Friday, August 29, 2014

Johnson & Johnson: G4 game-changer?

Did Johnson & Jonson, a veteran sustainability reporter with 17 years of reporting experience, change the game with its first G4 report? This post continues my analysis of what changed with G4, this time using Johnson & Johnson  reports over three years.

For an overview of what all this means, see this post.
For a G4 game-changer analysis of Fiat Group, see this post.
For a G4 game-changer analysis of Ahlstrom, see this post.

Johnson&Johnson




2013 Citizenship and Sustainability Report: G4 Core, 118 pages
2012 Citizenship and Sustainability Report:  GRI G3, Level A, 88 pages
2011 Responsibility Report: GRI G3, Level B, 82 pages


Materiality - drives the report or just for show 
J&J has delivered a very detailed G4 report, 20+ pages longer than prior reports, and with more Performance Indicators than prior reports (80 in 2013, 65 in 2012). This is perhaps not surprising when you consider that J&J identified 41 material issues for its 2013 report, narrowed down from a master list of 220 issues that the company developed. In 2012 and 2011, the list of issues reported was based on a 2010 materiality analysis in 2010 that identified 12 broad issues.


2013 material issues
 J&J prioritized these 41 issues based on an analysis of internal and external feedback.



The very high priority issues are in the left-hand column and reporting covers these in some detail, usually several pages. The lower priority issues are covered in less detail in the report. Biodiversity, for example, ranks among the lesser important material topics, is covered in less than a page in the report.  Product Quality and Safety, the most important issue, gets several pages. However, this is not entirely consistent. Three of the least important issues - philanthropy, community investment and volunteerism have around 5 pages of content. But then, everyone likes to brag about donating to the community. 

The structure of the 2013 report follows the material issues grouped into 3 categories: advancing health, doing business responsibly and safeguarding the planet. All 41 issues are included in separate sections in one of these three groupings. That makes for a rather fragmented report and it is hard for the reader to focus on whats most important - the left hand column. This is not too dissimilar from prior J&J reports where the main section was entitled "Our Material Issues" and contained several chapters and sub-chapters. 

Johnson & Johnson has delivered a report in 2013 that is definitely materiality-oriented and built around the identified material issues. However, the report also includes the not-most important issues. This is similar to the reports of the past two years. Therefore, G4 doesn't appear to have been a significant game changer for J&J. J&J changed the game ahead of the game by reporting with a materiality focus well before G4 publication, something which many companies did not do. But in moving to G4, the focus has been diluted a little and the urge to report more than G4 requires is in evidence.  

Focus - focused and relevant or ticking the boxes
The content lists for each chapter are long and do not differentiate between the most important issues and the least important issues. There are 14 issues that are noted as "extremely high" priority. In the chapter on Advancing Human Health, there are 7 sections, Leading Business Responsibly, 23 sections, and Safeguarding the Planet, 9 sections. The 14 extremely high important issues are all included as the first sections in each chapter. But so are all the rest. 



There is some G4 logic in this presentation, but I had to spend quite a lot of time working this out.It took me a while to realize that the most important issues were the first chapters in each section. I feel that these issues could/should have been more effectively differentiated in a G4 report. In a sense, we cannot fault J&J for being attentive to a broad range of stakeholder needs. However, a bolder focus on the really important issues would give bigger impact and make this report more appealing and digestible. Reconsideration of the structure of this report might enable the reader to get to the critical parts more quickly, and use of the GRI Index, or an Appendix, or the company website could be options for disclosure of the less important issues for those stakeholders who require this additional information. 

Engagement - process or lip-service
I feel the stakeholder engagement process described in the J&J report was rather corner-cutting. It's hard to tell whether the process was a little under-cooked or whether the reporting of it was modest. J&J describes a new materiality process, the first since 2010. The mechanics are clear. Develop a broad range of issues, narrow them down and prioritize them using internal and external feedback. For external stakeholders, Johnson&Johnson "identified a group of external stakeholders primarily focused on corporate responsibility and asked them to rank the topics for overall importance of the topic and importance for Johnson &Johnson to address." It's not clear who this group is, how large it is, nor what kind of feedback the group gave. G4-27 specifically requires companies to state which stakeholders raised which topics.


J&J did not do this, listing issues in their final prioritized form. This is an area where I believe J&J hasn't changed the game in G4 - or at least - if it has, reporting of stakeholder engagement is weak. 

Integrity - shapes up or misleads
This report is in accordance at core level but reports on far more general disclosures and Performance Indicators than are required at core level. J&J indicates Performance Indicators with labels throughout the report, making it very easy to find disclosures. (In fact, the J&J report PDF is super-navigable, totally hyper-linked and very easy to work through). In general, I found J&J's reporting to be quite meticulous, and several awkward disclosures which many companies never get right are carefully presented in this report. However, something fell through the cracks. Take for example G4-LA3. G4-LA3 is pretty prescriptive.

J&J  confirm having reported G4-LA3, saying the disclosure is both in the report and online.

  
I couldn't find any relevant information online, and in the report, this is the G4-LA3 disclosure.


As you may have realized, the disclosure bears no resemblance to the disclosure requirement. It is difficult to report with integrity and many times, inconsistencies are often inevitable. It's better to publish a great report like this one from J&J with a little blip here and there than not to report at all. However, there is something about robust quality checking in reporting by people that truly understand reporting frameworks that should not be underestimated. Getting everything in sync is no easy task.

