Non-Financial Corporate Disclosure & CSR Reporting: Setting the Scenes

1. Non-Financial Corporate Disclosure & CSR Reporting: Setting the Scenes For Ryerson CSR Institute talk:  “The Changing Landscape of Corporate Disclosure: Why CSR Reporting Matters” Dr. Kernaghan Webb, LLB, LLM, LLD, Department of Law and Business, Ted Rogers School of Management Faculty of Business Ryerson University Toronto October 4, 2017

2. Main points • Key terms • Key underlying concepts • Non-financial topics disclosed • The non-mandatory disclosure legal paradox • Disclosure requirements (including EU Directive) • Some court decisions • Role of voluntary standards • Ryerson CSR Institute/RENRA/CSRSA Analysis of Canadian CSR Mining Reports Project

3. ISO 26000 definition of SR • SR: the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that: • Contributes to sustainable development, health and the welfare of society; • Takes into account the expectations of stakeholders; • Is in compliance with applicable law and consistent with international norms of behaviour; and • Is integrated throughout the organization and practiced in its relationships.

4. Some Possible Non-Financial CSR/Sustainability Disclosure Issues • Carbon disclosure (climate change) • Water/energy/ use/impacts/policy • Air/water/land emissions • Toxics use (eg., cyanide) • Conflict minerals, revenue transparency • Diversity policy, anti-discrimination • freedom of association, child labour, anti-slave labour, ethics policies • Wages/compensation • Envtal health & safety policies, mgt systems • Information security, privacy, customer service • Human rights policy/impacts/due diligence • Security/Human rights policy • Supply chain/procurement policies/approach • Anti-corruption approach

5. EU Non-Financial Reporting Directive A separate sustainability report accepted as compliant with the Directive if it: • covers the topics required by the Directive • is based on a recognized EU or International framework (e.g., UNGC, GRI, OECD MNE, ISO 26000) • is annexed to the annual report • covers the same financial year as the annual report

6. EU Non-Financial Reporting Directive • Who? (basically – more than 500 emp’ees) • What must be disclosed? “Information to the extent necessary for an understanding of the group’s development, performance, position and impact of its activity, relating to, as a minimum, environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters …” • When: the first company reports under the Directive are expected to be published in 2018, covering financial year 2017-2018. • ‘The disclosure of non-financial information is vital for managing change towards a sustainable global economy by combining long-term profitability with social justice and environmental protection.’ • Includes: EHSHR policies, due diligence approach, risk assessments, KPIs (comply or explain)

7. EU Non-Financial Reporting Directive Targetted firms required to disclose policies, outcomes and risks related to at least: • environmental matters (energy, water, greenhouse gas, air) • social and employee aspects (non discrimination, diversity, labour freedom of association) • respect for human rights (due diligence policy, implementation) • anticorruption and bribery issues • diversity in their board of directors Also info on due diligence implementation, supply chain/value chain to address risks/adverse impacts

8. EU Non-Financial Reporting Directive • The Directive requires undertakings to ‘provide adequate information in relation to matters that stand out as being most likely to bring about the materialization of principal risks of severe impacts, along with those that have already materialized.’ • GRI materiality principle: material topics are determined as those which reflect the organization’s significant economic, environmental and/or social impacts; or which substantively influence the assessments and decisions of its stakeholders.