Monday, December 24, 2012

Santa's Annual Financial and CSR Integrated Report

Santa's done it again. At the cutting-edge of knowledge, global advancement, pioneering communications and sustainability commitment, Santa has published an Integrated Report, in the spirit of the 2012 zeitgeist and general reporting hype. This Annual Integrated Report describes Santa Claus Inc. (SCI)'s financial and sustainability performance for the first time ever in one report, demonstrating integrated thinking, integrated actions and integrated communications. In fact, the only thing that is not integrated is Santa's stakeholders, all of whom want different things at different times via different channels. However, this is no more than a minor distraction for Santa, who, as you will recall, is an incredible woman.
This first-ever Integrated Report contains Santa's CSR disclosures, which, as you will also recall, have been featured on the CSR Reporting blog for the past few years. You can remind yourself of Santa's prior reporting by reading Santa's 1,747th 2011 Annual CSR Report here, Santa's 1,746th 2010 Annual CSR Report here, and Santa's 1,745th 2009 Annual CSR Report here.
This year, Santa has attempted to integrate the new G4 Exposure Draft Guidelines into the development of this report, which caused the General Elves and Pixies Trades Union to demand serious overtime payments, as the report ended up being 4,323 pages long. Santa declined their requests on the grounds that the elves and pixies should consider working on G4 as a valuable learning opportunity, which could turn them into reporting celebs after the May launch of the guidelines, because very few other companies will be able to adopt this new reporting framework without hiring G4 experts. In lieu of overtime payment, Santa agreed to provide each of the elves and pixies with a Santa Academy Certificate stating that they are G4 competent. This, fortunately, averted a general strike, which would have had to be reported in the Integrated Report, adding another three pages.
Additionally, the 2012  report was written in accordance with the recently published IIRC Integrated Reporting Framework Prototype. Actually, Santa didn't really understand quite what this meant for SCI's operating practices, but she felt that it was the right thing to do, given that the financial services community is supporting this, even if nobody really knows what it means. As Santa would like to expand SCI operations to new geographies in 2013 (Mars, Venus, Jupiter), requiring significant additional funding, Santa decided to demonstrate responsiveness to stakeholder views in a balanced, complete, linked, connected and material way.   

As I usually do, with permission, I will share with you the Santa Claus Annual Integrated Report 2012 CEO Statement:

Dear Stakeholders (especially all of you with money to invest),

Ho! Ho! Ho! It is time for me to wish all of you a wonderful holiday season filled with bright lights, good food, and iPhone5's.  As usual, at this time of year, we reflect on the past twelve months and what kind of a footprint we have left. I am pleased to report that my footprint has significantly reduced this year, as, after going on a strict diet, my feet got much thinner and I went down by two shoe sizes.

As far as Santa Claus Inc. is concerned, we had a very challenging but positive year, in which  we increased our revenues by 70%, mainly deriving from royalties for use of my name and photo, hiring of  red Santa suits, the explosion of Santa Apps and a range of new services and products which generate Shared Value (see below). We distributed more toys than ever during the last festive season, and did so with high energy efficiency and reduced carbon emissions by 0.3% per kg of toys. Our toy-recycling program worked well and we are now considering a Recycle your Recycled Toys campaign for 2013, and we might even extend this to a Recycle Someone Else's Toys Facebook Campaign for maximum impact. Our workforce was stable in 2012, and we maintained a positive safety record (with the exception of two pixie fatalities, who were outsourced to the Samsung plant in South Korea, which has now been confirmed as a death-trap). Finally, we tightened up our corporate governance by putting a lock on the Boardroom door so that Directors cannot escape when it's time to discuss the Annual CSR Report.

Shared Value through new Santa Services
In 2012, we significantly broadened our offering to create shared economic and social value through a range of new products and services. We felt it was time for Santa to take advantage of current technology and ensure accessibility to disadvantaged populations around the world, which, incidentally, is very profitable. We love Shared Value, as long as we get the Bigger Share. We love Bottom of the Pyramid, as long as Profit is at the Top. For example, in 2012, we encouraged the development of Santa Apps, and you can now find a range of innovative and creative offerings on iTunes. A popular choice is Talking Santa, which "enables you to create and share joyous 3D video animation greetings and Christmas cards that will warm the hearts of everyone on your wish-list!" There is also a Silent Santa App, in case you are fed up of listening to Talking Santa. You should also check out the free Santa Dancebooth App, in which I show off my best moves, though if you want me to dress up in a snowman or a gingerbread costume, there is a small charge. If you want me to dress up in a Bunny Girl outfit, you will have to pay considerably more. Additional Santa Apps include a Santa Jigsaw App, Santa Wallpaper App, Santa Games Apps and Santa Quiz Apps. You can create new Japanese meals with the Santa Sushi App, new Mediterranean Tastes with the Santa Hummus and Falafel App, and new desserts with the Santa Ice Cream Flavors App (recommended - ever tried reindeer-flavored ice-cream?). We also developed a few adult-only Apps such as Santa Strip Poker App, Santa's Night on the Town App and Santa Gets Naked with Prince Harry App. These Apps are strictly not available to minors, unless they lie about their age. We are in favor of responsible App-ing.
We have also launched a new range of Santa products. For example, in 2013, we will launch the first Santa fragrance, the first Santa sportswear line and the first Santa Thermal Underwear line. While I don't use much perfume, and have no time for sports, I can personally vouch for the thermal underwear.  Starting in the first quarter, we will offer reindeer and sleigh hire by the day or by the hour, with optional pixies. Finally, our most ambitious project yet, in partnership with the Lapland Association for Sustainable Travel, is Santa-Eco-Vacations to Lapland. For the first time, tourists will visit our natural elf and pixie habitats, eat local organic foods and shower in cold water. We undertake to offset carbon emissions generated during your stay, provided you pay extra.
Renewable Energy
During 2012, we installed a 400 panel solar array in Santa's Village in Lapland, intended to provide our operations with 100% renewable energy. Unfortunately, as we only had 3 days of sunshine this year, we spent over eleven months in darkness, cold and relative isolation. We have now relocated our solar panels to our Holiday Home for Retired Elves in Hawaii, and reverted our Santa HQ to grid-based fossil-fuel electricity. While we have not improved our environmental impact, you cannot fault us for good intentions.

