Machine Translated by Google Aimed at issuing companies Machine Translated by Google Contents I. Introduction 2 II. sustainability in the market 3 of capitals III. Why publicize the efforts 5 in sustainability or ESG? IV. Recommendations to create 7 a sustainability report IN. Indicators of performance 13 to include in the report WE. Attachment 16 Steps to incorporate sustainability in your company VII. References 18 1 Machine Translated by Google I Introduction Governance, transparency and accountability in the promoting sustainability in capital markets, by markets for connecting investors, companies and regulators. capitals are critical issues for sustainable development, for this reason the For this reason the Bags Initiative was born United Nations Program for the Sustainable United Nations Environment (UN Environment) is encouraging the (SSE), of which the National Stock Exchange is a development of markets for part, and whose objective is to explore how stock more transparent capitals since investors are exchanges, in collaboration with investors, regulators increasingly interested in knowing in a broad and and can improve companies, corporate transparency comprehensive way how the issuing companies by incorporating sustainable investment (ASG) long term. and aspects, promote approach their management, considering not only the financial performance but also environmental, social and corporate governance (ESG) aspects, with the aim of incorporating said As part of this commitment, the National Stock information into its investment analysis process. Exchange has prepared this Guide to guide and motivate issuing companies to create their sustainability reports and disclose information related to In line with these demands, companies face the environmental, social and governance (ESG) issues. challenge of providing more and better information on their management, integrating ESG policies and practices into their strategies and daily operations, to strengthen transparency and good practices, and This Guide is voluntary and takes as reference thus add value to Its performance. recommendations indicated por the Sustainable Stock Exchanges (SSE), World Federation of Exchanges (WFE) y Global Reporting Initiative (GRI). Faced with this reality, stock markets can be an important engine in the 2 Machine Translated by Google II Sustainability in the capital market Capital markets play an important 1. Role of stock markets role in sustainable development. when connecting Stock exchanges, by defining standards and investors with issuing companies, guidelines, training and product promotion, can facilitate the channeling of financial contribute to sustainability in the capital market. resources towards the Execution of projects that allow us to move towards sustainable The exchanges seek to strengthen the transparency development, and through the of the stock market and one way to do so is to promotion of good practices in improve the information that flows from the issuing sustainability, inreinforce primary two of the companies to the investors. objectives of this market, such as transparency and governance. 3 Machine Translated by Google 2. Role of issuing 3. Role of investors companies Investors are the economic agents that have the The issuing companies are the so- necessary financial resources to finance called socializea sustainable projects, and it is currently a global and lead the sustainable development trend that good financial performance is not the of the economy, balancing both only economic results and criteria considered by investors when making environmental and social aspects of investment decisions. Duty its operations. Currently, the role of investor fiduciary requires consideration of all companies in sustainability is to ESG factors. In continuously seek viability In recent years, there has been an increase in the economics of the business, adoption of responsible investment, which harmoniously coexisting with considers financial criteria -such as profitability environment and community. and risk- and the aforementioned factors. 4 Machine Translated by Google III Why disclose sustainability or ESG efforts? Transparency in corporate reporting on ESG governance (ESG). For them, a company's issues promotes a greater awareness of the sustainability report provides a clear idea risks and opportunities that companies must about the quality of manage to succeed, and is of paramount business management and helps them importance in attracting the interest of investors forecast results, which is why there is and other stakeholders. already an international trend requiring issuing companies to communicate how Increasingly, investors are interested in they manage the risks and opportunities incorporating environmental, social and related to these issues. security aspects into their investment processes. 5 Machine Translated by Google Disclosing ESG aspects not only facilitates the attraction of capital, but also contributes to: • Maintain customer loyalty. • Generate financial value for the company by identifying opportunities cost savings, new revenue streams, and risk mitigation. • Promote the alignment of company goals with ESG aspects. • Demonstrate commitment on the part of the company to manage responsibly the environmental, social, economic and governance impacts. • Exhibit corporate adherence to ethical standards, ESG criteria, sustainable development goals, among others. • Know the progress that the company is making in relation to ESG factors, providing an annual basis for comparison and promoting the improvement of strategies. • Improve the company's reputation by publicizing its commitment to sustainability. • Ensure that shareholders, clients and investors have access to relevant