Sunday, January 25, 2015

Our second Sustainability Report - hot off the press



DRUMROLLLLLLLLL


Announcing the Beyond Business 
2014 Sustainability Report



Yes, we finally made it to our second report. Just a little behind schedule. But there is something entirely uplifting about completing a Sustainability Report so for us, it was worth the effort. This report tells the story of our little company that has been making a BIG impact over the past few years and the roller-coaster journey we have been on since our last report covering 2010. 

Of course, our report is in accordance with the GRI G4 Reporting Guidelines. Of course, because we have come out strongly in support of the G4 framework and have encouraged our clients to adopt G4 where possible. Therefore, believing it is right to practice what we preach, we had no other reasonable choice. Having said this, the G4 framework worked well for us. It helped us define what's most important in a concise way, leading us to focus on the top six impacts, after having started with a much longer list. And this helped us keep our report short and focused. 


We also pioneered the new GRI Content Index Service - a check by GRI that all the disclosures and performance indicators that we included in our content index are actually present  and correctly located in the report. This was a useful exercise, and we did correct a few details in order to receive the coveted icon. We felt it was important for us to experience this check so that we know how it works if/when we recommend it to clients. Happily, for us as GRI Organizational Stakeholders, the check was free of charge. 

It's clear that our small business is not especially complex - we don't have a supply chain to speak of and governance isn't really in our lexicon. In terms of direct impacts, there is not much to speak of either. Even our commitment to addressing climate change by being carbon neutral since 2009 is unlikely to make a big dent in the global temperature rise. Recycling all our electronics and printing both sides in our minute quantities is hardly going to save the world. Where a company like ours can shine, however, is in the contribution we make to helping our clients advance along their sustainability journey and in helping the conversation around sustainability evolve in general. That's something we cannot measure in a direct way, but the confirmation we receive from our clients and the position of respect we (modestly) hold in the sustainability community indicates that, overall, our impact is positive. 

Of course, as with our last report, we included a page of failures - yes, we had some of those as well - recognizing that people only believe the good things if they also read the bad things. 

On a more philosophical level, our reporting demonstrates that SMEs can do it, that G4 can work for SMEs and that there is value in the process. We have long advocated that SMEs should report - both for the benefits it brings to their business directly and for the supply chains they are part of. I believe that SMEs have important stories to tell, and reporting is within reach. And it can be done on a modest budget. We did not need external assistance to prepare our report so that was not a budget line for us, but we did save (again!) by not having our report professionally designed, preferring to make it look as nice as we could using our own resources. Hopefully it's reasonably legible.  As part of our commitment to supporting SMEs in adopting a sustainable approach and transparency, we are holding a free workshop for SMEs in early March in our home market, to teach them the essentials and hopefully get them into the transparency habit on a low budget in a way that adds value for them. 

Finally, our report reflects our approach to reporting, which is that reporting is serious but also fun. We hope you will think so too. 

We'd love to hear your feedback!

Thank you.  





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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Sustainability Report in 2015? Contact elaine: info@b-yond.biz   

Friday, January 23, 2015

BP: Back in the Picture

In the world of sustainability, there are some names that evoke a range of strong emotions and reactions and I suspect that BP is one of them. BP has had some extremely interesting sustainability successes, and also, at least one devastating low point. You don't even have to mention the company name: just refer to Gulf of Mexico, Macondo, Deepwater Horizon, I want my life back - there are a million ways to say BP and most of them are not exactly positive. But if you stand back from the oil spill disaster of 2010, and accept that we are still and will continue to be reliant upon fossil fuels as our main source of energy for some time into the future, and take a look at what BP is doing today with a pair of fresh eyes, you may be encouragingly impressed. As I was.  

I was doing my homework in preparation for a conversation  with Louise Tyson, Head of Corporate Reporting at BP (that's both financial and sustainability reporting). Louise will be sharing her insights on "Giving your report complete clarity & readability" at the Smarter Sustainability Reporting Conference in London in February 2015 (still time to register :)). As usual, as the conference chair, I like to chat with speakers in the run-up to the conference. Ahead of our call, I navigated to BP's sustainability and reporting site after what I confess to several years of not paying close attention. I was pleasantly surprised. 

BP is an employer of 83,000 people, a strong contributor to the global economy and a long-standing sustainability reporter addressing serious issues in detail in its reporting suite. BP has various reports and formats to meet different stakeholder information needs. This year's suite includes:



A Sustainability Review for 2013 in PDF format
Several country reports for 2013 including Angola, Azerbaijan and more
Site reports from different local operations
A report archive with reports in different languages and reports dating back to 1998
An economic impact report for BP's operations in the U.S.
A super-snazzy Health, Safety and Environment charting tool that enables you to play around endlessly to review 25 years of data in different visual formats.



And my chat with Louise Tyson:

How did you get into the reporting role at BP? 
"Actually, my background is not in reporting. I was in magazine publishing for ten years and then worked in online communications. I was a consultant to BP one year, putting their sustainability report online. That was my introduction to sustainability, around seven or eight years ago. BP later hired me as the Sustainability Reporting Manager. My first report was published five days before the Gulf of Mexico incident."    

