Corporate ESG / Sustainability Reporting

Does It Matter? Who Cares?Presented by

Louis D Coppola, M.B.A, Senior Vice PresidentGovernance & Accountability Institute, Inc. Tel 646.430.8230 x14 Email lcoppola@ga-institute.com Web www.ga-

institute.com

NIRI NYBaruch College, New York, New York – March 27, 2012

Questions Posted in Research Effort

Does corporate sustainability and responsibility reporting according to GRI Framework matter to capital market players?

Do capital market players assign a premium to corporate issuers that measure, manage and publicly report on ESG performance?

Does GRI reporting influence credible third parties ranking and/or rating corporate performance in leading compilations?

Short Answers… Yes, Yes & Yes

US Companies Looked At

Fortune 500® Companies Largest in Revenues in USA Stock Performance Selection by Third Parties for Rankings & Ratings

S&P500® Index Companies Stock Performance Only

To Determine: Was there measurable outperformance if large-cap

companies reported on their ESG KPIs according to the GRI Framework

Fortune 500 Companies examined S&P 500 Companies Examined Measured against Equal Weighted Index of

S&P 500 Index for Years 2006-2010

Four Year Performance of S&P 500 GRI Reporters & Fortune 500

GRI ReportersVS S&P 500 Equal Weighted Index (S&P

500 EWI)

Indexes1 Year Return

2 Year Return

3 Year Return

4 Year Return

TOTALReturn

YTDReturn

S&P 500 GRI Reporters 18.46% 71.29% 4.19% 14.66% 19.85% 4.52%Fortune 500 GRI Reporters 17.60% 82.11% 7.13% 15.54% 20.72% 3.42%S&P 500 EWI Reporters 19.81% 71.64% 1.28% 1.34% 6.66% 4.06%

Given Indicated Outperformance, Are Fortune 500 Companies

That Are GRI Corporate Reporters MoreLikely to be Included in Leading

Indexes?

NASDAQ OMX CRD Global Sustainability Index ® (QCRD) Yes

Dow Jones Sustainability Index World® Yes

Dow Jones Sustainability Index North America® No

NASDAQ OMX CRD Global Sustainability Index ® (QCRD)

Dow Jones Sustainability Index World®

Dow Jones Sustainability Index North America®

Question: What Impact Does Sustainability & CR Reporting have on Selection for Third Party Reputational

Lists? Question:

Is there a correlation for corporate GRI reporters and selection for popular and credible reputational lists and rankings? We looked at two leading lists with companies ranked.

Answers: Yes for Newsweek Greenest Companies in America®

Ranking Top 100 and 500 Yes for CRO 100 Best Corporate Citizens®

Newsweek Greenest Companies in America® Ranking Top 100 and 500

CRO 100 Best Corporate Citizens vs. GRI

Question: DoesSustainability & CR Reporting

have an impact on Sustainability Ratings?

Yes for CRD’s Sustainable Performance Value® (SPV) – Smart View 360® Platform

Yes for Carbon Disclosure Project Score (CDP)

CRD’s Sustainable Performance Value® (SPV) – Smart View 360®

Platform

82% of Non Reporting CompaniesScored Below 50

64% of Reporting CompaniesScored Above 50

Carbon Disclosure Project Score (CDP)

Sector Differences to Consider

Conclusions Corporate Sustainability and Responsibility reporting according to

the GRI Principles seems to make a difference to investors – reporting companies are outperforming S&P Index peers in share price performance.

Reporting matters to compilers of leading reporting list and reputational rankings, and for corporate ratings on ESG performance.

GRI is the standard for ESG/Sustainability reporting – Investors Want Consistency and Comparability.

GRI has become a global standard for Corporate Responsibility and Sustainability Reporting – becoming a widely-accepted mechanism to providing Consistency over the past four years.

US Companies are measuring and managing ESG performance and reporting to GRI Principles in increasing numbers – but the percentages by sectors is still low compared to other countries and regions.

Updated Report Coming This Year

Analyzing the S&P 500® Companies in the same way using 2011 reporting data.

Adding additional corporate rankings and ratings by third parties. Updated Report will be available July 1st.

News: G&A Institute is now the USA, UK, and Ireland Data Partner for GRI

– gathering and analyzing corporate reporting results to GRI for dissemination worldwide.

Providing much more quantitative and qualitative information for the corporate comparisons going forward.

Coming Soon: US Focal Point / Big 4 / G&A

Trends in External Assurance External Assurance improves the quality of

reporting and the trust shareholders/stakeholders can place in the data

Roughly 15% of US GRI Reporters have their reports externally assured

Worldwide around 50% are assured

Pressing Issues for External Assurance

Confusion in terminology

Who is most qualified to do such reviews?

What are the differences in the levels and scope of reviews?

About G&A InstituteGovernance & Accountability Institute, Inc. (www.GA-Institute.com) Navigating the way to sustainability... G&A serves as Sustainability Headquarters™ for leaders in the corporate, investor and social sectors, providing value-added services focused on ESG/Sustainability issues, including research, monitoring and strategic counsel and advisory services.

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