Impact - what we did or what difference we made
J&J has an impressive range of Healthy Future 2015 goals and reports progress against each. Many of these are outcome oriented in one way or another. For example, "approximately 75 percent of strategic suppliers have two or more publicly reported sustainability goals" is an outcome of having embedded sustainability processes in the extended supply chain. While a deeper outcome might be to calculate the benefits that suppliers gained through reported sustainability goals, this interim outcome is, for me, a good indicator of impact. It's not "we trained our suppliers" and it's not "our suppliers signed our Code of Conduct". It's a behavioral change by suppliers. I think that's great. Another example: "46 percent [of employees] have completed a health risk assessment and know their key health indicators". Again, this is evidence of a positive impact on employee behavior. There are many more examples. This is good G4 practice, but for J&J, it's not so much of a game-changer because it's what J&J has been doing for some years. But it's still good to see. 

Game-changer - does or doesn't?  
I give this report a 65% game-changer rating, the highest of the three so far (Fiat 58%, Ahlstrom 54%). This rating is more about meeting expectations of a G4 report than about a total transformation of the reporting approach, because J&J was already reporting though a materiality lens in the past. However, as a report to emulate in our G4 landscape, it's the best of those I have analyzed so far. But, it could be better :)

Material issues -85%
Focus  - 65%
Stakeholder Engagement -  40%
Integrity -  65%
Doing or impacting -  70%

This completes the first three G4 game-changer analyses. Stay tuned for more perspectives on how G4 is changing the game. Or not.  


elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Thursday, August 28, 2014

Ahlstrom: G4 game-changer?

Did Ahlstrom, a Finnish fiber-based materials company with 3,500 employees, change the game with its first G4 report? This post continues my analysis of what changed with G4, this time using Ahlstrom reports over three years.

For an overview of what all this means, see this post.
For a G4 game-changer analysis of Fiat Group, see this post.


Ahlstrom
 





Ahlstrom Sustainability 2013: G4 core, 40 pages
Ahlstrom Sustainability 2012: G3, B+, 60 pages
Ahlstrom Sustainability 2011: G3.1, B, 54 pages

Materiality - drives the report or just for show 
Just by looking at the cover of the 2013 Ahlstrom Report, versus the 2012 and 2011 reports, you can already notice the change in approach. This is also reflected in the change in the structure of the reports. 2011 and 2012 had a four part structure: Company, products, performance culture and supply chain. The 2013 report has a series of chapters, each dealing with a separate issue correlating more or less to the material issues identified. 

Ahlstrom's 2013 report includes 35 G4 core General Disclosures and 31 fully reported Performance Indicators, versus 25 fully reported Performance Indicators in 2012. Once again, more indicators, fewer pages. In addition to the GRI content index, Ahlstrom includes a correlation of material issues identified to G4 Performance Indicators which certainly helps understanding the report. However, only a few of the indicators are correlated to G4 Performance Indicators and some are not even reported. For example, employee-well-being is a material issue but it is not correlated with any G4 Aspect and is is not mentioned anywhere in the report - no disclosure and no indicator. Eco-design approach is a top ranking material issue - but it is not correlated to a G4 Aspect or Performance Indicator and the two-page review of progress in this area does not indicate how Ahlstrom will measure ongoing performance. 


Ahlstrom's 2011 report contained a materiality matrix but the 2012 report did not. In fact, the 2012 report did not mention materiality even once. The Ahlstrom 2013 report includes a brand new materiality matrix which is quite different to the one published in 2011, and identifies 16 material issues.

Comparing the content of the report to the material issues - we can see a correlation. 

Examples of correlation of 2013 report contents to stated material issues

Although, as mentioned, there is some dissonance between materiality and content, I believe it is a departure from prior reports and has a hint of game-changing. 

Focus - focused and relevant or ticking the boxes
Ahlstrom has been selective in the content of this report and the indicators reported. The correlation of indicators to material issues is not exact, but in general, the report chapters match the material issues mentioned. I would have preferred to see, however, fewer material issues and greater reporting depth. Ethics, for example, is the number one material issue this time around. It has one page in this 40 page report, and most of the narrative is an exact word for word copy-paste of what was reported in 2012. Amazingly the exact same number of grievances were reported in 2012 as were reporting in 2013. How incredible is that ?! Aside from some additional anti-corruption training in 2013, there is nothing in this report to suggest any additional material focus on ethics. 

Water, on the other hand, gets much more detailed treatment in the 2013 report, with more information about withdrawal sources and water effluent composition. Water as a single material issue was not even mentioned in the Ahlstrom 2011 materiality matrix, demonstrating a shift in thinking and attempt to measure and improve. Ahlstrom advises that a focus area for 2014 will be to determine the best water metrics for measuring and improving performance.

Engagement - process or lip-service
Ahlstrom has an interesting definition of  stakeholders. "A stakeholder is anyone who is interested in what the company is doing." Really? Ahlstrom does not describe stakeholder engagement with anyone who is interested in what the company is doing, but specifically with six stakeholder groups: customers, employees, suppliers, shareholders, academia, society and industry peers. Once again, the examples of dialogue and feedback received were very similar to that reported in 2013, though some additional and different detail was provided. There is no evidence of additional deep-dive stakeholder engagement process, but nonetheless, a comprehensive overview is provided that includes details of a range of stakeholder interactions. Not game-changing, but reasonably good game.



Integrity - shapes up or misleads
As mentioned, in this report, there is a lack of accurate correlation of material issues with G4 material Aspects. However, my random check of indicators enabled me to quickly find disclosures through the GRI Content index. So while this report is not fully in accordance with G4 core level in the strictest sense, reporting integrity seems to be applied.

