Venue, Date

Sustainability Reporting Trends

“Game Changing Developments”

June 2012

Mike Wallace

Director, Focal Point USA

Global Reporting Initiative

wallace@globalreporting.org

What is the current

situation?

Range of Terminology • CSR - Corporate Social Responsibility

• CC - Corporate Citizenship

• SD - Sustainable Development

• ES - Environmental Sustainability

• BE - Business Ethics

• CE - Corporate Ethics

• CG - Corporate Governance

• ESG - Environmental, Social & Governance

• IR - Integrated reporting

Non-Financial Reporting

What is GRI’s role?

GRI’s Vision & Mission

Vision

A sustainable global economy where organizations

manage their economic, environmental, social and

governance performance and impacts responsibly

and report transparently.

Mission

To make sustainability reporting standard practice by

providing guidance and support to organizations.

GRI: Global Network Organization

*Business

*Civil Society

Governments

*Financial markets

*Labor

*Mediating institutions

Academia

The GRI Guidelines

Environmental

• EN 3 - Direct energy consumption by primary

energy source

Labor

• LA 7 - Rates of injury, occupational diseases, lost

days and absenteeism, and number of work related

fatalities by region.

Human Rights

• HR 4 - Total number of incidents of discrimination

and actions taken

Product Responsibility

• PR 6 - Programs for adherence to laws, standards,

and voluntary codes related to marketing

communications, including advertising, promotion,

ad sponsorship.

Economic

• EC 4 – Significant financial assistance received

from government.

What are we seeing?

Corporate Sustainability:

A Progress Report • Reviewed 3400 companies representing the national leaders

from 34 countries around the world, including the 250 largest global companies

• Ninety-five percent of the 250 largest companies in the world (G250 companies) now report on their corporate responsibility (CR) activities, two-thirds of non-reporters are based in the US.

• CR reporting has gained ground within the Top 100 companies in each of the 34 countries surveyed.

• The total number of reporting N100 companies increased by 11 percentage points, to 64 percent in 2011.

• Eighty percent of G250 and 69 percent of N100 companies are now aligning to GRI reporting standards.

October 2011

Global Growth in Reporting

1

0

Country Level Specifics USA – 9th place from 74% up to 83% in 3 years

2008 versus 2011 of N100 companies

1

1

US Reporting Trends (Absolute figures)

US GRI data partner

71 119

141 187

273

23

47

2007 2008 2009 2010 2011

Sustainability Reports in the USA

GRI G3 + G3.1 GRI reference Non-GRI sustainability report

46% growth in absolute

number of GRI reports (w/

index) 2010 - 2011

And counting!!

* Data from the Sustainability Disclosure Database as of 12 April 2012

23 125 446

87

40

35

21 112 415

170

167

41

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Africa Asia Europe Latin America NorthernAmerica

Oceania

Not assured

Externally assured

Data Integrity

Growing International Trends “Integrated Reporting”

87%

13%

2010

Notintegrated

Integrated

79%

21%

2011

*Sustainability Disclosure Database data from 1 February 2012

American GRI reporters

GRI Sector Leaders:

Who really cares?

Increasing Stakeholders and Demand

Modern

Due

Diligence

GRI Reporting by Sector (2010)

0

50

100

150

200

250

300

*Sustainability Disclosure Database data from 1 February 2012

Shareholder Initiatives & Coalitions

• Principles for Responsible Investment (PRI) [2006] – Currently represents over $30 Trillion in investment capital

– 1000+ signatories

• Investor Network on Climate Risk (INCR) [2003] – Currently represents over $10 Trillion in investment capital

– 100+ members

• Carbon Disclosure Project (CDP) [2002] – Currently represents over $71 Trillion in investment capital

– act on behalf of 550+ institutional investors

• Institutional Investors Group on Climate Change (IIGCC) [2001] – Currently represents $6 Trillion in investment capital

– 70 members

• Interfaith Center on Corporate Responsibility (ICCR) [1972] – Currently represents over $100 Billion

– 300 members

Signatories to the PRI (US) 1000+ international signatories PARTIAL LIST OF ASSET OWNERS (200):

• AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan

• CalPERS / CalSTRS

• Connecticut Retirement Plans and Trust Funds (CRPTF)

• General Board of Pension and Health Benefits United Methodist Church

• Illinois State Board of Investments

• Los Angeles County Employees Retirement Association (LACERA)

• Maryland State Retirement and Pension System

• New York City Employees Retirement System / New York State Local Retirement System

• SEIU Pension Plans Master Trust

• State Universities Retirement System of Illinois

• Teachers' Retirement System of the City of New York

• Universal Health Care Foundation of Connecticut

Signatories to the PRI (US) 1000+ international signatories PARTIAL LIST OF INVESTMENT MANAGERS:

• BlackRock • Calvert Investments • CBRE Investors • Domini Social Investments • JPMorgan Asset Management • Kohlberg Kravis Roberts & Co, LLP • Krull & Company • Northern Trust Global Investments • Prudential Real Estate Investors • Russell Investments • TD Asset Management Inc. • The Townsend Group • TIAA - CREF

• Boston Trust • Capital Group International • Clear Bridge Advisors • MFS Investment Management • Principal Global Investors • T. Rowe Price • Tower Capital Asset

Management LP

Mainstream Involvement

How are they conducting due diligence?

