Communication on Progress

1. Communication on Progress “Public transparency and accountability are the cornerstones of the Global Compact” – Georg Kell

2. COPs Submitted, by Join Year

3. Current Participant Status

4. Current SME Status

5. The COP in context

6. Sustainable reporting trends • Learning curve • Anecdotal (little data) • EMS/ISO 14001 • Triple bottom line e.g. GRI • Integrated reports http://www.sustreport.org/business/report/trends.html

7. Why are companies issuing sustainability reports? What is the value proposition for sustainability reporting? Companies are issuing sustainability reports for numerous reasons, including the following: • To demonstrate their interest in To demonstrate their commitment to and efforts involving human rights, fair labor policies, health of the environment, their employees and the communities they serve • To promote transparency as a means of leveling the playing field • To build and maintain relationships (solicit feedback) with external parties • To better manage and communicate risk • To enhance or protect their reputation • To grow shareholder and brand value • To increase market share http://www.aicpa.org/innovation/baas/environ/faq.htm

8. DIRECTIVE 2003/51/EC OF THE EUROPEAN PARLIAMENTAND OF THE COUNCIL of 18 June 2003 The review shall be a balanced and comprehensive analysis of the development and performance of the business and of the position of the undertakings included in the consolidation taken as a whole, consistent with the size and complexity of the business. To the extent necessary for an understanding of such development, performance or position,the analysis shall include both financial and, where appropriate, non-financial key performance indicators relevant to the particular business, including information relating to environmental and employee matters.

9. Obstacles • Company liquidation/bankruptcy • Scarce resources • Lack of understanding of CSR or reporting • Change in leadership (not internalized in the company culture) • Free-riders

10. Methods? • GRI's Sustainability Reporting Guidelines • The International Organization for Standardization (ISO) 14001 for environmental management systems and ISO 14031 for environmental performance evaluation • The Coalition for Environmentally Responsible Economies (CERES) Principles. • AA1000 • SAI • Homegrown Methods

11. What are we after? “We thrive and survive on planet earth as a single human family. As Benjamin Franklin said at the signing of the Declaration of Independence, "We must all hang together, or assuredly we shall all hang separately." His words still resonate. In an age of globalization, our interdependence deepens with every passing day. And one of our main responsibilities is to leave to successor generations a sustainable future.”

12. Innovation: the operating mode of CSR, driving progress The development of an economythat works for all,now and in the future,within the limitsof the planet Transparency and Public Accountability helps ensures the transition towards...

13. How can reporting act as a scaling agent for:

14. Reporting is part of Process… Therefore failures to report are failures in process Three places to look for process improvements • Companies • GCO • Local Networks

15. Companies

16. Planstrategy Plan Do Implement Check Checkprogress Reporting is part of a cycle of improvement • Act on the top opportunities by setting specific performance objectives • Plan the resources and steps to achieve the objectives • Do what is planned to reach the objectives • Check the results achieved against objectives and plans • Act to correct deviations, integrate learning from doing and setobjectives for further improve-ments Set goals Act Statusassessment

17. Performance enablers Vision Leadership enablers Business strength is based on elements that, together, are necessary and sufficient to ensure excellence in every objective the business chooses to pursue. Competitive advantage balance and perfect integration, difficult to imitate because performance skills and tools vary with activity and the cultural environment where the business operates. However, elements are universal and independent of size and activity. Resources Empowerment Policies Strategy Processes Innovation

18. Holistic results Results include • The core financial and direct operational output parameters. • Impacts and benefits for society • The perception by employees and key partners in the value chain. Impact onpeople Impacton society Impact onvaluechain results Reporting

19. Vision Financial Perspective Organisational learning Leadership goals goals goals goals Measures Measures Measures Measures What are the financial benefits ofour sustainability performance? How do stimulate and sustain innovation and continuous improvement? Resources Empowerment Policies Strategy Business processes Processes& Innovation What CSR activities add value to the organisation? Impact onpeople Impacton society Impact onvaluechain Stakeholder perspective How will we satisfy our customers and stakeholders needs? Reporting Not the only model… Source: KPMG 2002adaptation from Kaplan/NortonBalanced Score Card

20.  best in class for years  verified gains and positive trends  many positive results  some results $      anecdotal clueless awareness modelin place innovation deepintegration The path is the goal ...the change escalator Why are we doing?How can we do better? Communication on Progress results  continuousimprovement stage of integrating

21. GCO

22. 2006 • Inactives • FAQs • Process Improvements • Due Diligence • Progress and Value Workshops • Introduce Notable Criteria

23. 2007 • Process Improvements • COP Review Project • Quality Feedback • Scale P and V workshop • Network Work Plan Best Practices • Guidance improvements • Refine Notable Criteria • IAT Training

24. Guidance Documents Coming soon: SME Guide, The Value of Communicating Progress, and Networks Guide Revision process underway

25. Next Steps • Remove participants from the inactive list after one year of inactivity. • Refine efforts to support Local Networks. • Further develop the model that differentiates the leaders from the beginners. • Promote the use of the COP contents by stakeholders. • Strengthening of the GC’s relationship with CSR implementation schemes.

