OUR CORPORATE RESPONSIBILITY VISION COMMUNITY ESSENTIALS FINANCIAL ESSENTIALS 2 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION MHFI SNAPSHOT Headquarters New York City 95 30 offices INTRODUCTION OUR BUSINESS: ESSENTIAL INTELLIGENCE LETTER FROM OUR CEO McGraw Hill Financial (MHFI) is the world’s foremost provider of ratings, benchmarks and analytics in the global capital and commodity markets. Our iconic brands provide investors, analysts, industry leaders and others with essential insights and information, acting as a catalyst for sustainable growth worldwide and fostering transparency in financial markets. WHAT MAKES A COMPANY n tandard & Poor’s Ratings Services helps investors and S market participants manage risk through credit ratings, research and analytics. n inancial professionals turn to S&P Capital IQ for F high-value content across all asset classes. n I nvestors use the S&P 500, Dow Jones Industrial Average and thousands of other indices produced by S&P Dow Jones Indices across asset classes to measure and monitor global markets. n raders, risk managers, analysts and industry leaders use T Platts’ price assessments and insights to enable informed decision making across energy, petrochemical, metals markets and agriculture markets. countries Close to 18,000 employees worldwide FAIRNESS, INTEGRITY AND TRANSPARENCY We are a leading ratings, benchmarks and analytics provider serving the global capital, commodities and commercial markets. n ompanies from more than a dozen industries turn to C J.D. Power’s quality and customer satisfaction research for actionable consumer insights to help produce better products and services. RESPONSIBLE? WE BELIEVE IT IS AN UNSHAKEABLE COMMITMENT TO FAIRNESS, INTEGRITY AND TRANSPARENCY. These values inform the business decisions our employees around the world make every day. They also drive McGraw Hill Financial’s new Corporate Responsibility vision and strategy. Built around the twin pillars of Financial Essentials and Community Essentials, the strategy is designed to maximize our contribution to global society and the natural environment we all share. It also aligns our Corporate Responsibility activities more closely with our business objectives – and for good reason. Our goal is to create opportunity and build communities around the world. We seek to deliver sustainable growth with unique solutions, insights and analytics that provide our customers and other stakeholders with essential intelligence. This is true whether we are providing information to investors about oil company credit risks related to climate change or to veterans on using credit wisely. The success of our businesses and our CR activities depends on our talented and committed employees who care deeply about making a difference – in our markets and in our world. From Mexico City to Mumbai, we seek to deliver Financial Essentials and Community Essentials for all our stakeholders. We welcome your feedback at [email protected]. About this brochure Our Corporate Responsibility (CR) Vision introduces McGraw Hill Financial’s new CR strategy and places it in the context of our business. For more detail on our CR policies and programs, and associated data, see our latest Corporate Responsibility Report, available at www.mhfi.com/corporate-responsibility. Douglas L. Peterson President and Chief Executive Officer McGraw Hill Financial 3 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION OUR STRATEGY: CREATING OPPORTUNITY, BUILDING COMMUNITY OM Y M PIT AL CA OF GTH CON We believe everyone benefits from this responsible approach to doing business – our brands, shareholders, employees, suppliers, communities and the wider society. A EE warding innovative grants that promote financial A capability and education with an emphasis on micro and small enterprises. EL LE NC E ITY ESSEN V I TA L T NM EN OF Y IT RO VI UN A I T EN XC M LS Build thriving communities by developing and connecting our employees and enhancing the environment. E n eveloping products and services that serve the D growing sustainability marketplace while making our own operations more efficient and sustainable M EE n Our goal is to achieve transformative global change both inside and outside the Company, in the areas of focus shown in the graphic opposite. Programs and projects in these areas – from empowering micro and small businesses to providing products on environmental risks and promoting financial education and capacity – are showcased on the following pages. CO apping employee expertise to build stronger, T sustainable communities, an engaged workforce and lasting relationships with our neighbors COMMUNITY ESSENTIALS build thriving communities by developing and connecting our employees and enhancing the environment. OY n HE FAIRNESS, INTEGRITY AND TRANSPARENCY PL trengthening capital markets and supporting S access to capital, which in turn creates economic opportunity and jobs Create economic opportunities, access to finance and jobs by providing fundamental financial knowledge and tools. EM n IAL ESSEN C TI N A AL IN TH Our Corporate Responsibility efforts focus on areas where we can make the biggest positive impact on society: FINANCIAL ESSENTIALS create economic opportunities, access to finance and jobs by providing fundamental financial knowledge and tools. N OF Corporate Responsibility (CR) embraces not just how we operate