cecp presentation on international giving trends mark ... · source: raj sisodia, firms of...

THE CEO FORCEFOR GOODTHE CEO FORCEFOR GOOD

CECP Presentation on International Giving Trends

Mark Tulay, Director of Strategic Investor Initiative

Trialogue CSI Conference 2017

16 May 2017

THE CEO FORCEFOR GOOD

MARK TULAYDIRECTOR, STRATEGIC INVESTOR INITIATIVECECP

FOUNDER AND CEOSUSTAINABILITY RISK ADVISORS

FORMERLY COO GLOBAL INITIATIVE FOR SUSTAINABILITY RATINGS (GISR)



AGENDA• WHO IS CECP• US GIVING TRENDS• GLOBAL TRENDS• ROLE OF CONSUMERS• LONG-TERM

THINKING• CEOS AND INVESTORS



CECP: THE CEO FORCE FOR GOOD

CECP is a coalition on CEOs united in the belief that societal improvement is an

essential measure of business performance. Founded in 1999, CECP has grown to

a movement of more that 200 CEOs and companies representing the world’s

leading brands across all industries. Revenues of engaged companies sum to $7

trillion annually, with aggregate total giving topping $18.6 Billion in 2015. A

nonprofit organization, CECP is the trusted partner to help the world’s leading

companies be a force for good, offering proprietary data, CEO perspectives,

company engagement, trends, and insights.


PURPOSE-DRIVEN COMPANIES OUTPERFORM S&P 500

Source: Raj Sisodia, Firms of Endearment, Second Edition, 2003-2013; Project ROI, IO Sustainability & Babson Social Innovation Lab, 2015

0%

200%

400%

600%

FoE Good to Great

S&P 500

Cumulative Performance10 years

FirmsofEndearment

Purpose-Driven• Customers• Employees• Communities• Planet

Shareholder Value

RevenueSystematic

Risk

Turnover

Examples of “Firms of Endearment”


c

Source: CECP company-reported dataset. 2013-2015 Matched-Set Data, n=195. Inflation-Adjusted

COMPANIES THAT OUT-PERFORMED FINANCIALLY, ALSO SAW HIGHEST TOTAL

GIVING INCREASES

2,6%

-0,3%

8,3%

-2,3%

Companies That Increased Total Giving by 10% or More

All Other Companies

Financial Performance Growth Rates By Total Giving Increases, 2013-2015

Median Revenue Growth Rate Median Pre-Tax Profit Growth Rate

c

* Notes: Unless noted, 2015 data collected in 2016. HOW MUCH represent medians and top quartile in Millions (minimum to be in the top 25% of companies on each measure). EMPLOYEE GIVING percentage represents the median. CAUSES figure represent average percentages. N values vary for each measure. Additional definitions available in the CECP Valuation Guide.

GIVING IN NUMBERS 2016 BRIEF


PROGRAM AREA PERCENTAGE BREAKDOWN OF TOTAL GIVING OF CECP COMPANIES


MEASURING OUTCOMES BECAME A MORE WIDESPREAD PRACTICE

Source: CECP company-reported dataset, 2013-2015, Matched-Set Data, n=112

Percentage of Companies Measuring Social Outcomes and/or Impacts, 2013-2015

(Logic Model: Inputs > Activities > Outputs > Outcomes > Impact)

COMPANIES SHARED ESG INFORMATION ON SOCIETAL COMMITMENTS WITH NEW STAKEHOLDER: INVESTORS

Source: CECP company-reported dataset, 2015 Data, n=217

“Has your corporate citizenship department (or similar department) been called upon to provide environmental, social, and/or governance (ESG) information on to a particular investor or to the investor relations department?”

13%

30%

25%

28%

4%

Median Giving $12.0

Million

Median Giving $14.3 Million



Median Giving $32.1

Million

Unsure

No, neither

Yes, investor relations

departmentYes, both a

particular investor and investor

relations department

Yes, an investor

56%reportESG

information to

Investors

Percentage of Companies Reporting ESG Information to Investors And Median Giving in US$ Millions


CEO POLL: BOARD OF BOARDS CONFERENCE 2016

What would be the greatest benefit to expanding societal investment at your company?