How did you move from sustainability reporting to corporate reporting? 
"I realized that our financial and sustainability reporting often cover the same issues - such as climate change and human rights – and that we should be talking about them in the same voice, even if the reporting focus and purpose is different. So, when I was promoted to the head of corporate reporting role, I knew there was an opportunity to encourage more accessible language and consistency across all of our reporting It's turned out to be a really interesting challenge. But if you had asked me if I had ever imagined that I would be doing what I am doing today, I'd probably never have guessed."  

How has BP's reporting changed over the years? 
"For many years, BP was recognized as a leader in sustainability reporting. We would win reporting awards and we were generally considered as innovative in our approach. After the Gulf of Mexico incident, things changed, of course. It became even more important that we report transparently, factually, credibly and in a balanced way – responding to the disappointment and anger of many of our stakeholders. It was very tough. We needed to provide a balanced view, clearly communicating what had happened and how we were responding. And, it was essential that our communication didn’t show up as green-washing. Over time, things have rebalanced somewhat and now most of our stakeholders are asking us much the same questions that they would ask of any large oil and gas player." 

Your reporting is so detailed and includes a wide range of local and site-specific reports. How do you manage your reporting cycle? 
"We launch our sustainability report in March, and we immediately begin on the next year’s report by getting feedback from external stakeholders on how they think we’ve covered the material issues. Over the summer, we work with representatives from our policy, risk, government and public affairs, and environmental and social teams, to pull together and prioritize a list of the most important topics. This is really powerful because it offers a broad perspective on the issues and where we are and what we should be doing. From September to December, we work on the report draft and present it to the board committee focused on sustainability issues. We then spend the first part of the year incorporating all feedback before publication."

What's the policy on country reports? 
"Country reports are developed locally by the local businesses. They decide whether they want to publish a local report. For some, it's extremely helpful as an engagement tool. We do not dictate a policy at corporate level, though we do provide a framework for local reporting, for those countries that adopt this practice. We provide positioning on group issues and other guidance. We also review the reports at corporate level before publication, to ensure there is alignment around common issues and approaches. Site reports can be very relevant to the detailed discussion at local level with local stakeholders. In general, countries and sites that report do so as a response to local demand and interest. In Azerbaijan and Angola, for example, we know this is helpful in maintaining positive relations with local institutions and government offices."

I am looking forward to hearing Louise sharing more insights at the Smarter Sustainability Reporting Conference next month. 

P.S.
I couldn't resist taking a look at BP's first Environmental and Social Report for 1998, at a time when there was no GRI, no other reporting frameworks and hardly any other companies that even acknowledged the value of transparency, let alone actually put a report together.


It's fascinating to see how advanced this BP report was for its time, and of course, compare it to the latest the 2013 review. They are both 52-53 pages in length, so that's one thing that hasn't changed. Surprisingly perhaps, given the dynamic evolution of reporting and the advances in reporting practice over the years, the pioneering 1998 report has many elements that are still very relevant today.  

The 1998 report contains:
  • policies, approaches and commitments - good old DMAs in GRI lingo
  • a range of environmental and social data dating back to 1990 in some cases , or later years when data collection commenced - demonstrating continuity and consistency
  • a 20 year GHG emissions reduction target - 10% from 1990 to 2010
  • several case studies covering different aspects of BP's operations in different parts of the world, supplemented with external commentaries developed through a process of interviews with local stakeholders by an independent consultancy - a precursor to what would today be called "stakeholder engagement"
  • an "attestation statement" - external verification and a precursor to what has become known as "assurance"
  • a questionnaire with a pre-paid postage form requesting feedback on the report. 
Looking at the BP 2013 Sustainability Review, you can see evidence of the transformation reporting has made over the years. The discussion is far more strategic and much greater context and depth is provided. The upstream-downstream business model demonstrates a higher level of value chain thinking, and the report is far more quantitative, focused and formal. The GRI, IPIECA and UNGC frameworks and principles help structure the disclosures and the metrics. New issues such as fracking and oil sands are explained and BP's approach is described (these issues were not around in the 1998 report). 

In the 1998 report, especially when compared to today's document, there is a sense of almost naive authenticity in a sort of clumsy but trust-building way. 2013's report is far more polished, and while it is direct and balanced, I wonder if recapturing something of the early-day spirit might be an interesting thought for BP and other companies to enhance credibility. To give you a sense of this, here are a few "gems" from the 1998 report:

"Our success depends on our making, and being seen to make, a distinctive contribution to every activity in which we are involved." 

"Ours is an evolving, rather than predetermined or overly bureaucratic, approach. We know that for high standards of ethical and social behaviour to thrive as part of our culture they must be felt and understood by our people. It is more important for it to be in the bloodstream than in a set of manuals."

"Diversity in internal teams (now the norm) is highly valued as it has been seen to result in more creative solutions."

