Venue, Date Sustainability Reporting Trends “Game Changing Developments” March 2012 Mike Wallace Director, Focal Point USA Global Reporting Initiative

What is the current situation?

Range of Terminology CSR- Corporate Social Responsibility CC- Corporate Citizenship SD- Sustainable Development ES- Environmental Sustainability BE- Business Ethics CE- Corporate Ethics CG- Corporate Governance ESG- Environmental, Social & Governance IR- Integrated reporting Non-Financial Reporting

How does GRI help?

GRI’s Vision & Mission Vision A sustainable global economy where organizations manage their economic, environmental, social and governance performance and impacts responsibly and report transparently. Mission To make sustainability reporting standard practice by providing guidance and support to organizations.

The GRI Guidelines Environmental EN 3 - Direct energy consumption by primary energy source Labor LA 7 - Rates of injury, occupational diseases, lost days and absenteeism, and number of work related fatalities by region. Human Rights HR 4 - Total number of incidents of discrimination and actions taken Product Responsibility PR 6 - Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, ad sponsorship. Economic EC 4 – Significant financial assistance received from government.

GRI Harmonization – Local & Global

What are we seeing?

Corporate Sustainability: A Progress Report Reviewed 3400 companies representing the national leaders from 34 countries around the world, including the 250 largest global companies Ninety-five percent of the 250 largest companies in the world (G250 companies) now report on their corporate responsibility (CR) activities, two-thirds of non-reporters are based in the US. CR reporting has gained ground within the Top 100 companies in each of the 34 countries surveyed. The total number of reporting N100 companies increased by 11 percentage points, to 64 percent in Eighty percent of G250 and 69 percent of N100 companies are now aligning to GRI reporting standards. October 2011

Who are these Reporters?

GRI Reporters (North American Sample)

US Business Roundtable ABB Accenture Abbott Alcoa American Electric Power AT&T CB Richard Ellis Group Inc. CH2MHill Companies, Ltd. Chevron Chubb Citi Coca-Cola Conoco Philips Cummins Darden Deloitte Dow Chemical Duke Energy DuPont Eastman Kodak Co. EMC Exxon Mobil Freeport McMoran General Electric General Motors HSBC IBM International Paper ITT  Johnson & Johnson  Johnson Control  Life Technologies Corp  McKesson Corp.  Merck  Motorola  NexTera (Formerly FPL)  Office Depot  Owens Corning  PepsiCo  Pfizer  Praxair  Proctor & Gamble Co.  Ryder  Sara Lee  SAP USA  SAS  Southern Company  Siemens Corp  Target Corporation  Tyco  UAL Corporation  Weyerhauser  Whirlpool Corporation  Williams  Xerox

Who really cares?

Increasing Stakeholders and Demand Modern Due Diligence

Shareholder Initiatives & Coalitions Principles for Responsible Investment (PRI) [2006] – Currently represents over $30 Trillion in investment capital – 900+ signatories 900+ signatories Investor Network on Climate Risk (INCR) [2003] – Currently represents over $10 Trillion in investment capital – 100+ members 100+ members Carbon Disclosure Project (CDP) [2002] – Currently represents over $71 Trillion in investment capital – act on behalf of 550+ institutional investors550+ institutional investors Institutional Investors Group on Climate Change (IIGCC) [2001] – Currently represents $6 Trillion in investment capital – 70 members 70 members Interfaith Center on Corporate Responsibility (ICCR) [1972] – Currently represents over $100 Billion – 300 members 300 members

Signatories to the PRI (US) 900+ international signatories PARTIAL LIST OF ASSET OWNERS (200): AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan CalPERS / CalSTRS Connecticut Retirement Plans and Trust Funds (CRPTF) General Board of Pension and Health Benefits United Methodist Church Illinois State Board of Investments Los Angeles County Employees Retirement Association (LACERA) Maryland State Retirement and Pension System New York City Employees Retirement System / New York State Local Retirement System SEIU Pension Plans Master Trust State Universities Retirement System of Illinois Teachers' Retirement System of the City of New York Universal Health Care Foundation of Connecticut

Signatories to the PRI (US) 900+ international signatories PARTIAL LIST OF INVESTMENT MANAGERS: BlackRock Calvert Investments CBRE Investors Domini Social Investments JPMorgan Asset Management Kohlberg Kravis Roberts & Co, LLP Krull & Company Northern Trust Global Investments Prudential Real Estate Investors Russell Investments TD Asset Management Inc. The Townsend Group TIAA - CREF Boston Trust Capital Group International Clear Bridge Advisors MFS Investment Management Principal Global Investors T. Rowe Price Tower Capital Asset Management LP

Mainstream Involvement

How would you conduct due diligence? Can any of this really be measured?

Sustainability Performance GRI Reporters Presence: 95% of the Dow Jones Sustainability Index 78% of the FTSE4Good 70% of the Global % of the NASDAQ OMX CRD Sustainability Index

Market Evolution 300,000+ data terminals globally 5,000+ companies and climbing Sustainability Aspects Emissions Energy Consumption Human Rights Policies Board Make-Up Built around GRI

Environmental Criteria (2010) Company Names Environmental Disclosure Score Total Energy Consumption (Mwh) Total GHG Emission (Th Tonnes) Water Consumption (Thousands of cubic meters) Total Waste (Thousands of metric tons) Apple n/a n/a---n/a CA, Inc. n/a --- n/a --- Dell EMC Fujitsu HP Intel n/a IBM n/a Microsoft 11.63n/a--- Toshiba

Sustainability Performance MSCI World & GRI 2002 to 2012 S&P 500 & GRI 2001 to 2011

SROs - Stock Exchanges Regulatory Developments – National & State Regulation – Supply Chain Implications Supply Chain Developments GRI Developments & Trends

Mainstream Uptake May 2010 January 2011

Global Regulatory Review "More governments are making sustainability reporting mandatory.“ 142 regulatory instruments addressing sustainability reporting exist in over 30 countries 65% are classified as mandatory, the rest voluntary United States WH CEQ - EO USPS, US Army, GSA, etc…. SEC Dodd-Frank CA Transparency on Trafficking & Slavery

Supply Chain Ripple Sept 2011 – GSA Oct 2011 – MS Jan Apple

Supply Chain Ripple Training Customer Suppliers GRI Stakeholders

View Forward G4 timeline - Working Groups and 2 nd PCP We are here! We are here G4 Working Groups Supply Chain Disclosure Disclosure on Management Approach Governance & Remuneration Boundary Application Level

Venue, Date Mike Wallace Director, Focal Point USA Global Reporting Initiative Twitter: M_A_Wallace Linked In: Thank you