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How do you Measure? Climate Change and Related Environmental Disclosures Mike Harris, Partner and National Leader, Sustainable Business Solutions, PricewaterhouseCoopers Agenda • Meaningful Sustainability Disclosure – the purpose of the MD&A • From Disclosure to Analysis – reporting out on sustainability performance • Reporting Frameworks – improving comparability • Materiality – the process of determining what to include • Effectively communicating your performance to the capital markets and other stakeholders • Building an integrated reporting framework • Next steps – factors to consider going forward Meaningful Sustainability Disclosure • Sustainability reports ≠ investment community • MD&A: trends & analysis & high level impacts to business (including sustainability factors where relevant) Data Analysis • Make sure your analysis is based on reliable data! MD&A From Disclosure to Analysis • Reporting out on climate change – e.g. sustainability reports, CDP, sustainability rating agencies – opportunity to explore data relevance & preliminary conclusions • At what point do you disclose your data? Materiality Quantification Report Assurance Analysis Reporting Frameworks • Data compilation, management and measurement – what to report and how • Reporting frameworks – GRI – GHG Protocol – ISO 14064 – (Stakeholder consultation) • Materiality – who wants to know and why Materiality – how? High Societal Interest Climate Change Water usage Management Compensation Spills End of life disposal Biodiversity Low Impact on Company Weapons & Defense Terrorism Human Rights High Impact on Company Labour Unrest Low Societal Interest An Integrated Reporting Framework - sustainability metrics Balance Financial + non-financial + narrative information = more complete and balanced record of organization’s performance 90 80 70 60 50 40 30 20 10 0 78.5 76.8 TARGET 73.2 29.3 0.06 0.053 0.05 0.02 1 2006 2 2007 3 4 2008 2012 - 0.07 - 0.06 - 0.05 - 0.04 - 0.03 - 0.02 - 0.01 -0 C02e per barrel produced C02e - millions tonnes Non-Financial Indicators An Integrated Reporting Framework – link to financial performance Strategic relevance Linking sustainability issues to organization’s overall strategy Key Indicators Direct Company Impacts Climate, waste and resource indicators Financial performance Emissions 2006 $m 2007 $m 2008 $m C02 equivalent emissions - Abatement expenditure 20.0 24.0 30.0 - Offset expenditure 2.0 3.0 4.0 - Carbon equivalent liability 20.0 26.0 38.0 2.0 2.0 4.0 Other significant emissions - sustainability expenditure Next Steps • What sustainability issues are relevant to your business objectives? • What is your company doing to address these issues? • What do your shareholder and other stakeholders want/need to know about performance with respect to these issues? • Do you have reliable information to report? • How does this information feed into your analysis of potential business outcomes?