Market scan GRI GOLD webinarDecember 6, 2016

Eszter Vitorino, Senior Manager, Public PolicyDanielle Chesebrough, Senior Manager Investor-Company Relations, PRI

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How to use Webex

The GRI GOLD Community

Through the GRI GOLD Community, we bring together a global, multi-stakeholder network of organizations committed to demonstrating how greater transparency is a catalyst for change towards a more sustainable economy and world.

Get in touch: GOLD@globalreporting.org

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Agenda

15:00 – 15:05 – Introduction15:05 – 15:15 – Latest policy developments 15:15 – 15:30 – Sustainable Stock Exchanges Initiative15:30 – 15:40 – Analysis of trends15:40 – 15:55 – Discussion / Q&A15:55 – 16:00 - Conclusions

GOLD Webinar

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Policy Developments

Further updates on policy developments from participants

• EU NFR Directive, shareholder directive, tax payments

• NAPs on Business and Human Rights• SCP and procurement policies• FSB Task Force on Climate Related

Financial Disclosures• Germany’s G20 Presidency• Establishing a sustainable financial

system

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Current references to GRI

41 countries and regions reference GRI in their SR instruments

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41 countries and regions referencing GRI

Argentina Denmark Maldives Switzerland

Australia Ecuador Netherlands Taiwan

Austria EU Nigeria Thailand

Bangladesh Finland Norway Turkey

Bolivia Germany Pakistan UK

Brazil Hong Kong Philippines US

Canada Iceland Singapore Vietnam

Chile India South Africa Zimbabwe

China Italy South Korea Thailand

Colombia Japan Spain

Cyprus Malaysia Sweden

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Benefits

• A more flexible and future-proof structure: ensuring the GRI Standards remain up-to-date and relevant

• Greater suitability for referencing in policy initiatives: to enable further integration into government and market legislation around the world

• A global common language for non-financial information: providing one universal framework and set of disclosures to meet all sustainability reporting needs – from comprehensive reports to issue-specific disclosures

• Standards that are credible and robust: developed with true multi-stakeholder contributions and rooted in the public interest

The GRI Standards will deliver:

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Sustainable Stock Exchanges Initiative

- What is the SSE - Who are the members- Model Guidance on ESG Disclosure- Campaign to Close the ESG Guidance Gap- Q&A

Danielle Chesebrough, Senior Manager, Investor – Company Relations

ORGANIZED BY:

www.SSEinitiative.org | info@SSEinitiative.org

“I call on stock exchanges around the world to join this effort”.Ban Ki-moon, 2007-2016 UN Secretary-General

60 Partner ExchangesRepresenting over 70% of listed Equity Markets

Listing over 30,000 companiesUS $55 trillion in market capitalization

5 Global Dialogues with more than 600 attendees

USA (2009); China (2010); Brazil (2012); Geneva (2014); Singapore (2016)

Named by Forbes magazine as one of the “World’s Best Sustainability Ideas” in 2011

5 Reports on Progress80+ Fact Sheets

Monthly Newslettercovering all major exchanges

4 organizationsUNCTAD, UNGC, PRI & UNEP-FI

Working as 1 UN

Why stock exchanges?The multiplier effect: taking corporate sustainability to scale.

Stock exchanges globallyINVESTORS

POLICY MAKERS

CIVIL SOCIETY

STOCK EXCHANGES

list over 75,000 companies

SSE Partner Exchanges

2012 2013 2014 2015 2016

Significant Momentum

6 917

4860

Number of SSE Partner Exchanges

Countries with an SSE Partner ExchangeGlobal Reach

The role of ExchangesIn their own words

Download Brief

regulator & standard settergatekeeper & advocate

financial services innovatorraise ESG

awareness

influencing corporate and investor behavior

improve ESG disclosure & performance among issuers

developing global standards

making corporate sustainability a priority in every corporate’s agenda

total picture

creating awareness and understanding of responsible investing among investors

enable market participants to transition to a low carbon economy

enhance corporate social responsibility and environmental reporting

Informed investment decisions

better future for next generations

market intermediaryproviding an efficient & sustainable capital market availability & quality of corporate ESG

