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CNIF Sustainability Report 2014

Managing and reporting environmental, social and governance (ESG) business practices help companies compete in a global business environment characterized by finite natural resources, changing legislation, and heightened public expectations. Reporting allows companies to publicize and gain strategic value from existing sustainability efforts and identify emerging risks and opportunities. ESG issues can pose significant risks to business, and without proper disclosure, stakeholders and analysts cannot ascertain whether the company is managing its ESG exposure.
The link between strong sustainability management and value creation is increasingly evident. A 2012 Deutsche Bank review of 100 academic studies, 56 research papers, two literature reviews, and four meta-studies on sustainable investing found 89% of studies demonstrated that companies with high ESG ratings also show market-based outperformance, and 85% of the studies indicated that these companies experience accounting-based outperformance. 
A May 2012 Harvard Business School working paper revealed that “High Sustainability” companies outperformed “Low Sustainability” companies on several measures. Based on stock market performance in a value-weighted portfolio, $1 invested in 1993 in the “High Sustainability” group would have grown to $22.60 by 2010, compared to $15.40 in the “Low Sustainability” group. 
More than 1,200 institutional investors managing over $33 trillion have joined The Principles for Responsible Investment, and publicly commit to seek comprehensive corporate ESG disclosure and incorporate it into investment decisions.
According to a 2011 KPMG report, 80% of Fortune Global 250 companies produce sustainability reports.  The majority of large corporations also recognize the value of sustainability reporting. As of December 2012, 53% of the S&P 500 and 57% of the Fortune 500 published a corporate sustainability report.  
The Board of Directors shall issue an annual sustainability report describing Cincinnati Financial Corporation's short- and long-term responses to ESG-related issues. The report should include objective quantitative indicators and goals relating to each issue where feasible, be prepared at a reasonable cost, omit proprietary information, and be made available to shareholders by September 30, 2014.
The report should address relevant policies, practices, metrics and goals on topics such as: greenhouse gas emissions, financed emissions, water management, waste minimization, energy efficiency, and other relevant environmental and social impacts. The report should also include a plan for our company to help mitigate its business risk from climate change by adopting policies to help mitigate climate change by encouraging (where feasible) reduced greenhouse gas emissions by our customers and our company. 
We recommend Cincinnati Financial Corp. consider using the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines to prepare the report. The GRI is an international organization developed with representatives from business, environmental, human rights and labor communities. The Guidelines cover environmental impacts, labor practices, human rights, product responsibility, and community impacts. The Guidelines provide a flexible reporting system which allows the omission of content irrelevant to company operations.