated
non-financial statement shall
provide a clear and reasoned
explanation for not doing so.”
EU Non-Financial Reporting Directive – How companies make the most out of it! 12
Requirements in practice
Source: PIVISO/flickr

13. September 16 | Tweet @CDSBGlobal
Case Studies
13
Luke Blower
Senior Technical Officer
Climate Disclosure Standards Board

14. September 16 | Tweet @CDSBGlobal
A brief description of the undertaking’s
business model
EU Non-Financial Reporting Directive – How companies make the most out of it! 14
NFR Directive CDSB requirements CDP questionnaires
Brief description of the undertaking’s
business model
REQ 6 – Outlook CC0.1, F0.1, F0.2, W0.1
Good practice examples
• The use of the International <IR> Framework guidance and structure to include the different capitals as inputs and outputs
(Eni S.p.A);
• Inputs, outputs and outcomes to the model are included (Eni S.p.A); and
• The model links with the corporate strategy and includes the value chain (AB Volvo) to demonstrate connectivity. This can
either be presented through the model, or as part of an accompanying narrative as shown in the Volvo example.
Recommendations
• We recommend using the IIRC’s guidance on the business model; and
• Link your business model to the company’s strategy and policies.

15. September 16 | Tweet @CDSBGlobal
Eni S.p.A
EU Non-Financial Reporting Directive – How companies make the most out of it!

16. September 16 | Tweet @CDSBGlobal
EU Non-Financial Reporting Directive – How companies make the most out of it! 16

17. September 16 | Tweet @CDSBGlobal
A description of the policies pursued by the group in relation to those
matters, including due diligence processes implemented
EU Non-Financial Reporting Directive – How companies make the most out of it! 17
NFR Directive CDSB requirements CDP questionnaires
A description of the policies pursued by the group
in relation to those matters, including due
diligence processes implemented
REQ 1 – Policy, strategy and targets
REQ 6 – Outlook
CC2.2, CC2.3, CC3.1, CC3.2
F8.1, F8.2, F8.3, F8.4, F9.5, F9.6, F10.2, F10.5
W6.2, W6.3, W8.1, W9.1
Best practice examples
• Policy, strategy and targets are clearly stated and explained (Norsk Hyrdo ASA/PostNord AB);
• A separate section dedicated to a viability statement, with clearly defined strategies and targets is also connected to other content elements (Norsk
Hydro ASA);
• Materiality assessments and stakeholder engagement provides rationale for the policies and strategies (Norsk Hydro ASA/Mondi Plc);
• The inclusion of the supply chain within policies and strategies demonstrates management beyond the financial reporting entity (Norsk Hydro ASA); and
• Communicating targets, including science-based targets, and outcomes alongside strategy (Mondi Plc/PostNord AB) demonstrates not only
performance and progress, but also the criteria and context against which this is assessed.
Recommendations for companies
• Outline policies clearly and provide a forward-looking statement with rationale. This should include how environmental policies and strategies relate to,
or support, the organisation’s overall policies and strategies, and also demonstrate due diligence; and
• Clear targets, timeline and key performance indicators should be outlined alongside the environmental strategy to demonstrate how it is measured and
resourced.

18. September 16 | Tweet @CDSBGlobal
Mondi plc
EU Non-Financial Reporting Directive – How companies make the most out of it!

