Promoting discussion and problem solving
among sustainability thought leaders
Wednesday April 4, 2012
“The Evolving Metrics for
Corporate Sustainability: Beyond
Waste Water and Energy”
Dr. Blair Feltmate
Director of Sustainability Practice,
University of Waterloo
Media Sponsor
Venue Sponsor
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The Value and Process of Developing a
Sustainable Development Index (SDI)
Toronto Sustainability Speakers Series
April 04, 2012
Dr. Blair Feltmate
Director, Sustainability Practices, Faculty of Environment, University of Waterloo
Chair, Climate Change Adaptation Project (Canada)
bfeltmat@uwaterloo.ca
Overview
1. General Observations on Corporate SD Reporting
2. Case Study: Purpose and Characteristics of the SDI,
Canadian Electricity Association
3. SDI: Weighting and Scoring of Performance Metrics
4. SDI 2010 Thresholds & Score
5. SDI for 2006-2010 (2004/05 base years)
6. Next Steps
Page 3
Corporate Sustainable Development Reporting:
General Observations
1. Canadian corporations produce about 150 Sustainable Development Reports annually,
and 3,000 are produced globally
2. Since Place Dome Inc. produced Canada’s first Corporate Environmental Report (early
1990s), followed by Noranda Inc. and Falconbridge Ltd., the look and content of
SD/Environmental Reports has not changed much
3. SD Reports are not generally well reviewed/embraced by the financial community (e.g.,
financial analysts, institutional and retail money managers, institutional money
management consultants, VPs Finance, etc.)
4. SD Reports are often difficult for Boards of Directors and Senior Management to fully
appreciate/digest
To remedy this omission, SD Reports must be changed in at least two ways:
A. Sustainable Development Index
B. Identification of 3-6 key SD metrics, that financial analysts can readily
translate into financial value creation, presented up-front in SD Reports
Page 4
Purpose and Characteristics of the
Sustainable Development Index
Purpose of the SDI

The SDI enables the CEA and all stakeholders to determine if the CEA
membership is collectively trending “better or worse” in reference to SD
– NOTE: the SDI could be applied to any association, company or
government enterprise
Characteristics of SDI




The SDI includes measures of environmental, social and economic
performance
The SDI is predisposed to transparency regarding the relative
contribution of environmental, economic and social performance
metrics to the index
The SDI is “simple” to calculate
The SDI is predisposed to being amended/updated
Page 5
Weighting and Scoring of Performance
Metrics: Consensus Reached in 2009/2010

SDI can (and does) have an unbalanced number of metrics within each category of
Environment, Society and Economy

Each SDI category of Environment, Society and Economy is given equal weighting in the
SDI calculation, regardless of the number of metrics per category

Scoring for a given metric in a given year is made relative to a % change in performance
relative to the average of the base years 2004/05
o 2004/05 were chosen as base years due to (a) data availability, (b) integrity of data,
(c) a mean of 2 years helps to lesson the impacts of a single ‘anomalous” year, and
(d) going back “too far” may be perceived as compromising the rigour of the analysis

A score is determined relative to a % change in performance based on pre-assigned criteria
o pre-assigned criteria were established based on a sensitivity analysis of annual
variation in criteria performance
Page 6
Current SDI Parameters
Environment
NOx Total
NOx Intensity
SO2 Total
SO2 Intensity
CO2 eq. Total
Spills
SF6
% of companies with ISO Consistent EMS
Society
All Injury/Illness Frequency Rate
Lost Time Injury Frequency Rate
Lost Time Injury Severity Rate
% of companies producing a public Sustainability report
% companies with a public education program
% of companies with an Aboriginal Relations group/senior advisory position
% of companies with business relationships or partnerships with Aboriginal communities
% of companies with procedures or practices to ensure training & employment opportunities for Aboriginal employees
Total value of annual company charitable donations ($)
Economy
Total capital expenditures on new / refurbished generation infrastructure ($/yr)
Total capital expenditures on new / refurbished transmission infrastructure ($/yr)
Total capital expenditures on new / refurbished distribution infrastructure ($/yr)
System Average Interruption Duration Index (SAIDI)
System Average Interruption Frequency Index (SAIFI)
Total Energy saved through external energy conservation initiatives
Page 7
SDI – 2010 Environment Thresholds & Score
0
0% relative
to base yrs
25
<6% decrease
relative to base yrs
50
>6% decrease
relative to base yrs
Score: 61.11
Page 8
SDI Summary for 2006-2010
SDI Summary
2006-2010
2006
2007
2008
2009
2010
Page 9
Overall
Environmental
Social
Economic
8.54
2.92
28.33
55.42
53.33
28.13
6.25
62.50
62.50
56.25
12.50
12.50
12.50
43.75
68.75
-15.00
-10.00
10.00
60.00
35.00
SDI for 2006 – 2010 (04/05 base yrs)
100.00
CEA Sustainable Development Score
(Based on Data Variability)
75.00
50.00
25.00
Environmental
0.00
2006
Social
2007
2008
-50.00
-75.00
Page 10
2010
Economic
Linear (Overall)
-25.00
-100.00
2009
Year
Next Steps
SDI Broad Application
• associations and companies across all industry sectors could develop
and present similar style SDIs
• SDIs could be presented on the inside front cover of SD and related
reports
• SD is generally not on the “radar screen” of financial analysts, retail and
institutional money managers, and institutional money management
consultants – SDIs could contribute to turning this situation around
• SD reports have not evolved much in the past 15 years – SDIs could
offer change that would be positively received by key stakeholders
(notably senior management and Boards)
Page 11