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GRI Sector Leader Webinar Series
Enhancing quantity and quality of reporting The launch of GRI’s US external assurance study
Rina Levy, Bloomberg (GRI Sector Leader) [email protected]
Louis Coppola, G&A Institute (GRI Data Partner) [email protected]
Mike Wallace, Marjella Alma, GRI Focal Point USA [email protected]
GRI webinar with Bloomberg and G&A Institute, 3 April 2013
Outline
Introduction
Mike – GRI
US trends in sustainability reporting
Louis - G&A Presenter
The launch of the US external assurance study
Marjella – GRI Presenter
The value assurance (data)
Rina – Bloomberg Moderator
Louis Coppola
Louis D Coppola – Executive Vice President
GOVERNANCE & ACCOUNTABILITY INSTITUTE, INC. (GRI Data Partner for the US)
Summing up the State of Sustainability Reporting in the U.S.A.
April 3, 2013
Our Findings: About Corporations and Their Sustainability and Responsibility (“S&R”)
Leaders in S&R Enjoy Competitive Advantages
Greater access to capital - attracting patient, long-
term investors – asset owners using ESG screens
Can dramatically lower operating costs
Create clear product & service differentiation
Reduce regulatory or litigation issues
Better enhance and protect their brands, reputation
Enjoy share price enhancement vs. peers
Improve corporate risk management processes
Sampling of US Reporters
Growth in US Sustainability Reporting
2003 – 25 Reports
2004 – 37 Reports
2005 – 36 Reports
2006 – 45 Reports
2007 – 70 Reports
2008 – 118 Reports
2009 – 141 Reports
2010 – 187 Reports
2011 – 333 Reports – March of last year (358 today)
2012 - ~450 Reports
Submit Your Reports – PLEASE!
Download the Submission Sheet:
www.sustainabilityhq.com/reports
Send the completed form to [email protected]
Visit the GRI Global Database
database.globalreporting.org
Trends – Characteristics We See
Leadership companies set pace for peers
investment peers and sector or industry peers
Reporting is becoming “more than annually”
Formats are diverse – print, on-line, hybrids
“Integrated” reports – pacesetters like Clorox (2nd)
Integration of key corporate documents
Reports are end of process – GRI Framework provides
rigorous process – enhances company operations,
marketing, finances, performance
Being used like a Six Sigma or TQM process
Assurance Slowly Being Acquired by Leaders
Corporate ESG / Sustainability Reporting
Does It Matter?
Available at www.ga-institute.com
S&P 500 Reporters / Fortune 500 Reporters VS S&P 500 Equal Weighted Index (01/07 – 9/12 5+ Years)
Are Sustainability Reporters More Likely 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®
Yes
Some Answers:
NASDAQ OMX CRD Global Sustainability Index ® (As of June 30, 2011)
97% are reporting
86% of those use the GRI Framework
Dow Jones Sustainability Index World®
(As of September 2012)
98% are reporting
85% of those use the GRI Framework
Dow Jones Sustainability Index North America® (As of September 2012)
85% are reporting
77% of those use the GRI Framework
What Impact Does Sustainability Reporting have on Selection for Third Party Reputational Lists?
Some Answers:
Yes for Newsweek Greenest Companies in America®
Ranking Top 100 and 500
Yes for CRO 100 Best Corporate Citizens®
Yes for Ethisphere’s World’s Most Ethical Companies®
Newsweek Greenest Companies in America®
GRI Reporters on Average Rank The Highest
Not Reporting – Lowest Average Score
Newsweek Greenest Companies in America®
GRI Reporters on Average – Most Favorable Scores
Not Reporting – Lowest Average Score
(NOTE: Higher is Favorable except Envtl_Impact)
CRO 100 Best Corporate Citizens (As of March 2011)
53% are reporting
72% of those use the GRI Framework
Ethisphere’s 2012 World’s Most Ethical Companies (As of March 2012)
76% are reporting
90% of those use the GRI Framework
Does Sustainability Reporting have an impact on Sustainability Ratings and Rankings?
Yes for Carbon Disclosure Project (CDP)
Disclosure Score + Performance Score
Yes for Glass Door Rankings (4 Rankings Analyzed)
Yes for CSRHub Company Ratings
Yes for BrandLogic/CRD Corporate Sustainability IQ
Matrix
Yes for Bloomberg ESG Disclosure Score
Some Answers:
Average CDP Disclosure Score 2012 (As of September 2012)
GRI and GRI Reference
Score Most Favorably
Average CDP Performance Score 2012 (As of September 2012)
Most Common GRI Reporting Score is an A
Glassdoor Ratings (As of July 2012)
GRI Reporting Companies Have Happier Employees
And More Respected CEOs
CSRHub Company Ratings (As of June 2012)
GRI Reporting Companies Score Higher
Across the Board
Brandlogic Corporate
Sustainability IQ Matrix
(As of June 2012)
The Most Favorable
Quadrant - Leaders
Is Made up of 100%
GRI Reporters
Average Bloomberg ESG Disclosure Score (As of September 2012)
GRI Has the Highest Average Scores &
The Top 32 (highest ranking) companies
are ALL GRI Reporters
S&P 500 Report Conclusions
GRI Reporting Companies
Outperform S&P Index Peers
Are Selected More Often For Leading Reputational Lists
Get Rated Higher by Sustainability Raters
Included More Often In Leading Sustainability Indexes
Keep up with G&A
In 2012 we analyzed over 450 reports for quantitative and qualitative
information.
