MPMA Sustainability Conference 2013

Transcription

1 MPMA Sustainability Conference 2013 Sustainability ratings: how transparency can drive performance 3 rd

2 Sustainability is at the core of people, planet and profit dimensions The company s degree of social responsibility, including the fair and beneficial business practices towards labour and the community The measurement of a company s environmental responsibility through minimising ecologically destructive practices The economic value generated through the organisation s operations after costs 2

3 The evolution from philanthropy to sustainability CR Sustainability CSR Economic Social Corporate Philanthropy Environment Source: Adapted from Khazanah National Berhad Sustainability ratings: How transparency can drive performance? 3

4 Companies should aim to achieve leadership and growth from their sustainability efforts Opportunity INCREASING VALUE Value Protection Risk Management Where many organisations start Operational risk Regulatory compliance Reputational risk Value Creation Operational efficiency Where some organisations are heading Operations cost savings Supply chain cost savings Implement reporting systems Revenue growth Where leaders are heading Product innovation Increasing market share Brand enhancement Risk Compliance & Risk management Sustainability ratings: How transparency can drive performance? Operational Effectiveness Strategic Advantage 4

5 Why do sustainability reporting? Measure, track and improve sustainability performance to attract sustainable investments, e.g. SRI funds Identify & address risks and opportunities Demonstrate responsibility and contributions to society and the environment Promote transparency & accountability to stakeholders Sustainability ratings: How transparency can drive performance? 5

6 Sustainability reporting is on the rise in the ASEAN region Over 61% of ASEAN companies report on sustainability in some form 21% of ASEAN companies have a standalone sustainability report Sustainability ratings: How transparency can drive performance? 6

7 Globally, there are many different sustainability frameworks and standards Companies can choose not to adopt or adopt multiple frameworks and standards for their sustainability reporting. Sustainability ratings: How transparency can drive performance? 7

8 GRI Guidelines A set of flexible, voluntary guidelines which help define report content and quality and provide guidance on how to set reporting boundaries Consists of a set of Principles for defining report content and quality, and Standard Disclosures made up of Performance Indicators There are a total of 84 core and additional performance indicators, spread across 6 disclosure categories Core Indicators have been developed through GRI s multi-stakeholder processes, which are intended to identify generally applicable Indicators and are assumed to be material for most organisations Additional Indicators represent emerging practice or address topics that may be material for some organisations, but are not material for others G4 has been launched as an update to G3.1 in May 2013 Report on what really matters and where it matters Material topics are more important than showing that you are ready to disclose indicators Moves sustainability report to strategic level Source: GRI website Sustainability ratings: How transparency can drive performance? 8

9 Dow Jones Sustainability Index First global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. Provide a rationale and consistent methodology in benchmarking the performance of investments in sustainability companies and funds. Basis for derivatives and funds focused on sustainability companies. 4 Assessment is based on RobecoSAM's corporate sustainability assessment. 5 6 More than 70 DJSI licenses are held by asset managers in 16 countries managing over 7 billion USD based on the DJSI. DJSI data is made publicly available in monthly updates, newsletters and factsheets. Licensee holders gain access to more commercially sensitive information. Source : Sustainability ratings: How transparency can drive performance? 9

10 DJSI participation brings internal and external gains RobecoSAM research and a Harvard Business School study that used RobecoSAM data confirm that, in the long run, the most sustainable companies are more successful than their less sustainable counterparts. Source : Petra Segal, Insight 2012: 1,544 companies analysed 340 companies listed in DJSI World Internal gains (regardless of whether companies make the Index) Benchmark report helps identify strategic and operational improvement areas External gains Recognition as leading sustainability company in sector Increase internal awareness of sustainability Credible benchmark of sustainability performance used by investors, buyers and other stakeholders Develop internal sustainability reporting Source : Sustainability ratings: How transparency can drive performance? 10

11 Stock exchanges worldwide have been responding to the demand for sustainability data reporting & management Sustainability ratings: How transparency can drive performance? 11

12 Summary of presentation Sustainability is at the core of people, planet and profit. Therefore, companies should aim to achieve leadership and growth from their sustainability efforts Sustainability reporting is on the rise in the ASEAN region. Why do sustainability reporting then? Measure, track and improve sustainability performance Identify & address risks and opportunities Demonstrate responsibility and contributions Promote transparency & accountability We have seen stock exchanges responding to demand for sustainability measures. How does indexes drive sustainable business? Allows recognition as leading sustainability company in sector Serve as credible benchmark of sustainability performance used by investors, buyers and other stakeholders Benchmark report helps identify strategic and operational improvement areas Increase awareness of sustainability internally through the development of sustainability reporting measures Sustainability ratings: How transparency can drive performance? 12

13 Thank you 2013 PricewaterhouseCoopers. All rights reserved. In this document, PricewaterhouseCoopers and/or refers to the individual members of the PricewaterhouseCoopers organisation in Malaysia, which are member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.