Social and sustainability Reporting Corporate Sustainability Reporting, trends and opportunities for the future 29 May 2012

Corporate Sustainability: an overviewPage 2 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

Corporate Sustainability: an overviewPage 3 Sustainability Reporting Global Trends Global output by year*Global output by year & region* *CRRA 2011 **CDP 2011 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 reporting companies**

Corporate Sustainability: an overviewPage 4 Sustainability Reporting- why bother? Source: “Striking the Balance” - WBCSD Regulatory compliance Creating financial value Attracting favorable financing Employee motivation, attracting talent Improving management systems Risk awareness Encouraging innovation Continuous improvement Enhancing reputation Transparency to stakeholders

Corporate Sustainability: an overviewPage 5 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.

Corporate Sustainability: an overviewPage 6 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?

Corporate Sustainability: an overviewPage 7 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 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 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 PRI: 850 signatories, USD 25 trillion CDP: 551 signatories, USD 71 trillion Current investment into clean energy and finance: Europe – EUR 94 billion, China- USD 54 billion, USA- USD 34 billion Current investment into clean energy and finance: Europe – EUR 94 billion, China- USD 54 billion, USA- USD 34 billion

Corporate Sustainability: an overviewPage 8 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 Failure to identify CSR risks CSR risk review/risk mapping Ineffective engagement with stakeholders Advice on stakeholder engagement strategy Lack of mitigation plans for CSR impacts Advice on/reviews of CSR action plans Ineffective CSR management processes Development/reviews of management systems Insufficient monitoring and weak governance controls Building/testing governance controls and monitoring systems Insufficient internal/ external communications Advice and assurance over disclosures Effective corporate sustainability report What is covered in sustainability reporting ?

Corporate Sustainability: an overviewPage 9 What makes a GRI sustainability report? ► Society/Community ► Labor Practices/Decent Work ► Human Rights ► Education & Training ► Corruption Prevention ► Health & safety ► Product/Service Responsibility Corporate Governance EnvironmentSocial Economic ► Energy ► Water ► Emissions ► Waste ► Products and Services ► Carbon footprint ► Economic Performance ► Market Presence ► Indirect Economic Impact Approach towards multi-front reporting on sustainability, a vital measure of successful businesses Total indicators : 79 KPIs 40 KPIs 30 KPIs 9 KPI = Key Performance Indicator

Corporate Sustainability: an overviewPage 10 Key challenges and risks of reporting Doing a reality check 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 1. Data consistency 2.2. Data comparability 3. Striking the right balance 4. Dialogue vs Communication 5. Continuous improvement

Corporate Sustainability: an overviewPage 11 Where do you start and how do you get there? ► 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 Collect data Set targets Report Assure ► Obtain limited (a review) and/or reasonable (an audit) assurance on your sustainability report

Corporate Sustainability: an overviewPage 12 Sustainability reporting in the Middle East – trends and developments

Corporate Sustainability: an overviewPage 13 Sustainability Reporting in the UAE ►Abu Dhabi Airports Company ►Abu Dhabi Chamber of Commerce and Industry ►Abu Dhabi Commercial Bank PJSC ►Abu Dhabi Department of Economic Development ►Abu Dhabi Department of Municipality Affairs ►Abu Dhabi Department of Transport Authority ►Abu Dhabi Water and Electricity Authority ►Abu Dhabi Sustainability Group ►Abu Dhabi Tourism Author ►Abu Dhabi Gas Industries Ltd ►Abu Dhabi Gas Liquefaction company ►Abu Dhabi National Oil Company ►Aldar properties ►Dubai Aluminium Company Ltd. ►Dubai Centre for Corporate Values ►Dubai Customs ►Dubai Properties Group ►Dolphin Energy ►Emirates Foundation ►Emirates Integrates Telecommunications Company PJSC (“du”) ►Energy Management Systems International ►Environment Agency- Abu Dhabi ►Jumeirah Group LLC ►Landmark Group ►Metito (overseas) ltd. ►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

Corporate Sustainability: an overviewPage 14 Sustainability Reporting in the Middle East Bahrain ►Arab Bank ►Zain telecommunications Syria ►Syria telecommunications Kuwait ►Burgan Bank ►Commercial Bank of Kuwait SAK ►Kuwait Finance House ►National Bank of Kuwait Qatar ►Qatar National Bank ►Qatar telecom ►RasGas Company Limited Oman ►Petroleum Development Oman LLC KSA ►Saudi Aramco ►Dr Solman Fakeeh Hospital ►Saudi Arabia Fertilizers Company ►Saudi Arabian Oil Company ►Saudi Basics Industries Corporation ►Saudi Electricity Company ►The National Commercial bank ►The Saudi British Bank Egypt ►Arab African International Bank ►Assut Cement Company ►Bavarian Auto Group ►Orascom Telecom Holdings ►Sekem Group ►Shell Egypt NV ►Suez Cement Company Jordan ►Arab Bank ►Aramex international Ltd ►Jordan Aircraft maintenance Ltd ►Jordan River Foundation ►Nuqul Group ►Schema- tactical thinking ►Zain (Jordan) ►Lebanon ►Holcim Lebanon sal

Corporate Sustainability: an overviewPage 15 Report output by type and year Source: Corporateregister.com

Corporate Sustainability: an overviewPage – 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.

Corporate Sustainability: an overviewPage – 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”)

Corporate Sustainability: an overviewPage 18 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

Corporate Sustainability: an overviewPage 19 Trends beyond 2013 ►Credibility through Assurance ►Openness & Honesty ►Relevance and Materiality ►Carbon Disclosure ►Creativity in Communications ►Integrated Reporting

Thank you For further information please contact us: Amjad Rihan Partner Climate Change & Sustainability Services - Middle East Direct: Office: Mobile: