The sdEffect™: Translating Sustainable Development into Financial Valuation Measures A Pilot Analytical Framework Authored by Yachnin & Associates, Sustainable Investment Group Ltd. and Corporate Knights Inc. February 2006

Table of Contents

ACKNOWLEDGEMENTS

FOREWORD

EXECUTIVE SUMMARY

1.0 INTRODUCTION/CONTEXT

1.1 Audience

1.2 Background

1.3 Rationale

1.4 The Report

2.0 PART I - SUSTAINABLE DEVELOPMENT METRICS

2.1 Company Selection

2.2 Sustainability Reports

2.3 Sustainable Development Metrics

2.4 Summary

3.0 PART II - TRANSLATION INTO VALUATION

3.1 Valuation Techniques

3.1.1 Ratio Analysis

3.1.2 Discounted Cash Flow (DCF) Analysis

3.1.3 Rules of Thumb Valuations

3.1.4 Economic Value Added (EVA™) Analysis

3.1.5 Option Pricing

3.2 Translation Examples

3.2.1 INCO Solid Waste Diversion (Non-hazardous)

3.2.2 Noranda/Falconbridge Energy Savings (Greenhouse Gas Emissions Reductions)

3.2.3 Placer Dome Community Involvement

3.2.4 Teck Cominco Community and Employee Relations

3.2.5 INCO Sustainable Development Awards

3.2.6 Noranda/Falconbridge Improved Reportable Injury Frequency

3.2.7 Noranda/Falconbridge Six Sigma Projects

3.3 Summary

4.0 PART III - GUIDANCE AND RECOMMENDATIONS

4.1 Key Steps to Translation

4.2 Sustainable Development Metrics Predisposed to Financial Valuation

4.3 Further Research

5.0 CONCLUSION

Afterword

APPENDIX A: PROJECT BACKGROUND AND POSITION WITHIN THE LITERATURE

APPENDIX B: THE MINING SECTOR AND SUSTAINABLE DEVELOPMENT IN CANADA

Executive Summary »