McKinsey_presentation_IFC麦肯锡工作方法

What are your “pain points” as an ESG practitioner?
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Getting adequate resources, traction and integration internally
Establishing and monitoring metrics to assess impact of program
Company interviews and case studies
▪ 135 interviews across
20 companies
▪ 11 industries ▪ U.S. and Europe ▪ Range of functions: ESG
professionals, human resources, environment, strategy, finance, and investor relations
▪ Examined existing metric
systems
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CFO, Investor, ESG Professional McKinsey Quarterly survey
▪ 238 CFOs and investment
professionals
areas traditionally valued by the market:
– Growth – Return on Capital – Risk Management – Management Quality
▪ Investors and CFOs believe ESG activities create
▪ Gain access to new markets and market share through exposure from ESG programs ▪ Create products to meet unmet social needs and increase differentiation
Reputational risk
▪ Mitigate risks by complying with regulatory requirements, industry standards, and NGO demands
▪ Facilitate uninterrupted operations and entry in new markets using local ESG efforts and community dialogue to engage citizens and reduce local resistance ▪ Secure consistent, long term, and sustainable access to safe, high quality raw materials and products by engaging in community welfare and development
Return on capital
Workforce efficiency
Reputation/Price premium
▪ Enable bottom line cost savings through environmental operations and practices (e.g., energy and water efficiency, less raw materials needed, etc.)
SOURCE: Team analysis
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▪ Tie ESG to value along
4 dimensions typically used by market: growth, return on capital, risk management, management quality
Growth New customers/market share ▪ Use ESG to engage consumers and build knowledge of expectations and behaviors
Innovation
▪ Develop cutting edge technology and innovative products and services for unmet social or environmental needs that could translate to business uses, patents, proprietary knowledge, etc.
value, but are not fully taking it into account
▪ Many companies create real value from ESG
activities, but most do not measure that value, and even fewer communicate the value
▪ 127 ESG professionals and
socially responsible institutional investors through BC CCC
▪ Range of industries
and regions
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activities
– Develop more sophisticated
metrics to capture the financial value
– Build better tools and methods to
communicate that value to internal and external stakeholders
Research methodology
Initiative white paper, with analysis of ESG measurement issues and recommendations
▪ Examination of ESG
programs today, the challenge of measuring value, and methods for assessing and communicating value
▪ There is a real opportunity for ESG professionals
to fill this gap
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Key findings
▪ ESG activities create value along the four
Meeting the demands of existing metric systems
Getting recognition from the market for effective ESG
▪ Develop 10 best practices
for designing strategic ESG programs
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DRAFT
BCCCC Presentation March 2009
CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited
Objectives of the research
▪ Focus on financial link between ESG
activities and financial value creation
▪ Develop understanding of what it
takes to:
– Create value through ESG
▪ Reduce costs generated by employee attraction and turnover by using ESG to build morale ▪ Develop employees’ skills and increase productivity through participation in ESG activities
Reputation/differentiation ▪ Foster brand loyalty, reputation and goodwill with stakeholders by engaging with them on ESG programs
Operational efficiency
▪ Avoid negative publicity and boycotts by addressing ESG issues
Management quality
Leadership development Adaptability Long term strategic view
▪ Develop leadership skills and improve employee quality through ESG participation ▪ Build ability to adapt to changing political and social situations by engaging local communities ▪ Develop long term strategy encompassing ESG issues
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Valuing Corporate Social Responsibility and Sustainability
Framework for linking ESG activities to Value Creation
CSR creates value along 4 business dimensions
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ILLUSTRATIVE
New markets New products
▪ Develop reputation on ESG that garners customers’ willingness to pay price increase or premium
Regulatory risk
wk.baidu.com
Risk management
License to operate
Supply chain/security of supply