As an aside, unrelated to G4, this report does something almost no other report does. It publishes right up front a list of areas for improvement. Now, you don't have to look for the bad news. That saves a lot of time :)


    
Impact - what we did or what difference we made
Ahlstrom makes references to different kinds of impacts. For example, money donated via the company foundation "has been very successfully used in a 3-year UNICEF WASH (Water Sanitation and Hygiene) project in India, where close to 20 million schoolchildren, especially girls, have been helped". One case study shows how 30% of energy savings can be made using a new type of filtration media product (although it doesn't say whether the product has actually been used). Another makes reference to economic impacts:

(Wonder how Ahlstrom knows that people pay their taxes and act as active neighbors ?!)

Ahlstrom presents a full page on the company's impacts on global sustainability "Our sustainability promise is to make products for a clean and healthy environment, minimizing our own impacts, and communicating about the sustainability benefits of our products in a clear way", but actually, there are very few examples of how Ahlstrom realizes this promise in this report. Most of the narrative is about responsible and ethical business behavior and not actual sustainability impacts (with the exception of direct environmental impacts, as is the case with most reports). I believe there is a great story here which G4 could help Ahlstrom tell, but in this report, the great story remains just below the surface. 

Game-changer - does or doesn't?  
Overall, there appears to be a decision at Ahlstrom to apply G4 in the best way possible, and to restructure reporting to meet the new G4 framework. My sense is that Ahlstrom does this in practice, to some extent, and with genuine intent. There are lots of positives in this report. Still, I don't feel that Ahlstrom has really exploited the full potential of G4 to drive clarity, focus and impact. Maybe the report's title "Acting Responsibly" should give us a hint of how the company approaches reporting. Funnily enough, the 2011 and 2012 reports did not have titles other than "Sustainability Report".

I give this report a 54% game-changer rating.

Material issues - 65%
Focus  - 55%
Stakeholder Engagement -  45%
Integrity -  65%
Doing or impacting - 40%

Stay tuned for more game-changer analyses.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Wednesday, August 27, 2014

Fiat Group: G4 game-changer?

The first in my G4 game-changer series... randomly selected from G4 reporters in 2014, here is the Fiat Group. As game-changers go, Fiat seems to be making progress. For some background to game-changers, see this post. 


Fiat  Group



Sustainability Report 2013 : G4 Comprehensive, 197 pages
Sustainability Report 2012:  G3.1, A+, 296 pages
Sustainability Report 2011:  G3.1, A+, 268 pages

The first thing you might notice about the 2013 Fiat report is that it is around 100 pages shorter than the two prior reports. Bad news for graphic designers but great news for those who predicted that G4 would lead to compactness. However, despite the fewer pages, Fiat identified more material issues in 2013 (23) than in 2012 (18) (material issues were not specified in 2011). Not only that, Fiat actually fully reported more general disclosures and more performance indicators in 2013 than in both prior reports. (2011 and 2012: 42 general disclosures, 2013: 55 general disclosures. 2011 and 2012: 83 performance indicators, 2013: 88 performance indicators). Fiat reports on everything in the framework, material or otherwise. 

Material issues - drives the report or just for show?
In this report by Fiat Group, there does seem to be a shift towards more considered reporting of material issues. The materiality matrix has substantially changed from 2012 to 2013.

2012

2013

In 2012, there were fewer issues and the issues were rather broad-based: corporate governance, climate change, public policy engagement etc. The issues were not sector specific, and could apply to any industry anywhere. In 2013, while there are more issues, they are more sector specific, more closely related to Fiat's core business and more narrowly defined, in a way that enables more detailed focus and defined management approach. Vehicle safety and vehicle quality for example, are two issues that feature in 2013 that were not present in 2012. Additionally, the prioritization of issues has changed significantly in 2013. Of the top five issues, only two were restated in 2013 - customer satisfaction and research and innovation - but both have changed position. Customer satisfaction was number one in 2012 ... it has dropped a couple of notches in 2013. Research and innovation has been bumped up a little.

This change in materiality seems positive. The new matrix seems more relevant and focused on the issues that affect Fiat and Fiat's stakeholders. The structure of the Fiat report has changed to reflect the new material focus. In the two prior reports, Fiat reported in three sections: economic, environmental and social. In the G4 report, there is a series of chapters that break the report into smaller, more specific sections, for instance, there is a section on employee health and safety, and sub-sections on vehicle safety and vehicle quality. There appears to be evidence of an attempt to align the report structure with the stated material issues, although, with 23 issues, this makes for a rather crowded, and slightly fragmented, report.

Focus - focused and relevant or ticking the boxes?
At comprehensive level, all performance indicators should be reported for each material Aspect in this report. With 23 material issues... that's quite a lot. Also, one issue, for example, human rights across the value chain, can cover 12 different human rights indicators across ten different material Aspects. In this report, Fiat identifies six other issues that came up in stakeholder engagement that are covered in the online report, but not in the main print report. So, although some of the material issues are broad enough to encompass a broad span of indicators, it seems that Fiat has been a little selective and not just ticked all the boxes indiscriminately, even though everything is reported in one way or another.  

Engagement - process or lip-service?
It's very easy to fudge stakeholder engagement to give the impression that a great deal of interaction has taken place when in fact, not much actually has. In the Fiat report, there is evidence of several targeted stakeholder intervention opportunities that have shaped Fiat's thinking. 

In addition, Fiat has published a set of Stakeholder Engagement Guidelines. This is good practice, and I suspect that stakeholder engagement policies are now becoming quite trendy. 

