Market Interest in Nonfinancial Information

Transcription

1 Market Interest in Nonfinancial Information Robert G. Eccles Michael P. Krzus George Serafeim Working Paper September 22, 2011 Copyright 2011 by Robert G. Eccles, Michael P. Krzus, and George Serafeim Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.

2 MarketInterestinNonfinancialInformation RobertG.Eccles,MichaelP.Krzus,andGeorgeSerafeim Market interest in nonfinancial (e.g., Environmental, Social, and Governance [ESG]) information, includingdataproducedbythecarbondisclosureproject(cdp),isgrowing.usingdatafrombloomberg weanalyzethisinterestfromavarietyofdifferentperspectives,andindoingsoareabletoprovidea levelofgranularityaboutmarketinterestinnonfinancialinformationthathasnotyetbeenprovided. Thedatarevealanumberofinterestinginsights.First,thereisalargemarketinterestinthelevelofa company sdegreeoftransparencyaroundesgperformanceandpolicies,asshownindisclosurescores calculated by Bloomberg. This high level of interest in ESG disclosure scores might be the result of investorsusingesgdisclosurequalityasaproxyformanagementquality(goldmansachs,2009). Second,attheaggregatemarketlevel,interestinEnvironmentalandGovernanceinformationisgreater thaninterestinsocialinformation.higherinterestinenvironmentaldatarelativetosocialdatacouldbe attributedtothefactthatenvironmentalimplicationsareeasiertoquantifyandintegrateintovaluation modelscomparedtosocialdata.alongandsignificantstreamofliteratureandresearchfindingsonthe implicationsofgovernanceforfirmperformanceandriskiness(becht,bolton,androell,2003)couldbe thecauseofthehigherinterestingovernancedata. 1 Fromthesetofenvironmentalmetrics,thehighestmarketinterestisshownforgreenhousegas(GHG) emissionsandotherclimatechangedata,suchasco2emissions.however,thisisnottruefortheus marketwheretheinterestinthesedataisverylow,consistentwithusbeingoneofthemostskeptical countriesaboutthepotentialeffectsofclimatechange 2.Fromthesetofgovernancemetrics,market RobertEcclesisaProfessorofManagementPracticeatHarvardBusinessSchool,MikeKrzusisthePresidentof Mike Krzus Consulting, and George Serafeim is an Assistant Professor of Business Administration at Harvard BusinessSchool. 1 AreportpublishedbytheOrganizationforEconomicDevelopmentandCooperation(OECD)in2004identified45 currentandpredecessorgovernancecodesandprinciplesin29differentcountries.thisfindingdidnotinclude specificprinciplessuchasthoseofinvestmentfunds.organizationforeconomicdevelopmentandcooperation. CorporateGovernance:ASurveyofOECDCountries, accessedseptember2011.inaddition,a2009oecdreportincludedcitationsto43researchpapersandother governanceliterature.organizationforeconomicdevelopmentandcooperation.corporategovernanceandthe FinancialCrisis:KeysFindingsandMainMessages,June TheWorldBank.Publicattitudestowardclimatechange:findingsfromamulticountrypoll, December3,

3 interestisconcentratedonboardcompositionandboardactivitydata.the marketinterestforthese data in the US is even higher, consistent with the market placing a high importance on governance characteristics. Wealsoanalyzemarketinterestbyassetclass,consideringequityinvestorsandfixedincomeinvestors. Equity investors exhibit a higher interest in nonfinancial information compared to fixed income investors.equityinvestorsplacemoreemphasisonesgdisclosureandghgemissionsdata.incontrast, fixed income investors place more weight on governance data. A potential explanation for this differenceinemphasisisthatequityinvestorsdonotonlycareaboutthedownsiderisk,asfixedincome investorsdo,butalsoabouttheupsidepotentialofthebusiness.governancemetricscanbeusedto primarilyjudgetheriskofextremenegativeeventsthatmightleadafirmtodefaultinthefuture.in contrast,transparencyaroundesgperformanceandpoliciesisusedasaproxyformanagementquality and the potential for the management to grow profitably the business in the future.similarly, GHG emissionsrepresentariskexposuretoacompany,suchasthroughregulationsforreducingemissionsor emissions taxesthatwillaffectequitypricesmorethanbondprices. Finally, we analyze market interest by type of investment firm. We find that sellside firms (broker dealers)areprimarilyinterestedinghgemissions.combiningthisfactwithrecentevidencethatsell sideanalystsissuemoreoptimisticrecommendationsforfirmswithbettersustainabilityscores(ioannou andserafeim2010),suggeststhatanalystsactuallyintegratethefinancialimplicationsofghgemissions into their investment recommendations. In contrast, buyside firms (hedge funds, insurance firms, pensionfunds,andmoneymanagers)aremostinterestedinesgdisclosuredata.onereasonforthis differencecouldbethatghgemissionsareeasiertoquantifyandintegrateintovaluationmodelsand earnings forecasts that sellside analysts rely in order to form their investment recommendations. Portfolio managers might use ESG transparency as an additional signal of how investable a firm is, withoutnecessarilyformallyintegratingthevaluationimplicationsofesgtransparency. PartIofthispaperreviewsthegrowinginterestinESGinformationonthepartofbothcompaniesand investors.partiiisadiscussionofthetop20metricsfortheglobalandusmarket,andinpartiiiwedo the same for each category of Environmental, CDP, Social, and Governance.In Part IV we analyze informationuseaccordingtopositionanddothesameforassetclassandfirmtypeinpartsvandvi, respectively. We conclude with some summary observations about implications for practice and suggestionsforfutureresearch. GrowingInterestinNonfinancialInformation Duringthepasttwodecades,therehavebeenmanyideasforimprovingbusinessreportingandnearly allofthemfocusontheimportanceofcompaniesprovidingmorenonfinancialinformation.onereason for the growth in disclosure of nonfinancial information is that the percentage of an entity s market valuethatcanbeattributedtotangibleassetshasdiminishedfromabout80%in1975tolessthan20% in2009(seetable1). 3 A2003InstituteofCharteredAccountantsofEnglandandWaleswhitepaper 3 OceanTomo, IntellectualCapitalEquity, accessedseptember,

