Automotive industry & gri june 2011
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Venue, Date Sustainability Reporting Trends Automotive Sector June 2011 Mike Wallace Director, Focal Point USA Global Reporting Initiative [email protected] +1 212 339 0356 Sustainability Reporting Trends
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Transcript of Automotive industry & gri june 2011
Venue, Date
Sustainability Reporting TrendsAutomotive SectorJune 2011
Mike WallaceDirector, Focal Point USAGlobal Reporting [email protected]+1 212 339 0356
Sustainability Reporting Trends
What’s the problem?
Comes in all shapes & sizes
• CSR - Corporate Social Responsibility• SD - Sustainable Development• ES - Environmental Sustainability• BE - Business Ethics • CE - Corporate Ethics• CG - Corporate Governance• ESG - Environmental, Social & Governance• IR - Integrated reporting
What is your “Footprint”?
Who cares?
Increasing Stakeholders and Demand
Modern Due
Diligence
What’s a solution?
GRI’s Vision & Mission
GRI’s VisionA sustainably global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently. GRI’s MissionTo make sustainability reporting standard practice by providing guidance and support to organizations.
Global Reporting Initiative• Non-profit, originated in
United States in 1997
• Reputable, respected, credible multi-stakeholder approach
• Many more reporters have made reference to the Guidelines.
• www.globalreporting.org
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.
G3 Content Index New & Improved
What are we seeing?
Fortune 250 Survey
• 80% of Global Fortune 250 companies now release CR data• Doubled since 2005 - up from 37% • Increasingly driven by economic concerns
• 74% of top 100 US companies published corporate responsibility (CR) information in 2008 either as part of their annual financial report or as a separate document
• Reasons cited:• 70% cited ethical considerations as primary driver for CR disclosures• 50% cited economic concerns as the leading reason
• GRI is used by:• 77% of G250• 69% of N100 in 22 countries
October 2008
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
200
400
600
800
1000
1200
1400
1600
1800
2000
11 44122 139 166
274
373
516
709
1116
1491
1818
GRI Reporting TrendsYear # of
reportsGrowth rate
1999 11
2000 44 300%
2001 122 177%
2002 139 14%
2003 166 20%
2004 274 65%
2005 373 36%
2006 516 38%
2007 709 37%
2008 1116 58%
2009 1491 34%
2010 1818 22%
• 586 first-time reporters in 2010.
G2 G3
US Reporters in 1999• Bristol-Myers Squibb• GM• P&G• Sunoco
GRI Reports by Region 2010*
Europe45%
Asia20%
Latin America
14%
Northern America
14%
Oceania4%
Africa3%
Who are some of these reporters?
GRI Reports Listhttp://www.globalreporting.org/GRIReports/GRIReportsList/
GRI Reporters (North American Sample)
Where do we find a strong business
case?
As a buyer, what information do you expect?
When you buy a house, a car, a product or service . . .
What information do you deserve?
Is it useful & comparable?
Shareholder Initiatives & Coalitions
• Principles for Responsible Investment (PRI) [2006]– Currently represents over $22 Trillion in investment capital– 800+ signatories
• Investor Network on Climate Risk (INCR) [2003]– Currently represents over $9 Trillion in investment capital– 90+ members
• Carbon Disclosure Project (CDP) [2002]– Currently represents over $71 Trillion in investment capital– act on behalf of 551 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) 800+ international signatories
PARTIAL 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
PARTIAL 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
Signatories to the PRI (US) 800+ international signatories
Mainstream Involvement
Can any of this really be measured?
How would you do this?