Therefore, in this report, the game on stakeholder engagement does appear to have changed. In the prior report, engagement initiatives reported were primarily incident-based, with less emphasis on ongoing dialogue and process. In 2013, more detail is provided. 



Integrity- shapes up or misleads?
To be in accordance as a G4 comprehensive report, Fiat should identify the material Aspects that have governed the selection of specific standard disclosures (including performance indicators). This is sort of achieved in a sort of indirect way in the Fiat report. The material issues are listed in the materiality matrix. At this point, these issues are not directly correlated to the GRI table of material Aspects, as is required by G4. They are reported as a set of company-defined issues. General disclosure G4-19 requires the reporting company to "List all the material Aspects identified in the process for defining report content". However, Fiat Group does not do this in a direct way and in my view, does not therefore respond precisely to G4-19.

On the other hand, each page of the Fiat report includes a disclosure-label reference to the relevant GRI G4 performance indicator which is part of a material Aspect. So, for example, in the narrative that discusses vehicle safety, the indicator labelled is G4-PR1 (Report the percentage of significant product and service categories for which health and safety impacts are assessed for improvement). This is part of the material Aspect: Customer Health and Safety. (I managed to work this out all by myself :) So while this does not totally strictly meet the requirements of G4, there is a sort of audit trail from material issue to Aspect to indicator. But.

The but is that, more importantly, perhaps, using the same example, the PR1 indicator label is referenced on ten separate pages in the report. I looked at all ten and was not able to find any specific response to the indicator, although there are several pages of narrative about vehicle safety and a whole load of technical stuff about the Euro NCAP 5-star rating, structural crashworthiness, Anthropomorphic Test Dummies, traction and chassis control systems, side-thorax airbags, hood deformation and more things I prefer not to think about. So, not only is the Aspect missing, but also a clear response to the performance indicator.

I find this quite puzzling as this report received GRI's Materiality Matters Check icon, which means that the GRI was charged with checking that the information required by materiality disclosures is present in the report. The Materiality Matters check does not assess the quality of the disclosures, it assesses their presence in the report.


G4-19 is not disclosed. Material Aspects are not stated. So how did this report pass the Materiality Matters check?

Even more puzzling, or perhaps we should be accustomed to this by now, this report was externally assured, and the assurers confirmed that this report meets the G4 comprehensive in accordance requirements.

How can this be confirmed if material disclosures are not reported as declared?

While I fully respect reporters that choose not to report GRI, G3, G4 or any G, I do find it disappointing when reporters declare they have reported in accordance with something and then they do not. And if two sets of checkers cannot identify this discrepancy, then there is something structurally wrong with the skills and expertise that are deployed throughout the entire reporting process. Whether it is a matter of skill, intention, understanding or born-on-Mars, the report's declaration that it meets the requirements of G4 comprehensive level is misleading in this specific example. I didn't look for more examples.

Impact - what we did or what difference we made? 
When it all boils down to what's most important, we could probably argue that the real game-changer of G4 is that is should be about impacts (material impacts) and not (only) about actions. A report that drones on about we did this and we did that is (a) boring (b) boring and (c) irrelevant. A report that relates the activity to the impact the company is having in society is (a) relevant (b) more credible and (c) more meaningful for stakeholders.

Unfortunately, one of the things that was not entirely fixed in G4 was the dissonance between a report that should be about impacts and a set of indicators which are about performance. Unfortunately, too many G4 indicators require counting up what we did (hours we trained or communicated, assessments we made, initiatives we undertook). This doesn't really help us know if all these actions actually delivered a desired outcome for society, or the beginnings of one. Fiat, in this report, has followed this direction and reports extensively about its activities but far less about its overall impact. I'd like to have seen more impact-based disclosures, maybe even a few representative case studies. For example, in the vehicle safety section, the most material issue, there is a ton of detail about how Fiat is making cars safer. But there is no information about the outcome of this activity. The report says "The Group is strongly committed to its efforts to ensure safety for all road users. This commitment is grounded in the respect for human life which is reflected in all of the Group’s activities." But actually, there is nothing in the narrative about whether road users are actually safer as a result of Fiat's efforts. I would have found a case study or some reference to numbers or severity of accidents in Fiat cars to be far more convincing than line after line of safety awards for different car models and safety ratings achieved.

Game-changer - does or doesn't?  
I think the Fiat report is driving (safely) in the right direction. There are signs that the company has made an attempt to move in the direction of G4. The rather techno-babbly and over-wordy language make for tough reading, and the immense detail tends to detract from the core material focus. There is an opportunity to change the game more decisively with Fiat's next report.

I give this report a 58% game-changer rating.

Material issues - 65%
Focus - 70%
Stakeholder Engagement - 60%
Integrity - 50%
Impacts - 45%

Stay tuned for more game-changer analyses.


elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Tuesday, August 26, 2014

Has G4 changed the game?

G4 is really taking off.... hundreds of G4 reports have now been published....and almost all the new reports that are released are talking the G4 language. It's time to take a quick look to see if G4 has really changed the game. I used the GRI Sustainability Disclosure Database (now showing 427 G4 reports) to check out the current and past reports of companies. 

G4 was supposed to be a game changer. It was supposed to move reports from box-ticking to focused, relevant transparency based on robust stakeholder engagement process. Like any framework or standard, it's only as good as its application in practice. While expecting a certain degree of continuity, we could nevertheless have expected G4 to create a different kind of report where material issues are not only clearly stated, they drive the content and structure of the disclosures. As I often say, if the material issues don't smack you in the face, it's not G4.

