Social and sustainability Reporting

1. Social and sustainability Reporting Corporate Sustainability Reporting, trends and opportunities for the future 29 May 2012

2. Introduction - what is Sustainability Reporting? • The roots of sustainability from social philanthropy to Corporate Social Responsibility to sustainability. • Triple bottom line business accountability expands on traditional business reporting to take into account environmental and social performance in addition to financial results. • It provides stakeholders with insight into the organization’s key non-financial risks and challenges • It demonstrates how a company’s financial results can be affected by sustainability performance

3. Sustainability ReportingGlobal Trends Research by Ernst & Young shows that more than two-thirds of Fortune Global 500 companies publish some form of sustainability or corporate responsibility reports, reflecting the broad trend towards greater disclosure Global output by year* CDP reporting companies** Global output by year & region* *CRRA 2011 **CDP 2011

4. Sustainability Reporting- why bother? Source: “Striking the Balance” - WBCSD Benefits of CSR - Benefits of CSR - Benefits of CSR - Benefits of CSR - Benefits of CSR - Benefits of CSR - Benefits of CSR - Benefits of CSR - Creating financial value Attracting favorable financing Regulatory compliance • Business case for sustainable development Transparencytostakeholders Employee motivation, attracting talent Enhancing reputation Improving management systems Risk awareness Continuous improvement Encouraging innovation

5. The benefits of sustainability reporting • A tool to enhance brand value, reduce political and stakeholder resistance and help to differentiate a company in the global marketplace. • Establishes a foundation for open, positive communication between a company and its stakeholders. • Sustainability reporting can reinforce the link between short term financial goals with longer term environmental and social objectives. • Can offer a dynamic organizational learning process which benefits employees.

6. Key questions for management • Does the business understand its material sustainability related risks and impacts? • Have key stakeholders been engaged to understand their expectations of the business in relations to sustainability activities? • Are strategies for significant sustainability issues such as energy management clearly articulated? • Is there appropriate governance to deliver consistent standards and drive performance improvement? • Is there accurate performance data to support performance improvement claims? • Can the systems and processes for collecting and collating performance data be relied upon?

7. Investors push for sustainability/ESG data The DJSI criteria Criteria include: Industry specific environmental issues Environmental reporting Biodiversity Climate Change Social reporting Gender Diversity Standards for suppliers Corporate citizenship Codes of conduct on corruption & bribery Labour & compensation • Investors looking at safer investments, comprehensive risk management including environmental and social risks. • Companies with good sustainability performance record or innovating around sustainability trends identified as good investment targets. • Sustainability Indexes established to enable investors to track company sustainability performance: • Dow Jones Sustainability Indexes (DJSI) • FTSE4Good • Nasdaq Global Sustainability 50 Index Current investment into clean energy and finance: Europe – EUR 94 billion, China- USD 54 billion, USA- USD 34 billion PRI: 850 signatories, USD 25 trillion CDP: 551 signatories, USD 71 trillion

8. What is covered in sustainabilityreporting ? • Typical issues: • Pollution • Biodiversity • Business Excellence • Water consumption • Carbon emissions • Health and Safety • Occupational health • Governance • Community relations • Government relations • Revenue transparency • Employee Satisfaction • Supply chain capacity Failure to identify CSR risks Ineffective CSR management processes CSR risk review/risk mapping Development/reviews of management systems Effective corporate sustainability report Insufficient monitoring and weak governance controls Ineffective engagement with stakeholders Building/testing governance controls and monitoring systems Advice on stakeholder engagement strategy Insufficient internal/external communications Lack of mitigation plans for CSR impacts Advice and assurance over disclosures Advice on/reviews of CSR action plans

9. What makes a GRI sustainability report? • Approach towards multi-front reporting on sustainability, a vital measure of successful businesses Society/Community Labor Practices/Decent Work Human Rights Education & Training Corruption Prevention Health & safety Product/Service Responsibility Total indicators : 79 • Energy • Water • Emissions • Waste • Products and Services • Carbon footprint Social Environment Corporate Governance 30 KPIs 40 KPIs Economic 9 KPIs • Economic Performance • Market Presence • Indirect Economic Impact KPI = Key Performance Indicator

10. Data consistency • 3. • 1. • 2. • 4. • 5. Key challenges and risks of reportingDoing a reality check Data comparability Striking the right balance Dialogue vs Communication Continuous improvement Issuing the sustainability report is a challenge by itself; it requires a lot of ground work and data gathering; it also requires dedication and a very high level of involvement from all process owners in the organization. Another challenge is the ability to fulfill commitments in places where is lack of regulations and systems to support the initiatives in our report. RajiHattar Chief Sustainability Officer, Aramex

