Sunday, June 10, 2012

First time reports : 8 examples from 2012

Don't you just love first reports? I do. Ha ha. That's not just because I am a reporting geek. It's because a first CSR Report signifies a major step out of the darkness and into the light of transparency. No matter how minimal or even clumsy a first report may be, it represents the fact that one more company has realized that responsibility without transparency is like ice cream without cream, and that sustainability without sustainability reporting is like, well, ice cream without cream.

Apart from the fact that they are first publications, there are no unique defining traits of first reports. They are as varied and multifarious (thanks to for multifarious) as second, third and even tenth reports. There are no specific commonalities or characteristics - or even special formulas - which define a first report. There is no template that works for all first reports. What's special about the first report is the breakthrough it represents. Even if it's marketing motivated and greenwash packed, it's a breakthrough. Though don't be fooled - some first reports are highly polished and project a mature approach to reporting.  

Once a company has published a first report, they open themselves up to scrutiny and criticism, (though they might prefer praise and recognition). The fact is, though, that people increase their trust in companies after reading their CSR Reports. And this is even more significant for first timers.

First time reporting inevitably raises new questions for management and sparks healthy internal discussion. This can support decision making and business development, and generally offer another prism through which execs can see their business and its role in society. It's a worthwhile process and every single client I have ever worked with has experienced this.

Having said that, though, there are some first reports which do stretch the term "Sustainability Report" or "CSR Report" to the upper limits of what might reasonably be expected. There are some which are blatantly inadequate to the point of being almost amusing or totally depressing.

If I had a few tips for first time reporters, they would be these:

Get really clear on materiality and your company's sustainability story - don't just list all the good stuff you are doing - make the good stuff count by linking it to both material issues and outcomes.

Keep it short but relevant- some shorter reports can knock the socks off many of the longer ones.

Take it seriously - the best demonstration of a serious approach is to set targets and publicly commit to them. While some reporters use the current reporting year as a baseline, it is still possible to set quantitative targets for future performance. External assurance also lends an additional dimension to a serious approach to reporting - more for its internal value of adding rigor to the process  than because of the additional credibility it affords in the eyes of stakeholders. Use your first report to cut your transparency teeth - have the discussions in the business, and with external stakeholders, hear what they are telling you and shape your program accordingly. Remember that, even though your report might not be a bestseller,  someone somewhere will read it. Make sure your report stands up to scrutiny by each stakeholder who happens to take an interest.

Explain the challenges - no one expects you to be perfect because no one is. Expressing some of the more challenging aspects of your performance adds to your report's credibility.

Always - always - always include personal perspectives - from a range of employees or from external stakeholders. No matter how dry the narrative, real people in your report liven things up and make it much more palatable and credible.

This post is in honor of some of the first timer reports I have come across in 2012, in no particular order. Congrats to all! I  have only included a few and there are tens more published this year that I wanted to highlight as well, but well, even us bloggers have our limits. Maybe I will do another post on the first timers - they are a great bunch.

This is a list of the reports covered in this loooooooooooooooooong post:

Alpha Natural Resources 2011 Sustainability Report (U.S.)
Cogeco Cable,Inc. Canada,2011 Corporate Responsibility Report
Flowserve Corporation U.S. 2011 Sustainability Report
GAIL (India) Ltd, FY 2010-2011 Sustainability Report
Omnicane, Mauritius, 2011 Sustainability Report
Taj Pharmaceuticals Ltd, India, 2011 Sustainability Report
The North Face, U.S. 2010 Sustainability Report
Yüksel İnşaat A.Ş, Turkey, 2011 Sustainability Report

Format: PDF 30 pages and flipper book online
Assurance: No
Materiality Matrix: No
Future Performance Targets: No.
External Stakeholder Commentary: No
Internal Stakeholder Commentary: No
Picture of a Child or a Tree or a Globe on the Cover: No, but there is a green landscape view.
Mentions Ice Cream: No - no ice cream at the coal face.