4 analyzed11initiativestoreformreportingandconcludedthat Noneofthesemodels,whatevertheir merits,hassofarsucceededincommandinggeneralsupport. 4 (Table1abouthere) Even though no framework for nonfinancial reporting has risen to the level of International Financial Reporting Standards (IFRS) or US Generally Accepted Accounting Standards (GAAP), an increasing number of companies have been experimenting with more robust disclosure of nonfinancial information.according to CorporateRegister.com, a data repository with over 35,000 reports from 8,220differentcompaniesacross168countries,almost5,400reportscontainingsustainabilityandother nonfinancialinformationwerepublishedin TheGlobalReportingInitiative s(gri)sustainabilityreportingguidelines,betterknownasg3,maybe themostwidelyusedframeworkfornonfinancialinformation.g3providesguidanceonreportingonan entity s economic, environmental, and social performance.the guidelines are designed for use by organizationsregardlessofsize,sector,orlocation.in2000,lessthan50companiespreparedreports usingthegriguidelines.thatnumbergrewto376in2005,andover1,860companiesusedtheg3 Guidelinesfortheirsustainabilityreportsin Inadditiontovoluntarynonfinancialreportingbycompanies,otherinitiativeshavebeenformedtopush thedevelopmentofmorerigorousandsystematicreportingofnonfinancialinformation(ioannouand Serafeim,2011).Forexample,SouthAfricahasmandatedintegratedreporting asinglereportwhich combines information on the company s financial performance with information on its nonfinancial performance(ecclesandkrzus,2009) 7 In2010,theJohannesburgStockExchange(JSE)codifiedtheKing III recommendations by amending its listing rules to require approximately 450 listed companies to produceanintegratedreportinplaceoftheirannualfinancialreportandsustainabilityreportorexplain whytheyarenotdoingso.anintegratedreport wasrequiredforyearsendedonorafter March1, Another example is the United Nations Principles for Responsible Investment s (UNPRI) Sustainable StockExchangeInitiative. 8 Thisinitiativeisaimedatexploringhowexchanges,investors,regulators,and companies can work together to improve transparency and disclosure of ESG performance, and encourage longterm approaches to investment. Emerging market exchanges are leading the way in termsofimplementingsustainabilitydisclosureandothermeasurestoenhancecorporatesustainability 4 InstituteofCharteredAccountantsinEnglandandWales.InformationforBetterMarkets:NewReportingModels forbusiness,november CorporateRegister.com. availableonasubscriptiononlybasis. 6 GlobalReportingInitiative. September InstituteofDirectorsSouthAfrica.KingReportonGovernanceforSouthAfrica UNPrinciplesforResponsibleInvestmentSustainableStockExchanges, 3

5 reporting of listed companies. For example, exchanges in Brazil, China, Egypt, India, Indonesia, Malaysia,andSouthAfricahavelaunchedESGdisclosurerulesinrecentyears. 9 In January 2011, a coalition of investors wrote to the CEOs of 30 stock exchanges to demand that sustainabilityreportingbecomeembeddedwithinlistingrulesandthatlistedcompaniesputaforward lookingsustainabilitystrategytovoteattheirannualgeneralmeeting.theletter 10 alsosoughtopinions on, among other things, how companies should be integrating sustainability into longterm strategic decisionmakingandencouragingcompaniestoundertakeintegratedreporting. Developmentofframeworksforreportingnonfinancialinformation One barrier to widespread acceptance and use of nonfinancial information by investors and other stakeholders is the lack of a generally accepted information framework and reporting standards. Standardswouldbringconsistencytoreportingandpermitcomparabilityofinformation,atleastwithin sectors.inaddition,astandardwouldprovideabenchmarkagainstwhichreportscouldbeassessed andassurancecouldbeprovided. Since2008,atleast18organizationshaveissuedframeworksandguidanceforreportingnonfinancial information. 11 Thisproliferationofguidanceraisesanotherissue.Thisnumberofframeworkscreatesa perception about competing frameworks and causes confusion in the marketplace about what 9 UNPrinciplesforResponsibleInvestmentSustainableStockExchanges.SustainableStockExchanges:Real Obstacles,RealOpportunities. Sustainable_Stock_Exchanges_2010.pdf,accessed September. 10 UNPrinciplesforResponsibleInvestmentSustainableStockExchanges. September AccountingforSustainability,ConnectedReporting;AllianceforWaterStewardship,AWSStandards;Australian StockExchange,ListingRule ;BuenosAiresCityCouncil,Law2598;BursaMalaysia,BursaMalaysiaCSR Framework;CanadianSecuritiesAdministrators;StaffNotice51333EnvironmentalReportingGuidance;Canadian SecuritiesAdministrators,NationalInstrument51102ContinuousDisclosureObligations;ChinaStateOwned AssetsSupervisionandAdministrationCommission,Directive;ClimateDisclosureStandardsBoard,TheCDSB ReportingFramework;DanishCommerceandCompaniesAgency,Parliamentarylaw;DVFASocietyofInvestment ProfessionalsinGermany,KPIsforESGIssues,Version3.0;EuropeanUnion,BusinessReview Modernization Directive(4 th and7 th Directives);ExtractiveIndustryTransparencyInitiative,EITIPrinciplesandCriteria;France, Grenelle2;Germany,GermanSustainabilityCode;GlobalReportingInitiative,G3Guidelines;International AccountingStandardsBoard,IFRSPracticeStatementManagementCommentary;InternationalIntegrated ReportingCommittee,DiscussionPaperTowardsIntegratedReporting:CommunicatingValueinthe21stCentury; InternationalOrganizationforStandardization,ISO14000;InternationalOrganizationforStandardization,ISO 26000;JohannesburgStockExchange,Listingrequirements;OrganizationforEconomicCooperationand Development,ReportingGuidelinesonMultinationalEnterprises;SingaporeStockExchange,PolicyStatementon SustainabilityReporting;Sweden,Parliamentarylaw;U.S.SecuritiesandExchangeCommission,Interpretive release CommissionGuidanceRegardingDisclosureRelatedtoClimateChange;U.K.AccountingStandardsBoard, ReportingStatement:OperatingandFinancialReview;UnitedNations,GlobalCompact;UnitedNations,Principles forresponsibleinvestment;waterfootprintnetwork,waterfootprintassessmentmanual..thislistwasadapted andupdatedfromlydenberg,steveandkatiegrace.innovationsinsocialandenvironmentaldisclosureoutside theunitedstates,november accessedseptember

