Thank you WORLD ENVIRONMENT CENTER Effective Sustainability Reporting for Trade Associations: Options in an Era of Digital Transparency Terry F. Yosie, President & CEO World Environment Center March 25, 2015 Washington, D.C.

Today’s discussion Evolution of environmental and sustainability reporting Current challenges Major drivers reshaping reporting Options and opportunities for trade associations Some rules of the road

Examples of Environmental/Sustainability Reporting 1986: EPCRA (Sara Title III) Toxics Release Inventory 1989: Valdez Principles (CERES) 1991: International Chamber of Commerce Business Charter for Sustainable Development: Principles for the Environment 1994: Public Environmental Reporting Initiative (PERI) 2000: Global Reporting Initiative (GRI) Guidelines: G2 (2002), G3 (2006) and G4 (2013) 2003: Responsible Care® requirement for all member companies to individually report metrics on ACC’s public Web site 2003: Carbon Disclosure Project: CDP Supply Chain (2008), CDP Water (2010) c. 2010: emergence of integrated financial/environmental reporting

Current Challenges Proliferation of different reporting initiatives, each with different metrics and capabilities to evaluate submitted information Coordination and integration across reporting initiatives Credibility of third party ratings and rankings Lack of common standards on assurance and verification Connecting reporting to business value Can various reporting initiatives be integrated into a common standard?

Major Drivers That Are Reshaping Sustainability Reporting

End-to-end Traceability for a System Level View Source: IBM/WEC Innovations for Environmental Sustainability Council, Feb presentation, Orlando, FL

Value Chain Analysis

Momentum of Materiality Assessments

Reporting Options/Opportunities for Trade Associations Incorporate selected materiality metrics into reporting—what is relevant for business and their stakeholders? Address product impacts in a life cycle context Expand scope of reporting to include value chain metrics Identify social metrics relevant to your business sector Communicate business benefits metrics: e.g., innovation, economic indicators Help member companies by convening customer and stakeholder dialogues to better define expectations Advocate simpler, agreed upon reporting standards—don’t invent another system for trade associations

Some Rules of the Road Be guided by practices of leading companies in your sector Road test metrics and reporting with stakeholders How will data reported by trade associations be verified? Find out who reads your sustainability reports Think and behave digitally Be an active player in social media Reporting is a means, performance is an end Remember: you’re telling a business story Reporting will fundamentally change in 5 years

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