Zürich, October 14, 2014
Financial Materiality and Clarity in Multi-stakeholder Reporting
RobecoSAM at a glance
• Investment specialist focused exclusively on Sustainability Investing since 1995
• Offering complementary capabilities to Sustainability Investing
• Powering the Dow Jones Sustainability Indices since 1999
• USD 11.8 billion total assets (as per 30.06.2013)
• In 2013, 50% of total stock market capitalization in the world, or $26 trillion, were analyzed and €100 billions of managed assets is integrating RobecoSAM corporate sustainability information in the investment decisions
• Servicing a global and diversified client base
• Approximately 110 employees headquartered in Zürich, Switzerland
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RobecoSAM Corporate Sustainability Assessment
Overview
• Over 3,000 companies invited annually
• 830 companies participated in 2014
Methodology
• Integrated assessment of economic, environmental and social criteria with a strong focus on long-term shareholder value
• Rules-based methodology and use of primary research
• Focus on best-in-class companies. Yearly review of component selection and continuous monitoring of companies
• Assurance of the assessment process by Deloitte
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RobecoSAM Definition of Corporate Sustainability
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A company‘s capacity to prosper in a hypercompetitive and changing global business environment
anticipating and managing current and future economic, environmental and social opportunities and risks
focusing on quality, innovation and productivity to create competitive advantage and long-term value
by
How we use sustainability reporting
• Verification of submitted answers and data
• Reporting on targets and progress of sustainability initiatives
• Identification of material issues and the stakeholder engagement process
• How sustainability initiatives align with long-term corporate strategy
• The business and financial benefits of sustainability initiatives
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RobecoSAM Corporate Sustainability Assessment – Data Collection
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Social
EnvironmentalEconomic
RobecoSAM defines Materiality as “Any factor which might have a present or future impact on companies‘ value drivers, competitive position, and thus on long-term shareholder value creation“
Financial Materiality Framework
Key Question: How do different forms of capital impact financial performance?
RobecoSAM’s Definition of Materiality of Sustainability
Forms of Capital:
● Intellectual capital ● Customer capital● Manufactured capital● Human capital ● Environmental capital ● Social capital ● Financial capital & business
model
Impact on Financials:
● Growth (Revenue)● Profitability (Costs)● Capital Efficiency● Risk profile
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Materiality in Reporting
Is your company publically reporting on the processes and tools used to identify and prioritize critical environmental issues within the sustainability strategy, including a consideration of impact on the company’s business performance
Elements of Materiality Framework
1 - Process description available
2 - External Stakeholders involved in process
3 - Internal Stakeholders involved in process
4 - Material issues identified and disclosed
5 - Material issues prioritized
8Source: RobecoSAM Corporate Sustainability Assessment 2014. Data based on all participating companies and additional companies assessed based on publicly available information (1,813 companies)
Materiality in Reporting
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Is your company publically reporting on the processes and tools used to identify and prioritize critical environmental issues within the sustainability strategy, including a consideration of impact on the company’s business performance
Elements of Materiality Framework
1 - Process description available
2 - External Stakeholders involved in process
3 - Internal Stakeholders involved in process
4 - Material issues identified and disclosed
5 - Material issues prioritized
Source: RobecoSAM Corporate Sustainability Assessment 2014. Data based on all participating companies and additional companies assessed based on publicly available information (1,813 companies)
Source: RobecoSAM Corporate Sustainability Assessment 2014. Data based on all participating companies and additional companies assessed based on publicly available information (1,813 companies)
Reporting on materiality
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Quantification in Reporting
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Reporting on Environmental/Social Cost Savings in CSR Report
Environmental Social
Source: RobecoSAM Corporate Sustainability Assessment 2014. Data based on all participating companies and additional companies assessed based on publicly available information (1,813 companies)
Quantification in Reporting
Environmental Social
Reporting on Environmental/Social Revenue Generation in CSR Report
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Source: RobecoSAM Corporate Sustainability Assessment 2014. Data based on all participating companies and additional companies assessed based on publicly available information (1,813 companies)
Focus on financial materiality
How useful do investors find the different types of non-financial information when making investment decisions?*
Source: EY Tomorrow’s investment rules - Global survey of institutional investors on non-financial performance, April 2014
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Annual Report32%
Integrated Report18%
Corporate website
18%
Press coverage13%
ESG data providers
9%
Sustainability report
7%
Sustainability rankings3%
Social media2%
Evolution of Corporate Reporting
Reporting : Moving Towards Integration
Integrated reporting is designed to enhance the concept of primary report, a report that combines the financial performance, management discussion, corporate governance, remuneration disclosure, and sustainability reporting into a single report. Such a report enhances transparency and accountability, which are essential in building trust and resilience. The concept of integrated reporting is to provide a clear and concise representation of how an organization demonstrates stewardship on all its resources and how it creates and sustains value.
Source: Source: IIRC (2011) “Towards Integrated Reporting”
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FinancialStatements
ManagementCommentary
Governanceand
Remuneration
EnvironmentalReporting
FinancialStatements
ManagementCommentary
Governanceand
Remuneration
Sustainability
Reporting
FinancialStatements
FinancialStatements
ManagementCommentary
Governanceand
Remuneration
SustainabilityReporting
IntegratedReporting
202020001980
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Shifting focus of sustainability reporting – DOs and DON’Ts• Focus on materiality – financial materiality vs. stakeholders perception
• Integrated vs. decentralized reporting
• Who are we reporting for? – Completeness without too much fluff
• What do we report? Quality vs. Quantity
• Third-party verification
• Comparable metrics
• Storytelling AND measuring
• How often do we report?
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Thank you. Questions?
Amara GoereeJr. Sustainability Operations [email protected]+41 44 653 12 58
Disclaimer
No warranty This publication is derived from sources believed to be accurate and reliable, but neither its accuracy nor completeness is guaranteed. The material and information in this publication are provided "as is" and without warranties of any kind, either expressed or implied. RobecoSAM AG and its related, affiliated and subsidiary companies disclaim all warranties, expressed or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose. Any opinions and views in this publication reflect the current judgment of the authors and may change without notice. It is each reader's responsibility to evaluate the accuracy, completeness and usefulness of any opinions, advice, services or other information provided in this publication.
Limitation of liability All information contained in this publication is distributed with the understanding that the authors, publishers and distributors are not rendering legal, accounting or other professional advice or opinions on specific facts or matters and accordingly assume no liability whatsoever in connection with its use. In no event shall RobecoSAM AG and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of any opinion or information expressly or implicitly contained in this publication.
Copyright Unless otherwise noted, text, images and layout of this publication are the exclusive property of RobecoSAM AG and/or its related, affiliated and subsidiary companies and may not be copied or distributed, in whole or in part, without the express written consent of RobecoSAM AG or its related, affiliated and subsidiary companies.
No Offer The information and opinions contained in this publication constitutes neither a solicitation, nor a recommendation, nor an offer to buy or sell investment instruments or other services, or to engage in any other kind of transaction. The information described in this publication is not directed to persons in any jurisdiction where the provision of such information would run counter to local laws and regulation.
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