Intuit: Sustainability Report Cone Award

As we are now almost three months into 2012, I decided to take a look at who's been publishing what (Sustainability Reports  of course - I wasn't searching for the latest true crime bestsellers - though some might not notice the difference).

This starts a series of posts  based on a random pick of Sustainability Reports published in 2012 and some insights about what I found valuable and what I, IMHO, found less valuable.

For some, reading about Sustainability Reports may be rather boring (that's me being responsive to stakeholder concerns). So here's a good tip. It's always best to read the CSR Reporting Blog with ice-cream. This makes every Sustainability Report just a little more palatable. Therefore, for everything I like about the report, I will award One Ice Cream Cone. For things I like less, I take away One Ice Cream Cone. For really bad reports, that leaves more ice-cream for me! However, I will try to be magnanimous. Sometimes I will award a Cone for the quality of the reporting, sometimes for the sustainability activity which is reported. You will have to guess which is which.

(All ice cream cone images are sourced from: Ice Cream Cone ClipArt - the Go-To-Place if you are feeling depressed or suicidal). (The different sizes of the cone pictures are not indicative of anything other than the fact that it's awkward for non-techies like me to size all the pictures equally - blame the pixels.)

Intuit 2011 Corporate Sustainability Report

About the Company:

Intuit is a provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. HQ in California. Traded on NASDAQ. $4 billion revenue. 8,000 employees.

About the report:

First report. PDF - 16 pages. Not conforming to the GRI Framework. Not externally assured.

Ice Cream Cones Awarded:

This is a great starter report with a very meaningful 16 pages. It's written in eye-level, user-friendly language which is accessible for non-seasoned report readers. The design is simple, pleasant and doesn't give you a headache. The Sustainability Report website makes content accessible online.



One aspect of user-friendliness is the Equivalent To explanations. For key data, Intuit facilitates visualization of environmental achievements through comparisons to things that we can  see in our mind's eye as we read the report. For example, "Intuit’s supply chain accounted for 21 percent of our carbon footprint in 2008. It produced 5,500 tons of waste that year - the equivalent of 1,600 dumpsters."  "During a three-month period in 2011, Intuit removed 21 tons of e-waste from the solid waste stream... that’s roughly equivalent to 138 refrigerators!" Can't you just see 138 refrigerators stacked up outside your office?

Intuit tracks indirect impacts which are enabled through the use of Intuit products. Use of Intuit software enables Intuit customers to reduce paper and energy consumption. Intuit reports on the total paper saved by customers in this way, with a target to help customers cut paper use by 1 billion sheets annually, resulting in the avoidance of 12,000 MtCO2e of GHG emissions and equivalent to saving 400 acres of forestland in the United States. (see that Equivalent To thing again?). This is a great approach - focusing not on what Intuit does, but on the result of what Intuit does - this is what's important when considering sustainability impacts.

I give a Cone to Intuit for telling it like it is. Here is what the company says about Water Management. "We’re attempting to collect Intuit’s water usage data. We’ve made some progress, but before we can report the data we need to collect more and confirm its accuracy." It is often a dilemma for first-time reporters to go public without the data or stay under the radar. The force of a public commitment to doing more next time deserves recognition.

 Another Cone for Intuit's Green Team reported activity. The company has Green Teams at more than 15 locations and describes a enthusiastic activity ranging from engaging 4,000 Intuit employees in Earth Day activities, WasteWatch waste reduction program, Live Green Sweepstakes using the internal social network to make employees aware of a sustainable lifestyle with the chance to win a Vespa, Freecycle@work program to encourage recycling and reuse of "stuff" and a Green Your Business Forum, encouraging small business owners to engage to get Green Tips and advice.

Ice Cream Cones dewarded:

I miss some form of index - while I prefer the GRI Index, any other Index would do. Indexing report contents makes it so much easier to find specific information.

I miss some evidence of stakeholder engagement and a materiality analysis. The fact that Intuit sets out key goal areas and future targets does not necessarily mean that these are the most material issues for the company for all stakeholders. For example, Intuit reports, as mentioned above, on resource consumption avoidance at customers. This does not feature as an area of focus for future goals, but I suspect it is a core material issue.

The report does not contain any information about governance or the way sustainability is managed at this company. The introductory message is written by the CFO and not the CEO. I wonder why? Was the CEO on vacation at the time this report was written? Or did the CEO opt out of Sustainability? Or does the CFO have a particular passion for the subject? Whatever the reason, I have an expectation that the most senior person in the organization will have ownership for sustainability (and reporting) and make a public comment in the Sustainability Report so that everyone is clear about where s/he stands. The CFO, of course, can always add more.

Overall Net Ice-Cream Cone Status:

Two cones for Intuit. But that's ok. They can share them around.

elaine cohen, CSR Consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen on Twitter or via my business website www.b-yond.biz/en (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

15 ways to say Sustainability Report Data Management

How do you define "data" in the context of Sustainability Reporting?  Here are 15 synonyms for Sustainability Report Data Management:

1. Headache
2. Migraine
3. Marathon
4. Boring
5. Painful
6. Tiresome
7. Impossible
8. Geez
9. Never
10. Endless
11. Struggle
12. Mismatch
13. Error
14. Exasperation
15. Depression

Get the picture? No-one, but no-one, has an easy time getting the data together for a Sustainability Report.

Arguably, the single most-underestimated challenge in writing Sustainability Reports is compiling  the quantitative data  and presenting it in a way which is transparent, clear, logical and understandable by a range of stakeholders. Reporting companies face many questions as they go through the reporting cycle:

• What quantitative data to include?
• What processes are used to collect the data?
• What's the cut-off point and how do you ensure that all data is aligned with that?
• How do you start to measure what is not already measured?
• Who should be responsible for the data collection?
• Is Excel good enough or do we need an IT platform?
• How do you select data-providers?
• Should it be cloud-based or server-based?
• How do we verify the data internally?
• Who signs off on all the numbers?
• Do we cover all global operations or only the big locations?
• What about assurance? Is it worth it? How to go about it?
• Who is really going to use our data? What to they really want?
• Where are the bottlenecks and how to manage them?
• What exactly is the CSR Data Management Lifecycle?

