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AgendaAgenda
Sustainability Reporting – O’Brien
“High Performance Buildings” - Video
Project Teams - Working Session
Sustainability ReportingSustainability ReportingSources: “Sustainability – The New Business Paradigm”, Chapter 10 (to be published in 2010)
Sustainability Report by Teri
“Sustainability Reporting”, Professor Ans Kolk, University of Amsterdam Business School, VBA Journal, 2005
“10 Trends in Sustainability Reporting”, Globe Net, February 10, 2010
DefinitionBackground10 TrendsWhy Companies ReportTypes of Reports:
◦ Required by Legislation◦ Voluntary Initiatives
Voluntary InitiativesPros and Cons: ReportingBenefitsSample Reports
TopicsTopics
DefinitionDefinition
Sustainability Reporting is the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organizational performance against specific environmental, social and economic/governance (“ESG”) goals and metrics.
Sustainability Reporting is rapidly gaining adoption across all market sectors globally, and is now the norm among large companies globally, driven mainly by global investment community demand.
BackgroundBackground
Reporting on performance can help a companydrive internal change in numerous ways:• forces the company to acknowledge sustainability issues and
assess if any gaps exist.• when communicated internally, the company leaders can
show managers and employees as to what needs to be done and rally support for a cause or an action.
• The report can serve as a part of the check in a standard “Plan – Do – Check – Act” (PDCA) process.
• change can also come about a benchmarking study whereby data is collected and compared to a best-in-class company.
• sustainability reports also invite comments and scrutiny from external stakeholders.
10 Trends10 Trends
Financial statements capture only a portion of corporate risks and value-creation potential, with the balance derived from intangible factors such as strategy, product innovation, brand and reputation management, energy/resource efficiency, commercial risk reduction, and environmental and social risk reduction.
Sustainability reporting is largely voluntary worldwide.
Sustainability reporting is now the norm among large companies globally, increasing from about 300 sustainability reports in 1996 to 3,100 (The Global Reporting Initiative reported more than 1,000 organizations worldwide that have registered sustainability reports in 2008 based on the GRI G3 Guidelines.)
Sustainability reporting in the U.S. has been much slower to develop than in Europe.
Most industrialized countries have long-standing environmental laws that restrict environmental-impact activities and require some form of environmental regulatory reporting.
10 Trends continued10 Trends continued
The evolution of metric frameworks for sustainability reporting is a major challenge for suppliers and users.
Multiple metric frameworks, a lack of uniform definitions, and a lack of consistent applications are producing variable and unreliable measurement and disclosure results.
The emergence of national and regional legislation and regulation, which have not been integrated and/or synchronized with multiple metric frameworks, is a major challenge.
Synchronization of voluntary reporting frameworks with governmental and regulatory requirements may be driven in part by recent initiatives by GRI and the World Intellectual Capital Initiative
Governmental, regulatory, and audit oversight of sustainability issues will become the norm within five years, in both the developed and developing world, across all industries
Why Do a Report? Why Do a Report?
Providing information about challenges and achievements to shareholders, employees, the public and other stakeholders
An internal commitment to environmental and social responsibility As a marketing tool, associating the company with sound
environmental management and sustainable activities
Tracking progress on integration of sustainability principles into company planning and programs
Taking first steps towards doing things in a more sustainable way
A successful pilot project persuades decision-makers to take the initiative company-wide
A commitment while becoming a world leader in sustainability
Importance of Sustainability Importance of Sustainability ReportingReporting
Self-assessment toolManagement systemExternal monitoring mechanismAction planBusiness development toolCommunications vehicle
Looking beyond short-term band-aids to find longer term solutions that make business sense
Types of ReportsTypes of Reports
Required by Legislation
Voluntary Initiatives
Required by LegislationRequired by Legislation
Voluntary InitiativesVoluntary Initiatives
Carbon Disclosure Project (CDP) https://www.cdproject.net/en-US/Pages/HomePage.aspx
Dow Jones Sustainable Index (DJSI) http://www.sustainability-index.com/
Global Reporting Initiative (GRI) http://www.globalreporting.org/Home
UN Global Compact COPhttps://globalcompact.pbworks.com/Introduction+-+The+10+Principles
Pros: ReportingPros: Reporting
Cons: ReportingCons: Reporting
BenefitsBenefits
Reduce operating costs and improve efficiencies;Develop innovative products and services for
access to new markets;Improve reputation and brand value;Recruit and retain excellent people;Gain better access to investor capital;Enhance the public value of the company;Reduce liabilities through integrated risk
management.
Preparing a Sustainability Preparing a Sustainability ReportReport
Intensive, year-round process
Frequency of reporting – Annual (aligned with annual reporting process)
Format and Medium - PDF format in combination with stand-alone hard copy and web-based interactive reporting
Principles for ensuring Report Quality: Material issues and topics; Balance; Comparability; Accuracy; Timeliness and Clarity
Typical Reporting ProcessTypical Reporting Process
Brainstorming0.51.53.0
Duration (Months)
MinimumAverage
Maximum
OutlineDevelopment
0.251.52.0
InformationCollection
0.753.06.0
Writing andDesign
1.03.07.0
InternalReview
1.02.04.0
ExternalReview
1.01.02.0
Sample ReportsSample Reports
Cascades, Inc.
Desert Glory
Questions?Questions?