"We wanted this year’s report to include more than just the ‘official’ views of the company."

"Questions of business ethics are often not clear-cut and cannot be resolved by rules alone. With this in mind, during 1998 we revised our Guidelines on Business Conduct, which provide guidance on ethical issues to anyone who has custodianship of the company’s assets or commercial relationships."

"To mark the 50th anniversary of the Universal Declaration of Human Rights we launched a human rights page on our internet site..."

"Our social impacts can range from positive ones, such as the creation of jobs and prosperity, to less welcome ones, such as fuelling unrealistic employment expectations, exacerbating existing or latent conflicts and disrupting settled ways of life."

Anyway, that nostalgic look at the early days of reporting has given me a new sense of respect for BP and its consistent, ongoing investment in transparency. This doesn't make BP perfect and it doesn't mean that BP should not continue to be held accountable for its far-reaching impacts on society and the environment in all that it does. But, especially after my conversation with Louise Tyson, I am more ready to believe that there is earnest intention behind the written words. 





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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your next Sustainability Report ? Contact Elaine: info@b-yond.biz   

Monday, January 19, 2015

5 ways to make sustainability reporting more sustainable

Is sustainability reporting sustainable? There are some that think it is. The practice is now more widespread than ever before and and legislation in different parts of the world is supporting increased non-financial disclosure. This would indicate that reporting is here to stay. On the other hand, there are some that think it isn't. There are those who subordinate sustainability reporting to the new financial reporting trend called Integrated Reporting, while others advocate online interactive disclosures instead of reports. As we move into 2015 and face another year of corporate efforts to improve impacts, manage risk and engage with the new opportunities that sustainability brings, amid a flurry of surveys and reports that support the case for or against sustainability reporting, what can companies do to embed reporting practice in a sustainable manner? In addition to the predictable list of things we already know - focus, clarity, materiality, relevance, balance, frameworks etc - here are some more creative approaches that companies might like to consider. 

Excite your Board of Directors about reporting 
Reporting has often been considered an add-on, a project for the CSR Manager, something that exists alongside the "real" reporting processes. Sustainability reporting has not really hooked the attention of the highest level of leadership and in most cases, does not find its way onto the Board agenda. In order to make reporting more sustainable, Directors must be excited about sustainability reporting. They must see it as an advantage, a benefit, a value-adding activity, and not something they tolerate. Let's be honest, how many company Directors actually read the sustainability reports of the companies they are engaged to be accountable for?  How many Directors are actually consulted in the process of preparing the report? As key stakeholders, company Directors surely deserve some acknowledgement, recognition and even voice in the annual Sustainability Report. In order to excite your Board of Directors, engage them in the reporting process and have them approve the output, here are some things you can do: 
  • Empower your board members. This can be done, for example, through Board workshops to build awareness, knowledge and engagement around relevant issues for each company. In 2014, the UN Global Compact launched an interesting Board Program to help align the Board on sustainability matters and help Directors demonstrate leadership on Board adoption of sustainability principles. As Board members engage in deep consideration of sustainability issues, they become empowered to embrace leadership and guide the company along the sustainability journey. This program looks like a good start but it must result in something more than discussion in order to truly deliver change. Therefore, after education, comes action. 
  • Engage company Directors in the reporting process. Help your Board of Directors own your Sustainability Report by asking them to contribute. Interview them individually or as a group and include their pictures and their commentaries in the Sustainability Report. Stakeholders will be gratified by evidence of greater Board commitment, and Board members will be energized by their own involvement and declaration of what is important to them. Involving them may also help reinforce their accountability for the Sustainability Report and its contents. This kind of involvement is positive but it is not enough. Involvement must be formalized.
  • Establish and publish a formal Board policy for sustainability reporting. This should describe Board accountability for sustainability reporting. The policy should define Board actions prior to report publication including a Board discussion and concurrence of the report content and agreement to publish. Following the report publication, the policy could require the Board to conduct a review of whether the report has met its objectives and agree new objectives for the next reporting cycle.   
Make your reporting process cool
I maintain that sustainability reporting as a process is incredibly cool. The right process empowers people, challenges people, gets people listening to one another, sometimes even talking to one another, occasionally even agreeing with one another. This applies to both employees as well as external partners, organizations, suppliers, local authorities and consumers. Rather than inviting people to a meeting about the Sustainability Report (yaaaaaaawn!), there are many ways you can involve people in activities that both interest and engage them, while at the same time, getting the information you need for your report. This includes competitions (send-us-a-video-of-how-your-job-contributes-to-improving-the-environment) or prizes (weekend for two for the first complete set of sustainability reporting information sent back to corporate) or Ice Cream Meetings (round table discussions with internal and/or external stakeholders on sustainability issues, where the meeting leader brings (lots of) ice cream for consumption during the meeting). There are a million ways to make the reporting process fun, even  if, at some point, there is a certain amount of  actual hard work to be done.

