csr-reporting

10 ways to liberate the sustainability report

2012-01-25T15:52:00.000+02:00

Yesterday saw the publication of the SMI-Wizness Social Media Sustainability Index, a must-read for anyone who wants to know who are the corporate movers and shakers of the social media cypermap and what they are doing and why. According to the report, authored by the social-media master Matthew Yeomans, "a new landscape of social media sustainability has emerged. Today, at least 250 major corporates are engaged in some form of social media sustainability comms and more than 100 have a blog, YouTube, Facebook or Twitter channel dedicated to talking about sustainability."

The report ranks the social media practices of 100 top rated sustainable companies (selected from existing listings and green rankings) provided they have a blog, Facebook page, Twitter account or YouTube channel.. If you are serious about socmed, then at least one of these options is a must-have.

Companies today are using social media "to not just communicate their sustainability stance but also to involve the public in building a better world". The main ways in which they do this include hiring experienced filmmakers, writers and reporters to tell a complicated story well, crowdsourcing, crowdfunding, creating alliances with NGOs, charities and conservation watchdogs to support common goals and raise awareness, leveraging the public through campaigns and contests, and more. Twitter is the main platform used by corporates, followed by Facebook, YouTube and a Company blog. See the full report to see who does what best. But here's a hint. The top ten in social media.

The methodology of calculating the ranking for the 100 companies in the sample is based on a score of a maximum 100 points which include the following parameters:

• Useful communication: possible 20 points
• Commitment to community: possible 20 points
• Transparency (allowing comments and replying) - 10 points
• Communicating actions not beliefs - possible 10 points
• Social media shareable CR/Sustainability Report - possible 10 points
• Regular updates of social media communication - possible 10 points
• Creative storytelling - possible 20 points

GE came out as the overall best with a score of 93 points, retaining its first place from last year because of consistent leverage of social media channels to advance the Ecomagination and Healthimagination agendas, and also because of its "App". There are actually several companies who are using Apps to make their reports accessible to a wider audience, as I mentioned in my CSRwire.com article earlier this month. Apps will become commonplace for Sustainability Reports, I have no doubt. Pretty soon we will need an App to track the Sustainability Report Apps. VF corporation made it into 7th place with 84 points (from nowhere last year) , mainly because of its Timberland acquisition. The Top Ten SocMed Swingers' best practices are profiled in the report which makes for fascinating reading and offers inspiration for companies which haven't yet staked their claim.

One thing that was of particular interest to reporting geeks like me was Matthew Yeoman's analysis entitled "10 ways to liberate the sustainability report". This year, 36% of the 100 companies reviewed in the index have used social media to "liberate their reports from the dungeons of disinterest" (wow, a little harsh, maybe? Remind me to take a look in my local dungeon for the 64% which have apparently stayed there). Anyway, 36% is more more than double the number of companies which were reported to be dungeon-free last year. The ones who are picked out for commendation are:

GE : for their iTunes App
Alstom : with a shareable microsite
Timberland: for use of social channels
SAP: for an interactive materiality matrix
North Face: for use of video
Alcatel Lucent: for publishing their report on Scribd
Danisco: for publishing on Slideshare
UPS and McDonald's: for use of infographics
Ford: for a sharable digital map

Finally, the report also lists the top 100 Sustainability Twitterers (among which I am proud to be counted) and I will now happily call myself a member of the Wizness Green Twitterati. 22 of the 100 are company twitter handles and 20 are NGO's. A good a #CSR #FF list as ever there was.

By now it is clear that Sustainability without Social Media is like Ice Cream without a Spoon. It's all in the delivery. The SMI-Wizness Social Media Sustainability Index will help you think about what companies are doing today to leverage their sustainability platforms through all the social media possibilities that are available. The author even offers a checklist to help companies get thinking about telling their social stories. The only thing that's missing is what flavor ice-cream the corporate bloggers prefer.

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 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)

21 ways to make your Sustainability Report stand out from the crowd

2012-01-17T09:02:00.000+02:00

Inspired by this post on Geenbiz.com entitled "I published my CSR Report. Where's my media coverage?", in which Elin Nosewski offers some tips about how to get noticed by reporters and bloggers - mainly focusing on the report content, I thought I would offer some tips of my own on how to make your Sustainability Report stand out from the crowd. Here they are:

Call it iReport 4s. Everyone will queue for one.
Write it in Latin or Ancient Greek. You will easily capture all the very very very old people who read Sustainability Reports.
Include pornographic pictures. Porno is the most viewed content on the internet. Every second, 28,528 internet users are viewing pornography.
Have your CEO present it to Financial Analysts and Investors over breakfast in a London Hotel. They won't understand but they will enjoy the croissants.
Have your VP for Human Resources write the introduction. Now, that's original. That's how Lloyd's Bank did it in 2009.
Have the CSR Reporting Blog mention it in The Top Ten Reports of the year. (No-one one has been able to afford this, yet, but you could be the first.)
Print your report on virgin paper, destroying 347 Amazon Forest trees, and send it using the postal service to thousands of stakeholders. Greenpeace will make such a campaign about this that no-one will fail to notice your report.
Win a CSR Reporting award. That's how Vodafone does it.
Gamify it. That's how BT does it.
Write it in Braille. 39 million blind people will love you.
Turn it into multiple-choice test. It will be used in school syllabuses all around the world.
Offer an iPad to those who provide feedback. That's how OneSteel does it.
Offer a luxury weekend in Hawaii to all those who are prepared to use the weekend to read your report. Don't worry, only 4 people will respond. Your mom, your dad and your 2 kids.
Send out a Presss Release saying you have published a Sustainability Report. (OK, this is not a serious entry.)
Add disposal instructions on the back cover. Something like: Please dispose of this report in an environmentally responsible manner before you read it.
Fit it all into one webpage. This is how AHA! does it.
Use a sexy waitress to deliver it to male executives. See how Heinz does it with Ketchup.
Publish it on the web, then Digg it, Stumble Upon it, Slideshare it, Facebook it, Google+ it and Tweet it. Again. Once more. And again.
Employ a blogger relations specialist and create a bloggers corner blog. This is how SAP does it.
Make it all in videos. This is how Burt's Bees does it.
Accidentally on-purpose, call it your Annual Report. The entire financial world will love it! And financial journalists will rush to scrutinize it.

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 www.twitter.com/elainecohen on Twitter or via my business website www.b-yond.biz/en (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

Responsible Marketing ? Heinz #Fail

2012-01-15T22:13:00.000+02:00

An interesting thing happened last week. I was in a client meeting and we were discussing sustainability strategy. At one point, the conversation turned to responsible marketing. We started to talk about examples of responsible marketing and I couldn't help but blurt out: "Have you seen the new Heinz Ketchup TV Ads?"

Before you could say "Heinz Ketchup Irresponsible Marketing", EVERYBODY around the table reacted in loud tones of indignation and disapproval. Their response was so immediate that it even took me aback. Most people don't get so enraged by inappropriate marketing, accepting it as an inevitable side-effect of branding and promotional activity.

The current Heinz Ketchup "Be Original" Ads showing in Israel are a far cry from the wholesome, clean, family, humorous and entertaining ads we have been used to from Heinz. In the ad below, two guys have the brainwave-like idea for a new TV Show - isolating a group of people in a house for a couple of months and evicting one, or two, of them every week - a reference to the Big Brother reality show - a totally depressing TV program that I personally would not want my brand associated with in any way or form. The guys are apparently suggesting something "original" - hence the tie-in with the campaign tag-line - "Be Original". However, Big Brother is not the issue. The issue is that these two guys, in mid-bite of their hot-dog, are suddenly entranced by a sexy blonde waitress in a red uniform, who mysteriously appears to bring them a bottle of Ketchup. See for yourself:

Heinz states in the Company's Communication and Marketing Guidelines, part of the Heinz' Global Code of Conduct, that "Heinz has established guidelines for all of its units and affiliates worldwide related to the marketing of its products..........It is important that all of the Company's communications reflect Heinz's commitment to family-oriented values and its long-standing commitment to proper nutrition and consumer well-being. Heinz must convey these commitments through responsible advertising and messages which promote the healthful consumption of the Company's products."

