Sustainability reporting trends and the retail industry

1. Sustainability Reporting Trends
Retail Industry Leaders Association (RILA)
October 12 14 2011
12-14,
Mike Wallace
Director, Focal Point USA
Global Reporting Initiative
wallace@globalreporting.org
+1 212 339 0356
Venue, Date

2. What is the cu e
a s e current
situation?

3. Range of Terminology
g gy
• CSR - Corporate Social Responsibility
• CC - Corporate Citizenship
p p
• SD - Sustainable Development
• ES - Environmental Sustainability
• BE - Business Ethics
• CE - Corporate Ethics
• CG -CCorporate Governance
t G
• ESG - Environmental, Social & Governance
• IR - Integrated reporting
What is your “Footprint”?
Footprint ?

4. Who
Wh really cares?
ll ?

5. Increasing Stakeholders and Demand
Modern
Due
Diligence

6. How d
H does GRI h l ?
help?

7. GRI’s Vision & Mission
Vision
A sustainable global economy where organizations
manage their economic, environmental, social and
g
governance p performance and impacts responsibly
p p y
and report transparently.
Mission
Mi i
To make sustainability reporting standard practice by
providing guidance and support to organizations
organizations.

8. 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.
sponsorship
Economic
• EC 4 – Significant financial assistance received
from government.

9. What
Wh t are we seeing?
i ?

10. GRI Reporting Trends
2000
Year # of Growth
1818
1800
US Reporters in 1999 reports rate
•Bristol-Myers Squibb
1999 11
1600 •GM 1491
2000 44 300%
1400
•P&G
2001 122 177%
•Sunoco
1200 2002 139 14%
1116
2003 166 20%
1000
2004 274 65%
800 2005 373 36%
709
2006 516 38%
600 516 2007 709 37%
373 2008 1116 58%
400
274
2009 1491 34%
200 139 166
122
2010 1818 22%
44
11
0 586 first-time
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
reporters in 2010
G2 G3

11. GRI Reports by Region 2010*
O
Oceania
i Af i
Africa
4% 3%
Northern
America
14%
Europe
45%
Latin America
14%
Asia
20%

12. GRI Reports by Sector 2010*
300
250
200
150
100
50
0

13. Who
Wh are these Reporters?
th R t ?

14. GRI Reports List
http://www.globalreporting.org/GRIReports/GRIReportsList/

15. GRI Reporters
(North American Sample)
( p )

16. US Business Roundtable
• ABB • ITT
• Accenture Johnson & Johnson April 2009
• Abbott Johnson Control
• Alcoa Life Technologies Corp
• American Electric Power McKesson Corp.
• AT&T Merck
• CB Richard Ellis Group Inc.
p Motorola
• CH2MHill Companies, Ltd. NexTera (Formerly FPL)
• Chevron Office Depot
• Chubb Owens Corning
• Citi PepsiCo
• Coca-Cola Pfizer
• Conoco Philips Praxair
• Cummins Proctor & Gamble Co.
• Darden Ryder
• Deloitte Sara Lee
April 2010
• Dow Chemical SAP USA
• Duke Energy SAS
• DuPont Southern Company
• Eastman Kodak Co. Siemens Corp
• EMC Target Corporation
• Exxon Mobil Tyco
• Freeport M M
F t McMoran UAL Corporation
C ti
• General Electric Weyerhauser
• General Motors Whirlpool Corporation
• HSBC Williams
• IBM Xerox
• International Paper

17. Reporting Trends
p g
Textile and Apparel Sector

18. GRI Reports List Review
Organization Country Region Sector
Teijin Japan Asia Textiles and Apparel
Adidas Germany Europe Textiles and Apparel
Nike United States of America Northern America Textiles and Apparel
Puma Germany Europe Textiles and Apparel
Interf ace United States of America Northern America Textiles and Apparel
The Timberland Company United States of America Northern America Textiles and Apparel
Aksa Akrilik Turkey Asia Textiles and Apparel
Grupo Cortef iel Spain Europe Textiles and Apparel
TOPKAPI IPLIK SAN. ve TIC. Turkey Asia Textiles and Apparel
Art on Stitch Thailand Asia Textiles and Apparel
Ecologic Designs United States of America Northern America Textiles and Apparel
Impahla Clothing South Af rica Af rica Textiles and Apparel
Lindex Sw eden Europe Textiles and Apparel
Liupanshui Minyiyuan Business and China Asia Textiles and Apparel
Trade Company Ltd.
Shunde Hengf a Knitting Garment China Asia Textiles and Apparel
Suzi Products South Af rica Af rica Textiles and Apparel
Vimal Clothing South Af rica Af rica Textiles and Apparel
Central Textiles Group China Asia Textiles and Apparel
Delta Galil Israel Asia Textiles and Apparel
Lindström Oy Finland Europe Textiles and Apparel
Desigual Spain Europe Textiles and Apparel
Gildan Canada Northern America Textiles and Apparel
GoLite LLC United States of America Northern America Textiles and Apparel
Marui Group Japan Asia Textiles and Apparel
Milteks Turkey Asia Textiles and Apparel
Phillips-Van Heusen (PVH) United States of America Northern America Textiles and Apparel
SLN Tekstil ve Moda San.Tic.Ltd.Sti. Turkey Asia Textiles and Apparel
Sree Santhosh Garments (SSG) India Asia Textiles and Apparel
Sw itcher Sw itzerland Europe Textiles and Apparel
Tubas Textile Turkey Asia Textiles and Apparel
CALIDA Sw itzerland Europe Textiles and Apparel
CELTIC ESTORES, S.L Spain Europe Textiles and Apparel
Hansoll Textile Republic of Korea Asia Textiles and Apparel

19. GRI Global Reporting by Region
p g y g
Textile and Apparel Companies Breakdown by
Region
Retailers B kd
R t il Breakdown b R i
by Region

20. Example of Global Reporters

21. Example of North American Reporters

22. What does a G Report
a GRI epo
look like?

23. “The GRI offers a comprehensive
framework for reporting a
company’s impacts and activities”
Nike FY04 Report
“We developed this report with
reference to the Global Reporting
Initiative’s third generation of
indicators. Based upon our
assessment of Reporting and the
GRI criteria, we b li
it i believe our
reporting achieves B-level
application of the GRI.” Nike FY07-09
Report

24. “...the Global Reporting Initiative (GRI), arguably the
world’s most credible and trusted framework for
corporate responsibility reporting” GoLite Website
t ibilit ti ”

25. “In 2005 and 2006, Gap Inc.
Participated in the GRI’s
working group to develop an
Apparel and F t
A l d Footwear S tSector
Supplement that would
introduce a reporting
framework spec c to the
a e o specific o e
issues in our industry. The
GRI’s new G3 guidelines and
the draft GRI Apparel and
footwear Sector Supplement
helped guide us throughout
the development of this
p
Report” GAP 2005 Report

26. “At Target, we recognize the
a ge , e ecog e e
GRI index as one of the
most credible and widely
used reporting standards,
and believe it helps bring
focus to our continued and
evolving work as a
responsible corporate
p p
citizen” Target Website

27. “The framework we have used to
measure and report our results
p
has been adopted from the Global
Reporting Initiative (GRI) G3
Guidelines” HBC Report 2010

28. How ca you make the
o can a e e
business case?

29. As a buyer, what information do you expect?
When you buy a house, a car, a product or
service . . .
i
What i f
Wh t information do you d
ti d deserve?
?
Do
D you want it to be useful & comparable?
t t b f l bl ?

30. Shareholder Initiatives & Coalitions
• Principles for Responsible Investment (PRI) [2006]
– Currently represents over $22 Trillion in investment capital
– 800+ signatories
• Investor Network on Climate Risk (INCR) [2003]
– Currently represents over $9 Trillion in investment capital
– 90+ members
• Carbon Disclosure Project (CDP) [2002]
– Currently represents over $71 Trillion in investment capital
– act on behalf of 551 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

31. Signatories to the UN PRI (US)
800
800+ international signatories
PARTIAL LIST OF ASSET OWNERS (200):
• AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan
• CalPERS CalSTRS
C lPERS / C lSTRS
• 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 C Care Foundation of C
f Connecticut

32. Signatories to the UN PRI (US)
800
800+ international signatories
PARTIAL LIST OF INVESTMENT MANAGERS:
• BlackRock
• Calvert Investments • Boston Trust
• CBRE Investors • Capital Group International
• Domini Social Investments • Clear Bridge Advisors
• JPMorgan Asset Management • MFS Investment
• Kohlberg Kravis Roberts & Co, LLP Management
• Krull C
K ll & Company • Principal Global Investors
• Northern Trust Global Investments • T. Rowe Price
• Prudential Real Estate Investors • Tower Capital Asset
• Russell Investments Management LP
• TD Asset Management Inc.
• The Townsend Group
• TIAA - CREF