11. Where do you start and how do you get there? Collect data • Start with what you have, you don’t have to start from scratch • Collect sustainability data from different departments across the organization Set targets • Review the current state in order to set (reasonable and achievable) targets for the future • Be transparent to stakeholders about achievements and goals going forward Report • Use international reporting standards and frameworks like the GRI and AA1000 in order to generate a world-class sustainability report • Balance, materiality and transparency establish credibility Assure • Obtain limited (a review) and/or reasonable (an audit) assurance on your sustainability report

12. Sustainability reporting in the Middle East – trends and developments

13. Sustainability Reporting in the UAE • Abu Dhabi Airports Company • Abu Dhabi Chamber of Commerce and Industry • Abu Dhabi Commercial Bank PJSC • Abu Dhabi Department of Economic Development • Abu Dhabi Department of Municipality Affairs • Abu Dhabi Department of Transport Authority • Abu Dhabi Water and Electricity Authority • Abu Dhabi Sustainability Group • Abu Dhabi Tourism Author • Abu Dhabi Gas Industries Ltd • Abu Dhabi Gas Liquefaction company • Abu Dhabi National Oil Company • Aldar properties • Dubai Aluminium Company Ltd. • Dubai Centre for Corporate Values • Dubai Customs • Dubai Properties Group • Dolphin Energy • Emirates Foundation • Emirates Integrates Telecommunications Company PJSC (“du”) • Energy Management Systems International • Environment Agency- Abu Dhabi • Jumeirah Group LLC • Landmark Group • Metito (overseas) ltd. • National Bank of Abu Dhabi • Ras Al Khaimah Ceramics PSC • Sama Dubai • Sorouh Real Estate PJSC • The Emirates Group • Tourism Development and Investment Company (TDIC) • Zonescorp

14. Sustainability Reporting in the Middle East Bahrain • Arab Bank • Zain telecommunications Syria • Syria telecommunications Kuwait • Burgan Bank • Commercial Bank of Kuwait SAK • Kuwait Finance House • National Bank of Kuwait Qatar • Qatar National Bank • Qatar telecom • RasGas Company Limited Oman • Petroleum Development Oman LLC KSA • Saudi Aramco • Dr SolmanFakeeh Hospital • Saudi Arabia Fertilizers Company • Saudi Arabian Oil Company • Saudi Basics Industries Corporation • Saudi Electricity Company • The National Commercial bank • The Saudi British Bank Egypt • Arab African International Bank • Assut Cement Company • Bavarian Auto Group • Orascom Telecom Holdings • Sekem Group • Shell Egypt NV • Suez Cement Company Jordan • Arab Bank • Aramex international Ltd • Jordan Aircraft maintenance Ltd • Jordan River Foundation • Nuqul Group • Schema- tactical thinking • Zain (Jordan) • Lebanon • Holcim Lebanon sal

15. Report output by type and year Source: Corporateregister.com

16. 2011 – Developments in the Middle East: awareness • Organized groups/ communities • Abu Dhabi Sustainability Group • Estidama • Green Building Councils • Awards • Dubai Award for Sustainable Transport • CSR Arabia Awards • Government push • Corporate Governance and ESG standards • Abu Dhabi 2030 • Competitiveness • Leader vs. follower • Financial incentives • Sustainability Indexes, carbon trading, energy efficiency projects, etc.

17. 2011 – Developments in the Middle East (cont’d) • Top down vs. bottom up approach • Majority of Sustainability initiatives are being pushed through middle management • Executive management/ Board • Sustainability systems and policies implementation (“You Can't Manage What You Don't Measure”)

18. Trends for 2012/13 • Increased number of reports (one in five a ‘first time reporter’): increase in quantity, but awaiting the step-change in quality • Independent third party assurance • Increased level of stakeholder engagement • Internally: Executive/ Board awareness and understanding • Externally: interaction with communities, customers and suppliers • Communication feedback process

19. Trends beyond 2013 • Credibility through Assurance • Openness & Honesty • Relevance and Materiality • Carbon Disclosure • Creativity in Communications • Integrated Reporting

20. For further information please contact us: AmjadRihan Partner Climate Change & Sustainability Services - Middle East Direct: +973 17 203 971 Office: +973 17 535 455 Mobile: +973 3962 7674 amjad.rihan@bh.ey.com Thank you