ESG Analysis of Tech Sector
Apple x x 7.95
CA ---
Dell x x x x 6.14
EMC x 6.86
Fujitsu x ---
HP x x x 7.74
Intel x x x x 7.96
IBM x x x 7.60
Microsoft x x x x 6.54
Toshiba ---
X Updated 2010
Technology Hardware \ Technology Software & Services
CompanyCorporate
Governance
Social
Environment
Overall 2010 ESG
ScoreLeadership EmployeesStakeholder
s
Apple 28 3 11 7 14 63
CA, Inc. 25 4 14 16 9 68
Dell 27 8 16 8 21 80
EMC 26 5 19 12 14 76
Fujitsu 13 7 10 10 18 58
HP 26 8 16 10 25 85
Intel n/a n/a n/a n/a n/a n/a
IBM 24 9 20 12 20 85
Microsoft 29 7 15 17 15 83
Toshiba 19 7 13 10 18 67
Maximum score
(possible)30 10 30 15 30 115
Market Evolution
300,000+ subscribers globally
3,500+ companies and climbing
ESG Aspects• Emissions • Energy Consumption• Human Rights• Policies• Board Make-Up
Built around GRI
ESG Disclosure Score Company Name Environmental Disclosure
ScoreSocial Disclosure Score Governance Disclosure
ScoreOverall ESG
Disclosure Score
2010 2009 2010 2009 2010 2009 2010 2009
Apple --- 12.40 --- 8.77 --- 51.79 --- 20.66
CA, Inc. n\a n\a 3.51 3.51 46.43 46.43 11.57 11.57
Dell 37.98 40.31 29.82 38.60 51.79 57.14 39.26 43.80
EMC --- 54.26 --- 42.11 --- 66.07 --- 54.13
Fujitsu 55.04 55.04 47.37 45.61 57.14 57.14 53.72 53.31
HP --- 44.19 --- 43.86 --- 57.14 --- 47.11
Intel --- 46.51 --- 50.88 --- 75.00 --- 54.13
IBM --- 41.09 --- 40.35 --- 51.79 --- 43.39
Microsoft 11.63 n\a 36.84 14.04 57.14 46.43 28.10 14.05
Toshiba 53.49 56.59 36.84 36.84 53.57 51.79 49.59 50.83
Environmental CriteriaCompany 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
Social & Governance Criteria Company
NameSocial Disclosure Score Governance Disclosure score
Score
2010
Score 2009
% Employees Unionized
Community Spending
(Mn $)
Score 2010
Score 2009
% Independent Directors
% Women on Board
2010 2009 2010 2009 2010 2009 2010 2009
Apple --- 8.77 --- --- --- --- 51.79 --- 85.71 --- ---
CA, Inc.3.51 3.51 --- --- n/a n/a 46.43 46.43 88.89 90.00 22.22 20.00
Dell 29.82 38.60 --- --- 27.43 40.89 51.79 57.14 81.82 83.33 --- ---
EMC --- 42.11 --- 0.00 --- --- --- 66.07 --- 82.00 --- 9.00
Fujitsu 47.37 45.61 46.97 50.35 50.00 20.00 57.14 57.14 30.00 30.00 10.00 0.00
HP --- 43.86 --- --- n/a 52.20 --- 57.14 --- 90.91 --- 18.19
Intel --- 50.88 --- --- n/a 100.00 --- 75.00 --- 90.91 --- 27.00
IBM --- 40.35 --- --- n/a 185.90 --- 51.79 --- 92.86 --- 21.42
Microsoft 36.84 14.04 0.00 0.00 687.50 516.90 57.14 46.43 78.00 80.00 22.22 20.00
Toshiba36.8
436.8
4--- --- 189.00 3000.00 53.57 51.79 28.57 28.57 0.00 0.00
Bloomberg Survey
“With over 300,000 users, the Bloomberg Professional service provides a great opportunity and platform for you to share information with current and potential investors concerning your Sustainability or Corporate Social Responsibility program.”
“Our survey is based on the guiding principles of the GRI framework.”
So what?
Dow Jones – Ind. Avg. vs. SI30
-Dec
-99
2-M
ar-0
22-
May
-04
2-Ju
l-06
2-S
ep-0
82-
Nov
-10
2-Ja
n-13
2-M
ar-1
52-
May
-17
2-Ju
l-19
2-S
ep-2
12-
Nov
-23
2-Ja
n-26
2-M
ar-2
82-
May
-30
2-Ju
l-32
2-S
ep-3
42-
Nov
-36
2-Ja
n-39
2-M
ar-4
12-
May
-43
2-Ju
l-45
2-S
ep-4
72-
Nov
-49
2-Ja
n-52
2-M
ar-5
42-
May
-56
2-Ju
l-58
2-S
ep-6
02-
Nov
-62
2-Ja
n-65
2-M
ar-6
72-
May
-69
2-Ju
l-71
2-S
ep-7
32-
Nov
-75
2-Ja
n-78
2-M
ar-8
02-
May
-82
2-Ju
l-84
2-S
ep-8
62-
Nov
-88
2-Ja
n-91
2-M
ar-9
32-
May
-95
2-Ju
l-97
2-S
ep-9
92-
Nov
-01
2-Ja
n-04
2-M
ar-0
62-
May
-08
60%
80%
100%
120%
140%
160%
180%
DOW JONES SUSTAINABILITY INDEX DOW JONES INDUSTRIAL AVERAGE
Source: Bloomberg
Bloomberg – Reporters vs. Non
What about the automotive sector?