6 frameworkacompanyshoulduse.oneinitiativethatmightleadtoconvergenceintheseframeworks, similar to the convergence taking place between IFRS and US GAAP is the International Integrated Reporting Committee ( IIRC ).This diverse global organization includes leaders from the corporate, investment, accounting, securities, regulatory, academic and standardsetting sectors as well as civil society. 12 Growingmarketinterestinnonfinancialinformation Investorsareincreasinglyinterestedinnonfinancialinformation.Oneforcedrivingthisinterestisthe growing number of assets being managed by socially responsible investment (SRI) funds which make nonfinancialinformationakeycomponentoftheirinvestmentdecisions.table2onglobalsridataas of September 2010 shows that firms identifying themselves as socially responsible investors have increasedtheirassetsundermanagementbyalmost35%from2008to2010. (Table2abouthere) AnotherindicatorofmarketinterestinnonfinancialinformationisthesupportforTheUnitedNations backedprinciplesforresponsibleinvestmentinitiative.thepriisanetworkofinternationalinvestors working together to put the six Principles for Responsible Investment into practice.the Principles reflect the view that environmental, social, and governance issues can affect the performance of investmentportfoliosandthereforemustbegivenappropriateconsiderationbyinvestorsifinvestors aretofulfilltheirfiduciaryduty. ThePrinciplesprovideavoluntaryframeworkbywhichallinvestorscanincorporateESGissuesintotheir decisionmakingandownershippracticesandsobetteralign theirobjectiveswith those ofsocietyat large.asofseptember6,2011,therewere941signatoriestotheprinciples.thesignatoriesinclude 239assetowners,535investmentmanagers,and167professionalservicepartners 13 ;asofapril2011, 850signatorieshadapproximatelyUS$25trillionassetsundermanagement. 14 AccordingtotheWorld Federation of Exchanges, an association of 52 regulated exchanges around the world, global market capitalizationatjuly2011wasapproximatelyus$56trillion. 15 Private equity investors have also shown a growing interest in nonfinancial information, specifically sustainabilityinformation.in2010,privateequityfirmsinvestedus$251.3billionincompaniesaround the world, with US$ billion invested in North American companies and US$ 68.3 billion in Europeancompanies. 16 Attheendof2010,theglobalprivateequityindustryhadnearly$2.4trillionin 12 TheIIRC,MissionStatement,InternationalIntegratedReportingCommittee, accessedseptember PrinciplesforResponsibleInvestment. September UNPrinciplesforResponsibleInvestment. 15 WorldFederationofExchanges. September PrivateEquityGrowthCapitalCouncil.GeographicDispersionofPrivateEquityInvestmentin2010,

7 fundsundermanagement. 17 InFebruary2009,thePrivateEquityCouncil,todayknownasPrivateEquity GrowthCapitalCouncil (PEGCC), published Guidelinesfor ResponsibleInvestment 18 thatmemberswill apply prior to investing in companies and during their period of ownership.the guidelines cover environmental, health, safety, labor, governance, and social issues and, among other things, PEGCC memberscommittoworkingwithportfoliocompaniesonthesesustainabilityissues,withthegoalof improvingfinancialandnonfinancialperformance.inordertodothis,theyneedtoandaregettingmore nonfinancialinformationfromtheirportfoliocompanies. Clearly,reportingofnonfinancialinformationbycompaniesisincreasingandthemarketisincreasingly interested in this information. The question is: What specific types of nonfinancial information are beingusedbyinvestors? NonfinancialInformationofGreatestInterest Our data are based on the nonfinancial metrics included in Bloomberg s database which was kindly madeavailabletous. 19 WeuseddatabasedonthreebimonthlyperiodsstartingonNovember2010and endingonapril2011thatincludedatotalnumberof43,813,557hits,wherea hit isdefinedasevery timeauseraccessesthatdatapoint.wehavenowayofknowinghowtheinformationwasused,such aswhethertheuserjustglancedatitorifheorsheincorporateditinafinancialmodelinsomeformal way.however,thefactthataprofessional,timeconstrainedinvestortakesthetimeandefforttosearch foradataitemisasignaltousthatshefindsthedataitemofinterest.the247nonfinancialmetricsin thisdatabaseareclassifiedintofivegroups:(1)carbondisclosureproject(cdp)data(102withatotal numberof4,370,723hitsforanaverageof42,850permetric),(2)environmentalmetrics(121witha totalof20,363,387andanaverageof168,292),(3)socialmetrics(35withatotalof6,583,107andan averageof188,089),(4)governancemetrics(17withatotalof6,547,074andanaverageof385,122), and(5)disclosurescores(4withatotalof5,949,266andanaverageof1,487,317)). Ofthefivecategories,theoneofgreatestinteresttothemarketonanaveragehitspermetric(AHPM) basisisthedisclosurescores.thiscategoryisbasedoncalculationsbybloombergregardingthedegree of transparency of a company s reporting measured in terms of how many of the possible metrics a companyisreporting.thefourmetricsareenvironmentaldisclosurescore(degreeoftransparencyon environmentalmetrics),socialdisclosurescore(degreeoftransparencyonsocialmetrics),governance Disclosure Score (degree of transparency on governance metrics), and ESG Disclosure Score (overall degree of transparency across all environmental, social, and governance metrics). The AHPM for the disclosurecategoryis1,487,317,nearlyfourtimesasmanyasthesecondhighestahpmcategoryof governancemetrics.thesocialandgovernancecategoriesaresimilarintermsofahpmat188,089and 168,292,respectively.RankedlastisCDPat42,850AHPM. 17 TheCityUK.PrivateEquity,August2011, accessedseptember PrivateEquityGrowthCapitalCouncil.GuidelinesforResponsibleInvestment, September Inparticular,wewouldliketothankCurtisRavenel. 6