Is this the family-oriented values face of Heinz Ketchup?

Photo from grey.co.il

I personally think it's a big responsible marketing #FAIL for Heinz, showing disrespect to women, using inappropriate sexual connotations to promote a family food aired on prime time TV when kids of all ages are viewing. Is this really the only way to sell Ketchup? Perhaps it's time I changed brands.

Ten examples of Carbon Footprint Reporting

2012-01-15T09:30:00.000+02:00

There are just 7 days to go until close of voting in the CorporateRegister.com CRRA '12 fifth annual online reporting awards. While you are finalizing your votes, please consider voting for my own Sustainability Report - How a little consulting firm makes a big impact - which is entered in four categories: Best Report, Best First Time Report, Best SME Report and Best Creativity in Communications. Additionally, you might also please consider reviewing and voting for the Baran Group Report - which I worked on - which is entered in two categories: Best Relevance and Materiality and Best Openness and Honesty.

If you want a recap of the awards this year and the reports entered, you could look at the three posts I have written about CRRA '12:

Today, I thought I would see how companies are reporting on carbon, by reviewing the Best Carbon Disclosure Category. The Awards guidelines ask us to consider: Which report gives the best disclosure of the company’s carbon emissions, the implications for climate change, and the mitigation measures taken? Check for policy, quantified data, targets.

There are just 10 entries this time around in this category, three from the U.S., two from Brazil and the UK, and one each from the Netherlands, Austria and Finland. Here they all are in alfa order:

Amcor Limited - global packaging manufacturer

Banco Bradesco SA - bank

Banco Santander Brasil SA - bank

Bank of America - bank

British Sky Broadcasting Group plc - TV entertainment

Coca-Cola Enterprises Inc - beverages

Royal Dutch Shell plc - energy

Tieto Corporation - IT and product engineering services company

Vodafone Group plc - telecoms

Wyndham Worldwide Corporation - hotels and leisure

You might think it would be quite straightforward to report on Carbon Emissions. After all, it's one of the most measurable and trackable areas of sustainability performance.

The GRI Indicators covering carbon emissions are simply stated (all the reports in this category in CRRA '12 are written in accordance with the GRI Framework):

EN16: Total direct and indirect greenhouse gas emissions by weight.

EN18: Initiatives to reduce greenhouse gas emissions and reductions achieved.

Calculation of carbon emissions often uses the framework of the Greenhouse Gas Protocol which defines three scopes. The GHG Protocol further categorizes these direct and indirect emissions into three broad scopes:

Scope 1: All direct GHG emissions from sources that are owned or controlled by the reporting entity.

Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam.

Scope 3: Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. Transmission & Distribution losses) not covered in Scope 2, outsourced activities, waste disposal, etc.

However, in addition to these indicators, each company can choose to disclose a host of information which puts the data into a certain context relative to the organization's overall impacts and performance, explains the sources of carbon emissions and actions taken to control carbon emission impacts. What we actually find is that companies tend to report in very different ways. Some more detailed, some less. Some clearer, some less. Some barely giving more than a single number, some offering long stories and explanations. Some also refer to their carbon impacts on third parties - indirect impacts - which are often greater than the directly generated impacts of doing their business. All in all, reporting on carbon is as diverse as the carbon performance of companies itself. Looking at the ten companies which entered their reports in this category, aspiring to be the Best Carbon Disclosure reporters, I found this to be true.

What would I expect the best carbon disclosure to include?

Overall absolute emissions - the scope (Scope 1, Scope 2 and Scope 3) and their sources.
The scope of the reporting - covering all operation or just a selection.
Performance versus prior years and performance versus targets with explanations.
The way carbon reductions have been achieved.
How employees have been engaged in the carbon emission reduction efforts.
How external stakeholders (customers/suppliers) have been engaged in carbon emission reduction efforts.
Future plans/targets to reduce the emissions burden and the way these will be achieved.

What did I find ?

Overall absolute emissions - the scope (Scope 1, Scope 2 and Scope 3) and their sources.

Amcor provides details of carbon intensity (per unit of production) by Scope over 6 years for Amcor "legacy" sites, representing Amcor prior to its Alcan Packaging acquisition.

Amcor also discloses the level of total absolute carbon emissions.

Banco Bradesco does not include details of carbon emissions in their 61 page report, but refers to the website, which is all in a foreign language - Portuguese ? with no English option. The emissions numbers - in toneladas - are stated as part of the GRI Index.

Banco Santander shows Scope 1, 2 and 3 emissions for the reporting year:

The Bank also confirms that emissions per employee dropped 76% between 2005 and 2010.

Bank of America details Scope 1, 2 and 3 emissions for 2010 and prior year 2009, by source, including details of Renewable Energy Credits.

British Sky Broadcasting provides details data for Scope 1, 2 and 3 emissions since 2008 baseline tracking. Data is shown for absolute emissions and per GBP million turnover. Even the Sky News Helicopter is detailed as generating 183 tons of (Scope 3) carbon emissions in 2010/2011.

Coca Cola Enterprises reports in detail against all three Scope emissions, explaining methodology, sources, and even an estimation of the likely effect of new additional territories:

Royal Dutch Shell provides 10 years of carbon emission data in a concentrated data table separate from the report narrative. The narrative states that higher emissions were due to higher production, especially in Nigeria because of an improved security situation. Shell makes a distinction in the report narrative between Scope 1 and 2 emissions (also splits emissions between production operations and flaring). It is not clear whether Scope 3 emissions are included.

Tieto explains the sources of carbon emissions, mainly generated through data center consumption plus employee work and travel.

Tieto provides details for all Scope 1, 2 and 3 for the year 2010.

Between 2009 and 2010, Tieto has increased the scope of its reporting from 7 offices in Sweden and Finland to 58 offices - a significant achievement- but rendering an absolute comparison with prior year data not relevant. As you might imagine, total CO2 emissions increased significantly with increased business activity. However, while Scope 1 and 2 emissions per person decreased in 2010 vs 2009, Scope 3 emissions per person increased from 0.7 tons to 0.82 tons in 2010, this, despite a stated decrease in travel expenses per person by 3% (Scope 3 emissions, as can be seen, is primarily business travel). This is not explained.

Vodafone reports absolute emissions in the printed report, supplemented by significant detail on the Vodafone Sustainability Report website.

Wyndham Worldwide Corporation reports total Scope 1 and Scope 2 carbon emissions and sources.

The scope of the reporting - covering all operations or just a selection.

Amcor's reporting covers all manufacturing sites.

Banco Bradesco's report covers all the Bank's operations.

Banco Santander's report covers all the Bank's operations.

Bank of America's report covers the entire activities of the Bank.

British Sky Broadcasting covers all sites except joint ventures and is annualized data based on 11 months operations.

Coca Cola Enterprises reports on all the business with some omissions for newly acquired territories in 2010/2011.

Royal Dutch Shell reports on all operations.

Tieto's carbon reporting covers between 73% and 90% of employees (18,000 employees).

Vodafone's report includes all operations with the exception of joint ventures.

Wyndham Worldwide Corporation reports on all facilities over which the company has direct control.

Performance versus prior years and performance versus targets with explanations.

Amcor reports a 2.4% carbon emission reduction in intensity (per unit of production) over 5 years for Scope 1 and 2 but did not meet the 10% 5-year target. No explanation for falling short of targets is provided.

Banco Bradesco does not refer to prior year performance or express any carbon targets.

Banco Santander does not disclose targets and does not explain performance versus prior years beyond a passing reference.

Bank of America shows a big increase in Scope 3 emissions. However, 2010 data now includes all forms of business travel, not just air travel which was the only element reported in the 2009 report - a good example of how reporting scope improves from year to year. BoA also reports emissions from waste disposal and negative emissions from recycling and composting (232,171 tons).

