CDP and XBRLMaking sustainabilitys stainabilit disclosure
disclos re mainstream

1st October, XBRL Japan
Ni l Topping,Nigel
TiCIO

Agenda1. Who we are @ CDP
2. Sustainability information to financial markets
3 Why XBRL
3.

CDP• Non-for-profit
international organization• FoundedF
d d iin 2000
• Investor based initiative• > 4000 companies
reporting• 722 investors• = AUM $87 trillion
Global system forcompanies and cities tomeasure,, disclose,,manage and share vitalenvironmental information

Power of information$$$
INFORM
MATIOON$Investors
Client/Supplier
CitiesCitizens

CDP - Programmes“CDP isoff bbusinesswhati tto theth ffuturetih t
the X-ray was to the then-future ofmedicine — without it
it, we would never
have seen the insides of the patient's
health ”
health.

Christiana Figueres
Executive Secretary of the UN
Framework Convention on Climate
5
Change (UNFCCC)CDP – Uses of data
Engaging with companies andincorporating data
Into financial models
INVESTORS

Building
knowledge in
the areas ofmanagement,
accounting, andpolicy

ACADEMICS

Understanding theenvironment inwhich policies aredesignedDISCLOSINGCOMPANIES

CDP
DATA

POLICY ACTORSPROCURINGCOMPANIES

Informing
procurement
decisions

Benchmarking,informing strategy &learning from bestpracticeSustainability & financial markets

Assessment andtransparency of risks acrossthe board helps to prevent
systemict i risks
i k tto th
the global
l b lfinancial ((& economic))
system7

Sustainability & financial markets

β = stock sensitivity to market fluctuation –measures the stock risk
“analysisy of ppotential beta variations led tosustainability impacts of up to ± 10% on thettargett pricei off companies”
i ”“Sustainability really matters for financiallyneedy companies”
companies (EBIT(EBIT<15%)
15%)(Valery Lucas‐Leclin & Sarbjit Nahal, 2007, Sustainability Analysis, Analysts at Societe Generale )8Sustainability & financial markets

9Sustainability & financial markets - climate

10

Sustainability & financial markets - water
Water supply crisis

ImpactMajor systemic
financial failure

MineralResource
SupplyVulnerability

Likelihood

Sustainability & financial markets - water

53% of companies have already suffereddetrimental impacts from water
Sharp rise from 38% in 2011
Reported financial costs as high as $US300 million

68% report exposure to substantive water-relatedriskss s

62% of risks reportedp
to have potentialp
to impactp

within 5 years

Exelon announced the closure of its
Oyster Creek, New Jersey nuclear plant 10years early due to the potential $800
million upgrade cost of meeting more
stringent water permitting conditionsXBRL – where sustainability fits

FiFinancial
i l

Environmental

SocialXBRLFacilitating mash‐up of financial and environmental data ismaded easieri byb using
i same technology
h lforf ESG
SG andd financial
fii l datad13

XBRL – understandable structure

Adoption of xbrl as a standard helps think in a more structured
way about the data architecture
14

XBRL

HHow
tto workk without
ith t mandates?
d t ?
Where xbrl is mandated, adoption happens
automatically!!
i ll !!
Until now,, no mandated use of xbrl forsustainability reporting
S llots
Sot off hhand‐holding
d h ldi iis required!!
i d!!
xbrl and Openp Data – CDP is exploringpg therelease of xbrl tagged climate change data
to the market to drive innovation
15

XBRL – CDP has created a toolkit for regulators
Publicly available: Climate Change disclosure toolkit

An accounting standard

An xbrl taxonomy

A reporting platform

16

xbrl
b l forf sustainabilityt i bilit datad t – an infrastructurei fttforf theth futuref twww.cdp.net | @CDP