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transcript
DJSI 2017 Results WebcastSeptember 2017
Agenda
General Review & Developments 2017 Manjit Jus, Head of Sustainability Application & Operations
Methodology Review & CSA Findings Jacob Messina, Head of Sustainability Investing Research
Q&A
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2017 Methodology
Review DJSI 2017 Review
RobecoSAM CSA: Participation Trend
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Increasing participation of companies in DJSI over the years
Source: RobecoSAM Corporate Sustainability Assessment 1999-2017
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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Companies Participated
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416
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516
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533
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569
656
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729
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818
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864
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942
Companies Participated
Sheet1
Environmental InnovationSelf AssessedCompanies ParticipatedCompany Participation Growth Rate (CAGR 7.69%)
1999188280280
2000154416416
2001579421421
2002635465465
2003255516516
2004450528528
2005523550550
2006667533533
2007519533533
2008553569569
2009743656656
2010693700700
2011714729729
2012761790790
20131013818818
2014983830830
2015981864864
20161119867867
2017942942
0.0659361812
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Regional Breakdown of Participating Companies
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2017 Methodology
Review
195
273
16
267
81
8723 North America Europe Developed
Europe Emerging Markets Asia Pacific Developed
Asia Emerging Markets Latin America
Africa & Middle East
Source: RobecoSAM Corporate Sustainability Assessment 2017
Strongest Growth in Participation
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2017 Methodology
Review
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Peru Greece Russian Federation Mexico
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Participation Growth (percentage)
Source: RobecoSAM Corporate Sustainability Assessment 2016 -2017
Strongest Growth in Participation
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2017 Methodology
Review
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Japan Mexico United States Peru Netherlands
Part
icip
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g Com
pani
esParticipation Growth (absolute)
2016 2017
Source: RobecoSAM Corporate Sustainability Assessment 2016 -2017
Major Developments in 2017
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Methodology
Methodology review of financial materiality of Corporate Sustainability Assessment (CSA) criteria
Industry-based approach to reviewing sustainability topics and trends
Introduction of new criterion Policy Influence, expansion of Impact Measurement & Valuation, furtherdevelopment of Human Rights, new questions for Corporate Governance and Supply Chain Management
Other Developments
Alignment with other global sustainability reporting frameworks such as GRI and SASB
Company Information section normalizing companies data with appropriate denominators, reportingcurrency unified
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2017 Methodology
Review General Remarks
General Remarks
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2017 Methodology
Review
2017 Focus
Reducing the overall number of questions within the questionnaire
Removing questions or criteria no longer of material significance
Introducing new general and industry-specific criteria, to ensure that our assessment continues to raise the bar and challenge companies in their thinking about long-term risks and opportunities
Observations
Companies struggle to provide information for new or updated questions
Solutions
Provide additional clarification on new questions
Use clearer definitions
Better explain our expectations
General Remarks
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2017 Methodology
Review
Data Quality
Consult the information texts each year, and read the question texts carefully to ensure that nothing has changed from one year to the next
Ensure that the provided data meets the definitions provided by RobecoSAM
In case something is not clear, consult the CSA Helpline for clarification
Supporting References
Gradually try to reduce overall number of references while simultaneously providing more public references
Be as specific as possible in terms of page number and sections of the documents
Only provide comments and documents that are relevant for the question
Documents should be provided in a timely manner, within the assessment timeframe and RobecoSAM should be informed in advance if any of documents will be finalized after the deadline
Non-English Documents
The official language of the CSA is English, we rely on translations to verify answers
In cases where we specifically ask for public information, we expect this to be in English, so that it is accessible by all investors globally
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2017 Methodology
Review
New Methodology
Review & CSA Findings
Policy Influence
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This new criterion has been added to ALL industries
Civil society, consumers, and investors are increasingly aware that:
Companies legitimately represent themselves in public discourse
However, excessively high contributions and activities that go against the common good can create risk
Companies are not transparent around the types of contributions that they make
Two questions in the criteria:
Total contributions and other spending
Five largest contributions and expenditures
Benefits:
Recognized leadership for companies with lower reputational and corruption risk through lower spending on policy influence and superior transparency for investors and the public
Policy Influence
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2017 Methodology
Review
What we were looking for:
Disclosure on all types of contributions, except charitable contributions or donations to corporate citizenship activities
This includes:
Lobbying and interest representation
Industry, trade and other business associations
Political candidates, parties and organizations, for campaigns, ballot measures, referendums, etc.