but what we do. It helps drive our growing global business by informing our ability to provide essential market intelligence. TS L SERVICES INNOVA TIO S Launched in 2014, the strategy draws on insights and feedback from executives and employee focus groups across the Company as well as input from external stakeholders. Focusing on issues most material to our business, the strategy streamlines our CR programs, practices and report under the following two pillars: A E RK FI CIA NAN H LT McGraw Hill Financial’s Corporate Responsibility strategy is designed to maximize our societal and business impact. It aligns with our corporate objective to promote sustainable financial growth and reflects the priorities and expertise of our iconic individual businesses. F CORPORATE RESPONSIBILITY AT MHFI: IT’S ESSENTIAL INTRODUCTION ST R E N 4 TH E 5 6 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION FINANCIAL ESSENTIALS FINANCIAL ESSENTIALS WOMEN FINANCIAL ESSENTIALS DRIVE TODAY’S WORLD. MCGRAW HILL FINANCIAL LOOKS TO DEPLOY OUR EXPERTISE IN DATA AND ANALYTICS TO HELP STRENGTHEN CAPITAL MARKETS AND TO PROMOTE INNOVATION IN FINANCIAL SERVICES AND HEALTHY, INCLUSIVE ECONOMIES. THOUGHT LEADERSHIP BY DOING SO, WE CAN BRING BENEFITS TO SOCIETY WHILE PURSUING NEW MICROFINANCE OPPORTUNITIES FOR OUR BUSINESS. We put our commitment to Corporate Responsibility and society into practice by building the capacity of women-run small businesses and microfinance institutions (MFIs) around the world and by leading efforts to understand and improve financial education and capacity. KNOWLEDGE Empowering the world through knowledge We strongly believe that providing basic financial knowledge and tools, and the ability to access credit, creates economic benefits for individuals, communities and economies. Over time, and in the right hands, such actions can help bridge income gaps and provide life-changing financial opportunities for underserved populations. Among the ways we achieve these goals is through innovative grant making. In line with our goal of creating opportunities CASE STUDY F UNDING FIRST GLOBAL FINANCIAL LITERACY SURVEY How do people across the world make basic financial decisions? How well do they understand money and the concepts at the heart of financial decision making? These questions will soon be answered, on a global scale, thanks to pioneering research by McGraw Hill Financial and Gallup. The Global Financial Literacy Survey will, for the first time, document financial literacy across gender, age, education, geographic region and national income levels. With expert support, McGraw Hill Financial has added questions to the 2014 Gallup World Poll that will gauge people’s understanding of basic financial concepts including risk, diversification and interest, targeting 148 countries. The data collected will help to identify needs and priorities around the world and to guide policy development and service delivery. “This project will enable us, for the first time, to compare financial literacy across the world,” said Dr. Annamaria Lusardi, Academic Director of the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University. Dr. Lusardi, along with Dr. Leora Klapper, Lead Economist at the World Bank Development Research Group, acted as the project’s technical advisers. The indicators Dr. Lusardi helped design will produce universal data on people’s ability to do simple calculations and understand basic financial concepts. “Policy makers, NGOs and financial services companies will be able to use the results to target efforts to improve financial literacy,” added Lusardi. “Financial literacy is essential for people anywhere in the world to participate in today’s society. McGraw Hill Financial understands this. The Company is a real thought leader in this area.” 7 8 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION FINANCIAL ESSENTIALS Although India has adopted several measures to advance financial inclusion, about 40% of its population is still without access to basic financial services. One reason is the lack of credible district-level data on the extent of financial inclusion, which has hindered efforts by policy makers, bankers and regulators to plan and implement inclusion initiatives. that spur economic growth, we increasingly support projects that are helping to fill data gaps and provide analysis to enable more effective delivery of services and greater access to finance and credit. In India, for example, CRISIL, a global analytics company majority owned by Standard & Poor’s, runs a national financial awareness initiative called “Pragati – Progress through Financial Awareness.” The Pragati workshops provide training in basic savings and investment concepts, mainly to rural women and female students across several Indian states with high rates of financial exclusion. CRISIL Inclusix, a pro-bono initiative, helps address this situation. Leveraging CRISIL’s expertise and understanding of the financial services sector, it measures financial inclusion across India’s 638 districts and 35 states, based on three parameters – branch penetration, credit penetration and deposit penetration. The latest update, released in 2014, highlights that while India’s overall Inclusix score remains relatively low there is a clear, if slow, upward trend. Inclusix also captures wide geographical disparities in the penetration of financial