8 DatafromtheUSmarketshowsbroadlysimilarresults,althoughwithsomeimportantdifferences.The rankorderofthefivecategoriesisthesame,withdisclosurefirst(ahpmof92,621)andcdplast(ahpm of2,906).governanceisrankedsecondwithahpmof85,438,notfarbehinddisclosure,incontrastto the global data where disclosure ranks much higher than governance. As with the global data, environmentalandsocialhavesimilarahpms. These data show that the market is very interested in knowing a company s degree of transparency around ESG performance and policies.while these disclosure scores are not specific performance metrics, they indicate the degree to which a company is using and reporting on nonfinancial information.ourhypothesisisthatceterisparibusthemarketperceiveslessriskininvestinginmore transparent companies because there is less uncertainty about their ability to deliver on expected financialperformance.thisisduetousingeffectiveesgmanagementtocapturerevenuegenerating opportunities,achievecostsavings,andminimizethedownsideoffailures,fines,andlawsuits. Table 3 shows the top 20 metrics of greatest interest to the market on a global basis.the one of greatestinterestis ESGDisclosureScore whichreceived2,395,230hits,significantlyhigherthanthe secondrankedmetricofghgscope1(1,520,488hits).governancedisclosurescore(1,337,078hits), EnvironmentalDisclosureScore(1,238,417hits),andSocialDisclosureScore(978,541)arerankedthird, fourth, and sixth, respectively.eight of the top 20 metrics are environmental and they fall into two categories.thefirstisemissions(ghgscope1,ghgscope2,totalghgemissions,ghgscope3,direct CO2Emissions,andTotalCO2Emissions)andthesecondisthecompany spolicyoncarbon(verification Type 20 and UN Global Compact Signatory). Clearly carbon dominates market interest on the environmentaldimensioncomparedtoothertopicssuchaswater,waste,andenergyconsumption althoughallofthesecaninvolvecarbonaswell.therearefivegovernancemetricsinthetop20(% IndependentDirectors,SizeoftheBoard,BoardMeetingAttendance%,NumberofBoardMeetingsfor theyear,andceoduality).sincethereisonlyatotalof17governancemetrics,thisisconsistentwith G beingratedhigherthan E and S. EventhoughtheAHPMforsocialmetricsisaboutthesameas forenvironmentalones,notasinglesocialmetricappearsinthetop20whichisconsistentwithsocial Disclosurebeingthelowestrankedscoreofthefourdisclosurescores.TwoCDPmetricsappearinthe top20,carbondisclosureleadershipindexscoreandscope1activityemissionsglobally.theformeris analogous to the four disclosure metrics and the latter is consistent with investor interest in carbon metrics. (Table3abouthere) Table 4 shows the top 20 metrics of greatest interest to the US market; there are some significant differencescomparedtotheglobalresultswithonlyeightappearingonbothlists(esgdisclosurescore, Number of Independent Directors, Size of the Board, Number of Board Meetings for the Year, % IndependentDirectors,TotalCO2Emissions,CEODuality,andBoardMeetingAttendance%).Onlyone of the Disclosure Scores, ESG Disclosure Score, appears on the U.S. list, indicating that the market is primarily interested in a company s overall degree of transparency and not in terms of the specific 20 VerificationTypeIndicateswhetherthecompany'sESGpoliciesweresubjecttoanindependentassessmentfor thereportingperiod. 7

9 dimensionsofesg.aswiththeglobaldata,eightenvironmentalmetricsappear,butonlytwoareabout carbon per se: Total CO2 Emissions and CO2 Intensity. The other six are about the company s environmentalpolicies(energyefficiencypolicyandemissionsreductioninitiatives),costsfromviolating environmental regulations (Environmental Fines and Number of Environmental Fines), waste (Total Waste), and energy (Energy Consumption). It appears that the US market is more interested in environmental metrics that have clear financial implications since there is no price on carbon.the samefivegovernancemetricsthatappearonthegloballistareimportanttotheusmarketbuttheyare allrankedhigher.theusmarketalsodiffersfromtheglobaloneinitshigherlevelofinterestinsocial metricswherefourappearinthetop20:numberofemployeescsr, 21 CommunitySpending,%Women in Management, and Fair Remuneration Policy.US interest in information on social performance replacesglobalinterestindisclosurescoresandcdpinformation. (Table4abouthere) NonfinancialInformationofGreatestInterestbyCategory Wealsoanalyzedthetop20metricsforenvironmental,social,andCDPandallofthe17governance metrics.as with the overall list, there are similarities between the global and US markets, with the degreeofdifferencesvaryingbycategory.thegreatestdifferencesareintheenvironmentalcategory, followedbycdp.governanceisthecategorywiththemostsimilarities,followedbysocial. EnvironmentalInformation Table5showsthetop20environmentalmetricsfortheglobalandUSmarkets.Fortheformer,the metricsofmostinterestareaboutemissions:ghgscope1(ofgreatestinterestbyfar),ghgscope2, TotalGHGEmissions,GHGScope3,andDirectCO2emissions.Thisisaresultofagreaterconcernabout climatechangeoutsidetheus,particularlyineurope.theusmarkethasamorevariedinterestintheir top five. In addition to Total CO2 Emissions, it is also interested in Total Waste, Total Energy Consumption, Environmental Fines, and Number of Environmental Fines, reflecting the pattern discussedaboveofbeingmoreconcernedaboutenvironmentalissueswhosedirecteconomicimpactis more easily calculated. Ten of the top 20 metrics are common to both groups and they fall into the categories of emissions, policies, energy, waste, and environmental fines.the 10 other metrics of interesttotheglobalmarketincludesmoreinformationonemissions,policies,waterconsumption,and newproductsforhelpingcustomersdealwithclimatechange.theother10metricsfortheusmarket fall into the categories of waste, manufacturing and supply chain, and environmental rewards and penalties.intermsofthetotalnumberof hits, theusmarketisasinterestedintotalwasteasitisin Total CO2 Emissions, ranked first and second respectively.in contrast, these are ranked eighth and twelfthbytheglobalmarketwhichranksghgscope1andghgscope2firstandsecond,respectively.in general,theglobalmarketismorefocusedonemissionsandpolicies,whereastheusmarketislooking atabroaderrangeofenvironmentalissuesandmorefocusedonbusinessmanagementtopics,suchas productsandmanufacturing. 21 Thisisthetotalnumberofemployeesinthecompanyattheendofthereportingperiodasreportedinthe company scsrreport,ifithasone,ortakenfromitsannualreportifitdoesnot. 8

