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Harnessing Sustainability Ratings to Move Markets European University at St. Petersburg Dr. Allen L. White 30 Septem PowerPoint Presentation
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Harnessing Sustainability Ratings to Move Markets European University at St. Petersburg Dr. Allen L. White 30 September 2013. Peter Bakker President , WBCSD; former CEO, TNT.

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Presentation Transcript
slide1

Harnessing Sustainability Ratings

to

Move Markets

European University at St. Petersburg

Dr. Allen L. White

30 September 2013

slide2

Peter Bakker

President, WBCSD; former CEO, TNT

“I am a capitalist…The mistake currently lies in only expecting (and managing) a return on financial capital. Capitalism requires a new operating system and needs to be re-booted so that we expect and manage the return on financial, natural and social capital.

Business as usual is not an option for a future-proofed economy in which nine billion people live well with the limits of the planet by mid-century.”

slide4

About GISR

  • Founders: The Global Initiative for Sustainability Ratings (GISR) is a joint project of Ceres and Tellus Institute — partners that founded the Global Reporting Initiative (GRI)
  • Vision:Redefine the definition and measurement of company value creation that incorporates all forms of capital: human, intellectual, natural, social, along side financial
  • Mission: Create a world class corporate sustainability ratings standard as an instrument for embedding sustainability into company practices and financial markets worldwide
  • Strategy: Steward a multi-stakeholder and global process comprising: investment managers, pension funds, companies, NGOs, accountancies, academics, governments and raters
  • Launch: June 2011
  • Role: A standard setter. GISR will not rate companies; its standard will be applied by existing and future ratings organizations
20 years of sustainability metrics
20 Years of Sustainability Metrics
  • More voluminous
    • GISR data base: 1500+ indicators/500+ issues
    • SASB: 900+ indicators; 500+ unique
    • GRI: G4: 29 issues/149 “disclosures”; sector research: 2800 indicators
  • More applications
    • SRI
    • Self Assessment
    • Stock Exchanges
    • Ratings: Sustainability and Credit

…………………. More material? More impactful?

slide6

Sustainability Ratings:

What’s the Problem?

  • Too many indicators
  • Too many issues
  • Too many surveys
  • Too much volatility
  • Too little transparency

>>>Curbs utility, uptake, integration, and impact

Opportunity—grow the supply and credibility of quantity of quality ratings; mainstream sustainability, enhance company practices, move financial markets…

slide7

Value Proposition for the GISR Standard

  • Companies
    • Survey Fatigue
    • Transparency
    • Convergence
  • Investors
    • Clarity
    • Relevance
  • Raters
    • Credibility
    • Market Expansion
slide10

Selected GISR Partners

Sponsors

Investors

Companies

NGOs & Foundations

Metanoia

Fund

slide11

Building the Standard:

Content and Accreditation Levels

slide12

Component 1: Principles

Exposure Draft>>>Beta>>>Version 1.0: November 2013

Process

  • Assurability
  • Continuous Improvement
  • Impartiality
  • Inclusiveness
  • Transparency

Content

  • Balance
  • Comparability
  • Comprehensiveness
  • Sustainability Context
  • Long-Term Horizon
  • Materiality
  • Value Chain
slide13

Example 1: A Balancing Act--

Transparency

  • Companies: Essential for performance improvement
  • Raters: IP is part of the business model
  • Investors: Essential for informed choice and application

Thus, transparency of what, to whom and in what form?

slide14

Example 2: A Balancing Act – Comprehensiveness and Sustainability Context

SUSTAINABILITY CONTEXT - FINISH LINE

Peer comparison

3

START LINE

X

4

1

2

Baseline year

PerformanceToday

CompanyGoal

credit ratings the next sustainability frontier
Credit Ratings:The Next Sustainability Frontier
  • Sustainability ratings rate companies
  • Credit ratings rate debt issues
  • Companies, public and private, float issues

>>>>>Credit markets=$10’s trillions/year

state of play credit ratings
State of Play – Credit Ratings

Source: NRSRO Annual Certifications, 2011

slide18

Ratings 2020: Companies and Credit

Ratings

2013

Ratings

2020

RATINGS 2020 FINISH LINE

  • Financial
  • Ratings

START LINE

  • Integrated
  • Ratings

Sustain.

Ratings

slide20

An Invitation

  • Support GISR’s Standard Development Activities
    • Technical Committee, Expert Advisor Committee, feedback on public exposure and beta versions: www.ratesustainability.org
  • Join the Supporting Stakeholder Program
    • A growing multi-stakeholder network of supporters http://ratesustainability.org/get-involved/become-a-supporting-stakeholder/
  • Contact GISR to Explore Opportunities for Collaboration : http://ratesustainability.org/contact-gisr/
slide21

Thank you

For more information:

www.ratesustainability.org

Mark.tulay@ratesustainability.org