Sustainability Performance

GRI Reporters Presence:

• 95% of the Dow Jones Sustainability Index

• 78% of the FTSE4Good

• 70% of the Global 100

• 70% of the NASDAQ OMX CRD

Sustainability Index

Market Evolution

300,000+ data terminals

globally

5,000+ companies and

climbing

Sustainability Aspects

• Emissions

• Energy Consumption

• Human Rights

• Policies

• Board Make-Up

Built around GRI

Bloomberg ESG Peer Comparison

Environmental Criteria (2010)

Company Names

Environmental Disclosure

Score

Total Energy Consumption

(Mwh)

Total GHG Emission (Th Tonnes)

Water Consumption (Thousands of cubic

meters)

Total Waste (Thousands of metric

tons)

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

Apple --- 12.40 --- n/a --- 9542.00 --- n/a --- n/a

CA, Inc. n/a n/a --- --- n/a n/a --- --- --- ---

Dell 37.98 40.31 676.00 619.90 366.19 406.25 1596.00 1683.00 52.61 100.00

EMC --- 54.26 --- 932.51 --- 386.26 --- --- --- ---

Fujitsu 55.04 55.04 6638.90 7713.89 273.00 428.00 23106.00 24569.00 32.44 29.71

HP --- 44.19 --- 4046.00 --- 1951.00 --- 7647.00 --- 124.48

Intel --- 46.51 --- 5110.00 --- n/a --- 30379.32 --- 44.48

IBM --- 41.09 --- 6323.06 --- n/a --- --- --- 87.33

Microsoft 11.63 n/a --- --- --- --- --- --- --- ---

Toshiba 53.49 56.59 15398.33 15856.11 3078.00 3435.00 52930.00 55800.00 2610.00 291.00

Performance Over Time

MSCI World & GRI 2002 to 2012

S&P 500 & GRI 2001 to 2011

• SROs - Stock Exchanges

• Regulatory Developments

– National & State Regulation

– Supply Chain Implications

• Supply Chain Developments

• Harmonization

– Associations, Initiatives & Institutions

Global Developments & Trends

Stock Exchange Activity

May 2010 January 2011

Regulatory Developments "More governments are making sustainability

reporting mandatory.“

• 142 regulatory instruments addressing

sustainability reporting exist in over 30

countries

• 65% are classified as mandatory, the rest

voluntary

• United States

• WH CEQ - EO 13514

• USPS, US Army, GSA, etc….

• SEC

• Dodd-Frank

• CA Transparency on Trafficking &

Slavery

Supply Chain Developments

• Sept 2011 – GSA

• Oct 2011 – MS

• Jan 2012 - Apple

Supply Chain Developments

Training

Customer

Suppliers

GRI Stakeholders

GRI Global Harmonization

Association Activity • ABB

• Accenture

• Abbott

• Alcoa

• American Electric Power

• AT&T

• CB Richard Ellis Group Inc.

• CH2MHill Companies, Ltd.

• Chevron

• Chubb

• Citi

• Coca-Cola

• Conoco Philips

• Cummins

• Darden

• Deloitte

• Dow Chemical

• Duke Energy

• DuPont

• Eastman Kodak Co.

• EMC

• Exxon Mobil

• Freeport McMoran

• General Electric

• General Motors

• HSBC

• IBM

• International Paper

• ITT

Johnson & Johnson

Johnson Control

Life Technologies Corp

McKesson Corp.

Merck

Motorola

NexTera (Formerly FPL)

Office Depot

Owens Corning

PepsiCo

Pfizer

Praxair

Proctor & Gamble Co.

Ryder

Sara Lee

SAP USA

SAS

Southern Company

Siemens Corp

Target Corporation

Tyco

UAL Corporation

Weyerhauser

Whirlpool Corporation

Williams

Xerox

Association Activity

What’s on the horizon –

G4?

Six main work streams Technical standardization by editing Task Force

Revision of parts of G3(G3.1) or new content by Working Groups

Harmonization by Secretariat and TAC

G4 online by Secretariat

XBRL G4 Taxonomy for G4 by Secretariat

Updating sector guidance (supplements)

G4 - Stepping Stone Towards Integrated Reporting

Mai

nst

ream

ing

Sust

ain

abili

ty D

iscl

osu

re

Integrated Reporting

Sustainability Reporting

G4

Other paths to mainstreaming

GRI – Due Process

BoD

Public

Comment

Period

WG BoD

Public

Comment

Period

SC +

TAC

View Forward G4 timeline - Working Groups and 2nd PCP

We are here!

MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

2011 2012 2013

2011 2012 2013

Text Revision / Editing Task Force

Preparatory StagePublic Comment

Period 1Public Comment

Period 2

Working GroupsMeet

Final Edit LAUNCHGovernance Bodies give Final Vote

WorkingGroupsFormed

Working GroupsMeet

We are here

G4 Working Groups • Supply Chain Disclosure • Disclosure on Management

Approach

• Governance & Remuneration • Boundary • Application Level

• Anti-corruption

• Biodiversity

• GHG

• OH&S

• June 20 to Sept. 20, 2012

View Forward G4 timeline - Working Groups and 2nd PCP

G4 PCP 1 - Participants

Business 29%

Civil Society Organization

9%

Financial Markets &

Information Users

4%

Labor 1%

Mediating Institution

57%

AFRICA 3%

ASIA 17%

EUROPE 41%

LATIN AMERICA

19%

NORTHERN AMERICA

15%

OCEANIA 5%

Constituency

Breakdown

Regional Breakdown

Total 1834

More involvement with GRI?

In addition to getting started with GRI reporting,

you can:

• Join the Organizational Stakeholder Program

• Become a US Sector Leader

• Participate in Working Groups

• Participate in Governance Structures

Cipriani Wall Street, 55 Wall Street, New York, NYOctober 2-3, 2012

www.COMMITForum.com

Event brought to you by:

Venue, Date

Mike Wallace

Director, Focal Point USA

Global Reporting Initiative

wallace@globalreporting.org

Twitter: M_A_Wallace

Linked In: http://www.linkedin.com/in/mikewallace

Thank you