Approaching Integration from the Investor and the Company Perspective

Reaching Investors with the GRI Guidelines

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Sector Supplement

Annexes

The GRI reporting framework

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Declared use of the GRI Guidelines

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Perspectives on Sustainability Reporting

The Business Case

Net Asset Value and Market Value Gap

Corporate governance Intangibles: reputation and brand License to operate / public trust Cost of capital

The limits of conventional reporting Risks and opportunities

Integrated value reporting

The Public Policy Case

Social and environmental capital No free lunch “Joules law”: nothing disappears

Full cost accounting

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Sustainability Matters for Business

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How do investors use ESG information?

Screening

Engagement

Finding alpha

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What Gets Integrated?

New regulations E.g., carbon emissions trading

New consumer preferences E.g., organic foods, hybrid cars

New market costs E.g., increasing cost of fossil fuels

When it becomes a matter of character and trust

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How Does it Get Integrated?

Index approaches and adjusting one factor

Scenarios

Items with new costs (e.g., carbon emissions, regulatory compliance)

Quality of Management

Thematic funds

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What conclusions do people draw?

Short-term risks (e.g., protests, spills, etc.)

Quality of management

The company’s ability to grow over the longer-term

Emerging or ongoing costs or liabilities (e.g., soil remediation)

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How Does a Company See It?

EnablersValue Drivers

Financial Results

ESG

Supply Chain Labor Standards

Customer Loyalty

Sales(Market share)

(Pricing premiums)

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How Does a Corporate Manager Work?

Disaster/Risk

New business idea

Routine Good Management

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The Gap in Today’s Measurement

EnablersValue Drivers

Financial Results

Supply Chain Labor Standards

Customer Loyalty

Sales(Market share)

(Pricing premiums)

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The Gap in Today’s Reporting

Link to business is not clear

Priorities are not clear

Data is not comparable enough

Different languages for talking about business strategy and sustainability strategy

Hard to explain why it is good business

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Using the G3 to reach investors

CEO Statement Vision & Strategy External trends Priorities Outlook

Analysis Key risks & oppty Targets and results

Table of data

Verification statement

Strategy & Analysis

Full Report

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What Can be Measured Financially?

InternalInterest

PublicInterest

FinanciallyQuantifiable

Qualitative Judgment

Carbon Emissions

Soil Pollution Liabilities

Supply Chain Labor Practices

Ecosystem Health

Legal fines

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…but Analysts Often Work Qualitatively

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Please Contact Us!

Sean [email protected]: +31-20-531-0004

Visit us online at www.globalreporting.org