Engage your employees around the published report
So many reports go unnoticed by the very employees whose hard work made the report possible. That means all the employees in the company. The minute the report is published is the signal to start the work of engaging employees around the report. Rather than just broadcasting an email announcement - we published our report (yaaaaaaawn!), there are many ways to get your employees to sit up and take notice. This may include quizzes with prizes (Who is quoted on page 34 of our last report? By how much did our GHG emissions reduce last year?), games (How far can you throw our Sustainability Report?) and feedback (Cross-functional discussion groups  - can be web-meetings - each focusing on a single section of the report and analyzing the content together, with recommendations for the next report). You might even  involve your employees' children in preparing a poster about how your company makes a positive contribution to the world - requiring employees to explain the essence of the report messages to their kids. Prizes of course for the best contributions. Each company can find its own way to be creative in developing an engagement process which both informs and interests employees. You might find employees actually enjoy reading the report and discover things about the company - and their colleagues - that they didn't know. More importantly, they will be able to talk to stakeholders about the issues that matter in an informed way.

Drive your reporting throughout the supply chain
How many companies ask their suppliers to contribute to their reporting and engage suppliers once the report is published? More and more, the report of one company is both the start-point and the endpoint of the reports of other companies. I am not aware of anyone trying to track a product through all the sustainability reports of the companies involved in producing it from raw materials to end-of-life - that could be an interesting exercise. However, suppliers are big enablers of any business and their influence on the direct impacts of an organization may be quite significant. Perhaps suppliers should have a bigger place in sustainability reports - strategic suppliers can contribute data, case studies and specialist perspectives  - and may be grateful for the recognition their customers' reporting offers them, thereby reinforcing the relationship with them. Once the report is published, reverting to suppliers, emphasizing the key messages, acknowledging their role and encouraging them to adopt sustainable practices in their own businesses is a critical step in maintaining the reporting momentum.  

Celebrate reporters
It's so easy to criticize reports, it's so easy to say that reports are full of irrelevant information, it's so easy to dismiss reporting as some sort of activity that apparently everyone has been duped into doing for the wrong reasons and producing the wrong results. It's much harder to stand up for reporting and talk about what it really is: a business process that adds value, engages people and empowers employees. The folks that lead reporting in organizations have to address not only the hard work of reporting - and it is hard work - but also overcome these notions that are bandied around saying reporting is worthless. Reporting leaders in organizations should be celebrated. They have one of the hardest jobs around. Reporters play a critical role in helping organizations move forward sustainably and helping shape the future of business. I have often said that reporting is a catalyst for performance, and great reporters know how to use the reporting process to drive change.  Make sure the reporting leader in your organization gets the respect s/he deserves, has the resources s/he needs and gains the attention of management as and when needed. Ringfence your reporter and ensure s/he has enough ice cream to last through the entire reporting cycle.   


Good luck to all companies starting reporting cycles about now. Let me know how you got on with this list:)



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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Top Ten Report in 2015? Contact Elaine: info@b-yond.biz   

Thursday, January 8, 2015

Sustainability Reporting: 25 words to watch in 2015

Everybody is doing trends. There is something about the turn of a year that makes people stop and gather up all the trends they can think of - maybe even anything they can think of, and call it trends - and then write an article about them. The question is: when does something start being a trend and stop being a wishlist? Some of the so-called trends we read about are actually things that have been happening and are well embedded in current practice, while some are so not trending that you begin to wonder what a trend actually is. A trend is, I think, something that is gaining in popularity to the point that we expect loads of people to subscribe. But the world of sustainability and reporting is so fragmented that it's hard to discern a movement. There are multiple movements and multiple agendas. That's why I don't tend to trend. Take a look at the following wishlist trends articles and see if you can spot any common ground.


Predicting trends is a bit like publishing rankings. Just as rankings tend to serve the rankers more than the ranked, so trend-articles tend to serve the writers rather than the readers. However, the debate is always valuable... so well done to all the 2015 CSR and sustainability trend-spotters - you have given us something to talk about for the next 12 months. Until it all starts again.

In the meantime, I decided to avoid trends and take a look at what to look at in 2015. What's on the radar. Things that might flourish, metamorphose or die in 2015, things that may change the game, the paradigm or the comfort zone, things that may improve the quality of life of destroy it. Here are 25 words that sustainability stakeholders should have on our radar in 2015. IMO. No science. No analysis. No prediction. Not in any special order of importance. Many are not new. Some are. Just words. For your radar.

Post 2015 Agenda:  2015 is the year where we stop and think. A year of planning - let's hope all the planning doesn't obscure all the action. And let's hope that what's being planned is what's going to work. Google brings up 370,000,000 results in .0.39 seconds for the search term "post-2015 agenda". That's a heckuvalot of planning.   

Paris: No, not the Eiffel Tower or even the French Open. It's COP21,where the target is to agree to limit planetary temperature increase to no more than 2 degrees above pre-industrial levels. And if you are not sure how to get to Paris, the WBCSD has created a roadmap specially for you

Climate-smart: In a world where just about everything turned green over the past few years, climate-smart is now PC for green. If you are merely green, you are old and boring. If you are climate-smart, you are new, fresh and exciting. And really really smart.

