Loras College 2014 Business Analytics Symposium | Margie Flynn: Measuring Sustainability

Measuring Sustainability
Margie Flynn
BrownFlynn

BrownFlynn At A Glance
• Award-winning corporate responsibility and sustainability consulting firm founded in January 1996
• 100% of our business is derived from sustainability consulting, communications and training services
• First U.S.-certified Global Reporting Initiative training organization and a GRI Organizational
Stakeholder
• Since 2006, we have advised clients on the GRI process, producing GRI-based reports
and utilizing the framework as a robust management tool
• A Silver Consultancy Partner for the Carbon Disclosure Project (CDP)
• Founding member of U.S. Business Council for Sustainable Development
• Extensive experience in guiding regional, national and global clients on their sustainability journeys
• A women-owned company (W/FBE) and a DBE (Disadvantaged Business Enterprise)
BrownFlynn 2014. All Rights Reserved

Your Partner, Our Services
BrownFlynn is a
corporate responsibility and
sustainability consulting firm
advising companies on:
• Integrating responsible
practices into their
business strategies
• Communicating these
practices internally
and externally for
bottom-line impact
• Training to build skills
and engage associates
CONSULTING
Sustainability and Corporate Responsibility Advisors
COMMUNICATIONS TRAINING
We advise you on
your journey
We help you
communicate
your successes
We train you/your
team along the
journey
• Sustainability
Strategy
• Goal Setting
• Materiality
• Stakeholder
Engagement
• Research
and Analysis
• Facilitation
• Stakeholder
Communications
• Branding
• Sustainability
Reporting
• Community
Outreach
• CDP, DJSI and WDP
Responses
• Executive Sessions
• Customized
Employee Sessions
• Open Enrollment
Classes
• Webinars

Agenda
• Measuring Sustainability
– Trends: Sustainability Data, Ratings, Frameworks
• Sustainability Reporting
– Benefits
– Global Reporting Initiative
– Best Practices
• Q&A

Measure What Matters
“You can’t manage what you can’t measure.”
– Peter Drucker, Management Consultant, Educator and Author

Ethical Business & Sustainability
Reporting
• 76% of the 2012 World’s Most Ethical Companies write sustainability reports, of
which 90% use the GRI framework.
Sources: Ethisphere Website, G&A Institute Research 2012

Proliferation of Sustainability Data
• The evolution of Big Data technology is enabling the proliferation and dissemination
of sustainability data.
• As a result, stakeholders are expecting companies to be more transparent about their
measurement and management of environmental, social and governance (ESG)
performance.

Explosive Growth of Ratings,
Rankings & Indices
21
108
182
0
50
100
150
200
2000* 2010* 2014**
Number of Ratings, Rankings and Indices
*According to Research by Sustainability, “Rate the Raters” 2010
**Lastest count according to research of CSRHub resouces by BrownFlynn

Frameworks, Agencies and Rankings

Sustainability Reporting Frameworks

What is IR?
• The International Integrated Reporting Council (IIRC):
– Global coalition of regulators, investors, companies, standard setters,
the accounting profession and NGOs
– Views that communication about businesses' value creation should be
the next step in the evolution of corporate reporting
– Over 100 business in the IIRC Pilot Programme Business Network
• The IR Framework
– Released in December 2013
– Voluntary standards, adopting integrated thinking for cohesive and
efficient reporting
– Trialed in over 25 countries

Stock Exchanges Support
Sustainability Reporting
Mandatory Non-Financial Disclosure Recommended Non-Financial Disclosure
Johannesburg Stock Exchange Brazilian Stock Exchange
Sweden Singapore Stock Exchange
Denmark Shanghai Stock Exchange
Malaysia (Burse Malaysia) European Commission
Argentina (Buenos Aires) France
London Stock Exchange (2013) NASDAQ
Securities and Exchange Board of India NYSE Euronext

What is CDP?
• CDP is a nonprofit that works to transform the way the world does business
to prevent dangerous climate change and protect natural resources
• Annual questionnaire was launched in 2000 to promote disclosure as an
investment tool and agent of sustainable improvement
• CDP now covers:
– Climate Change
– Water
– Supply Chain
– Forest
– Cities
– Carbon Action

Growth of CDP Responses
• As of 2013, 5000+ organizations (81% of the Global 500; 70% of the S&P
500) in 72 countries measure and disclose their emissions and climate
change strategies.
Source: CDP

CDP Investor Members
• CDP has 722 institutional investors representing $87 trillion in assets.

