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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)
                                     rilevy1@bloomberg.net
                         Louis Coppola, G&A Institute (GRI Data Partner)
                                   lcoppola@ga-institute.com
                         Mike Wallace, Marjella Alma, GRI Focal Point USA
                                    alma@globalreporting.org
Venue, Date                       wallace@globalreporting.org



    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
Summing up the State of
Sustainability Reporting in the U.S.A.
             April 3, 2013


      Louis D Coppola – Executive Vice President
 GOVERNANCE & ACCOUNTABILITY INSTITUTE, INC.
             (GRI Data Partner for the US)
GRI Launch of the US external assurance study with G&A Institute & Bloomberg
GRI Launch of the US external assurance study with G&A Institute & Bloomberg
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 reports@ga-institute.com

   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?

Some Answers:
    NASDAQ OMX CRD Global Sustainability Index ® (QCRD)
      Yes

    Dow Jones Sustainability Index World®
      Yes

    Dow Jones Sustainability Index North America®
      Yes
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?
Some Answers:

  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
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
     • Daily Announcements (also on www.Accountability-Central.com)
     • Sign up for our Newsletters (also on www.ga-institute.com)
     • Follow us on Twitter (@gainstitute, @GACRUSAReports, @GACRUKReports,
       @GACRIEReports)
     • Like us on Facebook (find the link on www.ga-institute.com)
     • Join our LinkedIN Group.


   Proud to help GRI Launch the publication on assurance today
GOVERNANCE & ACCOUNTABILITY INSTITUTE
             215 Park Avenue South, 10th Floor (at Union Square)
                         New York, New York 10003
                             Tel 646 430 8230
                         Web www.ga-institute.com



Louis Coppola, MBA - Executive Vice President, Technology & GRI Strategies
             Tel 646.430.8230 x14 - Email lcoppola@ga-institute.com
Stats & Facts by Rina Levy
…over time, GRI reporters
outperform the benchmark
Assured reporters outperform
STANDARDIZE DATA?
           • 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
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




                                       4
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
Sustainability Reports in the USA
                        GRI G3 + G3.1   GRI reference   Non-GRI sustainability report




US GRI data partner

                                                                                        47
                                46% growth in
                                absolute number of                                      23
                                GRI reports (w/
                                index)
                                2010 - 2011


                                                                                        269

                                                                         187
                                              141
                      119
   71

  2007                2008                    2009                       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


NEW GRI data collection


Emphasis on
Third party opinions/
assurance/verification




                          database.globalreporting.org
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
Thank you!
              More information:


