YOUR HEADING HERE10.05.2011

2013: What happened? A Summary on Corporate Sustainability

‘Tone from the top’ is key for Sustainability culture★

• Companies where top management takes the lead are more aware and prepared to address sustainability risks

• Sustainability becomes more embedded in corporate strategy and governance where CEO’s report to the board on these issues

• Involvement of the C-suite underlines growth of corporate sustainability as a strategic differentiator

Customers are pushing the agenda

• Pushing the agenda – for example on environmental and working conditions

• Growing interest on product sourcing• Demand for transparency and engagement

Governments

• Failure by governments to take the lead- from annual UN-led climate summits (COPs) ; 2012 Rio Summit

• Pessimism over governments failure to take action on planets biggest challenges

• Risk of sovereign bonds being further impacted by threatened or depleted natural resources

Increasing role of NGOs to press for change

• NGO’s increasingly have stepped into the void created by government failure to take action

• Greater push by NGOs for transparency and accountability. For example, the Carbon Disclosure Project pushing companies to disclose carbon footprints and water risks

• Greater campaigning on human rights issues

Stock exchanges awaken to sustainability

• NASDAQ OMX founding member of Sustainable Stock Exchanges Initiative

• Johannesburg Stock Exchange requires more than 450 companies to produce integrated report

• Brazilian exchange BM&FBOVESPA adopted a comply and explain policy in 2012

Shareholders beginning to have their say

• Growth of shareholder proposals on social and environmental risks- E&Y report they now account for 40% of shareholder proposals

• Focusing on energy consumption and how companies are addressing greenhouse gas emissions reductions

• Other inquiries cover publishing a sustainability report and working conditions/ human rights issues

Mandatory reporting increases

• Major changes to reporting in the UK. • All companies (except small ones) to produce a

strategic report • Listed companies to include human rights in their non-

financial KPIs• Green house gas emissions reporting now mandatory

for listed companies• EU proposal on Mandatory disclosure of non-financial

risks Directive

More rigorous reporting standards

• Global Reporting Initiative (GRI) new G4 standard published: geared towards materiality

• Integrated Reporting-new framework published with focus on information for investors

• Sustainability Accounting Standards Board (SASB)- US-non-profit aims to develop comprehensive set of disclosure standards for UScompanies filing their SEC Reports

• Climate Disclosure Standards Board(CDSB)guidance on GHG reporting

Natural resource shortages a growing concern

• Extreme weather (floods, droughts, hurricanes, wildfires)

• Environmental realities( overfishing, clearcutting)

• Social and political issues (conflict minerals, waste)

• Underground water sources at risk- demand for water expected to increase an d world to fact 40% shortfall by 2030★

Supply chains still key

• Growing interest in supply chain and product sourcing from consumers

• Sustainable procurement increasingly setting scorecards for suppliers

• Critical to long term reputation of companies

Corporate risk management framework not paired with sustainability risk

• Companies are still failing to incorporate sustainability into risk management

• Translates into lack of preparedness• Failure to anticipate key tipping points as

growing interconnectedness of issues • Lack of disclosure in shareholder or regulatory

disclosure

Drive for energy innovation continues

• Overall global investment in renewable energy was down in 2013

• Tech giants like Apple, Facebook, Google and Microsoft continues to make huge commitments this year

• Clean Energy IPOs made a comeback• Greening the existing power infrastructure

continued

Employee leverage

• Large scale change driven by driving sustainability throughout an organisation

• Linking sustainability to performance management and working with key groups, such as human resources

Company claims v external verification

• Majority of consumers and customers want third party verification of green claims

• Increasing ISO standards for eco-labels and management systems

ISO standards becoming more ‘strategic’

• ISO20121- focus on internal and external risks of a company

• ISO14001 –being revised to include understanding the organisation’s strategic context and engagement with interested parties

• BS8900 –focus on sustainability at a strategic level

And lastly…

www.clt-envirolaw.com