information to make informed decisions about the company's ability to create value in the short, medium and long term. 6 Machine Translated by Google IV Recommendations for creating a sustainability report The sustainability report is an informative document Although there are different references through which To prepare a sustainability report, the companies communicate clearly and objectively, recommendations set forth in this document are and for a period, the quality of their business based on some suggestions made by: management in three areas: environmental, social Sustainable and governance (ESG). Stock Exchanges (SSE), World Federation of The aspects indicated in the report must be Exchanges (WFE) y verifiable and comparable with the evolutionary Global Reporting process of the company and that of its peers, for Initiative (GRI). which it becomes a tool strategy that helps the company measure its performance and facilitates the process of continuous improvement. 7 Machine Translated by Google 4.1 Content The reports must include at least sustainable development goals issued by information related to the environmental, the United Nations Organization (UN)1. social and governance axis, and indicate how they contribute to the environmental axis social axis governance axis 1 See the SDGs at the following link: http://www.undp.org/content/undp/es/home/sustainable-development-goals.html 8 Machine Translated by Google a. environmental axis This section should present the strategies applied by the • Business opportunities company in relation to caring for the environment. For It refers to the different initiatives that the company has implemented related to This, at a minimum, must include information on: the creation of products and services that have a positive environmental impact. • Internal initiatives Corresponds to the good environmental practices that the company implements internally to optimize natural resources and minimize the generation of waste, for example: Waste management. Energy saving. Water management. Use of paper. Recycling campaigns. Employee awareness. Reduction of carbon emissions. 9 Machine Translated by Google b. social axis In this section, the company must indicate • Customers the social welfare initiatives In this case, it is relevant if the product carried out both inside and outside the or service developed by the company institution. You can focus on the has quality and safety standards, if it is good practices used with collaborators marketed with fair treatment. and the community. • Relationship with the community • Collaborators It refers to the responsible practices that As for employees, the company can the company carries out for the benefit mention the good practices it implements of the community and any contribution to promote their health, a calm work that it makes to contribute to its environment, a culture of equality and development. diversity, and the development of their skills. Mention can be made of the employee compensation and incentive plan, inclusion activities within the company, volunteer programs and regular training, among others. 10 Machine Translated by Google c. governance axis This section includes the company's policies and • Anti-corruption practices and data strategies to increase value generation through good management: the company's anti-corruption governance practices. principles and practices, as well as the policies for the management and protection of personal data For example: in documents and electronic information. • The corporate governance structure of the company 4.2 Types of report • Code of conduct: the actions taken by the Sustainability Information company when providing employees with the o ESG criteria can be presented in three ways: principles that guide their conduct for the performance of their duties. a. In a report independent of the company's financial report, where all ESG information is disclosed • Risk management: the company's risk management relevant to the investor. b. In a report policies, as well as the actions it carries out to partially linked to financial results. develop a risk management culture in the company. c. In a report fully integrated with the financial information, where it is shown how the company's strategy 11 Machine Translated by Google are and performance lead to organization, governance, 4.4 Others the creation of value in the short, medium, and long • Clearly define who is responsible for preparing term. the sustainability report. • The report must be easily accessible, use simple 4.3 Periodicity language and a presentation format that is clear and relevant to investors. It is recommended to update the sustainability report every year in order to have an annual comparison base and achieve a better measurement of the impact of ESG factors on the company's business strategy. If the publication of the sustainability report is Report of Sustainability independent of the financial report, it is recommended that the two reports be published in the same period, which will allow investors to evaluate the information. finance in the context of ESG information. 