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Promoting discussion and problem solving among sustainability thought leaders. Wednesday April 4, 2012 “The Evolving Metrics for Corporate Sustainability: Beyond Waste Water and Energy”. Dr. Blair Feltmate Director of Sustainability Practice, University of Waterloo. Media Sponsor .

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Promoting discussion and problem solving among sustainability thought leaders

Wednesday April 4, 2012

“The Evolving Metrics for Corporate Sustainability: Beyond Waste Water and Energy”

Dr. Blair FeltmateDirector of Sustainability Practice, University of Waterloo

Media Sponsor

Venue Sponsor

twitterchat #TSSSchat


The Value and Process of Developing a sustainability thought leadersSustainable Development Index (SDI)Toronto Sustainability Speakers SeriesApril 04, 2012

Dr. Blair Feltmate

Director, Sustainability Practices, Faculty of Environment, University of Waterloo

Chair, Climate Change Adaptation Project (Canada)

[email protected]


Overview
Overview sustainability thought leaders

  • General Observations on Corporate SD Reporting

  • Case Study: Purpose and Characteristics of the SDI, Canadian Electricity Association

  • SDI: Weighting and Scoring of Performance Metrics

  • SDI 2010 Thresholds & Score

  • SDI for 2006-2010 (2004/05 base years)

  • Next Steps


Corporate Sustainable Development Reporting: sustainability thought leaders

General Observations

  • Canadian corporations produce about 150 Sustainable Development Reports annually, and 3,000 are produced globally

  • Since Place Dome Inc. produced Canada’s first Corporate Environmental Report (early 1990s), followed by Noranda Inc. and Falconbridge Ltd., the look and content of SD/Environmental Reports has not changed much

  • SD Reports are not generally well reviewed/embraced by the financial community (e.g., financial analysts, institutional and retail money managers, institutional money management consultants, VPs Finance, etc.)

  • SD Reports are often difficult for Boards of Directors and Senior Management to fully appreciate/digest

    To remedy this omission, SD Reports must be changed in at least two ways:

    • Sustainable Development Index

    • Identification of 3-6 key SD metrics, that financial analysts can readily translate into financial value creation, presented up-front in SD Reports


Purpose and characteristics of the sustainable development index
Purpose and Characteristics of the Sustainable Development Index

Purpose of the SDI

  • The SDI enables the CEA and all stakeholders to determine if the CEA membership is collectively trending “better or worse” in reference to SD – NOTE: the SDI could be applied to any association, company or government enterprise

    Characteristics of SDI

  • The SDI includes measures of environmental, social and economic performance

  • The SDI is predisposed to transparency regarding the relative contribution of environmental, economic and social performance metrics to the index

  • The SDI is “simple” to calculate

  • The SDI is predisposed to being amended/updated


Weighting and scoring of performance metrics consensus reached in 2009 2010
Weighting and Scoring of Performance Metrics: Consensus Reached in 2009/2010

  • SDI can (and does) have an unbalanced number of metrics within each category of Environment, Society and Economy

  • Each SDI category of Environment, Society and Economy is given equal weighting in the SDI calculation, regardless of the number of metrics per category

  • Scoring for a given metric in a given year is made relative to a % change in performance relative to the average of the base years 2004/05

    • 2004/05 were chosen as base years due to (a) data availability, (b) integrity of data, (c) a mean of 2 years helps to lesson the impacts of a single ‘anomalous” year, and (d) going back “too far” may be perceived as compromising the rigour of the analysis

  • A score is determined relative to a % change in performance based on pre-assigned criteria

    • pre-assigned criteria were established based on a sensitivity analysis of annual variation in criteria performance


Current sdi parameters
Current SDI Parameters Reached in 2009/2010


Sdi 2010 environment thresholds score
SDI – 2010 Environment Thresholds & Score Reached in 2009/2010

0 25 50

0% relative <6% decrease >6% decrease

to base yrs relative to base yrs relative to base yrs

Score: 61.11


Sdi summary for 2006 2010
SDI Summary for 2006-2010 Reached in 2009/2010



Next Steps Reached in 2009/2010

SDI Broad Application

  • associations and companies across all industry sectors could develop and present similar style SDIs

  • SDIs could be presented on the inside front cover of SD and related reports

  • SD is generally not on the “radar screen” of financial analysts, retail and institutional money managers, and institutional money management consultants – SDIs could contribute to turning this situation around

  • SD reports have not evolved much in the past 15 years – SDIs could offer change that would be positively received by key stakeholders (notably senior management and Boards)


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