disclosure

systemic sustainability of capital markets

communicating with investors, companies, regulator

support interests of many market participants

ESG datalonger-term investmentsbuilding trust capital market

organizer

standards among listed companies

defining the rules and best practices

market integrity & confidence champion for transparency

Stock Exchange Fact Sheets

82 publically available Fact Sheets inform investors and stakeholders about exchanges efforts to advance sustainability in capital markets

All fact sheets available atwww.sseinitiative.org/data/fact-sheets/

Responsible investment policy is widespread

Query the database at www.unpri.org/policymap

Key findings

Responsible investment policy is widespread and the pace is increasing

There’s some evidence it’s driving better ESG company performance

Policy effectiveness is hampered by weak implementation and weak signals

Despite the increase in sustainable finance regulation, most governments aren’t connecting sustainability and capital markets policy – but there are signs this is beginning to change.

SSE 2016 Report on Progress

Launched at the Global Dialogue in Singapore, the 2016 Report on Progress features: an overview of international progress over the last

two years

16 case studies on how exchanges are supporting the SDGs through current business practices

Download a copy atwww.sseinitiative.org/2016rop/

Ensure women’s full and effective participation end equal opportunities for leadership, at all levels of decision making

Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle.

Improve education, awareness raising and human & institutional capacity on climate change mitigation, adaptation, impact reduction & early warming.

Enhance global partnerships for sustainable development that mobilize and share knowledge, expertise, technologies and financial resources.

Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation & encourage the formalization and growth of micro-, small & medium-sized enterprises.

SSE initiative: What it does

Consensus buildingA peer-to-peer learning platform for stock exchanges to share best practices and promote sustainable business

A neutral multi-stakeholder forum for stock exchanges, regulators, policymakers, investors and companies

Partners with multilateral organisations to promote agreement on actions for creating more sustainable capital markets

ResearchConducting research on current stock exchange and regulatory initiatives

Providing a database on sustainability policies and actions being taken by stock exchanges and regulators

Offering a library of publications on sustainability measures and reporting practices

Capacity buildingProviding guidance and training on best practices for policy makers and stock exchanges

Assisting stock exchanges with the development of sustainability indices and other practical outputs

Creating workshops with global and local partner organizations to increase sustainability awareness and educate sustainability practices

Model guidance on ESG reporting

The Model Guidance- a Tool to Facilitate Action An application-oriented, voluntary technical tool to assist stock exchanges in

communicating to their listed companies on the issue of sustainability disclosure.

Developed in partnership with stock exchanges to ensure that it is appropriate to fit stock exchange needs.

Stock exchanges can use this voluntary guidance as a starting point, as it captures and augments existing guidance from various markets.

Exchanges are encouraged to adapt the Model Guidance to meet the specific needs of their own unique market.

This Model Guidance is not a substitute for detailed guidance on specific reporting indicators. It is meant to complement, not replace, existing guidance on specific indicators and frameworks.

The Gap: At the start of the project Less than 1/3 of Exchanges offered a Guidance to issuers on reporting on ESG factors which creates a barrier to understanding a company’s material issues

Closing the Guidance Gap

The GoalAll World Federation of Exchanges (WFE) stock exchanges and SSE Partner Exchanges providing listed companies with guidance on reporting ESG information.

The Campaign Launched alongside the release of the Model Guidance, the SSE launched a letter campaign supported by over 100 investors and companies globally asking exchanges enhance corporate ESG disclosure in their markets.

The Progress

Model guidance on ESG reporting

Committed Exchanges, Class of 2016

Global and Regional DialoguesSince February 2015, the SSE, has organized 3 Regional Dialogues in South East Asia, Latin America, and the Nordics. The events featured more than 400 participants in total and Ministers of Finance, stock exchange CEOs and capital market regulators. These events are relevant tools for building regional consensus and bringing the SDGs to the local level.

