Thursday, March 3, 2011

Is reporting waste a waste of time ?

One of the biggest issues, I believe, in GRI-based reporting is that of comparability, which is the ability to compare performance across companies. Included in the ambitious vision of the GRI was the aspiration to become a platform to enable company and sector comparisons of key sustainability performance metrics. Whilst on a broad scale, some degree of comparability is possible with companies who report with a high level of transparency, there still remain vast gaps in the quality of reporting against individual indicators. Because the GRI check is limited only to a sampling of indicators reported, these gaps are not necessarily picked up by the GRI application level check.

To explain how this shows up in different reports, I took a look at Performance Indicator EN22 which is all about something we all create (ha-ha some more than others): waste. The GRI indicator requests details of hazardous and non-hazardous waste created by the organization's operations by disposal method, reported in tonnes. Companies are asked not only to detail what they waste but also what they do with their waste. This is as important to the financial sustainability of the company (waste is money) as it is to the sustainability of our environment. It sounds like a fairly simple thing to report, right ? Well, perhaps not.

First report from this company, published in 2011, GRI Application Level B  GRI Checked. This company has published a printed report summary. The GRI index appears online only. Indicator EN22 is noted as fully reported. In the summary report, we learn that Arizona generated approximately 2.5 million pounds of hazardous waste in  the USA in 2009 and less than 10 million pounds in Europe. Over 98% of hazardous waste is sent for off-site incineration and the remaining waste at 2% is landfilled or recycled as required by law. Solid waste, which is not hazardous, is landfilled (80%), incinerated (13%) and recycled (3%). And that's it. Total amount of waste is not reported, I have to really search for the relevant data and also do some number-crunching to understand their hazardous waste levels in tonnes, and frankly, I really have no idea exactly how much this company is sending to landfill each year. EN22 is not reported in full.

GRI Application Level A+, third party checked and GRI Checked. This report is an annual report which also confirms to GRI A+ Application Level. The GRI Index is a PDF which has to be downloaded separately and not part of the printed report. Indicator EN22 is noted as fully reported.  In the printed report, we learn that Hoffman La Roche generates waste to landfill (inert waste 1,226 tons; construction waste, 14,900 tons; reactor waste 7,208 tons) and separately we are told that the organization generates 27,249 tonnes of general waste and 29,020 tonnes of chemical waste. Now, it gets more complicated. The PDF download GRI Index also has embedded downloads, such as this one one the subject of waste. In this third download, we are told that 95% of chemical waste was incinerated and the rest was  landfilled. Then there's this: In addition, 4279 metric tons of residual substances could be sold as valorised socondary products. Another 16,369 metric tons consisting of mainly solvents were recycled. As regards general waste, 19% of the 27,429 metric tons noted above were incinerated and the rest landfilled. 14,900 tons of this was rubbish from demolished buildings. In addition, 92,141 metric tons of residual materials were recycled. So, by this time, I am totally confused. Is Hoffman's total waste 1,226 PLUS 14,900  PLUS 7,208 PLUS 29,020 PLUS 4,279 PLUS 16,360 PLUS 27,429 PLUS 92,141 =192,563 tonnes ?  How much of this total waste, whatever total means, is hazardous ? The report does not distinguish between hazardous and non hazardous.  In addition to having to download three documents, try to make sense of non-sensical figures and add everything up myself, I still remain perplexed as to the total waste levels of this company, despite their pride at having reduced waste levels, so they say, during the past five years.  Here we have an A+ report checked by two separate external parties, and I can't even get a simple figure such as total waste. EN22 is not reported in full.

This is an Application B+ level report, checked by the GRI. In this report, the GRI Index is part of the report (whew!) and EN22 is noted as fully reported. And lo and behold! We have data. See  this:

Here we have clear reporting. Hazardous and Non-Hazardous waste separately recorded, split by type and tonnage. Great. Now, where did all those millions of tonnes of waste end up? Oops. Who knows? This is not reported, as far as I can tell. So, all in all, whilst I have a much easier time getting to clear numbers about waste generation, I still do not know how the Company manages waste disposal and Indicator EN22 is not fully reported.  