19. September 16 | Tweet @CDSBGlobal
The outcome of those policies
19
NFR Directive CDSB requirements CDP questionnaires
The outcome of those policies REQ-01 – Policy, strategy and targets
REQ-05 – Performance and comparative
analysis
REQ-06 – Outlook
CC3.4, CC12.1, CC12.2, CC12.3, CC12.4,
CC14.3
W5.1, W5.2, W5.3, W6.4, W7.1
Best practice examples
• Performance is compared to previous years, and relates to targets. This allows for comparative analysis (Titan Cement Company SA).
• Methodologies on how data has been collected are stated, with details about any changes for calculating results (BP Plc).
• Outcomes to inform future actions are presented which demonstrates forward looking disclosure (Titan Cement Company
SA/Daimler AG).
Recommendations for companies
• Consider including visuals (i.e.: graphs, charts, diagrams) in reports that would otherwise be text-heavy to make information clear
and concise.
• Provide a clear link to overall policy, strategy and targets to allow for an assessment of your performance.
• Provide explanations of any significant changes in results, including those resulting from changes in strategy, governance, KPIs,
acquisitions, divestments or other factors. Explain and justify the reason for any missing data.
EU Non-Financial Reporting Directive – How companies make the most out of it!

20. September 16 | Tweet @CDSBGlobal
BP
EU Non-Financial Reporting Directive – How companies make the most out of it!

21. September 16 | Tweet @CDSBGlobal
The principal risks related to those matters linked to the group's operations
including, where relevant and proportionate, its business relationships, products
or services which are likely to cause adverse impacts in those areas, and how the
group manages those risks
21
NFR Directive CDSB requirements CDP questionnaires
The principal risks related to those matters linked to
the group's operations including, where relevant and
proportionate, its business relationships, products or
services which are likely to cause adverse impacts in
those areas, and how the group manages those risks
REQ-02 – Risks and opportunities
REQ-06 – Outlook
CC2.1, CC5.1, CC6.1
F2.1, F2.2, F3.1, F3.2, F3.3, F3.4, F4.1, F4.2, F4.3, F7.2
W2.1, W2.2, W2.3, W2.4, W2.6, W2.7
Best practice examples
• An overview is provided of risk management approach (BHP Billinton Plc).
• Description of both legislative and operational risks are included (Norsk Hydro ASA/BHP Billinton Plc).
• The physical risks associated with climate change are described to an extent. This could be improved with specific detail and mitigation strategies (PKN Orlen
SA/(Norsk Hydro ASA).
Recommendations for companies
• Provide a comprehensive set of environmental risks, including regulatory, physical, reputational, transition and litigation risk.
• Explain how the reported risks impact operations, supply chain, business model, financial performance and all other material implications.
• Provide the causes and sources of these risks. This could inform your mitigation strategies.
• Include timeframes for the risks to take effect, in addition to the mitigation strategies.
• Link risks to policies and strategies where appropriate, to demonstrate due diligence.
EU Non-Financial Reporting Directive – How companies make the most out of it!

22. September 16 | Tweet @CDSBGlobal
BHP Billiton
EU Non-Financial Reporting Directive – How companies make the most out of it!

23. September 16 | Tweet @CDSBGlobal
Non-financial key performance indicators
relevant to the particular business
23
NFR Directive CDSB requirements CDP questionnaires
Non-financial key performance indicators relevant
to the particular business
REQ-01 – Policy, strategy and targets
REQ-04 – Sources of environmental impact
REQ-06 – Outlook
CC1.2a, CC7.1, CC8.2, CC8.3a, CC9.2a, CC9.2b,
CC9.2c, CC9.2d, CC10.1a, CC10.2a, CC10.2b,
CC10.2c, CC11.2, CC11.3, CC11.5, CC14.1
F0.5, F0.6, F1.1, F5.1, F5.2
W1.2, W1.2a, W1.2b, W1.2c, W5.1, W5.1a, W5.2,
W5.2a
Best practice examples
• Indicators reflect business activities, vision and strategy (AkzoNobel N.V./Pennon Group Plc/Marks and Spencer Plc.).
• Connect strategy to qualitative and quantitative information and explains how the targets are to be assessed (AkzoNobel N.V.).
• The KPIs that are used are relevant and material to individual companies (Pennon Group Plc).
Recommendations for companies
• Communicate relevant and material KPIs. Ensure that these are accompanied by short/medium/long term forecasts.
• Connect KPIs with other information in the mainstream report, such as overall organisational strategy, performance and prospects.
• To demonstrate how the KPIs are used to assess the progress against targets, provide baselines and consistent year on year disclosures.
• Differentiate KPIs and other performance indicators.
EU Non-Financial Reporting Directive – How companies make the most out of it!

