FSA Credential Level I Study Guide - Part III PDF

PART III FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS WHAT IS USEFUL SUSTAINABILITY- RELATED FINANCIAL INFORMATION? LEARNING OBJECTIVE(S) COVERED IN THIS CHAPTER:...

PART III FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS WHAT IS USEFUL SUSTAINABILITY- RELATED FINANCIAL INFORMATION? LEARNING OBJECTIVE(S) COVERED IN THIS CHAPTER: 7 RECALL [Without standards] there would be no consistency, no comparability, little transparency and a lack of trust in the information, which would lead to higher costs of capital and increased risks for investors.’ COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 91 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS value chain COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 92 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 9.3.1. COMPREHENSIVE INFORMATION 9.3.2. INTERNATIONAL APPLICABILITY 9.3.2.1. GAAP agnostic: reporting entity COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 93 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 9.3.2.2. Globally relevant metrics 9.3.3. INTEROPERABLE WITH JURISDICTIONAL REQUIREMENTS AND MULTI- STAKEHOLDER REPORTING COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 94 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Figure 13—The IFRS Sustainability Disclosure Standards provide a global baseline 9.4.1. INDUSTRY-SPECIFIC COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 95 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS transition risk physical risk INDUSTRY DISCLOSURE TOPIC METRIC (1) Total energy consumed by portfolio area with data coverage, (2) percentage grid electricity and (3) percent- Real Estate Energy Management age renewable, by property sector (Gigajoules (GJ), Percentage (%)) (1) Total water withdrawn, (2) total water Meat, Poultry & consumed; percentage of each in regions with High or Water Management Dairy Extremely High Baseline Water Stress (Thousand cubic metres (m³), Percentage (%)) Gross global Scope 1 emissions, percentage methane, Oil & Gas Reserves Valuation & percentage covered under emissions-limiting regulations - Midstream Capital Expenditures (Metric tons (t) CO 2-e, Percentage (%)) Electric Utilities GHG Emissions & Greenhouse gas (GHG) emissions associated with & Power Energy Resource power deliveries (Metric tons (t) CO 2-e) Generators Planning Fuel Economy & Automobiles Use-phase Emissions by region (Mpg, L/km, gCO2/km, km/L) Incorporation of Amount of assets under management, by asset class, Asset Management ESG Factors in that employ (1) integration of environmental, social, and & Custody Activities Management and governance (ESG) issues, (2) sustainability themed Advisory investing and (3) screening (presentation currency) 9.4.2. COST-EFFECTIVE COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 96 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 9.5.1. QUALITATIVE CHARACTERISTICS OF USEFUL SUSTAINABILITY-RELATED FINANCIAL INFORMATION Relevance: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 97 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS complete Neutral accurate COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 98 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS estimation uncertainty Comparability: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 99 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Timeliness: SECTOR: RESOURCE TRANSFORMATION INDUSTRY: CHEMICALS TOPIC: GREENHOUSE GAS EMISSIONS ‘Proposed and existing ‘Continuous improvement ‘Gross global Scope 1 emis- governmental laws and regu- - sions: 411,079 MT CO2e. In 2019, lations relating to greenhouse facturing facilities along with we reduced our greenhouse gas gas and other air emissions may manufacturing of products that emissions on an intensity basis subject certain of our operations by 15% from our 2015 baseline, incremental to [ensure access to exceeding our goal to achieve a costs and restrictions on their affordable, reliable, sustainable 10% reduction one year early… operations and may reduce sales and modern energy for all]. We, The key drivers for our emissions of our products.’158 at FFC, are continuously striving reductions are renewable elec- tricity purchases in Europe and by continuously upgrading our plants. Our target of reducing Because we use less water in 2% energy consumption by 2020 our operations, we also use less from 2014 level demonstrates energy, reducing our greenhouse gas emissions.’160 and reduction in associated GHG emissions.’159 COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 100 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 7 RECALL ? JUMP TO ANSWERS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 101 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS THE IFRS SUSTAINABILITY DISCLOSURE STANDARDS LEARNING OBJECTIVE(S) COVERED IN THIS CHAPTER: 8 RECALL 10 DISCERN COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 102 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Governance Strategy Risk management COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 103 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Metrics and targets 10.2.1. FAIR