Loras College 2014 Business Analytics Symposium | Margie Flynn: Measuring Sustainability

Measuring Sustainability

Margie Flynn

BrownFlynn

BrownFlynn At A Glance

• Award-winning corporate responsibility and sustainability consulting firm founded in January 1996

• 100% of our business is derived from sustainability consulting, communications and training services

• First U.S.-certified Global Reporting Initiative training organization and a GRI Organizational

Stakeholder

• Since 2006, we have advised clients on the GRI process, producing GRI-based reports

and utilizing the framework as a robust management tool

• A Silver Consultancy Partner for the Carbon Disclosure Project (CDP)

• Founding member of U.S. Business Council for Sustainable Development

• Extensive experience in guiding regional, national and global clients on their sustainability journeys

• A women-owned company (W/FBE) and a DBE (Disadvantaged Business Enterprise)

BrownFlynn 2014. All Rights Reserved

Your Partner, Our Services

BrownFlynn is a corporate responsibility and sustainability consulting firm advising companies on:

• Integrating responsible practices into their business strategies

• Communicating these practices internally and externally for bottom-line impact

• Training to build skills and engage associates

CONSULTING

Sustainability and Corporate Responsibility Advisors

COMMUNICATIONS TRAINING

We advise you on your journey

We help you communicate your successes

We train you/your team along the journey

• Sustainability Strategy

• Goal Setting

• Materiality

• Stakeholder Engagement

• Research and Analysis

• Facilitation

• Stakeholder Communications

• Branding

• Sustainability Reporting

• Community Outreach

• CDP, DJSI and WDP Responses

• Executive Sessions

• Customized Employee Sessions

• Open Enrollment Classes

• Webinars


Agenda

• Measuring Sustainability

– Trends: Sustainability Data, Ratings, Frameworks

• Sustainability Reporting

– Benefits

– Global Reporting Initiative

– Best Practices

• Q&A


Measure What Matters

“You can’t manage what you can’t measure.”

– Peter Drucker, Management Consultant, Educator and Author


Don’t forget: You can copy-

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Ethical Business & Sustainability

Reporting

• 76% of the 2012 World’s Most Ethical Companies write sustainability reports, of

which 90% use the GRI framework.

Sources: Ethisphere Website, G&A Institute Research 2012


Proliferation of Sustainability Data

• The evolution of Big Data technology is enabling the proliferation and dissemination

of sustainability data.

• As a result, stakeholders are expecting companies to be more transparent about their

measurement and management of environmental, social and governance (ESG)

performance.


Explosive Growth of Ratings,

Rankings & Indices

21

108

182

0

50

100

150

200

2000* 2010* 2014**

Number of Ratings, Rankings and Indices

*According to Research by Sustainability, “Rate the Raters” 2010

**Lastest count according to research of CSRHub resouces by BrownFlynn


Frameworks, Agencies and Rankings


http://www.csrhub.com/

Sustainability Reporting Frameworks


What is IR?

• The International Integrated Reporting Council (IIRC): – Global coalition of regulators, investors, companies, standard setters,

the accounting profession and NGOs

– Views that communication about businesses' value creation should be the next step in the evolution of corporate reporting

– Over 100 business in the IIRC Pilot Programme Business Network

• The IR Framework – Released in December 2013

– Voluntary standards, adopting integrated thinking for cohesive and efficient reporting

– Trialed in over 25 countries





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Stock Exchanges Support

Sustainability Reporting

Mandatory Non-Financial Disclosure Recommended Non-Financial Disclosure

Johannesburg Stock Exchange Brazilian Stock Exchange

Sweden Singapore Stock Exchange

Denmark Shanghai Stock Exchange

Malaysia (Burse Malaysia) European Commission

Argentina (Buenos Aires) France

London Stock Exchange (2013) NASDAQ

Securities and Exchange Board of India NYSE Euronext


What is CDP?

• CDP is a nonprofit that works to transform the way the world does business

to prevent dangerous climate change and protect natural resources

• Annual questionnaire was launched in 2000 to promote disclosure as an

investment tool and agent of sustainable improvement

• CDP now covers:

– Climate Change

– Water

– Supply Chain

– Forest

– Cities

– Carbon Action


Growth of CDP Responses

• As of 2013, 5000+ organizations (81% of the Global 500; 70% of the S&P

500) in 72 countries measure and disclose their emissions and climate

change strategies.

