finding value in non-financial reporting
DESCRIPTION
This presentation was given at the annual meeting of Boston College's Center for Corporate Citizenship (BCCCC) on April 12, 2011.The presTRANSCRIPT
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
Bloomberg – Reporters vs. Non
© GRI 2011
How else can you find value?
Supply Chain
Financial Markets, Private Equity & Exchanges
Integrated Reporting
Government Uptake
G4 Development
© GRI 2011
Supply Chain Ripple
Customer
TrainingTraining
Suppliers
GRI Stakeholders
© GRI 2011
Mainstream Uptake (May 14, 2010)
© GRI 2011
Mainstream Uptake (Jan 31, 2011)
© GRI 2011
International Integrated Reporting Committee (IIRC)Reporting Committee (IIRC)
http://theiirc.org
© GRI 2011
Early Adopters of Integrated ReportingReporting
© 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
Wh t b t G4?What about G4?
© GRI 2011
Global Reporting Initiative
Thank you
Mike WallaceDirector, Focal Point USAGlobal Reporting Initiativewallace@globalreporting [email protected]+1 212 339 0356