10 (Table5abouthere) CDPInformation Table6reportsthetop20CDPmetricsfortheglobalandUSmarkets.Thereare12metricsincommon tothesetwogroups.highestrankedforbothisthecarbondisclosureleadershipscore,whichmakesit totheoveralltop20listfortheglobalmarketbutnotfortheusone.alsocommontobothgroupsare a broad range of emissions metrics (e.g., CH4, N2O, HFCs, SF6, and PFCs).Both groups are also concerned with regulatory and physical issues that cover both risk and opportunity Regulatory Risk Exposure and Regulatory Opportunities Present, and Physical Opportunities Present and Physical Risk Exposure)issuesthatcoverbothriskandopportunity,respectively.Consistentwiththeenvironmental metrics,theglobalmarkethasadeeperinterestincarbondisclosuresandpolicies,suchaswhetherthe company has a committee responsible for climate change. The US market is more interested in the relationship between emissions and business activity (e.g., Emissions Avoided via Use of Goods and Services, Emissions for Facilities covered in the EU ETS, Activity Related Emissions Intensity, and Emissions from Employee Business Travel) and sources of energy (e.g., Energy Generated from Stationary Sources and Electricity from Renewables).Similar to environmental metrics, the global marketismorefocusedonthecompany spoliciesandtheusmarketismorefocusedoneconomicsand businessoperations. (Table6abouthere) SocialInformation Table7reportsthetop20socialmetricsfortheglobalandUSmarket.Recallthatfoursocialmetrics madethetop20overalllistfortheusandnonedidforthegloballist.thetotallistof35socialmetricsis muchshorterthanfortheenvironmental(121)andforcdp(102)listsandthusthereislessopportunity forvariationinthetop20list.nevertheless,itisstrikingtoseethat18ofthe20metricsarecommonto both groups and three of the top five (Fair Remuneration Policy, Number of EmployeesCSR, and % WomeninManagement)arecommontobothgroups.FatalitiesTotaland%EmployeesUnionizedonly appearonthegloballistand%minoritiesinmanagementandfatalitiescontractorsonlyappearonthe USlist.Thepercentagestatisticsareareflectionofthemuchhigherdegreeofunionizationoutsidethe US in places like Europe and the more diverse workforce that exists in the US.Similarly, the use of contractorsismorecommonintheusandhencethefocusonfatalitiesforthisgroup.despitethishigh levelofsimilaritytherearesomeimportantdifferences.aswiththeenvironmentalandcdpmetrics, thereisapatternoftheglobalmarketbeingmoreinterestedinacompany spoliciesandtheusmarket being more interested in a company s business operations. For example, Human Rights Policy, Equal Opportunity Policy, and Health and Safety Policy all rank higher in the global market than in the US market.similarly,communityspending,employeetrainingcost,andactualcashflowperemployeeall rankhigherintheus.nevertheless,thereismoresimilarityininterestinsocialmetricsbetweenthe twogroupsthanthereisforenvironmentalandcdpmetrics. (Table7abouthere) 9

11 GovernanceInformation Thereareonly17GovernancemetricsandthesearereportedinTable8.Thusthecomparisonbetween thetwogroupsneedstobepurelyintermsofrankorder.evenso,thegovernancedimensionistheone onwhichthereisthegreatestdegreeofconsensusanditisquitehigh.thetopsixmetricsarethesame forbothgroups,asarethebottomtwo.thesefindingssuggestthatprinciplesofgoodgovernanceare relativelyuniversalandarebasedonsuchattributesasnumberandpercentofindependentdirectors, numberofandattendanceatboardmeetings,andwhethertheroleofchairmanandceoisseparateor combined.in contrast, the relative importance of social issues is more contextdependent, such as basedoncountrycultureandlawsandregulations.thisisevenmoresoforenvironmentalissuesdueto differencesinlawsandregulationsandcustomerattitudesandbuyingpatterns. (Table8abouthere) VariationbyAssetClass Weanalyzedmarketinterestinnonfinancialinformationforequityvs.fixedincomeinvestorsasshown intable9.bothfixedincomeandequityinvestorslookatabroadrangeofinformation.anindicatorof thisisthattheratioofnumberofhitsforthehighesttothelowestrankedmetricisaboutfiveinboth cases.thisissimilartohedgefundsandmoneymanagerswheretheratioissixandfour,respectively, but in contrast to the ratios of 15 for brokerdealers, 17 for pension funds, and 78 for insurance companies. Incomparingthesetwoassetclasses,therearemoredifferencesthansimilarities;thetwogroupsshare onlysevenmetricsincommon(onlytwointhetop10),withfourofthesebeinggovernancemetrics(% Independent Directors, Size of the Board, Board Meeting Attendance % and CEO Duality). ESG DisclosureScoreisatthetopofthelistforboth,indicatingtheimportancetheyaccordtoanoverall assessmentofacompany sdegreeoftransparency.overalltransparencyisaproxyforthequalityof managementsincemorecapableexecutivesareconfidentinprovidingmoreperformanceinformation for which they are held accountable. The growing market interest in sustainability means that it is interested in having an overall sense of how well a company is integrating it into its strategy and operations.totalco2emissionsappearsonbothlists,althoughmuchhigherforfixedincome(ranked fourth)thanequity(ranked17 th ).Alsoincommonaretwodisclosurescoremetrics,theoneonoverall ESGtransparencyandtheotherongovernance. Equity investors are more interested in environmental metrics which represent 10 of their top 20, compared to six for fixed income investors.both are very interested in governance as well, with six metricsforequityandsevenforfixedincome,fourofwhichtheyhaveincommon.butfixedincomehas fivesocialmetricsintheirtop20andnotasingleoneappearsonthelistforequityinvestors. Theintenseinterestequityinvestorshaveinenvironmentalmetrics,eightofwhichareaboutcarbon and other GHG emissions, reflects the concern they have that economic, regulatory, and legislative 10

