Presented by Vania Maria da Costa Borgerth Advisor to the CEO - PDF document

UNCTAD-ISAR Workshop on the Future Direction of the Corporate Reporting Model Monday, 13th October 2014 Room XXVI, Palais des Nations, Geneva Workshop material: The role of business and corporate reporting in addressing major challenges of global development agenda Presented by Vania Maria da Costa Borgerth Advisor to the CEO Brazilian Development Bank (BNDES) This material has been reproduced in the language and form as it was provided. The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.

UNCTAD-ISAR TECHNICAL WORKSHOP Future Direction of the Corporate Reporting Model Geneve - November 13, 2014 1

WHY CORPORATE REPORTS ARE SO IMPORTANT? Cause Effect Better controls Reporting requires knowledge Better Management Reporting influences behavior Solid decision making process Good Reports result in greater Improve market capability of transparency ascertain the company’s value Good Reports help to build Generate long term value trust 2

FINANCIAL REPORTS Local International Global GAAPS GAAP GAAP

FINANCIAL REPORTS Listed Companies/ Financial Institutions Corporate Public Non-listed Sector Report Companies SMEs

The percentage of market value represented by physical and financial assets versus intangible factors, some of which are explained within financial statements, but many of which are not.

Sustainability Environmental Report Report 6

WHEN A COMPANY HAS PROVED ITSELF SUSTAINABLE? Economical Resources Environmental Human Resources Resources Integrated Management Integrated Management Corporate Governance SUSTAINABLE COMPANY 7

Evolution of Corporate Reporting Source: IIRC

Content Elements Operating context, Organizational overview including risks and and business model opportunities Strategic objectives and Governance and strategies to achieve remuneration those objectives Performance Future Outlook 9

Basic Principles of Integrated Reporting Strategy focus • Companies shall inform not only and future where they are now, but where orientation they intend to be in the future • What a company inform in a Connectivity of report shall be compatible with Information what is informed elsewhere Stakeholders • Reports shall address the responsiveness necessity of stakeholders

Basic Principles of Integrated Reporting • Excess of information can be misleading, Materiality and companies shall keep reports concise and Conciseness objetive through the aplication of materiality concept • Reports shall present not only opportunities, Reliability and but also the risks a company is subject to, in such a way that independente auditors can, in Completeness the future, provide assessment Consistency • Information shall be given on a consistente and basis so stakeholders can build solid analysis comparability

Report Responsibility INTEGRATED THINKING Financial Information Accounting Department Marketing/Environmental Sustainability Division Social Responsibility Human Resources Corporate Governance Investor Relations

REPORTING EVOLUTION REGIONAL • Until a recent past, each country applied their own accounting standard GAAPS • Currently a large number of countries had converted INTERNATIONAL to an international standard – mainly IFRS and at the same time that are requiring or stimulating the GAAP + presentation of non-financial information, like SUSTAINABILITIES sustainability reports REPORTS • In a near future, all countries and companies will be INTEGRATED presenting financial and non- REPORTING financial information on an integrated basis

Transparency REPORTS ARE Better Information MANAGEMENT TOOLS Better decisions 14

Brazilian Initiatives Brazilian Stock Exchange and Central Bank have been sponsoring the presentation of non-financial information • Sustainability Report or Integrated BMF & Bovespa Reporting - Brazilian Exchange • Explain why not Brazilian • Resolution 4327 Central Bank • Socio-environmental Policy

The Future We Want § 47 “ We acknowledge the importance of corporate sustainability reporting and encourage companies, where appropriate, especially publicly listed and large companies, to consider integrating sustainability information into their reporting cycle. We encourage industry, interested governments as well as relevant stakeholders with the support of the UN system, an appropriate, to develop models for best practice and facilitate action for the integration of sustainability reporting, taking into account the experiences of already existing frameworks, and paying particular attention to the needs of developing countries, including for capacity building”.

Development Banks Engagement • Leadership • Link to and Regulators Knowledge of companies Take part in Antecipate the Problems Regulation Process Act as facilitator Represent towards the the IDFC’s Capital positition Market • Aim at • Network to Transparency other development banks

Brazilian Monitoring Network

Brazilian Monitoring Network Pilot Program • Brazilian • IIRC Market • Member Companies Brazilian FRAMEWORK Network

BNDES / 17 13/07/2012 SP participants 44 05/10/2012 Febraban participants 92 Auditorio 04/12/2012 participants Febraban Auditório 78 31/01/2013 Febraban participants Auditório 158 May 2013 Febraban participants

Companies Associations Investors/Banks • AES ELETROPAULO • FEBRABAN • BMF&BOVESPA • NATURA • IBRI • PREVI • VIA GUTEMBERG • ABRASCA • BNDES • PETROBRAS • ANEFAC • SANTANDER • GRUPO CCR • IBGC • CITI • FORJAS TAURUS • BRAIN • ITAU-UNIBANCO • BETTER GOVERNANCE • APIMEC • VALE Sustainability Organizations Media / ONGs and Academia Accounting Organizations •CDP • GRI •CFC •ETHOS •IBRACON • PRI •REPORT SUSTENTABILIDADE •CPC/CODIM • REV. CAPITAL ABERTO •QUINTESSA •ERNST&YOUNG TERCO • MEDIAGROUP •BYCONN •PWC •FUND. BRAS. DES. SUSTENTÁVEL •BDO • FGV •REVER •KPMG • BRASILS •LANAKANA •DELOITTE • UNIFOR •DINAMUS •FBM • ANIMA •BIGG •R2P2 • RDD

Febraban • Brazilian Federation of Banks • Brazilian Institute of Investor IBRI Relations ABRASCA • Association of Listed Companies • Brazilian Corporate Governance IBGC Institute

BMF&BOVESPA • Brazilian Securities Exchange IBRACON • Brazilian Institute of Auditors APIMEC • Association of Market Analysts • INICIATIVE OF BRAZILIAN BRAIN EXECUTIVES

ACCOUNTING GRI PRI FIRMS

IT’S TOO MUCH IMPORTANT TO ALLOW FOR PASSIVE ACTITUDE

Contato Brazilian Development Bank Av. República do Chile, nº 100 CEP: 20031-917 Rio de Janeiro – RJ – Brazil Vânia Maria da Costa Borgerth Advisor to the CEO on Market Transparency borge@bndes.gov.br