Embed Size (px)
Citation preview
Corporate Sustainability
Jane Okun Bomba
Chief Sustainability, IR and Comms Officer
IHS Inc.
February 2014
IHS – Quick Facts
• Based in Denver, Colorado USA
• 8,000 employees in 31 countries
• 140 offices around the world
• In business since 1959; IPO in 2005 (NYSE: IHS)
• Half of annual revenue from North America; half of revenue from rest of the world
• Customers in 4 major industries:– Energy and Natural Resources
– Chemicals
– Technology / Electronics
– Transportation – Automotive, Maritime, Aerospace & Defense
2
IHS – the world’s leading information, insight and analytics company
• Unique and leading position in attractive, high-growth markets
• “Must-have” offerings that support the core workflows of our diversified and global customer base
• Primarily subscription-revenue model delivering recurring revenue and high levels of cash flow
• Scalable business model with significant operating leverage
• Compelling strategies driving continued profitable growth
• Experienced management team
3
© IHS 2014
2005 2013
Adjusted EBITDA1,3
+ 26% CAGR
$87
$562
1$ in millions except per-share amounts.2Based on 11/11/05 close price.3”Free Cash Flow” and “Adjusted EBITDA” are non-GAAP measures as defined in our most recent earnings release (see www.ihs.com).
We’ve delivered sustained, double-digit, profitable growth since our IPO over 8 years ago
2005 41673
Cumulative Post-IPO Shareholder Return1,2
+ 26% CAGR
$17per share
$111per share
2005 2013
Free Cash Flow1,3
+ 33% CAGR
$43
$405
2005 2013
Revenue1
+ 18% CAGR
$476
$1,841
+1,230 bpsof margin expansion since 2005!
18.2%30.5%
4
© IHS 2014
We constantly measure against five benchmarks that drive all aspects of our performance
Customer Delight
Profitable top- and bottom-line
growth
Shareholder success relative
to peer group
ColleagueSuccess
Corporate Sustainability
5© IHS 2014
© IHS 2014
Our target industry sectors are large, growing and global in nature representing a significant opportunity
IHS Target Industry Sectors
Energy & Natural
Resources
TransportationTechnology
Chemicals
$41T revenueLarge
GrowingAbove-market long-term growth (high single to double digit)
InterdependentEmbedded in each other’s supply chains
Vertical depthDeep IHS industry knowledge & expertise
6
Corporate Sustainability:A driver of long-term profitable growth
Strong Corporate Sustainability can make your company a better company
• Attract and retain top talent
• Corporate Sustainability can drive innovation and efficiency and…ultimately, valuation
8
• Decision-making through a Sustainability lens supports long-term profitability
• A big goal of Corporate Sustainability is increased transparency.
• Sustainability is largely about managing risk and driving innovation, both of which are top priorities for most corporations
© IHS 2014
% of CEOs believe sustainability should be integrated into company strategy and operations96
% of CEOs cite complexity of implementation across functions as the most significant barrier to company-wide sustainability
49Source: A New Era of Sustainability, UN Global Compact - Accenture CEO Study 2010
Sustainability is measured in broad terms
10
Social Reporting, Labor Practices, Human Capital, Talent Attraction & Retention, Citizenship & Philanthropy, Health & Safety, Advertising ethics, Editorial policy, Stakeholder Engagement
Environmental Reporting, Environmental Policy/ Management, Operational Eco-Efficiency, Hazardous Substances
Corporate Governance, Risk Management, Codes of Conduct, Customer Relationship Mgmt, Lobbying, Piracy
Governance1 Environment2 Social3
Corporate Sustainability: Measuring performance in very broad terms
Focus on Corporate Sustainability will drive Shareholder Value
“Sustainability is a company’s capacity to prosper in a competitive and changing global business environment by anticipating and managing current and future economic,
environmental and social opportunities and risks. Companies that address these factors through innovation, quality and productivity enhance their ability to generate
long-term shareholder value.”
--Sustainable Asset Management
11
© 2013 IHS 12
Growing trends in corporate sustainability
Ernst & Young 2013 survey looked at how companies are responding to a wide range of internal and external forces related to environmental sustainability risks and how well companies are prepared to address them.
Several trends emerged:1. Inquiries from investors and shareholders are on the rise.
2. The “tone from the top” is key to heightened awareness and preparedness for sustainability risks.
3. Governments and multilateral institutions aren’t playing a key role in corporate sustainability agendas.
4. Sustainability concerns now include increased risk and proximity of natural resource shortages.
5. Corporate risk response is not well paired to the scale of sustainability challenges.
6. Integrated reporting is slow to take hold.
© 2013 IHS
International Integrated Reporting Council (IIRC)
• The International Integrated Reporting Council (IIRC) - a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs.
