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The business of sustainability
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ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018
Part of ERM's 2018 Sustainability Means
Business Webinar Series
September 20, 2018
www.erm.com
Welcome
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 2
This presentation will be recorded and all who registered will receive a follow-up email containing a link to
the presentation within a week.
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www.erm.com ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 3
ESG Up and Down the
Supply Chain (Nov)
Disclosure Trends (today)
Maximizing the Value of Assurance
(July)
Valuing Corporate
Impacts on the Environment and Society
(May)
Climate-related
Financial Disclosures
(March)
Megatrends:
Climate change Digital transformation Population growth Emerging middle classes
2018 ERM Webinar Series
www.erm.com
Today’s Speakers
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 4
James MargolisERM
Partner
+1 (484) 913-0405
Jennifer EastesERM
Senior Consultant
+1 (720) 200-7126
Cora Lee MooneyERM
Partner
+1 (216) 303-6006
Kashia MouaAllstate
Senior Manager, Sustainability and
General Counsel Communications
www.erm.com
Research Overview
Presentation Overview
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 5
Allstate Case Study
Key Takeaways and Examples
03
Looking Ahead
Q&A
02
01
04
05
Research Overview
www.erm.com
What We Reviewed
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 7
*Reports included were reports released as of August 1, 2018
Sector# of Reports
Included*
Chemical 19
Mining 19
Oil & Gas 15
Other 32
Power 17
Tech/Media 15
TOTAL 117
01 02 03 04
Report
Type
Report
Length
Assurance SDGs
05 06 07 08
TCFD Materiality Design Strategy
We tracked:
www.erm.com
Types of Reports
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 8
59% of the reports were using GRI Standards [Core: 69%; Comprehensive: 12%; Referenced: 19%]
76 pages – average length of non-integrated reports
223 pages – average length of integrated reports
74% of companies used PDF as the primary delivery mechanism for their reports
[Only 9 companies (7%) had a solely web-based report, with others using a mix of PDF and web]
SectorNon-GRI
GRI
ReferencedG3 G4
GRI
StandardsIntegrated
Chemical 0 1 0 7 11 6
Mining 1 1 0 5 12 2
Oil & Gas 2 0 0 6 7 2
Other 6 0 3 8 18 5
Power 1 0 0 5 12 0
Tech/Media 2 0 0 1 13 0
TOTAL 12 2 3 33 73 15
10%Non-GRI
2%GRI Referenced
2%G3
27%G4
59%GRI Standards
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2018 Shareholder Proposals
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 9
Materiality, shared value, SDGs, TCFD and
reporting for multiple audiences
Key Takeaways and Examples
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Materiality
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 11
GRI provided further clarification for materiality through the Standards
The exact matrix is not required Most companies continue to show their business on the “X-axis”
More companies are articulating their impact in subsequent tables
www.erm.com
Dow
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 12
www.erm.com
Dow
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 13
www.erm.com
Evonik
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 14
www.erm.com
Evonik
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 15
www.erm.com
Evonik
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 16
www.erm.com
Monsanto
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 17
www.erm.com
Monsanto
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 18
www.erm.com
Creating Shared Value
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 19
Structured as:
Inputs Business Outputs Outcomes
This strategy focuses on how
companies can add value to their
company and society by addressing
environmental and social issues that
intersect with their business
Goes beyond traditional compliance
or responsibility
19 companies oriented their strategy
depiction around creating “shared”
or “sustainable” value
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Maersk
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 20
www.erm.com
Maersk
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 21
www.erm.com
Maersk
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 22
www.erm.com
Sasol
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 23
GoldCorp
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TE Connectivity
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 24
www.erm.com
Syngenta
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 25
www.erm.com
Sustainable Development Goals (SDGs)
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 26
Sector# of Reports
with SDGs
Total
ReportsPercent
Chemical 17 19 89%
Mining 12 19 63%
Oil & Gas 12 15 80%
Other 22 32 69%
Power 9 17 53%
Tech/Media 8 15 53%
TOTAL 80 117 68%
The SDGs were readily adapted this year. 68% of
reports analyzed referenced the SDGs
The chemical sector had the highest adaptation rate -
89% of the reports included in our analysis mentioned
the SDGs, followed by Oil & Gas at 80%
There was no uniform approach to addressing the
SDGs – ranging from disclosures on:
Programs
Strategy
Goals
Materiality
Direct vs/ Indirect Impact
Value Chain
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SDG Disclosure – Programs
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 27
HPE
www.erm.com
SDG Disclosure – Goals
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 28
Dow Enel
www.erm.com
SDG Disclosure – Strategy
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 29
PTT Hydro Quebec
www.erm.com
SDG Disclosure – Materiality
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 30
Nestle Owens Corning
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SDG Disclosure – Value Chain
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 31
FCA AkzoNobel
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SDG Disclosure – Direct vs. Indirect Impact
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 32
Oil Search ABB
Reporting for Multiple Audiences
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Stakeholder Expectations
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 34
Demands for transparency come from multiple stakeholder groups
Customers
Employees
Investors
Consumers
Suppliers
Regulators/Legislators
Boards of Directors
Sustainability
Transparency
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Multiple Stakeholders – Multiple ESG Audiences
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 35
Audience: Shareholders
Financial Reporting:
10-Q (Quarterly)
10-K (Annual)
Annual report (or wrap)
Earnings Guidance
(Quarterly)
Financial Statements
(Annual)
Proxy Statement
Audience: Diverse stakeholders
Sustainability Reporting:
Global Reporting Initiative
UN Global Compact
Sustainability Accounting
Standards Board
Industry-specific metrics
In-depth responses to
topic-specific questions
Alignment with SDGs
Audience: Long-term stakeholders
Integrating Reporting:
Forward-looking strategic plan with full business context
Integrates financial & material ESG factors
Values multiple types of capital and articulates
interdependencies
International Integrated Reporting Framework
Task Force on Climate-related Financial DisclosuresAdapted from CECP
Short Term Financial Disclosure (U.S.)