12 Machine Translated by Google IN Performance indicators to incorporate in the report Below is a series of indicators that companies could sustainability tools carried out by the Sustainability Working Group incorporate into their sustainability report. of the World Federation of Exchanges. It should be noted that this list is not exhaustive and companies are free to choose the most These indicators are the result of a relevant indicators according to their business. analysis to the different standards and ASG Aspect Metric Annual measurement or specification environmental Direct and indirect emissions of Total quantity, metric tons. greenhouse gases (GHG) environmental carbon intensity Total emissions relative to revenue. environmental Direct and indirect energy consumption Total quantity, metric MWh. environmental energy intensity Amount of direct energy used per m³ of space and per full-time shift. environmental primary power source Cite specific type of energy that is used mostly. environmental Renewable energy intensity Percentage of direct energy consumption from renewable sources. environmental water management Total amount of water consumed, recycled or recovered in m³. environmental waste management Total amount of waste generated, recycled or recovered (by type and weight). environmental environmental policy Does your company publish and apply an environmental policy?: Yes / No environmental environmental impacts Has your company assumed any legal or regulatory responsibility for an environmental impact?: Yes / No 13 Machine Translated by Google Social Salary ratio by gender Ratio: average of men and women for the total number of employees. Social Employee turnover rate Percentage of turnover of full-time and subcontracted employees. Social gender diversity Percentage of women hired by positions or positions held. Social gender diversity Percentage of women hired in Senior Management positions. Social gender diversity Percentage of board seats held by women. Social Temporary worker rate Percentage of full-time workers by outsourced/ part-time/fixed-term employees. Social Nondiscrimination Does your company publish and apply a non- discrimination policy?: Yes / No Social injury rate Total number of injuries and deaths related to workplace accidents. Social global health Does your company publish and apply an occupational health and well-being policy?: Yes / No Social Child labor and forced labor Does your company prohibit child labor and forced labor throughout the supply chain?: Yes / No Social Human rights policy Does your company publish and apply a human rights policy or declaration?: Yes / No Social Human rights violations Number of human rights complaints that have been filed, dealt with or resolved. corporate Separation of powers in the board Does your company allow the general manager to sit on governance the board of directors, or act as chairman, or chairman of committees? 14 Machine Translated by Google corporate Confidential vote in the directory Are the votes of the board (individual or governance collective) public?: Yes / No corporate salary incentives Do company executives have formal governance incentives for the development of ESG policies?: Yes / No corporate Supplier codes of conduct Within the company (or in the supply chain) governance are there inhibitors for workers to organize?: Yes / No corporate Codes of ethical conduct Does your company publish and apply a code governance of conduct to its suppliers?: Yes / No corporate anti-corruption code Does your company publish and apply an anti- governance corruption code?: Yes / No corporate Tax transparency Does your company publish and apply a tax governance policy supervised by the board of directors?: Yes / No Others Sustainability report Does your company publish sustainability reports?: Yes / No Others Sustainability Publishing Framework Does your company publish ASG information on GRI, CDP, SASB, IIRC or UN GC? Others external verification Is your corporate sustainability publication verified by a third party?: Yes / No 15 Machine Translated by Google WE Attachment Steps to incorporate Training for the team involved is necessary. sustainability in your company • Involve the Board of Directors • Carry out a diagnosis and Senior Management (Materiality Study) If an effective sustainability agenda is desired In order to know the current situation that adds value to the company, the of the company, identify gaps and define implementation decision must come from Senior priorities, it is necessary to carry out a Management and have the support of the Board diagnosis on the degree of sustainability of Directors. of the company. This diagnosis can be carried out with the support of consultants, • Establish a work team or internally by setting up teams representing various anddepartments discuss to the with It is important to at least appoint a coordinator, sustainability agenda. who will be in charge of involving more people when required. 16 Machine Translated by Google • Develop a sustainability policy and transparency is through the annual publication strategy of reports, and it is relevant to use different communication channels. It is recommended to establish a sustainability communication, including websites. To make policy and define a strategy, to facilitate the information more accessible to planning and execution of relevant actions by international investors, companies can also each department. disclose ESG information in English. • Set priorities Based on the diagnostic results, the next step is to prioritize the sustainability agenda. • Report achievements and challenges To gain the trust of investors and other stakeholders, you must be transparent. The best way to show 17 Machine Translated by Google VII References Global Reporting Initiative: https:// www.globalreporting.org Sustainable Stock Exchanges Initiative (2015). Model guidance on reporting ESG information to investors: http://www.sseinitiative.org/wp- content/uploads/2015/09/SSE-Model-Guidance-on-Reporting-ESG.pdf The Sustainability Yearbook 2018. RobecoSAM: https:// yearbook.robecosam.com/fileadmin/Files/Documents/Spanish_2018/The_Sustainability_Yearbook_ 2018_spanish.pdf WFE Sustainability Working Group Exchange Guidance & Recommendation: https://www.world- exchanges.org/storage/app/media/research/Studies_Reports/WFE%20ESG%20Recom mendation%20Guidance%20and%20Metrics%20Oct%202015.pdf 18