@GRIAusConf_The stakeholder View: How reports are read and used - Amanda Dobbie

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The Stakeholder View –How reports are read and used.

Chair: Lena Geraghty, Network Manager, Focal Point Australia, Global Reporting Initiative

Dr Leeora Black, Managing Director, Australian Centre for Corporate Social Responsibility Peter Colley, National Research Director, Construction, Forestry, Mining and Energy UnionAmanda Dobbie, General Manager, Bloomberg Australia and New ZealandNicola Hayhoe, Executive Leader of Policy, Research and Communications, Ability OptionsBastien Mignonneau, Consultant, Banarra

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GRI AUSTRALIA +

BLOOMBERG

3// 27 // 2012

BLOOMBERG L.P.

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TABLE OF CONTENTS

1. How Bloomberg collects and analyses ESG data

2. What information do investors require?

3. How Bloomberg presents this information

4. How investors use this information in their decision making process

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HOW DOES BLOOMBERG COLLECT DATA>>>>>>>>>>>>>>

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ESG GEOGRAPHIC COVERAGE

All rights reserved, Bloomberg Professional Service

Coverage increased 3,500 to 5,000 from 2009 to 2012ESG data for 319 companies are available in Australia

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DATA COLLECTION OVERVIEWBloomberg collects ESG data from publicly available information, such as CSR reports, Sustainability reports and Annual reports

Look for CSR reports on company website

Upload reports on Bloomberg terminal

Take relevant ESG data and display it on Bloomberg terminal

>>>>>>>>>>>>>>

WHAT DO INVESTORS REQUIRE

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ESG USER & DATA ANALYSIS

NO. OF UNIQUE USERS INCREASED BY 48% SINCE 09-2010

NO. OF FIELDS USED INCREASED BY 150% SINCE 09-2010

Consistent growth in unique users and ESG data in the last 3 quarters

Sep-Oct 2010 Nov-Dec 2010

Jan-Feb 2011 Mar-Apr 2011

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000No. of Fields Used

No. of Field Used

Source: Bloomberg Professional Service

Sep-O

ct 2

010

Nov-D

ec 2

010

Jan-

Feb 2

011

Mar

-Apr

201

1

May

-Jun

e 20

11

July-

Aug 2

011

Oct-N

ov 2

011

0

500

1000

1500

2000

2500

3000

NO. of ESG Users

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ESG USERSAustralia is the 7th largest ESG population in the world.

Source: Bloomberg Professional Service

Others

Denmark

South Africa

Spain

Brazil

Taiwan

Netherlands

South Korea

Italy

India

China

Singapore

Germany

Hong Kong

Australia

France

Canada

Japan

Switzerland

England

United States

15%

1%

1%

1%

1%

1%

1%

1%

2%

2%

2%

3%

3%

3%

3%

4%

4%

4%

4%

11%

30%

Germany; 22.1%

United States; 17.6%

England; 16.4%Netherlands; 7.8%

Canada; 5.1%

Switzerland; 4.2%Denmark; 3.8%China; 3.0%

Russia; 3.0%France; 2.3%

Japan; 2.2%

Aus-tralia; 1.7%

Aus-tria;

1.7%

Italy; 1.4%

Lithuania;

1.2%Other; 6.7%

Global ESG data HITs

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USERS BY ASSET CLASS, INDUSTRY, POSITION

Source: Bloomberg Professional Service

Investment Advisors/Money MgrsUniversitiesBroker Dealers - RegionalBroker Dealers - GlobalCorporationsHedge FundsBanks - RegionalInsurance CompaniesPension Fundsother

AnalystPMOtherTraderRiskSalespersonTreasuryExecutive OfficerOther

Equity

Fixed Income

Other

Over The Counter

Foreign Exchange

Commodity

Other

GLOBAL AUSTRALIA

In Australia, largest ESG users are Equity Analyst in Investment Advisors/Money Managers. It is the same trend as Global ESG Users.

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MOST USED ESG DATAMost widely used fields are Governance

Fields both globally and in Australia. CDP data is second largest use in Australia.Top Global - Most Used ESG Data

1 Size of the Board

2 % Women on Board

3 ESG Disclosure Score

4 Board Average Age

5 % Women in Management

6 Governance Disclosure Score

7 Social Disclosure Score

8 Environmental Disclosure Score

9 % Independent Directors

10 UN Global Compact Signatory

*As of 12/02/2011

Source: Bloomberg Professional Service

Top Australia - Most Used ESG Data1 ESG Disclosure Score

2 Size of the Board

3 % Independent Directors

4 Number of Board Meetings for the Year

5 Fair Remuneration Policy

6 Business Ethics Policy

7 Board Meeting Attendance %

8 CEO Duality

9 Number of Independent Directors

10 UN Global Compact Signatory

*As of 12/02/2011

Global Australia0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

22%17%

18%

17%

32%

25%

15%

17%

8%

4%

1%

0%

4%

20% CDP

Industry Specific

Ratio

Disclosure

Governance

Social

Environmental

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HOW DOES BLOOMBERG PRESENT DATA

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ESG DATA DISPLAYOver 220 ESG data is displayed in the same template as fundamentals data so that traditional investors and analysts find useful

All rights reserved, Bloomberg Professional Service

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ESG DATA TRANSPARENCYData Transparency to company sourced documents provides consistent presentation of new data sets, thus creating comfort and acceptance of those unfamiliar with ESG factors.

All rights reserved, Bloomberg Professional Service

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ESG RATIOBloomberg is structured to collect and normalise disparate data sets. This helps investors to do peer analysis.

All rights reserved, Bloomberg Professional Service

>>>>>>>>>>>>>>

HOW DO INVESTORS USE THIS INFORMATION

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ESG PEER ANALYSIS Investors can compare a company against its peers on “Efficiency”. For example, GHG emission per sales rather than absolute emissions.

All rights reserved, Bloomberg Professional Service

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Carbon Analysis Tool Carbon Analysis Tool

SCREENING SAMPLE» Negative Screening to screen out

companies in Tobacco industry

» Select market/exchange/index

» Take companies with good ESG disclosure

SCORING SAMPLE» Decrease on GHG intensity per

sales: Lower is better

» Current Dividend Yield: Higher is better

» % Independent Directors: Higher is better

ESG INVESTMENT STRATEGY

All rights reserved, Bloomberg Professional Service

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Bloomberg analytics enable users to screen companies to determine universe. And then investors can score companies based on criteria as you like and pick stocks from the top score.

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SCREENING RESULTSBloomberg analytics allows users to create ESG Rating. The results show the final rating as well as ESG performance in criteria for selected universe.

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PORTFOLIO ANALYSISAfter selecting stocks in analytical tools, investors can construct a portfolio to check if it performs better than benchmark.

DJ Sustainability World

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PORTFOLIO ANALYSISAdditionally, users can check heat map of any indicators including ESG to see which industry negatively affects performance on greenhouse gas intensity relative to benchmark.

DJ Sustainability World

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ESG VALUATION MODEL

Source: Bloomberg Professional Service

Investors can now assess how material ESG factors are on profitability and how ESG is related to financial profit and loss to the company’s EBIT.

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SUPPLY CHAIN RISKBloomberg can track suppliers and suppliers’ supplier and check how dependent each other.

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BLOOMBERG INDUSTRYBloomberg Industry provides industry insights on ESG. One example below shows the correlation between long-term share value and corporate governance performance.

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