AgendaAgenda

Sustainability Reporting – O’Brien

“High Performance Buildings” - Video

Project Teams - Working Session

Sustainability ReportingSustainability ReportingSources: “Sustainability – The New Business Paradigm”, Chapter 10 (to be published in 2010)

Sustainability Report by Teri

“Sustainability Reporting”, Professor Ans Kolk, University of Amsterdam Business School, VBA Journal, 2005

“10 Trends in Sustainability Reporting”, Globe Net, February 10, 2010

DefinitionBackground10 TrendsWhy Companies ReportTypes of Reports:

◦ Required by Legislation◦ Voluntary Initiatives

Voluntary InitiativesPros and Cons: ReportingBenefitsSample Reports

TopicsTopics

DefinitionDefinition

Sustainability Reporting is the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance against specific environmental, social and economic/governance (“ESG”) goals and metrics. 

Sustainability Reporting is rapidly gaining adoption across all market sectors globally, and is now the norm among large companies globally, driven mainly by global investment community demand.

BackgroundBackground

Reporting on performance can help a companydrive internal change in numerous ways:• forces the company to acknowledge sustainability issues and

assess if any gaps exist.• when communicated internally, the company leaders can

show managers and employees as to what needs to be done and rally support for a cause or an action.

• The report can serve as a part of the check in a standard “Plan – Do – Check – Act” (PDCA) process.

• change can also come about a benchmarking study whereby data is collected and compared to a best-in-class company.

• sustainability reports also invite comments and scrutiny from external stakeholders.

10 Trends10 Trends

Financial statements capture only a portion of corporate risks and value-creation potential, with the balance derived from intangible factors such as strategy, product innovation, brand and reputation management, energy/resource efficiency, commercial risk reduction, and environmental and social risk reduction.

Sustainability reporting is largely voluntary worldwide.

Sustainability reporting is now the norm among large companies globally, increasing from about 300 sustainability reports in 1996 to 3,100 (The Global Reporting Initiative reported more than 1,000 organizations worldwide that have registered sustainability reports in 2008 based on the GRI G3 Guidelines.)

Sustainability reporting in the U.S. has been much slower to develop than in Europe.

Most industrialized countries have long-standing environmental laws that restrict environmental-impact activities and require some form of environmental regulatory reporting.

10 Trends continued10 Trends continued

The evolution of metric frameworks for sustainability reporting is a major challenge for suppliers and users.

Multiple metric frameworks, a lack of uniform definitions, and a lack of consistent applications are producing variable and unreliable measurement and disclosure results.

The emergence of national and regional legislation and regulation, which have not been integrated and/or synchronized with multiple metric frameworks, is a major challenge.

Synchronization of voluntary reporting frameworks with governmental and regulatory requirements may be driven in part by recent initiatives by GRI and the World Intellectual Capital Initiative

Governmental, regulatory, and audit oversight of sustainability issues will become the norm within five years, in both the developed and developing world, across all industries

Why Do a Report? Why Do a Report?

Providing information about challenges and achievements to shareholders, employees, the public and other stakeholders

An internal commitment to environmental and social responsibility As a marketing tool, associating the company with sound

environmental management and sustainable activities

Tracking progress on integration of sustainability principles into company planning and programs

Taking first steps towards doing things in a more sustainable way

A successful pilot project persuades decision-makers to take the initiative company-wide

A commitment while becoming a world leader in sustainability

Importance of Sustainability Importance of Sustainability ReportingReporting

Self-assessment toolManagement systemExternal monitoring mechanismAction planBusiness development toolCommunications vehicle

Looking beyond short-term band-aids to find longer term solutions that make business sense

Types of ReportsTypes of Reports

Required by Legislation

Voluntary Initiatives

Required by LegislationRequired by Legislation

Voluntary InitiativesVoluntary Initiatives

Carbon Disclosure Project (CDP) https://www.cdproject.net/en-US/Pages/HomePage.aspx

Dow Jones Sustainable Index (DJSI) http://www.sustainability-index.com/

Global Reporting Initiative (GRI) http://www.globalreporting.org/Home

UN Global Compact COPhttps://globalcompact.pbworks.com/Introduction+-+The+10+Principles

Pros: ReportingPros: Reporting

Cons: ReportingCons: Reporting

BenefitsBenefits

Reduce operating costs and improve efficiencies;Develop innovative products and services for

access to new markets;Improve reputation and brand value;Recruit and retain excellent people;Gain better access to investor capital;Enhance the public value of the company;Reduce liabilities through integrated risk

management.

Preparing a Sustainability Preparing a Sustainability ReportReport

Intensive, year-round process

Frequency of reporting – Annual (aligned with annual reporting process)

Format and Medium - PDF format in combination with stand-alone hard copy and web-based interactive reporting

Principles for ensuring Report Quality: Material issues and topics; Balance; Comparability; Accuracy; Timeliness and Clarity

Typical Reporting ProcessTypical Reporting Process

Brainstorming0.51.53.0

Duration (Months)

MinimumAverage

Maximum

OutlineDevelopment

0.251.52.0

InformationCollection

0.753.06.0

Writing andDesign

1.03.07.0

InternalReview

1.02.04.0

ExternalReview

1.01.02.0

Sample ReportsSample Reports

Cascades, Inc.

Desert Glory

Questions?Questions?