JSE Limited · JSE:JSE
JSE — Company Briefing March 09 sflb
23 slides from JSE's investor presentation, March 2009
Slide 1: Socially Responsible Investment Index Company briefing
Socially Responsible Investment Index Company briefing Corli le Roux Head of SRI Index 2009 Review www.jse.co.za Copyright© JSE Limited 2008
Slide 2: Highlights of Index evolution
Highlights of Index evolution Established May 2004 • Crystallise debate • Enable SRI • Identify companies with good sustainability practices • Aspirational benchmark Broad sustainability assessment • Triple bottom line • Corporate governance 2007 introduction of automatic assessment and internationa
Slide 3: Value proposition
Value proposition Highlight imperatives of sustainability • Globally aligned • Locally relevant – close the loop for companies around local concerns Framework for – • internal risk management • comprehensive reporting Enhanced reputation Framework/reference for awards, investment, ratings tools www.
Slide 4: Eligibility
Eligibility Base Universe: FTSE/JSE All Share Index • For 2009 review: All Share as at March 2009 Automatic assessment • 2008 SRI Index constituents • Top 40 • Mid Cap Voluntary assessment • Small Cap If excluded from All Share at any time during process or after review, not eligible for SRI Index w
Slide 5: Eligibility (cont.)
Eligibility (cont.) Companies with structural complexities • Holding companies • Holding company policies and influence over holdings as guiding principle • Full consideration of holdings above revenue threshold (to be determined) • Board practice and other governance issues at holding company level
Slide 6: Criteria overview: General
Criteria overview: General Full sustainability approach structured along ESG lines Criteria as for 2008 Core and desirable indicators • Core indicators reflect what should be regarded as minimum by companies (even though index does not at present require meeting all core indicators) • Desirable indi
Slide 7: Criteria overview: General (cont.)
Criteria overview: General (cont.) Policy, Management and Reporting • Policy statements and documents, strategies and undertakings – ideally publicly available • Management and performance cover implementation of systems, programmes, targets, objectives, includes monitoring and measuring of performa
Slide 8: Criteria overview: Environment
Criteria overview: Environment Aligned with FTSE4Good Impact classification • High, medium, low - activity-based, assessed by EIRIS in relation to five key issues: climate change, air pollution, water pollution, waste, water consumption • Overall classification based on highest impact • High impact
Slide 9: Criteria overview: Social
Criteria overview: Social Thematic approach BEE and HIV/Aids • Applies only to companies with South African operations Threshold at two / three levels, all of which must be met • Majority of all indicators (core and desirable) – half plus one AND • One third of indicators met must be core AND • SA c
Slide 10: Criteria overview: Governance and related sustainability concerns
Criteria overview: Governance and related sustainability concerns Thematic approach Covers basic corporate governance and listings requirements Covers economic issues and indirect impacts Threshold at two levels, both of which must be met • Majority of all indicators (core and desirable) – half plus
Slide 11: Criteria overview: Additional issues - roadmap
Criteria overview: Additional issues - roadmap Climate change • Intention to include specific criteria in 2010 • Climate change questionnaire included to help gather data for benchmarking • Engagement will take place during the year to set level for SRI Index criteria Reporting • Move towards core i
Slide 12: Process: Timelines
Process: Timelines Review comprises second half of the year Phase 1: EIRIS review of public information – commences in July Profile mailings to companies in three tranches: • Tranche 1 – end July • Tranche 2 – mid-August • Tranche 3 – end August Phase 2: All companies have three weeks from receipt o
Slide 13: Process: Phase 1
Process: Phase 1 EIRIS review of public information • Most recently available public information • Web sites, most recent annual report, brochures, etc. Preliminary profile of company compiled • Contains general overview of business, environmental impact classification and assessment of public data
Slide 14: Process: Phase 2
Process: Phase 2 Company response to profile assessment • Respond directly on profile AND/OR • Complete survey questionnaire in full or in part Directly on profile • Typically where reporting is more advanced and most indicators met • Mark up changes particularly to provide evidence for areas that s
Slide 15: Process: Phase 2 (cont.)
Process: Phase 2 (cont.) Survey questionnaires • Complete to the extent necessary in relation to areas that still have to be met, or to improve on met areas • Useful where reporting is limited, to provide detail Attach additional information that is relevant • Return to original researcher EIRIS inc
Slide 16: What information?
What information?* For policies – • Send the document • If no text, proof of commitment/undertaking (e.g. Board resolution/minutes) For management systems – • Adequate supporting evidence and information indicating that all relevant aspects of system exist • E.g. training, managerial responsibility,
Slide 17: Borderline companies (BLs)
Borderline companies (BLs) Companies that meet most areas but fail marginally on one area Process: • EIRIS submits final analysis to JSE • JSE engages on that specific area with BL companies • Deadline of a few days provided • JSE decides whether to include or not Repeat borderline issues: • Ground
Slide 18: Best performers (BPs)
Best performers (BPs) Companies that meet • Relevant environmental threshold • All core indicators in social • All core indicators in governance and related concerns Disclosed by environmental impact www.jse.co.za
Slide 19: Controversial issues / major news stories
Controversial issues / major news stories EIRIS conducts news search flagging specific issues • Environmental violations, health & safety issues, major competition incidents, human rights violations • First comprehensive search completed by end July, subsequent spot search end September JSE consider
Slide 20: Results correspondence
Results correspondence Cover letter • Indicates individual company result and salient matters, e.g. relevant controversial stories that were considered Summary sheet • Indicates overall performance in relation to each pillar • Environment overall met/not met • Social and governance indicates number
Slide 21: Salient issues
Salient issues Publication of results • Press release • Names of successful constituents and best performers • Quotes by constituent companies • No naming and shaming Value of research data • Profile – guidance for companies on areas of improvement • 2008 saw milestone collaboration with GEPF for da
Slide 22: Contact information
Contact information JSE • sri@jse.co.za • Corli le Roux +27 11 520 7104 • Makhiba Mollo +27 11 520 7022 EIRIS • jse@eiris.org • Shelley McCluskey – Project Leader www.jse.co.za
Slide 23: www.jse.co.za
www.jse.co.za