Human Rights: Human rights is hotting up to the point that it's now almost not ignorable. Protecting, respecting and remedying is now so on the agenda, that no sustainability report is complete without it. Material or not material. It's material. 

G4: The G4 uptake has developed rapidly with hundreds of reporters already making the transition well before the deadline of end 2015. But the coming year will continue to be a learning period for G4 reporters, many of whom have adopted the framework in name only. Game-changing G4 reports are still few and far between, but, I suppose, you have to get on the playing field before you can improve your game.
 
Stakeholder Engagement: An old fave. But one which cannot be done and dusted quite just yet. Meaningful stakeholder engagement still eludes many companies and many stakeholders are still sitting on the fence. Some may not even know they are stakeholders. Watchers of stakeholder engagement in the coming year might catch a glimpse of the beginnings of a more mature approach to  engagement, but only if they don't blink. 

Material Impacts: Buzz buzz buzz... materiality in 2015 will continue to hit the ceiling to the point that it becomes somewhat diluted. During 2015, watch out for materiality synonyms. But don't expect GRI, SASB, IIRC, CDP, UNGC and anyone else to actually agree on what it means. 

Externalities: Our savior. True cost accounting bares all and EP&L's are the new sustainability celebs. Get one or get near one. Accountants will love you. 

Ebola: Can you afford to ignore the ebola effect? Even the ALS ice-bucket challenge did not spread as quickly as the panic around ebola. Is Twitter to blame? Get ebola in your next Sustainability Report. It may go viral too. (No pun intended.) (Correction, pun intended.)  

Water Scarcity: Another not-new term, but one that is top of mind and not only for sea-turtles. Water scarcity is one of the planet's biggest threats, and while the scientists are arguing about the temperature of the planet, MBA students are peeing in the shower to save water. Water scarcity, coming to a city near you in 2015. Either companies will deal with it, or they'll move to another city, if they can find one.
 
Sector: Business sustainability is sectorized and that's that. The future of comparative performance in sustainability is by sector, not by country or by issue. Your company is a member of a sector. You may even have your own association. Benchmark yourself against your peers and get granular about what your sector is doing to make a difference. Keep track of the sector radar. 

Smart Cities: Safety, security, efficiency, creativity, control centers, congestion reduction, disaster relief, off-grid... all this and more in your local smart city. Smart reporting in smart cities. Smarten up your radar in preparation. 

Resource Scarcity: Yes, we know, we know. Everything is getting used up. Resource scarcity as a driver for sustainability is still a good hook. Deforestation and all that. As  part of a sustainability strategy, it does wonders for focusing the mind on alternative sources, technologies and operational cost reductions. It also gives you a great reason not to print your Sustainability Report. 
  
Child Labor: Check out the ILO pages on child labor and see if they don't make you squirm. Corporate supply chains must continue to adress this negative byproduct of our consumer economy. The fact that, today, ONLY 168 million children are trapped in child labor (down from 246 million) is no cause for joy but cause for deep reflection on what makes our corporations successful. This must always stay on our radar.
 
Whatsapp: How do you communicate with your reporting team? Or with your report readers? Not enough to create IOS or Android apps any more, or even tweets and Facebook posts. The conversations are moving to instant, real-time, simple, personal, direct and omnipresent. Whatsapping Sustainability Reports is now on the radar. 

The Internet of Things: Everything is wifi'd and connected in our new brave world. Is your Sustainability Report?
 
Radical Transparency: Since when did transparency become radical? The idea of everyone knowing everything is perhaps a little too much for most of us. I much prefer Relevant Transparency. Either way, watch out for everyone knowing everything before you do, and be careful of being overtaken by what it's possible to know. Most things that are radical never lead to much good. 
 
Rich Media: Bye Bye static advertising, hello rich media. See what Profoundry says about rich media. Watch out for Rich Media Sustainability Report banners on a website near you. 

Disruptive Technology: Follow the "relentless parade" of new technologies and discover the benefits and opportunities they can bring. Even better, invent one yourself.  

Circular Economy: The circular economy is not just about waste and recycling. It's about an entire new system design that utilizes resources in a way that prevents losses before they circle back and shoot us in the foot. The European Commission gets it, the World Economic Forum deplores the take-make-dispose business model and obsoletism is now becoming rather tiresome. Watch out for Sustainability Reporting getting more circular. 

Food Waste: The fact that so much food goes to waste before, during and after its journey along the food chain and into our stomachs or our garbage cans is one of the great crimes of our times. When food goes to waste, it's not only food. It's all the resources that were used to create, transport, distribute, prepare, market, package, merchandise and sell food. Plus all the extra ones required for its disposal as waste. The Food Waste Reduction Alliance, the FAO Save Food initiative, and  the numerous organizations focused on reducing food waste are moving in the right direction, but things are going slow. Maybe Seattle has got it right? No more food in trash. Maybe, in 2015, measures to combat food waste will be so material that every company will need to be part of the solution, not only those directly involved in the manufacture and supply of food. 
  
