1. www.bitc.org.uk The Investor Project Demonstrating the shareholder value of being a responsible business Risk exercise

2. www.bitc.org.uk Investor Value Driver framework

3. www.bitc.org.uk Risk exercise In investor terms, effective Risk management looks like: 1.Understanding and grading your ESG risks (distinguish between actual operational/financial risks, and Stakeholder perceived risks) 2.Setting targets for your most material risks 3. Linking targets to executive remuneration to deliver change and signify their importance 4. Reporting on outcomes, positive and negative, against these targets A. Do a risk assessment of your Environmental, Social and Governance issues (Impact on the business x Likelihood of happening) A useful starting point for identifying issues to map is here and also the Forces for Change. Think about what is material to your business however, not just the sector in general.hereForces for Change -If you already have a Materiality assessment this is a good start, however these often rank issues by ‘Significance to the Business’ x ‘Stakeholder concern’ which can skew the operational and financial significance of the issue. B. Overlay your existing CR/Sustainability strategy against these risks in the form of a matrix (provided in this ppt) to show which risks are being mitigated by your current activity -Include any targets and KPIs that address these risks -Signify which of these targets have senior accountability, and whether they are linked to remuneration and how -Provide a link to where you report on progress in the public domain, and a short précis of your progress over the years to mitigate

4. www.bitc.org.uk A. Understand and grade ESG risks Shell CR Report ?

5. www.bitc.org.uk Sample ESG risk matrix Significance to the business Likelihood of happening

6. www.bitc.org.uk (Look at your core Risk Register too to see if there are any ‘wider’ risks included there, if so feature these) United Utilities Annual Report 2014

7. www.bitc.org.uk Look at your CR strategy and overlay on your risks (matrix provided) Land Securities CR Report 2014

8. www.bitc.org.uk Include any targets, leadership remuneration link, progress United Utilities CR Report 2014