33. How would you conduct
y
due diligence?
Can any of this really be
measured?

34. Analysis of Tech Sector
Apple
A l x x 7.95
CA ‐‐‐
Dell x x x x 6.14
EMC x 6.86
Fujitsu x ‐‐‐
HP x x x 7.74
Intel x x x x 7.96
IBM x x x 7.60
7 60
Microsoft x x x x 6.54
Toshiba ‐‐‐
Based on 2010 information

35. Analysis of Tech Sector
Social
Corporate Overall 2010
Company Environment
Governance ESG Score
Leadership
d hi Employees
l Stakeholders
k h ld
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 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
30 10 30 15 30 115
Score
Based on 2010 information

36. Market Evolution
300,000+ data terminals
globally
5,000+ companies and
climbing
Sustainability Aspects
• Emissions
• Energy Consumption
• Human Rights
• Policies
• Board Make Up
Make-Up
Built around GRI

37. ESG Disclosure Score
Company Name Environmental Disclosure Social Disclosure Score Governance Disclosure Overall ESG
Score Score Disclosure Score
2010 2009 2010 2009 2010 2009 2010 2009
Apple ‐‐‐ 12.40 ‐‐‐ 8.77 ‐‐‐ 51.79 ‐‐‐ 20.66
CA, Inc. na na 3.51 3.51 46.43 46.43 11.57 11.57
Dell 37.98
37 98 40.31
40 31 29.82
29 82 38.60
38 60 51.79
51 79 57.14
57 14 39.26
39 26 43.80
43 80
EMC ‐‐‐ 54.26 ‐‐‐ 42.11 ‐‐‐ 66.07 ‐‐‐ 54.13
Fujitsu 55.04 55.04 47.37 45.61 57.14 57.14 53.72 53.31
HP ‐‐‐ 44.19 ‐‐‐ 43.86 ‐‐‐ 57.14 ‐‐‐ 47.11
Intel ‐‐‐ 46.51 ‐‐‐ 50.88 ‐‐‐ 75.00 ‐‐‐ 54.13
IBM ‐‐‐ 41.09
41 09 ‐‐‐ 40.35
40 35 ‐‐‐ 51.79
51 79 ‐‐‐ 43.39
43 39
Microsoft 11.63 na 36.84 14.04 57.14 46.43 28.10 14.05
Toshiba 53.49 56.59 36.84 36.84 53.57 51.79 49.59 50.83

38. Environmental Criteria
Company Environmental Total Energy Total GHG Emission Water Consumption Total Waste
Names Disclosure Consumption (Th Tonnes) (Thousands of cubic (Thousands of metric
Score (Mwh) meters) tons)
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Apple ‐‐‐ 12.40 ‐‐‐ n/a ‐‐‐ 9542.00 ‐‐‐ n/a ‐‐‐ n/a
CA, Inc.
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

39. Social & Governance
Company Social Disclosure Score Governance Disclosure score
Name
% Employees Community % Independent % Women on
Score 2010
Score 2009
Score 2010
Score 2009
Unionized Spending Directors Board
(
(Mn $)
2
2
2
2
2010 2009 2010 2009 2010 2009 2010 2009
Apple ‐‐‐ 8.77 ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 51.79 ‐‐‐ 85.71 ‐‐‐ ‐‐‐
CA, Inc. 3.51 3.51 ‐‐‐ ‐‐‐ n/a n/a 46.43 46.43 88.89 90.00 22.22 20.00
Dell 29.82 38.60 ‐‐‐ ‐‐‐ 27.43 40.89 51.79 57.14 81.82 83.33 ‐‐‐ ‐‐‐
EMC ‐‐‐ 42.11 ‐‐‐ 0.00 ‐‐‐ ‐‐‐ ‐‐‐ 66.07 ‐‐‐ 82.00 ‐‐‐ 9.00
Fujitsu 47.37 45.61 46.97 50.35 50.00 20.00 57.14 57.14 30.00 30.00 10.00 0.00
HP ‐‐‐ 43.86 ‐‐‐ ‐‐‐ n/a 52.20 ‐‐‐ 57.14 ‐‐‐ 90.91 ‐‐‐ 18.19
Intel
I t l ‐‐‐ 50.88
50 88 ‐‐‐ ‐‐‐ n/a 100.00
100 00 ‐‐‐ 75.00
75 00 ‐‐‐ 90.91
90 91 ‐‐‐ 27.00
27 00
IBM ‐‐‐ 40.35 ‐‐‐ ‐‐‐ n/a 185.90 ‐‐‐ 51.79 ‐‐‐ 92.86 ‐‐‐ 21.42
Microsoft 36.84 14.04 0.00 0.00 687.50 516.90 57.14 46.43 78.00 80.00 22.22 20.00
Toshiba
T hib 36.84
36 84 36.84
36 84 ‐‐‐ ‐‐‐ 189.00
189 00 3000.00
3000 00 53.57
53 57 51.79
51 79 28.57
28 57 28.57
28 57 0.00
0 00 0.00
0 00

