Finding value in non-financial reporting

Sustainability Reporting TrendsGlobal Reporting Initiative

Fi di th V l i NFinding the Value in Non-Financial ReportingApril 2011

Mike WallaceDirector, Focal Point USAGlobal Reporting InitiativeGlobal Reporting [email protected]+1 212 339 0356

What is non-What is nonfinancial reporting?

Comes in all shapes & sizes

CSR - Corporate Social ResponsibilitySD - Sustainable DevelopmentES - Environmental SustainabilityyBE - Business Ethics CE - Corporate EthicspCG - Corporate GovernanceESG - Environmental, Social & GovernanceESG Environmental, Social & GovernanceIR - Integrated reporting

What is your “Footprint”?© GRI 2011

What is your Footprint ?

Wh ll ?Who really cares?

© GRI 2011

Increasing Stakeholders and Demand

Modern DDue

Diligence

© GRI 2011

Wh t i ?What are we seeing?

© GRI 2011

GRI’s Vision & MissionGRI’s VisionA sustainably global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently.

GRI’s MissionTo make sustainability reporting standard practice by providing guidance and support

© GRI 2011

to organizations.

Fortune 250 Survey• 80% of Global Fortune 250 companies now release CR data

• Doubled since 2005 - up from 37%

October 2008

p• Increasingly driven by economic concerns

• 74% of top 100 US companies published corporate responsibility (CR) information in 2008 either as part of their annual financial report or as ainformation in 2008 either as part of their annual financial report or as a separate document

• Reasons cited:• 70% cited ethical considerations as primary driver for CR disclosures• 70% cited ethical considerations as primary driver for CR disclosures• 50% cited economic concerns as the leading reason

• GRI is used by:77% of G250• 77% of G250

• 69% of N100 in 22 countries

© GRI 2011

GRI Reporting Trends1818

1600

1800

2000 Year # of reports

Growth rate

1999 11

2000 44 300%

2001 122 177%

US Reporters in 1999•Bristol-Myers Squibb

1116

1491

1200

1400

1600 2001 122 177%

2002 139 14%

2003 166 20%

2004 274 65%

2005 373 36%

Bristol Myers Squibb•GM•P&GS

709800

1000

2005 373 36%

2006 516 38%

2007 709 37%

2008 1116 58%

2009 1491 34%

•Sunoco

139 166

274373

516

200

400

6002009 1491 34%

2010 1818 22%

• 586 first-11 44

122 139 166

0

200

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

time reporters in 2010.

G2 G3

© GRI 2011

GRI Reporters (North American Sample)(North American Sample)

© GRI 2011

Why should this ymatter to you?

© GRI 2011

As a buyer what information As a buyer, what information do you expect?

When you buy a house, a d t i car, a product or service . . .

What information do you What information do you deserve?

Is it useful & comparable?© GRI 2011

Shareholder Initiatives & Coalitions

Principles for Responsible Investment (PRI) [2006]Currently represents over $22 Trillion in investment capital800+ signatories

Investor Network on Climate Risk (INCR) [2003]Currently represents over $9 Trillion in investment capital90+ members90+ members

Carbon Disclosure Project (CDP) [2002]Currently represents over $71 Trillion in investment capitalact on behalf of 551 institutional investors

Institutional Investors Group on Climate Change (IIGCC) [2001]Currently represents $6 Trillion in investment capital70 members

Interfaith Center on Corporate Responsibility (ICCR) [1972]Currently represents over $100 Billion300 members

© GRI 2011

GRI Reporters - Databasehttp://www.globalreporting.org/GRIReports/GRIReportsList/

© GRI 2011

ESG Analysis of Tech Sector

Apple x x 7.95 pp

CA ---

Dell x x x x 6.14

EMC 6 86EMC x 6.86

Fujitsu x ---

HP x x x 7.74

Intel x x x x 7.96

IBM x x x 7.60

Microsoft x x x x 6 54Microsoft x x x x 6.54Toshiba ---

© GRI 2011

X Updated 2010

Technology Hardware \ Technology Software & Services

Company Corporate Governance

SocialEnvironment Overall 2010

ESG Scored hi l k h ld

Governance ESG ScoreLeadership Employees Stakeholders

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 85HP 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 score (possible) 30 10 30 15 30 115