12 forcescouldhaveonequityprices.inadditiontoataxoncarbonandregulationsrequiringcompanies to make capital investments to reduce emissions, other factors include greater weather risk (e.g., hurricanesandtornadoes),whichdisruptoperationsandimposeadditionalcosts,andgenerallyhigher operatingcosts,suchasforenergyasenergysupplierspassalongcostsduetoregulationandlegislation to their customers. All of these can reduce earnings, both in the shortterm and potentially over the longterm.incontrast,climatechangewillhavemuchlessofadirecteffectonbondpricessincethey aredeterminedbytheriskthatthecompanywillnotbeabletomeetitsdebtobligations.theeffectsof climatechangearehardtomodelandwilloccuroveraperiodoftimethatislongerthanthecurrent maturityofmostdebtinstruments.thustheenvironmentalissuesofconcerntofixedincomeinvestors haveamoreimmediateeffectoncashflowssincetheyareindicatorsofhowefficiently(totalwaste, TotalEnergyConsumption,CO2Intensity)andeffectively(EnvironmentalFinesandWasteRecycled)the companyisrunningthebusiness. (Table9abouthere) VariationbyFirmType WealsoanalyzedmarketinterestinnonfinancialinformationbyfirmtypeasshowninTable10.PanelA reportsdataforbrokerdealers(sellside)andmoneymanagers(buyside).thesetwotypesarebroadly similarintermsofthemetricsofinterest,althoughtherearesomeimportantdifferencesaswell.thisis not surprising since the brokerdealers are advisors to money managers and thus focused on issues importanttotheirclients.environmentalmetricsdominatewith10and13,respectively.bothtypesof firmscareaboutgovernance,atsixandthreerespectively.socialmetricsareoflittleinteresttoeither zeroforbrokerdealersandoneformoneymanagers suggestingthesearenotparticularlyrelevantto theirrecommendationsandinvestmentdecisions.animportantdifferenceisthatdisclosurescoresare moreimportanttomoneymanagers,withesgdisclosurebeingthetoprankedmetricforthiscategory. (Table10abouthere) Thedistinctivecharacteristicofbrokerdealerswhichdifferentiatesthemfrommoneymanagersistheir focusonjustthreemetrics:ghgscope1,2, 22 and3 23.Thenumberofhitsforeachisroughly665, Scope1includesemissionsfromoperationsthatareownedorcontrolledbythereportingcompany.For example,emissionsfromcombustioninownedorcontrolledboilers,furnaces,vehicles,etc.;emissionsfrom chemicalproductioninownedorcontrolledprocessequipment.scope2emissionsarefromthegenerationof purchasedoracquiredelectricity,steam,heatingorcoolingconsumedbythereportingcompany.forexample, useofpurchasedelectricity,steam,heatingorcooling.thegreenhousegasprotocolinitiative.greenhousegas ProtocolpublishedbytheWorldBusinessCouncilforSustainableDevelopmentandtheWorldResourcesInstitute, RevisionMarch2004forScopes1and2, 23 Scope3coversallotherindirectemissionsthatoccurinthevaluechainofthereportingcompany,includingboth upstreamanddownstreamemissionssuchas,productionofpurchasedproducts,transportationofpurchased products,useofsoldproducts.scope3emissionsarehardtomeasureaccuratelygiventhelargenumberof variables.forexample,emissionsrelatedtoemployeetravelincludesfactorssuchas,whichlegsofthetripto include,theaveragedistancepertrip,thenumberofvehiclesperday,thenumberofpassengerspervehicle,the typeofvehiclesdriven,etc.thegreenhousegasprotocolinitiative.greenhousegasprotocol:corporatevalue 11

13 withthefourthrankedmetric,esgdisclosurescore,onlyreceivingabout90,000hits,afactorofseven andthelowestrankedmetric,investmentsinsustainability,receivingabout45,000hitsforafactorof 15. The sellside clearly believes that greenhouse gas emissions have the largest potential impact on financialresults.itisthenonfinancial bottomline forthemthesamewayearningsareforfinancial results.theirroleofcoveringmanycompaniesmeansthattheylookforafewsimplemetricsthatthey hope are good predictors of future financial performance. In the case of GHG emissions, high levels representriskstoearningshouldmarketandregulatoryforcesenduppricingtheminvariousways. In contrast, money managers have a more evenly distributed level of interest with the ratio of the numberofhitsforthehighestrankedmetric(824,666foresgdisclosurescore)tothelowestranked metric(218,196forenvironmentaldisclosurescore),afactoroffour.forthemvariousmeasuresofghg emissionsarealsoveryimportant,alongwithesgdisclosurescoreandverificationtype.butthefact thattheyhaveahighlevelofinterestinothertypesofenvironmentalmetricsandsomegovernance metricsshowsthattheyaretakingamoreholisticviewofnonfinancialperformance. Panel B reports data for three different types of asset owners insurance companies, pension funds, andhedgefunds.atahighlevel,theirinformationinterestsaresimilarintermsofthebalancebetween thecategories.thefourdisclosurescoresareoneachtypestop20listanddisclosuredominatesthe level of interest. Environmental metrics and in particular GHG emissions are the second category of interest.abroaddifferenceexistsbetweenthefirmtypesintermsofthedistributionoftheirinterest acrosstheirrespectivetop20metrics.theratioofthetoprankedmetrictothebottomrankedmetric, anindicatoroftherangeofinformationconsideredininvestmentdecisions,is78forinsurancefirms,26 forpensionfunds,andonly6forhedgefunds.thislownumberforhedgefundssuggeststhattheir modelsincorporatealargerrangeofnonfinancialinformationthanisthecaseforinsurancefirmsand pensionfunds. Eachfirmtypealsohassomedistinctivecharacteristics.Insurancefirmsaresimilartobrokerdealersin thatafewmetricsdominate.theratioofthenumberofhitsbetweenthetoprankedand20 th ranked metric is 78. For insurance companies, it is the four disclosure scores each of which receives around 585,000 hits with the fifthranked metric, % Women on Board, only receiving 28,871 hits. Insurance companiesareexpertsontakingriskandtheinvestmentsidetendstohavealongtermperspectiveon their assets. Companies that score low in transparency represent high levels of risk due to the uncertainty about their longterm prospects and the difficulty of evaluating them due to the lack of information.wesuspectthatdisclosurescoresareusedasaninitialscreen,withcompaniesranking lowonthismetricleastlikelytobeheldintheirportfolios. Pension funds have longterm liabilities, the payouts to the individuals whose retirements they are responsible for, and so they invest for the longterm as well. For the same reason, transparency is important.thedistinctivecharacteristicofpensionfundsistheirhighlevelofinterestingovernance. Chain(Scope3),AccountingandReportingStandard(seconddraftreleasedNovember2,2010)forScope3 publishedbytheworldresourcesinstitute/worldbusinesscouncilforsustainabledevelopment accessedseptember

