Sustainability Reporting Trends March 2012

1. Sustainability Reporting Trends “Game Changing Developments” June 2012 Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org Venue, Date

2. What is the current situation?

3. 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

4. What is GRI’s role?

5. 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. Mission To make sustainability reporting standard practice by providing guidance and support to organizations.

6. GRI: Global Network Organization *Business Academia *Civil Society *Mediating institutions Governments *Labor *Financial markets

7. The GRI Guidelines Environmental • 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.

8. What are we seeing?

9. Corporate Sustainability: A Progress Report October 2011 • 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.

10. Global Growth in Reporting 1

11. Country Level Specifics USA – 9th place from 74% up to 83% in 3 years 2008 versus 2011 of N100 companies 1

12. US Reporting Trends (Absolute figures) Sustainability Reports in the USA GRI G3 + G3.1 GRI reference Non-GRI sustainability report US GRI data partner 46% growth in absolute number of GRI reports (w/ 47 index) 2010 - 2011 23 And counting!! 273 187 141 119 71 2007 2008 2009 2010 2011

13. Data Integrity 100% 90% 80% 21 112 415 41 70% 170 60% 167 50% Not assured Externally assured 40% 30% 23 125 446 35 20% 87 10% 40 0% Africa Asia Europe Latin America Northern Oceania America * Data from the Sustainability Disclosure Database as of 12 April 2012

14. Growing International Trends “Integrated Reporting” 2011 2010 13% 21% Not integrated Integrated 87% 79% *Sustainability Disclosure Database data from 1 February 2012

15. American GRI reporters GRI Sector Leaders:

16. Who really cares?

17. Increasing Stakeholders and Demand Modern Due Diligence

18. GRI Reporting by Sector (2010) 300 250 200 150 100 50 0 *Sustainability Disclosure Database data from 1 February 2012

19. Shareholder Initiatives & Coalitions • Principles for Responsible Investment (PRI) [2006] – Currently represents over $30 Trillion in investment capital – 1000+ 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

20. Signatories to the PRI (US) 1000+ 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 S • 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

21. Signatories to the PRI (US) 1000+ international signatories PARTIAL LIST OF INVESTMENT MANAGERS: • BlackRock • Boston Trust • Calvert Investments • Capital Group International • CBRE Investors • Clear Bridge Advisors • Domini Social Investments • MFS Investment Management • JPMorgan Asset Management • Principal Global Investors • Kohlberg Kravis Roberts & Co, LLP • T. Rowe Price • Krull & Company • Tower Capital Asset • Northern Trust Global Investments Management LP • Prudential Real Estate Investors • Russell Investments • TD Asset Management Inc. • The Townsend Group • TIAA - CREF

22. Mainstream Involvement

23. How are they conducting due diligence?

24. 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

25. 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

26. Bloomberg ESG Peer Comparison

27. Environmental Criteria (2010) Company Environmental Total Energy Total GHG Emission Water Consumption Total Waste Names Disclosure Consumption (Th Tonnes) (Thousands of cubic (Thousands of metric Score (Mwh) meters) 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

28. Performance Over Time MSCI World & GRI 2002 to 2012 S&P 500 & GRI 2001 to 2011

29. Global Developments & Trends • SROs - Stock Exchanges • Regulatory Developments – National & State Regulation – Supply Chain Implications • Supply Chain Developments • Harmonization – Associations, Initiatives & Institutions

30. Stock Exchange Activity May 2010 January 2011

31. Regulatory Developments "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

32. Supply Chain Developments • Sept 2011 – GSA • Oct 2011 – MS • Jan 2012 - Apple

33. Supply Chain Developments Customer Training Suppliers GRI Stakeholders

34. GRI Global Harmonization

35. • ABB Association Activity • ITT • Accenture  Johnson & Johnson • Abbott  Johnson Control • Alcoa  Life Technologies Corp • American Electric Power  McKesson Corp. • AT&T  Merck • CB Richard Ellis Group Inc.  Motorola • CH2MHill Companies, Ltd.  NexTera (Formerly FPL) • Chevron  Office Depot • Chubb  Owens Corning • Citi  PepsiCo • Coca-Cola  Pfizer • Conoco Philips  Praxair • Cummins  Proctor & Gamble Co. • Darden  Ryder • Deloitte  Sara Lee • Dow Chemical  SAP USA • Duke Energy  SAS • DuPont  Southern Company • Eastman Kodak Co.  Siemens Corp • EMC  Target Corporation • Exxon Mobil  Tyco • Freeport McMoran  UAL Corporation • General Electric  Weyerhauser • General Motors  Whirlpool Corporation • HSBC  Williams • IBM  Xerox • International Paper

36. Association Activity

37. What’s on the horizon – G4?

38. Six main work streams Technical standardization by editing Task Force Revision of parts of G3(G3.1) or new content by Working Groups Harmonization by Secretariat and TAC G4 online by Secretariat XBRL G4 Taxonomy for G4 by Secretariat Updating sector guidance (supplements)

39. G4 - Stepping Stone Towards Integrated Reporting Sustainability Reporting Sustainability Disclosure Mainstreaming G4 Integrated Reporting Other paths to mainstreaming

40. GRI – Due Process SC + WG TAC BoD BoD Public Public Comment Comment Period Period

41. View Forward G4 timeline - Working Groups and 2nd PCP 2011 2012 2013 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 Text Revision / Editing Task Force We are here We are here! Working Working Governance Public Comment Working Groups Public Comment Bodies give Preparatory Stage Groups Groups Final Edit LAUNCH Period 1 Meet Period 2 Final Vote Formed Mee t 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 G4 Working Groups • Supply Chain Disclosure • Governance & Remuneration • Disclosure on Management • Boundary Approach • Application Level

42. View Forward G4 timeline - Working Groups and 2nd PCP • Anti-corruption • Biodiversity • GHG • OH&S • June 20 to Sept. 20, 2012

43. G4 PCP 1 - Participants Total 1834 Constituency Regional Breakdown Breakdown AFRICA 3% OCEANIA 5% ASIA Business NORTHERN 17% 29% AMERICA 15% Mediating LATIN Institution Civil Society AMERICA 57% Organization 19% 9% EUROPE 41% Financial Markets & Information Labor Users 1% 4%

44. 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

45. Cipriani Wall Street, 55 Wall Street, New York, NY October 2-3, 2012 Event brought to you by: www.COMMITForum.com

46. Thank you Mike Wallace Director, Focal Point USA Global Reporting Initiative wallace@globalreporting.org Twitter: M_A_Wallace Linked In: http://www.linkedin.com/in/mikewallace Venue, Date

Sustainability Reporting Trends March 2012

Sustainability Reporting Trends March 2012

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