90% of Companies Don\’t Do Sustainability Reports in the USA.

1. Sustainability Reporting Trends
“Game Changing Developments”
December 2011
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. How d
H does GRI h l ?
help?

5. 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.

6. 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.

7. What
Wh t are we seeing?
i ?

8. Corporate Sustainability:
A Progress Report
P R October 2011
• 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
(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
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.
li i i d d

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

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

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

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

13. 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

14. Who
Wh really cares?
ll ?

15. Increasing Stakeholders and Demand
Modern
Due
Diligence

16. Shareholder Initiatives & Coalitions
• Principles for Responsible Investment (PRI) [2006]
– Currently represents over $30 Trillion in investment capital
– 900+ signatories
900+ signatories
• Investor Network on Climate Risk (INCR) [2003]
– Currently represents over $10 Trillion in investment capital
– 100+ members
100+ members
• Carbon Disclosure Project (CDP) [2002]
– Currently represents over $71 Trillion in investment capital
– act on behalf of 550+ institutional investors
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

17. Signatories to the PRI (US)
900+ international signatories
PARTIAL LIST OF ASSET OWNERS (200):
• AFL CIO Reserve Fund / AFL CIO Staff Retirement Plan
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
General Board of Pension and Health Benefits United Methodist Ch rch
• 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 S
• 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
Universal Health Care Foundation of Connecticut

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

19. Mainstream Involvement

20. Proliferation & Consolidation

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

22. Sustainability Disclosure Database
http://database.globalreporting.org/
Research & Benchmarking
Research & Benchmarking
Capabilities
• 3,012 Organizations
, g
• 7,681 Reports
• 7,593 GRI Reports
7,593 GRI Reports

23. ESG Analysis of Tech Sector
Apple x x 7.95
CA ‐‐‐
Dell x x x x 6.14
EMC x 6.86
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 6.54
Toshiba ‐‐‐
X Updated 2010

24. Technology Hardware Technology
Software & Services
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 score
30 10 30 15 30 115
(possible)

25. 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

26. Environmental Criteria (2010)
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

27. Social & Governance (2010)
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

28. Sustainability Performance

29. Sustainability Performance
Source: Bloomberg

30. 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

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

32. 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

33. Business Transparency on
Trafficking and Slavery Act
New US Legislation
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.

34. Supply Chain Ripple
October 14, 2011
“. . . The objective of this contract is
to equip the government with the
i h ih h
skills it requires to complete a GRI
report. The work performed under
this contract shall result in a core
group of GSA personnel developing
expertise in the application of GRI
standards to GSA's operational
environment, application of the GRI
Framework and principles to GSA's
SSPP, and how the agency should
approach its first‐ever GRI
sustainability report..”

35. Supply Chain Ripple
October 13, 2011
“. . . Microsoft will also
encourage all its suppliers
ll it li
to consider use of the
reporting guidelines
reporting guidelines
provided by the Global
Reporting Initiative. . . .”

36. Supply Chain Ripple
Customer
Training
Suppliers
GRI Stakeholders

37. Mainstream Uptake
May 2010
May 2010 January 2011
January 2011

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

39. IIRC Participants

40. Early Adopters of Integrated
Reporting

41. GRI
Continuous I
C ti Improvement
t

42. G4 Development Process
Consensus Based Approach:
• Phase I:
Call for Sustainability Reporting Topics
• Phase II:
Registration for Public Comment Period
• Phase III:
FIRST - Open Public Comment Period
(90-day - through Nov. 24, 2011)
• 2012
Working Group Development

43. 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