24. September 16 | Tweet @CDSBGlobal
Akzonobel
EU Non-Financial Reporting Directive – How companies make the most out of it!

25. September 16 | Tweet @CDSBGlobal
Supply chain &
science-based targets
Marie-Camille Attard
Account Manager Europe
Supply Chain, CDP

26. www.cdp.net | @CDP
Engage with key suppliers to assess risks exposure and
management.
„ [...] shall include in the management report [...] 2014/95/EU
(d) the principal risks related to those matters linked to the understaking‘s operations including, where relevant and
proportionate, its business relationships, products or services which are likely to cause adverse impacts in those
areas, and how the undertaking manages those risks. „
(e) non-financial key performance indicators relevant to the particular business
CDP Supply Chain Programme facilitates to engage with key
suppliers (business relationships):
- To report on risks and their management
- To track your environmental KPI‘s on value chain.

27. www.cdp.net | @CDP
US$100trillion in assets
Climate change: 827 investors
Water: 643 investors
Forest: 365 investors
>US$2.7trillion in purchasing
power
89 CDP supply chain members
Climate change: 88 members
Water: 24 members
• A non-financial reporting platform on Natural Capital – Climate Change, Water and Forest
• An environmental organization combining purchasing power with investors & reduce burden on responders.
• This year 8310 suppliers were ask to respond to CDP supply chain by 89 Members.
CDP: How does it work ?
Investors Customers
1 Questionnaire / 1 Response
Suppliers

28. www.cdp.net | @CDP
Supply Chain Programme
Benefits from the Programme :
§ Reduce reporting Burden to suppliers: more than 8000 suppliers have been asked in 2016, might include one of
your suppliers ?
§ Minimize risks and identify opportunities to tackle them – dedicated risk management questions
§ CDP Database : >10000 companies: a reporting framework allowing benchmarking. You and your stakeholders
are able to evaluate and compare envrionmental performance between companies providing information
following a same standard.
§ Accessible to stakeholders
January February March April May June July August Sept. Oct. Nov. Dec.
3.Suppliers respond to CDP
1. Set Strategy, evaluate success and
prepare for following year
2. Identify and communicate with
selected suppliers
4.Results and Analyses to Members
and Suppliers

29. www.cdp.net | @CDP
Assessing Risks
Supply Chain Questionnaire
CoreQuestionnaires
Climate change questions Water questions
Management: Strategies, targets,
emissions reduction activities
Risks & Opportunities: Regulatory, physical,
other
Emissions Reporting: Emissions methodology
and data
Current State: Growth strategy & experienced detrimental
impacts
Risk Assessment & Implications: Risk assessment,
exposure and opportunities
Water Accounting: Water consumption, discharge,
withdrawals and recycling
Corporate Response: Governance, strategy, targets and
initiatives
Supplychain
module
Customer Specific Information
• Allocating emissions to customers
• Collaborative opportunities
• Action exchange
• Product (goods & services) level data
Customer Specific Information
• Highlighting facilities at risk with customer spend
• Collaborative opportunities
• Product (goods & services) intensity data

30. www.cdp.net | @CDP
Defining and Tracking KPIs
Climate change
KPI’s
2014 2015 2016
Target
Response Rate 88% 90% 100%
Reporting Scope 1 & 2
Emissions
74% 80% 80%
Have Emissions Target 37% 50% 70%
Reporting Emissions
Reduction Activities
46% 60% 75%
# of Collaborative
Opportunities Reported
27 35 50
Total amount of CO2
specifically associated
with member
engagement
314 500 1000
Climate Change
Water
stewardship KPI
2014 2015 2016
Target
Response Rate 0 40% 60%
Reporting water
withdrawal and
discharge information
0 35% 50%
Report having a public
water policy
0 30% 50%
report completing a risk
assessment for their
operations
0 20% 40%
# of Collaborative
Opportunities Reported 0 5 20
Water