British Sky Broadcasting clearly shows performance against targets over two reporting periods.

Coca Cola Enterprises provides data for prior years, showing improvements in absolute performance while increasing sales.

Royal Dutch Shell makes general comments about performance relating to manufacturing efficiency.

Tieto Corporation of Sweden makes no secret of their carbon vision - though it is not clear by when this is scheduled to be achieved.

Vodafone provides good, clear detail relating to performance versus objectives:

Wyndham Worldwide Corporation does not provide details of past performance (this is a first Sustainability Report).

The way carbon reductions have been achieved.

Amcor refers to "a range of procedural and technical improvements" including lighting replacement, improving boiler efficiencies, insulating steam pipes and replacing inefficient heating with infrared space heating.

Banco Bradesco offers no information. In fact, it is not clear whether there have been any carbon reductions.

Banco Santander advances construction or maintenance of branches to reduce the use of natural resources and raw materials that contribute to the Bank´s direct and indirect GHG emissions. It also compensates its emissions through the Projeto Floresta Real. 2010 emissions will be offset by March 2011 by planting 60,000 native forest trees in degraded areas with low Human Development Index (HDI) levels.

Bank of America achieved a 7.5% reduction in Scope 1 and 2 emissions in 2010 by improving energy efficiency in its retail banking centers, office buildings, and data centers and optimizing real estate portfolio to make the most efficient use of space. The Bank also discloses that there was a reduction in the GHG intensity of the U.S. electricity grid, which also contributed to their improved performance.

British Sky Broadcasting refers to building efficiency improvements including lighting, increased air sensors and air conditioning chiller units. Energy at UK Sites is purchased at renewable tariffs. The British Sky report also includes a page entitled "30 things we have done to reduce our environmental impact", many of which relate to energy consumption and carbon emissions.

Coca Cola Enterprises provides data for prior years and detailed explanations of what carbon emissions are generated where and what actions have been taken through energy-efficient technologies in manufacturing (compressed air, lighting and heating), renewable energy use, transportation efficiencies and cooling equipment for soft drinks (which are 62% of Coca Cola's core business emissions) and vending machines. Also, plant production lines are equipped with energy meters which show energy consumption performance in real-time and can be used to make adjustments which affect resulting carbon emissions.

Royal Dutch Shell does not give details about specific actions taken to reduce carbon emissions.

Tieto's main advance has been the opening of "one of the most environmentally efficient" data centers in Sweden, called "Tieto Cave", with 20 meter rock solid walls. Wow. Sounds like a good setting for Mission Impossible 6. I can just see Tom Cruise tunneling through that. When fully utilized, the data center will supply 1,000 homes with heat and warm water.

Vodafone discloses great detail about the way carbon efficiencies have been achieved including using fresh air to cool equipment instead of air conditioning, increasing temperature at which base stations can operate, thereby reducing cooling requirements, remote shutdown of base stations, installing more energy efficient base stations, reducing number of computer servers, using alternative energy (solar and wind) for part of the operations and reducing operating time of generators through technology improvements.

Wyndham Worldwide Corporation provides a long list of carbon-reducing activities relating to lighting, heating, Energy Star appliances and the company purchases 100% of its energy usage from wind power at the corporate HQ.

How employees have been engaged in the carbon emission reduction efforts.

Amcor does not refer to employee engagement in carbon emission reductions. Amcor refers only to an EMS, using ISO18000.

Banco Bradesco offers no information.

Banco Santander lays on 85 free daily chartered buses between subway stations and the organization's administrative buildings. The service is used by 1,662 employees. Santander also provides bicycle parks and changing rooms with showers, towels and shampoo.

Bank of America engages "thousands" of employees in environmental issues through workshops and other activities. Employees saved 2,268 tons of carbon savings and 350 employees became Environment Ambassadors. Bank of America also offers a subsidy to employees to purchase hybrid electric (and now also, compressed natural gas) vehicles - over 3,700 employees have bought hybrids since 2007. This is important as Scope 3 emissions, which are mainly employee commuting and business travel, increased in 2010. Business travel emissions increased by over 150%.

British Sky Broadcasting ran a second Flight Challenge for employees focusing on minimising flights between Scotland and London by raising awareness of alternatives.

Coca Cola Enterprises does not specifically refer to employee engagement in environmental performance though there is one short employee story.

Royal Dutch Shell does not mention employees.

Tieto does not specifically refer to employee engagement in Green activities, though much of the company's carbon performance will be affected by reducing business travel which clearly requires employees to collaborate.

Vodafone does not specifically refer to employees in relation to carbon emission activities.

Wyndham Worldwide Corporation runs a Wyndham Green Council with representatives from across the Company, including over 200 associates from cross-functional departments in each business unit in over 20 countries. Innovations, experiences, and best practices are regularly shared across the Company and published annually in a Global Best Practices document.

In addition, Wyndham offers Sustainability 101 training in 10 languages, and has already trained 35% of the company's employees. This is supplemented by educational efforts reaching 76% of the workforce on Earth Day and around other events. Wyndham also has a Green Kids program, designed to teach children about sustainability and the best of all, a Caught Green Handed program, to recognize positive environmental performance of employees.

How external stakeholders (customers/suppliers) have been engaged in carbon emission reduction efforts.

Amcor does not disclose information on how Amcor engages with customers or suppliers with regard to carbon reduction efforts, except in the area of future targets.

Banco Bradesco is a signatory to the Equator Principles and reports on how they apply environmental thinking to credit decisions. The bank offers four environmentally positive investment funds. However, aspects related to carbon disclosure are not specifically discussed.

Banco Santander participates in the Sectoral Forum for the Management of GHG Emissions – Engagement of Suppliers. The objective is to persuade suppliers to adopt a systematic inventory process, establishing activities for mitigating and offsetting emissions.

Through its core business, the Bank of America is committed to advancing a low-carbon economy and has generated low-carbon business worth $11.6 billion between 2007 and 2010 including more than $1.9 billion in “green” commercial real estate debt and equity transactions, $1 billion in debt and equity for green affordable housing in 23 states, $476 million in financing for energy efficiency upgrades and retrofitting for K–12 schools, colleges and universities and acted as underwriter on four IPOs, raising $3.7 billion in capital for renewable energy, clean technology and energy efficiency companies. Bank of America also held a supplier conference, encouraging disclosure to the Carbon Disclosure Project - 75 of the Bank's largest suppliers responded to the CDP.

British Sky Broadcasting asked 50 most carbon intensive suppliers to measure their carbon footprint and further reduce emissions using the Carbon Disclosure Project reporting framework. 25 agreed to participate so far. Through the Sky Rainforest Rescue campaign, in partnership with WWF, British Sky involves customers in a campaign to help save one billion trees in the Amazon rainforest.

Coca Cola Enterprises does not specifically refer to customers though the section on sustainable packaging and carbon footprint throughout the lifecycle of Coca Cola products involves consumers and requires their participation in responsible environmental behavior such as recycling.

Royal Dutch Shell describes in detail what the company is doing to develop produce cleaner energy and advanced biofuels and lubricants developed to help customers use less energy.

Tieto confirms that their core business offering, data centers and IT solutions, can help customers reduce their carbon footprints.

Vodafone reports on offerings of low-carbon solutions including smart metering for customers. "Combined with innovative technology from our partners – such as Isotrak’s Active Transport Management System or AMS’ smart metering solutions – more than 5 million Vodafone M2M connections are providing access to data that help businesses improve efficiency and cut costs. We believe that at least 4 million of these connections also help to reduce energy use and related carbon emissions."

Wyndham Worldwide Corporation operates a vacation ownership program with certification programs reaching over 800,000 timeshare owners, focusing on reduction of energy, water and waste. At Wyndham Hotel Group, the Green Franchisee Hotel Advisory Board was formed in 2010 in which 12 cross-brand hotel owners and general managers showcased and shared green practices to advance sustainability in the hotel group portfolio. Also, Wyndham has a Green Supplier initiative to partner with suppliers and vendors who have a similar commitment to protecting the environment.

