The Future of Sustainability Reporting: From Routine to Strategic JUNE 2015 0
About Corporate Citizenship Established in 1997, one of the longest-standing specialist sustainability consultancies A global business, with offices in London, New York, San Francisco, Singapore and Santiago Working experience in more than 40 countries across Africa, India, South East Asia and Latin America. Owned by Chime Communications PLC (London Stock Exchange: CHW.L) Corporate Citizenship helped us to understand the issues, anticipated what s next and realise the opportunities for growth. Global VP, Sustainable Business 1 1
Speakers Nana Guar Megan DeYoung Nana Guar Davida Heller Senior Consultant SENIOR CONSULTANT Corporate Citizenship London DIRECTOR Corporate Citizenship New York ASSISTANT VICE PRESIDENT CORPORATE SUSTAINABILITY Citigroup 2 2
Asking questions Ask a Question 3 3
What we will cover today About our research Reporting challenges The Reporting Journey: 8 Defining Questions Four drivers of change Responding to a changing landscape Guest Presenter: Citi Audience Poll Discussion and Q&A Round up 4 4
About our research 5
What we have heard It s hard to know what is relevant, what to leave out, where to start. How does the report add value to our brand? Sustainability Reporting In 2015 Who actually reads them? This isn t that clear. I think they try to reach too many audiences, and generally fail as they try to be a hybrid to everyone rather than focussed on say, convincing the investor that CR is linked to the bottom line. With all the standards, requirements, where will all the data go? Generally I d like to see reports move away from the fluffy stuff and become more data and results oriented- demonstrating the quantifiable contribution CR is making o the company and wider stakeholders. I m not 100% convinced by the whole integrated reporting stuff integration can lose the sustainability message. Nobody actually reads it cover-to-cover but it s a helpful review of CR activities and for benchmarking. There are many other avenues through which to give updates on CR activities- it doesn t all need to go in the one report! 6 6
The Reporting Journey: 8 Defining Questions 1. Aims What is the objective of the report? 2. Audience Who are the audiences for the report? 3. Materiality What is the approach to identifying issues that are important to the business and to stakeholders? 4. Systems & Processes What types of reporting systems and processes are in place to facilitate sustainability communications 5. Standards & Frameworks What reporting standards and frameworks are used? 6. Outputs What is produced from the reporting process? 7. Engagement What is the approach to engaging audiences? 8. Frequency How often will the exercise be repeated or other outputs be produced? 7 7
Four drivers of change I. Strategic Alignment Closer alignment between sustainability and commercial decisions has become a business imperative. II. Issues Expansion The scope and significance of issues are expanding across extended value chains. III. Standards Proliferation There is a rapid proliferation of sustainability-related standards, rankings, ratings, and indices. IV. Digital Innovation Digital innovation offer new ways of presenting data and communicating with audiences. 8 8
Responding to a changing landscape 9
Driver 1: Strategic Alignment RESPONDING TO A CHANGING LANDSCAPE Closer alignment between sustainability and commercial decisions has become a business imperative. Scenario Planning Big Targets, Big Plans Environmental Profit and Loss Account (EP&L) 10 10
Driver 2: Issues Expansion RESPONDING TO A CHANGING LANDSCAPE The scope and significance of issues are expanding across extended value chains. Patagonia 11 11
Driver 3: Standards Proliferation RESPONDING TO A CHANGING LANDSCAPE There is a rapid proliferation of sustainability-related standards, rankings, ratings, and indices. 12 12
Driver 4: Digital Innovation RESPONDING TO A CHANGING LANDSCAPE Digital innovation offer new ways of presenting data and communicating with audiences. 13 13
Davida Heller Assistant Vice President Corporate Sustainability 14
Sustainable Progress: Citi s Sustainability Strategy STRATEGY FOCUSES ON THREE THEMATIC PRIORITIES: Combating Climate Change - Identifying solutions that are client-centered, scalable and have the potential for global impact Championing Sustainable Cities - Leveraging our people and relationships to support the promise as well as address the challenges of urbanization and growth Engaging People and Communities - Considering the benefits and risks to impacted communities in both urban and rural areas to conduct our business in a manner that supports universal human rights Activities are organized under three primary pillars: 15 15
$100B Environmental Finance Goal Reporting 3 16 16
For more information on Citi s Citizenship report and sustainability strategy please visit www.citizenship.citigroup.com 17
Audience Poll 18
Audience Poll 1. What is your organisation s primary purpose for reporting? a. Mandatory compliance with regulations b. Shareholder confidence c. Broader stakeholder expectations for responsible business d. Driving performance and operational change in the business e. Leadership position on big sector or global issues 19 19
Audience Poll 2. Who is your primary reporting audience? a. Employees & Recruits b. Investors & Analysts c. Key Opinion Formers (e.g. academics, NGOs, think tanks) d. Government & Regulators e. Consumers & Customers f. Local Communities g. Business Partners 20 20
Audience Poll 3. What is the primary way your organisation identifies topics to report? a. Compliance with regulatory requirements b. Voluntary reporting framework c. Sustainability / Corporate responsibility team d. External stakeholder views e. Formal materiality assessment 21 21
The Reporting Journey: Where do you fall? KEY CONSIDERATIONS STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5 1. Aims Mandatory /Compliancebased 2. Audience Undefined or compliance-based and reputation performance operational change Everybody Defined multiaudience Influencing the debate Prioritised target audiences 3. Materiality Random or compliance-based selection of issues 4. Systems & Processes Weak or ad hoc systems Anything and everything Informal and/or internally focused materiality process Formal materiality exercise Add-on systems Embedded systems Extended systems Extensive process to aggregate and prioritise Integrated systems 5. Standards & Frameworks Compliance-based or none 6. Outputs Reviews and pamphlets 7. Engagement Business as usual or ad-hoc Informed guidance Full-length report or PDFs Business as usual interactions 8. Frequency As required Annually or every two years Commitment to specific frameworks and guidance Stratified communications Strategic selection of advanced standards Targeted Engagement Value-added standards Bespoke Communication s suite Enabled feedback Interactive Targeted engagement of priority audiences Defined and regular time period Ongoing Real-time 22 22
Q&A 23
Thank you for joining us! 24
Contact us For further information please contact: Nana Guar Senior Consultant E: Nana.Guar@corporate-citizenship.com T: +44 (0) 207 861 1616 London For further information please contact: Megan DeYoung Director E: Megan.DeYoung@corporate-citizenship.com T: 1-212-226-3702 New York W: www.corporate-citizenship.com E: mail@corporate-citizenship.com Twitter: @CCitizenship LinkedIn: Corporate Citizenship Company London Office Holborn Gate, 5th Floor 26 Southampton Buildings London WC2A 1PQ United Kingdom New York Office 241 Centre Street 4th Floor New York, NY 10013 United States San Francisco Office 901 Mission Street Suite 105 San Francisco, CA 94103 United States Santiago Office Nueva Costanera 3698 Of 203 Vitacura - Santiago Chile Singapore Office 12 Kallang Avenue Aperia #04-25 Singapore 339511 T: +44 (0)20 7861 1616 T: 1-212-226-3702 T: 1-415-416-9580 T: +56 (2)2 247 9008 T: +65 6836 9098 25