About the Company
Alpha Natural Resources, headquartered in Virginia, U.S., is the world’s third largest metallurgical coal supplier with production capacity of nearly 126 million tons of steam and metallurgical coal. (Steam coal is primarily purchased by large utilities and industrial customers as fuel for electricity generation and manufacturing, and metallurgical coal is used primarily to make coke, a key component in the steel making process.) Alpha employs 14,000 people, extracting coal from 145 active mines, shipping over 100 million tons of coal worldwide in 2011 and turning over around $7 billion.

About the Report
This report is a very nice first publication. It shows evidence of a company taking a serious approach to managing its own direct impacts. Very early on, Alpha establishes its unique sustainability language - Running Right, Leading Right and Living Right and this leitmotif, which is at the root of Alpha culture, is the basis of the story that Alpha tells. The report has three core sections - our people, our environment and our communities.

Stakeholder Engagement
A nice touch for this first report is a process of stakeholder engagement - Alpha consulted with a list of external organizations representing different stakeholder groups - in order to seek input on material issues. Alpha confirms having learned a lot in the process, and having used this input to crystallize and report on material issues. Unfortunately, beyond disclosing that this process had taken place, Alpha does not share the issues raised, nor does the report present a materiality matrix, leaving us to guess what most important issues came up in consultation. While most of the value, I will admit, is in the stakeholder conversation, I fail to understand why Alpha would not share at least a partial outcome with all stakeholders.

Is Coal Sustainable?
Alpha sidesteps the issue of the overall sustainability of the coal industry and concentrates squarely on the way it does its business. In fairness, the CEO hints at an underlying blip: "At Alpha, we believe there’s a higher purpose to what we do: we’re fueling progress around the world. Coal is an affordable, abundant energy source that plays a key role in producing electricity and steel. We know people’s lives improve – their education levels, quality of life and overall health – when they have access to electricity. And 1.5 billion people currently lack that access. Yet the perception of the coal industry is not particularly good, and our social license to operate is threatened. I think the image of the industry and reality are different – but I also know that perception matters."

In other words, Alpha makes no apologies for being in the coal business -people need coal, and heck, it's legal - and the expression of their Corporate Responsibility is to do it in the right way. This is probably a sensible path for a first report. However, some discussion of the impacts of that perception on Alpha's business might be welcome in future reports - not just about (un)sustainable supply of their core raw material, but also the ways the business will need to navigate an increasingly hostile perception about the role of coal in our society, the way this will impact the cost of doing business and upcoming regulatory issues. How will Alpha deal with this threat to its social license to operate?

One final point about accessibility: Alpha's ebook report is hosted on in a flipper book format - which I find rather illegible. To download it as a PDF you have to register. Normally, I don't bother to go through this hassle but for the purposes of this post, I made the effort. I wish companies would not make it so hard for us to access their reports.
Format: PDF 30 pages
GRI: GRI Application Level B
Assurance: No
Materiality Matrix: No
Future Performance Targets:  Yes - some environmental targets.
External Stakeholder Commentary: No
Internal Stakeholder Commentary: No
Picture of a Child or a Tree or a Globe on the Cover: No - no picture at all.
Mentions Ice Cream: No -  no VOIP ice cream.

About the Company
Cogeco Cable is a telecommunications corporation, the second largest hybrid fibre coaxial cable operator in Ontario, Québec and Portugal. The company has revenues of CA$1.9 billion in Canada and employs 2,511 people in Canada.

About the Report
The report covered Cogeco Cable's operations in Canada only, and the company promises to expand the scope with future reporting. The report is structured about four main sections: economic performance, customers, social performance and communities. The narrative is well and clearly written, follows the GRI structure quite closely, and is easy to read. There are some short case studies throughout the report which add nice perspective. It's concise and factual, no literary creativity here, but it works well enough. A good, solid, first report, testifying to some decent CSR initiatives.

As a first report, meaningful transparency is on the low side, and Cogeco Cable reports on 22 indicators, just two above the level required for GRI Application Level B, and not all are strictly compliant with the GRI requirements.