Future plans/targets to reduce the emissions burden and the way these will be achieved.

Amcor announces a new target of an additional 10% reduction in carbon intensity by FY 2015/2016. This will be achieved through engaging suppliers, working with customers to make packaging more environmentally friendly and continuing internal efficiency drives.

Banco Bradesco established an Eco-efficiency Working Group which developed a Master Plan that aims to establish an environmental management structure in line with the Bank’s activities, including actions to be developed over the next five years. What this space, as they say.

Banco Santander is not explicit about future plans to achieve carbon reductions.

Bank of America has declared a goal to reduce carbon emissions by 15% in the next 5 years. They will do this by increasing LEED certified space to 20% by end 2015 and will offer monetary rewards and career advancement for employees who contribute to achieving environmental goals.

British Sky Broadcasting includes a narrative relating to next steps, in which the company will continue to do what it has already been doing in terms of carbon management.

Coca Cola Enterprises: "We are reviewing our carbon reduction goal in 2011, looking at our carbon impacts beyond our immediate operations and the demands of our stakeholders and policy makers." Watch this space, too.

Royal Dutch Shell does not specify future targets.

Tieto explains how the company will work towards carbon neutrality: reduced business travel, lower data-center energy consumption, lower office energy consumption etc.

Vodafone offers a detailed program for future carbon emissions reduction, the only reporter in this category to do so at this level of detail:

Wyndham Worldwide Corporation also give some specific through not quantifiable targets, indicating positive intention.

So, any conclusions about which report YOU will VOTE for in this category? (if you got this far, CONGRATULATIONS!!!)

My votes go to Vodafone, Coca Cola Enterprises, Wyndham and British Sky. I especially like Wyndham's employee practices.

So remember, carbon is carbon is carbon but reporting is not reporting is not reporting is not reporting. Help the best reporters gain recognition and raise the bar through your VOTES >>>;.

A Sustainability Reporting Quiz for 2012

2012-01-03T09:30:00.000+02:00

This is a quiz to test your knowledge about Sustainability Reporting. Answers at bottom of page.

How can you tell a real Sustainability Report from a fake Sustainability Report?

Check to see if it was written by Jackie Collins. If Jackie Collins is the CSO, it's real.
Read the first page. If you want to continue to the second page, it's fake.
Check to see if it contains the words "This is a real Sustainability Report". If yes, it's real.
Subscribe to the CSR Reporting Blog - if the CSR Reporting Blog says it's real, it's real.

What's the ideal number of pages for a Sustainability Report?

20 pages: 1 page introduction, 15 pages of brand info, 4 pages of GRI Index.
150 pages: 10 pages introduction, 100 page of brand info, 40 pages of GRI Index.
Depends on whether each page contains content.
365 pages. One for each day of the year.

What value does assurance add to a Sustainability Report?

People instantly believe everything that's written.
Accounting firms earn tons of money.
It stops people actually reading the report while they are trying to figure out what the assurance statement actually means.
It's a great excuse for not taking responsibility for errors and omissions.

Where is the best place to display your Sustainability Report?

Next to the medicine cabinet (stocked with Advil).
In the dentist's waiting room (it will make toothache seem like heaven).
On your bookshelf along with great classics like Alice in Wonderland. There are similarities.
Next to the rest of your company's marketing brochures.

Should you report using the GRI Framework?

Yes. Why stand out from the crowd?
Yes. The GRI stats need a boost.
Yes. People will think your report is impressive even before they read it.
No. Why make it easy for stakeholders to navigate the report?

Which Sustainability Reports start with the words "Sustainability is in our DNA"?

All of them. It means Definitely Not Accountable.
All the ones written by PR companies.
All the ones who know what DNA stands for.
All the ones who have imposed genetic testing on all employees as part of their Sustainability Strategy.

What's the best way to write a Sustainability Report?

Plagiarize. Only Crane and Matten will notice.
Use a pencil. Easier for erasing all the stuff the lawyers tell you to take out.
Copy-paste from last year. But don't forget to change the dates and add new photos.
Hire the best Sustainability Report writer available. Hint. Me.

How much money should you invest in producing your Sustainability Report?

$100,000 to produce it. $100,000 to pay people not to read it.
Check the ROI. How much additional sales revenue do you expect to generate as a result of people reading your Sustainability Report?
More than last year. Even Sustainability Reporting is subject to inflation.
Less. Find a fabulous Sustainability Reporter who will give you a very reasonable price. Hint. Me.

Is an Integrated Report better than a separate Sustainability Report?

Yes. It will make you instantly popular in global financial and investment circles.
No. Sustainability information will be overshadowed by financials. OK. Make that a Yes.
Yes. Putting all your eggs in one basket saves baskets.
No. Integrated reporting is the result of integrated thinking. This means you will have to think.

What is the main benefit of Sustainability Reporting?

Ice cream sales increase when people write reports.
Sustainability Reporters have lots of fun. Hint. Me.
Sustainability Reporting has become a prominent industry sector contributing to global financial prosperity. This is your opportunity to make a contribution.
Sustainability Reporting ensures that your business is totally transparent, which means that all stakeholders are able to make informed decisions and can decide to criticize, boycott or tell Greenpeace about your company.

Happy Sustainability Reporting in 2012 :-)

Quiz answers: Please send a check payable to the CSR Reporting Blog in order to receive the quiz answers. Please leave your email so that we can send you marketing junk forever.

Speeky Engleesh 2

2011-12-30T08:54:00.000+02:00

Last year, I wrote a post about the English errors in translated Sustainability Reports. I know that the content counts, and errors in translation are not always easy to avoid. I try not to judge a company's report on the quality of its English translation and I am appreciative of companies who make the effort to produce their report in English, enabling me to read it. Most reports which contain translation errors have a certain charm. I can't help but chuckle.

Here is my pick of 2011:

The Xinguang Knitting Company Ltd from Guangdong, China
Sustainability Report 2010

Our sustainability report publishes once a year.
During the period of selecting indicators, Xinguang mainly thought about the relevance, materiality and availability of different concrete indicators.
When enterprise performs its role of corporate social responsibility, it focus on the responsibility to employees, environment and society,
Certainly, our performance of social responsibility has a wide range of contents. We make donation, obey the law and help low income groups. And we also try our best to make more contribution in different respects. All in all, figuring out our minds, we put the work into practice and create a system characterized by corporate social responsibility.
Nowadays, because of the shortage of cotton, the instability of petroleum byproducts and labor shortage, the cost of raw materials has been rising at the rate of 10% to 15% per year. Within 5 years, this trend will not change. And here comes a question---how to cope with these unbeneficial factors?
For the company, staff is the most important stakeholder.
In 2010, Xinguang added plenty of fitness facilities and entertainment equipment, such as Bing-bong ball and Billiard equipments, so that employees can increase the range of leisure activities
In order to eliminate discrimination and race conflicts, Xinguang has developed some employment policies.
From the charts above that picture the proportion of female and male, we can discover that there is not much difference between the number of female and male employees. Consequently there wasn't any case of discrimination reported in 2010.
The consumption of domestic water forms the lion's share of Xinguang's total consumption.
We promise to keep doing improvement and with this we crate a workplace which helps our staff to play to their respective strengths.

Bing-bong ball? Crate a workplace ? Chuckle away..... Seriously, though, I commend Xinguang, a privately-owned 400 people garment manufacturer in China for producing a report and taking CSR seriously. If ever I visit Guangdong, I will buy them all ice-cream!