Chrysler in dates• 1998: Chrysler and its subsidiaries entered into a partnership dubbed a "merger of
equals" with German-based Daimler-Benz AG, creating the combined entity DaimlerChrysler AG Daimler subsequently acquired Chrysler
• 2007: DaimlerChrysler announced the sale of 80.1% of Chrysler Group to American private equity firm Cerberus Capital Management
• 2009: Chrysler Group LLC emerged from a Chapter 11 reorganization bankruptcy and was sold to the Italian automaker Fiat
• 2011: Fiat bought out the remaining U.S. Treasury’s stake in Chrysler for $500 million increasing its ownership of the automaker to 52%.
• BOTH FIAT & DAIMLER ARE CURRENTLY A GRI REPORTER
DAIMLER Reporting
DAIMLER Reporting
http://sustainability.daimler.com/daimler/annual/2011/nb/English/pdf/002_GRI_ENG.pdf
GRI Index
GRI IndexHighlights:
• Economic
• Environmental
• Labor Practices and Decent Work
• Human Rights
• Society
• Product Responsibility
GRI Sector Supplement
• Automotive Supplement
DAIMLER: Product ResponsibilityPR1 Life cycle stages in which health and
safety impacts of products…Link 100
PR2 Total number of incidents of non-compliance with regulations…
Daimler provides extensive information on all its products in accordance with clearly formulated principles in the individual business units.
100
PR3 Type of product and service information required by procedures…
Daimler AG must provide the users of its products with appropriate information regarding their proper use and the associated risks. The company must also warn users of the potential dangers associated with its products, particularly in relation...
100
PR4 Total number of incidents of non-compliance with regulations and…
Daimler provides extensive information on all its products in accordance with clearly laid out principles within the individual business units
100
PR5 Practices related to customer satisfaction…
Link 100
PR6 Programs for adherence to laws, standards and voluntary codes related to marketing…
To ensure integrated communication, various measures to maintain standards, e.g. specific milestones and guidelines, are defined in the overall communication process. All publications and texts are cleared with Legal Affairs with regard to ethical legal rules and product liability facts. With regard to sponsorship activities and events, clearance with the Compliance department is mandatory for all employees.
50
PR7 Total number of incidents of non-compliance…
No known cases 100
PR8 Total number of substantiated complaints regarding breaches of customer privacy…
Link No incidents involving losses of customer data were recorded in the period under review.
100
PR9 Monetary value of significant fines for non-compliance with laws and regulations…
The Annual Report contains information on fines and non-monetary sanctions to the extent incurred to any significant extent at Daimler.
100
FIAT Reporting
Sustainability Report
FIAT: Sustainability JourneyHighlights:
• 2004: FIAT issued their first Sustainability report
• 2005: FIAT became a GRI Reporter and issued its first GRI Report
• 2009: “Economic, Environmental and Responsibility” the name of their last report
• 2011: the last report is coming soon
GRI Content IndexHighlights:
• Economic performance indicator
• Environmental performance indicator
• Social performance indicator
o Employment
o Human Rights
o Society
o Product Responsibility
FIAT: Product Responsibility
PR1 Life cycle stages in which health and safety impacts of products…
SR - pages 45-47, 76-81, 88-91
PR2 Total number of incidents of non-compliance with regulations…
SR - page 159
PR3 Type of product and service information required by procedures…
SW
PR4 Total number of incidents of non-compliance with regulations and…
SR - page 159
PR5 Practices related to customer satisfaction… SR - pages 57, 144-146
PR6 Programs for adherence to laws, standards and voluntary codes related to marketing…
SR - pages 166-167
PR7 Total number of incidents of non-compliance… SR - page 159
PR8 Total number of substantiated complaints regarding breaches of customer privacy…
SR - page 159
PR9 Monetary value of significant fines for non-compliance with laws and regulations…
SR - page 159
WHAT ABOUT THE CUSTOMERS?