The GRI has recently announced that sustainability data will be much easier to find with the new XBRL Taxonomy. The GRI calls this "a major step forward in making sustainability data available to society."  This is done through the use of software which tags data contained in Sustainability Reports for efficient retrieval. But, before you can tag it, you gotta catch it, right? If you don't do a good job of collecting and collating the data, even gold-plated taxonomy won't help.

Enter the CSR Data Management Conference. All about "Strategies For Successful CSR Data Lifecycle Management".  April 19th. London. One unique day dedicated to Data Management for improving sustainability performance and generating Sustainability Reports. Promises to provide answers. Brings speakers from reporting companies and data-services vendors who can shed light on the entire process of getting the right data to the right place at the right time for your Sustainability Reporting process and presenting it in a meaningful way.

After the conference, you may be talking about Data Management in a different way. Just in case, here are 15 alternative synonyms for Sustainability Report Data Management: 

1. Easy-peasy
2. Piece of Cake
3. No-brainer
4. Professional
5. Self-sustaining
6. Elementary
7. Painless
8. Accurate
9. Timely
10. Smart
11. Straightforward
12. Pushover
13. Efficient
14. Systematic
15. Ice-cream

I will be speaking at the conference. I always have a lot to say when it comes to Sustainability Reporting. You might have noticed.

See you there ?

PS: To round off the day, starting at 6:00pm, one of my favorite annual events: The CorporateRegister.com annual CR Reporting Awards Gala Evening, announcing the results of the fifth annual CR Reporting Awards (CRRA) and presenting trophies to the winners of all the reporting categories. Watch this space for news of the winners! See 2011 winners here and 2010 winners here.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

7 material issues for the GRI to consider

Hot off the press is the GRI's latest Sustainability Report for 2010/2011 at Application Level A, covering the financial year 1 July 2010 to 30 June 2011. This time, the report contains a summary of prioritized material issues based on a stakeholder survey. This is the first GRI's own sustainability report to be based on the G3.1 Guidelines and the NGO Sector Supplement. The report is 33 pages long, supplemented by 26 pages of GRI Index and 14 pages of Annex, in which most of the quantitative data in response to performance indicators is reported.

Last year, the GRI GRI report was not terribly impressive and left big gaps in our understanding of the true impact of the GRI's performance in driving sustainability reporting. (See a post by Antonio Vives, Sustainability Guru, for a great summary of the issues). This year, efforts have been made to respond to the critics and take on board stakeholder feedback in three key ways:

- An online stakeholder survey to which 159 stakeholders responded.

- A review by a newly-established External Feedback Committee composed of five members selected by the GRI.

- Inclusion of disclosures relating to the NGO Sector Supplement indicators relating to Program Effectiveness.

The online stakeholder survey yielded eight key aspects of GRI impacts that are most material - these are all specific GRI indicator heading such as "training and education" or "marketing communications". This still does not get to the real, meaningful, material issues, in my view. It seems like a list of indicators which 159 individuals consider to be more important than other indicators. Materiality should be about specific issues relevant to specific stakeholder groups relative to a specific business - otherwise they remain generic and do not contribute to stakeholder understanding. Take a look at the way Vodafone presents materiality which I wrote about in a previous post.

As a GRI Organizational Stakeholder with a passion for Sustainability Reporting, I would consider several issues to be material:

The impact of sustainability reporting - how many companies report ?

The GRI, in 2010, announced a target: "By 2015, all large and medium-size companies in OECD countries and large emerging economies should be required to report on their Environmental, Social and Governance (ESG) performance and, if they do not do so, to explain why." After two years, and with three years to go, I would expect to read about the GRI's specific progress towards this target in the Sustainability Report. There is reference to much that GRI is doing in the framework of "Report or Explain" activities. There is reference to an increase in the number of large global companies which report (95% of the G250 in 2011 according to KPMG research versus 80% in 2008) and this can definitely be attributed, in part, to the good work of the GRI staff.   The overall number of sustainability reports published appears to be increasing and has done so every year for over a decade. These are great achievements. And yet, reporting still remains below around 10% of the target companies globally. Is this really mainstream or is it just talking mainstream?

There is something to be said for increasing awareness of Sustainability Reporting and in this sense, the GRI has made a pivotal contribution. Collaboration with the Organisation for Economic Cooperation and Development (OECD), the United Nations Global Compact (UNGC), the United Nations Environment Programme (UNEP), and the International Standards Organisation (ISO) has indeed created awareness platforms for the GRI Framework, reaching many channels and geographies. No doubt this awareness, as well as the work that the GRI does with governments around the world, is getting the message, at least in part, through to the regulators. Nonetheless, how many OECD governments currently require ESG performance reporting? The GRI reports on its advocacy activities, but not on their impact.

The outcome of sustainability reporting - does it make a difference?
The vision of the GRI is "A sustainable global economy where organizations manage their environmental, social and governance impacts responsibly, and report transparently".  This assumes that the sustainability reporting contributes to more sustainable practices. If, as I believe, sustainability reporting is a catalyst for sustainability performance, then we should be able to see the performance improvements in sustainability by corporation, by sector and by geography. While this is a hard nut to crack, I believe it's highly material. If all companies are doing is reporting their unsustainability, we haven't saved the world. We need companies to be performing more sustainably and reporting about that. While a measurement of reporting's contribution to sustainability doesn't really feature in the GRI lexicon of metrics at present, I feel that, sooner or later, Sustainability Reporting will have to become accountable. Right now, it's seen as a cost, a massive effort and a serious organizational burden by most. The ROI of reporting has not been clearly articulated and while we all know that it brings immense benefits, one day, someone will have to quantify those benefits in a way which we can all understand. It would be nice to see the GRI rise to this challenge.   