And while we are on the subject, here is another one:

Ambuja Cements Ltd Corporate Sustainable Development Report 2010

We were facing a lot of problem in maintaining the day to day quality and in turn our whole operational efficiency was getting affected be it blasting efficiency, loading efficiency or hauling efficiency.
While these activities are carried out, the impact could be upbeat as well as downbeat.
At Ambuja, we recognize community as one of our prime stakeholders and we endeavor to reach out to it to accomplish our social responsibilities. The surrounding communities are our partners in our march to progress.
Those involved in successful micro enterprises are able to generate income that has given them a degree of power hitherto unheard of.
The cultivation of wadis or orchards has been beneficial to several economically backward families, especially tribals.
These efforts strive to improve the quality of education and make schools child-friendly.
The Company has adopted structured benefit schemes to ensure wellbeing of employees in case of both post-retiral life and similar eventualities.

In fairness, Ambuja Cements have produced a great report and demonstrate some very interesting and impressive sustainable practices. The company is a publicly traded company in India, employing over 5,700 people. A few chuckles here and there do not detract from the positive reporting of this company. In fact, I quite enjoyed it. Almost as much as ice-cream.

The Top Ten CSR Reports of 2011

2011-12-26T11:51:00.000+02:00

How can I not write this post? Any respectable blogger has to write a post about the best of 2011. It's part of our license to operate. It's about professional integrity. It's in our job description. Even though I did cover 2011 in Retrospect in a post for CSRwire, CSR Reporting is in a class all of its own. The Top Ten CSR Reports of 2010 got quite a lot of hits - in fact it was the fourth most popular post of all time on this blog.

During 2011, I have written about hundreds of CSR Reports (and not written about thousands more). I have formally reviewed reports on CorporateRegister.com, Ethical Corporation and Sustainable Business Forum. Here's the list of all my reviews - it's almost up to date :).

What makes a report an outstanding report, for me?

I look for three things. I call it the AIM Reporting Model (hah, just invented that, sounds considered, right?) AIM for Authenticity, Impacts and Materiality.

Authenticity: I look for whether the company has reported in an honest way, using stakeholder voices to supplement performance data. Authenticity for me includes balance, accuracy and completeness. I look for targets and progress against stated targets.

Materiality: I look for whether the company has clearly defined the most important issues for the company and its stakeholders and defined the way in which those issues have been identified and prioritized. Reporting materiality should also include a certain amount of contextual information which can assist us in understanding the issues and why they are material.

Impacts: I look for whether the company identified impacts rather than just presenting a shopping list of activities. This means discussing the outcomes of what was achieved. The outcomes are the achevement, not the activities. This is by far the most difficult thing for companies to address and very few, if any, do it well.

So, with AIM in mind, here are the reports that stand out for me in 2011, in no particular order:

WPP Corporate Responsibility Report 2010/2011

WPP reports get better and better. This one is the best yet, I think. A wonderful online presentation, creative, clear, easy-to-read, covers all bases and provides good data. It has one of the most Authentic CEO Introductions that I have read for a while ("Sustainability is a slow motion crisis. More pressing issues intervene"). Materiality is represented under the heading "How we manage risk and opportunity", in a nice table which reports how WPP are addressing each issue. This is one of the few reports that actually mention Impacts head-on - there is a section called Impact of our Work. This section showcases WPP's client projects, some of which are quite fascinating. Authenticity is the aspect of this report which I might consider as an opportunity for additional work in coming years. There is very little in this report except good news (except, perhaps for the Employee Infringements section). No stakeholder voices provide additional credibility and the report is not assured. Overall, however, a great fun-serious report.

BT 2011 Sustainability Report

BT's printed report is compact but packed (the website offers more case studies). It covers a broad spectrum of BT's Impacts on society and environment and the thing I especially like about BT's reporting is the way they match "non-financial" performance indicators to financial performance indicators. Lost time injuries, for example is recorded as Injury Rate and also as a financial cost to the business in terms of the cost of time lost through injury. The number of days lost to sickness are also converted to BT sick pay costs. Waste management and recycling performance is translated into the financial net waste savings. Overall sustainability performance is also converted into the number of customer bids that BT won that contain a sustainability component (GBP 2.1bn in 2010). (BT has still not been able to develop an "appropriate financial measure" for the value of good diversity performance - this is something I find a little strange, as I have mentioned before). Nevertheless, the report includes examples of practice and in most cases, some form of result or outcome, for example. BT has conducted carbon impact assessments at customers showing how BT helps them reduce energy consumption and carbon emissions. While BT could go further in assessing and reporting Impacts in other areas, this is in the right direction. A Materiality Assessment is provided and is nicely specific to BT's current business issues, including as a most material issue, for example, support for the London Olympic and Paraolympic Games. Internal and external stakeholder voices are present in this report. All in all, it passes my AIM test reasonably well.

Kuoni Travel Holding Corporate Responsibility Report 2010

I picked up this report when researching my post on 25 examples of creativity in Sustainability Reports, and it stayed in my mind, primarily because of its spectacular design. It's a great read, as well, includes a Materiality assessment, and some assessment of impacts is included in external stakeholder commentaries. A thoughtful, interesting and attractive report.

Ford's 2010-2011 Blueprint for Sustainability Report

Ford's approach to Materiality is world-class and disclosures are comprehensive. Although a little light in the Impact area, this is an Authentic Report which covers complex issues such as business restructuring, health care provisions, vehicle safety, and lifecycle sustainability design.

Hauska and Partners Sustainability Report 09/10

Hauska and Partners is a privately owned Corporate Relations consulting business employing 37 people. The company is developing impressively on its sustainability journey, and this year reports at GRI B+ level, moving up from the C level report of last year. This is Hauska's third report and its's well presented online. While there is no materiality matrix, there is a list of key issues which broadly serves the same purpose. It's an Authentically written report (for example, 81% of employees received performance evaluations and this, says Hauska, was one of the areas the company was "least satisfied with".) It's a short, compact, report but makes a positive impression, though here again, Impacts are under-presenced. It would be nice to see this company reporting in the future on the kind of impacts it makes through its consulting work. In the meantime, kudos to a private, small business that advancing responsible business practices.

Avon Corporate Responsibility Report 2010

This report just made in time, having been published just last month. However, Avon makes its mark well as a company that does big things that make a big difference. With a very clear focus on three core pillars - empowering women, (environmental) sustainability and philanthropy - Avon shows how consistent actions deliver results. Personal stories of Avon Representatives do give a glimpse into the transformation that the Avon framework can achieve for women, while Avon's deforestation campaign shows the measure of Impact Avon is generating. Avon's Materiality issues are listed. While Avon is on the right track with this GRI B level report, I would like to see more focus on Impacts in the future - both from the standpoint of economic empowerment of Avon Reps and actual results of Avon's social and environmental campaigns, but also from the perspective of the products that Avon sells and the women who buy them. I believe a fascinating discussion could be developed about the way that Avon is making an Impact in the beauty market and how the unique selling proposition that Avon has perfected make a difference in the lives of Avon's customers.

Delhaize Corporate Responsibility Review 2010
I reviewed this report in the context of Materiality during 2011, and it stuck in my mind as a well prepared, well-presented and interesting report to read, even for the lay reader. It covers Materiality well, includes internal and external stakeholder voices, good reporting on progress against targets and a nice mix of case studies. Impacts of a retail supermarket on healthy eating habits or other behaviors of consumers are covered in this report, which means that I can find some level of Authenticity, Materiality and Impacts, though, of course, there is still room for more.

Vestas Sustainability Report 2010
I used this report as an example of good reporting against waste management performance indicators. However, beyond this, it's an authentically written report which presents the case and impacts of wind power in a coherent and insightful manner. The report lacks a Materiality Analysis - something the company should consider in future years to demonstrate its responsiveness to stakeholders as well as focusing on the four priorities which Vestas has defined for itself - Cost of Energy, Safety and Citizenship, Partnership and Business Case Certainty. Case studies illustrate Vestas approach in an appropriate way and targets are clearly stated. Not AIM, but getting there.

