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Partnership Risk Assessment Services
Simon MacMahonDirector, Advisory Services [email protected]
March 30th, 2011
1. Introducing Sustainalytics
2. NGO/Business Partnerships
3. Our Approach to Partnership Risk Assessment
4. Deliverables
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Disclaimer
Copyright © 2011 Jantzi-Sustainalytics. All rights reserved. No portion of this
material may be reproduced in any form without the expressed, written
permission of Jantzi-Sustainalytics.
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Introducing Sustainalytics
Sustainalytics
Sustainalytics is an international and independent sustainability research and servicesprovider with coverage of North America, Europe and Asia
More than 50 analysts assess corporate environment, social and governance (ESG) performances
Our database contains sustainability profiles for more than 3000 companies
Evaluation methodologies for more than 40 different industries
A consistent and thorough methodology that allows for robust comparative analysis
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Stakeholder Model Covering ESG: Governance
Social
Environmental
Controversial Products
Country Involvement
Context Driven Analysis that Takes into Account: Industry
Business model
Regional differences
Company size
In each area we assess: Policies
Management systems
Outcomes
Goals and targets
Controversies
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Our Research Framework
Over 3000 publicly traded companies around the world are assessed according to this criteria
Our Research Process
Research Analysis
Company Feedback
Peer Review and
QA
Company Profiles & Ratings
Portfolio Reviews and Screenings
Comparative Performance Reports
Alert Service
Partnership Risk Assessments
Industry and Issue Level Thought Leadership
Company DataMedia Reports NGO DataSector StudiesPublic Institutional DataNetwork Engagement
Sou
rces
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Relevant Services
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Controversy Research
ESG Policies, Programs,
Performance Research
Partnership Risk
Assessment Services
Country Involvement
Research
Product Involvement
Research
Controversial Weapons
Radar
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NGO/Business Partnerships
The Rise of NGO/Business Partnerships
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To achieve their goals, companies and NGOs are finding ways towork together.
Benefits to Civil Society:
• Create business value and NGO funding
• Raise the bar on responsible performance
• Leverage skills and perspectives not
available within the organization
• New Solutions
• Build respect and credibility
Benefits to Business:
• Stakeholder engagement/ Head off
confrontation
• Branding
• Media relations
• New types of products and services
The Rise of NGO/Business Partnerships
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Risk to Internal Stakeholders
Risk to Public and Media Relations
Risks to Funding
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Examples
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Why Conduct a Partnership Risk Assessment
Advantages of a Partnership Risk Assessment:
1. Conduct due diligence of potential partners to better understand their values
and any potential risks
2. Gather intelligence in order to shape the terms of the partnership
3. Engage with the partners to improve performance
4. Plan communications strategies that respond to stakeholder concerns
related to the partnership
Our Approach to Partnership Risk Assessment
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What is Partnership Risk
Client’s Values
Potential Partner’s
Values
Component One Screen for Incidents and Controversies
Component TwoAssessment of Policies, Programs and Performance
Partnership Risk Assessment Process
Controversy Screen
Analysis Analysis Output
ESG Policies, Programs, and Performance
Partnership Risk Evaluation
AnalysisPartnership Risk
Recommendation and Analysis
Current Reputation and Involvement
Future Reputation and Current Practices
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Controversy Screen
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Foundations of the GC Controversy Screen
• Controversies Related to Environment Operations
• Contractor and Supply Chain-Related Controversies
• Product/Service-Related ControversiesEnvironment
• Employee Controversies:
• Contractor and Supply Chain-Related Controversies
• Customer-Related Controversies
• Community Controversies or Incidents
Social
• Business Ethics Controversies or Incidents
• Corporate Governance Controversies or Incidents.
• Public Policy Related ControversiesGovernance
Controversy Severity
The impact of the incident on different
stakeholders / level of public
outcry
Degree of exceptionality
/ sphere of influence
Level of Responsibility
Recurrence / Pattern of incidents
Company response to
specific incidents
Preventive policies and
risk management
systems
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ControversiesAssessment Methodology
Our assessment includes a detailed methodology for evaluating the severity of controversies:
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Foundations of the Controversy Screen
Human Rights
Universal Declaration on Human Rights
International Covenant on Civil and Political Rights
International Covenant on Economic, Social and Cultural Rights
International Convention on the Right of the Child
International Convention against all forms of Discrimination against Women
International Convention against Racism
International Convention against Enforced Disappearances
International Convention against Torture
International Convention on the Rights of Disabled People
International Humanitarian Law (especially the Geneva Conventions)
The UN-Declaration on the Rights of Indigenous People
The UN-Code of Conduct for Law Enforcement Officials
The UN-Basic Principles on the Use of Force and Firearms
Relevant national legislation related to the protection of human rights
Labour Rights
ILO Minimum Age Convention No. 138
ILO Declaration on fundamental principles and rights at work
Worst Forms of Child Labour Convention No. 182
UN Convention on the Elimination of all Forms of Discrimination against Women.