An interesting point that Cogeco takes care to note, when confirming their self-declared Application Level B is "This grade is not an actual rating of our performance or the implementation of our corporate social responsibility initiatives." - just in case anyone mistakenly thinks that the GRI A, B and C levels are a performance quality grading system :)


Format: PDF 30 pages
GRI: Yes, contains an Index and Performance Indicators are noted throughout the report.
Assurance :  No.
Materiality Matrix:  No.
Future Performance Targets: No.
External Stakeholder Commentaries: No.
Internal Stakeholder Commentaries: No.
Picture of a Child or a Tree or a Globe on the Front Cover: Yes, both plants and kids.No Globe though!
Mentions Ice Cream: No ice cream flows in the Flowserve report.

About the Company
Flowserve supplies pumps, valves, seals, automation, and services to the power, oil, gas, chemical, and other industries. The company has more than 16,000 employees in more than 50 countries.

About the Report
This is short report, demonstrating limited progress, signaling the company's intentions as it builds its sustainability approach. Grouped around the traditional quadrant model - marketplace, workplace, environment and community- this report picks off the bits that Flowserve is already addressing in the business - this is primarily employee safety, energy consumption, brief references to water and waste, and community involvement. The report covers 16 indicators, not all fully. Data is provided at different levels - some covers 26 sites, some covers 21 sites.

As far as it goes, this report is clear, although it is somewhat repetitive and emotionless. In a short report of 30 pages, there is an overview of 9 pages, some of which is repeated in the report sections, and later in the report, there is a one-page summary of data which has already been presented. Aside from the CEO and COO introductions, there are no people in the report, and no stories. As a factual status of Flowserve's status, it's ok. For future reports, a little more passion would be nice.

Format:  PDF 84 pages
GRI: Yes, B+
Assurance : Yes, very clear Assurance statement.
Materiality Matrix: Yes, list of top six issues and detailed explanations.
Future Performance Targets: No specific, quantitative targets but a strong statement of intent.
External Stakeholder Commentaries: No.
Internal Stakeholder Commentaries:  No.
Picture of a Child or a Tree or a Globe on the Front Cover: No - it's a gas processing unit.
Mentions Ice Cream: No. Apparently ice cream is not material for gas production.

About the Company
GAIL is a CPSE (Central Public Sector Enterprise) and is the largest state-owned natural gas processing and distribution company in India, headquartered in New Delhi. Revenue is about $7 billion and GAIL has about 3,800 employees.

About the Report
This report is entitled "Value Beyond Business". As my consulting firm is called Beyond Business, I naturally formed an immediate bond with this report :). In his opening remarks, the Chairman and Managing Director says: "Being India’s premier natural gas company for over 25 years, we recognize that our maiden Sustainability Report was indeed overdue but our commitment to the concept of sustainability has always been embedded in our systems, processes and activities."  That's a nice admission, and sets a credible and frank tone for the rest of the report.  A further nice touch is that all the executive directors of the business offer their own perspectives in a short piece which sets out the key focus and challenges from their respective disciplines. (Just a shame that they are all male - a little gender diversity would be a good thing).

(Hardly Any?) Women at GAIL
A propos the all-male Executive Team, I suspect this is a sensitive point at GAIL - in response to indicator LA2 which requires breakdown of workforce by age and by gender - GAIL, despite claiming to respond fully, does not show the gender split of the workforce. In fact, this report refers only very briefly to gender diversity. "A special Women’s Cell at GAIL is focused on reaching out to the women workforce, initiate discussions and adequately address their concerns including sexual harassment at the workplace. Additionally, we have set up Ladies’ Clubs at our operational sites and have instituted GAIL women’s awards to promote their involvement and enhance satisfaction" A women's cell? A Ladies Club? Sounds like GAIL needs to rethink the concept of gender equality. Any guesses on the percentage of women at GAIL?

Thorough reporting
In other respects, GAIL does a very comprehensive job with this first report, and has not spared words and data. Every section is well detailed. The report includes five pages of the history of natural gas development in India, linked to the development of GAIL. India is one of the top five consumers of energy in the world, with gas representing 11% of this consumption and more than half of this is traded by GAIL. The company grew 30% in revenues last year.

