Social and sustainability Reporting

Social and sustainability ReportingCorporate Sustainability Reporting, trends and opportunities for the future

29 May 2012

Corporate Sustainability: an overview

Introduction - what is Sustainability Reporting?

► The roots of sustainability from social philanthropy to Corporate Social Responsibility to sustainability.

► Triple bottom line business accountability expands on traditional business reporting to take into account environmental and social performance in addition to financial results.

► It provides stakeholders with insight into the organization’s key non-financial risks and challenges

► It demonstrates how a company’s financial results can be affected by sustainability performance


Sustainability ReportingGlobal Trends

Global output by year*

Global output by year & region*

*CRRA 2011 **CDP 2011

Research by Ernst & Young shows that more than two-thirds of Fortune Global 500 companies publish some form of sustainability or corporateresponsibility reports, reflecting the broad trend towards greater disclosure

CDP reporting companies**


Sustainability Reporting- why bother?

Source: “Striking the Balance” - WBCSD

Regulatory compliance

Creating financial

valueAttracting favorable financing

Employee motivation, attracting

talent

Improving management

systems

Risk awareness

Encouraging innovation

Continuous improvement

Enhancing reputation

Transparencyto

stakeholders


The benefits of sustainability reporting

► A tool to enhance brand value, reduce political and stakeholder resistance and help to differentiate a company in the global marketplace.

► Establishes a foundation for open, positive communication between a company and its stakeholders.

► Sustainability reporting can reinforce the link between short term financial goals with longer term environmental and social objectives.

► Can offer a dynamic organizational learning process which benefits employees.


Key questions for management

► Does the business understand its material sustainability related risks and impacts?

► Have key stakeholders been engaged to understand their expectations of the business in relations to sustainability activities?

► Are strategies for significant sustainability issues such as energy management clearly articulated?

► Is there appropriate governance to deliver consistent standards and drive performance improvement?

► Is there accurate performance data to support performance improvement claims?

► Can the systems and processes for collecting and collating performance data be relied upon?


Investors push for sustainability/ESG data

► Investors looking at safer investments, comprehensive risk management including environmental and social risks.

► Companies with good sustainability performance record or innovating around sustainability trends identified as good investment targets.

► Sustainability Indexes established to enable investors to track company sustainability performance:► Dow Jones Sustainability Indexes (DJSI)► FTSE4Good► Nasdaq Global Sustainability 50 Index

The DJSI criteriaCriteria include: Industry specific

environmental issuesEnvironmental reporting

BiodiversityClimate ChangeSocial reportingGender Diversity

Standards for suppliersCorporate citizenshipCodes of conduct on corruption & bribery

Labour & compensation

PRI: 850 signatories, USD 25 trillion CDP: 551 signatories, USD 71 trillion

Current investment into clean energy and finance:

Europe – EUR 94 billion, China- USD 54 billion,

USA- USD 34 billion


Typical issues:► Pollution► Biodiversity► Business

Excellence► Water consumption► Carbon emissions► Health and Safety► Occupational health► Governance► Community

relations► Government

relations► Revenue

transparency► Employee

Satisfaction► Supply chain

capacity

Failure to identify CSR risks

CSR risk review/risk mapping

Ineffective engagement with stakeholders

Advice on stakeholder engagement strategy

Lack of mitigation plans for CSR impacts

Advice on/reviews of CSR action plans

Ineffective CSR management processes

Development/reviews of management systems

Insufficient monitoring and weak governance controls

Building/testing governance controls and monitoring systems

Insufficient internal/external communications

Advice and assurance over disclosures

Effectivecorporate

sustainability report

What is covered in sustainabilityreporting ?


What makes a GRI sustainability report?

► Society/Community► Labor Practices/Decent Work► Human Rights► Education & Training► Corruption Prevention► Health & safety► Product/Service Responsibility Corporate

Governance

EnvironmentSocial

Economic

► Energy► Water► Emissions► Waste► Products and Services► Carbon footprint

► Economic Performance► Market Presence► Indirect Economic Impact

Approach towards multi-front reporting on sustainability, a vital measure of successful businesses

Total indicators : 79

KPIs40

KPIs30

KPIs9

KPI = Key Performance Indicator


Key challenges and risks of reportingDoing a reality check

Issuing the sustainability report is a challenge by itself; it requires a lot of ground work and data gathering; it also requires dedication and a very high level of involvement from all process owners in the organization. Another challenge is the ability to fulfill commitments in places where is lack of regulations and systems to support the initiatives in our report.Raji HattarChief Sustainability Officer, Aramex

1. Data consistency

2. Data comparability

3. Striking the right balance

4. Dialogue vs Communication

5. Continuous improvement


Where do you start and how do you get there?