31. www.cdp.net | @CDP
Science-Based Targets
Benefit to set Science-Based Targets:
- Be ready to fix you emissions reductions targets aligned with the 2°C / 1.5°C pathway
- Comply with Paris-Outcome and your contribution to the NDC’s
- Gives a benchmarking framework to validate your targets : do your targets make
sense?
- Covers Scope 1, 2 and 3 Emissions
„ [...] shall include in the management report [...] 2014/95/EU
(b) „ a description of the policies [...] including due diligence processes implemented„
(c) The outcome of those policies

32. www.cdp.net | @CDP
Science – Based Targets
- An initiative part of the We Mean Business - Commit to Action Platform
www.wemeanbusinesscoalition.org
- 184 Companies have committed to set up Science-Based Targets
Process
Background

33. www.cdp.net | @CDP
Criteria Science-Based Targets
- Time frame: 2 years to set target; 5 year time horizon min. 15 years max.
- Boundary: Scope 1 & 2 emissions and all GHGs (Scope 3 if relevant)
- Level of ambition: Aligns with a 2 degree pathway
- Reporting: Disclose progress annually
Scope 3 targets (if greater than 40% of total scope 1,2,3 emissions):
§ Ambitious and measureable Scope 3 target with a clear time-frame
§ Complete scope 3 emissions screening
§ Boundary: majority of value chain emissions as defined by the GHG Protocol Corporate
Value Chain (Scope 3) Standard (e.g. top 3 categories, or 2/3 of total scope 3 emissions
Longer Term
targets are
strongly
recommended!

34. www.cdp.net | @CDP
Additional information
Supply Chain:
How to engage with your suppliers
Marie-Camille Attard, CDP
Account Manager,
Supply Chain Europe
marie-camille.attard@cdp.net
Science-Based Targets
Elena Stecca, CDP
Project Officer Global Initiatives,
Commit to Action
elena.stecca@cdp.net

35. September 16 | Tweet @CDSBGlobal
Next steps

36. September 16 | Tweet @CDSBGlobal
36
Fiduciary duty & climate change disclosure
With the support of
“We are a group of companies and investors sharing a concern that financial markets do
not yet take sufficient account of climate-related corporate performance, risks and
opportunities relevant to future shareholder value …
For this reason, we have decided to produce and make use of such information on a
common basis … whether or not required by current regulation. We take this step
primarily out of a sense of fiduciary responsibility.”
• 150 corporate signatories from all sectors and regions
• Endorsement of funds: over $10 trillion in assets under management
Join at cdsb.net/Fiduciary
Fiduciary duty

37. September 16 | Tweet @CDSBGlobal
Opportunities
1. Take a look at the CDP/CDSB handbook
2. Follow member state implementation plans &
contribute to consultations
3. Think about alignment & harmonization
4. Produce clear, coherent and connected
reports
EU Non-Financial Reporting Directive – How companies make the most out of it! 37
Be prepared and lead
EU environmental
reporting handbook
What could environmental reporting in line with
the Non-Financial Reporting Directive look like?
v1.0, September 2016
www.cdsb.net/NFR
cdsb.net/NFRhandbook

38. September 16 | Tweet @CDSBGlobal
38EU Non-Financial Reporting Directive – How companies make the most out of it!
Questions?
Please send us your questions using the chat function
Download from
cdsb.net/NFRHandbook
EU environmental
reporting handbook
What could environmental reporting in line with
the Non-Financial Reporting Directive look like?
v1.0, September 2016
www.cdsb.net/NFR

39. September 16 | Tweet @CDSBGlobal
Thank you
e: michael.zimonyi@cdsb.net
t: +44 (0)203 818 3939
www.cdsb.net
@CDSBGlobal