Framework: Reporting frameworks are breeding faster than rabbits. Keep your RSS feeds up to date in case you miss a new framework in 2015. Instead of harmonization, we have fragmentation. Instead of simplification, we have complication. Instead of consensus, we have the Framework Wars. What will change in 2015? The radar will reveal all. 

Anti-corruption: Has anti-corruption lost its edge? It seems so banal these days. I mean, we all know what it is and why it shouldn't be. But it is. And it is probably no less. That's why it stays on the radar. 

Women on Boards: The glass ceiling has not yet cracked and women are still disadvantaged and discriminated against throughout the entire corporate regime. Why is it still so challenging to identify and advance capable women, not just on Boards but throughout organizations? Maybe the radar in 2015 will offer some answers. 

Selfie: What's sustainability reporting if not a form of corporate selfie? Watch out for Sustainability Reports becoming more selfiecized. If Ellen de Generes can do it, so can you. 
**********

Actually, I had about another 325 words to complete this list. Including of course ICE CREAM. But, in the interests of not boring - or frightening - everyone to death, I decided to stop at 25. After all, FOCUS is also one of those words that didn't make the list above. 

2015 here we come.....get your radar ready for a whole load of words....



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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Top Ten Report in 2015? Contact Elaine: info@b-yond.biz   

Tuesday, December 30, 2014

Our Year in 2014

2014 was a super-fun-busy year for my company, Beyond Business. We supported 9 clients in the development of GRI-based sustainability reports: 7 are G4-core reports, one is G3 and one is not GRI based. In some cases, this included more extensive stakeholder engagement and/or strategic development work with these great clients, the results of which you can see in some of the reports.


We also continued to support the different and varied requirements of other new and long-standing clients including bench-marking reports, reports analysis, strategy preparation and lectures and training sessions for management and in-house sustainability teams. 

In 2014, Elaine lectured or facilitated in sustainability events in 5 countries in addition to our home base and also participated in an online debate about stakeholder engagement. Elaine contributed chapters to two sustainability educational books published in 2014. We continued to write frank sustainability report reviews that are published in Ethical Corporation magazine - 6 reviews in 2014. 

We have had an active year too on the CSR Reporting Blog with 66 posts excluding this one (that's an average of 5.5 per month) covering hundreds of sustainability reports, events, and general views on the transparency landscape. That brings the total CSR Reporting Blog posts to 511. The most popular posts of all continue to be the annual Top Ten Sustainability Report picks. 

We have responded to numerous requests for advice and assistance from students of sustainability or even fellow professionals or those aspiring to be. Through it all we have tweeted far and wide, mostly about #sustainability, #CSR and #reports, bringing our total tweets to 16,448 to 12,407 followers, at the time of writing. 

Our community involvement primarily took the form of cash donations to non-profit organizations in the areas of women's empowerment and food-waste rescue, and our team of four took a day in July to help pack food parcels that we purchased for needy families. We remain an environmentally conscious company, recycling pretty much everything and being carbon neutral since 2009, covering our modest GHG emissions through purchasing offsets. 

Alison, Gal and Iris of the Beyond Business team in 2014


Also in 2014, we created, with a little (lot of) help from design professionals, our first sustainability video featuring Dr. Sustainability, and we launched our spanking brand new website, detailing the range of services we offer and the support we can provide to corporate clients, large and small. I'd love you to check it out! You never know, maybe there is something we might be able to assist you with in 2015! If so, I'd love to hear from you!

In the meantime, we are looking forward to 2015 and another fun-packed reporting year. We hope you are too! 

Happy New Year!


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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Top Ten Report in 2015? Contact Elaine: info@b-yond.biz   

  

Sunday, December 28, 2014

Why the materiality matrix is useless

2015 is a new year - Happy New Year to everyone! And as we close out 2014, I thought it would be a good time to shake things up a little and get just a touch provocative. (Totally out of character, haha). See, I have begun to be really irritated by useless materiality matrices.  I am looking forward to a year in 2015 where materiality drives strategy and reporting in a profound way, and where we stop playing around with dots on a matrix just because that's what seems to be the de rigeur of sustainability reporting.

One of the things that is going to have to get a whole lot better if companies are really going to gain best value from a strategic sustainability approach is the way materiality is considered, analyzed, developed and communicated, as well as, more importantly, used as a basis to drive action. In many cases, it's near impossible to relate what are stated as material issues to the way the company approaches its sustainability activities. The more G4 reports I read, the more materiality matrices I look at,  the more I come to the conclusion that, by and large, many companies are just missing the point

This is probably not entirely intentional. Maybe many companies actually think they are doing a good job of defining materiality. Spending time plotting little dots on a matrix and moving them up or down a millimeter may actually be someone's idea of meaningful strategic planning. Maybe people think that's how it's supposed to be done. Maybe companies look at their materiality matrices and give themselves a big slap on the back. 