Materiality is assessed through an internal process which includes a review of challenges to the global gas and oil industry - but not explicit stakeholder consultation. For a first report, this is a good baseline, and the 32 issues identified were whittled down to the top six which includes sustainable gas sourcing, continuing to grow the business in the face of competition, availability of skilled employees and more. Environmental reporting is detailed and safety figures are clearly stated including reportable, minor and near miss incidents for both payroll employees and contractors. The report even includes a glossary and cross references to the Global Compact Principles and other local reporting frameworks in addition to the GRI Index.

If anything, the overall message of GAIL's contribution to sustainable development and quality of life in India gets a little lost in the fine detail of this long-ish first report. I would recommend a little more focus on the story, and less on the activities, for future publications.  

Format: PDF 46 pages
GRI:  Yes, Application Level C.
Assurance :  No
Materiality Matrix:  No
Future Performance Targets:  No
External Stakeholder Commentaries: No
Internal Stakeholder Commentaries:  No
Picture of a Child or a Tree or a Globe on the Cover: No. But there's a nice blue sky.
Mentions Ice Cream: No. But then, there's no sugar in ice cream. Is there?

About the Company
Omnicane is a Mauritius-based sugar producer, created in 2009 following the rebranding of Mon Trésor Mon Désert Limited (MTMD), a long-established sugarcane group in Mauritius whose origins can be traced back to the 1850s. MTMD was amongst the first companies to be listed on the Stock Exchange of Mauritius and, Omnicane has successfully transformed itself from a basic-commodity supplier into a multi-product, vertically integrated agro-industrial cluster. The company’s main  operations are: sugarcane cultivation, sugar milling and refining and energy production. Omnicane has 1,132 employees and makes around $3.5 billion. Kudos to one of the very few operations in Mauritius to report on sustainability.

About the Report
The report is a well-prepared, professional, clear document - formal in style and following the GRI C Level framework very closely, addressing the GRI disclosure headlines  more or less in the order they appear in the Framework. Performance is disclosed  at minimum level, reporting fully on 11 performance indicators (ten required at Level C) , and in addition, provides a high level of detail by month on chemicals consumed and by week on water discharge quality etc, which is probably unnecessary at this level of detail. The report focuses on environmental sustainability and provides very detailed disclosures about the sugar processing and energy generation aspects of the business.

Did you know what bagasse is? Hmmm, showing my ignorance again. Bagasse is the fibrous matter that remains after sugarcane or sorghum stalks are crushed to extract their juice. (Thanks, Wikipedia). Omnicane assumes that we all know what bagasse is. It would have liked to see this explanation in the report. Omnicane does explain other terms such as fly ash, coal ash, bottom ash, boiler slag, molasses and vinasse - an ethanol manufacturing by-product. Omnicane produces over 2 million Gj per year of bagasse renewable energy which is used in consumption and sold to the National Grid.

Omincane use the acronym CSER for what we know as CSR or CR. Corporate Social and Environmental Responsibility. Add that to your lexicon.

Closing a Factory
One nice piece in this report is the very detailed disclosure of provisions provided for 152 employees affected by a site closure. CSR is not only about the employees you hire, it's also about the employees you fire. Omnicane deals with this openly and responsibly.

No Sugar
Despite the "sweetness" of Omnicane's business, there is no sugar in this report. It's formal, dry and even a little boring. There are no case studies, no testimonials and while it's just about readable for the lay person, it's rather technical and  unexciting. As a first report, it does a good job in getting Omnicane's performance message through, but the story gets lost. I think this group  plays a much bigger role than this report reflects. In future reporting, I would recommend adhering to the GRI Framework but being less constrained by its structure, and focus on the true story of Omnicane's impacts and contribution to sustainable society.  Nonetheless, this is great progress.

Format: PDF 30 pages
Assurance : No
Materiality Matrix: No
Future Performance Targets: No
External Stakeholder Commentaries: No
Internal Stakeholder Commentaries: No
Picture of a Child or a Tree or a Globe on the Cover: Yes, classic. Hands cupping a sapling.
Mentions Ice Cream: No - no ice cream medicines.

About the Company
Taj Pharmaceuticals Limited is a pharmaceutical company founded and based in India. The company manufactures pharmaceutical formulations and API for India and other countries of world, owning about 450 brands and 600 generic licenses. The company was established in 1995 as an enterprise and in 2004 became a public limited company with about $1Bn in sales.