services within India, revealing that 11% of all bank branches are found in the country’s six largest cities. In response to the need for better data to create a more inclusive financial system, we are partnering with Gallup® on groundbreaking global research on financial literacy (see Case Study, page 7). Accessing banking services As many as 2.5 billion people lack access to basic banking services. Microlending to individuals and entrepreneurs who cannot access mainstream banking services is one important way to bridge this gap, and McGraw Hill Financial is helping lead efforts to expand and improve the global microfinance sector. In line with our CR strategy, these efforts go beyond on-theground support for microfinance in developing countries to include analysis of how to deliver such services more widely and effectively that microfinance institutions can use. Increasingly we are targeting this support to womenowned businesses, due to growing evidence that this pays dividends for society. Women entrepreneurs bring in 20% more revenue with 50% less invested, according to Harvard Business Review. For example, we financed research by the international nonprofit Women’s World Banking, on the challenges and opportunities of offering microenterprise lending to low-income individuals in Mexico. Its findings estimated a potential market of 2-2.5 million Mexican microentrepreneurs currently unserved by individual lending. BRINGING BASIC BANKING SERVICES TO MILLIONS OF LOW-INCOME PEOPLE AROUND THE WORLD “We fully expect the index to be one of the most potent tools for broad-basing financial inclusion in years to come,” says Maya Vengurlekar, Senior Director, who leads CRISIL’s Corporate Social Responsibility initiatives. Innovating with thought leadership To tap this market successfully, the report concluded that financial institutions must: tailor loans to borrowers’ business cash flow and household economics; provide and clearly communicate transparent loan benefits and terms; embed financial education in all marketing and communication strategies and invest in staff training to ensure proper loan analysis. Promoting healthy, inclusive economies Our business products can also promote economic inclusion, by shedding light on access to basic banking services. One example is CRISIL Inclusix, a comprehensive index that measures financial inclusion within India down to the district level. We also promote understanding of Financial Essentials through thought leadership. Launched in 2013, the McGraw Hill Financial Global Institute provides a high-level forum to advance open, transparent capital and commodity markets, which in turn increases economic opportunity. In partnership with leading academic, business and nonprofit organizations, the Institute also addresses broader societal issues, including sustainability, exploring solutions in fields such as sustainable energy and smart cities. Other examples of thought leadership include our participation in UN efforts to define a sustainable financial system (see Case Study, page 14). CASE STUDY M APPING THE 2.5 BILLION UNBANKED AND UNDERBANKED CREATES NEW MARKETS As the microfinance sector grows, so do the prospects for bringing basic banking services to millions more low-income people around the world. The Microfinance Information Exchange (MIX), long supported by McGraw Hill Financial, is helping drive this expansion. By providing standardized data services, analysis and business information on more than 3,000 microfinance institutions (MFIs), MIX enables foundations and multilateral banks to make effective investments and track the results. “Microfinance is an increasingly visible and important industry and MIX makes it more transparent and adds credibility,” says Jane Eddy, Region Head, Latin America, at Standard & Poor’s Ratings Services and a longstanding member and now Chair of the MIX Board of Directors. S&P Ratings Services helped the founders of MIX, based in Washington, D.C. to design their approach a decade ago, and has used the MIX database when rating MFIs. McGraw Hill Financial also supports MIX’s efforts to measure financial inclusion indicators in developing countries. In 2013, this funding supported mapping the availability of an array of banking services against local population centers on every island in the Philippines. The innovative tool highlighted gaps in supply of ATMs, mobile banking units, cooperatives, microfinance institutions, bank branches and other basic financial amenities. “Our hope is that policy makers, international development banks and microfinance services will see these results as underscoring a major opportunity to enter the Philippines market in these underserved areas,” Eddy says. For S&P, such projects support core business goals as much as Corporate Responsibility. “These are the markets of the future,” explains Eddy. “By making objective data available for regulatory agencies and banks to use in decision making, we are building a reputation for Standard & Poor’s as part of the solution.” 