14 ThetoprankedmetricisGovernanceDisclosureScore,closelyfollowedby%IndependentDirectorsand CEO Duality. Pension funds have long been active in engaging with companies to improve their governance in order to reduce the likelihood of poor decisions by management that will destroy shareholder value. 24 More recently pension funds have shown an interest in whether companies are adoptingglobalframeworksrelatedtosustainability 25,suchastheUNGlobalCompact,andwhetheror not a company is a signatory to this ranks fourth.ranked fifth is whether the company is a UN PRI Signatory,asustainabilityframeworkforinvestors.Thisisatopicofgreatimportancetothepension funditself,manyofwhicharesignatoriesthemselves,andthustheylookforthisininvestmentfirms whicharepartoftheirportfolios. Forhedgefunds,ESGDisclosureScoreisrankedfirst,althoughforhedgefundsitcouldbeforadifferent reasonthaninsurancefirmsandpensionfunds.lackoftransparencyrepresentsapotentialopportunity forahedgefundifitfeelsthishasresultedinanunderpricedassetduetomarketriskaversionfromthe resultinguncertainty.hedgefundsworkhardtogatherinformationthatotherinvestorsdon thaveand, asaresult,canbetterassessthetruerisksofaninvestment.notsurprisingly,theyhavethesmallest ratiooftoptobottomrankedmetric.theyarealsotheonlyoneofthefivefirmtypesthathasatleast one environmental, social, governance, and disclosure metric in their top six, again reflecting their interestinabroadrangeofinformation.oneotherdistinctivecharacteristicofhedgefundsisthattotal EnergyConsumptionishighlyrankedatthirdanditdoesnotappearinthetop20oftheothertwofirm types (or for the two firm types in Panel A). This suggests they are particularly concerned about the effectthepriceofenergycanhaveonthevalueofanasset. RecommendationsforCompanyExecutives Company executives often wonder whether the market cares about nonfinancial information. This question is greatest for those that are especially committed to reporting it.this question is often followedbytheobservationthatquestionsaboutsustainabilityareneverraisedinquarterlyconference 24 Holmstrom,BengtandStevenN.Kaplan.TheStateofU.S.CorporateGovernance:What srightandwhat s Wrong?March19, September,2011.Theideaofacoordinatedinternationalcorporategovernancemovementwasinitiallydiscussed atameetingofthecouncilofinstitutionalinvestorsin1994.thediscussionledtotheformationofthe InternationalCorporateGovernanceNetwork.TheICGNwasfoundedinMarch1995inWashingtonDCwhenthe firstmeetingwaschairedbyprofessorwilliamcristofcalpers.internationalcorporategovernancenetwork. HistoryoftheICGN, 25 TheUNPrinciplesforResponsibleInvestmentsignatorieshasgrowntoover900andassetsundermanagement nowreachus$30trillion.unitednationsprinciplesforresponsibleinvestment.annualreportofthepri Initiative2011, oftheunprinciplesforresponsibleinvestmentis, WewillseekappropriatedisclosureonESGissuesbythe entitiesinwhichweinvest. AsurveyofthedifferentwaysthatUNPRIsignatoriesrequestESGinformationfrom investeeentitiesshowedthatinternalstaffcontinuetoplayanimportantroleinaskinginvesteecompaniesfor disclosurerelatedtoesgpolicies,practicesandperformance.intotal,87%ofinvestmentmanagersand60%of assetownersrelyoninternalstaffforthis.however,therehasalsobeenanincrease(61%,comparedto55%last year)inthenumberofassetownersaskingtheirinvestmentmanagerstocollectesgdisclosurefromtheir investees.unitednationsprinciplesforresponsibleinvestment.reportonprogress2011,ananalysisof signatoryprogressandguidanceonimplementation. 13

15 callsormeetingswithanalystsandinvestors.yetthebloombergdataclearlyshowthatthemarketis payingatleastsomeattentiontononfinancialinformation,althoughclearlytonotthesamedegreeas traditionalfinancialinformation.whatisequallyclearisthatthemarketdiscriminatesintermsofthe specific nonfinancial information it is interested in and this helps to provide guidance for company executives in terms of their communication with the market.based on our analysis, we have five recommendationsforexecutivesconcerningtheirmarketcommunicationsstrategies. First,transparencymatters.TheESGDisclosureScoreisthetoprankedmetricforboththeGlobaland U.S.markets.Thisandtheotherdisclosurescoresareveryimportantforcertainassetclassesandfirm types.executivesshouldassesstheirowncompany sdegreeoftransparency,particularlyincomparison totheirpeers,andiftheyranklowtheyneedtoconsciouslydecidewhethertoimprovetheirlevelof transparencyornot.opaquefirmsmightpayapriceintheformoflimitedaccesstocapitalwhenthey wanttofundnewprojectsandmakeconsiderableinvestments(cheng,ioannou,andserafeim,2011). Second,equityandfixedincomeinvestorshaveverydifferentinformationneedsandsothecompany s communication strategy needs to be targeted to each. Disclosure and environmental metrics are relativelymoreimportanttotheformerandgovernancemetricsarerelativelymoreimportantforthe latter. Third,thesellsideisfocusedonamuchnarrowerrangeofinformationthanthebuysideisanditis almostpurelyfocusedonghgemissions.whilethesecanbehardtomeasure,especiallyscope3,they are the nonfinancial analogue of earnings and so the company should ensure that it has the data it needs to produce and report these metrics. Moreover, sellside analysts should try to incorporate a broadersetofnonfinancialmeasuresinordertogetamoreholisticviewofthebusiness. Fourth, some firm types are more interested in a broad range of information than others. The most efficientwayforacompanytorespondtothisistomakesurethatitismeetingtheneedsofitsmost informationintensive investors, particularly hedge funds and money managers. These two types are especiallyimportantsincetheyoftenmanagemoneyforpensionfundsandeveninsurancecompanies, andsincetheytypicallyrepresentthevastmajorityofacompany sstock.thisreinforcestheimportance oftransparencyandgivesguidanceonhowtoachieveitbymakingsurethecompanyisreportingonthe metricsofinteresttohedgefundsandmoneymanagers. Fifth,interestinparticularnonfinancialmetricsvariesbygeography.Thusthecompanyshouldtargetits communications strategy accordingly. For example, U.S. investors are relatively less interested in climatechangethanarethosebasedineurope. All five of these recommendations have a general implication.companies need to be constantly assessingtheamountandqualityoftheinformationtheyaresupplyingtothemarket,bothinabsolute terms and in comparison to their peers.they also need to do this on a segmented basis due to variationsbyassetclass,firmtype,andgeography. 14

16 Conclusion UsingdatafromBloomberg,wehavebeenabletoprovideinsightsintomarketinterestinnonfinancial informationatalevelofgranularitythathasneverbeendone.thishasenabledustogobeyondthe increasinglycommonassertionthat investorsarepayingmoreattentiontoesg andtoidentifyexactly what information is of greatest interest, contrasting both the global and US market across the full spectrumofesginformationandforeachcomponentofesg,aswellascdpmetrics.wewerealsoable to show variation in interest across asset classes and firm types and we presented some preliminary explanationsforthesedifferences. From a practitioner perspective, these data can be used to benchmark one s own information use according to asset class and firm type. Practitioners can assess whether any differences represent competitivestrengthsorweaknessesintheinformationtheyareusingintheirdecisions.companiescan usethesefindingstocreatemoresophisticatedcommunicationstrategiestailoredtotheinformation needsofmarketparticipantsacrossassetclassesandfirmtypes. Weconcludewithaviewofthefuture.Wepredictthatasmorecompaniesdisclosemorenonfinancial information,asmoreknowledgeisdevelopedbyresearchandteachingprogramsinbusinessschools andasmoresophisticatedvaluationmodelsaredevelopedbyinvestors,marketinterestinnonfinancial data will exponentially increase in the future. Taken together, the efforts of practitioners and researchers can improve the dissemination and use of nonfinancial information, thereby enabling companiestocreatemoresustainablestrategiesforamoresustainablesociety. 15