The quality of sustainability reporting

GRI says that they do not police reports or reporting companies - rather, the role of the GRI is to provide the reporting framework and offer guidance and support for reporters. But surely, the term sustainability reporting, or GRI Framework, should offer an inherent promise of minimum quality and accuracy? The reputation of the GRI and sustainability reporting is not well served when headlines such as Lies, Damn Lies and CSR do the rounds online, referring to research on thousands of Sustainability Reports which contain errors and misleading information. The purpose of Sustainability Reporting is not advanced when reports which are primarily "look how great we are" platforms destroy credibility. Sustainability Reporting kicks itself in the shins when all that is disclosed are "doing good" actions instead of impacts and outcomes. The number of truly high quality, comprehensive reports which give a "fair and balanced" representation of a company's sustainability performance are few and far between. I hate to dampen the positive buzz about sustainability reporting, and let there be no mistake that I believe Sustainability Reporting is important and that the GRI's role is crucial, but the quality, accuracy and scope of Sustainability Reporting needs to improve by several orders of magnitude. How can this not be material for the GRI? Does the lack of credibility in Sustainability Reporting not materially affect the GRI's ability to maintain its influential role?

Use of the Application Levels

In the GRI's own report for 2010-2011, an A level report, 47 indicators are "not material" and 6 indicators are "not available" - 53 indicators for which there is no response. This is a 67% non-response rate for the highest level of "transparent reporting". Doesn't this seem odd? The GRI is probably correct in the fact that many indicators are indeed not material to its operations - after all, GRI is not a global manufacturing company employing hundreds of thousands of people in a high-impact industry -  but it points to a problem in outlook and perception. If the most transparent level of reporting can get away with responding to only 33% of indicators, then either transparent needs a new definition or the Application Level framework is poorly constructed. This will surely be part of the new G4 considerations and I hope that the new-generation GRI Framework will address this issue in a thorough way. See my views about how to construct reporting in my post about whether sustainability reports actually report what people what to know or not. See also this post from AccountAbility which covers five misconceptions about GRI Reporting, the first relating to this very point about Application Levels.

The role of assurance

Not much has changed since I referred to Assurance as the Wild West of Sustainability Reporting. I recently came across another article about the poor quality of Sustainability Report Assurance in 2011, based on research conducted by Carbon Smart. This research shows that "the level of sustainability assurance provided by FTSE 350 companies remains pitifully low. Just 79 of the 350 companies included some kind of assurance comment for their 2010 CSR reports, only 66 of which were independent assurance statements. Even where assurance is provided, many of the statements fail to meet minimum requirements that would render them accessible and useful to readers." Add to this the fact that reports parade as "assured" when only a very small proportion of the data has actually been verified or only a small part of a corporation's global data is actually disclosed. For Sustainability Reporting to be both more useful and more credible, assurance practices need to change. Surely this impacts the mission of the GRI in a material way?

The GRI relationships with financial services stakeholders

Two of GRI's five largest donors are financial services institutions (PWC and KMG). The USA Focal Point was established through the financing of the Big Four Accounting companies. Integrated Reporting efforts are primarily focused on investor needs. The GRI EFC has two out of five members from the financial services community.  The weight of the financial services community on the development of the GRI cannot go unnoticed. But, as I have often said, sustainability should not only address financial stakeholders. If the purpose of sustainability (and reporting) is to help investors make more money, then I think something has gone astray somewhere along this journey. I believe a material issue for the GRI has to be the maintenance of a broader perspective - an appeal to all stakeholders, including those who are looking for a better future, not necessarily defined as having more money in the bank. See my Heretical thoughts on Integrated Reporting.

The GRI's management of its operations in a social and environmentally responsible manner

This is the area to which the GRI has given the most detail in its report, as in previous years. I concur with the External Feedback Committee (EFC) which wrote: "The report could be improved by providing a consistent and clear link between the DMAs and the performance results and by including performance-related data in the main body of the report, rather than the Annex or Content Index sections." Dumping data into a report add-on is usually indicative of a lack of integration of performance into core operations and often a way to conveniently skip over delivering full accountability for results.  However, the GRI does provide good narrative around the data, with clear explanations (except, perhaps, for the fact that the GRI Board of Directors is only 21% female, when the Secretariat is 70% female and total workforce is around 45% female).

Back, then, to the GRI's own GRI Report.

I support the GRI (as an Organizational Stakeholder) and believe that its value is far greater than the impression which readers of this report will take away. The GRI has made efforts to be more responsive this time around and has reflected a more rounded picture of the organization's activities and areas of impact. Attempts to include feedback are better than last time. My ability to write this post is facilitated by the GRI's commitment to transparent reporting. The GRI is still on its own reporting journey and this report shows progress.

In future, I would like to see the GRI take a less mechanical approach towards the use of the GRI Framework and see the GRI get beneath the skin of reporting to where real impact is created - in the hearts and minds of corporate leadership, in the daily practice of organizations, in the interplay between all stakeholders and in the engagement around the issues that bubble below the surface of sustainability reporting. In short, around the issues that companies do not (yet) report.  I would like the GRI report to be an account of outcome as well as action, a story as well as a checklist, a delight as well as an obligation.

Anyone for ice-cream?

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

Editing Sustainability

How do you edit sustainability? What's relevant when you are the editor of a sustainability publication?

One person that confronts these questions every day is Tom Idle, a writer, journalist, editor and commentator in the field of corporate sustainability, climate change policy, environmental protection, clean energy and renewables, and corporate social responsibility. Currently, Tom is Editor of Sustainable Business, a climate change and sustainability magazine. I will be meeting up with Tom at the Smart Sustainability Reporting Conference which I will be chairing on 15th May in London, so I asked Tom about what goes through his mind as editor.

