Venue, Date

Sustainability Reporting Trends

“Game Changing Developments”

March 2012

Mike WallaceDirector, Focal Point USAGlobal Reporting Initiativewallace@globalreporting.org+1 212 339 0356

What is the current situation?

Range of Terminology• CSR - Corporate Social Responsibility• CC - Corporate Citizenship• SD - Sustainable Development• ES - Environmental Sustainability• BE - Business Ethics • CE - Corporate Ethics• CG - Corporate Governance• ESG - Environmental, Social & Governance• IR - Integrated reporting

Non-Financial Reporting

How does GRI help?

GRI’s Vision & Mission

Vision A sustainable global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently. MissionTo make sustainability reporting standard practice by providing guidance and support to organizations.

The GRI GuidelinesEnvironmental• EN 3 - Direct energy consumption by primary

energy source

Labor• LA 7 - Rates of injury, occupational diseases, lost

days and absenteeism, and number of work related fatalities by region.

Human Rights• HR 4 - Total number of incidents of discrimination

and actions taken

Product Responsibility• PR 6 - Programs for adherence to laws, standards,

and voluntary codes related to marketing communications, including advertising, promotion, ad sponsorship.

Economic• EC 4 – Significant financial assistance received

from government.

GRI Harmonization – Local & Global

What are we seeing?

Corporate Sustainability:A Progress Report

• Reviewed 3400 companies representing the national leaders from 34 countries around the world, including the 250 largest global companies

• Ninety-five percent of the 250 largest companies in the world (G250 companies) now report on their corporate responsibility (CR) activities, two-thirds of non-reporters are based in the US.

• CR reporting has gained ground within the Top 100 companies in each of the 34 countries surveyed.

• The total number of reporting N100 companies increased by 11 percentage points, to 64 percent in 2011.

• Eighty percent of G250 and 69 percent of N100 companies are now aligning to GRI reporting standards.

October 2011

Who are these Reporters?

GRI Reporters (North American Sample)

US Business Roundtable• ABB• Accenture• Abbott• Alcoa • American Electric Power • AT&T• CB Richard Ellis Group Inc. • CH2MHill Companies, Ltd.• Chevron • Chubb • Citi • Coca-Cola• Conoco Philips • Cummins • Darden • Deloitte • Dow Chemical • Duke Energy • DuPont • Eastman Kodak Co. • EMC• Exxon Mobil • Freeport McMoran • General Electric • General Motors • HSBC• IBM • International Paper

• ITT Johnson & Johnson Johnson Control Life Technologies Corp McKesson Corp. Merck Motorola NexTera (Formerly FPL) Office Depot Owens Corning PepsiCo Pfizer Praxair Proctor & Gamble Co. Ryder Sara Lee SAP USA SAS Southern Company Siemens Corp Target Corporation Tyco UAL Corporation Weyerhauser Whirlpool Corporation Williams Xerox

Who really cares?

Increasing Stakeholders and Demand

Modern Due

Diligence

Shareholder Initiatives & Coalitions• Principles for Responsible Investment (PRI) [2006]

– Currently represents over $30 Trillion in investment capital– 900+ signatories

• Investor Network on Climate Risk (INCR) [2003]– Currently represents over $10 Trillion in investment capital– 100+ members

• Carbon Disclosure Project (CDP) [2002]– Currently represents over $71 Trillion in investment capital– act on behalf of 550+ institutional investors

• Institutional Investors Group on Climate Change (IIGCC) [2001]– Currently represents $6 Trillion in investment capital– 70 members

• Interfaith Center on Corporate Responsibility (ICCR) [1972]– Currently represents over $100 Billion– 300 members

Signatories to the PRI (US) 900+ international signatoriesPARTIAL LIST OF ASSET OWNERS (200):

• AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan • CalPERS / CalSTRS • Connecticut Retirement Plans and Trust Funds (CRPTF)• General Board of Pension and Health Benefits United Methodist Church• Illinois State Board of Investments• Los Angeles County Employees Retirement Association (LACERA)• Maryland State Retirement and Pension System• New York City Employees Retirement System / New York State Local Retirement System• SEIU Pension Plans Master Trust• State Universities Retirement System of Illinois• Teachers' Retirement System of the City of New York• Universal Health Care Foundation of Connecticut