17 References Becht, Marco, Bolton, Patrick and Roell, Ailsa, Corporate governance and control, in: G.M. Constantinides&M.Harris&R.M.Stulz(ed.),HandbookoftheEconomicsofFinance,edition1, volume1,chapter1,pages1109elsevier. Cheng,Beiting,IoannisIoannou,andGeorgeSerafeim.CorporateSocialResponsibilityandAccessto Finance.HarvardBusinessSchoolWorkingPaper. Eccles, Robert G. and Krzus, Michael P. One Report: Integrated Reporting for a Sustainable Strategy, Hoboken,N.J.:JohnWiley&Sons,2010. GoldmanSachs2009.ChallengesinESGdisclosureandconsistency.October. Ioannou,Ioannou,andGeorgeSerafeim.2010.TheImpactofCorporateSocialResponsibilityon InvestmentRecommendations.BestPaperProceedingsoftheAcademyofManagement,Annual Meeting. Ioannou,Ioannou,andGeorgeSerafeim,2011.Consequencesofmandatorycorporatesustainability reporting.harvardbusinessschoolworkingpaper. 16

18 Table1:ComponentsofS&P500MarketValue Table2:AssetsunderManagementbySociallyResponsibleInvestmentFunds Source:2010EuropeanSRIStudyRevisedEdition.2008EuropeanSRIStudy.EuropeanSocialInvestmentForum. 17

19 Table3:Globalmarketinterest Variable Category Hits ESGDisclosureScore DISCLOSURE 2,395,230 GHGScope1 ENVIRONMENTAL 1,520,488 GovernanceDisclosureScore DISCLOSURE 1,337,078 EnvironmentalDisclosureScore DISCLOSURE 1,238,417 GHGScope2 ENVIRONMENTAL 1,067,085 SocialDisclosureScore DISCLOSURE 978,541 TotalGHGEmissions ENVIRONMENTAL 920,170 %IndependentDirectors GOVERNANCE 899,148 GHGScope3 ENVIRONMENTAL 890,932 DirectCO2Emissions ENVIRONMENTAL 781,569 SizeoftheBoard GOVERNANCE 735,853 CarbonDisclosureLeadershipIndexScore CDP 732,102 Scope1ActivityEmissionsGlobally CDP 729,630 NumberofIndependentDirectors GOVERNANCE 651,913 VerificationType ENVIRONMENTAL 645,330 UNGlobalCompactSignatory ENVIRONMENTAL 606,998 TotalCO2Emissions ENVIRONMENTAL 583,403 BoardMeetingAttendance% GOVERNANCE 540,427 NumberofBoardMeetingsfortheYear GOVERNANCE 519,099 CEODuality GOVERNANCE 508,482 18

20 Table4:USmarketinterest Variable Category Hits ESGDisclosureScore DISCLOSURE 265,677 NumberofIndependentDirectors GOVERNANCE 257,750 SizeoftheBoard GOVERNANCE 249,250 NumberofBoardMeetingsfortheYear GOVERNANCE 117,420 %IndependentDirectors GOVERNANCE 112,059 TotalCO2Emissions ENVIRONMENTAL 109,883 TotalWaste ENVIRONMENTAL 109,028 NumberofEmployeesCSR SOCIAL 97,862 CommunitySpending SOCIAL 97,300 CEODuality GOVERNANCE 96,230 TotalEnergyConsumption ENVIRONMENTAL 95,404 BoardMeetingAttendance% GOVERNANCE 93,371 EnvironmentalFines ENVIRONMENTAL 92,168 NumberofEnvironmentalFines ENVIRONMENTAL 88,631 CO2Intensity ENVIRONMENTAL 87,999 %WomeninManagement SOCIAL 83,532 %WomenonBoard GOVERNANCE 82,901 EnergyEfficiencyPolicy ENVIRONMENTAL 80,215 EmissionsReductionInitiatives ENVIRONMENTAL 79,127 FairRemunerationPolicy SOCIAL 78,499 19

21 Table5:GlobalandUSmarketinterestinCDPdata Global Hits US Hits CarbonDisclosureLeadershipIndexScore 732,102 CarbonDisclosureLeadershipIndex 26,646 Score Scope1ActivityEmissionsGlobally 729,630 CDPRegulatoryRiskExposure 23,083 Scope2ActivityEmissionsGlobally 465,402 CDPPhysicalOpportunitiesPresent 22,999 CoUsesGHG/otherMethodology 170,936 CDPPhysicalRiskExposure 22,999 CDPRegulatoryRiskExposure 135,305 CDPRegulatoryOpportunitiesPresent 22,996 CDPPhysicalOpportunitiesPresent 134,785 SelfgeneratedRenewableEnergy 18,869 CDPPhysicalRiskExposure 133,869 EnergyGeneratedfromStationary 18,694 Sources CDPRegulatoryOpportunitiesPresent 126,779 OverallStrategyforCompinany 9,911 EmissionsProg CDPOtherRiskExposure 104,478 CDPReportedCH4 7,884 CDPOtherOpportunitiesPresent 104,184 CDPReportedN2O 7,884 CarbonEmissionsDisclosureIndicator 88,452 CDPReportedHFCs 7,875 Emissionsand/orEnergyReductionTarget 81,096 CDPReportedSF6 7,860 CommitteehasResponsibilityforClimate 55,585 CDPReportedPFC 7,846 Change CDPReportedCH4 31,242 EmissionsAvoidedviaUseofGoods 7,357 andservices CDPReportedSF6 31,126 EmissionsforFacilitiescoveredinthe 7,311 EUETS CDPReportedN2O 31,119 EmissionsfromBiologically 7,302 SequesteredCarbon EmissionsAvoidedviaUseofGoodsand 31,118 Emissionsand/orEnergyReduction 3,479 Services PlaninPlace CDPReportedHFCs 31,097 ActivityRelatedEmissionsIntensity 3,461 CDPReportedPFC 30,710 EmissionsfromEmployeeBusiness 3,457 Travel SelfgeneratedRenewableEnergy 28,751 ElectricityfromRenewables 3,448 20