26. Networks

27. What Networks are doing • COP workshops • Translations • Templates and Tools • Connecting to the local CSR community and leveraging existing and emerging incentive structures • Local / Direct Support and Encouragement

28. Lessons from the field… • Engage early. Once companies become non communicating they are likely to become Inactive. • Make the COP part of your networks work plan. Those networks with COP work plans have the highest rate of success. • Manage expectations within your network. There will be a rate of attrition.

29. What is a Communication on Progress? • A COP is a communication to stakeholders on the progress the company has made in implementing the ten principles and forming partnerships in pursuit of wider UN goals.

30. The COP

31. What does a COP achieve? • Ensure and deepen the commitment of Global Compact participants • Safeguard the integrity of the initiative • Create a rich repository of corporate practices that serves as a basis for continuous performance improvement.

32. COP Policy -timeframe Company joins Global Compact

33. COP Policy -timeframe Company joins Global Compact COP submitted within 2 years of join date Next COP due in 1 year

34. COP Policy -timeframe Company joins Global Compact COP submitted within 2 years of join date COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating Next COP due in 1 year

35. COP Policy -timeframe Company joins Global Compact COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted N/C flag removed Next COP due in 1 year

36. COP Policy -timeframe Company joins Global Compact COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted N/C flag removed Next COP due in 1 year

37. COP Policy -Timeframe Company joins Global Compact COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted N/C flag removed Company inactive (de- listed) 1 year after classified as Non Communicating Next COP due in 1 year

38. COP Policy -Timeframe Company joins Global Compact COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted N/C flag removed Company inactive (de- listed) 1 year after classified as Non Communicating Next COP due in 1 year COP submitted company re-instated

39. COP Policy -Timeframe Company joins Global Compact COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted N/C flag removed Company inactive (de- listed) 1 year after classified as Non Communicating Next COP due in 1 year COP submitted company re-instated

40. COP Policy -Timeframe Company joins Global Compact Grace Period A 45 day grace period will be granted to companies that contact the Global Contact Office and request an extension. COP submitted within 2 years of join date COP not submitted within 2 years of join date. Company listed as non- communicating COP submitted company listed as active Company inactive (de- listed) 1 year after classified as Non Communicating Next COP due in 1 year COP submitted company re-instated

41. What active, inactive & non-communicating actually means

42. What do I need to do to fulfill the COP requirement? • Step 1) Create an annual Communication on Progress • Step 2)Share the COP with the company’s stakeholders • Step 3)Submit the COP to the Global Compact website.

43. Step 1) Creating an annual Communication on Progress • While there is no single structure for the creation of a COP, a COP must include: • Element 1: A statement of continuing support • Element 2: Description of practical actions: related commitments, policies, systems and activities. • Element 3:Measurement of outcomes: use of the GRI G3 Guidelines is recommended. • Ideally, COPs should be integrated into a company’s existing communication with stakeholders, such as an annual financial or sustainability report. ***A COP is not a communication with the United Nations Global Compact Office.

44. Step 2 ) Sharing the COP with the company’s stakeholders • Companies should use those platforms and channels where their stakeholders would expect to find sustainability information (e.g. websites, direct mailings, employee alerts, open houses) to share their COP.

45. Step 3) Submitting the COP to the Global Compact website • In addition to sharing the COP with stakeholders, companies are expected to post an electronic version (and web link if available) of their COP on the Global Compact website.

46. Hints and Tips

47. Choose your Language • A company’s COP should be created in the language which is most appropriate for the company’s stakeholders.

48. Define the Scope • There is no expectation that small companies will be able to provide as much depth and breadth in their COPs as multinational companies. • There is no expectation that all ten principles will be covered in every COP, nor that all ten principles will be addressed to the same extent.

49. Don’t start from scratch • Your company is likely already doing things in relationship to the ten principles.

50. Be Specific • Don’t try to cover all ten principles with an overarching statement. • Move away from generic statements (e.g., “we have a training program for suppliers”) to more specific descriptions (e.g., “we trained 50 suppliers on how to improve their spill response performance”).