About the Report
This is the kind of report that makes you smile. Or grimace. It's not really a report, but it's a cute attempt to represent a certain social philosophy that is present in the business in an authentic way, with half an eye on the potential reputational benefits of adding Sustainability Report to your corporate resume. It's mainly a copy of the relevant website pages which have some vague connection to CSR, plus a whole set of pages containing legalese disclaimers and website terms of use. The actual Sustainability Report content of this not-really-a-report can be accommodated in a few short pages. There is no data on any aspect of Sustainability Performance.

How do I know that it's half a marketing document? Read this: "We will welcome any Export / Import business partnership with Canada, Mauritius, U.S.A., Moscow, London, Brazil, foreign manufacturers and Indian manufacturers and large or small-scale regional distributors, medical and prophylactic establishments and drugstores. Cooperate with us and we shall together develop the pharmaceutical market for the welfare of the World people, so that we could say together "curing life…". "

The Gems
There are some more "gems" in this report:
"At Taj Pharmaceuticals, we keep to the definition spelt out in the 2004 Brundtland Report ...." (ahem... just a few years too late, but who's counting?)
"We still believe that good corporate citizenship should be a matter of course and is not something to be shouted from the rooftops." ( but ... this report is on the rooftop anyway...)
"Taj Pharmaceutical is your gateway to doing business with people who can make procurement decisions in the rounding antibody Company of World Wide." (and I thought this report was written in English)

Next Report
So, come on Taj Pharma, if you want to produce a second Sustainability Report, it's time to make a more serious effort.  It looks as though the company has some good intentions, but in practice, this "report" is not worthy of its title.

Format: Online only, no download.
GRI: Yes, Application Level C.
Assurance : No
Materiality Matrix: No - but focus areas are defined and key outcomes of a Stakeholder Feedback session are disclosed.
Future Performance Targets: Yes, 2013-2015 goals.
External Stakeholder Commentaries: Yes, several.
Internal Stakeholder Commentaries: Yes - many videos and personal commentaries.
Picture of a Child or a Tree or a Globe on the Cover: No - rock climbing is cooler.
Mentions Ice Cream: Lots of ice, but no ice cream - surely ice cream would help at the North Face?

About the Company (Brand)
The North Face designs and delivers an extensive line of high performance outdoor apparel, equipment and footwear, founded in 1966 and owned by VF Corporation, the guys that bought Timberland. (The North Face is the coldest, most unforgiving side of a mountain). The North Face employs 2080 people across the world and has $1.5 billion revenues in 70 countries.  

About the Report
The North Face is actually a brand, operating as a division of the $7 billion apparel corporation VF. As such, this represents a great initiative - I have often believed that Sustainability Reporting should be by brand, and not just by company. This is a great example. It reads well and oozes credibility.

Presenting the Challenges
The North Face Report is a modest and authentically written account of the  brand at the start of a sustainability journey, supported by its parent company infrastructures (though VF Corporation does not report on sustainability), and declaring the report as presenting the challenges of the road (mountain?) ahead, and not just the successes. It has very much a work-in-progress feel, though core elements of the baseline are nicely presented: stakeholder consultation with external experts, key performance indicators (Fabric Sourcing, Fabric Content, GHG Emissions reductions and Offsets, Office and Packaging Waste, Community Outdoor Participation and volunteerism) and defined program focus areas. Although this is a first report, data is presented since 2009 against KPI's, evidencing the fact that this report is the result of efforts to date, and not simply a declaration of intent.

Online Reporting
This is probably one  of the best online examples of a Sustainability Report presentation, and very fitting for this outdoor brand with appeal to the under-35's including many college students, as well as other consumers, who stay connected using the internet and rely on the web as a main source of information. The online report is on its own mini-site, packed with videos, infographics, plain language "equivalencies" (56 million gallons of water saved = 85 Olympic sized swimming pools) and other helpful design elements. The only personal problem I have with this report is that nothing is downloadable. For those who have an interest in the report content, not the interactive experience, it would be helpful to have the narrative in the form of a document which can be saved and read offline - even a summary document. The online report has no download options at all, not even by section. However, I can, grudgingly, understand the exclusively online presentation, and, in this case, it works.  