• 63% Human Capital• 20% Brand and Reputation• 10% Products

Leading CEOs agree that business must measure the impact of a higher visible purpose on the brand, which will reinforce the

importance of purpose (2016 Board of Boards Conference).


GIVING AROUND THE GLOBE REGIONAL PROFILE: AFRICA

Source: CECP company-reported dataset. 2013-2015, Matched-Set Data, n=95. Contribution Team Full Time Equivalent (FTE)


GIVING AROUND THE GLOBE REGIONAL PROFILE: EUROPE


“Consumer brands that haven’t embraced sustainability are

at risk on many fronts. Social responsibility is a critical

part of proactive reputation management. And companies

with strong reputations outperform others when it comes to

attracting top talent, investors, community partners, and

most of all consumers.”

Carol Gstalder SVP, Reputation & Public Relations Solutions, Nielsen

CEO PERSPECTIVES

“The best corporations are those that can see themselves as part of the

world’s problem-solving ecosystem.”

Darren Walker, President, Ford Foundation


Source: CECP company-reported dataset, 2015 Data, n=217

84%of consumers believe that

business can pursue self-interest while

doing good for society

Edelman’s Trust Barometer (2014) and Nielsen’s The Sustainability Imperative (2015)

66%of global

consumerswill pay more for

sustainable goods

“Over the past two years, has building greater trust with consumers and other stakeholders been one of the articulated goals for your company’s societal

engagement programs ?

55%

Definitely No11%

Mostly No21%

Unsure12%

Somewhat27%

Mostly Yes13%

Definitely Yes

17%

TRUST: COMPANIES SAW BUILDING TRUST WITH CONSUMERS AND OTHER STAKEHOLDERS AS A GOAL OF

THEIR SOCIETAL ENGAGEMENT PROGRAMS

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CONSUMERS ARE DOING THEIR HOMEWORK

2015 Global Reputation Study - Opinion Elites, Personally Done in the Past Year

68% 81% 79%

61% 49% 57%

74% 44%

79% 73%

47%

USMEXBRA

GERUKFRAMERUS

INDCHIJPN

Proactively try to learn more about the companies they hear

about or do business with

45% 31% 32%

40% 40%

19% 19%

29%

28% 27% 34%

USMEXBRA

GERUKFRAMERUS

INDCHIJPN

Decided not to do business with a company because of

what I learned…Proactively tried to influence

friends or family…

40% 44% 44%

26% 28% 27%

42% 44%

45% 53%

14%

USMEXBRA

GERUKFRAMERUS

INDCHIJPN

AMERICAS

ASIA

EUROPE & MIDDLE EAST

"Corporate America take note: the majority of U.S. consumers are seeking information about

your practices, and in some cases, rejecting companies they interact with because of what they

learn.“Sarah Simmons, Senior Reputation Consultant at Nielsen

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CONSUMERS CARE AND PAY EXTRA FOR SUSTAINABILITY

Source: The Sustainability Imperative, Nielsen Report 2015

Percent willing to pay extra for products and services that come from companies who are committed to positive social and environmental impact

ASIA-PACIFIC

76%

LATIN AMERICA

71%

MIDDLE EAST/AFRICA

70%

EUROPE

51%

NORTH AMERICA

44%2015

YOYChange +12 +8 +7 +11 +2

GLOBAL AVERAGE

+11YOY Point

Change66%

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SUSTAINABILITY AND PROFITABILITY ARE NOT MUTUALLY EXCLUSIVE

Source: The Sustainability Imperative, Nielsen Report 2015

42% of global consumers want more new products in themarket that are socially responsible and environmentally friendly

over 4% greater sales

1,300+ brands

13 categories

13 markets

Products with sustainability efforts contributed to…


Source: 2016 Edelman Trust Barometer

PURPOSE AND PROFITS MATTER

Percent who agree that CEOs should be personally visible in discussing…


BUSINESS MUST LEAD TO SOLVE PROBLEMS

Source: 2016 Edelman Trust Barometer Q249. Please indicate how much you agree or disagree with the following statement? (Top 4 Box, Agree). General Population, 27-country global total, question asked of half the sample..

80% agree

“A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.”

upfrom74% in2015

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THE BUSINESS IMPERATIVE

Is your brand at risk?

