Friday, June 22, 2012

On track for Rio + 20: EIRIS's take

In a lively presentation at the Canadian Responsible Investment Conference Wednesday, Lisa Hayles of EIRIS reviewed their latest report, On Track for Rio + 20 How are global companies responding to sustainability?. The report analyses the sustainability performance of 50 of the world's largest companies by market capitalization.

At the top of the list is Puma. No surprise given the accolades the company has received for its ground breaking environmental profit and loss reporting. (Remember that the next time you go out to buy a pair of casual or athletic shoes.) A number of pharmaceutical companies were highly ranked, and Ms. Hayles explained that this was due to fact that the ratings assigned weight to the product that is made, and big pharma does deliver a range of health providing and disease fighting products.
While Ms. Hayles went through some of the data and methodology quite carefully with us, the sustainability ratings themselves are intended to be simple. The ratings provide a complete picture of corporate sustainability performance, expressed on a clear A-E Scale, and combine EIRIS' assessment of a company’s sustainability impacts with analysis of management response to ESG risks.

Ms. Hayles also discussed two new initiatives EIRIS is supporting at RIO+20, the Natural Capital Declaration (NCD) and the Corporate Sustainability Reporting Coalition (CSRC).

The NCD is a declaration by the financial sector demonstrating their commitment at the Rio+ 20 Earth Summit to work towards integrating Natural Capital considerations into financial products and services. The 39 banks, investors and insurers who now back the Natural Capital Declaration joined forces with more than 50 countries including Botswana, the Philippines, South Africa and the United Kingdom, as well as corporations such as Unilever, Puma, Dow Chemical and Mars Incorporated, to make a collective call for natural capital valuation and accounting.

The CSCR is urging all nations at Rio+20 to commit to develop an international policy framework fostering the development of national measures requiring, on a report or explain basis, the integration of material sustainability issues within the corporate reporting cycle of all listed and large private companies. In a wonderful example of how companies are always a mix of the good, the bad and the ugly, the sponsor of the CSCR is Aviva, who recently got into a spot of trouble over executive compensation.
We’ll have more on these two initiatives as developments unfold.

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