PRESENTATION fair presentation COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 104 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 10.2.2. MATERIALITY 10.2.3. REPORTING ENTITY report- ing entity COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 105 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 10.2.4. CONNECTED INFORMATION COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 106 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 10.3.1. SOURCES OF GUIDANCE sources of guidance COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 107 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Figure 15—Required and optional sources of guidance 10.3.1.1. Required sources of guidance: the SASB Standards 10.3.1.1.1. Structure of the SASB Standards COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 108 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Figure 16—Structure of SASB Standards EXAMPLES SECTORS Health Care Sectors and Industries are based on SASB’s Sustainable Industry Biotechnology & (SICS) ®. INDUSTRIES Pharmaceuticals SUSTAINABILITY Social Capital DIMENSIONS GENERAL ISSUE Customer Welfare CATEGORIES DISCLOSURE Counterfeit Drugs TOPICS HC-BP-260a.1: HC-BP-260a.2: HC-BP-260a.3: Description of methods Discussion of process Number of actions METRICS and technologies used for alerting customers that led to raids, to maintain traceability and business partners seizure, arrests, and/ of products throughout of potential or known the supply chain and risks associated with charges related to prevent counterfeiting counterfeit products counterfeit products 10.3.1.1.2. Components of a SASB Standards COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 109 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Figure 17—Components of a SASB Standard 1. INDUSTRY DESCRIPTIONS 2. DISCLOSURE TOPICS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 110 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Figure 18—Financial drivers linked to disclosure topics COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 111 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS 3. METRICS 4. TECHNICAL PROTOCOLS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 112 FSA CREDENTIAL LEVEL I STUDY GUIDE PART I: THE NEED FOR SUSTAINABILITY ACCOUNTING STANDARDS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 113 FSA CREDENTIAL LEVEL I STUDY GUIDE PART I: THE NEED FOR SUSTAINABILITY ACCOUNTING STANDARDS Industry practice: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 114 FSA CREDENTIAL LEVEL I STUDY GUIDE PART I: THE NEED FOR SUSTAINABILITY ACCOUNTING STANDARDS 8 RECALL 10 DISCERN ? JUMP TO ANSWERS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 115 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM SETTING IFRS SUSTAINABILITY DISCLOSURE STANDARDS LEARNING OBJECTIVE(S) COVERED IN THIS CHAPTER: 9 RECOGNIZE Figure 19—Structure of the IFRS Foundation COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 116 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM The IFRS Foundation Trustees The IFRS Foundation Monitoring Board As of 2023, members of the Monitoring Board include: the Board of the International Organization of Securities Commissions (IOSCO); the IOSCO Growth and Emerging Markets Committee; the Financial Services Agency of Japan (JFSA); the European Commission; the US Securities and Exchange Commission (SEC); the Comissão de Valores Mobiliários (CVM) of Brazil; the Financial Services Commission (FSC) of Korea; the Ministry of Finance of the People’s Republic of China; the Financial Conduct Authority (FCA) of the United Kingdom; and (observer) the Basel Committee on Banking Supervision. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 117 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM 11.2.1. THE BRIEF BUT IMPORTANT ROLE OF THE TECHNICAL READINESS WORKING GROUP COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 118 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM 11.2.2. THE ISSB STANDARD-SETTING PROCESS exposure drafts Research and project screening: Proposing a new standard or update to an existing standard: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 119 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM Redeliberation and publication: effects analysis Post-implementation review: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 120 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM Figure 20—The ISSB standard-setting process 11.2.2.1. Due process principles Transparency: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 121 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM Full and fair consultation: Accountability: basis for conclusions 11.2.2.2. Informed by experts Table 4—Example IFRS Foundation Standards advisory groups IFRS Advisory Council COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 122 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM 11.3.1. THE INITIAL DEVELOPMENT OF THE SASB STANDARDS additional provisional standards 11.3.1.1. Evidence of interest Financial impacts and risk: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 123 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM Legal, regulatory, and