RING THE BELL FOR GENDER EQUALITY

Exchanges Requests for Collaboration

To facilitate more comprehensive and productive engagement on environmental, social, and governance (ESG) issues.

To expand interaction through partnerships to get a deeper understanding of how investors are currently using available ESG information.

To lead a collective effort to further education on ESG information through seminars, working groups, surveys, and workshops to share insights and best practices on ESG issues.

To carry out empirical research and relevant studies on the benefit of ESG integration in investment decisions.

To get involved in exchanges’ sustainability-related initiatives to create a market with international standards in place.

To increase transparency – listed companies by removing disclosure barriers to enable more informed investor decision-making, and investors by disclosing information about their investments and their ESG exposure.

Investors to increase interaction with issuers and exchanges on ESG issues.

Regulators to adopt a more proactive and collaborative approach with companies to seek out genuine opportunities for commercial and social benefit.

Additional actors in the investment value chain to join the conversation on mainstreaming ESG integration.

Moving forward

Stock Exchanges are encouraged to:Become an SSE Partner Exchange and join the World Federation of Exchanges' sustainability working group.

Utilize resources in the SSE website's Data and Research section for guidance on advancing sustainability in their market(s)

Commit to at least one action to advance the UN SDGs, for ideas see the SSE Report on Progress.

Regulators and Policy Makers are encouraged to:Create the regulatory environment that supports long-term approaches towards investment and that encourages transparency on material ESG factors that meets investor needs.

Investors are encouraged to:Join the PRI’s SSE Investor Working Group to engage with exchanges and regulators to advance the disclosure of sustainability strategies among listed companies.

Increase interaction with issuers, policy makers and exchanges on ESG issues.

Enhance disclosure on how ESG information is incorporated into the investment process.

Companies are encouraged to:Join the Global Compact’s SSE Corporate Working Group, lend your voice to the discussion, and encourage your stock exchanges to undertake sustainability activities.

Support global discussion on a baseline listing standard to improve transparency.

All stakeholders are encouraged to:Consider organizing local events and workshops and to reach out to the SSE with suggestions and new ideas to drive the discussion forward.

We look forward to your involvement with the SSE.

www.SSEinitiative.org | info@SSEinitiative.org

Exchanges. Policy Makers. Regulators. Investors. Companies.

Join the Dialogue.

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• Increased focus on global value chains (SMEs)• Mandatory reporting – introducing sanctions • Broader scope (who should report and what to report on)• SDGs reporting – how to go about it?• Focusing on financing sustainable development (UN Environment

Inquiry, EU High Level Expert Group)• Investment community – reporting on process vs. outcomes /

impacts?• New collaborations and alliances (SSE, UNGC, PRI, etc)

Analysis of policy trends

SMEs matter!

90%of all businesses

45%of total employment

33% of GDP in emerging markets

Building competitiveness in global value chains

Today’s challenge is accountability

MNCs held to account for performance in complex value chains

The Sustainable Development Goals17 goals & 169 targets for the world

The SDG Compass

• Guide companies how they can align their strategies, measure and manage their contributions to the SDGs

• A written guide and two online tool www.sdgcompass.org

• Partnership

Objective and partnership

1. Shaping the future of SDG reporting – in partnership with UN Global Compact

2. Help business making it happen : offering business tools, services and a unique 2030 Corporate Leadership Group

3. Monitoring sector level, national & global business implementation

GRI’s SDG program: three pillars

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GRI references in policies

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How will this influence reporting in practice

Impacts of policy developments

- More companies reporting- Focus on creating dialogue with data

users (analysts, investors)- Still not a strong push for mandatory

assurance- Mutual complementarity of reporting

approaches - Continued focus on materiality – further

improvement of reporting quality

Thank you

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