Global Reporting Initiative (GRI)
The Institution The Process
The Framework The Report
Global Reporting
Initiative (GRI)
a non-profit,
multi-stakeholder
resource
a framework for
improving the quality of
sustainability disclosures
a sustainability
management
process
a set of basic disclosure
requirements for a
sustainability report
History of GRI Video

GRI Report Content Principles
The report should cover Aspects that reflect the organization’s significant economic,
environmental and social impacts; or substantively influence the assessments and
decisions of stakeholders.
The organization should identify its stakeholders, and explain how it has responded to
their reasonable expectations and interests.
The report should present the organization’s performance in the wider context of
sustainability.
The report should include coverage of material Aspects and their Boundaries,
sufficient to reflect significant economic, environmental and social impacts, and
to enable stakeholders to assess the organization’s performance in the reporting
period.
Materiality
Stakeholder
Inclusiveness
Sustainability
Context
Completeness

GRI Report Quality Principles
The report should reflect positive and negative aspects of the organization’s performance
to enable a reasoned assessment of overall performance.
Select, compile and report information consistently. Information should be presented in a
manner that enables stakeholders to analyze changes in the organization’s performance
over time, and compare to other organizations.
The reported information should be sufficiently accurate and detailed for stakeholders to
assess the organization’s performance.
Report on a regular schedule so that information is available in time for stakeholders to
make informed decisions.
The organization should make information available in a manner that is understandable and
accessible to stakeholders using the report.
The organization should gather, record, compile, analyze and disclose information and
processes used in the preparation of a report in a way that they can be subject to
examination and that establishes the quality and materiality of the information.
Balance
Comparability
Accuracy
Timeliness
Clarity
Reliability

GRI Aspects
Environmental Labor Practices
& Decent Work
Human Rights
• Materials
• Energy
• Water
• Biodiversity
• Emissions
• Effluents and Waste
• Products and Services
• Compliance
• Transport
• Overall
• Supplier Environmental Assessment
• Environmental Grievance
Mechanisms
• Investment
• Non-discrimination
• Freedom of Association & Collective
Bargaining
• Child Labor
• Forced /Compulsory Labor
• Security Practices
• Indigenous Rights
• Assessment
• Supplier Human Rights Assessment
• Human Rights Grievance Mechanisms
• Training and Education
• Employment
• Labor/Management Relations
• Occupational Health & Safety
• Diversity & Equal Opportunity
• Equal Remuneration for Men and Women
• Supplier Assessment for Labor Practices
• Labor Practices Grievance Mechanisms
Product ResponsibilitySocietyEconomic
• Economic Performance
• Market Presence
• Indirect Economic Impacts
• Procurement Practices
• Local Communities
• Anti-Corruption
• Public Policy
• Anti-competitive Behavior
• Compliance
• Supplier Assessment for Impacts on Society
• Grievance Mechanisms for Impacts on
Society
• Customer Health & Safety
• Product & Service Labeling
• Marketing Communications
• Customer Privacy
• Compliance

Who is Using GRI?

How does CDP complement the GRI
process?
• CDP Content:
– CDP questions correspond to disclosure topics
within the GRI framework
– Opportunity to re-purpose outcomes from CDP
for Sustainability Report and vice versa
• GRI Report Development Outcomes:
– Information from interviews (risks,
opportunities, projects)
– Content and positioning can be leveraged

Why Report Sustainability
Information?
• G250 companies view reputation and ethical
considerations as key reasons to report
sustainability efforts.
0% 20% 40% 60% 80%
Cost Savings
Improved Relationships w/ Government…
Strengthened Supplier Relationships
Market Position Improvement
Access to Capital or Increased Shareholder…
Economic Considerations
Risk Management
Employee Motivation
Innovation and Learning
Ethical Considerations
Reputation or Brand
Source: KPMG International Corporate Responsibility
Reporting Survey, 2011
• Sustainability reporting improves CEO
approval ratings and employee satisfaction.
Companies with GRI-based reports have the
highest CEO approval and employee
satisfaction ratings.
67.00
68.00
69.00
70.00
71.00
72.00
73.00
74.00
75.00
CEO Approval Rating
Percentage
(as of July 2012)
Source: Glassdoor, G&A Research, 2012
3.00
3.05
3.10
3.15
3.20
3.25
3.30
Employee Satisfaction
Scale - 0 to 5
(as of July 2012)

Supply Chain Pressure for
Reporting
• Companies are shifting their supply chain engagements from authoritative to
collaborative.
Authoritative Approach
Companies demand suppliers
to provide information through
surveys, questionnaires or
scorecards.
Demonstrative Approach
Companies ask suppliers to
use reporting frameworks they
are already using.
Collaborative Approach
Companies work with and
educate suppliers on how they
want to report information.

Supply Chain Collaboration
Through Reporting
• Companies who produce sustainability reports see an increase in supply chain
member collaboration
Source: MIT and BCC, 2012.
Global executive study and
research project.