Climate Change
Given that the globe is getting warmer, were are fearful that melting of snow in Lapland will create flooding, disruption to Lapland's natural biodiversity, and represent a threat to our local ecosphere. We have therefore established the Santa Snow Preservation Fund. All donations should be made to the CSR Reporting Blog. Fast.

Disaster Relief
This year, we have witnessed several effects of climate change in the form of extensive natural disasters and Santa and her team were always ready to help out. After Hurricane Sandy, for example, we donated 43 tons of recycled toys to over 5,000 children in the affected areas. This kept the kids occupied while parents were arguing with the insurance companies about levels of compensation for their homes damaged by rains and floods. We also provided 10,000 brand new walkie-talkie units for families who could not gain access to the Internet. Using these walkie-talkies, families were able to communicate 140 character messages to a neighbor and have him tweet their current position and ask for assistance. During this period, over 42,000 walkie-talkie based tweets were tweeted. We have approached Twitter to discuss a Joint Venture called Walkie-Talkie-Tweetie, designed specifically for disaster relief and emergency communications. 

Animal Welfare
For the first time ever, in 2012, we were attacked by an animal rights organization for not providing our reindeer with decent working conditions and paying them a fair wage. This was the result of our two negatively-disposed whistleblower reindeer  who went public with a story about forced, unpaid overtime during the holiday season. It is true that our main holiday season in December and January does require reindeer to work additional hours, often in inclement weather, but we do have a Reindeer Relief Package which provides protective clothing, anti-stress tablets and ergonomically-designed  reins.  Furthermore, we do pay all overtime due to reindeer, but in the interests of the Christmas Spirit, we require them to donate it back to provide more toys for the world's children, so that we can spread more cheer and goodwill. After long negotiations, we conceded and improved terms and conditions for all reindeer. However, next season, the whistleblowers will be looking for new jobs.

Ethical Supply Chain
As you know, Santa has one of the most complex supply chains in the whole world, as we source our toys from over 14,000 toy makers and factories from every corner of the globe. This year, we developed an Ethical Supply Charter which all suppliers must agree to adhere to. This charter binds them to maintaining ethical practices, upholding human rights and using environmentally-friendly materials in the toys we source. 100% of suppliers signed the Charter, therefore we can confirm that our supply chain is 100% ethical. We decided not to do supplier audits  as we have seen that every other global manufacturer which conducts supplier audits has not found this to be an effective way to prevent violations of ethical standards. Look what happened in the recent fire at the Tazreen factory in Bangladesh. One day, global manufacturers will realize that audits, training programs and prescribed checklists are not enough to transform an entire culture of low-cost, fast-paced, high-volume on-demand consumerist supply chains which perpetuate corner-cutting, safety-hazards and human rights abuses. For the time being, everyone who receives a Santa toy during this holiday season can be comforted by the knowledge that our supply chain is no less ethical that anyone else's.

A New Call-Center
In the interests of being more responsive to our stakeholders, we have established a new call-center, offshored in Cancun, to respond to the growing enquiries we receive about our services. The main problems seem to be Santa-denialists, who claim that Santa Claus does not exist. Generally, our response is to send them a plastic, head-bobbing Santa and that does the trick. Other inquiries are about toys arriving late. Generally we explain that it is not the toys which arrive late, but Christmas which arrives early. This usually keeps them satisfied. The most significant enquiry relates to our Santa Claus Executive Pay Policy and the gap between the highest level of pay in the organization and the average elf wage. As you know, there is only one Executive at SCI and that's me, the CEO. My pay is determined by the Board of Directors, which I chair. We tried to compare CEO pay levels at similar companies but, unsurprisingly, we are quite unique in our global marketplace. Therefore, I feel justified in saying that comparing my Executive Pay to the average elf wage is not material for our business, and does not reflect the complexities of a challenging, goodwill-generating, global operation from which all benefit. Look at the broader picture. If I am happy, the elves are happy.

This short introduction to the Santa Claus Inc.'s first Integrated Report does not do justice to the intensive processes we have driven to improve our sustainability this year. However, since the  the Santa heritage dates back to the seventeenth century, I think our record of being a sustainable operation cannot be questioned.

Wishing you and everyone else in the world a wonderful Holiday Season and a Happy New Year! 

elaine cohen, CSR consultant, winning (CRRA'12) 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 Ltd, an inspired CSR consulting and Sustainability Reporting firm)

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