Includes activities with a positive purpose
Observations:
In the CSA, many companies solely reported political contributions
Most companies do not disclose beyond what is legally mandated
Public disclosure extending beyond direct political contributions to trade association memberships, etc is extremely low
Impact Measurement & Valuation
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2017 Methodology
Review
Piloted in 2016, a revised and expanded version was rolled out to all (non-utility) industries in 2017
Increasing in relevance with UNs Sustainable Development Goals
Companies & investors want to understand the externalities inherent in companies business models
3 questions:
Impact Valuation
Monetary, Quantitative/Qualitative, Pilot
Valuation Disclosure
Business Programs for Social Needs
Applicable to 25 industries
Benefits
Evaluating business activities impacts can help companies make better decisions and identify opportunities for innovation, and help investors understand such risks and opportunities
Impact Measurement & Valuation
16Source: RobecoSAM Corporate Sustainability Assessment 2017 Data based on 896 participating companies
Observations
Very few companies have a viable valuation approach in place to measure their impact on society & the environment but companies are beginning to explore new methodologies to do so:
What we were looking for:
Companies measuring outcomes: neither outputs nor input costs
Environmental/social profit loss statements measuring outcomes
Environmental/social return on investment methodologies
Application of existing methodologies such as True Value, TIMM, etc.
Pilot-testing of frameworks like the Natural Capital Protocol
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Asia Pacific EmergingMarkets
Europe NorthAmerica
Global
Pilot project
Quantitative or qualitative impact valuation
Monetary impact valuation
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2017 Methodology
Review
Methodology Changes
Criteria Revised in 2017
Corporate Governance
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This criterion has been revised for ALL industries
New Questions
Average Tenure
Board Industry Experience
Updated Questions
Board Structure
Clarified and aligned the definition of Independence with global best practices (e.g. NYSE Independence Test), tightening independence requirements (as per information provided in the information button)
Scored companies on overall board size as well as the boards level of independence, shown to be closely linked to company performance
Diversity Policy
Updated question to focus on the most critical aspects of diversity
Regional Corporate Governance Performance
19Source: RobecoSAM Corporate Sustainability Assessment 2017 2086 assessed companies
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Africa Asia Pacific Europe Latin America North America
Corporate Governance 2016 Corporate Governance 2017 Board Structure 2016 Board Structure 2017
Supply Chain Management
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This criterion has been revised for ALL relevant industries
Overall focus
Increased focus on risk awareness and risk management measures
New questions on Supplier Code of Conduct and Conflict Minerals (for select industries)
Added critical non-tier one suppliers to the scope of the assessment
Focus on transparency and public reporting
Supply Chain Management
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2017 Methodology
Review
The increased challenge and detail in the new and updated questions led to an overall score decline in each question, resulting in an overall average decline of 11.2 points at the criterion level
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Awareness ESG Integration in SCMStrategy
Risk Exposure Risk Management Measures Transparency & Reporting
2016 2017
Source: RobecoSAM Corporate Sustainability Assessment 2017 2086 assessed companies
Human Rights
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2017 Methodology
Review
RobecoSAM Expectations
Commitments - should be specific and detailed, in line with international standards and clearly extending throughout the supply chain to suppliers, contractors, business partners, etc. Simply encouraging third-parties to act in accordance with the companys own policies is no longer enough: companies should enforce high standards in those areas where they have an impact. Policies should be prepared in accordance with:
The Universal Declaration of Human Rights, The International Covenant on Civil and Political Rights, The International Covenant on Economic, Social and Cultural Rights