GRI: The Leading Sustainability
Reporting Framework

The 2013 CRO Top 100
Johnson Controls
Campbell Soup
IBM
Bristol-Myers Squibb
Mattel
3M
Kimberly-Clark
Hewlett-Packard
Nike
Gap
General Mills
Intel
Coca-Cola co.
Coca-Cola Enterprises Inc.
Pinnacle West Capital
Albemarle
Spectra Energy
E.I. DuPont De Nemours & Co
Johnson & Johnson
Abbott Laboratories
PG&E
Microsoft Corporation
Freeport-McMoran Copper&Gold
Pepsico
Raytheon
Advanced Micro Devices
Texas Instruments
Accenture
H.J. Heinz Co.
EMC
Hormel Foods
Jones Lang LaSalle
Eaton
Merck & Co.
Altria Group
Chevron
Cisco Systems
Occidental Petroleum
Starbucks
Colgate-Palmolive
Target
Hess
Ball Corp.
Green Mountain Coffee
Clorox
Dell Inc.
Yum! Brands
Motorola
Hershey Company
Exelon Corp
PPG Industries
McGraw-Hill
UPS
Baxter International Inc.
JPMorgan Chase & Co.
Northern Trust Corp
Verizon
Communications
Xerox Corp
Walt Disney
Dow Chemical
Lexmark International
FedEx
Oracle
Ford
State Street
Life Technologies
Mosaic
Carnival Corp.
Sprint Nextel
Wisconsin Energy Corp.
Darden Restaurants
Wyndham Worldwide
Rockwell Automation
CA Technologies
Southwest Airlines
ConocoPhillips
International Paper
Entergy Corp
Weyerhaeuser
Boeing
Sempra Energy
Dominion Resources
Whirlpool
AT&T
Eli Lily & Co.
General Electric Co.
TJX Companies
Duke Energy
Agilent Technologies
Hasbro
Lockheed Martin.
Northeast Utilities
Prudential Financial
Air Products &
Chemicals
Exxon
Praxair, Inc.
Marathon
Monsanto Co.
PVH Corp.
Allergan Inc.
88%

Reporting as a Management Tool
1. Discovery
• Project Launch Meeting
• Background (internal)
• Benchmarking (external)
2. Strategy and
Prioritization
• Value Chain Mapping
• Stakeholder Engagement
• Leadership Team
Materiality Workshop
3. Define Content
• Content Outline
and Site Map
• Theme Development
• Design
• Gather Additional
Data and Stories
4. Develop Content
• Write Copy and
Manage Edits
• Continue Design
• Define Assets
5. Production
• Development
• Content Pouring
• PDF and Summary Layout
• Testing and QA
• Proofing
• Launch Planning
6. Launch
• Launch
• Measure
• Optimize
BrownFlynn’s Approach

Sustainability Report Best Practices
Examples
• Allstate’s Interactive Materiality Matrix
• American Electric Power’s Stakeholder
Engagement:
– Send an e-card to family and friends
to remind them to use energy wisely
– Subscribe to AEP e-mail alerts and
contact AEP
– Measure carbon footprint
• Campbell’s Soup Data Accessibility
– Download data, entire CSR report, individual
sections, or previous reports

Award-Winning Sustainability
Reports
• 2011/2010 Best Report: Coca-Cola Enterprises Inc
• 2011/2010 Best 1st Time Report: La Trobe University
• 2011/2010 Best SME Report: Beyond Business
• 2011/2010 Best Integrated Report: Novo Nordisk A/S
• 2011 Relevance and Materiality: Marks and Spencer plc
• 2011 Openness and Honest: Marks and Spencer plc

Measure What Matters
“In God we trust, all others
must bring data.”
– W. Edwards Deming, Statistician

Thank You for Attending!
Margie Flynn
Principal and Co-Founder
440-484-0100, x3
margief@brownflynn.com
For more information on BrownFlynn’s services,
please visit www.brownflynn.com

Q & A

Measuring Sustainability: APPENDIX
Margie Flynn
BrownFlynn

What is SASB?
• The Sustainability Accounting Standards Board (SASB) is a
nonprofit organization that establishes industry-based
sustainability standards for the recognition and disclosure of
material environmental, social and governance impacts by
companies traded on U.S. exchanges.
• Sectors include health care, financials, technology &
communication, non-renewable resources, transportation,
services, resource transformation, consumption, renewable
resources & alternative energy, and infrastructure.

Ford Connects Big Data with
Environmental Impacts
• “Analytics permeates almost every aspect of sustainability at Ford,
helping to chart paths to a cleaner, brighter, better world and a
stronger business.”
• “The amount of available data is growing fast: Ford researchers
have begun experimenting with vehicles that produce 250 gigabytes
of data an hour. More information leads to further improvements in
increasing fuel economy and reducing vehicle emissions.”
• “Ford considers big data and analytics the next frontier for
innovation, competition and productivity, with new opportunities
emerging such as green routing, that allows consumers to optimize
driving routes to minimize their impact on local air quality”
– Read the full press release here: Ford Embracing Analytics and Big
Data to Inform Eco-Conscious Decisions, Stay Green

Big Data Inform Solutions
“You can have data without information, but you cannot
have information without data.”
– Daniel Keys Moran, Technologist
Data is a “raw material ready to be shaped.”
– Tate Cantrell, CTO of Verne Global
“Organizations are cultivating ‘big data’ towards
sustainable solutions across industries and sectors.”
– Elaine Hsieh, Program Director & Senior Analyst, Verge
Source: VERGE

Loras College 2014 Business Analytics Symposium | Margie Flynn: Measuring Sustainability

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Loras College 2014 Business Analytics Symposium | Margie Flynn: Measuring Sustainability