ESG Data – from CSR reporting to investment analysis and decision making

Tamara Hardegger, Product Manager ESG – ASSET4Thomson Reuters

tamara.hardegger@thomsonreuters.com www.asset4.com

About Me

• Background – MA, Intl Studies, Geneva.

– CSR Cert of Adv Studies

• Thomson Reuters– 2008: Account Manager, IM &

Corporates, Geneva

– 2010: ESG Specialist, London

– 2012: Product Manager ESG (for former ASSET4 company)

Thomson Reuters Corp (TRI.N)

• “Leading source of intelligent information” – B2B, largely subscription based and via electronic media

– Financial, legal, accounting, IP & sciences news

• Financial & Risk (7.4 bn $, 55%) provides investors and companies with trading, investment and risk mgmt data and news.

• In Nov `09, Thomson Reuters aquires ESG information and analytics provider ASSET4.

Our ESG Data collection

4

Annual Reports

CSRReports

CompanyWebsites

NewsSources

NGOWebsites

Stock Exchange Filings

Publicly sourced and standardized ESG Data on 4000 companies

Our 130 analysts scan and filter public information, standardizing it and filling in over 750 data points, which are calculated into 250 relative KPIs

Data Framework

Economic Environmental SocialCorporate

GovernancePillars

Client Loyalty

Performance

Shareholders Loyalty

Resource Reduction

Emission Reduction

Product Innovation

Employment Quality

Health & Safety

Training & Develop.

Diversity

Human Rights

Community

Product Responsibility

Board Structure

Compensation Policy

Board Functions

Shareholders Rights

Vision and Strategy

Categories

Overall Company overview

Link to public data sources (Raw Data)

Indicators 250 indicators (calculated from data point values)

Default Data Structure

> 750 data pointsDataPoints

Examples

• Percentage of women managers

• Shareholder Rights Policy compliance

• The total compensation package of the senior executive.

• Total CO2 and CO2 equivalents emission in tonnes

• Total direct and indirect energy consumption in gigajoules.

• Number of full- and part-time employees.

• Percentage of women employees.

• Total salaries and benefit expenses (staff cost).

• Research and development costs.

• Does the company make donations in cash or in kind?

• Total training costs from all the training performed by all employees.

Challenges

• Reporting Standards: No mandatory standards yet, slowly emerging

• Data availability: Offer & Demand not in line

• Sustainability Ratings: How to measure sustainability? Which indicators to choose?

My day job: Integrating ESG DATA

How to make ESG data accessible and interesting for ten-thousands of mainstream Investment Management users of our financial information platforms?

My day job: Integrating ESG Data

How to make ESG data accessible and interesting for ten-thousands of mainstream Investment Management users of our financial information platforms?

How is ESG data used and integrated? Example of typical IM workflow

Viewing, analysing and configuring indicators and screens (ratings)

Company ESG view (model)

Sector Comparison

13

Sector Comparison

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Charting

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Source: Thomson Reuters Datastream

Percentage Annual Change in Pharmaceutical Company Water Use

2006 2007 2008 2009 2010-10

-5

0

5

10

15

20

% C

hang

e in

Wat

er U

se

-10

-5

0

5

10

15

20

2006 2007 2008 2009 20100

100

200

300

400

500x 1,000,000

Tota

l Wat

er U

se in

m3

0

100

200

300

400

500x 1,000,000

1Y % change of BAYER - Total Water Use1Y % change of GLAXOSMITHKLINE - Total Water Use1Y % change of ABOTT LABS. (LON) - Total Water Use1Y % change of NOVARTIS 'R' - Total Water Use

Women in the workplace

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Women in the workplace

• We are starting to have enough data history only now.

• Result: Companies are doing more to track and quantify the number of women they employ. Progress is slow, but in the right direction. European companies disclose more but perform worse than their US counterparts.

• Companies with > 20% women outperform!

• Ebook: http://updates.thomsonreuters.com/ebook/#0