policy drivers: Industry norms and competitiveness: Stakeholder concerns and social trends: Opportunities for innovation: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 124 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM 11.3.1.2. Identifying metrics Determining scope and high-level objectives: Developing recommendations: COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 125 FSA CREDENTIAL LEVEL I STUDY GUIDE PART II: THE SUSTAINABILITY INFORMATION ECOSYSTEM Soliciting public consultation and feedback: This chapter contains information related to the following Learning Objective(s): 9 RECOGNIZE ? JUMP TO ANSWERS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 126 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS HOW COMPANIES DISCLOSE SUSTAINABILITY- RELATED FINANCIAL INFORMATION LEARNING OBJECTIVE(S) COVERED IN THIS CHAPTER: 11 DIFFERENTIATE COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 127 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS State Street Corporation | A US-based company operating in the Asset Management & Custody Activities industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 128 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS AGL Energy Ltd., An Australia-based company operating in the Electric Utilities & Power Generators and the Gas Utilities & Distributors industries. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 129 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Fauji Fertilizer Company (FFC), A Pakistan-based company operating in the Chemicals industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 130 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Key Takeaways Etsy, Inc., Form 10-K A US-based company operating in the E-commerce industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 131 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Vornado Realty Trust, Form 8-K A US-based company operating in the Real Estate industry. Item 7.01. Regulation FD Disclosure. On April 6, 2020, Vornado Realty Trust (the “Company”), the general partner of Vornado Realty L.P., issued a press release announcing that the Company released its 2019 Environmental, Social and Governance (“ESG”) report. The ESG report is posted on the Company’s website under the “Sustainability” page. The press release and the ESG report are attached as Exhibit 99.1 and 99.2, respectively, to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure. as amended, or the Exchange Act. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The following exhibits are being furnished as part of this Current Report on Form 8-K: 99.1 Vornado Realty Trust Press Release dated April 6, 2020 99.2 2019 ESG report COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 132 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Tokyo Electric Power Company (TEPCO), A Japan-based company operating in the Electric Utilities & Power Generators industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 133 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Roxgold, Bringing Back the Forests As part of Roxgold’s biodiversity program, we’ve expanded our reforestation efforts. In 2019, we helped plant more than 15,000 trees in the area surrounding the Yaramoko mine, surpassing our initial goal of 10,000. We also fenced and reforested one hectare of land adjacent to Bagassi Secondary School, and distributed 300 fences in an effort to protect trees in particularly vulnerable areas. Our 2019 activities brought the total number of trees planted to more 100,000 since 2014. Through a partnership between Roxgold and the Provincial Service of Environment, we monitor the success rate of the program, and the last evaluation conducted in December 2019 found that 91% of trees planted had survived. Priority Topics and Associated Metrics Unit 2019 2018 2017 SASB Metric Waste disposal: stored m 619 519.4 Total weight of tailings waste dmt 466,157 266,599 Percentage of tailings recycled % 0 0 0 Total weight of mineral processing waste t 617,133 Percentage recycled of mineral processing waste % 74 57 51 A Canada-based company operating in the Metals & Mining industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Jabil, A US-based company operating in the Electronic Manufacturing & Original Design Manufacturing industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 135 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS European Investment Bank (EIB), A Luxembourg-based company operating in the Investment Banking & Brokerage industry. EIB 2019 Sustainability Disclosures in accordance with SASB Framework (Sustainability Accounting Standards Board) SASB Accounting Metrics Employee diversity and inclusion Metric: FN-IB-330a.1 I EIB gender representation by employee category (%) 2019 2018 2017 Female Male Female Male Female Male Managers 29.7 70.3 29.1 70.9 27.4 72.6 Executive Staff 43.2 56.8 42.2 57.8 40.8 59.2 Support Staff 87.6 12.4 85.8 14.2 85.7 14.3 Local Agents 51.9 48.1 55.0 45.0 50.0 50.0 Incorporation of ESG factors in investment banking and brokerage activities Metric: FN-IB-410a.2 E ESG integration 100% of EIB investments incorporate environmental, social and governance (ESG) factors. Total investment in 2019 amounted to EUR 63.3 billion. For a breakdown by sector, please see FN-IB-000.B. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 136 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS General Motors (GM), A US-based company operating in the Automobiles industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 137 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Key Takeaways COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 138 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Grupo Arcor (Arcor Group), An Argentina-based company operating in the Processed Foods, Agricultural Products and Containers & Packaging industries. Reporting Across Languages While the referenced Grupo Arcor report is in English, like many companies with global investors and non-investor stakeholders, it publishes re- ports in multiple languages. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 139 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS AGL Energy Ltd., Previously mentioned: An Australia-based company operating in the Electric Utilities & Power Generators and the Gas Utilities & Distributors industries. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Alcon, Our Story About This Report Benefiting Customers Caring for Our Winning in the Working With Integrity ESG Content Indices 38 & Patients Environment Workplace Performance Data Critical Materials Leveraging supplier diversity results to meet internal and external goals Measuring success based on quarterly and annual metrics for supplier diversity HC-MS-430a.3 We seek to partner with suppliers in the following categories: Most critical materials and production processes used in the manufacture of Alcon’s Women-Owned Business Enterprises (WBE) products are, where possible, dual sourced. Alcon maintains an ongoing risk mitigation project team to manage the risks in our supply chain of critical materials. We conduct Minority-Owned Business Enterprises (MBE) business with a wide range of suppliers, and our manufacturing operations are not Veteran-Owned Business Enterprises (VBE) overly dependent on a single supplier, except where intellectual property and/or other Small Business Enterprises (SBE) exclusivity agreements exists. Our annual spend with the largest direct material supplier Lesbian/Gay/Bisexual/Transgender-Owned Enterprises (LGBTE) to Alcon accounts for less than 4% of our total annual direct material expenditure. As a member of the Dallas Fort Worth (DFW) Minority Supplier Development We seek to understand the origin of the materials that go into our products, and we Council and the Women’s Business Council Southwest, Alcon participates in have adopted a formal Conflict Minerals policy, which we communicate to and enforce various outreach activities to support our supplier diversity goals and objectives. with our suppliers. This policy describes our commitment to compliance with conflict These outreach activities provide an opportunity to promote innovation minerals requirements, supplier due diligence, and ongoing supply chain evaluation. through the introduction of new products, services, and solutions, as well as to collaborate on industry best practices. Annually, we establish and document our process to evaluate our products, in order to identify and assess the presence and sources of conflict minerals in the supply chain. Our Conflict Minerals Core Team uses standardized documentation to capture data, key decisions, and processes and procedures related to the use and sources of Our Results conflict minerals in our products. We retain such documentation in accordance with our corporate document retention policy. On May 29, 2020, we published our first Conflict We track our spending on diverse suppliers to measure our impact on diverse Minerals Report as a standalone company. and small business enterprises. In 2019, Alcon spent 12% of our US supplier spend on qualified diverse suppliers. As we move forward, we are improving our due diligence process by increasing supplier responses to our Reasonable Country of Origin Inquiry (RCOI) in terms of 2019 DIVERSE SUPPLIER SPEND accuracy, timeliness, and completeness. Diverse Supplier Category 2019 Supply Chain Management Percentage of (1) entity's facilities and (2) Tier ESG Performance Data HC-MS-430a.1 I suppliers’ facilities participating in third-party audit programs for manufacturing and product Supply Chain Management Description of efforts to maintain traceability Responsible Procurement HC-MS-430a.2 within the distribution chain. & Supply Chain - Track & Trace Program Supply Chain Management Description of the management of risks Responsible Procurement & Disclosure does not identify the critical HC-MS-430a.3 Supply Chain - Critical Materials materials that present a significant risk to Alcon's operations, the type of risk(s) they represent. A Switzerland-based company operating in the Medical Supplies industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Hawaiian Electric, COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Hawaiian Electric, A US-based company operating in the Electric Utilities industry & Power Generators industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Frontline, COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS A Norway-based company operating in the Marine Transport industry. Key Takeaways COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Interface, Inc., Sustainability Accounting Standards Board (SASB) Index – 2019 ACCOUNTING TOPIC METRIC CODE RESPONSE VERIFIED (1) Total energy 1) In 2019 Interface consumed 559,723 GJ of energy in manufacturing. Energy consumed, (2) 2) 44% of electricity use in manufacturing was grid electricity, while 54% was thermal energy. Management in percentage grid CG-BF-130a.1 3) 100% of the electricity was renewable or made renewable through the purchase of Renewable Energy Credits Third-party electricity, (3) (RECs). 