But actually, it's not being done well. It's not hitting the right spots. It's not generating the leverage that is needed. Materiality, so far, as a concept, is not proving itself. It's a nice buzz word, makes everyone feel good, sound intelligent and provides creative license to draw pleasant graphs, charts and multicolor, even interactive, visuals, but it's not doing what it intended to do. This is clear from the disconnect we are still finding in sustainability reports between what's supposedly material (because the matrix says so) and what companies are actually doing (based on what's reported). 

The basis for my comments is my personal review of many of the 500+ GRI G4-based sustainability reports that have been published to date. I am referring to G4, because G4 places material impacts squarely at the center of the reporting approach. Not because it's right for reporting. Because it's right for business. This is how GRI G4 defines materiality: 


In G4 reporting, companies are required to list material aspects and provide disclosures that show how  an organization "identifies, analyzes, and responds to its actual and potential material economic, environmental and social impacts". Performance indicators supporting  material aspects are designed to reflect how a company measures its performance in relation to those stated material impacts. While I know that the G4 framework is not always 100% logical, and there is, in many cases, a rather unfathomable connection between certain material Aspects in the framework and the Performance Indicators that are designed to reflect those Aspects, the underlying issue is whether companies are approaching materiality in a meaningful way. (Perhaps someone might even be able to explain to me why G4 chose the very odd word Aspects and did not use the very clear word Impacts when making materiality the G4 engine driver). The metrics, or indicators, can be adapted or developed to meet the need. The material impacts should first drive what a company does or should do, and therefore measures, and therefore reports. Creating a materiality matrix after you have done everything else is not exactly going about things in the right way.

Let's think about what materiality really means in a sustainability context. It means the material impacts IMPACTS IMPACTS on stakeholders. 

These are things that material impacts are NOT (or not only):
  • what's going to help us make more profit
  • what our stakeholders mention in passing
  • how we perform
  • what we think is politically correct
  • what everybody else is saying
  • what's easiest to report
  • what shows us up best
  • what's in fashion
  • what the  lawyers tell us to say
  • what we've always said
  • what the assurers can count
  • things we have data for
  • an afterthought
  • an easy option
  • a buzz word
  • a box to tick
  • lip-service
  • a way to appear as though we wrote a G4 Sustainability Report

Material impacts are: 
  • the way our business activities affect the lives of our stakeholders and our long-term business viability
  • the basis for creating a sustainable business strategy with relevant targets
  • defined as the result of an analytical process that engages internal and external stakeholders about what affects them and how
  • the basis for creating sustainability communications including reporting
  • specific to a business, a sector, a geography, an issue
  • a catalyst for planning and action
  • connected to a business's core social mission
A few examples? Sure. Wizness recently published a free download benchmark of 50 materiality matrices across 5 industry sectors. Almost all of them have loads of little dots carefully plotted on creatively designed squares, blocks and circles. Some of them have so many dots you begin to wonder how on earth the company even recognizes the dots, let alone creates a strategy to manage them. Whoever is selling dots is making a killing. And the relativity between the dots is often just incomprehensible. Here are some examples from the ones presented by Wizness:

You may be able to see, just about, that this company has loads and loads of dots, with the top 16 prioritized as the most material issues/impacts, supported by a detailed stakeholder matrix of what affects whom. The top 9 issues all have the same degree of importance to stakeholders, yet they are all at different coordinates on the matrix. Compliance with laws and regulations is only mediumly important to the business and to stakeholders while compliance with laws concerning products and services hits the top right box in the matrix. I wonder how these nine issues were plotted. What makes anti-corruption so much more important than anti-competitive behavior? The report gives no clue to how these issues were placed in the matrix. Their placement suggests that they are not equally most material and that some are more most material than others. What does this differentiation actually mean? To me, it suggests that there is a focus on moving dots around a matrix and not on the underlying drivers of sustainability performance. Notwithstanding the fact that the very act of defining a set of material priorities is an important part of the process and should be encouraged.  

Here is another example:

Pan American Silver Sustainability Report 2013


Wow. The entire 46 G4 material Aspects and Sector Disclosure Aspects all carefully ticked or unticked and slotted into place on a matrix that it took me half an hour to work out what's where. I wonder how long the plotting exercise took and how the little letters on the matrix were locked into position. The color coding of the different categories makes it almost impossible to tell without detailed study what is actually most material for this company. It looks to me like the top three - turquoise "a" is "local communities" as the top issue,  purple "c" is "occupational health and safety" one of the two runners-up and blue "d" looks like child labor as the second runner up. Why are these issues more important, than, say, anti-corruption, which appears much lower on the list, or labor relations which is not material at all?

