Friday, June 18, 2010

What is Deutsche Telekom's report worth ?

I was disturbed to read about the criticism by its own employees of Deutsche Telekom's alleged unionbusting practices in the USA and commented on this in my blog on CSR and HR practices, with reference to Human Resources practices of this company. Clearly, this backlash was timed to conincide with the publication of Deutche Telekom's  2010 Corporate Responsibility Report , announced earlier this week, and forms part of an ongoing and well-planned campaign which includes a report called "Lowering the Bar" published by Dr John Logan of San Fransisco University, a seemingly credible figure, a website, and many interventions  on Facebook and social media. An organized campaign designed to enable Deutsche Telekom's employees at T-Mobile in the USA to unionize and discredit the Company for allegedly not allowing them to do so. 

Why would employes have to resort to this sort of campaign for unionization? Freedom of association is one of the fundamental principles of the International Labor Organization and the United Nations Global Compact which Deutcshe Telekom declare support for. The German employee population are unionized and enjoy a strong position. What's the big deal here? Where is the truth ?

The Press Release for the 2010 report on stated:

The report, titled 'We take responsibility', claims that Deutsche Telekom is well on the way to adopting an international leadership role on sustainability and corporate responsibility and 'is making it easier for customers and suppliers to participate in modern everyday life with sustainable and international products, processes and services'..........The report has also been checked by the Global Reporting Initiative (GRI) for an A+ application level against the GRI G3 reporting framework. 

In this report, despite the GRI index, and UNGC communication on progress, I couldnt find any reference to labour disbutes in the USA. The most that Deutsch Telekom says in the report is this:
I wondered how materiality was assessed and if the Assurance process for this for the A+ report  touched on these issues.

Re Materiality - there is a nice materiality matrix which shows Employee Satisfaction and "Employee codedetermination and labor rights" in the top right segments, indicating high importance for the Company and for stakeholders, but, beyond the paragraph captured above, no further information. There is refererence to Group wide employee safisfaction but no disclosure of results.  

Re Assurance - PWC's pathetic assurance statement says "Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the data of the CR Report for the calendar year 2009 marked with the check symbol ( v) has not been prepared, in all material respects, in accordance with the GRI criteria." This limited, partial assurance, covering a small section of the report data , is not worth the paper it is written on.

Now, what conclusions can we draw from this?  One the one hand, a seemingly perfect and transparent performance by Deutsche Telekom in its reporting. On the other hand, a massive campaign which completely discredits the company's labour relations and human rights activities in the USA. Who should we believe ?

The point is, really, that it is of no consequence who we believe. I am sure there are two sides to every story and I learnt many many years ago that things are not always what they seem, so on the issue of labour rights, I suspend comment and judgement. But on the issue of reporting, I believe Deutsche Telekom is abusing the system. This is clearly a visible and higly material issue. Even if Deutche Telekom believe they are squeaky clean in this respect, they should have made reference and provided a response in their 2010 report, in the name of transparency, and fair and balanced representation of their sustainability performance. Equally, the Assurance statement, which does not cover employee issues, is a farce. If you are a stakeholder  in Deutsche Telekom, you should be bombarding the Company with requests for detailed information on labour practices. As I complete this post, I will also be writing to them to ask for their position on this issue. After all, what is sustainability reporting all about if not issues such as these? And what other issues are hidden behind the glossy texts ?

elaine cohen is co-founder and co-CEO of Beyond Business, a leading social and environmental consulting and reporting firm. Visit our website at

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