In applying G4, have companies gone back to basics, re-engaged, re-materialized, re-prioritized, re-focused and re-emerged with a G4 report that looks, feels and speaks differently? Or is it more of the same, with a new name?

In order to assess whether G4 reports have changed the game or changed the name, I consider five broad reporting dimensions in a comparison between G4 and prior reports of different companies. The five points are: Materiality, Focus, Engagement, Integrity and Impact


Materiality - drives the report or just for show 
Materiality in G4 is not just about putting a slick materiality matrix out there. It's about connecting the report content to the issues that are most important - as defined in the list of material issues in matrix form or otherwise. If I have to search and search and search for the material issues, and then, once I find them, I have to work hard to find disclosures related to those issues.... this is not game-changing G4. I like to see a clear set of material issues and a report structure which ensures those issues are dealt with up front in the report. Material issues need to be prominent, without readers having to look for them like a needle in a haystack.

Focus - focused and relevant or ticking the boxes
In a G4 report, the idea is to focus on what's most important. Clearly, some reporters need to maintain a measure of continuity with previously reported information, and others may use the report for wider disclosure to meet different stakeholder needs. However, in general, the report should not contain a whole load of irrelevant information, or minor performance details which divert focus from the most important issues. Longer isn't smarter and fuller isn't better. Websites, data books, other formats are available for additional information needs.

Engagement - process or lip-service
Over the years we have seen reporters write reams of rubbish about how they are engaging in dialogue with stakeholders and how that helps them build trust, understand needs, define what's most important. There have been so many empty words written about stakeholder engagement that you began to wonder if reporters were given big bonuses for the number of times they included the words stakeholder and dialogue in a single report. When you actually try to figure out what kind of engagement actually takes place, it's all a big mystery. Engagement is one of the hot topics of sustainability... it's getting more important... people are realizing that it's a process, not a survey monkey to hundreds of anonymous box-tickers. In G4, the emphasis is on this process and the use of quality engagement to first, understand sustainability priorities and second, report about them. G4 reports should demonstrate a different kind of stakeholder dialogue than the reports we have been used to so far.

Integrity - shapes up or misleads
I have been referencing the quality of reports for years, and while I believe there is some improvement, there is still a mismatch between the disclosures that reports declare they report and what they actually report. A reporting framework exists for a reason. No-one ever said it's perfect, but, if you voluntarily decide to adopt a certain framework, the first rule of responsible reporting is to apply the framework with integrity. Now that GRI has removed the school scores A,B and C, I expect companies that declare in accordance with G4 to step up and execute G4 in the way it was intended.

Impact - what we did or what difference we made
Sustainability reporting should be about impacts and outcomes, not about activities. Clearly, you need to tell the story of what you have achieved in order to describe what difference it made. What we really want to know, however, is not how companies are behaving but what sort of an impact they are having. In general, 90% of sustainability reporting content is historical activity with no punchline. The punchline is whether the activity made a difference and if so, can we quantify that in some way, economically, socially or environmentally. Environmental outcomes are generally easier to describe - greenhouse gas emission reduction or water conservation or even biodiversity protection. But social and economic impacts are harder, and most companies have failed to address this effectively. With G4 focus on (material) impacts, I would like to see more of the talk being walked and more of the impacts being reported.

****

In many cases, we can already start to see the change in reporting and the influence of materiality analysis and process. In some cases, we can detect a refreshed approach to stakeholder engagement and use of stakeholder input to determine sustainability direction. In a few cases, we see correct application of the G4 guidelines in their entirety. In general, we are seeing a tentative transition and even some experimentation with the best way of using the G4 guidelines.

On the other hand, materiality is not yet fully driving the reporting structure and delivering greater focus, relevance and clarity. List of issues are there, but they are not truly creating the reporting story. Reporting is still far removed from the disclosure of impacts (except in environmental resource efficiency) and still overly focused on behavior and shopping lists of activities. Greater rigor in defining and describing the difference a company makes is needed in reporting.

As with any transition, progress is varied. Uptake is fast, but real change is slow. There is a light at the end of the tunnel... but it's  a verrrrrrrry long tunnel. In my next few posts, I will share analyses of the G3 to G4 reporting journey of Fiat Group, Ahlstrom and Johnson&Johnson, asking the question: did they change the game with G4 or did they just change the name?

Bet you can't wait....... 




elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Tuesday, July 29, 2014

Liberty Global brings on G4

It's always a privilege to work with companies that are passionate about helping create a better society for us all. I have been pleased to work with a fantastic team at Liberty Global to help develop their latest publication, the company's third Corporate Responsibility Report, under the heading: Empowering a Digital Society, launched this week.  



It's a first G4 report for Liberty Global at G4 core level, with a full G4 content index online. And guess what, it's short. Weighing in at only 40 pages, Liberty Global shows how a G4 report can be focused, complete and actually very interesting. In line with the corporate mission "Connect. Discover. Be Free.", this report is about possibilities, opportunities and the transformation that technology can help create. 

As Liberty Global is the largest cable company in the world with more than 45 million subscribers, that's a lot of transformation. With a materiality matrix that places digital inclusion and protecting children online at the forefront of this international cable company's CR considerations, Liberty Global drives CR home at the core of its business. In promoting a digital society, and helping people have the confidence to get online and build the skills to do so effectively, Liberty Global's business encourages us to make the most of new digital opportunities. 

