Hedstrom Associates

Sustainability Benchmarking:

How do we stack up?

ABC Company

June 2019

How are companies sharing the Scorecard results internally – especially with senior

executives?

This “Pitch Deck” builds on examples companies have provided to date…

If you would like a PPT version of this, just ask Gib.

Example “PITCH DECK”

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Hedstrom Associates

Background & Benefits Confidential ESG Benchmarking

• Helps us align internally re ESG

• Benchmark with:

‒ Cross-industry peers & industry leaders

‒ ~70 Fortune 500 companies and growing

‒ Our industry sector/sub-sector

• Easy to use; fast; powerful graphics

A well-established, proven tool

• C-suite and board-focused

• 20-years of development

‒ 2015: Pilot with 25 major companies

‒ 2018: 60 “founding” participants (F-500)

‒ 2019: Official launch

• Rating system and criteria have been vetted by >80 companies

Why Bother?

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Hedstrom Associates

Benchmark Companies

3M

Air Products

Altria

Ashland

Bristol-Myers Squibb

Campbell Soup

Chemours

Chevron Phillips Chemical

Cisco

Coca-Cola

Con Edison

Danaher

DTE Energy

Eastman

Ecolab

Fluor

Ingersoll Rand

Kaiser Permanente

Kohler

Marriott

Medtronic

Merck

Novelis

PPG

PSEG

Sempra Energy

Stanley Black & Decker

Xerox

Founding Participating

Companies by Sector

• Energy (2)

• Materials (11)

‒ Chemicals (9)

‒ Metals (2)

• Industrials (12)

‒ Capital Goods (6)

‒ Transport & Services (6)

• Consumer Discretionary (5)

• Consumer Staples (6)

• Healthcare (8)

‒ Equipment (4)

‒ Pharmaceuticals (4)

• Financials (1)

• Information Technology (6)

• Telecom (1)

• Utilities (8)

Founding Participants

by Industry Sector

For current list of participating companies, visit

https://thesustainabilityscorecard.com/user/participants/

Selected Participating Companies

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Hedstrom Associates

How do we stack-up - Overall? Summary “Bubble Chart”

30,000 Foot Summary

A Tough Rating Scale

Note: this is the highest level summary (“30,000 foot”)

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Hedstrom Associates

20,000 Foot Summary: Strategy Section

How do we stack-up – Strategy How we rated ourselves

• 4 Sections ‒ Governance

‒ Strategy (shown at right)

‒ Environment

‒ Social

• 17 elements; ~140 KSIs

Note: this is the second level summary (“20,000 foot”)

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Hedstrom Associates

20,000 Foot Summary: Strategy Section

How we stack up vs. peers

• Rainbow Charts (prior

slide) = how we rate

ourselves

• Bar Charts (right) = how we

stack-up vs. our peers

• Bar Chart Comparisons: ‒ All companies

‒ Our industry sector

‒ Our industry sub-sector

• Four levels of Detail: ‒ Overall rating

‒ Rating by Section (e.g., Strategy)

‒ Rating by Element (17)

‒ Rating by KSI (~140)

How do we stack-up – Strategy

Note: this is the second level summary (“20,000 foot”)

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Hedstrom Associates

10,000 Foot Summary: Strategic Planning Element

How we stack up vs. peers

• Compare our company to: ‒ All companies

‒ Our industry sector

‒ Our industry sub-sector

• Four levels of detail: ‒ Overall rating

‒ Rating by Section

Governance

Strategy

Environment

Social

‒ Rating by Element (e.g., for Strategy)

Strategic Planning (shown )

Innovation, R&D

Customers & Markets

Products, Services & Solutions

‒ Rating by KSI (~140)

How do we stack-up – Strategic Planning

Note: this is the third level summary (“10,000 foot”)

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Hedstrom Associates

KSIs we marked as “Highly Relevant” (to our company /industry)

Areas to

Focus on

– with

additional

resources

Our Key Improvement Priorities How we selected:

• ~145 KSIs

• We flagged ~10-15%

of KSIs as “Highly

Relevant”

• This resulted in our

initial “top 9”

• Just a first draft; easy

to change

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Hedstrom Associates

KSIs we marked as “Highly Relevant” (to our company /industry)

Our Key Improvement Priorities A deeper dive…

• Our “Top 9” priorities

• Selected across: ‒ Governance

‒ Strategy

‒ Environment

‒ Social

• Assessed “Top 9” ‒ Impact on business

‒ Ability to get done

• Simple to change

LEGEND = Governance = Strategy = Environment = Social

Imp

ac

t o

n V

alu

e

Cre

ati

on

H

igh

er

Lo

we

r

Ability to Influence Higher Lower

Speeches on

“S” by CEO &

C-suite Execs

Board of Directors’

Sources of ‘S’

Learning

Interaction with

Investors on ‘S’

Linkage b/w

Sustainability

& Innovation

Accounting for Most

Material Externalities

(e.g., Carbon

Engaging on Most Material

Issues Across Supply Chain Energy Purchased

– Scope 2

Materials Sourced

– Human Made

‘S’ in

Recruitment &

Retention

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Hedstrom Associates

Rating Criteria

Stage 1: Engage on an issue in own

operations to gain visible PR

Stage 2: Engage on most material

issue(s) in own operations

Stage 3: Engage on most material

issue(s) across full supply chain

Stage 4: Engage on most material

issues across full supply chain, with

focus on opportunity

#4: Engaging on Most Material Issues Across Supply Chain

Priority KSIs (Highly Relevant and we Scored < Stage 2.5)

Note: this is the fourth (lowest) level summary (“ground level”)

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Hedstrom Associates

Example Best Practices

Brasil Foods (Brazil) engages with

stakeholders to predict material sustainability

issues. Read More

BT committed that by 2020 the company will

help customers reduce their carbon emissions

by three times the end-to-end carbon impact of

BT’s business. Read More

Ingersoll Rand provides an Energy Efficiency

Leader Award to companies implementing

sustainability best practices. Read More

Reliance Industries (India) has eight key

stakeholder groups, each with an action plan.

Read More

Veja, a French shoe maker, won The

Guardian’s Sustainable Practices Award in the

Supply Chain category for “the fully integrated

approach to supply chain and sustainability.”

Read More

#4: Engaging on Most Material Issues Across Supply Chain

Priority KSIs (Highly Relevant and we Scored < Stage 2.5)

Note: Over 400 industry “best practices” are

embedded in the Scorecard.

Note: this is the fourth (lowest) level summary (“ground level”)

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Hedstrom Associates

NEXT STEPS

We will continue to build and improve this example

“Pitch Deck” based on your input.

Please send along any ideas re how to take the results of

your Company Self-Assessment (Scorecard) and share

the key messages internally with senior executives

Gib Hedstrom

gib@hedstromassociates.com

http://thesustainabilityscorecard.com/

Thank You!