Intel 2010 Corporate Responsibility Report
Intel's reporting is professional, direct, intelligent and pretty intense. The complexities of reporting for such a large global corporation are tremendous and I think Intel pulls it together pretty well. Intel reports on economic impacts, which is a bit of a number crunching exercise, but an interesting way of looking at how a company contributes to economic development beyond the direct sales of its products. Intel also includes a detailed water footprint analysis, and also describes a range of ways in which technology is used to solve environmental challenges. Intel's handling of the $1.45bn fine imposed for anti-competitive activities in Europe is directly hit on the head in the report, but it's there and one can sense Intel's indignation. Intel discloses its Materiality Matrix and includes some stakeholder voices, supplemented by videos which can be accessed from the interactive PDF. One difficult balance to achieve is to what extent annual sustainability reporting continues to trot out the same texts which relate to policies and management approaches which largely remain the same year after year. Intel could do a better job at identifying what I call the Delta, the things that have specifically changed from one year to the next, while cutting back on some of the policy statements which could be hosted for reference on the Intel website. While some Authenticity is lost because of the factual and punchy style of this report, comprehensive reporting, consistency and clarity make up for this. A reasonably AIM report.

Federacion Nacional de Cafeteros de Colombia Sustainability Report 1927-2010
Yes, you did read the dates correctly. This report covers 83 years, and all in only 175 pages. I reviewed this report earlier this year and even included a little coffee quiz, so now's your chance to go back and see if you do any better at a second attempt. It's hard to review this sort of report in the same light as single company reports, as the focus of an industry association is somewhat different, as I have also blogged about. However, the impact of industry associations can be very important, especially as sustainability is trending towards sectoriality, so this is as important a report as it is an interesting one. There's a good chunk of PR content in there, so Authenticity is a little diluted, but Materiality is addressed and key issues listed. Impacts are described both at the level of how member coffee growers have been supported by the Federacion's work and also at the level of advancing the sustainability of Colombian coffee. I like this report - I just hope we don't have to wait another 83 years for the next one!

De Beers Sustainability Report 2010
I reviewed this report as part of my "Reporting: How they do it" series on Sustainable Business Forum, and the report lodged with me as a clear, clean and progressive disclosure. This is a part of what I wrote: "The De Beers report is a delight to read, it is intelligently structured, well-cut, polished and completely aligned with the report's title "Living up to Diamonds". Reading the statements by the Chairman and Joint Acting CEO's is rewarding – both are focused, factual, forward-looking and frame the report content in a relevant way - a far cry from most of the platitude-ridden clichéd report-speak that features in most opening messages from company leaders." Impacts on diamond-delivering communities are also addressed to a certain extent. This report broadly meets my AIM threshold and is an impressive piece of work.

******

Of course, it is most difficult to select 10 reports out of the hundreds I read each year and the thousands that are available. There are several strong reports which I haven't mentioned here, which would appear in my Top 20, 50 or even Top 100 list. But all good things are better in small doses (except ice cream), so I have contented myself with ten reports this time around. Apologies to all those other fabulous reports that I have loved reading, learning from, reviewing, talking and writing about this year.

Note: Just to be fair, I didn't include four Sustainability Reports I worked on this year, even through all of those are my favorites too....Ellbit Systems Report, Baran Group's Report, Novus International Report and of course, my own Beyond Business Report.

Santa's 1,747th Annual CSR Report

2011-12-23T17:24:00.000+02:00

True to form, Santa has sent me her 1747th CSR Report. (See prior reports here: 1,746 and 1,745). But yes, you did read that correctly. This year, Santa is a WOMAN. She was appointed after a nomination by the Santa Claus Inc. (SCI) Board of Directors Nominating Committee and approved at the SCI AGM. This is a first for SCI. Not only is Santa a woman, but she is a single mom, she's of Chinese origin, has a personal disability (a wooden leg) and was abandoned by her parents at birth, only to be found in a garbage dump by concerned citizens who prayed for her welfare. After finding home in a series of orphanages, Miss Santa applied to the Vocation Elf Training Academy in Lapland, believing that distributing gifts to children would make the world a better place. From Day One she was mentored by senior SCI Managers, offered several leadership development programs, provided with flexible working options so that she could be home for her children in the afternoons. Miss Santa is paid exactly the same as her male counterparts. Graduating from the elf program with distinction, Miss Santa quickly rose through the elf ranks and became a significant influence at SCI. When it was time to appoint a new Santa, she was not considered as a leading candidate because she is a woman. Santa has never been a woman. However, Miss Santa did a good thing. She personally talked at all the members of the SCI Board of Directors and promised to behave like a man. They accepted, and the rest is history. Follow Santa on Twitter at @Santa or visit Santa's Facebook page.

As I usually do, with permission, I will share with you the CEO statement.

Santa Claus

The Shared Values Report 2011

Dear Stakeholders,

As you all approach Christmas 2011, I urge you to be conscious consumers. I know how tempting toy stores are at this time of the year. Blinking lights, massive colorful displays, new improved versions of all your favorite toys, all screaming at you "Buy ME, Buy ME, Buy ME!" I say to you, conscious citizens of the world. UNITE! Join together in a spirit of sustainability. Don't buy! Instead, donate the money you would have spent to the Retired Santa Foundation, which ensures that all prior Santa's can continue to live in a way to which they have not yet become accustomed.

2011 has been a year of ups and downs. Yes, we reached new heights and experienced new lows. In this 1,747th CSR Report, I will share with you the heights. You can work out the lows for yourself. The theme of this report is how Santa creates Shared Value. We do this by continuing to do what we have always done, but calling it Shared Value. In sustainability terms, we have made notable progress and have been accepted by the Dow Jones Sustainability Index as a Super Sector Leader for the very first time. (Actually, there is no other company in our sector, so leadership is a POC). We have also joined the United Nations Global Compact, mainly because of the problems of corruption we see in our industry. We have already started a campaign to prevent local in-store Santas promoting toys from sponsored links.

Reinforcing our Values: One of my first acts as CEO was to review our Santa Claus value statement and bring it into line with our modern world. When Santa started out over 1,700 years ago, the world was a very different place. No internet. No cell-phones. No Chunky Monkey. No electric sleighs. No robot elves. Today, the world is full of technology and people have become addicted to Facebook and iPhones, leaving little time to experience the true meaning of relationships, the love of nature or the optimism of the human spirit. Our new values at SCI aim to reinforce our contribution to this modern world. Following a process of consultation with our Board of Directors, the Elf Representation Committee and selected external stakeholders (reindeer farmers, toy manufacturers, Greenpeace, children and moms, chimney sweeps), we believe this now best represents our core:

Mission

To perpetuate the love of Santa

Values

Faith in Santa

Disabled-Access Chimneys

Elf Emancipation

Reindeer Rights

Children's Universal Right to Gifts

Santa World Domination

Sleigh Energy Efficiency: As reported last year, we were considering moving to electric-powered sleighs, but we delayed this program due to lack of sleigh charging stations. We are disappointed to report no progress in global electric sleigh infrastructure, but we have commenced a pilot with solar power. We charge up our sleighs all summer in sunny Lapland and this provides enough energy to run the sleighs during the Christmas period, provided we use power-saving driving techniques. This saves over 463,000 tons of carbon emissions every Christmas season. The downside is that some sleighs run out of power before returning to base. If anyone has identified the whereabouts of 473 sleighs which have been lost somewhere over Iran, Ivory Coast, Philippines and New Zealand, please contact the SCI Sleigh Recovery Department.

Transportation Safety: All sleighs have now been fitted with tachometers, global GPS tracking and safety devices that monitor the driving techniques of elves and report problems online. In 2011, there were 225 sleigh accidents, mostly due to elves tweeting and texting while sleigh-driving. These resulted in only one fatality: a life-size inflatable Marilyn Monroe doll, destined for a home for motherless children. Instead, we supplied a life-size Powderpuff Girl. We have issued a new policy that forbids distractions when sleigh-driving and any elves which cause more than 3 accidents are demoted to toy-sorters in the Lapland warehouse.