Here are a few of the things that Tom told me:

"I am constantly asking myself the question: What is a sustainable business? The answer is, of course, that a truly sustainable business does not yet exist. The challenge for me is sorting the wheat from the chaff. A growing number of companies are taking it incredibly seriously; shifting their business models to prepare for the new paradigm. Many others are making incremental changes, which ought to be applauded. It's important that the two sets of companies are not treated the same from an editorial point of view."

"We are living in interesting times. The challenges posed by the dire economic state of the West, potentially catastrophic climate change, a growing population, suspected peak oil, emerging economies, etc, etc. call for a revolution in the way in which we live, buy, sell and behave. To be writing about sustainability issues right here, right now, makes me feel alive. I am part of the debate and, hopefully, my magazine offers part of the solution. I happened upon this agenda by chance not long after graduating as a journalist. Now I'm here, I won't be leaving."

"I am keen to get away from the term 'corporate sustainability' and to talk more about smarter business. Adopting green practices and processes is sustainable. But it's also about being smart. A lot of this stuff is about doing business better. "

"I want everybody that books a place at the conference to have a good time. I want them to learn something new and to teach the person sitting next to them something new. This is not just a listening exercise - this is a chance to meet new people, learn new ways of doing things and to have fun. From the stage, I want to hear some great stories. That is what journalism is: storytelling. And stories, told well, make great editorial for the magazine."

"I want the Smart Sustainability Reporting Conference to rip up the rule book that has been built over the years, telling companies how they should put their annual CSR report together. I want businesses to question the objective of sustainability reporting and find smarter ways of doing it - with the 'how', 'why' and 'what' centre of mind."

Tom tends to skim-read many Sustainability Reports and uses them to grab the headlines on any company that he might be writing about.  What does ripping up the rule book mean? What does he consider to be a "smart" report?

"For me, it's got to be about materiality. What's the point in companies spending lots of energy reporting on things that are of no interest to their stakeholders? Companies need to find value in the activity of sustainability reporting. It's not just about the final document and communication. It's about devising methods for extracting the key data that is vital to assessing the company's sustainability credentials and using that in creative, informative and interesting ways that will help drive value across the business and in the supply chain. I feel for reporters, though. It must be a tough job, especially if they are sitting in the midst of an unhelpful workforce that views them as merely a pain in the backside."

Yes, it's true. As a Sustainability Reporter, with broad contact within companies, often interviewing tens of managers for stories and chasing tens of others for data, the feeling of being a "pain in the backside" is not entirely foreign to me. Reporting is a tough job, and doing it well is even tougher. The focus on materiality is key and a fundamental assessment of material issues as the basis for Sustainability Reporting is certainly a smart start-point.

Editing sustainability, therefore, is giving critical voice to the material impacts for which companies are accountable, and their consequent outcomes. Using relevant and meaningful case studies to illustrate how all this happens is part of the editorial skill. Editing Sustainability and Sustainability Reporting, apparently, have a lot in common. 

Tom's insights led me to wonder if Sustainability Editors are just as much a pain in the backside as Sustainability Reporters? I didn't ask him that question.  

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

Dr Sustainability is back again again!

What an exciting event it is when Dr. Sustainability comes to town! Her last visit was a resounding success, and many sustainability practitioners, academics, consultants and worldwide opinion leaders can now be found quoting Dr. Sustainability's insights in keynotes, books, journal articles and PhD research papers. Dr. Sustainability enjoys having a positive impact and, once again, graced us with her presence and agreed to respond to more questions from CSR-Reporting Blog readers. Here are some of the questions you asked Dr. Sustainability, and her responses:

Dear Dr. Sustainability: How do I know when my company is sustainable?

Dear Clueless: When investment analysts tell you so, of course.

Dear Dr. Sustainability: We did an employee engagement survey this year. It showed that most of our employees are not engaged. What should we do?

Dear Awful Employer: Ask them to lie. It will look better in your Sustainability Report.

Dear Dr. Sustainability: I received feedback that our Sustainability Report was excellent this year. The feedback was from my mother. Is it ethical to post this to Facebook?

Dear Mommy's Boy: Yes, of course. If you don't, your mother will.

Dear Dr. Sustainability: I hear talk that new regulation will raise the bar for all public and private sector companies to develop strategies to advance a low-carbon economy. Should I include our strategy in our Sustainability Report?

Dear Strategist: Only if there is a GRI Indicator for that. Otherwise, wait for G4.

Dear Dr. Sustainability: I read somewhere that Sustainability Reports are full of data that people don't want to read. How do I know which data to include?

Dear Data-Based: Ask your stakeholders what they don't want to know, and leave it out.

Dear Dr. Sustainability:  Sustainability Reporting is driving me nuts. Every time I think I have a final draft, someone else in the company objects and we have to remove another section. The report is now reduced to 14 pages. I started with a draft of 132 pages. What should I do?

Dear Verbose: Next time, start with a draft report of 5 pages, and then everyone will want to add sections. You will soon be back to 132 pages.

Dear Dr. Sustainability: How is it that you know so much about sustainability?

Dear Skeptic: I have Google+.

Dear Dr. Sustainability: Where can I find cheaper paper to print my Sustainability Report?  Everyone keeps telling me that our report isn't worth the paper it is printed on. I think that is because of the high price of FSC Certified 99% post and pre-consumer waste paper. What do you suggest? 

Dear Paper-Waster: I suggest you replace your Procurement Manager and negotiate a discount.

Dear Dr. Sustainability: I have been a Chief Sustainability Officer for some years now, but I am getting disillusioned because, despite the fact that we are acting to solve all the world's problems, the world keeps having problems. Should I resign or add more members to my team?

Dear Problem-Solver: My advice is to think positive. Take the half-filled glass approach.  At least the world is now half-sustainable. 