Source: CDP


CDP Investor Members

• CDP has 722 institutional investors representing $87 trillion in assets.


Global Reporting Initiative (GRI)

The Institution The Process

The Framework The Report

Global Reporting Initiative (GRI)

a non-profit,

multi-stakeholder

resource

a framework for

improving the quality of

sustainability disclosures

a sustainability

management

process

a set of basic disclosure

requirements for a

sustainability report

History of GRI Video


http://www.youtube.com/watch?v=1R0wBZy9HwU

GRI Report Content Principles

The report should cover Aspects that reflect the organization’s significant economic,

environmental and social impacts; or substantively influence the assessments and

decisions of stakeholders.

The organization should identify its stakeholders, and explain how it has responded to

their reasonable expectations and interests.

The report should present the organization’s performance in the wider context of

sustainability.

The report should include coverage of material Aspects and their Boundaries,

sufficient to reflect significant economic, environmental and social impacts, and

to enable stakeholders to assess the organization’s performance in the reporting

period.

Materiality

Stakeholder

Inclusiveness

Sustainability

Context

Completeness


GRI Report Quality Principles

The report should reflect positive and negative aspects of the organization’s performance

to enable a reasoned assessment of overall performance.

Select, compile and report information consistently. Information should be presented in a

manner that enables stakeholders to analyze changes in the organization’s performance

over time, and compare to other organizations.

The reported information should be sufficiently accurate and detailed for stakeholders to

assess the organization’s performance.

Report on a regular schedule so that information is available in time for stakeholders to

make informed decisions.

The organization should make information available in a manner that is understandable and

accessible to stakeholders using the report.

The organization should gather, record, compile, analyze and disclose information and

processes used in the preparation of a report in a way that they can be subject to

examination and that establishes the quality and materiality of the information.

Balance

Comparability

Accuracy

Timeliness

Clarity

Reliability


GRI Aspects Environmental Labor Practices

& Decent Work

Human Rights

• Materials • Energy • Water • Biodiversity • Emissions • Effluents and Waste • Products and Services • Compliance • Transport • Overall • Supplier Environmental Assessment • Environmental Grievance

Mechanisms

• Investment • Non-discrimination • Freedom of Association & Collective

Bargaining • Child Labor • Forced /Compulsory Labor • Security Practices • Indigenous Rights • Assessment • Supplier Human Rights Assessment • Human Rights Grievance Mechanisms

• Training and Education • Employment • Labor/Management Relations • Occupational Health & Safety • Diversity & Equal Opportunity • Equal Remuneration for Men and Women • Supplier Assessment for Labor Practices • Labor Practices Grievance Mechanisms

Product Responsibility Society Economic

• Economic Performance • Market Presence • Indirect Economic Impacts • Procurement Practices

• Local Communities • Anti-Corruption • Public Policy • Anti-competitive Behavior • Compliance • Supplier Assessment for Impacts on Society • Grievance Mechanisms for Impacts on

Society

• Customer Health & Safety • Product & Service Labeling • Marketing Communications • Customer Privacy • Compliance


Who is Using GRI?





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How does CDP complement the GRI

process?

• CDP Content:

– CDP questions correspond to disclosure topics

within the GRI framework

– Opportunity to re-purpose outcomes from CDP

for Sustainability Report and vice versa

• GRI Report Development Outcomes:

– Information from interviews (risks,

opportunities, projects)

– Content and positioning can be leveraged


Why Report Sustainability

Information? • G250 companies view reputation and ethical

considerations as key reasons to report

sustainability efforts.

0% 20% 40% 60% 80%

Cost Savings

Improved Relationships w/ Government…

Strengthened Supplier Relationships

Market Position Improvement

Access to Capital or Increased Shareholder…

Economic Considerations

Risk Management

Employee Motivation

Innovation and Learning

Ethical Considerations

Reputation or Brand

Source: KPMG International Corporate Responsibility

Reporting Survey, 2011

• Sustainability reporting improves CEO

approval ratings and employee satisfaction.

