Saturday, March 24, 2012

SGS: Sustainability Report Cone Award

Following my first  Ice Cream Cone Award, Intuit, which, since publication, has caused an increase in corporate ice-cream consumption by 24% (and mine by 38%), I am pleased to make another Cone Award to SGS for the Company's Corporate Sustainability Report 2011.

(All ice cream cone images are sourced from: Ice Cream Cone ClipArt ) (Almost good enough to eat!)

About the Company
Headquartered in Geneva, Switzerland, SGS is an inspection, verification, testing and certification company with more than 70,000 employees and  a network of more than 1,350 offices and laboratories around the world. Established in 1878, SGS started by offering agricultural inspection services to grain traders in Europe. During the mid 20th century, SGS diversified into inspection, testing, certification and verification services across a variety of sectors, including industrial, minerals and oil, gas and chemicals among others. SGS is listed on  the SIX Swiss Exchange and has revenues of $5.2 billion.

About the Report
Third Corporate Sustainability Report. Conforms to B+ of  the GRI Guidelines as checked by the GRI. Assured by a third party auditor. PDF 84 pages. Separate GRI Index downloadable from the report website.

Ice Cream Cones Awarded

SGS has specific, quantified, timely and published goals through to 2014. Thirteen goals in the areas of Professional Excellence, Environment, People and Community which make it clear what SGS commits to achieving. This is not to be underestimated. Reducing carbon intensity by people and by revenue by 10%, reducing turnover (to below 14%) and sickness absence rate (to below 1.5%) and more, may not be breaking the sound-barrier in terms of stretch, but, as I learnt long ago, "80% of something is better than 100% of nothing". A nice, double cone for SGS for making their targets measurable and transparent.

Good practice for SGS on reporting stakeholder feedback. 1,319 stakeholders responded to a survey about the prior SGS report and in the current report, SGS summarizes the feedback that was  provided. This is a qualitative summary - it might have been nice to see quantitative data, and it is not clear how stakeholders were asked to respond in the survey. SGS also does not disclose the relative mix of stakeholders which provided feedback - 1,319 is made up of employees, customers, contractors, investors, NGO's and others. However, soliciting stakeholder feedback, and disclosing results, even in a rather filtered way, demonstrates a process of recognition for and understanding of the significance of stakeholder engagement.

I like the way that SGS describe their different services offering. While this might be thinly veiled marketing content, SGS offers compact contextual information about why each area of activity is important and contributes to sustainable agriculture, global trade, transportation, biodiversity and more. It's an interesting summary of many of today's global sustainability issues and opportunities, flavored with short stories about how SGS's work is making a difference, for example, through operation of a fleet of mobile laboratories for testing of ballast water, which can disrupt marine ecosystems (did you know that ?), or pioneering work to calculate the carbon footprint associated with farming scallops throughout their entire lifecycle for a Chinese fishery, or a new Battery Test House and E-Mobility Competence Centre in Munich, Germany where we for developing and testing safe electric, hybrid and fuel cell cars.

I wondered whether to award a Cone or deward a Cone for the SGS Risk Matrix (see below). On the one hand, key risks are transparently defined and areas of risks are referenced and explained within the Sustainability Report. On the other hand, I would have like to have known a little more about how this risk matrix was developed, and to what extent it includes stakeholder input. On balance, I settled for awarding rather than dewarding. Remember ? I promised I would try to be magnanimous.

With almost 48% of SGS's revenue being spent on employee wages and benefits, and 8,000 new people being recruited in the last year alone, getting the best out of SGS people and engaging them in sustainability is absolutely compelling. SGS present one of the best overall programs for embedding sustainability at all levels of the organization that I have seen in Sustainability Reports over the years. Ranging from sustainability workshops resulting in commitments to targets, e-learning sustainability programs, learning and development programs, to performance reviews etc, SGS demonstrates CSR for HR in a mature way.

Ice Cream Cones Dewarded

This is a marginal deward. SGS have done something very good. Following a risk assessment, road safety was identified as a number one risk and in India, SGS Launched a country-wide road safety initiative which includes mandatory reporting, distribution of road helmets and reflective jackets etc. So why the deward? I would like to see SGS reporting road safety results and also adopting a global road safety policy. This is one of my pet subjects to track - the impacts of road un-safety are massive and represent a real sustainability issue whichever way you look at it (as I wrote in a post on CSRWire a while ago). So, good progress by SGS, but hoping for more.

Gender diversity is not transparently reported by SGS - almost to the point that it generates a suspicion that performance is really quite poor. 34.4% of the total SGS workforce is female, but while SGS reports that more female employees were promoted to manager level - SGS does not report how many. Instead, SGS reports against an odd indicator called the "equal opportunity ratio"  - apparently the relative ratio of female managers to total female employees versus the ratio of male managers to male employees. Sorry, I don't get it. What I would like to know from SGS is how many women managers are in the business in total. Diverting to the SGS Website, I see that this company is led by an all-male 8-strong Board of Directors, and an Operations Council of senior executives with 25 members, 4 of whom are women (16%). I almost gave another deward for this, but I decided to continue to be magnanimous and stay with one cone down only.

The GRI Index is a separate download. I always find this irritating. I use the GRI Index to navigate sustainability reports. Having it separate from the PDF document is tiresome for me - meaning I have to bounce around between documents to get to information. If a company is producing an 84-page PDF, another couple of pages to integrate the GRI Index doesn't seem to me to be so much of a stretch.

Overall Net Ice Cream Cone Award
Five minus three makes two net cones for SGS. Half a cone each for the women senior execs. Ha-Ha. Overall, an impressive report, nicely laid out, demonstrating good basic commitment. With a little stretch, there will be some ice-cream for the SGS men next year, too!

elaine cohen, CSR consultant, Sustainability 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  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

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