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

The P.R.I.C.E. of CSR

A few weeks back, I participated in a panel on the theme of CSR: The Way Forward at World CSR Day in India. The panel was headed up by one of the most prominent pro-CSR thought-leaders in India, Dr. Bhaskar Chatterjee, Director – General & CEO, Indian Institute of Corporate Affairs. Dr Chatterjee has a long and illustrious career, having held several positions of importance in the Indian government, and as Secretary in the Department of Public Enterprises (DPE), he led game-changing reform and change among Indian State Owned Enterprises laying special emphasis on Corporate Governance, revitalization of the MOU system, Human Resource Management, Sustainable Development and CSR.

The DPE released CSR Guidelines for Public Sector Enterprises and run workshops to assist companies in implementation, which includes an allocation of net profit of up to 5% for small companies and 2% for larger companies. Although CSR in this context refers to "CSR activities" which "may be planned in parallel to the business plan, looking at every possible opportunity to link and integrate business plans with the need based social and environmental concerns", rather than a more integrative model whereby CSR becomes the way of doing business, the heightened awareness and contribution to sustainability is important in this fast-growing economy and no doubt has a positive impact.

In the few minutes I had to present my own views on CSR: The Way Forward, I listed five key points: (you might call this The P.R.I.C.E. of CSR :-))

P is for Partnerships: The world's problems extend beyond the capabilities of any single company to solve. Supporting global or regional solutions to sustainability issues is important for businesses which wish to thrive for the long term. Partnership across sectors, and within industry sectors, offers a collective way forward which benefits companies and their stakeholders. The level of partnership activity is increasing - and this will continue.

R is for Reporting: Paul Scott, MD of CorporateRegister.com expects, after all the 2011 reports are logged, to see between 6,000 and 6,500 CSR/Sustainability Reports covering the year 2011 on a global basis. This doesn't include reports written in non-latin languages, of which there are also many (Chinese, Japanese reports etc), so, in reality, there are far more reports. Several countries are including sustainability disclosure in regulation (such as Denmark)  and Stock Exchanges are starting to demand disclosure as a condition of listing (such as South Africa JEC). Reporting - business transparency - is here to stay and will become even more important as part of the way forward. While there numerous Indian companies now  reporting on sustainability performance (watch out for the India Transparency Index 2012 - coming soon!), reporting as a way of life for Indian corporations will need to move into a higher gear.

I is for Integrate: CSR can no longer be a "project" based activity. It is no longer about philanthropy. CSR means creating sustainable business strategy in which CSR is embedded as part of the organizational culture and drives all activities. CSR is relating to the needs and aspirations of stakeholders and identifying business risks and opportunities in a holistic and fully integrated way. Indian business needs to make this shift as part of its way forward.

C is for Creating Shared Value: While the now ubitquitous notion of CSV is gaining ground - some say, too much ground, (see Dr Sustainability's opinion on  CSV), because the concept is being diluted to mean almost anything that a corporation sells that people want to buy, CSV can offer win-win's for business and society. Kevin Moss of BT wrote an interesting piece about what CSV is and what it is not. However, CSV at its core is an outcome of integration of CSR principles into business strategy, and offers a positive prism through which to drive sustainable business practices. Take a look at the Nestle CSV case study website for practical examples.

E is (of course) for Employees: With employee engagement in sustainability having gone viral, and for good reason, corporations today must understand that CSR begins at home. Companies which invest in the compensation, safety, diversity and inclusion, wellbeing, development, environmental awareness and community  involvement  of their employees are winning the War for Talent, the War on Climate Change and the War for Long Term Sustainable Growth and Profit. As they win, we all benefit. CSR is not just about being good to employees; it's the development and systematic adoption of Human Resources policies and practices which lead to the transformation of corporate impacts ON employees to the sustainability impacts OF employees on all stakeholders. Read more about this at CSRforHR.com.

So that's The P.R.I.C.E of CSR. However, it's not a one-way road. A corporation that pays the P.R.I.C.E. of CSR delivers many dividends - and not only for the corporation. In fact, the P.R.I.C.E. of CSR has positive returns beyond standard investment ROI approaches. An article in Marketing Week quotes Marks and Spencer as having contributed an additional GBP 50 million to profit  in 2010 as a result of Plan A, while Coca Cola made $100 million savings due to packaging reductions. 

CSR: The Way Forward also includes attention to many other important aspects of doing business sustainably - such as good governance, the use of technology, especially in the race to a low-carbon economy, implications of regulation, investor demands, supply chain outsourcing, disaster and emergency relief and even the way CSR is managed in organizations. The fascinating presentations by my co-panelists and ensuing discussion highlighted many of these issues.

World CSR Day  in Mumbai was a welcome opportunity to continue spreading the message. I get the feeling that with people like Dr. Baskhar Chatterjee, and Dr R.L. Bhatia, founder of World CSR Day, at the helm, India may just be finding The Way Forward.

 

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Transparency is an asset

Transparency is an asset. That's what we believe here at Beyond Business and at the CSR-Reporting Blog. That's why, back in 2009, we developed the Transparency Index of leading publicly traded companies, analyzing the quality of sustainability transparency on their corporate websites. In 2009, 2010 and 2011, we analyzed the top 100 companies in our home market, Israel. However, the Transparency Index is a globally applicable index, which is equally valid for all companies in all sectors, providing complete comparability on what matters equally as much as what companies are doing to advance their own sustainability and that of the planet: how effectively their corporate websites make this information available and accessible to their local and global stakeholders. Therefore, in 2011, we formed a partnership with the Center for CSR Development in Ukraine, and, after updating the methodology to include some modifications reflecting our experience of performing the analyses over several years, we have started to analyze the leading companies in several additional countries around the globe. We are on our way to developing the first truly Global Transparency Index.