• This group shares the view that communication about value creation should be the next step in the evolution of corporate reporting
• An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term.
© 2013 IHS 14
Investor Responsibility Research Center Institute (IRRCI) Stats on S&P 500 (April 2013)
499 -- The number of companies making a sustainability disclosure in a financial filing or linking financial performance to a sustainability initiative
• 74% of companies placing a dollar figure on a sustainability‐related topic• 43% linking executive pay to sustainability criteria • 65% with a sustainability‐related monetary estimate in a Form 10‐K• 66% discussing climate change• 76% with sustainability reporting• 63% disclosing on hazardous waste• 54% talking about product formulations• 49% noting waste management initiatives• 29% making the financial connection in a sustainability report• 39% looking at water use• 60% disclosing sustainability‐related contingencies or liabilities
7 -- Number of companies with an integrated financial & sustainability report
© 2013 IHS
Strong Sustainability practices drive operating and financial performance
Environmental SocialGovernance
Higher environmental ratings suggest operational efficiency, reducing contingent liability profile by actively managing the firm footprint (e.g., waste and emissions) or positioning to exploit low-resource revenue opportunity.
High scores in the social dimension suggest effective management of human capital, safety of products and services, or positioning to realize opportunities from increased social inclusion.
Good governance is expected to produce long-term benefits to shareholders and creditors, principally from the reduction of risk driven by the formation of strong internal controls and effective board oversight.
Corporate Sustainabilityat IHS
© 2013 IHS
Sustainability at IHS
• Corporate Sustainability is a core element of our business model and key to our future performance; it is not a special project
• We embed Sustainability into every aspect of our culture and it is a core element of the solutions we provide to our customers
• As we increasingly integrate Corporate Sustainability into our operations it is becoming a key enabler of operational efficiency and excellence; a discipline that will help us to drive innovation and drive our long-term success
2011: Initiated a formal program/function
Formally launched the IHS Corporate Sustainability function and defined our vision
Built a global team of Site Champions with every IHS site represented
Provided structure and support for those Champions around the world to help them in leading local sustainability efforts
Created a global framework for gathering data from all IHS sites and implemented an IHS system for metrics management
Participated in the Dow Jones Sustainability Index SAM* Assessment
* SAM (Sustainable Asset Management) is a Zurich-based investment firm
2012: Established new Corporate Goal – Corporate Sustainability
IHS has added a fifth corporate goal – Sustainability: Make operational improvements that bring efficiencies and foster
innovation, and reduce environmental impacts
Positively affect our communities through global colleague participation and philanthropy
Be recognized as a leader in Corporate Sustainability based on 2015 performance
We will drive and measure our progress using the Dow Jones Sustainability Index SAM Assessment:
– Target: Inclusion in DJSI World Index based on 2015 performance
2013: Established structured process for SAM assessment; added VTO benefit
Implemented more structured process for assessment response:• Robust tracking and response management process
• Responses will be linked to business strategies and company goals
– What is the Benefit?– Does this policy, process, strategy:
• Improve Customer Delight? • Strengthen Colleague Engagement? • Help grow revenue? • Reduce costs and bring efficiencies to IHS?
Volunteer Time Off (VTO) benefit:
All Colleagues have a full day of paid time to volunteer
We encourage IHS team events to bring offices together
Supports Brand, Community, Colleague Engagement, Talent Attraction and Retention
2013: IHS added to the Dow Jones Sustainability Index – North America
IHS added to the DJSI North American Index: • Key Results: • 79th Percentile• IHS Score: 63• Industry Average: 45
Highlights: • Customer Relationship Management: 100th Percentile – Score of 88• Labor Practices and Human Rights: 95th Percentile – Score of 72
2014: Driving toward best-in-class performance
• Create corporate scorecards for each functional area• Maintain our listing on the Dow Jones Sustainability North America
Index• Support worldwide community involvement by ending the year with
100 percent of all IHS sites and offices participating in volunteer activities in their geographic locations• Contribute 16,000 IHS colleague volunteer hours globally
23
Corporate Sustainability: Top Takeaways for Initiating a Program
• Think broadly when defining; this isn’t about recycling
• Successful CSR is different for every company – think about what fits your company’s culture and long-term vision – it’s raison d’etre
• Develop a vision for how it connects with strategy and performance
• Learn how it can help to mitigate broad corporate risks
• Strong Sustainability efforts often lead to increased innovation
• Done right, it should make your company more efficient, a better place to work, & help to drive long-term competitiveness & growth
A focus on CSR will make your company more profitable, a better place to work, and a better investment!