Clear requirements for suppliers and business partners Presented in a clear and consistent matter, embedded in one formal policy and referenced in other
policies
Due diligence process needs to clearly include human rights, not just a companys overall risk framework; this due diligence process should be clearly described, not just mentioned
Assessment we expect all companies to have assessed their own operations, at a minimum, for potential human risks, regardless of their region(s) of operations
Disclosure we only accepted disclosure on specific points if minimum requirements were met in the previous questions
Human Rights - Commitment
23Source: RobecoSAM Corporate Sustainability Assessment 2017 942 participating companies
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Commitment according tointernational standards
Commitment covering ownoperations
Commitment covering suppliers Commitment covering partners Commitment outlining actionsand procedures
% answered % accepted
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2017 Methodology
Review Upcoming Webcasts
More Information and Upcoming Webcasts
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Annual Scoring & Methodology Review
Read up on this years major changes: http://www.robecosam.com/images/CSA_2017_Annual_Scoring_Methodology_Review.pdf
Webcasts
Policy Influence and Human Rights Thursday, October 5
Impact Measurement & Valuation and Supply Chain Management Thursday, October 26
Topic TBD* November 9
Topic TBD* November 30
*You can choose the topics to be discussed in the last two webcasts here:
https://www.surveymonkey.com/r/MNHHVD7
Send us your questions in advance!
assessments@robecosam.com
http://www.robecosam.com/images/CSA_2017_Annual_Scoring_Methodology_Review.pdfhttps://www.surveymonkey.com/r/MNHHVD7mailto:assessments@robecosam.com
Potential Topics for Upcoming Webcasts
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Topics include:
Corporate Governance
Materiality
Product Stewardship
Operational Eco-Efficiency
Human Capital Development
Other Updates
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2017 Methodology
Review
Selected percentile rankings at the total and dimension levels will be published on Bloomberg in late September
Benchmarking database is now available to companies with 2017 results through https://assessments.robecosam.com
Leading Practices Database will be available at the end of September
If they have been assessed by RobecoSAM on publicly available information, non-participating companies canalso log in and download their benchmarking scorecard
https://assessments.robecosam.com/
Questions?
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2017 Methodology
Review
Contact us:
RobecoSAM CSA Helpline
+41 44 653 10 30
assessments@robecosam.com
Visit the CSA website:
www.robecosam.com/csa
mailto:assessments@robecosam.comhttp://www.robecosam.com/csa
Disclaimer
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2017 Methodology
Review
No warranty This publication is derived from sources believed to be accurate and reliable, but neither its accuracy nor completeness is guaranteed. The material andinformation in this publication are provided "as is" and without warranties of any kind, either expressed or implied. RobecoSAM AG and its related, affiliated and subsidiarycompanies disclaim all warranties, expressed or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose. Any opinionsand views in this publication reflect the current judgment of the authors and may change without notice. It is each reader's responsibility to evaluate the accuracy,completeness and usefulness of any opinions, advice, services or other information provided in this publication.
Limitation of liability All information contained in this publication is distributed with the understanding that the authors, publishers and distributors are not rendering legal,accounting or other professional advice or opinions on specific facts or matters and accordingly assume no liability whatsoever in connection with its use. In no event shallRobecoSAM AG and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental or consequential damages arising out of the use of anyopinion or information expressly or implicitly contained in this publication.
Copyright Unless otherwise noted, text, images and layout of this publication are the exclusive property of RobecoSAM AG and/or its related, affiliated and subsidiarycompanies and may not be copied or distributed, in whole or in part, without the express written consent of RobecoSAM AG or its related, affiliated and subsidiary companies.
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2017 RobecoSAM AG
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