SSA - MIDTERMS!!!!

Global Reporting Initiative (GRI)

it is an independent international organization that provides the most widely used standards for sustainability reporting

GRI Standards

It also aligned with International standards and normative framework such as UNGC & ILO Tripartite Declaration

Governance; Economic; Environmental; Social Topics

GRI Standards has a comprehensive reporting requirement covering _____, ______, _____, ______.

Global Sustainability Standards Boards (GSSB)

Is an independent operating body under the auspices of the GRI

GRI 101: Foundation

GRI 102: General Disclosures

GRI 103: Management Approach

Universal Standards (100 series) includes 3 standards:

GRI 101: Foundation

is the starting point for using the set of GRI Standards.

GRI 102: General Disclosures

is used to report contextual information about an organization and its sustainability reporting practices

GRI 103: Management Approach

is used to report information about how an organization manages a material topic.

Topic Specific Standards

These are used to report information on an organization's impact related to economic, environmental, and social topics (e.g., Economic Performance, Materials, or Employment).

Economic; Environmental; Social

Topic Specific Standard, the 200 _____topics, 300 ____topics, and 400 ____topics.

Core

This options indicates that a report contains the minimum information needed to understand the nature of the organization, material topics, and related impacts and how these are managed

Comprehensive

This builds on the core option by requiring additional disclosures on the org's strategy, ethics and integrity and governance.

shall meet all criteria

To claim a sustainable report has been prepared in accordance with the GRI Standards, the reporting organization shall __________ for the respective two options.

reason for omission

If GRI Standards cannot report a required disclosure, the organization shall provide in a report a_______

1. Stakeholder Inclusiveness

2. Sustainability Context

3. Materiality

4. Completeness

The reporting principles for defining report contents includes:

1. Accuracy

2. Balance

3. Clarity

4. Comparability

5. Reliability

6. Timeliness

The reporting principles for defining report quality includes:

raison d'etre (reason of state)

GRI states " to help organizations be transparent and take responsibility for their impacts so that we can create a sustainable future "

IR Framework

It aims to monitor how the capitals are used and created by the business model and discloses the companies' strategies in light of risks and outlook

Integrated Report

It is a concise communication about how an organization's strategy, governance, performance and prospects in the context of external environment.

The Six Capitals

Stocks of value on which all organizations depend for their success as inputs to their business mode;.

1. Financial Capital

2. Manufactured Capital

3. Intellectual Capital

4. Human Capital

5. Social and relationship Capital

6. Natural Capital

6 capitals categorized in IR Framework :

Financial Capital

pool of funds that is available to an organization for use in the production of goods. and provision of services and obtained through financing.

Manufactured Capital

manufactures physical objects that are available to an organization for use in the production of goods or provision of services

Intellectual Capital

Organization, knowledge-based intangibles, including intellectual property and organization capital

Human Capital

competencies, capabilities, experience and motivations of people to innovate

Social and relationship Capital

The institutions and the relationships within and between communities, groups of stakeholders and other networks, and the ability to share information to enhance individual and collective well-being.

Natural Capital

all renewable and non-renewable environmental resources and processes that provide goods or services supports past, current or future.

1. Strategic Focus and future orientation

2. Connectivity of Information

3. Stakeholder relationships

4. Materiality

5. Conciseness

6. Reliability and Completeness

7. Consistency and Comparability

7 Guiding Principles of IR Framework

1. Organization Overview and External Environment

2. Governance

3. Business Model

4. Risks and opportunities

5. Strategy and resource allocation

6. Performance

7. Outlook

8. Basis of preparation and presentation

Content Elements of IR Framework

Sustainability Accounting Standards Board (SASB)

It provides industry-based sustainability standards for more than 77 specific industries that includes five general sustainability themes.

1. Environment

2. Social Capital

3. Human Capital

4. Business Model and Innovation

5. Leadership and Governance

Five general sustainability themes / dimensions are:

Environment (6 issues)

This dimension includes environmental impacts, either using non-renewable, natural resources as inputs to the factors of production or through harmful releases into the environment that may result in impacts to the company's financial condition or operating performance.

Social Capital (7 issues)

This dimension relates to the expectation that a business will contribute to society in return for a social license to operate.

Human Capital (3 Issues)

This dimension addresses the management of a company's human resources (employees and individual contractors) as key assets to delivering long-term value.

Business Model and Innovation (5 issues)

This dimension addresses the integration of environmental, human, and social issues in a company's value-creation process, including resource recovery and other innovations in the production process.

Leadership and Governance (5 issues)

This dimension involves the management of issues that are inherent to the business model or common practice in the industry and that are in potential conflict with the interest of broader stakeholder groups.

