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How Business Measures Sustainability: One Company’s Perspective

How Business Measures Sustainability: One Company’s Perspective. Sandra Odendahl Director, Corporate Environmental Affairs Royal Bank of Canada CSIN Conference March 2010. Overview. About RBC Why Measure? Who Cares? Setting Priorities Measuring Success How to Report What next?.

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How Business Measures Sustainability: One Company’s Perspective

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  1. How Business Measures Sustainability:One Company’s Perspective Sandra Odendahl Director, Corporate Environmental Affairs Royal Bank of Canada CSIN Conference March 2010

  2. Overview • About RBC • Why Measure? • Who Cares? • Setting Priorities • Measuring Success • How to Report • What next?

  3. I. About RBC • Assets ~ $655 billion; Market capitalization ~ $77.6 billion. • Approximately 80,000 employees in 50 countries • Major operations in Canada, US, UK and the Caribbean • Over 1700 branches and more than 4,800 ABMs globally • Business areas: • RBC Canadian Banking (~44% of revenue) • RBC Capital Markets • RBC Wealth Management • RBC US and International Banking • RBC Insurance Largest Canadian bank, 5th largest bank in North America 13th Largest Bank in the World

  4. Why Measure?- Financial measurement and reporting Financial performance measurement and reporting well-established • Objective: • “…to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.” • Users of financial statements: • present and potential investors, employees, lenders, suppliers and other trade creditors, customers, governments and their agencies and the general public. • What users want: • All user groups interested in the ability of an entity to generate cash and of the timing and certainty of those future cash flows. From the IASB's Framework for the Preparation and Presentation of Financial Statements

  5. Why Measure?- Sustainability measurement and reporting Sustainability performance measurement and reporting less well-established • Objectives: • management, increased comparability and reduced costs of sustainability, brand and reputation enhancement, differentiation in the marketplace, protection from brand erosion resulting from the actions of suppliers or competitors, networking and communications, benchmarking tool, corporate governance tool and an avenue for long term dialogue with reporting organizations* • Users of sustainability reports: • Subset of present and potential investors, employees, lenders, customers, governments and their agencies and the general public. • What users want: • They all want something different! * From the Global Reporting Initiative

  6. Why measure?Why RBC measures & reports • To inform stakeholders of progress • To inform socially responsible investors • To track progress toward goals • To benchmark against other organisations • To demonstrate commitment • Federal requirement that all financial institutions produce an annual PAS Formal CR Report since 2003

  7. Who Cares? Indicators our stakeholders care about Significant interest Some interest Little interest

  8. IV. Setting PrioritiesOur Corporate Responsibility Vision Indicators Depend on Priorities 8

  9. IV. Setting PrioritiesIntegrity: Governance and Ethics Priorities • Demonstrate sound corporate governance principles • Provide clear disclosure of financial results, and disclose reliable performance data on key non-financial items • Comply with all applicable laws and regulations in every country in which we operate • Conduct business with honesty and integrity In Financial Reports & Websites

  10. IV. Setting PrioritiesEconomic Impact • Priorities • Provide strong return to shareholders • Pay fair share of taxes • Create employment • Support small businessand economic development • Foster innovation and entrepreneurship • Purchase goods and services In Financial, CR Reports & Websites

  11. IV. Setting PrioritiesWorkplace Priorities • Maintain progressive workplace programs and practices • Respect diversity and promote inclusion • Provide competitive compensation and total rewards, and enable growth through training and development opportunities • Foster a culture of employee engagement In CR Reports and Website

  12. IV. Setting PrioritiesCommunities Priorities • Provide donations with a lasting social impact • Sponsor key community initiatives • Enable employees to contribute In CR Reports and Website

  13. IV. Setting PrioritiesEnvironment The RBC Environmental Blueprint sets priorities on environmental management Priority Issues Priority Activities • Reduce our environmental footprint • Risk Management & Responsible Lending • Environmental products and services • Engage with Communities Climate Change Forests/Biodiversity Water

  14. V. Measuring Environmental Success • Meaningful indicators • Snapshot - Summary indicators • Progress Report – Qualitative • Data • High standards for data quality • Broad data coverage • Targets • Benchmarking

  15. Measuring Environmental SuccessMeaningful Indicators - Summaries Vital Statistics The Snapshot

  16. Measuring Environmental SuccessMeaningful Indicators - Progress Blueprint Report Card The Progress Report

  17. Measuring Environmental SuccessMeaningful Indicators - Data Operational Footprint The Details (for Data Junkies)

  18. Measuring Environmental SuccessMeaningful Indicators - Data Responsible Lending Green Products and Services

  19. V. Measuring Environmental SuccessMeaningful Indicators - Data Community Engagement

  20. VI. How to Report • RBC.com/environment • RBC.com/responsibility • Customised PDF generator • Annual CR Report and PAS • Online only • CR Review • Brief printed brochure • For consumers, general public and employees • Ad hoc “sustainability surveys” • We avoid them, and direct people to our website • Quarterly reports to shareholders, Annual Report and Management Proxy Circular Websites, print documents, surveys, financial reports

  21. VII. What next? • Shift away from hardcopy reporting to electronic disclosure • RBC CR Report (full) only available online • RBC report generator for customized reporting • Manage increased volume of client, staff and public inquiries on sensitive environmental and social topics • Establish criteria to screen surveys and requests for more detailed information • More rigorous assessment of which sustainability indicators are financially material • Hint: not that many

  22. It Takes a Lot of Reporting to be Considered a Sustainability Leader

  23. Thank You! Questions? sandra.odendahl@rbc.com www.rbc.com/environment

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