1. The Role of Integrated
Reporting in Value Creation
.
Chair: Karin Ireton, Director, Group Sustainability Management,
Standard Bank Group, South Africa
Nelmara Arbex, Deputy Chief Executive, Global Reporting Initiative
Michael Bray, Chair, Better Business Reporting Group, KPMG
Nathan Fabian, Chief Executive, Investor Group on Climate Change
Dr. Jeanne Ng, Group Environmental Affairs, CLP Holdings Limited
John Stanhope, Chairman, Financial Reporting Council’s Integrated Reporting
Taskforce; Former Chief Financial Officer, Telstra

2. CLP’s Sustainability Reporting Journey
The Australian GRI Conference on
Sustainability & Integrated Reporting
28 March 2012
Dr Jeanne Ng
Director – Group Environmental Affairs
CLP Holdings Limited

3. CLP’s Sustainability Reporting (2010)
Sustainability Report – Online Full Version
Annual Report
Sustainability Report – Short
Accolade:
Globe Sustainability Reporting Award 2010
Group Environmental Affairs 2

4. CLP’s Sustainability Reporting (2011)
Integrated Annual Report Sustainability Report – Online Full Version
Group Environmental Affairs 3

5. It’s A Journey…
ESG Reporting Integrated Reporting
Setting
1 2 integrated Setting
Setting indicator 3 new
ESG targets standards
targets & methods
Monitoring 4
ESG Monitoring
indicators integrated
Developing indicators
Building & choosing
awareness integrated
& learning indicators
Choosing
ESG
indicators
2002 2011
Group Environmental Affairs 4

6. Sustainability and Integrated Reporting
 Publish reports and documents to:
 reach out to specific stakeholder groups
 for specific purposes
Hence:
 Our Sustainability Report is a voluntary document that
 focuses on reaching out to non‐governmental organizations,
academia & students and the general public
 to provide an annual performance report primarily on our
environmental and social performance, as well as a bit of our
financial and governance performance
 Our Annual Report is a compliance document that
 focuses on reaching out to our shareholders/investors, regulators,
lenders, business partners and financial analysts
 to provide an annual performance report primarily on our financial
and governance performance, as well as environmental and social
performance that is material to our business
Group Environmental Affairs 5

7. Objectives Of Piloting The Guidelines
 Our Integrated Annual Report focuses on investors: Historical focus of our
ESG communications primarily on non‐governmental organizations, general
community/public , very little on shareholders/investors
 Help satisfy enlightened investors (small portion), sustainability indices, investor
surveys e.g. CDP
 Inform/educate the less enlightened ones (help justify our investments for long
term)
 Improving our communications to our stakeholders on how we deal with
ESG issues: Although managing ESG risks and opportunities is a part of our
DNA, we need to be better at communicating what, how and why we do
what we do, to secure the trust we currently have with our communities.
 Embedding ESG reporting that is material to the business into the Annual Report
can help send the message that ESG is not philanthropy and has a solid business
case
Group Environmental Affairs 6

8. Piloting The Guidelines
 Eliminating one printed document: 9 years of printed sustainability reports.
It is time for an online‐only version of the report targeted for stakeholders
other than investors.
 Further improve and strengthen how we integrate ESG considerations into
our daily decision‐making processes : Operationally, we already have
processes in place (like IC sign‐off), but still relatively less cross‐dept
interaction/understanding
 We already have the normal AR/SR joint preparation process but the content
and perhaps members of the meetings/discussions will change (maybe more
participants and meetings than before)
 Starting to look into linking reporting prep process to the business planning
process
 Explore more relevant integrated metrics, e.g. CO2/$EBIDTA
Group Environmental Affairs 7

9. International Integrated Reporting Council
Group Environmental Affairs 8

10. International Integrated Reporting Council
Guiding Principles & Content Elements
Guiding Principles
Content
Elements
Group Environmental Affairs 9

11. The Guiding Principles
‐ Strategic Focus & Future Orientation
 Usually already have a vision and strategic objectives & business
plans developed around them
 Challenge: being able to communicate them along with the
justification behind them, but without giving away strategically
competitive info
 Way forward: identify the risks & opportunities landscape,
particularly with ESG relevance; strike a balance on the level of detail
of the business development plans to be divulged (consult/agree
with internal stakeholders)
Group Environmental Affairs 10

12. The Guiding Principles
‐ Connectivity of Information
 May have all the major pieces of information, but being reported and/or
managed in departmental/functional silos without clear connectivity to
strategic objectives
 Challenge: being able to communicate the complexity of the multiple
interrelationships between different types of information & data (vertically
from strategic objectives to planned activities, and horizontally across different
functional areas, e.g. financial implications of emissions levies)
 Way forward: increase cross‐departmental understanding & decision‐making
through more discussion/synergy in daily operations (through organizational
structure or process); develop more cross‐functional KPIs (& targets); bring
in/develop communications expertise to improve upon current methods of
communications
Group Environmental Affairs 11

13. The Guiding Principles
‐ Responsiveness & Stakeholder Inclusiveness
 Current social media channels has changed the rate and level of
sophistication at which stakeholders expectations are evolving
 Challenge: being able to communicate accurate facts and our
challenges in a manner to build trust
 Way forward: continue sharing our failures and challenges and
exploring/developing solutions together (empower our stakeholders
with the right knowledge so that they can make the right decisions to
support us in developing a more sustainable future for everyone)
Group Environmental Affairs 12

