Social and sustainability
Reporting
Corporate Sustainability Reporting, trends and
opportunities for the future
29 May 2012
Introduction - what is Sustainability
Reporting?
► The roots of sustainability from social philanthropy to
Corporate Social Responsibility to sustainability.
► Triple bottom line business accountability expands on
traditional business reporting to take into account
environmental and social performance in addition to
financial results.
► It provides stakeholders with insight into the organization’s
key non-financial risks and challenges
► It demonstrates how a company’s financial results can be
affected by sustainability performance
Page 2
Corporate Sustainability: an overview
Sustainability Reporting
Global Trends
Global output by year*
CDP reporting companies**
Global output by year & region*
*CRRA 2011
Page 3
Research by Ernst & Young shows that more
than two-thirds of Fortune Global 500
companies publish some form of
sustainability or corporate
responsibility reports, reflecting the broad
trend towards greater disclosure
**CDP 2011
Corporate Sustainability: an overview
Sustainability Reporting- why bother?
Creating
financial
value
Regulatory
compliance
Attracting
favorable
financing
Transparency
to
stakeholders
Employee
motivation,
attracting
talent
Improving
management
systems
Enhancing
reputation
Continuous
improvement
Risk
awareness
Encouraging
innovation
Source: “Striking the Balance” - WBCSD
Page 4
Corporate Sustainability: an overview
The benefits of sustainability reporting
► A tool to enhance brand value, reduce political and stakeholder
resistance and help to differentiate a company in the global
marketplace.
► Establishes a foundation for open, positive communication between a
company and its stakeholders.
► Sustainability reporting can reinforce the link between short term
financial goals with longer term environmental and social objectives.
► Can offer a dynamic organizational learning process which benefits
employees.
Page 5
Corporate Sustainability: an overview
Key questions for management
► Does the business understand its material sustainability related risks
and impacts?
► Have key stakeholders been engaged to understand their
expectations of the business in relations to sustainability activities?
► Are strategies for significant sustainability issues such as energy
management clearly articulated?
► Is there appropriate governance to deliver consistent standards and
drive performance improvement?
► Is there accurate performance data to support performance
improvement claims?
► Can the systems and processes for collecting and collating
performance data be relied upon?
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Corporate Sustainability: an overview
Investors push for sustainability/ESG data
►
►
►
Investors looking at safer investments,
comprehensive risk management including
environmental and social risks.
Companies with good sustainability performance
record or innovating around sustainability trends
identified as good investment targets.
Sustainability Indexes established to enable
investors to track company sustainability
performance:
► Dow Jones Sustainability Indexes (DJSI)
► FTSE4Good
► Nasdaq Global Sustainability 50 Index
Current investment into clean
energy and finance:
Europe – EUR 94 billion,
China- USD 54 billion,
USA- USD 34 billion
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The DJSI criteria
Criteria include:
Industry specific
environmental issues
Environmental reporting
Biodiversity
Climate Change
Social reporting
Gender Diversity
Standards for suppliers
Corporate citizenship
Codes of conduct on
corruption & bribery
Labour & compensation
PRI: 850 signatories, USD 25 trillion
CDP: 551 signatories, USD 71 trillion
Corporate Sustainability: an overview
What is covered in sustainability
reporting ?
Typical issues:
►
Pollution
►
Biodiversity
►
Business
Excellence
►
Water consumption
►
Carbon emissions
►
Health and Safety
►
Occupational health
►
Governance
►
Community
relations
►
Government
relations
►
Revenue
transparency
►
Employee
Satisfaction
►
Supply chain
capacity
Page 8
Ineffective CSR management
processes
Failure to identify CSR risks
CSR risk review/risk mapping
Development/reviews of
management systems
Ineffective engagement with
stakeholders
Insufficient monitoring and
weak governance controls
Advice on stakeholder
engagement strategy
Effective
corporate
sustainability
report
Building/testing governance
controls and monitoring systems
Lack of mitigation plans for
CSR impacts
Insufficient internal/
external communications
Advice on/reviews of CSR action
plans
Advice and assurance over
disclosures
Corporate Sustainability: an overview
What makes a GRI sustainability report?
Approach towards multi-front reporting on sustainability, a vital measure of successful businesses
Total indicators : 79
►
►
►
►
►
►
►
►
Society/Community
Labor Practices/Decent Work
Human Rights
Education & Training
Corruption Prevention
Health & safety
Product/Service Responsibility
40
►
►
►
►
Social
Environment
Corporate
Governance
KPIs
Economic
9
KPIs
►
KPI = Key Performance Indicator
►
►
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Economic Performance
Market Presence
Indirect Economic Impact
Corporate Sustainability: an overview
►
Energy
Water
Emissions
Waste
Products and Services
Carbon footprint
30
KPIs
Key challenges and risks of reporting
Doing a reality check
1.
2.
Data consistency
Data comparability
3.
Striking the right balance
4.
Dialogue vs Communication
5.
Continuous improvement
Page 10
Corporate Sustainability: an overview
Issuing the sustainability report is a
challenge by itself; it requires a lot
of ground work and data gathering;
it also requires dedication and a
very high level of involvement from
all process owners in the
organization. Another challenge is
the ability to fulfill commitments in
places where is lack of regulations
and systems to support the
initiatives in our report.