In 2011, we published The Transparency Index for the largest publicly traded companies in South Africa and in the UK. This year, 2012, after slightly modifying the methodology to reflect an improved balance of the Transparency Index four dimensions (reporting, content, navigation, accessibility), we have published a Transparency Index for the largest publicly traded companies in two countries: Denmark and the U.S.

In Denmark, Novo Nordisk takes the trophy with a leading 92% transparency, reflecting top level reporting on sustainability issues and great performance in the other three transparency dimensions on the Novo Nordisk website.  A Twitter stream, with a clearly explained policy, video content and even sustainability games in business ethics, climate change and economics and health. Novo Nordisk is way ahead of the average transparency of the top 25 companies in Denmark which ranks at 57.3%.

Here is how the top ten in Denmark looks:

The full report of the Transparency Index in Denmark can be downloaded here.

In the U.S. our findings are that companies are a little more transparent. Average transparency for the top 25 in the U.S. is 69% . Intel takes the trophy here with 91.5% transparency, reflecting sustainability reporting, a highly informative sustainability website, video content, a great  CSR at Intel blog , a report builder and an online feedback form.

Here is the top ten in the U.S.:

The full Transparency Index Report for the U.S. can be downloaded here.

The full methodology is transparently (!) described in each report.

While it is true that transparency is only half the picture - it's an important half of the picture. Transparency does not substitute for good performance, but it is necessary as a tool to inform about performance. Transparency is a public statement of commitment to sustainability, encapsulating both a declaration and a promise, a demonstration of serious intent and most importantly, an invitation to stakeholders to read, review and react. As the world embraces digital formats and interactions,  web-based sustainability transparency has an important place in the shaping of sustainability practices.

Watch this space for more countries  to follow in the Global Transparency Index  (and for news of the launch of our new GTI website) and for further analyses as the more countries are added to the mix.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

Is Sustainability Reporting off-target?

Sustainability information, research and survey-results overload is one of the greatest challenges of the sustainability profession! It seems that every day, another informative and insightful report plops into my inbox or miraculously appears in my Twitter Stream or Google Alert. Just scanning most reports is a full time job, so being selective is a key skill. One current report that I have selectively read end-to-end is worth reviewing. Here goes:

Finding Common Ground on the Metrics that Matter

This report, published by The Investor Responsibility Research Center Institute (IRRC), a not-for-profit organization established in 2006, working at the intersection of corporate responsibility and the informational needs of investors, and authored by Peter A. Soyka President, Soyka & Company, LLC and Mark E. Bateman President, Segue Point, LLC, describes three major findings, based on analysis of corporate data from the results of a recent "Green Metrics that Matter" survey conducted by the National Association for Environmental Management (NAEM), ESG researcher/investor data from company web sites and interviews with corporate execs and investment researchers.

The Metrics that Matter Report explores and documents the extent to which corporate environmental, social, and governance (ESG) information tracked and managed internally by companies is consistent with information sought by external parties, in particular, by ESG investors and the research companies that serve them.

In other words, are companies reporting what (investor) stakeholders want to know and are they doing it effectively? Great question. As Sustainability Reporting expands - CorporateRegister.com confirms 5,700 reports published in their database for 2010 and Mike Wallace of the GRI confirms roughly a 35 percent increase in GRI reporters in the U.S. from 2010 to 2011 - so the importance of the effectiveness of reporting becomes more acute. Add this to the fact that "virtually all publicly traded mid-cap to large-cap firms in the U.S. and in many other countries typically are included" in investment-focused analyses, and you can see that ESG disclosures are key to driving market impact.

The report covers five main aspects of this complex topic:
1: Background and context of reporting and investor requirements
2: Commonly used ESG metrics and why they are important
3: Analysis of metrics approach by leading rating frameworks
4: Commonalities and differences of ratings
5: Recommendations for the way forward

The major findings are:

#1 : No agreement on number of ESG metrics required

There is general agreement about the key corporate sustainability issues, but not necessarily on the specific form and number of metrics used to measure them. There is also a fundamental difference in the purpose(s) to be served by examining corporate ESG information between corporate executives and ESG researchers/investors. The IRRC report claims that there may be a "mismatch along several relevant dimensions between what ESG information companies claim they are developing and using and the information requested by external parties."

#2 : ESG is still about risk, not about value

Both ESG researchers / investors and corporate EHS managers and executives approach ESG issues from a risk mitigation perspective, not a value creation perspective.

#3 : More dialogue is need to improve disclosure effectiveness

Future improvements in corporate disclosure quality and in efficient and adroit collection and use of these data in investment analysis will require improved clarity and more effective and consistent communication between companies, researchers, and the consumers of information.

The crux of the metrics

The real issue of this report, however, addresses the mismatch between what investors want to analyze and what companies track and disclose in terms of ESG metrics, and why the mismatch exists. With typical companies tracking and disclosing on 37 ESG metrics, with some tracking more than 50, and sustainability performance being reported to C-level executives or Boards of Directors at numerous companies, as well as the rise in use of the GRI guidelines, one might be forgiven for thinking that alignment between investor interest and corporate disclosure would be more consistent. Surely, all the stakeholder engagement that the increasing number of companies is now attesting to would lead to a common denominator of interests, right? Wrong. First, different investors look for different metrics.  Second, dialogue is not really dialogue. Third, all that drives ESG tracking and disclosure is not wrapped up in $ bills. The Metrics that Matter Report shows that accountability and decision-making are the key drivers for the tracking of metrics within companies.