ILO-Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
ILO-Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
ILO-Forced Labour Convention, 1930 (No. 29)
ILO-Abolition of Forced Labour Convention, 1957 (No. 105)
ILO-Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
ILO Equal Remuneration Convention, 1951 (No. 100)
UN Convention against Racism UN-Convention on the Rights of the
Child UN-Convention on Civil and Political
Rights
Environment
National environmental legislation UN Conference on Environment and
Development and resulting standards/legislation
UN Framework Convention on Climate Change (and resulting Kyoto Protocol)
Rio Declaration on Environment and Development
Convention on biological diversity Agenda 21 Forest Principles International Treaty on Plant Genetic
Resources for Food and Agriculture Convention on International Trade in
Endangered Species Convention on biological diversity
(The Cartagena Protocol on Biosafety) Convention on Long-range
Transboundary Air Pollution Vienna Convention on the Protection
of the Ozone Layer Basel Convention on the Control of
Transboundary Movements of Hazardous Wastes and their Disposal
Corruption
OECD Convention against Corruption The UN Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions
The United Nations Convention against Corruption (UNCAC)
PACI Principles for Countering Bribery, Relevant national legislation against
bribery and corruption. Code of Good Practices on Fiscal
Transparency (IMF)
Product InvolvementScreen
Adult Entertainment
Alcohol
Gambling
Controversial Weapons
Firearms
Nuclear Power
Tobacco.
Fur
Genetically Modified Organisms
Pesticides
Type of Involvement
Degree of Involvement
Ownership Share
Risk Assessment
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Management Systems Screen
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ESG Policies, Programs, and Performance
Environmental
Operations
Supply
Chain
Products and Services
Social
Employees
Supply
Chain
Customers
Community and
Philanthropy
Governance
Business
Ethics
Corporate Governance
Public
Policy
ESG Dimension
ESG Categories
Our Performance Screen evaluates the degree to which potential partners support the core values of our client.
We will examine the degree to which companies incorporate our clients values into their operational corporate practice within their spheres of influence, including and not limited to:
Policies and codes of conduct, Programs, Goals and targets Management, monitoring and
reporting systems.
Sample Labour Performance Criteria
Social
Employees
Supply
Chain
Customers
Community and Philanthropy
Policy on Freedom of Association Formal Policy on the Elimination of Discrimination Programs to Increase Workforce Diversity Percentage of Employees Covered by Collective
Bargaining Agreements Employee Turnover Rate Programmes and Targets to Reduce Health and
Safety Incidents Health and Safety Certifications Trend in Lost-Time Incident Rate Number of Fatalities Etc.
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Sample Environmental Performance Criteria
Environment
Employees
Supply
Chain
Customers
Community and Philanthropy
Formal environmental policy Reporting Quality Environmental Data Environmental management System External certification of EMS Environmental fines and sanctions Environmental Impact Assessments Supply chain standards Specific thematic criteria such as water
management, GHG-emissions, biodiversity, others Specific sector related criteria (for example: mining:
policies on closure and rehabilitation of mining sites) Philanthropic activities Etc.
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Consistent Analysis Based on Robust Criteria
Formal Environmental Policy Evaluation Criteria
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Partnership Risk Evaluation
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The Scope of the Evaluation
Considerations that Impact the Scope of the Assessment:1. Number of Exclusionary Criteria2. Number of ESG Criteria3. Type of Company
a) Sizeb) Private vs. Publicc) Included in our Coverage
4. Level of Detaila) Risk assessment vs. engagement
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Partnership Risk Evaluation Summary (Typical)
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Partnership Risk Evaluation Summary (Detailed)
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Deliverables
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1. Partnership Risk Assessment Summary2. Company Profile 3. Exclusionary Criteria
i. Military Weaponsii. Tobaccoiii. Adult Entertainment
4. Qualitative Assessmenta) Product Safety and Marketing Practices Analysis
i. Relevant Controversies ii. Relevant Policies, Programs and Performance
b) Governance and Business Ethics Analysisi. Relevant Controversies ii. Relevant Policies, Programs and Performance
c) Community and Society Analysisi. Relevant Controversies ii. Relevant Policies, Programs and Performance
d) International Human Rights and Labour Standardsi. Relevant Controversies ii. Relevant Policies, Programs and Performance
e) Environmental Analysisi. Relevant Controversies ii. Relevant Policies, Programs and Performance
5. Overall conclusion and recommendation
Table of Contents (Sample)
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Sustainalytics as a Civil Society Service Provider
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For more information, please contact: Sarah Smith, Business Development
[email protected] 416-861-0403 x 19
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