Raji Hattar
Chief Sustainability Officer,
Aramex
Where do you start and how do you get
there?
►
►
Collect data
►
Set targets
►
►
Report
►
►
Start with what you have, you don’t have to start from scratch
Collect sustainability data from different departments across the
organization
Review the current state in order to set (reasonable and achievable)
targets for the future
Be transparent to stakeholders about achievements and goals going
forward
Use international reporting standards and frameworks like the GRI and
AA1000 in order to generate a world-class sustainability report
Balance, materiality and transparency establish credibility
Obtain limited (a review) and/or reasonable (an audit) assurance on
your sustainability report
Assure
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Corporate Sustainability: an overview
Sustainability reporting in the
Middle East – trends and
developments
Page 12
Corporate Sustainability: an overview
Sustainability Reporting in the UAE
► Abu Dhabi Airports Company ► Abu Dhabi Gas Liquefaction
Systems International
company
► Abu Dhabi Chamber of
► Environment Agency- Abu
Commerce and Industry
► Abu Dhabi National Oil
Dhabi
Company
► Abu Dhabi Commercial Bank
► Jumeirah Group LLC
► Aldar properties
► Landmark Group
► Abu Dhabi Department of
Economic Development
► Dubai Aluminium Company
Ltd.
► Metito (overseas) ltd.
► Abu Dhabi Department of
Municipality Affairs
► Dubai Centre for Corporate
Values
► Abu Dhabi Department of
Transport Authority
► Dubai Customs
► Abu Dhabi Water and
Electricity Authority
► Dolphin Energy
PJSC
► Dubai Properties Group
► Emirates Foundation
► Abu Dhabi Sustainability
Group
► Abu Dhabi Tourism Author
► Emirates Integrates
Telecommunications
Company PJSC (“du”)
► Abu Dhabi Gas Industries Ltd ► Energy Management
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Corporate Sustainability: an overview
► National Bank of Abu Dhabi
► Ras Al Khaimah Ceramics
PSC
► Sama Dubai
► Sorouh Real Estate PJSC
► The Emirates Group
► Tourism Development and
Investment Company (TDIC)
► Zonescorp
Sustainability Reporting in the Middle East
► Zain telecommunications
► Petroleum Development Oman ► Bavarian Auto Group
LLC
► Orascom Telecom Holdings
KSA
► Sekem Group
Syria
► Saudi Aramco
► Shell Egypt NV
► Syria telecommunications
► Dr Solman Fakeeh Hospital
► Suez Cement Company
Kuwait
► Saudi Arabia Fertilizers
Company
Jordan
Bahrain
► Arab Bank
► Burgan Bank
► Commercial Bank of Kuwait
SAK
► Kuwait Finance House
► National Bank of Kuwait
Qatar
► Qatar National Bank
► Qatar telecom
► RasGas Company Limited
Oman
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► Saudi Arabian Oil Company
► Saudi Basics Industries
Corporation
► Saudi Electricity Company
► Arab Bank
► Aramex international Ltd
► Jordan Aircraft maintenance Ltd
► Jordan River Foundation
► The National Commercial bank ► Nuqul Group
► Schema- tactical thinking
► The Saudi British Bank
Egypt
► Zain (Jordan)
► Arab African International Bank ► Lebanon
► Holcim Lebanon sal
► Assut Cement Company
Corporate Sustainability: an overview
Report output by type and year
Source: Corporateregister.com
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Corporate Sustainability: an overview
2011 – Developments in the Middle East:
awareness
► Organized groups/ communities
► Abu Dhabi Sustainability Group
► Estidama
► Green Building Councils
► Awards
► Dubai Award for Sustainable Transport
► CSR Arabia Awards
► Government push
► Corporate Governance and ESG standards
► Abu Dhabi 2030
► Competitiveness
► Leader vs. follower
► Financial incentives
► Sustainability Indexes, carbon trading, energy efficiency projects, etc.
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Corporate Sustainability: an overview
2011 – Developments in the Middle East
(cont’d)
► Top down vs. bottom up approach
► Majority of Sustainability initiatives are being pushed through middle management
► Executive management/ Board
► Sustainability systems and policies implementation (“You Can't
Manage What You Don't Measure”)
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Corporate Sustainability: an overview
Trends for 2012/13
► Increased number of reports (one in five a ‘first time reporter’):
increase in quantity, but awaiting the step-change in quality
► Independent third party assurance
► Increased level of stakeholder engagement
► Internally: Executive/ Board awareness and understanding
► Externally: interaction with communities, customers and suppliers
► Communication feedback process
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Corporate Sustainability: an overview
Trends beyond 2013
►Credibility through Assurance
►Openness & Honesty
►Relevance and Materiality
►Carbon Disclosure
►Creativity in Communications
►Integrated Reporting
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Corporate Sustainability: an overview
Thank you
For further information please contact us:
Amjad Rihan
Partner
Climate Change & Sustainability Services - Middle East
Direct: +973 17 203 971
Office: +973 17 535 455
Mobile: +973 3962 7674
amjad.rihan@bh.ey.com