How should Companies report this indicator?
Clear numbers, clear narrative, clear graphics, clear reporting, in conformance with EN22 performance indicator. At a glance, we know how much waste, the split between hazardous and non-hazardous, and what happened to it. Well done Vestas!

So, at least there may be light at the end of the tunnel, as one out of four reports I randomly reviewed appears to be able to get it right. As I often say, the GRI guidelines are good. The problem we have is adherence to the GRI guidelines in a rigourous way. Despite checks and verifications, comparability evades us because reporting companies are not applying the correct degree of rigour in their reporting. What's worse, they are telling us that they are. In the meantime, therefore, let's not add to overall waste levels by making reporting waste a waste of time, as time, as we all know, is one of the most valuable non-renewable resources of all.

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  on Twitter or via my business website (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)


kuszewski said...

Elaine, this is all absolutely true. I think GRI's biggest dilemma over the years has been the tension inherent between materiality (or 'flexibility') and comparability: on the one hand, companies want free rein to create a report that tells their 'story' in a way suitable to their reality, and on the other, many readers and stakeholders won't be able to use or value the information without the sort of rigorous, comparable data you describe. Companies interpret the materiality principle to allow them not only to select what issues should or should not be included in the report as a whole, but even which bits of indicators they can keep or lose, which seriously undermines the exercise.

But I also think the external checking of these reports is beyond pathetic in many cases - GRI does not have the resources required to perform a truly reliable review of G3 application; and the third party auditors clearly seem to have problems with it as well, judging by the experiences we have all had in reading reports where indicators are described as 'reported in full' when they are just not.

Reporters - and also their third-party suppliers - need to be held to account on this. How?

Mario Vellandi said...

It appears that the format, structure, and display of data enables (or disables) the ability to clearly report, or readers to understand, findings.

Data communication gurus like Edward Tufte expound on the importance of arranging your information in a coherent manner in the beginning, along more than two variables, so one can understand it better as one goes along building it. That allows easier comparability as well.

If such clarity is not afforded the reader, one can assume 3 things:
- Lack of skill in communicating data.
- Lack of data to communicate along multiple variables, or visually.
- An intent to obfuscate the data through narrative format because of a lack of data and/or potentially reader-perceived weaknesses the reported indicators may expose when showing unknowns in tables or equations.

Therefore, I can only blame the reporting organization for any weaknesses and not the GRI reporting guidelines themselves, unless you believe Elaine (as you're more knowledgeable in this regard), that the G3 guidelines do not provide enough guidance on communicating data.

elaine said...

hello Judy, thanks for reading and thanks for your comment. My personal view is that the GRI should take just a little more ownershio and for all those reports that are A B C checked, there must be a thorough check, indicator by indicator. At least then the GRI Checked label would be more meaningful.

elaine said...

hiya Mario, i agree with you. The GRI guidelines are basically solid and the protocols are very clear in what should be reported and how. Every single term is defined. I believe the fault is with the reporting organizations. Why ? Your three options and possible others. I think thats another post:)

aequology said...

Very interesting post Elaine & great comments too. I personnally believe that the GRI guidelines are good enough, I don't think that it's a problem of materiality, and I'm not sure I want to "shoot the reporter", even if totally agree with Mario about the importance (and lack) of communication skills. I find Mario's 3 possible options really interesting, the 3rd one in particular. Now, I'm not sure about those specific companies but I've seen many others that don't have the proper business intelligence and analytics systems to support the production of a coherent report on the GRI indicators. They often don't track in a single system, when they track at all, those indicators. When those data are available, often through spreadsheets or legacy systems, the reporting organization doesn't necessarily have the skills to convert them in meaningful information. Fortunately software vendors have developed specific solutions that allow companies to report on sustainability issues. The problem is that they might not see the ROI and the need for such solutions. Well, until our experts like Elaine start to question the consistency and transparency of the indicators provided.

elaine said...

Thanks Frederic, I agree with you that IT solutions can play a big part in getting data together in a way that can be more easily reported. Indeed, this is one of the focus areas of the new G4 revision. However, in many cases, I believe this is only a partial answer. I will explore this in another post. I have one or two additional ideas .... having worked with many companies on reporting myself.
Thanks for commenting!

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