To learn more: The Sustainability Imperative Global Responsibility Report

Consumer brands that demonstrate commitment to sustainability outperform those that don’t

the success of your business is directly related to the health of the communities

in which you operate

sustainability is a leading factor in the relevance, viability and growth of your

organization

integrating sustainability into

your strategy enables responsible

growth


LONG-TERM THINKING


0

5

10

15

20

25

Europe North America Global

USD

(tril

lions

)ESG Assets Under Management

2012 2014

Source: Global Sustainable Investment Alliance, 2015

LONG-TERM THINKING


Ø Strategic Investor Conference: February 27th, 2017

Ø Listening Tour: 270 individuals, $27 Trillion-AUM of Financials consulted

Ø Advisory Board: 27 members; investors, companies, professional service firms

LONG-TERM THINKING


THE STRATEGIC IMPERATIVE

Catalyze a new platform between leading CEOs and strategic investors

on sustainable value creation and facilitate expectations and commitments

between companies and investors to identify, research, and adopt

long-term value generating strategies.


CEO & INVESTOR PERSPECTIVES

86% of CEOs are too short-term oriented

Shareholder demands for short-term thinking

most imperils corporate values

CEOs Tell Us: Polling at CECP’s Board of Boards

Investors Calling for Long Term Plans & ESG Integration

“Develop & share long-term plans”LARRY FINK

CHAIRMAN & CEO, BLACKROCK FINANCIAL MANAGEMENT

“Boards should talk with LT investors”BILL MCNABB

CHAIRMAN & CEO, VANGUARD

“Board independence key to long-termism”RON O’HANLEY

PRESIDENT & CEO, STATE STREET GLOBAL ADVISORS


COMPANY & INVESTOR NEEDS

• Improve the balance between short-term and long-term

• Manage “headroom” for the long-term• Access long-term investors who want to “own” not

“rent”• Develop actionable best practices to inform

business strategy• Sort through the complexity surrounding non-

financial reporting standards and guidelines• Concerned about survey fatigue and inconsistencies

of performance scorecards • Seeking mandate from strategic investors to shift the

paradigm from short-term to social impact• Access to data, education, and training programs

to promote transparency and deeper understanding of the field

• Better align uneven reporting by companies on financially material environmental and social factors

• Drive corporate adoption of generally accepted sector-based environmental, social and governance indicators

• Seek clarity and a new dialogue with CEOs on their long-term business strategy

• Develop new scorecards to measure company ESG and long-term performance

• Seek guidance on strategies and commitments for achieving sustainable value creation

• Engage Boards of Directors to help relieve short-term pressures on senior management

• Leverage current disclosure standards to reflect long-term value across stakeholders

• Develop cultural indicators that provide key measurement success factors

InvestorsCEOs/Companies


THE BOARD OF BOARDS: A SPARK

CECP CEO Board of Board’s Panel (2014): Long-Term Capitalism and Investing in the Enduring

Health of CommunitiesL to R: Richard Edelman, President and CEO, Edelman; Anne Stausboll, CEO, CalPERS; Dominic Barton, Managing Director, McKinsey & Co.;

Duncan Niederauer, Former CEO, NYSE

“63% of the 1,000 CEOs interviewed felt they were getting pressure from

their Boards to be short-term.” DOMINIC BARTON, MCKINSEY & COMPANY

“There has to be a new value equation for business.”RICHARD EDELMAN, EDELMAN

“Sustainability is integrated into everything we do.”

ANNE STAUSBOLL, CALPERS


CECP’S NEW STRATEGIC INVESTOR INITIATIVE (SII)

Connecting the World’s Leading Companies & Strategic Investors

• Designed to advance CECP’s mission to create a better world through business, with its leading CEOs, companies, and investors as integral partners in solving societal problems.

• A platform that seeks to address short-term market constraints that inhibit corporate strategies and investments to build resilient businesses and sustained long-term value.

• A Center to provide objective insight, market clarity, and harmonization on the multitude of new initiatives on long-term investment and reporting on environmental, social, and governance efforts.



Thank you!

Mark TulayDirector of Strategic Investor Initiative

cecp presentation on international giving trends mark ... · source: raj sisodia, firms of...

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