© GRI 2011

Market Evolution300,000+ subscribers globally

3,500+ companies and climbing

ESG Aspects•Emissions •Energy Consumption•Energy Consumption•Human Rights•Policies•Board Make-UpBoard Make Up

Built around GRI

© GRI 2011

How do they compare? (FY2008)

CompanyESG

Disclosure Score

Total GHG(‘000 tonnes)

Total Energy Consumption(‘000 Mwh)

Total Waste(‘000 tonnes)

Community spending (mln US$)

% Independent

directors

Apple 37.96 130.00 247 2.2 --- 87.50%

CA, Inc. 40.28 --- --- --- 5.26 91.67%

Dell 53.24 528.54 --- 90.66 26.40 83.33%

EMC 44.91 371.62 727.51 --- --- 81.82%

Fujitsu 45.83 ---- 13798 33.95 --- 20.00%

HP 45.83 1713 --- 91.83 46.20 90.00%

Intel 66.20 3500 5643 83.80 102 83.33%

IBM 52.31 2500 6598 103.13 179.30 91.67%

Microsoft 43.06 257.7 192.79 --- 865.20 80.00%

NEC 59.26 1980 --- 48.00 7.90 33.33%

Toshiba 51.39 3510 16138 281.52 --- 28.57%

© GRI 2011

Why should this ymatter to you?

© GRI 2011

NASDAQ OMX Sustainability Index

© GRI 2011

Dow Jones – Ind. Avg. vs. SI180%

160%

180%Source: Bloomberg

120%

140%

100%

120%

60%

80%

60%

0-Ja

n-00

12-F

eb-0

425

-Mar

-04

6-M

ay-0

417

-Jun

-04

29-J

ul-0

49-

Sep

-04

21-O

ct-0

42-

Dec

-04

13-J

an-0

524

-Feb

-05

7-A

pr-0

519

-May

-05

30-J

un-0

511

-Aug

-05

22-S

ep-0

53-

Nov

-05

15-D

ec-0

526

-Jan

-06

9-M

ar-0

620

-Apr

-06

1-Ju

n-06

13-J

ul-0

624

-Aug

-06

5-O

ct-0

616

-Nov

-06

28-D

ec-0

68-

Feb-

0722

-Mar

-07

3-M

ay-0

714

-Jun

-07

26-J

ul-0

76-

Sep

-07

18-O

ct-0

729

-Nov

-07

10-J

an-0

821

-Feb

-08

3-A

pr-0

815

-May

-08

26-J

un-0

87-

Aug

-08

18-S

ep-0

830

-Oct

-08

11-D

ec-0

822

-Jan

-09

5-M

ar-0

916

-Apr

-09

28-M

ay-0

99-

Jul-0

920

-Aug

-09

1-O

ct-0

912

-Nov

-09

24-D

ec-0

9

DOW JONES SUSTAINABILITY INDEX DOW JONES INDUSTRIAL AVERAGE

© GRI 2011

How else can you find value?

Supply Chain

Financial Markets, Private Equity & Exchanges

Integrated Reporting

Government Uptake

G4 Development

© GRI 2011

Global Regulatory Review"More governments are making sustainabilitymaking sustainability reporting mandatory.“

142 l t i t t• 142 regulatory instruments addressing sustainability reporting exist in the 30 p gcountries

• 65 percent of the standards• 65 percent of the standards are classified as mandatory, the rest are considered voluntary

© GRI 2011

Global Reporting Initiative

Thank you

Mike WallaceDirector, Focal Point USAGlobal Reporting Initiativewallace@globalreporting [email protected]+1 212 339 0356

Finding value in non-financial reporting

Business

Transcript of Finding value in non-financial reporting