Toys Sourcing, Packaging and Recycling: This year, Santa is distributing toys which have certified conflict-free mineral content, contain reduced levels of packaging materials and only paper and carton from sustainable sources. Every toy is recyclable because it contains a special label: "Recycle this Toy - give it to a friend". Our experiment two years ago of distributing only recycled toys was not sustainable. Children rejected used toys due to missing parts, torn-off doll limbs and protruding nails and screws, despite our rigorous QA process. When children complained of having received a horse on a stick without the horse, a BeyBlade without the blade and a Justin Bieber doll which sings out of tune, we felt it was time to review this policy. (We are still checking whether the Justin Bieber issue is actually a fault).

We have also banned certain toys from our distribution list this year:

Swearing policeman toys - we value plain speaking but not bad language.
Jo-Ann Stores Rubber Ducky Garden Collection - toxic levels of lead paint are not in line with our safety policy
Paintball Guns - unintentionally flying paint cartridges are not pretty
Barbie - due to rainforest destruction - even Ken couldn't stomach it

Elf Freedom of Association: This year, we have made significant progress by acceding to elves' demand for representation, collective bargaining and freedom of association. Of the 342,400 elves in our employ, 17 have joined the Help Elves Live Longer (HELL) Union. HELL ensures a living wage for elves and protects their pension rights. The reason that only 17 elves have joined HELL is that unauthorized union-busting activity has apparently been more successful that we are able to admit.

Impact Evaluation Program: This year, for the first time, we concluded our first Impact Evaluation Study, aiming to show what value Santa adds to social cohesion all over the world during the holiday season. It took us quite some time to figure out how to measure this, but ultimately, with the support of the Toys for Global Spiritual Growth Association, we undertook the widest survey ever of children between the ages of 6 and 9, and parents between the ages of 23 and 24. This is what we found:

99.3% of children confirmed that receiving a toy from Santa contributes to their motivation to achieve higher grades in school. The 0.7% who disagreed are employed year-round, cotton picking in Uzbekistan and making tablecloths in factories in Guangzhou.

78.9% of children confirmed that playing with toys helps them form positive relationships with siblings. Those who did not, have no siblings. Those who confirmed positive relationships say this is due to the fact that, when they are playing with their toys, they are not interacting with their siblings and therefore have no time to quarrel.

100% of children confirmed that receiving toys helps them understand important social issues such as global warming, global poverty and gender equality. We think this is probably because the questionnaire did not have a negative response option.

93% of parents confirmed that their children love them more after they have received a toy at Christmas time. Quite how parents measure this is not clear. However, in parallel, records show a reduction of parental violence and child-beating in many countries. We can only conclude that our toys are contributing to strengthening positive bonds between parents and children.

99% of parents confirmed that children received toys from Santa that they would otherwise not have bought. This is because most parents prefer to spend on food, education and medical care. By reducing the burden on parents to budget for Christmas toys, our impact is undeniable: happier, healthier, better educated children who will save our planet from enironmental destruction.

As a result of this highly positive Impact Evaluation, we re-launched our Support Santa Fund. Please support us. Donations are welcome via the CSR Reporting Blog (who takes only a small percentage handling fee. Not more than 42.5%).

A+ Level Report: Finally, we are proud to announce that this is a self-declared A+ Level report, prepared in accordance with Santa's very own Reporting Framework. Actually, there is only an A+ Level. We prefer not to confuse people. We decided not to have our report assured this year in order to ensure that no-one picks up on our errors. However, we will consider making fewer errors in future years.

Wishing Everyone A Merry Christmas, Happy Holidays and A Happy New Year !

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)

A COP can be a good thing

2011-12-22T15:02:00.000+02:00

Some people think of the UN Global Compact Communication on Progress (COP) as a lightweight entry into the world of transparency. In some cases, they would be right. To submit an Active level COP, all you need to do is describe how you uphold the 10 Principles of the UNGC, describe the positive things your company is doing and sit back and wait for next year's deadline. However, in November 2011, 106 companies were delisted for not communicating, bringing the total delistings to 2,953 companies, so maybe it's a little more challenging.

Last year, the UNGC made a change to the COP structure, introducing what the UNGC calls the "Differentiation Programme". This gives companies two choices: Active Level and Advanced Level. Basically, "Active" means the old-style COP, in which companies do the Good News thing, saying how good they have been in advancing the 10 Principles. This could be compared to an Application Level C Report using the GRI Framework, though it doesn't quite require the same degree of rigor in terms of Management Disclosures. "Advanced" is another affair, requiring companies to report on how they meet 24 criteria of responsible and sustainable business practice, grouped in 5 broad categories:

strategy, governance and engagement
UN goals and issues
implementation of Global Compact principles
value chain implementation
verification and disclosure

Essentially, anyone aiming for an Advanced level COP is working at the level of a GRI Application Level A Report. But, as anyone who has ever written an A Level report knows, this is no small task. If you have the capability of producing an Advanced Level COP, in practice, you are capable of writing a Sustainability Report and posting it on the UNGC Website, thereby also fulfilling the UNGC COP requirements. The Sustainability Report will include a reconfirmation of the CEO commitment to the UNGC and a cross-reference index of UNGC principles to GRI Indicators. In practice, this is what most companies who report at GRI B or A Level do.

For companies which are not quite ready to report at this advanced level, an Active COP could be a positive alternative. It provides an opportunity for transparency in a globally recognized context and allows some flexibility regarding what to disclose. In some cases, companies invest quite a significant amount of effort to deliver an Active Level COP.

Take a look at this (Active Level) COP by (my client) , ECI Telecom.

ECI Telecom is a global provider of telecommunications networking solutions and this is the Company's second COP. Beyond confirming the Company's commitment to the 10 principles of the UNGC, ECI discloses how the company makes a Green Impact with ICT Technology. If you don't know your DSL from your VDSL, ADSL and HDSL, or the environmental significance of Vectoring, you can learn a lot from reading ECI's COP. ECI is a champion in low-power applications and E-band technologies. If this is all gibberish to you, don't worry. It was to me until I started to learn what it all means. It's actually surprisingly simple, once you get the letters in the right place, and confirms that ICT is one of the most significant opportunities for companies to provide services which improve their environmental footprint and those of consumers.

Additionally, ECI makes many environmental disclosures relating to its own environmental impacts. With an E-TASC (Electronic Tool for Accountable Supply Chains) score of 96%, the company's best to date, ECI demonstrates a commitment to managing, measuring and reporting. The company achieved a 20% reduction in paper consumption in 2010, a 20% reduction in electricity consumption per employee, a 12% reduction in water consumption and a 9.75% reduction in waste. Great progress.

However, my favorite part of this COP is the description of the Green Camera project that ECI Telecom's CSR Manager, Eynat Rotfeld, organized in 2010. Employees were invited to submit their "green" photographs and the three winning photos were selected from around the ECI globe. The photos were breathtaking. Here are the winning photos:

My Green Life in Huangzhou by Tony Xu (China)

Tony Xu said about this photo: "Bicycle is a green, healthy and convenient choice for me. In Hangzhou, the government purchased a mass of bicycles and offer free use for residents in order to improve the condition of traffic and reduce the usage of cars. You can borrow near the home and return at your destination. It is very convenient, saves money and good for health for everyone. That is my reason for choosing this picture."

Harvesting the power of nature by Glenn Leis (ECI Philippines)

Glenn said about this photo: "I was amazed when I saw those windmills up-close and personal and wonder how the force of nature, which is the wind, drives those giants to produce electricity without any bi-products / pollutants. I’ve been to some power plants during my college day field trips and I have compared it to those diesel-fed engines that are very dependent in oil in which we do not have here (yet) in our country. The power of nature is everywhere, we just need to harvest it in a way we do not destroy it in the end because it's FREE...."