One example of many in the range of ways Liberty Global invests in promoting a digital society is through involvement with CoderDojo. CoderDojo is a volunteer-led global movement that offers free coding clubs for young people. Children between the ages of 5 and 17 learn how to make websites, applications and internet games. Dojo workshops are set up, run and taught by volunteers and offer a fun environment for discovering and developing new skills. Wish I were 17 again! I'd spend all my time at Dojos coding internet games about ice cream. Liberty Global subsidiary Telenet, in Belgium, hosted CoderDojo events to give young people an opportunity to develop the skills that will help them secure a meaningful future. In 2014, Liberty Global is supporting CoderDojo with an additional 60 Dojos across Europe, reaching an additional 2,000 young people. 

As a parent, protecting my kids online is always a concern and I have had a rather scary near-miss with my own daughter. Therefore, I can appreciate the value of the significant investment Liberty Global makes in developing tools for educators, parents and kids of different ages to help keep kids safe online and develop their online identity with consciousness of both the opportunities and the risks. Kids develop several identities online, and they are not always aware of the digital footprint they are leaving behind. The Web We Want was developed by Liberty Global, the third in a trilogy of tools to provide assistance for safe behavior online., help kids control the information they leave on the internet and decide who they want to interact with. 



In this report, Liberty Global also communicates new environmental targets to 2020. The company commits to improving the energy efficiency of its electricity consumption by 15% every year through 2020 and becoming five times more carbon efficient by 2020. Advanced technology that combines functionality in different ways has enabled Liberty Global to increase the energy efficiency of its latest set-top boxes by 40%. This means that customers using set-top boxes in the home can reduce their energy consumption, an advantage both for the bank account and for the environment. On the supply chain front, a new program was launched to assess the environmental and social performance of Liberty Global's largest 100 suppliers and this will be expanded to 200 suppliers this year. 

One of the challenges for a global company such as Liberty Global is finding the common ground that connects Liberty Global subsidiary companies on a shared page. This includes companies such as Virgin Media, Telenet, UPC and more, each reporting on CR in their own right, each with slightly different considerations in their local markets. Pulling that together in a way that leverages the strengths of the global organization and embraces the differences of each component part requires patience, skill, flexibility and inspiration. My experience with Liberty Global is that the culture is one of possibility, not one of overly prescriptive frameworks and rules, and that best practice in one part of the company is recognized and can be leveraged for the benefit of all companies. 

With this report, it's clear that ‘Empowering a digital society’ is more than promoting technology. Helping people take advantage of technology is empowering them in new and different ways, and this includes people inside the organization as well as its customers. 

Take a look at this new report, get inspired, give feedback.


elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm

Wednesday, July 23, 2014

A new era of collaboration and innovation for GRI

GRI this month welcomes a new Chief Executive, Michael Meehan


GRI's announcement states:

Mr. Meehan’s appointment comes at a crucial juncture for GRI and for sustainability disclosures. In an evolving sustainability reporting landscape, Mr. Meehan will lead GRI in working with new methodologies such as those on natural capital and around integrated reporting, and will drive GRI’s collaboration with global reporting frameworks. He will guide the organization in achieving its mission of making sustainability reporting standard practice worldwide, and promoting the role of sustainability disclosures in addressing global sustainability challenges.

Sounds like Michael is going to have a lot on his plate. And certainly, he has a strong legacy left by Ernst Ligteringen who has done a sterling job leading GRI in the face of many challenges over the past 12 years. After chatting with Michael, I am left with optimism that he will know how to embrace the value that GRI has created while skillfully navigating new themes in the zeitgeist of sustainable development and the needs of sustainability disclosure. It's a complex map, and the sort of practical entrepreneurial spirit, driven by clarity of vision and collaborative orientation that Michael Meehan brings, seems to be the right mix. I wish MM warm congratulations on his appointment and good luck as he takes up residence in GRI's Amsterdam hub. 

As Michael takes up his role, I am sure the word strategy will feature quite a lot in the first few weeks and months. I am sure that everyone will be wanting to know what his priorities are, goals, targets, new ways of doing things, more of this, less of that, new broom and all that. I expect there will be quite a few who have some advice and recommendations, seeing a new chief as a new opportunity to get some things straight and promote an agenda. Allen White was top-speed off the mark in an open letter to MM published in the Guardian (I always wondered about the point of open letters...seems a bit oxymoronish to me) in which he lays down his priorities for the new boss. I expect there will be plenty more open, closed and ajar letters that attempt to influence the new boy on the block as he scans the landscape. However, for me, what's more important than giving Michael Meehan my views about where he should lead GRI, is getting to understand who he is. I am interested in knowing more about what's important to Michael and what motivates him, because that will influence what he does at GRI. (Anyone who doesn't like ice cream, for example, would be a complete non-starter, as far as I am concerned. Happily, this is not the case with Michael Meehan).

I was privileged to have some time to chat with Michael on the phone today...and am pleased to be able to introduce him to the CSR Reporting Blog readers, and share a bit about his thinking as he takes up his new role.   

Michael Meehan At A Glance
Michael or Mike? Michael
Born in? Antigonish, Scottish Gaelic: Am Baile Mór; "The Big Town" but we called it antigonowhere.
Star sign? Scorpio
Top breakfast food? Dutch waffles (called Stroopwafels in Holland)
Last movie you saw? Whatever was playing on the plane last time
Currently reading? Stacks of organizational material about GRI
Most like about Amsterdam? Cycling
Fave social media channel? Google + because I need way more than 140 characters to express myself.
Fave wine? Amarone wine cause it’s got the grit. Not filtered. There are twigs and stuff at the bottom but it tastes great.
Fave place to scuba dive? Scapa Flow.
Fave TV show? Don’t even remember the last time I watched TV
Fave Superhero? Underdog
Fave ice cream flavor? Moose Tracks. Best one going.
Scared of? My kids not knowing what I do for a living.
One thing most people don't know about me is….. In a former life I was actually a scuba diving teacher.