Table reproduced from the IRRC Report :
Finding Common Ground on the Metrics that Matter, February 2012

In other words, ESG data is used to help businesses manage themselves more sustainably for the long term. Isn't that great? It's not only about presenting ESG risks to investors. And here we circle back to my heretical thoughts on Integrated Reporting. Despite the fact that "ESG evaluation is all about assessing management quality, which raters believe is a key determinant of future financial outperformance", all that matters in sustainability metrics should not be investor driven. Happily, the way companies are using metrics seems to support this view. This being said, there is some correlation between demand and supply:

Table reproduced from the IRRC report - from the NAEM survey -
showing the level of analyst interest versus the number of companies that track related metrics

Most ESG researchers want disclosures on climate change, most companies provide them. Most analysts want information about diversity, most companies provide it. Most ESG researchers want health and safety data, everyone supplies it (influenced possibly, by regulation, not just voluntary disclosure). Going down the list, however, you can see the mismatch - mainly on the side of greater disclosure about things that most analysts do not (yet) consider all that important. However, the IRRC goes on to indicate that there are several other issues that ESG researchers look for which were not covered by the NAEM survey for which disclosures by corporations are less common.

Of course, companies should not  ignore investor demands, and no-one (I assume) would argue against the need for greater consistency, comparability, and even correlation to financial impacts of ESG data. However, a broader perspective needs to be retained when considering what companies should track in terms of metrics and what they should disclose. This should also be informed by a company-specific materiality analysis, something which is not always present in many Sustainability Reports.

The role of the GRI

The Metrics that Matter Report maintains that "the GRI has been very helpful, but contains too many questions and imposes burdens on responding companies that may limit its uptake." The interviews conducted with various experts indicate that they generally support the concept of GRI, and believe that it has substantially improved the ESG research space. "But there was also widespread recognition that GRI may ask for too much and make it too difficult for companies to disclose important information...and..that companies that report based on the GRI guidelines put significant effort into generating these reports. One interviewee described the process as like the 'Bataan Death March [for companies] to do a report.' As a result, relatively small numbers of companies issue such reports compared to the universe of companies ESG researchers must evaluate." This is important insight, but, in my view, it is not the reporting process that presents the largest burden, but the data management processes within companies. It is not the GRI Framework that is preventing companies from reporting - after all, many companies manage to report without the GRI Framework.

I work on many Sustainability Reports for companies, and there is no doubt that the most challenging parts of the process are (1) gaining genuine stakeholder input (2) assessing material issues and (3) gathering sustainability performance data that is consistent, comprehensive and accurate. Turning this into a Sustainability Report is the easier part of the process. If investors want the data, companies need to do the work whether or not they produce a Sustainability Report which fully conforms to GRI Guidelines at whatever level. Let's not forget that the GRI Framework is extensive but not mandatory - data points which are not relevant for companies can be (and are) skipped. I have found that, for companies that are serious about sustainability, and are prepared to make the effort to put in place good data management systems for key metrics, GRI reporting is not a barrier but a beneficial tool.  

The (sensible) recommendations made by the IRRC report include:

#1 : More clarity (or at least, more transparency) is needed regarding the relationships between ESG management and performance improvements and corporate financial performance.

#2 : Additional research is required to determine how closely disclosure reflects ESG management quality and performance.

#3 : Understand link to value creation - gaps remain in our understanding of the linkages and research illuminates a number of key issues and questions that speak to corporate value creation through adroit management of ESG issues.

#4 : Greater dialogue and sharing of information and perspectives is essential for both sides to understand the other’s needs and constraints, and to forge communication mechanisms that are more effective and less burdensome.

My view is that in an ideal world, there would be 30 core indicators (agreed by the main body of ESG researchers, analysts, regulators, where relevant, and corporations), that are material to all companies in any sector that every company would disclose, on a regular basis, using the same methodology, for all global operations,  in a way which makes a causative link between sustainability impacts and economic performance. This would achieve greater clarity, comparability and act as a basis for meaningful assessment of relative risk and opportunity. These indicators might even be the prime indicators for inclusion in Integrated Reports. Beyond the 30 core indicators, there may be another 50 - 100 sustainability performance metrics  that are in the pickn'mix category, with higher or lower material relevance to different companies in different sectors and geographies. Companies could choose if, and how, to disclose against these indicators, in line with their stakeholder interest.  I wonder if the revision of the GRI Framework to G4 will move in this direction?

Finally, I stress that there is much more insight and valuable information in the Metrics that Matter Report, whatever side of the equation you are on, and it is well worth the investment of time to read it in full. It contains a wealth of perspective, it's intelligently written and addresses many questions which are at the core of sustainability reporting efforts. It will certainly be useful material at the Smart Sustainability Reporting Conference in May.

Of course, I did a PDF search for "ice cream" and found none in this Report. This post, then, is a testimony to my impartial and magnanimous nature. I recommend the report anyway!

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

45 reasons to attend the Smart Sustainabilty Reporting Conference

One-Day Conference

15th May 2012, 76 Portland Place, London

www.sb-reporting.net

And here are the reasons to attend...