Looking Ahead
The North Face has done a great job with this report. In the future, I would like to see a deeper look at employee practices - environmental stewardship is what drives the  sustainability passion at The North Face, but with over 2,000 employees, the brand is still a big employer and I would like to see more of a reference to how the brand maintains a fair, diverse, nurturing workplace, beyond the involvement of employees in outdoor inspiration trips and community programs.

Format: PDF 56 pages
GRI: Yes, Application Level C.
Assurance : No
Materiality Matrix:  No
Future Performance Targets: Yes
External Stakeholder Commentaries: No 
Internal Stakeholder Commentaries:  Yes, many personal quotations from employees.
Picture of a Child or a Tree or a Globe on the Cover:  No. But there is a bird, hovering....
Mentions Ice Cream:  No mention of ice cream. Maybe in the next report ?

About the Company
Yüksel İnşaat A.Ş. was established in 1963 and is an engineering and construction group specializing in transportation, highways, dams, marine structures and other building projects.  The company has several subsidiary companies which are included in the scope of the report. The Group employs 11,360 people, including 3,708 contractor employees and has a turnover of around $1 Billion.

About the Report
This report covers Employees, Environment and Community, and is focused on the direct sustainability impacts of the Yüksel group. The group has been a participant in the UN Global compact since 2006 - proudly, the first company in the construction sector to take on this commitment - and has produced COP's on an annual basis, but this is the first Sustainability Report.

Overall, the report seems authentic and shows evidence of genuine progress and good intention - a local company doing its best to be a responsible citizen in its country, displaying national pride and a keen sense of community responsibility. One of the best pages in the report is a matrix of targets for the subsidiary companies, each of which has three targets, one each in the area of economic, environmental and social. I like this. It shows that this complex group of 18 subsidiary companies is trying to get eveyrone on the same page (no pun intended) and embed a common approach throughout the group. The targets are not quantitative in the main, but aspirational type directions, but it's a fine list all the same. There are a couple of amusing targets: one has as a social target "to train employees in sales and diction in order to increase quality" :), and another has "the creation of a Perfection Center" as their economic target.  I love reports that make me smile!  

Women in the Construction Industry
Yes, you guessed it. Not too many, and Yüksel is not exception. In Turkey, there are 285 women out of a total 4,343 employees (6.56%). Yüksel doesn't make any reference to this. Ironically, though, there are many positive  personal quotations from  Yüksel employees dotted throughout the report - and most of them are women! Perhaps this is Yüksel's way of attracting more women. Data on women in management is not presented.

Happy Employees
Employees are, apparently, deliriously happy at Yüksel. Here is just one quotation from Elif (female) which is pretty representative of most of the others: "It is wonderful to work with Yüksel. Working with Yüksel means working with a young and enthusiastic team, while at the same time benefiting from the experiences of competent masters of their work, developing you being a member of a large and happy family, who can turn work into fun with their smiling faces and working in the shadow of a half a century old sycamore with hundred percent security" Maybe something is lost (or gained?) here in translation, but this is a little too mushy for my liking. Including employee testimonials is a very useful and valid tool in reporting, but there is a fine line between inspiring and mushy. Still, it's nice to see happy employees.  

Assurance, Audit or both or none?
The Yüksel report is declared at GRI C+ level, where the "+", as we all know by now, represents an assurance statement. In fact,  the statement included in the report, by the CSR Association of Turkey,  does not provide any evidence of there having been an assurance process. The brief statement says that the report was sent to the CSR Association for audit. But whether an actual audit took place is not clear. In any event, the "assurance" statement is well short of what I would regards as acceptable practice.

Report Style
This report is obviously translated from Turkish, so it is hard for me to assess if the language, which is a little child-like at times, is representative of the original. It projects a certain authenticity, even though there are errors and awkward phraseology in English. I would always recommend those publishing in English to have the report fully proofed by a native speaker. For just a little extra effort, the report could project a much higher quality. 

Well, got this far? Maybe you also find first reports fascinating! Now you definitiely deserve a rest. And ice cream.

PS: Thanks to , where I found many of the first reports mentioned above.

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

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