Launching our New Awards and Recognition services for corporate consulting
clients next week with 3BL Media.
Keep up with reporting at www.SustainabilityHQ.com/reporting
• Interactive Sort/Search Database
• Daily Announcements (also on www.Accountability-Central.com)
• Sign up for our Newsletters (also on www.ga-institute.com)
• Follow us on Twitter (@gainstitute, @GACRUSAReports, @GACRUKReports,
@GACRIEReports)
• Like us on Facebook (find the link on www.ga-institute.com)
• Join our LinkedIN Group.
Proud to help GRI Launch the publication on assurance today
GOVERNANCE & ACCOUNTABILITY INSTITUTE
Louis Coppola, MBA - Executive Vice President, Technology & GRI Strategies Tel 646.430.8230 x14 - Email [email protected]
215 Park Avenue South, 10th Floor (at Union Square) New York, New York 10003
Tel 646 430 8230 Web www.ga-institute.com
Stats & Facts by Rina Levy
…over time, GRI reporters outperform the benchmark
Assured reporters outperform
• 50% of GRI compliant companies have a Bloomberg ESG Disclosure Score of 40 and above
vs
• 3% of those not reporting according to GRI have a score of 40 and above
STANDARDIZE DATA?
Marjella Alma
Key objectives GRI
More reports!
Better reports!
How does GRI help?
GRI Mission To make sustainability reporting standard practice by providing guidance and support to organizations.
95% of Global 250 companies issue sustainability reports – 80% use GRI
40
The GRI Guidelines – the Inventory
GRI Principles:
These guide the content and quality of your
reporting.
Materiality, boundary-setting, inclusiveness,
stakeholder engagement etc.
GRI reporting elements:
1. Profile Disclosures
Strategy, About, Governance.
2. Disclosures on Management Approach
EC, EN, LA, HR, SO, PR
3. Performance Indicators
EC, EN, LA, HR, SO, PR
US GRI data partner
71
119 141
187
269
23
47
2007 2008 2009 2010 2011
Sustainability Reports in the USA
GRI G3 + G3.1 GRI reference Non-GRI sustainability report
46% growth in
absolute number of
GRI reports (w/
index)
2010 - 2011
Launch of the US assurance paper
Data Partner G&A Data Providers: Bloomberg KPMG
GRI and assurance
• GRI recommends external assurance, but does not endorse particular providers nor approaches.
• Report on external assurance: Profile Disclosure 3.13
GRI’s six key qualities
(G3 GL, pg 38) External assurance should
• Be conducted by external party competent in subject + assurance;
• Be implemented in a manner that is systematic, documented, evidence-based, and characterized by defined procedures;
• Assess whether the report provides a reasonable + balanced presentation of performance;
• Utilize parties that come to an independent + impartial conclusion;
• Assess the extent to which GRI framework was applied;
• results in set of written conclusions that is publicly available.
Application levels and assurance
• Sustainability reports based on G3(.1) Guidelines (w/ an Index) that seek external assurance can be illustrated with a “+” – (A+, B+ C+) when the reporting organization determines the 6 key qualities are met.
• During the GRI Application Level Check GRI does not assess whether the external assurance for a report meets the key qualities for assurance identified by GRI, and offers no opinion on whether the “+” is justifiable.
Key Findings
The report shows that in the USA, only 10 percent (26 out of 269) of GRI-based sustainability reports declared a “+” in 2011.
Key Findings
Most assured (+) reports in the USA in 2011 are Application Level B+.
Key Findings
Some of the 26 assured reports contained more than one assurance statement; 30 assurance statements were identified.
Key Findings
The 30 assurance statements were performed by different assurance providers: accountancy, engineering or professional service firms.
Who are these companies?
Scope of assurance
For 16 out of the 30 assurance statements, a wide range of sustainability topics were assured. - some engagements only covered KPI’s
7 were performed for GHG emissions only
7 statements were performed on environmental topics (water, carbon and waste)
Level of assurance
The level of assurance was not specified in 11 out of 30 assurance statements
Standards
A third of assurance statements (= 10 statements for 8 organizations) did not make reference to any assurance standards.
Who should provide it?
Considerations from interviewees:
1) Interviewees looked at what value assurance could provide at a particular stage in the reporting process.
2) Interviewees talked about the rigor and perceived credibility of the external assurance approach and provider.
Questionnaire
• Why & perceived value
• Understanding of GRI and of assurance
• Composition of team providing assurance
• Approach & process
• Duration
• Presentation of outcomes
• Future of assurance
Quotes from interviewees
On the role of GRI
Quote from AICPA
Amy Pawlicki, from assurance standard developer AICPA, says:
“We are very pleased that GRI has conducted this research
study to gain a better understanding of third-party
verification on GRI -based reports. This research
represents an important step in helping the preparers
and users of sustainability disclosures better
assess the diversity of assurance options available
to them.”
Sustainability disclosure database
Data collection on assurance
database.globalreporting.org
NEW GRI data collection Emphasis on Third party opinions/ assurance/verification
Bloomberg - Verification
More involvement with GRI?
In addition to getting started with GRI reporting,
you can:
• Join the Organizational Stakeholder Program
• Become a US Sector Leader
• Participate in Working Groups
• Participate in Governance Structures
Venue, Date
Thank you! More information:
www.globalreporting.org http://focalpointblog.org/usa http://database.globalreporting.org
