Simon Propper of Context, Emma Howard Boyd of Jupiter Management, and Dax Lovegrove of WWF discuss which corporate sustainability reports have the X Factor

1. Sustainability Reporting
Have you got the X Factor?

2. XF t P l
Factor Panel
 Emma Howard-Boyd: Jupiter Asset Management
 Dax Lovegrove: WWF
 Simon Propper: Context
2

3. XF t R
Factor Reports
t
Shell Soco Xstrata
3

4. The X Factor test
1.
1 CEO Letter: D it
Does it…
Connect business and SD strategy? Set priorities?
p
Show leadership?
2. Text: Is it candid?
3. KPIs: Do they cut to the chase on key issues?
4.
4 Targets: Are they… Challenging? Quantified?
they
Short and long-term?
5.
5 Scope: Does it cover whole lif
D h l life-cycle impact?
l i t?
4

5. Xstrata:
 116 pages
 pdf download and website
 6th annual SD report
 Assurance by E&Y
 Indexed against GRI, UN Global
Compact and ICMM Principles
5

6. Xstrata: CEO L tt
Letter
…We must equally demonstrate to communities and
host nations that our presence delivers sustainable
benefits that extend beyond simply providing jobs or
paying taxes.
If we can achieve this, we will continue to secure
access to new resources and sources of capital employ
capital,
and retain the best people, manage risk, reduce costs
and create and seize business opportunities…
…Other challenges include managing the security risks
associated with operating in higher risk regions, and we
are implementing the Voluntary Principles on Security
and Human Rights to guide our use of private security
forces and our interaction with public security
personnel and communities across the Group.
Mick Davis Chief Executive
6

7. Xstrata: Candid text
Unfortunately, like any business, we also suffer setbacks and
do not always reach our own high standards. It is both tragic
and wholly unacceptable that nine people lost their lives
working for Xstrata in 2009
2009.
We investigate each incident thoroughly and in each case the
Executive Committee and the Board HSEC Committee receives
a personal report from the Chief Executive of the commodity
business concerned.
We must learn from these tragic incidents and do better in
future.
 18 February 2009: Australia A contract truck driver was fatally injured when ten
tonnes of coal reject from the loading bin fell directly onto the fibreglass roof of
his truck cabin.
 19 May 2009: Australia A loader operator was fatally injured when the loader
entered an open stope and fell 27 metres.
 9 June 2009: South Africa A contractor was fatally injured when caught between
ab l
bolter-mining machine and the wall of the underground roadway.
i i hi d h ll f h d d d
 11 July 2009: Colombia A contract labourer was crushed between a reversing
front-end loader and a truck. 7

8. Xstrata: Candid text
In 2009 we failed to meet our target to incur no environmental fines or penalties. We
incurred six environmental fines, totalling $760,573 (see table).
Three of the fines (worth a total of $696,062) were for activities at Prodeco coal mine in
Colombia that occurred prior to Xstrata’s management of the site. Xstrata acquired
site
Prodeco in early 2009 and we have since sold it back to its former owners Glencore
International.
We implemented remediation plans to mitigate the minor environmental impacts of the
Nikkelverk sulphuric acid spill and the administrative issues associated with the Noranda
Recycling and Horne fines, and to prevent them from happening again.
8

9. Xstrata: KPIs
9

10. Xstrata: KPIs
10

11. Xstrata: KPIs
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12. Xstrata: Targets
12

13. Xstrata: Scope
On climate impact:
Xstrata mines about 1.5% of the world’s annual thermal
1 5% world s
coal production, and is the largest exporter of the fuel…
In 2009, combustion of the coal we p
, produced by our
y
customers accounted for approximately 227 million
tonnes of CO2e, or approximately 10 times the
emissions generated by our operations.
13

14. Xstrata: Scope
On human rights:
Xstrata operates in several regions where security issues
p g y
make it necessary to protect our sites and employees.
Xstrata supports the UN Universal Declaration of Human
Rights, the International Labour Organisation Conventions
and is a signatory to the UN Global Compact
Compact.
We apply the Voluntary Principles on Security and Human
Rights (Voluntary Principles) to help ensure our security
measures are reasonable and responsible.
bl d bl
We conduct human rights risk assessments at all locations
and have identified sites in Colombia, Philippines, Peru, the
Dominican Republic and South Africa as posing the greatest
risk. Our focus on identifying human rights risk and
preventing incidents is important to ensure safe and
unhampered operation of our facilities
facilities.
14

15. Xstrata: Rating
1.
1 CEO L tt
Letter: 5/5
2. Candid text: 4/5
3.
3 KPIs: 5/5
4. Targets: 3/5
5. Scope: 3/5
20/25
15

16. Soco
 1 webpage report
 Approx 3000 words
 Almost no data
 No assurance
 No reference to external standards
16

17. Soco
17

18. Shell
 40 pages, 8 page summary report, local
reports
 pdf download and website
 Reporting since 1997
 Limited assurance by LLoyd's Register Quality
Assurance, External Review Committee
 Indexed against GRI, UN Global Compact
and IPIECA Guidelines
18

19. Shell: CEO
Sh ll C O Letter S report
SD
I believe sustainable development works best when it is
thoroughly integrated in our business decisions at the
very earliest opportunity. Safety, environmental and
social performance are now closer to the core of our
business plans and decisions… that is exactly how it must
be if we are to meet the complex challenges ahead in
the most effective and responsible way.
h ff i d ibl
Peter Voser Chief Executive Officer
(SD Report)
19

20. Shell: CEO
Sh ll C O Letter A
AR
…Our performance improved in 2009 in many of the
p p y
areas we monitor related to sustainable development.
Our occupational injury rate was the lowest we have
ever recorded. However, tragically we did incur 20
g y
work related fatalities during 2009. To help bring
down such fatalities – ideally to zero – we launched a
set of safety rules to address specifically the work-
time practices with the greatest risk to life.
…To channel our skills more quickly, more effectively
and more economically, last year I reorganised our
economically
business units. One of the main aims was to
concentrate in one unit the accountabilities for
delivering major new projects and developing new
technologies. That will better position us to execute
Upstream operations and secure access to resources.
It will also help us better manage the many
environmental and societal issues associated with
developing oil and gas fields. 20

21. Shell: SD embedded in main
investor presentation
i i
Premium Review Conference Sociéte Générale– Paris
December 3rd 2010
Simon Henry Chief Financial Officer
21

22. Shell:
Sh ll KPIs
22

23. Shell: i k
Sh ll Risk Factors
23

24. Shell: Climate Ch
Sh ll Cli Change
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25. Thank you
Have you got the X Factor?