GRI Launch of the US external assurance study with G&A Institute & Bloomberg

Venue, Date

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]

[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

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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

http://grifocalpointblog.org/usa

Venue, Date

Thank you! More information:

www.globalreporting.org http://focalpointblog.org/usa http://database.globalreporting.org