40. Bloomberg Survey
“With over 300,000 users, the Bloomberg
Professional service provides a great
opportunity and platform for you to share
information with current and potential
i f ti ith t d t ti l
investors concerning your Sustainability or
Corporate Social Responsibility program.”
“Our survey is based on the guiding
principles of the GRI framework.”

41. Sustainability Performance
Source: Bloomberg

42. NASDAQ OMX Sustainability Index

43. Bloomberg – Reporters vs. Non

44. Sustainability Performance
GRI Reporters Presence:
• 95% of the Dow Jones Sustainability Index
• 78% of th FTSE4G d
f the FTSE4Good
• 70% of the Global 100
• 70% of the NASDAQ OMX CRD
Sustainability Index

45. GRI Developments & Trends
• Government Uptake
• Supply Chain
• Financial Markets, Private Equity & Exchanges
• Integrated Reporting
• G4 Development

46. Global Regulatory Review
"More governments are making sustainability
"M t ki t i bilit
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, etc….
• GSA
• Department of State
• SEC

47. Business Transparency on
Trafficking and Slavery Act
New Legislation
There are only a few months left before California’s Transparency in
Supply Chains legislation goes into effect in January 2012.
Who will this affect?
The legislation (SB657 for short) impacts all retailers operating in
California that generate over 100 million in annual gross receipts
receipts.
What does it require?
It requires “conspicuous” public disclosure of the actions companies
are taking to prevent Human Trafficking and modern day slavery in
their supply chains.

48. Supply Chain Ripple
Customer
Training
Suppliers
GRI Stakeholders

49. Mainstream Uptake
May 2010
May 2010 January 2011
January 2011

50. International Integrated Reporting
Committee (IIRC)
http://theiirc.org

51. Early Adopters of Integrated
Reporting

52. Co
Continuous Improvement:
uous p o e e
G4 Development

53. G4 Development Process
Consensus Based Approach:
• Call for Sustainability Reporting
Topics (closed)
• Registration for Public Comment
g
Period (closed)
• Open Public Comment Period (90-
day - through Nov. 24, 2011)

54. How can GRI support
your efforts?

55. GRI Publications
GRI Guidelines & Template:
GRI Learning Publications:
Research and Development Publications
Publications…

56. GRI Publications
• GRI’s research & development publication
series
• Linkage documents

57. Sector Supplements
Available: Pilot Version:
Electric Utilities Airport Operators Automotive
Financial Services Construction & Real Logistics and
Estate Transportation
Food Processing Event Organizers* Public Agency
Mining & Metals Media* Telecommunications
NGO Oil & Gas* Apparel and Footwear
* Under Development

58. Certified Training Partners
g
Over 60 certified training partners globally
Over 60 certified training partners globally
Over 5000 people trained
North America Partners
North America Partners
www.brownflynn.com http://isosgroup.com/ www.leadcanada.net

59. GRI Certified Software & Tools
Program
• PE International
• SAP
• S2D2
• Microsoft
• EnviroCIP
• Enablon
• CSRware
• CA Inc
• Tofuture Oy
• CSR Nordic ApS
• SRI World Group
• Oracle America

60. Organizational Stakeholders

61. Thank you
Mike Wallace
Director, Focal Point USA
Global Reporting Initiative
wallace@globalreporting.org
+1 212 339 0356
Twitter: M_A_Wallace
Linked In:
http://www.linkedin.com/in/mikewallace
http://www linkedin com/in/mikewallace
Venue, Date