Michael Meehan and what's important

What's most important to you as you take up your new role?
What's most important to me, I think, is the same as what's important to most of us. We are all working to the same goal of a sustainable future.

The reason I am here is to help strengthen GRI's role as a driver and integrator of sustainability disclosure. The reporting landscape has changed, not necessarily unexpectedly, but it has changed. It is shifting rapidly, and that's a good thing. GRI is moving toward a standard-setting approach. This is an evolutionary step that GRI has been considering for some time. The emergence of other frameworks is also evolutionary. The perception out there is that these frameworks compete. But they do not. There is no competing version of materiality – there are different internal contexts that may apply, but this is not competition. 

The thing that differentiates GRI is that it is a strong network that we can leverage to increase collaboration and innovation to create new frameworks. There is a perception is that more frameworks are bad. I don't see it that way. More frameworks are good. We want to see more frameworks that help corporations manage governance and disclosure more effectively in ways that move them forward. GRI has always been that network in the middle that helps things come together.. a sort of backbone of sustainability disclosure, holistically capturing all of the universe of things in CSR reporting that need to be addressed. No one else is doing this. My interest is to strengthen that backbone to improve collaboration and facilitate innovation. We can learn from industries – such as the technology industry – that has done this well and apply those learnings to the sustainability disclosure landscape. GRI is an inclusive framework. We can build on this.

Who are the key stakeholders that you will be looking to engage and work with as you take up your new role?
The world of stakeholders, for GRI, is expansive and we have to move forward on several fronts as we target to strengthen our collaboration and innovation in sustainability disclosure. We will set our sights in working more closely on the labor and human rights side, and supporting new regulatory initiatives relating to reporting, while continuing to build our international leadership. I'll be reviewing the excellent relationships that GRI has maintained so far and looking to accelerate and broaden the momentum in areas that support improved collaboration and innovation.

What has been your interaction with GRI to date?
I have been familiar with GRI for ages. In fact, early on in my career, I invented one of the first carbon management platforms, to help companies calculate and manage their carbon footprint. This was part of the emerging sustainability disclosure world at that time. The first things clients would ask was: how does this fit with reporting frameworks such as GRI?  That was my first taste of sustainability reporting - using a data collection and reporting framework to help companies improve their impacts. 

What do you see as the biggest opportunities for expansion/acceleration of sustainability reporting? 
The number of reporting entities is increasing rapidly. There's no doubt about that. At the same time, there are concerns about the quality of reporting. Part of our role at GRI is to help drive not only widespread acceptance but also help improve the quality of reporting overall. That's one opportunity. Another opportunity is in the area of helping remove the confusion that exists in the area of competitive frameworks. Other frameworks for sustainability disclosure understand the need for collaboration but from the outside, this looks like competition. I have already spoken to the leadership of several other frameworks and I hear a genuine desire to collaborate. We have to build on this desire and make collaboration more apparent and transparent to all those who are watching what we do and are affected by what we do. This challenge has been met time and time again in other industries. It can be done.

What are the specific skills you bring that will be of most use to moving GRI forward in the next phase?
One of the key things is related to my point above. One of the areas I specialize in is helping markets come together. One of the things I love most is being in a place at the time when everything starts to coalesce and helping it happen. I have experience in this area. It's what I find most challenging and most rewarding. There may be lots of different interests but everything has the same goal. That's the skill set that I bring to the table, and that's my focus. The outcome is for GRI to get through it with a stronger backbone. The work we are doing on standards is a part of that. We need to focus more on how people are reporting, how we interconnect with other frameworks and how we define the architecture of the reporting landscape. GRI is the only de facto sustainability metrics framework in the world. We can play a very significant role here.

The second thing that I bring is my experience with developing and using technology. The ability of organizations to capture data and information in reports is now facilitated through technology. At one time, it was impossible. Now, technology enables you to get data very quickly, cut it up in different ways and reuse it in different formats to meet different reporting requirements. A GRI report is an incredibly robust source of data and this fits very well with many aspects of corporate governance. I believe I can help advance the use of technology in reporting that will help companies become more efficient in the way they report and also enhance innovation in the reporting market place.

What can we count on from you as GRI's new chief exec?
You can count on my mantra: collaboration and innovation. I'll be looking to drive better outcomes for GRI and for all of us in the field of sustainability reporting. Communications is a big part of this. We need to make sure everyone knows what's going on. 

***********

Sounds good to me! Collaboration, innovation and Moose Tracks. I confess that I had never even heard of Moose Tracks ice cream flavor. I am going to have to track some mooses down in the very near future. At the same time, I will be sending positive vibes through cyberspace all the way to Amsterdam in support of Michal Meehan and the other capable folks at GRI, hoping to see the fruits of collaboration and innovation in better sustainability reporting in the coming years. 


elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm

Saturday, July 19, 2014

How to grow revenues by connecting women

I am often asked, by clients or people I meet in the course of my work: What is the difference between embedding CSR into business decisions and doing business that improves sales and profits, provided its ethical? When you talk about embedding CSR into business decisions, its hard to know where business stops and CSR sets in. After all, both should lead to better business results. How can you know when a business decision has integrated CSR principles, or if it was based solely on goals of delivering income and profit growth? Doing "good" business, beyond philanthropy and community investment, is just doing good business. Or is it? 