► Start with what you have, you don’t have to start from scratch► Collect sustainability data from different departments across the

organization

► Review the current state in order to set (reasonable and achievable) targets for the future

► Be transparent to stakeholders about achievements and goals going forward

► Use international reporting standards and frameworks like the GRI and AA1000 in order to generate a world-class sustainability report

► Balance, materiality and transparency establish credibility

Collect data

Set targets

Report

Assure

► Obtain limited (a review) and/or reasonable (an audit) assurance on your sustainability report


Sustainability reporting in the Middle East – trends and developments


Sustainability Reporting in the UAE

► Abu Dhabi Airports Company

► Abu Dhabi Chamber of Commerce and Industry

► Abu Dhabi Commercial Bank PJSC

► Abu Dhabi Department of Economic Development

► Abu Dhabi Department of Municipality Affairs

► Abu Dhabi Department of Transport Authority

► Abu Dhabi Water and Electricity Authority

► Abu Dhabi Sustainability Group

► Abu Dhabi Tourism Author► Abu Dhabi Gas Industries Ltd

► Abu Dhabi Gas Liquefaction company

► Abu Dhabi National Oil Company

► Aldar properties► Dubai Aluminium Company

Ltd. ► Dubai Centre for Corporate

Values► Dubai Customs► Dubai Properties Group► Dolphin Energy ► Emirates Foundation ► Emirates Integrates

Telecommunications Company PJSC (“du”)

► Energy Management

Systems International► Environment Agency- Abu

Dhabi ► Jumeirah Group LLC► Landmark Group► Metito (overseas) ltd. ► National Bank of Abu Dhabi ► Ras Al Khaimah Ceramics

PSC► Sama Dubai ► Sorouh Real Estate PJSC► The Emirates Group► Tourism Development and

Investment Company (TDIC)► Zonescorp


Sustainability Reporting in the Middle East

Bahrain► Arab Bank ► Zain telecommunications

Syria► Syria telecommunications

Kuwait ► Burgan Bank ► Commercial Bank of Kuwait

SAK► Kuwait Finance House► National Bank of Kuwait

Qatar► Qatar National Bank ► Qatar telecom► RasGas Company Limited

Oman

► Petroleum Development Oman LLC

KSA► Saudi Aramco ► Dr Solman Fakeeh Hospital ► Saudi Arabia Fertilizers

Company ► Saudi Arabian Oil Company ► Saudi Basics Industries

Corporation ► Saudi Electricity Company ► The National Commercial bank► The Saudi British Bank

Egypt ► Arab African International Bank ► Assut Cement Company

► Bavarian Auto Group ► Orascom Telecom Holdings► Sekem Group► Shell Egypt NV► Suez Cement Company

Jordan ► Arab Bank ► Aramex international Ltd► Jordan Aircraft maintenance

Ltd► Jordan River Foundation► Nuqul Group► Schema- tactical thinking ► Zain (Jordan)► Lebanon► Holcim Lebanon sal


Report output by type and year

Source: Corporateregister.com


2011 – Developments in the Middle East: awareness

► Organized groups/ communities► Abu Dhabi Sustainability Group► Estidama► Green Building Councils

► Awards► Dubai Award for Sustainable Transport► CSR Arabia Awards

► Government push► Corporate Governance and ESG standards► Abu Dhabi 2030

► Competitiveness► Leader vs. follower

► Financial incentives ► Sustainability Indexes, carbon trading, energy efficiency projects, etc.


2011 – Developments in the Middle East (cont’d)

► Top down vs. bottom up approach► Majority of Sustainability initiatives are being pushed through middle management► Executive management/ Board

► Sustainability systems and policies implementation (“You Can't Manage What You Don't Measure”)


Trends for 2012/13

► Increased number of reports (one in five a ‘first time reporter’): increase in quantity, but awaiting the step-change in quality

► Independent third party assurance ► Increased level of stakeholder engagement

► Internally: Executive/ Board awareness and understanding ► Externally: interaction with communities, customers and suppliers

► Communication feedback process


Trends beyond 2013

►Credibility through Assurance►Openness & Honesty►Relevance and Materiality►Carbon Disclosure►Creativity in Communications►Integrated Reporting

Thank you

For further information please contact us:

Amjad RihanPartner Climate Change & Sustainability Services - Middle EastDirect: +973 17 203 971Office: +973 17 535 455Mobile: +973 3962 7674 [email protected]

Social and sustainability Reporting

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