45: You can get a discount from the CSR-Reporting Blog. email me for discount code.
44: You don't have any other plans for the 15th of May, 2012.
43: You might learn something.
42: You might teach something.
41: You will hear great speakers.
40: You can heckle great speakers.
39: You get to give the Conference Chair a hard time (ahem, I can take it)
38: You will be able to ask sustainability reporting experts loads of questions.
37: You get to hear about the "most read sustainability report". Which is that? Oh, Marks and Spencer. Read it yet?
36: You will at long last understand everything there is to understand about Sustainability Reporting.
35: Attendance will count as 16 credit points in the CSR Reporting Blog Sustainability Reporting Study Program.
34: You can do lots of networking in the breaks. Or lots of breaking in the networks.
33: You get to hear how ArcelorMittal increases transparency and drives performance.
32: You will learn about strategic communication at the Royal Bank of Scotland.
31. You will be able to avoid the stress of real work for a full day.
30: You will be able to impress all your friends with acronyms such as the IIRC, DEFRA, GRI and more.
29: You will never think about your own Sustainability Report in the same way again.
28: You will hear me answer the question: Is Integrated Reporting really the Holy Grail? Hint: Err.
27: You will learn all about segmented data sets at the BBC.
26: You will be able to hear John Elkington, the guru of sustainability.
25: You will find out where integrated reporting is likely to go from Paul Druckman of the IIRC.
24: You will hear Paul Scott of CorporateRegister.com debating where companies should draw the line on transparency.
23: You will be able to do some shopping in London after the conference.
22: You will hear from the most sustainable company in the world about pioneering integrated reporting. Guessed who? Novo Nordisk.
21: You will learn how to account for indirect ecological impacts in a complex supply chain. From Danisco.
20: You will be able to do some shopping in London before the conference.
19: You will be able to impress the Twitter CSR community with live tweets from the conference.
18: You will be able to list 45 reasons you attended the conference.
17: You will be able to slip out in the lunch break and do some shopping in London.
16: You will be able to compare this conference with the next Smart Sustainability Reporting Conference.
15: You will be able to answer the question: Is Sustainability Reporting Smart?
14: You will be able to brief your in-house reporting team on all the ways they can improve your company's Sustainability Report.
13:  You will be able to check out 76 Portland Place as a conference venue. 
12:  You will be able to post a picture of yourself at the conference on your Facebook page.
11: This line is intentionally left blank.
10: This line is unintentionally left blank.
9:   You will be able to make intelligent comments about Sustainability Reporting.
8:   You will be able to hear about the role of sustainability reporting in building a green economy.
7:   You will be able to hear how Wyndham created their first integrated report.
6:   Dare I leave another line blank?
5:   You will be able to enjoy the conference refreshments (hope they have ice cream).
4:   You will meet lots of people interested in Sustainability Reporting. Doesn't that sound like fun?
3:   You will enhance your reputation as a Sustainability Reporting Conference Go-er.
2:   I will be able to meet you.
1:   I want you to attend.

So, if that's not enough, here's a bonus reason for attending: you will not regret it.



elaine cohen, CSR consultant, Sustainabiliity Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

En route to the Taj

In honor of my forthcoming trip to Mumbai in India this week for the World HRD Congress, where I will be presenting on one of my favorite subjects, CSR for HR, and attending the World CSR Day ceremonies as a panelist on the subject of CSR- TheWay Forward, chaired by Dr Baskhar Chatterjee, the Director General and CEO of the Indian Institute of Corporate Affairs, I thought I would take a look at the Sustainability Report of the Taj Hotels, as I will be staying at the Taj Lands End. (I have fond memories of staying at the Taj Mahal Palace several years ago, so I have high expectations!- the Taj Mahal, as you may recall, made headlines in 2008 as the site of a brutal terrorist attack in which 175 people lost their lives, and the staff was subsequently commended for outstanding service beyond the call of duty, protecting guests and remaining loyal to their employer. Terror at the Taj has even become an HBS case study. Following the terror attack, the India Hotels Company set up the Taj Public Service Welfare Trust to assist the families affected).

The Taj Hotel Group recently released its eighth Sustainability Report, entitled "Beyond the Numbers". Beyond The Numbers is a way of expressing, for the Indian Hotels Company, owner of the Taj Hotel and other hotel brands, that doing business with CSR at the core is what defines the company as an organization and shapes its journey in responsible tourism by influencing every life that it touches.  The Indian Hotels Company is the largest hotel chain in South Asia, with a portfolio of 107 hotels and 12,795 rooms across 12 countries on 5 continents, selling almost 3 million room nights per year. The Company is owned by the Tata Group, one of the highly respected names in Indian industry.

The report is GRI Application Level A+, 88 pages long, with a clever design and a personal, inviting style. Each section begins with an anecdote or almost poetic story, such as how the turtle retreats to its shell for safety, as an introduction to the safety section, or the way workers spent hours fuelling a furnace or 12 hours bending over a conveyor in former times, as the backdrop to the section on how India Hotels is a great workplace, dating back to 1912 when the Tata Group introduced 8 hour shifts, the precursor to a productive work-life balance approach for employees.

This is a thorough report covering governance, compliance and risk management, with a discussion of key risks. The report does not contain a Materiality Matrix, but it does cover stakeholder engagement and offers a list of priority issues:
• Optimizing revenues
• Focusing on customer delight
• Ensuring safety
• Developing human capital
• Ensuring environmental excellence
• Creating sustainable livelihoods

The Indian Hotels Company places a strong focus on environmental protection and records energy, GHG emissions and water consumption per hotel room per night. It is interesting to note the gap between the luxury segment (with 202 kh CO2e emissions per night) and the lower-cost hotel options (18 kg CO2e emissions at the lower end). 23 hotels are ISO14001 certified. The group maintains a "War on Waste" with 16% of hotel organic waste being composted, and much of other types of waste are recycled. 3% of the Company's energy needs are met through renewable sources and 25% of water consumption is recycled water, with several hotels achieving zero water discharge.

Oddly, one thing I might have expected to read in this report does not gain air time: the whole question of human rights, child labor, human trafficking, prostitution and child sex exploitation. Just recently I caught a headline "Sex racket out of star hotels in Tamil Nadu busted", referring to arrests of pimps using local hotels to conduct their dealings. An internet report states that there are "estimated to be over 900,000 sex workers in India. 30% are believed to be children and that the number of children involved in prostitution is increasing at an estimated 8 to10% per annum. About 15% of the prostitutes in Mumbai, Delhi, Madras, Calcutta, Hyderabad and Bangalore are children and nearly half of them became commercial sex workers when they were minors. Conservative estimates state that around 300 000 children in India are suffering commercial sexual abuse."

One thing a responsible tourism player in India could do would be to become a signatory of The Code.org and establish a specific ethical code and policy regarding commercial exploitation of children, institute other measures to prevent such issues and report fully about the procedures in place. While the hotel and tourism industry may not be responsible for these issues, they certainly can be part of a solution which raises awareness, educates and ensures there is no degree of complicity in any of their activities.

In the meantime, I look forward to returning to India. It's been a while since I tasted Indian ice-cream :)


 

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)