I often answer this question rather simply, in a way that more or less aligns with the direction described in the Big Idea of Porter and Kramer, who explain: 

"The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center."

My answer, then, is about the considerations involved in developing new business initiatives or products. If it's about selling more to create economic growth (which is, in general, a good thing if business is done ethically), then this is hardly embedded CSR. Economic growth alone, as we have seen, does not always produce equitable social benefit and even risks perpetuating many of the global divides - poverty, malnutrition, access to medicine etc - that society faces today. Embedded CSR means approaching business development in a different way, that includes an assessment of the social and environmental impacts of potential decisions, and the social and environmental imperatives in the markets where a company operates. In making such decisions, then, economic considerations as well as social and environmental considerations share valuable weight in the decision-making process. The outcomes are measurable benefits to business, to the economy and also equitable social advancement. 

So far, I suspect, there's not much new here for the rather enlightened readers of this blog. Most of you already will already be familiar with shared value and integrating CSR type concepts. So let's get to the point. It's this. Vodafone. Mobile Technology. Economic Empowerment. Measurable Outcomes. Connected Women.

Earlier this year, Vodafone published one of the most fascinating reports I have read in a long while about the effects of mobile technology on women's empowerment and improvement in the quality of life. It's called: Connected Women. This actually missed my radar a few months back when it was launched, in March, at a Vodafone Connected Women Summit. Better late than never, I guess, and what's more, it's still relevant, of course. I learnt about it this week via an item from IndiaCSR, reporting the launch of the Connected Women report in India by Cherie Blair. 



The report is the summary of research for the Vodafone Foundation conducted by Accenture Sustainability Services. In addition to assessing the impact of increasing mobile ownership among women, Accenture modeled the potential social, economic and commercial impact of five services in the areas of education, health, safety, work and loneliness in 2020. These services are: 

1. mobile learning for adult literacy 
2. Text to Treatment: using mobile payments to cover travel costs to receive maternal healthcare 
3. an alert system for women at high risk of domestic violence 
4. a mobile inventory management system for rural female retailers 
5. new services to connect elderly people to their family, friends and carers.
The research ran in 27 markets around the world where Vodafone does business.

Conclusions are summarized in this infographic below, with the overriding message that the services Vodafone provides in the markets where it does business could enable 8.7 million women to improve their lives. Around the world an estimated 300 million fewer women than men own a mobile phone.  


I guess we all know that mobile technology can support education, health, safety and work so it is clear that improving access in these areas will have social benefits. The Vodafone reports looks at each of these issues in detail, and in relation to the special opportunities that women could enjoy, providing perspectives, data and impacts. There are some very compelling examples. The thing that I found most eye-opening is the issue related to loneliness. I guess, at some level, we know that phone and internet can help older people feel connected. We have all heard the stories of delighted grandparents who sent their first email to their grand-kids. But loneliness as a social issue is perhaps more real and more extensive than we imagined. In Spain, for example, 38% of people over 65 that live alone or have limited mobility report feeling lonely, the research shows.

"Loneliness and social isolation in old age can lead to sadness and anxiety and can even affect physical health. It is particularly a problem for women, since they are more likely to live longer and to live alone in old age."

Vodafone's initiatives in this area meet such real social needs - perhaps even ones that haven't yet been fully articulated - and open up opportunities for great business. Vodafone cites a potential $1.7 billion annual economic benefit to society in 2020 through reduced healthcare costs and informal carers being able to return to work. This translates into a potential $450 million cumulative revenue for Vodafone through 2020. Just by helping older women feel more connected.  

One of the neatest things in this report is the summary of findings and impacts. 


In each area, there is a clear benefit for society and a clear revenue opportunity for Vodafone as a result of empowering women through technology. The report closes with four recommendations, that place focus on doing business differently, engaging in partnerships and considering new business models.

Focus on women’s needs and preferences: Only by understanding their different needs as well as user preferences in each market, can operators provide the tailored services that will be valued by women customers. 

Local implementation with relevant partnerships:  Operators will need to work in partnership with NGOs, partners and funders to launch programmes at scale. Working with local partners will enable operators to leverage their expertise and networks to reach more women more effectively. 

Explore new models and funding options: Different economic models would be required to deliver the different services at scale. An estimated $900 million in donor funding would be required to achieve wide uptake of the modelled services in health, work and education in emerging markets. The mobile learning and Text to Treatment services are likely to require ongoing, large-scale donor or public sector funding. Nominal fees for services to recover development costs and public sector investments could contribute to these costs in some circumstances. Other services, such as those focused on work, safety and loneliness, have the potential to be self financing or revenue generating. 

Use local infrastructure and existing technologies: Combining projects with existing services, for example the M-Pesa mobile money transfer system, or infrastructure, such as local healthcare networks, will significantly improve reach and effectiveness.

Back to the question of how to define embedded CSR / shared value, it seems to me that this is an example of exactly that. It seems to me that Vodafone is quietly pioneering new business models and innovative ways of combining social needs with business development. 

It just so happens that I am currently reading Alice Korngold's excellent book, entitled: A Better World, Inc. In this book, Alice focuses on many of the ways that companies (including examples from Vodafone) are engaging in this new economy and achieving success through addressing social needs. In fact, Alice makes the point that "only global corporations have the resources, global reach and self-interest to build a better world". She says: 


In combination with a fundamentally RATS approach (responsibility, accountability, sustainability, transparency), corporations have the potential to change our lives for the better. This Vodafone example shows how. 


elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm
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