9 10 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION FINANCIAL SERVICE INNOVATION COMMUNITY / CASE ESSENTIALS STUDIES COMMUNITY ESSENTIALS COMMUNITY ESSENTIALS STRENGTHEN ORGANIZATIONS, SOCIETIES AND OUR SHARED NATURAL ENVIRONMENT. MCGRAW HILL FINANCIAL WORKS TO COMMUNITIES PROMOTE COMMUNITY ESSENTIALS IN TWO PRIORITY AREAS: EMPLOYEE EXCELLENCE AND ENVIRONMENTAL VITALITY. Promoting excellence and diversity Our business depends on knowledge, excellence and forward thinking. We invest in developing our employees’ skills and capabilities so that they can continue to provide customers with leading-edge data, analytics and information. GREEN BUSINESS Our goal to be a diversity leader is reflected in our longstanding one-on-one mentoring programs, in which MILITARY CASE STUDY DIVERSITY EMPLOYEES LEAD THE WAY Our eight grassroots-led Employee Resource Groups support, engage and inspire our employees They include global networks for Asian, Hispanic, black, female and gay, lesbian, bisexual and transgender (GLBT) employees, and host programs ranging from cultural events to financial fitness workshops, digital innovation and community outreach. In 2013, 2,000 employees on five continents took part in our GLBT group’s annual Spirit Day events, wearing purple in support of the anti-bullying campaign led by the U.S. advocacy group GLAAD. 4,000 employees worldwide have taken part, and our vibrant Employee Resource Groups (ERGs) (see Case Study, below). In 2013, our Executive Steering Committee launched a Diversity & Inclusion Scorecard to track progress and maintain best practices across our businesses. Supporting veterans and the military We support and celebrate veterans both inside and outside our business. In 2014, we launched VALOR (Veterans and Allies Leading for Organizational Results), an Employee Resource Group with a designated veteran leader for each MHFI business unit. This group matches newly hired veterans to a veteran employee mentor, and provides professional development and other services. For active service members not directly connected to MHFI, we teamed with the Better Business Bureau’s Military Line to develop a popular personal finance website, My Military & Money, and a free financial literacy smartphone app. The app and site teach military members and their families how to handle their finances. Nearly 7,500 users have downloaded the app so far. 11 12 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION Strengthening communities Our employees in 30 countries and more than 90 cities and towns are essential to our community-building efforts. May 2014 saw our first annual Community Impact Month, with 4,500 employees lending a hand to local nonprofits making a difference in our neighbors’ lives. McGraw Hill Financial provided each of the 170 projects with a $2,000 grant. Activities included: n essons in basic business and financial concepts from 145 L S&P Capital IQ employees in Hyderabad, India, for over 800 youth and adults to improve their employability. n 5 5 MHFI volunteers making roof repairs, painting walls and organizing children’s activities at Aqui Nadie se Rinde, a Mexico City organization that cares for children needing bone marrow transplants. n ssembling nearly 3,000 meals for St. Francis Food A Pantries and Shelters in New York City. COMMUNITY ESSENTIALS OUR EMPLOYEES IN 30 COUNTRIES AND MORE THAN 90 CITIES AND TOWNS ARE ESSENTIAL TO OUR COMMUNITYBUILDING EFFORTS. CASE STUDY POWERING A BENCHMARK FOR DISABILITY HIRING Our commitment to a diverse workforce goes beyond our own walls. For example, we have long supported the National Organization on Disability (NOD), through capacity-building grants and pro-bono, expert advice. So when the nonprofit needed in-kind support to craft its new Disability Employment Tracker, CEO Carol Glazer knew just who to turn to. Fifty large- and medium-sized companies, from sectors including healthcare, utilities, retail, financial services and technology took part in the confidential survey. Participants learned where they stood among the 50 companies against measures for hiring, training and supporting people with disabilities and injured veterans. For each measure, resources on workplace best practices were provided. “J.D. Power is the premier certifier of customer satisfaction for a range of sectors,” she says. “So we asked the head of their certification program to help us develop a rigorous tool that Fortune 500 companies could trust.” “J.D. Power not only helped us to design the tracker accurately, they showed us that it should be used more as a carrot than a stick – an opportunity for companies to lead on welcoming people with disabilities into the workforce,” says Glazer. “With their continued support we hope ultimately to make this a public survey and to endorse the companies with the best record.” As large employers look to hire more people with disabilities, NOD’s Disability Employment Tracker, piloted in 2014, provides a much-needed benchmarking service. Growing our green business Many MHFI products provide essential intelligence on environmental opportunities and risks, paving the way for policy makers and businesses to adopt effective mitigation strategies. n tandards & Poor’s Rating Services showcases how S environmental, social and governance performance can affect companies’ and countries’ creditworthiness, and highlights financial risks from trends such as climate change. It also supports the growing green bonds market through the nonprofit Climate Bonds Initiative www.climatebonds.net. n he Dow Jones Sustainability Index, the S&P U.S. T Carbon Efficient Index, the S&P Global Water Index and the S&P Global Eco Index measure leading companies’ sustainability performance. n Platts