Voluntary Non-Financial Disclosure
Long-Term Value Creation Disclosure
www.erm.com
TCFD
32% of reports in our
study referenced
TCFD or climate
scenario analysis
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 36
32%
53% 56%
19%
35%
7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Chemical Mining Oil & Gas Other Power TMT
% of Reports
5
10
8
54
11 1 12
0
2
4
6
8
10
12
Chemical Mining Oil & Gas Other Power TMT
Reference of TCFD or Scenario Analysis
TCFD Scenario Analysis
Tech/Media
Tech/Media
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Impact of TCFD
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 37
Stand-alone climate reports
01
Shift toward General Counsel, Investor Relations
02
BP
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Enbridge
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 38
www.erm.com
Reporting Approach – Sustainability Hubs
Companies are starting to rethink the way they present information—some have created “Sustainability Hubs” on
their website that mix permanent and continuously changing information in one easy-to-find place.
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 39
Updates In-Depth Answers Easy to Navigate No Delays
Update different reports on different
timelines
This approach addresses the growing list of topics that companies need to report
Provide more in-depth answers to certain
stakeholder questions without creating imbalance in the general report
Allows stakeholders to easily find the
information that is relevant to them
Prevents delays in releasing the report due to one section
or topic
www.erm.com
Formatting for Multiple Audiences
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 40
• Easily searchable (investors, NGOs, ESG rater/rankers)
• Semi-permanent once uploaded (regulators, data aggregators)
• Have all information in one place (internal stakeholders)
• Less expensive
• Easier to share specific pieces of information (consumers, employees)
• More engaging and interactive content (consumers, employees)
• Can be updated more regularly (internal stakeholders, customers, investors)
• Browser-based forms and surveys to collect stakeholder feedback (internal stakeholders)
• Analytics tracking tools provide information: traffic, behavior flow, content popularity,
and site search (internal stakeholders)
Advantages to PDF
Advantages to Web-based% of reports in the study using
a PDF as the primary format.
Most companies publishing web-based reports also publish a downloadable PDF.
74%
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Microsoft
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 41
www.erm.com
Barrick Gold
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 42
Allstate Example
www.erm.com
Allstate Sustainability Report
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 44
Looking Ahead
www.erm.com
Trends to Watch
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 46
TCFD, science-based targets
SDGs More targeted investor
disclosures –e.g., SASB
More web-based content
Goals beyond 2020
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New GRI Standards Released
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 47
www.erm.com ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 48
ESG Up and Down the
Supply Chain (Nov)
Disclosure Trends (today)
Maximizing the Value of Assurance
(July)
Valuing Corporate
Impacts on the Environment and Society
(May)
Climate-related
Financial Disclosures
(March)
Megatrends:
Climate change Digital transformation Population growth Emerging middle classes
2018 ERM Webinar Series
www.erm.com
ERM’s Next Webinar in this Series
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 49
ESG Up and Down the Supply Chain
November 2018
Understanding how Environmental, Social and Governance (ESG) factors affect each part of the supply chain is key to ensuring quality,
transparency and sustainability of business operations.
Speakers include:
David Weaver
ERM
August Martin
ERM
Lee Read
ERM
Questions
www.erm.com
ERM Sustainability Report 2018
Better business. Helping our clients balance the tension
between societal responsibilities and commercial demands.
ERM Webinar: Disclosure Trends – A Look at Sustainability Reporting for 2018 51
Click here to view our online
Sustainability Report 2018
ERM Foundation Annual Review 2018
MegatrendsWe see our clients responding to the impacts from four key megatrends:
The business of sustainability
Thank you James Margolis
ERM
Partner
+1 (484) 913-0405
Jennifer Eastes
ERM
Senior Consultant
+1 (720) 200-7126
Cora Lee Mooney
ERM
Partner
+1 (216) 303-6006