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

Venue, Date

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

  • 1. 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) rilevy1@bloomberg.net Louis Coppola, G&A Institute (GRI Data Partner) lcoppola@ga-institute.com Mike Wallace, Marjella Alma, GRI Focal Point USA alma@globalreporting.org Venue, Date wallace@globalreporting.org GRI webinar with Bloomberg and G&A Institute, 3 April 2013
  • 2. 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
  • 4. Summing up the State of Sustainability Reporting in the U.S.A. April 3, 2013 Louis D Coppola – Executive Vice President GOVERNANCE & ACCOUNTABILITY INSTITUTE, INC. (GRI Data Partner for the US)
  • 7. 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
  • 8. Sampling of US Reporters
  • 9. 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
  • 10. Submit Your Reports – PLEASE!  Download the Submission Sheet: www.sustainabilityhq.com/reports  Send the completed form to reports@ga-institute.com  Visit the GRI Global Database database.globalreporting.org
  • 11. 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
  • 12. Corporate ESG / Sustainability Reporting Does It Matter? Available at www.ga-institute.com
  • 13. S&P 500 Reporters / Fortune 500 Reporters VS S&P 500 Equal Weighted Index (01/07 – 9/12 5+ Years)
  • 14. Are Sustainability Reporters More Likely to be Included in Leading Indexes? Some Answers:  NASDAQ OMX CRD Global Sustainability Index ® (QCRD)  Yes  Dow Jones Sustainability Index World®  Yes  Dow Jones Sustainability Index North America®  Yes
  • 15. NASDAQ OMX CRD Global Sustainability Index ® (As of June 30, 2011) 97% are reporting 86% of those use the GRI Framework
  • 16. Dow Jones Sustainability Index World® (As of September 2012) 98% are reporting 85% of those use the GRI Framework
  • 17. Dow Jones Sustainability Index North America® (As of September 2012) 85% are reporting 77% of those use the GRI Framework
  • 18. 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®
  • 19. Newsweek Greenest Companies in America® GRI Reporters on Average Rank The Highest Not Reporting – Lowest Average Score
  • 20. Newsweek Greenest Companies in America® GRI Reporters on Average – Most Favorable Scores Not Reporting – Lowest Average Score (NOTE: Higher is Favorable except Envtl_Impact)
  • 21. CRO 100 Best Corporate Citizens (As of March 2011) 53% are reporting 72% of those use the GRI Framework
  • 22. Ethisphere’s 2012 World’s Most Ethical Companies (As of March 2012) 76% are reporting 90% of those use the GRI Framework
  • 23. Does Sustainability Reporting have an impact on Sustainability Ratings and Rankings? Some Answers:  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
  • 24. Average CDP Disclosure Score 2012 (As of September 2012) GRI and GRI Reference Score Most Favorably
  • 25. Average CDP Performance Score 2012 (As of September 2012) Most Common GRI Reporting Score is an A
  • 26. Glassdoor Ratings (As of July 2012) GRI Reporting Companies Have Happier Employees And More Respected CEOs
  • 27. CSRHub Company Ratings (As of June 2012) GRI Reporting Companies Score Higher Across the Board
  • 28. Brandlogic Corporate Sustainability IQ Matrix (As of June 2012) The Most Favorable Quadrant - Leaders Is Made up of 100% GRI Reporters
  • 29. 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
  • 30. 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
  • 31. 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 • Daily Announcements (also on www.Accountability-Central.com) • Sign up for our Newsletters (also on www.ga-institute.com) • Follow us on Twitter (@gainstitute, @GACRUSAReports, @GACRUKReports, @GACRIEReports) • Like us on Facebook (find the link on www.ga-institute.com) • Join our LinkedIN Group.  Proud to help GRI Launch the publication on assurance today
  • 32. GOVERNANCE & ACCOUNTABILITY INSTITUTE 215 Park Avenue South, 10th Floor (at Union Square) New York, New York 10003 Tel 646 430 8230 Web www.ga-institute.com Louis Coppola, MBA - Executive Vice President, Technology & GRI Strategies Tel 646.430.8230 x14 - Email lcoppola@ga-institute.com
  • 33. Stats & Facts by Rina Levy
  • 34. …over time, GRI reporters outperform the benchmark
  • 36. STANDARDIZE DATA? • 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
  • 38. Key objectives GRI More reports! Better reports!
  • 39. How does GRI help? GRI Mission To make sustainability reporting standard practice by providing guidance and support to organizations.
  • 40. 95% of Global 250 companies issue sustainability reports – 80% use GRI 4
  • 41. 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
  • 42. Sustainability Reports in the USA GRI G3 + G3.1 GRI reference Non-GRI sustainability report US GRI data partner 47 46% growth in absolute number of 23 GRI reports (w/ index) 2010 - 2011 269 187 141 119 71 2007 2008 2009 2010 2011
  • 43. Launch of the US assurance paper Data Partner G&A Data Providers: Bloomberg KPMG
  • 44. GRI and assurance • GRI recommends external assurance, but does not endorse particular providers nor approaches. • Report on external assurance: Profile Disclosure 3.13
  • 45. 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.
  • 46. 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.
  • 47. 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.
  • 48. Key Findings Most assured (+) reports in the USA in 2011 are Application Level B+.
  • 49. Key Findings Some of the 26 assured reports contained more than one assurance statement; 30 assurance statements were identified.
  • 50. Key Findings The 30 assurance statements were performed by different assurance providers: accountancy, engineering or professional service firms.
  • 51. Who are these companies?
  • 52. 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)
  • 53. Level of assurance The level of assurance was not specified in 11 out of 30 assurance statements
  • 54. Standards A third of assurance statements (= 10 statements for 8 organizations) did not make reference to any assurance standards.
  • 55. 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.
  • 56. Questionnaire • Why & perceived value • Understanding of GRI and of assurance • Composition of team providing assurance • Approach & process • Duration • Presentation of outcomes • Future of assurance
  • 58. On the role of GRI
  • 59. 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.”
  • 61. Data collection on assurance NEW GRI data collection Emphasis on Third party opinions/ assurance/verification database.globalreporting.org
  • 63. 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
  • 65. Thank you! More information: www.globalreporting.org http://focalpointblog.org/usa http://database.globalreporting.org Venue, Date