Thursday, October 9, 2008

Israel : finally waking up to sustainability reporting

After what has been a saddeningly dormant market in terms of sustainability reporting, the Israelis are now wakening up to the delights of revealing all to the public at large. Up until this year, an intermittent trickle of low-key reports characterized the market (such as the Egged Bus Company environmental report) , and the awareness of the industry. This year, 2008, albeit rather late in the year , an absolute flood of reports has revolutionized the market: FIVE reports between July and September:

comme il faut: sustainability report, GRI A checked, 85 pages
Partner Communications: sustainability report, GRI B checked, 56 pages
Strauss Group: Sustainabilityreport, GRI A checked, 126 pages
Bank Leumi : interim environmental report, non-GRI, 32 pages, HEBREW only
Motorola Israel : sustainability report, GRI-referenced, 76 pages, HEBREW only

Interesting to note that all reports are quite different in nature and represent different industry sectors – within this diverse group, 5 distinct industries are represented, and 5 different business models.

The first to break through the glass ceiling was
comme il faut – a medium-sized, privately-owned feminist fashion business with a social and environmental agenda. Their report is a masterpiece in creative design as well as professional content at a high level of disclosure, both in terms of transparency, materiality and issues for which the business has been criticized.

Next came Bank Leumi's Environmental Report, an interim report (Leumi, one of the two largest banks in Israel, was the first GRI reporter with a full sustainability report in 2006) detailing environmental advances (direct impacts) and carbon management policy – the first and only bank in Israel to develop and disclose in this field.

Third to hit the headlines was Partner Communications, with a GRI checked B level report full of superlatives and cringingly positive declarations but, sadly, lacking in measurable performance-related content. One of those reports that leaves you wondering: Is that really it ? Surely there must be some more data on the website. But then you look and find there isn’t. Partner is the second largest cellular provider in Israel marketing under the Orange brand, and a major local employer, renowned for bold marketing and innovation. We expected a beefier report.

Following on Partner's heels – Strauss Group. Strauss is an Israeli based global foods and bev business – salads, snacks, confectionery, coffee etc – traded in Israel and one of the few Israeli Companies with over $1 bn turnover worldwide, produced an interesting, professional report focusing on narratives of direct impacts with a reasonable degree of disclosure which admits to the Company being in the first stages of the sustainability learning curve but which conveniently fails to mention some of the less positive issues the Company has been associated with during the past year such as lysteria found in salads and industrial action by employees regarding their rights.

Finally, Motorola Israel , the leading Motorola subsidiary outside of the US, produced their third local report, a highly detailed account of Motorola's impressive activities in Israel as part of global Motorola Inc. This report is not a full GRI report, given reliance on the global reporting of the mother company, but it does reference GRI indicators and is the first report to have been assured in Israel.

The fact that this group of reports all appeared around the same time in 2008 is hopefully, not just a splash in the ocean or some csr bug in the air. It's the sign of a market starting to develop into a stage of maturity where transparency holds some attraction. The low degree of public engagement and activism in Israel creates little pressure for Companies to report. But the potential for good PR and reputation enhancement is now becoming a driver of corporate interest in sustainability.

Notwithstanding, a lack of deep understanding of reporting and its purpose is evident in these pioneer reports. Only the comme il faut report produced a materiality analysis and explored material themes in detail. Others were transparent to a degree but not material. The impact of cellular phones on society was not explored in any detail in the Partner report, and the issues of obesity, food safety and sustainable food supply chain were not tabled in the Strauss report. Stakeholder engagement is not clearly understood, and there is little evidence of true efforts to identify material issues for core stakeholder groups, aside from employee satisfaction surveys, which are less than adequate as a tool for measuring stakeholder concerns and aspirations.

This is more or less where the global reporting markets were around 5 years ago. A desire to be seen to be transparent, and a public shopping list of company policies and selected data was a good first step. The advent of normative frameworks such as the GRI, Global Compact, AA1000 standards and stakeholder processes have helped global Companies move from direct and broadly internally focused csr to externally focused sustainability approaches - the move from "What are we doing" to "How do we impact". This is the maturity evolution we can expect in the local Israeli market as Companies move to second and third reports.

But first, we need to see a critical mass of reporters in Israel – in many ways, any report is better than no report, and in Israel, the potential for 250 annual sustainability reports is not exaggerated.

Let's hope that 2009's reporters will abound, whilst at the same time, learn from years of reporting experience and avoid the pitfalls of the nearly -early adopters.

(For the record, as a local consultant, I was involved in writing the first Leumi social report 2006, comme il faut report 2007, and i assured the Motorola Israel 2007 report)


Lucia said...

Elaine, maybe there is a relationship between this reporting phenomenon and UN Global Compact activities in Israel? At least in Moldova, we are expecting the first dozen of reports to be published by the end of this year - all by members of the local Global Compact network.

elaine said...

hi lucia, thanks for posting. The UNGC has been markedly absent from mainstream business influence in Israel. There was a "launch event" a few months ago, but only a handful of companies have joined up - two of them because they are my clients ! - and no developing networks as far as i know. I think our market is basically complacent - we dont see ourselves as having major human rights issues as in some countries (though we do have issues which must be addressed) , and we have open trading relationships with Europe, USA and Far Eastern markets.

Israel was recently accepted to the OECD and this might cause more of a wave than the UNGC principles.

I look forward to seeing reports from Molodova. I have visited Chisinau 3 times and have a personal interest.

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