Signatories to the PRI (US) 900+ international signatoriesPARTIAL LIST OF INVESTMENT MANAGERS:

• BlackRock • Calvert Investments • CBRE Investors • Domini Social Investments • JPMorgan Asset Management • Kohlberg Kravis Roberts & Co, LLP • Krull & Company • Northern Trust Global Investments • Prudential Real Estate Investors • Russell Investments • TD Asset Management Inc.• The Townsend Group • TIAA - CREF

• Boston Trust• Capital Group International • Clear Bridge Advisors• MFS Investment Management • Principal Global Investors • T. Rowe Price• Tower Capital Asset

Management LP

Mainstream Involvement

How would you conduct due diligence?

Can any of this really be measured?

Sustainability Performance

GRI Reporters Presence:

• 95% of the Dow Jones Sustainability Index

• 78% of the FTSE4Good

• 70% of the Global 100

• 70% of the NASDAQ OMX CRD Sustainability Index

Market Evolution

300,000+ data terminals globally

5,000+ companies and climbing

Sustainability Aspects• Emissions • Energy Consumption• Human Rights• Policies• Board Make-Up

Built around GRI

Environmental Criteria (2010)Company Names

Environmental Disclosure

Score

Total Energy Consumption

(Mwh)

Total GHG Emission(Th Tonnes)

Water Consumption (Thousands of cubic

meters)

Total Waste(Thousands of metric

tons)

2010 2009 2010 2009 2010 2009 2010 2009 2010 2009

Apple --- 12.40 --- n/a --- 9542.00 --- n/a --- n/a

CA, Inc. n/a n/a --- --- n/a n/a --- --- --- ---

Dell 37.98 40.31 676.00 619.90 366.19 406.25 1596.00 1683.00 52.61 100.00

EMC --- 54.26 --- 932.51 --- 386.26 --- --- --- ---

Fujitsu 55.04 55.04 6638.90 7713.89 273.00 428.00 23106.00 24569.00 32.44 29.71

HP --- 44.19 --- 4046.00 --- 1951.00 --- 7647.00 --- 124.48

Intel --- 46.51 --- 5110.00 --- n/a --- 30379.32 --- 44.48

IBM --- 41.09 --- 6323.06 --- n/a --- --- --- 87.33

Microsoft 11.63 n/a --- --- --- --- --- --- --- ---

Toshiba 53.49 56.59 15398.33 15856.11 3078.00 3435.00 52930.00 55800.00 2610.00 291.00

Sustainability Performance

MSCI World & GRI2002 to 2012

S&P 500 & GRI2001 to 2011

• SROs - Stock Exchanges

• Regulatory Developments– National & State Regulation– Supply Chain Implications

• Supply Chain Developments

GRI Developments & Trends

Mainstream Uptake

May 2010 January 2011

Global Regulatory Review"More governments are making sustainability

reporting mandatory.“

• 142 regulatory instruments addressing sustainability reporting exist in over 30 countries

• 65% are classified as mandatory, the rest voluntary

• United States• WH CEQ - EO 13514• USPS, US Army, GSA, etc….• SEC• Dodd-Frank• CA Transparency on Trafficking & Slavery

Supply Chain Ripple

• Sept 2011 – GSA• Oct 2011 – MS• Jan 2012 - Apple

Supply Chain Ripple

Training

Customer

Suppliers

GRI Stakeholders

View Forward G4 timeline - Working Groups and 2nd PCP

We are here!

MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

2011 2012 2013

2011 2012 2013

Text Revision / Editing Task Force

Preparatory StagePublic Comment

Period 1Public Comment

Period 2

Working GroupsMeet

Final Edit LAUNCHGovernance Bodies give Final Vote

WorkingGroupsFormed

Working GroupsMeet

We are here

G4 Working Groups• Supply Chain Disclosure• Disclosure on Management

Approach

• Governance & Remuneration • Boundary• Application Level

Venue, Date

Mike WallaceDirector, Focal Point USAGlobal Reporting Initiative

wallace@globalreporting.org+1 212 339 0356Twitter: M_A_WallaceLinked In: http://www.linkedin.com/in/mikewallace

Thank you