In Pan Silver's report, there is a large section devoted to the most material Aspect, local communities. It's about how Pan Silver, while doing its core business, is engaged with local community projects to support economic and social development. A really fine array of projects that I am sure are highly commendable and make a genuine difference to local quality of life. But why is engaging with local community development projects the most material impact of this company? What about the impacts generated through the company's core business? What about materials use and ecological limits? Pan Silver produced 26 million ounces of silver and 150 thousand ounces of gold in 2013. What about water use in the mining sector? Total water withdrawn for Pan Silver in 2013 was more than 42 million cubic meters, that's about 15,000 Olympic swimming pools. Not to mention water discharge with potential toxic chemicals. Pan Silver has addressed these issues in the report, but what makes them less important local community projects? Does the materiality matrix indicate priority in allocation of the company's resources required to address material impacts, suggesting that a higher priority received more attention, more resources, more commitment? What I would really like to know from Pan Silver is its most significant impacts on stakeholders. The top 5 or 10. I don't really care where they are on a matrix. I don't really care about the tenth of a millimeter of space between the little letters. Does anyone? I don't even believe it is possible to differentiate between the most important material impacts at this level of detail. I am sure the process of thinking about what is most important should have been beneficial. I suspect that the part where the dots on the matrix slotted into place is simply a total waste of time.  

And here is another example from The Hershey Company 2013 CSR Report.



Hershey's has defined the priority issues and they are all dealt with well in the company's CSR report. It's great that out of a total of 25 issues, Hershey has selected ten that represent the most important impacts. However, what makes food safety so much less important than ethical sourcing? Why is child labor so much more important than GHG emissions? Why is ethics more important than governance? And if philanthropy is so low on the matrix, both for stakeholders and for the company, then what's it even doing on the matrix? Isn't that just a waste of energy, deciding where to put the philanthropy dot? And if the currency is dots, is philanthropy the only dot that is loooooooow priority? I could think of a whole load of additional issues that might have come up in a materiality discussion that are not on this matrix. The point is, selection of the top ten prioirities is great. Using these materiality priorities to define strategy is fantastic, and structuring your reporting around these material priorities is brilliant. Hershey does this fairly well.


But taking that to the point of plotting dots on a useless matrix is what I don't understand. Especially if no-one explains why these dots are where they are.

The GRI G4 guidelines does not require the presentation of material Aspects in a matrix. The reporting disclosure is:
The G4 guidance for determining what is material makes reference to defining thresholds for materiality and defining and documenting how the thresholds have been defined. The guidance also offers a matrix for presentation of material issues. But this is guidance... it's not a G4 requirement. In general, the companies that present materiality matrices define why issues are material but they do not make reference to the relative material priority of each dot on the matrix. So why bother with a matrix. Why not simply do what is asked: give a list.

Materiality and its importance were recently addressed by think-tank advisory firm SustainAbility



SustainAbility published an excellent paper on transparency and its use as a driver for improved performance. SustainAbility says: "Most companies are not gaining the value commensurate with the resources spent on reporting." This is a proposition that I wholly agree with, for many reasons. (Haha - you can see that from my red text). SustainAbility's response to this is to use materiality to drive the rest. 


The SustainAbility paper provides two examples of materiality presented in reports: PG&E and Fibria. 

The PG&E Sustainability Report for 2013 presents a materiality matrix in a pretty familiar way - using dots. (SustainAbility helped PG&E create this matrix.) It has an element not usually found in materiality matrices: the addition of arrows showing the interrelation of issues. The online presentation of the matrix is interactive - when you click on an issue, it turns blue and a number of little orange dots show up connecting things to the blue dot, as in the version shown below. No connection between Public Safety and Employee Engagement, for example. Seems rather odd to me. However, SustainAbility writes in their report that highlighting interconnectivity between issues "provided insight into how PG&E might approach issues in a more integrated way." Intuitively, that sounds sensible to me. Although, if I were to be truly provocative, I would say that pretty much everything is connected to pretty much everything.   



In the PG&E matrix, however, we again we have a nicely arranged set of dots. It is not clear, based on the description of the process, what criteria were used to actually decide where each dot should be carefully placed. On what basis do you assess the scale of business impact? Is this an opinion based assessment or a fact-based analysis? Interestingly, PG&E states that: "PG&E’s materiality assessment identified 18 issues. Every issue is material to PG&E’s long-term sustainability, regardless of its placement on the matrix." Sounds to me that there is no need for a matrix. The real value of the process was the engagement benefit. See this quote from the Corporate Sustainability Director.


The Fibria 2013 Sustainability Report, on the other hand, uses the list method. Isn't this super-clear? Ten key issues, all equally important, all top priority. Businesses are complex things. It's OK to have more than one top priority. 


For those of you who like a little more detail and to know where things fit, Fibria provides an infographic: 

However, the plain, no-dots list of material issues, and its use in defining strategy and reporting is.... for me.. the way to go. I like the list. I don't like the meaningless matrix.

In addition to the list of top priorities, for completeness, companies may also select to indicate other topics that are on the radar, but not considered to be most material. This could be another (not too long) list. All attempts at creating flurries of dots is simply a waste of energy.

So here's to a great 2015 and clear, focused, material reporting.
Down with the matrix.
Up with the list. 



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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Top Ten Report in 2015? Contact Elaine: info@b-yond.biz   
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