75% of Interface’s total energy usage, both electricity and thermal, comes from renewable sources Manufacturing verified by Apex percentage renewable through direct purchase or renewable energy credits. Interface has established an aggressive approach to the management of chemicals in our raw materials and finished products. Interface’s goal is to have zero chemicals of concern in our products. Description of Interface determines chemicals of concern based on a rigorous review of medical and scientific literature, processes to assess regulations and market trends and adopts global goals for their substitution and phase out for all product inputs. and manage risks Using this approach, Interface has phased out the use of numerous categories of chemicals including the CG-BF-250a.1 and/or hazards elimination of ortho-phthalate esters, formaldehyde, fluorocarbons and flame retardants. associated with Making products that are safe to use is only a starting point for creating sustainable and healthy products. In Management of chemicals in products addition to being screened for chemicals of concern, every material used in Interface products must meet stringent Chemicals in requirements for contribution to product performance, carbon footprint reduction, elimination of virgin raw materials, and recyclability at the product’s end of life. Products Percentage of eligible products meeting All Interface flooring (100%) meets indoor air quality standards for low VOC emissions. This is certified through volatile organic CG-BF-250a.2 several IAQ standards including CRI Green Label Plus, FloorScore, ACCS, GUT, GreenTag, Blue Angel, CDPH, Certified through compound (VOC) GreenGuard and other regionally specific standards. various product emissions and content standards standards A US-based company operating in the Building Products & Furnishings industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Cenovus Energy, A Canada-based company operating in the Marine Transport industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Deutsche Post DHL Group, within COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Deutsche Post DHL Group, Assurance Report within 2019 Sustainability Report A Germany-based company operating in the Air Freight & Logistics industry. BlackRock, Racial / Ethnic Group Representation of US Employees (%) Black or Hispanic or Asian African White Otherh N/Ag Latino American Executive Management a 22% 4% 3% 69% 0% 2% +3.1% +1.2% (0.8%) (4.5%) - +1.0% 18% 3% 3% 72% 2% 2% Non-Executive Management b +0.9% (0.4%) - (1.9%) +0.4% +1.0% 18% 3% 3% 72% 2% 2% +1.0% (0.3%) (0.1%) (2.0%) +0.4% +1.0% Professionals d 31% 6% 6% 52% 2% 3% +0.3% +0.4% +0.9% (3.3%) +0.1% +1.6% All Other Employees e 11% 15% 15% 53% 5% 1% +0.9% (0.7%) +1.4% (3.5%) +0.9% +1.0% 26% 5% 6% 58% 2% 3% +0.5% +0.1% +0.6% (2.8%) +0.2% +1.4% % of New Hires f 30% 8% 10% 43% 4% 5% A US-based company operating in the Asset Management & Custody Activities industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Tractor Supply Co. (TSC), A US-based company operating in the Multiline and Specialty Retailers & Distributors industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 150 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Hawaiian Electric, Previously mentioned: A US-based company operating in the Electric Utilities & Power Generators industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 151 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Cenovus Energy, Previously mentioned: A Canada-based company operating in the Marine Transport industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 152 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Azul, A Brazil-based company operating in the Airlines industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 153 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Jet Blue, ESG disclosures over multiple years 2015 2016 2017 Amount (Metric Tonnes) Emissions 7,417,431 Carbon Dioxide 11 Methane 6,7357 Nitrous Oxide A US-based company operating in the Airlines industry. COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS Key Takeaways COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 155 FSA CREDENTIAL LEVEL I STUDY GUIDE PART III: UNDERSTANDING IFRS SUSTAINABILITY DISCLOSURE STANDARDS This chapter contains information related to the following Learning Objective(s): 11 DIFFERENTIATE ? JUMP TO ANSWERS COPYRIGHT © 2023 IFRS FOUNDATION. ALL RIGHTS RESERVED 156 PART IV