provides global information on energy, petrochemicals, metals and agriculture as well as specialized products on carbon, biofuel and renewable energy markets. MHFI COMMUNITY IMPACT MONTH REACHED THOUSANDS OF COMMUNITIES WITH ESSENTIAL TRAININGS AND SUPPORT NOD CEO, CAROL GLAZER, AND J.D. POWER TEAM UP TO ENHANCE JOB ACCESS FOR PEOPLE WITH DISABILITIES 13 14 MCGRAW HILL FINANCIAL: OUR CORPORATE RESPONSIBILITY VISION COMMUNITY ESSENTIALS Shrinking our environmental footprint CASE STUDY As a financial company, our most significant impacts on the environment occur through our facilities and include greenhouse gas emissions, water use and waste. CARBON AND CREDITWORTHINESS How will likely future carbon regulation affect the powerful oil and coal sectors and their investors? Measures to reduce our climate impact focus on our buildings. To improve building efficiency and performance, we use green engineering and construction standards and tools such as LEED® (Leadership in Energy and Environmental Design) and the U.S. Environmental Protection Agency’s ENERGY STAR® efficiency program. CRISIL House, the 200,000-plus square foot CRISIL headquarters in Mumbai, is one stellar example of our dedication to environmentally sustainable operating practices. The LEED® Platinum-certified building features generous use of natural light, zoning systems to reduce power consumption, water recycling mechanisms and indoor gardens. Standard & Poor’s Ratings Services set out to answer this question as part of our efforts to align corporate credit analysis and climate change risk for investors. In recent research conducted with Carbon Tracker Initiative, a nonprofit think tank, we concluded that carbon constraints might negatively impact both industries in the short to medium term. For the oil sector, we analyzed a sample of the S&P rated oil and gas sector in North America, including major and medium-sized companies as well as unconventional businesses such as oil sands producers. Assuming increasing carbon constraints as well as high production and other costs, the results showed a significant impact. The financial risk profiles of smaller companies deteriorated to a degree that could lead to negative outlook revisions and downgrades by S&P over 2014-2017. The effect on major companies would be slower, with their current credit ratings maintained until 2016-2017. In a separate report on the coal industry, our analysts described a significant decline in coal production and consumption globally “becoming a much more realistic scenario” as governments seek to reduce their CO2 emissions. Carbon pricing mechanisms, among other factors, they concluded, will flatten the growth in coal demand over the medium term. “Through in-depth risk analysis and research collaborations such as with Carbon Tracker Initiative, we are aiming to provide practical resources to help investors and industry sectors take steps to address the very real credit risk issue of climate change,” says Michael Wilkins, S&P’s Managing Director, Infrastructure Finance Ratings. NEERAJ SAHAI, PRESIDENT, STANDARD & POOR’S RATINGS, SERVES ON THE UN ENVIRONMENTAL PROGRAMME’S INTERNATIONAL ADVISORY COUNCIL Thought leadership To fulfill our business mission of providing sustainable global growth we need to consider what a future sustainable financial system will look like. As a participant in the United Nations Environment Programme’s (UNEP) high-level Inquiry into a Sustainable Financial System, Standard & Poor’s Ratings Services and its President, Neeraj Sahai, are helping explore financial market policy and regulatory innovations that promote the transition to a global green economy. Environmental risk is another frontier area. S&P is part of the UNEP Finance Initiative’s “E-RISC” project, which integrates ecological factors into credit risk models for sovereign bonds. We also work with the pioneering Stranded Assets Programme at Oxford University’s Smith School, sharing research on how environmental risks may increasingly result in “stranded assets” – such as coal mines unable to recover their value due to carbon regulatory policies. Wherever practical, we also invest in on-site renewable energy generation. Employees lead many of the efforts to shrink our environmental footprint, from recycling to energy saving and green commuting. Currently, 16 formal Green Teams support our environmental targets and initiatives in the United States, United Kingdom, Mexico, India, Canada and Argentina. CASE STUDY CANARY WHARF: SUSTAINABILITY IN PRACTICE Our London site in Canary Wharf, housing almost 1,200 employees, is a model of sustainability practice. Certified to ISO 14001 and 50001 environmental management standards, it also offers food composting facilities and eLearning environmental training for employees. Hands-on learning includes an “energy bike” that employees pedal to create enough energy to turn on everyday appliances and an eco-driving simulator that teaches techniques to drive more fuel efficiently. Our New Targets 2013 baseline 2014 goals* 2016 goals* 2018 goals* Scope 1 and Scope 2 GHG emissions 64.2 -15% thousand tCO2e Waste diversion 46% 50% Recycled paper content 40% Maintain current percentage Paper use 148 tons -15% *from 2013 baseline 15 For more information, contact us at [email protected] www.mhfi.com/corporate-responsibility
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