Task Force on Climate-Related Financial Disclosure (TCFD)

a private-sector task force created by Financial Stability Board issued its final recommendations on climate-related financial disclosure focusing on climate-related risk, opportunities and financial impacts.

all entities with public debt or equity securities

TCFD encouraged _______ with ________ or ______ to voluntarily adopt its disclosure recommendations.

1. Governance

2. Strategy

3. Risk Management

4. Metrics and Targets

TCFD Framework includes 4 core themes/ elements includes:

Scenario Analysis

a well-established method of assessing or analyzing the likelihood of a range of possible future states, is discussed extensively in the TCFD recommendations.

Scope 1: Direct GHG Emissions

These emanate from sources that are owned or controlled by the business

Scope 2: Electricity indirect GHG emissions

This category encompasses emissions from purchased electricity used in a company's equipment or operations

Scope3: Other indirect GHG Emissions

These are all indirect emissions that are a consequence of the activities of the business, that occur from sources not owned or controlled by the business.

banks; insurance companies; asset owners and asset managers

Supplemental guidance created for finance sector is focused on ________

12 industries

Supplemental guidance created for non-financial sector based on ________

Transition Risks

It is related to the transition to a lower-carbon economy includes : policy and litigation risks, technology innovations

Physical Risks

It is related to the physical effects of climate change. includes; hurricanes, cyclones, flooding or fires and chronic risks (long term shifts in climate pattern)

False: 31-member

30-member global task force represents a broad range of financial sector and non-financial sector representatives (T/F)

TCFD Recommendations

A framework structured around four core these : governance, strategy, risk management and metrics and target

Existing Regimes

In developing recommendations, the task force considered the _______ for climate reporting across G20 countries,

GRI

As to materiality- Material Aspects are those that reflect the org's significant economic, environmental and social impacts

IR FRAMEWORK

As to materiality- A matter is material if it could substantively affect the organization's ability to create value in short, medium, long term.

SASB

As to materiality- Financially material issues that are reasonable likely to impact the financial condition.

TCFD

As to materiality- Public Companies legal obligation to disclose material information in their financial fillings (climate-related info_

Climate Disclosure Standards Board (CDSB)

It is an international consortium of business and environmental NGOs, companies can use to incorporate climate change and environmental information into their mainstream.

Climate Change Reporting Framework

It was the first CDSB Framework released in 2010, focused on the risks and opportunities that climate change presents to an organization's strategy.

P1 Applying the principles of relevance and materiality

P2 Faithfully represented

P3 Connected with other info

P4 Consistent and comparable

P5 Clear and understandable

P6 Verifiable

P7 Forward looking

CDSB Framework Guiding Principles

Investor

The primary audience of CDSB Framework.

REQ-01 Governance

REQ-02 Management's Environmental Policies, Strategy and Targets

REQ-03 Risks and Opportunities

REQ-04 Sources of Environmental Impact

REQ-05 Performance and comparative analysis

REQ-06 Outlook

REQ-07 Organizational Boundary

REQ-08 Reporting Policies

REQ-09 Reporting Period

REQ-10 Restatement

REQ-11 Conformance

REQ-12 Assurance

CDSB Framework Reporting Requirements include:

Investors

defined as "existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity"

Natural Capital

all renewable and non-renewable environmental resources and processes that provide goods or services that support the past, current or future prosperity of an organization.

Sources of environmental impact

the activities of and outputs from the organization that actually or potentially influence or contribute to environmental impacts.

Common Metrics

the result is a collection of core and expanded metrics and disclosures that have been drawn whenever possible from existing standards and disclosures. Selection criteria also included materiality to long-term value creation, universality, extent of actionability, and feasibility of reporting

Core metrics (24)

these are more established or critically important metrics and disclosures that are already being reported by many organizations or can be obtained with reasonable

Expanded metrics (34)

Less well-established in existing practice and standards and have a wider value chain scope.

Principles of Governance

Planet

People and

Prosperity

The metrics are organized along the lines of the four pillars; _________, __________, __________, _________ which are aligned with the UN Sustainable Development Goals (SDGs).

Principles of Governance

defined evolving as organizations are increasingly expected to define and embed their purpose at the center of their business.

Planet

An ambition to protect the planet from degradation, including through sustainable consumption and production, sustainably managing its natural resources and taking urgent action on climate change, so that it can support the needs of the present and future generations

People

An ambition to end poverty and hunger, in all their forms and dimensions, and to ensure that all human beings can fulfil their potential in dignity and equality and in a healthy environment

Prosperity

An ambition to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social and technological progress occurs in harmony with nature.