Chrysler supply chainBosal http://bosalna.com/ABOUTBOSAL/BosalGroup/Joboffers/tabid/3312/Default.aspxBuhlerPrince http://www.buhlergroup.com/northamerica/downloads/Buhler_Annual_Report_2010_EN.pdfChecker Industrial Ltd. ???????L&L Products, Inc. http://landlproducts.com/products.aspxCorvac Composites ?????Federal-Mogul ?????Flextronics http://www.flextronics.com/documents/2009CSERReport.pdfGerdau MACSTEEL http://www.gerdau.com/meio-ambiente-e-sociedade/Default.aspxGlobal Automotive Systems http://globalautosystems.com/reports/GAS_Reports/GAS_Overview_050110.pdfIAC ??????Janesville Acoustics ??????L&W Engineering Web site under construction Lear Corporation https://lear.portal.covisint.com/c/document_library/get_file?uuid=4c7c0de5-559c-4ec0-9c18-
7d4fb26425a9&groupId=122304 [2010 presentation; customers such as: Ford, Nissan]Mahle Filter Systems Canada ULC
http://epaper.mahle.com/mediasuite/modules/onlineCatalogue/popupCatalogue.cfm?20110607213049&CFID=2058233&CFTOKEN=44559644#SMR Automotive Systems USA Inc. http://www.smr-automotive.com/facts-figure.html
TEK Corporation ??????US Farathane Not clear informationUtica Enterprises, Inc. Not clear informationWico Metal Products ??????ADAC Automotive, Inc. http://www.adacplastics.com/Customers.phpAtlas Tool http://www.atlas-tool.com/customer_commitment.htmCreative Foam Corp http://creativefoam.com/customers.htmlGuardian Automotive Products, Inc. http://www.guardianbp.com/content.php?id=48 [Electrolux GRI reporter]Heidi Rawe ??????HHI Forging LLC http://
money.msn.com/businessnews/article.aspx?feed=PR&Date=20110502&ID=13501855&topic=TOPIC_JOINT_VENTURES&isub=1
TRW Automotive http://www.trw.com/sites/default/files/HSE_DOCS/web-content/index.html
ADAC-Non GRI Reporter
FORD Reporting
http://corporate.ford.com/microsites/sustainability-report-2009-10/default
FORD Reporting
http://corporate.ford.com/microsites/sustainability-report-2009-10/gri
FORD Sustainability JourneyHighlights:
• 2001: Ford issued its first Sustainability Report using GRI Guidelines
• 2009: “Blueprint for Sustainability-the future at work” the name of their last Sustainability report
• 2010: The new report is coming soon
“Business impact of Climate Change”
FORD’s first report dedicated to the issue of climate change and its effect on business as well as the automotive industry as a whole
GRI Index
Highlights:
• Economic
• Environmental
• Labor Practices and Decent Work
• Human Rights
• Society
• Product Responsibility
FORD: Product ResponsibilityCustomer Health and Safety Coverage
PR1 Life cycle stages in which health and safety impacts of products…
Building Ever-Safer VehiclesHow We Manage Vehicle Safety
PR2 Total number of incidents of non-compliance with regulations…
Products and Service Labeling PR3 Type of product and service information required by
procedures…
PR4 Total number of incidents of non-compliance with regulations and…
PR5 Practices related to customer satisfaction… Customer Satisfaction and QualityEconomy Data: Product, Quality and Service
Marketing Communication
PR6 Programs for adherence to laws, standards and voluntary codes related to marketing…
Policy Letters and Directives
PR7 Total number of incidents of non-compliance…
Customer Privacy PR8 Total number of substantiated complaints regarding breaches
of customer privacy…
Compliance PR9 Monetary value of significant fines for non-compliance with
laws and regulations…
Atlas-Non GRI Reporter
BOSCH Reporting
http://www.bosch.com/en/com/sustainability/report/gri_index/gri-index.html
CREATIVE FOAM-Non GRI Reporter
Johnson Controls Reporting
Johnson Controls Sustainability Journey
Highlights:
• 2004: Johnson Controls issued their first Sustainability Report using GRI Guidelines
• 2005-2009: The issued several Business and Sustainability Reports
• 2010:”Business and Sustainability”
the name of their last report
• 2011: Next report coming soon
GRI Index
Highlights:
• Economic
• Environmental
• Labor Practices and Decent Work • Human Rights
• Society
• Product Responsibility
Johnson Controls: Product ResponsibilityCustomer Health and Safety PR1 Life cycle stages in which health and safety impacts of
products…Product Safety Assess
PR2 Total number of incidents of non-compliance with regulations…
