I am often approached by students to provide assistance with their studies on sustainability. This time, an MSc student from the UK challenged me with several questions about the Marks and Spencer 2010 report. Whilst I don't manage to response to everyone in such great technicolor detail, I used this student's questions as a great opportunity to study the M&S report and blog about the iconic Plan A, all the while assisting with the study of sustainability.
Here are the questions in red with my answers in boring old black:
What is the GRI Application Level sought by the last report by M&S 2010? I have read that it is C, but looking at the GRI index at the end, it is not clear. How do I get this information?
Yes, it's true, some reports don't clearly state the Application Level of their report in a very visible and accessible way. The M&S Report notes on page 40: "To provide a common point of reference, the Global Reporting Initiatives’s (GRI) third generation G3 framework has been used as a checklist. As the Report is mainly based around our Plan A commitments it has been prepared in accordance with the level C". I interpret this to mean that they have not rigorously applied the C framework but have more or less, in a roundabout way, generally speaking, rather, somewhat, glanced at the GRI C framework. In actual fact, after a quick review I can see that one of the mandatory disclosures, 4.15 (basis for identification and selection of stakeholders with whom to engage) is not reported. You can look at the GRI Application Levels table on the GRI website to know what indicators need to be reported at each level.
M&S doesn't explain how they selected their core of stakeholders (4.15). However, although there is lot of literature on M&S, I never found a stakeholder unhappy to be left out. Most of the NGOs and Think Tanks commentators are positive about M&S's report (and therefore M&S's way of selecting stakeholders). Here is the contradiction: apparently they haven't reported properly (4.15) but nobody is complaining as if they have done well practically. Is this correct?
Actually, the Stakeholder Dialog section in the M&S report (pages 42 and 43) is quite impressive and certainly has more breadth and depth than most of the reports I read. Stakeholder dialog is one of the most important parts of a sustainability report and most don't do it well, mainly because they don't have a structured approach to stakeholder engagement and therefore revert to reporting about general conversations with customer and suppliers and mentioning a few industry associations they are affiliated with. True stakeholder dialog is the fundamental basis for legitimacy any organization can seek, and representing it well in the Sustainability Report one of the strongest pillars of credibility. M&S report on how they engaged an external party, Ernst and Young to gather "impartial feedback" from a range of organizations, which the report lists. All of these organizations are NGO's which focus on different aspects of sustainability. The broad stakeholder responses gained from this exercise are listed and are quite enlightening being not simply complimentary but offering good suggestions for M&S's sustainability direction. M&S's responses to the responses are also listed. In addition, M&S reports the channels for stakeholder interaction with other stakeholder groups.
This is a good overall representation of stakeholder engagement. We might of course ask how the stakeholder groups were selected, how many stakeholders from each NGO consulted provided feedback, and why they elected to use an external party to facilitate dialog rather than create a direct route for discussion involving M&S people. We might ask for more information about the true nature of stakeholder dialog with employees, suppliers, customers and regulators, some of which is only briefly referred to in the body of the report. We also might wonder how much stakeholder feedback and input influenced the selection of Plan A commitments (and we may need to go back to January 2007, when Plan A was launched, to find out) or the new 80 commitments launched in March 2010. In response to the point about no-one complaining because M&S did not disclose against 4.15, I would say that, first of all, we don't know who complained and if so, because M&S does not disclose this. In general, however, M&S does do well with a strongly branded and well-communicated Plan A, and a very detailed report against the commitments they have made, so I doubt there will be a stakeholder lobby about a gap against profile disclosure 4.15.
They said that they reported on 4.17 (what the stakeholders have to say). However, they reported only what the stakeholders said on the issues that M&S selected. So, we don't know whether the stakeholders presented other issues as material or not. Again, I never read practical criticisms of materiality on regard of M&S report 2010. I only read your comments to the report of 2008, on regard of the lack of transparency of what happened when employees were made redundant. So, am I right that 2010 report still lacks of transparency on materiality but that, at the same time, the public seems happy with it?
This is a good point. M&S have not published a materiality matrix. We are left to assume that the 100+ commitments reflect the most material issues. We don't know from the way M&S reports anything about the relative intensity of the feedback the company has received from different stakeholders, nor do we know how these issues tie into M&S's core business strategy, aside from some obvious assumptions relating to growth and cost savings. The plan A commitments range from aiming to make all UK and Republic of Ireland operations (stores, offices, warehouses, business travel and logistics) carbon neutral by 2012 (no. 1), to maintaining a non GM food policy (no. 53), to introducing a range of recycling services for customers including a project for used clothing (no. 44) to providing improved health and lifestyle information to employees (no. 100) and a whole lot more in between. Which of these are material? Which are more material ? Which are most material? And why? M&S did not meet commitment no. 49, to triple sales of organic food by 2010. In fact, 2009/10 sales were below 2005/6 levels. Is this of any material significance? Will the general health of consumers be seriously affected by avoidance of organic foods? Will M&S's share price take a hit because of this? Will fertilizer and pesticide volumes used in M&S products be increased as they sell less organic food?
M&S have a checklist of performance indicators, their own kind of GRI, and they work through this. The difference between Plan A and the GRI framework is that the GRI framework, imperfect though it may be, is a multi-stakeholder consensus driven platform which is now widely accepted as leading practice. The M&S Plan A is a unilaterally developed performance program. It's a bit like the ladder against the wall analogy. M&S are outstanding ladder-climbers, but is the ladder standing against the right wall? And how do we know?
In response to the point as to whether the public are happy with it, it seems they are. M&S enjoys much participation from consumers and gains much kudos from thought leaders in this space. The company deserves great credit. They are doing far more, and doing it far better, than many. Perhaps that is the limit of their stakeholder aspirations (and perhaps they know that).
I have the feeling (from many readings, but I can't point to any specific one) that the supply chain issue is better covered by other competitors, such as Sainsbury. However, M&S is famous for being very demanding with its supply chain, being mostly the only big retailer that is sending auditors everywhere. So, could M&S be weak on reporting on supply chain, but strong in practice? Why would it be so?
I think part of the response to this is the format M&S uses for its reporting. Rather than describe policies, goals, objectives, case studies, and provide a platform for stakeholder voices in the report, the Sustainability Report is a list of commitments and status statements against Plan A. This makes for a very disjointed view of the M&S performance. We only know about anything insofar as it is encompassed in one of M&S's commitments. Reporters who weave goals and objectives into a body of narrative which flows logically may well give an impression of more comprehensive reporting when in fact they may be doing less than M&S.
Marks and Spencer report is a C Level but why is it self-declared and C only (not C+) given that it was externally certified by Ernst and Young ?
The assurance statement by Ernst and Young could qualify for the GRI "+". However, as mentioned earlier, M&S are very hedgy about their claim to Application Level C. They have not really declared and Application Level but merely assessed their level of disclosure to be in adherence with Level C guidelines. They could have said C+ guidelines just as easily. However, the assurance statement did not assess the M&S report against the GRI guidelines requirements, which I would expect it to do if assuring a true GRI report. Perhaps it was just easier all round to leave this point rather fuzzy.
So, that was, for me, an interesting review of the Marks and Spencer report, based on an even more interesting set of questions from our London student. I think that definitely deserves a Chunky Monkey next time I am in London, don't you ?
elaine cohen, CSR consultant, Sustainabilty 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)