Companies with GRI-based reports have the

highest CEO approval and employee

satisfaction ratings.

67.0068.0069.0070.0071.0072.0073.0074.0075.00

CEO Approval Rating Percentage

(as of July 2012)

Source: Glassdoor, G&A Research, 2012

3.00

3.05

3.10

3.15

3.20

3.25

3.30

Employee Satisfaction Scale - 0 to 5

(as of July 2012)


Supply Chain Pressure for

Reporting • Companies are shifting their supply chain engagements from authoritative to

collaborative.

Authoritative Approach

Companies demand suppliers to provide information through

surveys, questionnaires or scorecards.

Demonstrative Approach

Companies ask suppliers to

use reporting frameworks they are already using.

Collaborative Approach

Companies work with and

educate suppliers on how they want to report information.


Supply Chain Collaboration

Through Reporting • Companies who produce sustainability reports see an increase in supply chain

member collaboration

Source: MIT and BCC, 2012.

Global executive study and

research project.





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GRI: The Leading Sustainability

Reporting Framework


The 2013 CRO Top 100

Johnson Controls Campbell Soup

IBM Bristol-Myers Squibb

Mattel 3M

Kimberly-Clark Hewlett-Packard

Nike Gap

General Mills Intel

Coca-Cola co. Coca-Cola Enterprises Inc.

Pinnacle West Capital Albemarle

Spectra Energy E.I. DuPont De Nemours & Co

Johnson & Johnson Abbott Laboratories

PG&E Microsoft Corporation

Freeport-McMoran Copper&Gold Pepsico Raytheon

Advanced Micro Devices

Texas Instruments Accenture

H.J. Heinz Co. EMC

Hormel Foods Jones Lang LaSalle

Eaton Merck & Co. Altria Group

Chevron Cisco Systems

Occidental Petroleum Starbucks

Colgate-Palmolive Target Hess

Ball Corp. Green Mountain Coffee

Clorox Dell Inc.

Yum! Brands Motorola

Hershey Company Exelon Corp

PPG Industries

McGraw-Hill UPS

Baxter International Inc. JPMorgan Chase & Co.

Northern Trust Corp Verizon

Communications Xerox Corp Walt Disney

Dow Chemical Lexmark International

FedEx Oracle Ford

State Street Life Technologies

Mosaic Carnival Corp. Sprint Nextel

Wisconsin Energy Corp. Darden Restaurants

Wyndham Worldwide Rockwell Automation

CA Technologies Southwest Airlines

ConocoPhillips

International Paper Entergy Corp Weyerhaeuser

Boeing Sempra Energy

Dominion Resources Whirlpool

AT&T Eli Lily & Co.

General Electric Co. TJX Companies Duke Energy

Agilent Technologies Hasbro

Lockheed Martin. Northeast Utilities

Prudential Financial Air Products &

Chemicals Exxon

Praxair, Inc. Marathon

Monsanto Co. PVH Corp.

Allergan Inc.

88%


Reporting as a Management Tool

1. Discovery

• Project Launch Meeting

• Background (internal)

• Benchmarking (external)

2. Strategy and

Prioritization

• Value Chain Mapping

• Stakeholder Engagement

• Leadership Team

Materiality Workshop

3. Define Content

• Content Outline

and Site Map

• Theme Development

• Design

• Gather Additional

Data and Stories 4. Develop Content

• Write Copy and

Manage Edits

• Continue Design

• Define Assets

5. Production

• Development

• Content Pouring

• PDF and Summary Layout

• Testing and QA

• Proofing

• Launch Planning

6. Launch

• Launch

• Measure

• Optimize

BrownFlynn’s Approach


Sustainability Report Best Practices

Examples

• Allstate’s Interactive Materiality Matrix

• American Electric Power’s Stakeholder

Engagement:

– Send an e-card to family and friends

to remind them to use energy wisely

– Subscribe to AEP e-mail alerts and

contact AEP

– Measure carbon footprint

• Campbell’s Soup Data Accessibility

– Download data, entire CSR report, individual

sections, or previous reports


http://www.allstate.com/corporate-responsibility/overview/about-this-report.aspx

http://2012.aepsustainability.com/stakeholders/engagestakeholders.aspx

http://2012.aepsustainability.com/stakeholders/engagestakeholders.aspx

http://csr.campbellsoupcompany.com/csr/pages/resources/reports-and-data.asp

Award-Winning Sustainability

Reports

• 2011/2010 Best Report: Coca-Cola Enterprises Inc

• 2011/2010 Best 1st Time Report: La Trobe University

• 2011/2010 Best SME Report: Beyond Business

• 2011/2010 Best Integrated Report: Novo Nordisk A/S

• 2011 Relevance and Materiality: Marks and Spencer plc

• 2011 Openness and Honest: Marks and Spencer plc


http://www.corporateregister.com/a10723/39362-11Co-10627740Y4906158404N-Eu.pdf




http://www.corporateregister.com/a10723/37319-11Su-9740259J1761755352V-Au.pdf

http://www.corporateregister.com/a10723/35985-11Su-8060640Q363844335O-Is.pdf

http://www.corporateregister.com/a10723/36205-11In-9992580X2172662050Q-Gl.pdf

http://plana.marksandspencer.com/media/pdf/how_we-do_business_report_2011.pdf






Measure What Matters

“In God we trust, all others

must bring data.”

– W. Edwards Deming, Statistician


http://en.wikipedia.org/wiki/File:W._Edwards_Deming.gif

Thank You for Attending!

Margie Flynn

Principal and Co-Founder

440-484-0100, x3

[email protected]

For more information on BrownFlynn’s services,

please visit www.brownflynn.com


mailto:[email protected]

http://www.brownflynn.com/

Q & A


Measuring Sustainability: APPENDIX

Margie Flynn

BrownFlynn

What is SASB?

• The Sustainability Accounting Standards Board (SASB) is a nonprofit organization that establishes industry-based sustainability standards for the recognition and disclosure of material environmental, social and governance impacts by companies traded on U.S. exchanges.

• Sectors include health care, financials, technology & communication, non-renewable resources, transportation, services, resource transformation, consumption, renewable resources & alternative energy, and infrastructure.


http://www.google.com/url?sa=i&rct=j&q=SASB&source=images&cd=&cad=rja&docid=eD9zym--pWbALM&tbnid=ELuobqrrEKkDlM:&ved=0CAUQjRw&url=http://blog.bloomberg.com/2012-10-04/bloomberg-supports-sasb-as-it-defines-sustainability-reporting-that-matters/&ei=pikVUfb9DcnX2QWC2IDABQ&bvm=bv.42080656,d.b2I&psig=AFQjCNEtn1_OAKJph5FSzZgsgwcO6w2OMA&ust=1360427811238192

Ford Connects Big Data with

Environmental Impacts

• “Analytics permeates almost every aspect of sustainability at Ford, helping to chart paths to a cleaner, brighter, better world and a stronger business.”

• “The amount of available data is growing fast: Ford researchers have begun experimenting with vehicles that produce 250 gigabytes of data an hour. More information leads to further improvements in increasing fuel economy and reducing vehicle emissions.”

• “Ford considers big data and analytics the next frontier for innovation, competition and productivity, with new opportunities emerging such as green routing, that allows consumers to optimize driving routes to minimize their impact on local air quality” – Read the full press release here: Ford Embracing Analytics and Big

Data to Inform Eco-Conscious Decisions, Stay Green


http://corporate.ford.com/news-center/press-releases-detail/ford-embracing-analytics-and-big-data-to-inform-eco-conscious




Big Data Inform Solutions

“You can have data without information, but you cannot have information without data.”

– Daniel Keys Moran, Technologist

Data is a “raw material ready to be shaped.” – Tate Cantrell, CTO of Verne Global

“Organizations are cultivating ‘big data’ towards sustainable solutions across industries and sectors.”

– Elaine Hsieh, Program Director & Senior Analyst, Verge

Source: VERGE


http://info.greenbiz.com/index.php/email/emailWebview?mkt_tok=3RkMMJWWfF9wsRolsqjIZKXonjHpfsX56OQuWKG/lMI/0ER3fOvrPUfGjI4CSsVmI+SLDwEYGJlv6SgFSLHEMa5qw7gMXRQ=

Loras College 2014 Business Analytics Symposium | Margie Flynn: Measuring Sustainability

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