14. The Guiding Principles
‐ Conciseness, Reliability & Materiality
 Keeping in mind the objective to communicate to different stakeholder
groups in order to manage their changing expectations
 Challenge: increasing dilemma of targeting multiple stakeholder groups
with increasing and evolving reporting scope requirements but using
more concise documents
 Way forward: focus the integrated report on our shareholders (&
continue with different documents to target different stakeholder
groups so that we can address the topics most material to the relevant
stakeholder groups in a timely and concise manner)
Group Environmental Affairs 13

15. Getting Started
Overview Of The 7 Stages (Process Components)
1. Identifying your starting point
2. Planning your exploration
3. Engaging with stakeholders
4. Identifying report content
5. Assessing systems
6. Preparing the report
7. Continuing with your exploration
 Some are interlinked or progressed in parallel
 Some may be in a different order depending on company and/or
from year to year
Group Environmental Affairs 14

16. Progress on the 7 Stages/Process Components
Year 1:
1. Planning your exploration
2. Identifying your starting point All stages
3. Identifying report content Engaging with
4. Preparing the report stakeholders
-External
5. Continuing with your -Internal
exploration by gathering
lessons learned
 In year 1, securing senior management support comes first in the
exploration stage both in terms of budget, authoritative commitment
& agreed timeline
 Engaging stakeholders runs parallel throughout all stages
Group Environmental Affairs 15

17. Progress on the 7 Stages/Process Components
Year 1: Year 2:
1. Planning your exploration 1. Identifying your starting point
2. Identifying your starting point 2. Planning your exploration
3. Identifying report content 3. Identifying report content
4. Preparing the report 4. Assessing systems
5. Continuing with your 5. Preparing the report
exploration by gathering 6. Continuing with your
lessons learned exploration by gathering
lessons learned
 In year 2, identifying starting point from previous year’s lessons
learned was a natural first step and looking at assessing/developing
systems for reporting cycle began
Group Environmental Affairs 16

18. Group Environmental Affairs 17

19. Why Do We Report?
Our Values… Company values to
honor our commitments
to our stakeholders
Group Environmental Affairs 18

20. Why Do We Report?
Reporting
Drive Engage
Performance Stakeholders
Reporting contributes to risk management, e.g. regulatory compliance, reduce
exposure to regulatory risks and enhances corporate reputation
Group Environmental Affairs 19

21. Why Do We Report? Enhanced public awareness
increases pressure to improve
performance and transparency
Drive Engage
Performance Stakeholders
Example:
• Increasing number of external surveys, questionnaires and queries (mostly
relating to socially responsible investments) are benchmarking us and are
increasing scrutiny of our performance and transparency
Group Environmental Affairs 20

22. Responding To External Surveys
CLP provides environmental performance metrics to a number of
international surveys
• Listed on DJSI Asia Pacific
since March 2009.
• The only HK company on
DJSI Asia Pacific 40
Group Environmental Affairs 21

23. Why Do We Report?
Example:
Making a commitment • Climate Vision 2050 targets
public increases
pressure to deliver
Makes sure everyone in the
Drive company is on the same
Performance page on our policies,
practices & goals
Creates opportunity to Examples:
align systems, policies & • Group Flue Gas Desulphurisation
Policy
practices across the Group
• ISO14001 Certification Policy
Group Environmental Affairs 22

24. Awards and recognition helps
Why Do We Report? communicate our
achievements and influence
our brand & reputation
Stakeholders play an
important role in helping 2011 Examples:
us set the rules and • Listed on the
directions for our DJSI Asia Pacific
operations. They 40
• Listed amongst
influence our brand
CDP Top
reputation and Engage disclosure
regulatory compliance scores (6th) for
requirements. Stakeholders Asia ex‐Japan
Global 500
companies
Examples:
• Study of Wind Energy Resources
Communications, support and
over HK, by the Environmental collaboration with stakeholders can help
Central Facility (ENVF) of HKUST build a better foundation for reasonable
• Sustainable Energy Curriculum, for compliance requirements
HK secondary schools
Group Environmental Affairs 23

25. Why Do We Report?
If you don’t report, sometimes someone else will guess your
emissions…
Made massive errors in reporting
CO2 emissions from Castle Peak (and
other CLP facilities)
“ So far, out of the 50,000 plants listed only one meaningful
discrepancy has been identified: China Light and Power
(CLP)… informed us that its massive Castle Peak power
plant...emitted significantly less CO2 than the CARMA
estimate... CLP presented audited records to support this
assertion and the CARMA team quickly made adjustments.”
Unfortunately, retractions are rare and damage already done..
Group Environmental Affairs 24

26. Towards Reporting of Integrated Metrics
Desired
Principles    
Existing Economic Social Value Resource Use Environmental Etc.?
Measures Value Impact
Develop & Use Units of #employees /
Metrics Linking Output unit of output
ESG that is
Material to $Profit CO2 / $ profit
Business
Performance
$Costs
Etc.? Developing Integrated Indicators Material To Business/Company
Some examples…..
Group Environmental Affairs 25