Product Health & Safety Non-compliance
Product and Service Labeling PR3 Type of product and service information required by
procedures…Product Information Labeling
PR4 Total number of incidents of non-compliance with regulations and…
Labeling Non-compliance
PR5 Practices related to customer satisfaction… Customer Satisfaction
Marketing Communications PR6 Programs for adherence to laws, standards and
voluntary codes related to marketing…Marketing Law Programs
PR7 Total number of incidents of non-compliance… Marketing Non-compliance
Customer Privacy PR8 Total number of substantiated complaints regarding
breaches of customer privacy…Customer Privacy Breach
Compliance PR9 Monetary value of significant fines for non-
compliance with laws and regulations…Total Non-compliance Fines
General Electric Reporting
• Strategy and analysis• Organizational profile• Report Parameters• Governance, Commitments &
Engagement • Management Approach and
Performance Indicators:
Product Responsibility
Highlights:
o Economic disclosureo Environmental disclosureo Labor practices and decent worko Human rights o Society o Product Responsibility
Product responsibility: GE PR1 Life cycle stages in which health and safety
impacts of products…Our products & servicesEnvironment
Partial
PR2 Total number of incidents of non-compliance with regulations…
Our products & servicesEnvironment
Partial
PR3 Type of product and service information required by procedures…
Product Issues are disclosed on a case-by-case basis in the various sections of the Citizenship Report. Due to the complexity of the business and ongoing litigation related to its range of products and services, GE does not formally report this indicator.
PR4 Total number of incidents of non-compliance with regulations and…
GE does not report on this metric.
PR5 Practices related to customer satisfaction… GE does not release customer satisfaction data for proprietary and competitive reasons. More on customers can be found in the Our Customers section.
PR6 Programs for adherence to laws, standards and voluntary codes related to marketing…
Operational ExcellenceOur Products & Services
Partial
PR7 Total number of incidents of non-compliance… GE does not report on this metric
PR8 Total number of substantiated complaints regarding breaches of customer privacy…
GE does not report on this metric
PR9 Monetary value of significant fines for non-compliance with laws and regulations…
Any significant legal actions and material regulatory fine/settlements are disclosed in our public filings.There were no significant fines for non-compliance with laws and regulations concerning the provision and use of GE products and services during 2009
Full
GAS-Non GRI Reporter
SMR-Non GRI Reporter
SMR: Costumers Served
TRW-Non GRI Reporter
Industry Associations
FLEXTRONICS-Non GRI Reporter
“Autos” at Goldman Sachs
CompanyCorporate Governanc
e
Social
Environment
Overall 2010 ESG ScoreLeadershi
pEmployee
sStakeholder
s
BMW 16 7 24 10 24 81
Daimler 16 7 22 12 22 79
Fiat 19 9 19 10 19 76
Toyota 16 9 12 11 26 74
Peugeot 17 7 21 10 18 73
Renault 16 7 20 10 20 73
Ford 24 9 11 6 18 68
Honda 14 6 14 8 23 65
Nissan 8 8 15 10 16 57
Hyundai 8 9 12 6 11 46
Maximum score 30 10 30 15 30 115
Goldman Sachs 2010
ESG in the Automotive Market
BMW x x
Daimler x 51.70
Fiat x
Toyota x x x 85.15
Peugeot
Renault
Ford x x x 80.14
Honda x x 84.98
Nissan x x x 68.88
Hyundai x
Table as of 2010
What is next?
First Step…Standard Disclosure: Report on the TBL
• Economic
• Human Rights
• Environmental
• Labor Practices and Decent Work
• Product Responsibility
• Society
Second Step…
•Government Uptake
•Supply Chain
•Financial Markets, Private Equity & Exchanges
•Integrated Reporting
•G4 Development
How else can you find value?
Global Regulatory Review"More governments are making
sustainability reporting mandatory.“
• 142 regulatory instruments addressing sustainability reporting exist in the 30 countries
• 65 percent of the standards are classified as mandatory, the rest are considered voluntary
• United States• WH CEQ - EO 13514• USPS, US Army, etc….• GSA• Department of State• SEC
Supply Chain Ripple
Training
Customer
Suppliers
GRI Stakeholders
Mainstream Uptake
May 2010
January 2011
Early Adopters of Integrated Reporting
What about G4?