The ECI Biking Team in Georgia by Amit Singer (Israel)

Amit said about this photo: "This picture was taken during our "green" sporting activity, an ECI team bike ride, which doesn’t cause any form of pollution. The team also gets involved in a lot of volunteering activity, including making donations to hospitals, supporting underprivileged children and more. The photo itself represents the spirit of the group – riding in an atmosphere of calmness and blending with the green of nature."

ECI Telecom's 2011 COP is a comprehensive document of 65 pages covering a wide range of social and environmental disclosures, demonstrating year on year progress in advancing sustainable practices. Not a lightweight entry by any means.

Seasons Greetings from the CSR Reporting Blog

2011-12-21T21:18:00.000+02:00

About this time of the year, no prizes for guessing why, I always wish my readers a Happy Christmas or a Cool Yule or Seasons Greetings.

so:

to all my spice-loving readers: Seasonings Greetings
to all my readers planning a family gathering: See Sons Greetings
to all my farming readers: Seize Hens Greetings
to all my curious readers: Reasons Greetings
to all my rebellious readers: Treasons Greetings
to all my sailing readers: Seamen's Greetings
to all my hungry readers: Cheese Buns Greetings
to all my cold readers: Seasons Heatings
to all my bedcothes manufacturing readers: Seasons Sheetings
to all my workaholic readers: Seasons Meetings
to all my violent readers: Seasons Beatings
and to everyone else: Seasons Greetings with a ~~double~~ triple helping of Ice Cream !!

Wishing everyone a great end-of-2011 and a fabulous .... ok, have to say it ... sustainable ... 2012, plus lots of strength to get through (approximately) 534,327 posts and articles which all extol the Top Ten Things of 2011 and predict the Top Ten Things of 2012.

(Haha - that's my next post. Watch this space!)

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 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)

18 Examples of (Not-So) Integrated Sustainability Reports

2011-12-20T13:51:00.001+02:00

Last week, I dutifully submitted my feedback to the International Integrated Reporting Committee on their discussion paper. It was an interesting exercise. Here are a few of my responses:

Do you believe that action is needed to help improve how organizations represent their value‑creation process?

Me: I believe companies need to take responsibility and be held accountable for their impacts on society. Action is needed to improve the number of companies who do this and the way in which they do it. This includes value companies create for society, but it is also about negative impacts on society and accounting for them.

Do you support the development of an International Integrated Reporting Framework?

Me: In principle yes, but on page 8, the Discussion Paper says that the IR framework will provide "high-level" guidance - I think it should provide very detailed guidance. Similarly, the approach states that it is focused on the needs of investors in the initial stages. I believe this is absolutely wrong. Integrated Reporting should AT THE VERY OUTSET focus on the needs of all stakeholders, otherwise it misses the point. Clearly, financial stakeholders are looking for tools to quantify the social/environmental risks and impacts in terms of shareholder value, but if this is the prime direction of Integrated Reporting, we are back to Square One, where sustainability is relegated to almost no influence on financial decisions and shareholder considerations. Once the framework has been developed for investors, there will be zero motivation to change or enhance it for all stakeholders.

Do you agree that Integrated Reporting will drive the disclosure of information that is useful for integrated analysis (from the perspective of investors)?

Me: Yes. In fact, that's pretty much all it will do. I don't think that's enough.

So, as I am having an integrated thinking week, I thought I would take a look at what's really happening out there and scan the 18 Integrated Reports that are contestants in the largest online annual Corporate Responsibility Reporting Awards - CRRA12.

Ultimately, a truly integrated report would show connectivity between the sustainability parts and the financial parts. Ultimately, a truly integrated report would make linkages between business strategy and sustainability strategy and define financial and social/environmental impacts of both in a seamless way. As I review the 18 reports entered in the Best Integrated Category, this is primarily what I am looking for. Connectivity. Linkage. Causality. Integration.

The IIRC discussion paper contains a couple of examples, including this one from Akzo Nobel:

Here we can an example of demonstrating financial value generated through response to global (green) market drivers.

As you will discover, in most reports, I don't find this degree of linkage. Most integrated reports today are a juxtapositioning of two separate reports. In the better cases, some of the narrative is blended so that business strategy appears to take financial, social and environmental aspects into account. Finding a report that actually considers the financial implications of sustainability actions is more difficult, though in some cases, the opportunities of sustainability strategy are discussed - sometimes using the Porter Creation of Shared Value Concept as inspiration.

One thing that puzzles me, for example, is why the cost of energy or other environmental or social factors are not considered. Only one company in this Integrated Reporting Category reports the cost impact of energy - all others report only the KWH consumed and the GHG's emitted. Surely, energy conservation is both a sustainability and a financial risk/opportunity? Why would companies not wish to understand (and disclose) the financial impacts of their energy practices? This seems obvious to me but no-one does it. Yet.

Here are the 18 reports in the Best Integrated Report category (in alpha order):

Alma Media Oy, Annual Review 2010, Finland, 43 pages, GRI B

This is the first integrated report of Alma Media Oy, "the voice of sustainable media", a company whose reporting I have always loved, and this integrated version is great. It looks and feels like a Sustainability Report while ensuring the financials are included and well presented. There is a good deal of contextual information about markets and sustainability considerations. While it doesn't go quite as far as to truly integrate CSR issues into financial and business strategy, and lacks a materiality analysis (though it does include top subjects raised by stakeholders), this report is so well written that it almost make me want to read newspapers again!

Altron - Allied Electronics Corporation, Integrated Annual Report 2011, South Africa, 259 pages, GRI B+

This is Altron Group's second integrated report prepared in line with the King Report on Governance for South Africa (King III). It's a very official looking sort of report, not something you would want to enjoy reading, though it does provide a good range of data. The Company has identified 11 Strategic Themes and a set of Material Issues which are analyzed in the report in detail. There is a clear financial flavor to this report - although consolidated financials start only on page 143, in the early part of the report, much space is devoted to financial impacts and market reviews, including a CFO review and results highlights.

A material issue for Altron, energy consumption, shows a massive increase, from a total of 113,000 Mkwh to 218,000 Mkwh in one year, more than double:

In fairness, there is some discussion of this in the report, and Altron is committing to improving measurement procedures and initiatives to reduce the Group's carbon footprint. However, I couldn't help wondering what the financial impact of this single environmental indicator had on Altron's overall budgets and exactly what Altron is planning to do to to make a change, and how this will impact operations and people.

Cebu Holdings Incorporated Integrated Annual and Sustainability Report 2010, Philippines, 174 pages, GRI B

This real estate company in the Philippines has been an integrated reporter now for 4 years, and although the Chairman's review opens with Dear Stockholders (and not Stakeholders), the company has a nice sustainability framework and the report is quite a pleasant read. Sustainability issues are dealt with well, and include external stakeholder commentaries. The Financial part of this report begins officially on page 123.

One of the things this company integrates alongside financial, social and environmental performance is its core values - Cebu is one of the only companies I have seen whose core values include the Love of God. I wonder if this is a condition of hiring?

Cermaq ASA Annual Report, Norway, 131 pages, GRI B+

This is a fascinating report about a company who makes a living from salmon farming and making salmon feed. Did you know that 70% more salmon was consumed in Norway in 2010 versus 2009? Rising salmon eating trends is due to more sushi and sashimi consumption by younger people in the West, emulating Japanese fish eating habits. As salmon demand increases and supply falls behind, salmon is getting much more expensive. This is good news for Cermaq who made more profits than ever before in 2010. Another fascinating aspect of fish farming is the monitoring of salmon stress levels. Did you know that salmon could be in stress? Did you ever think about how much that salmon fillet you ate for dinner last week was stressed-out during its lifetime? Cermaq is able to identify stress levels in salmon and in 2010, was able to reduce stress levels by 60%. Wow. (Perhaps they could do the same for Sustainability Consultants?) Another fun fact is that Cermaq have 46 million fish in the sea as part of their farming effort and not one managed to escape. Hey, I bet prison services around the globe would be interested in Cermaq's methodologies.

Cermaq's Integrated Report is really a joined Sustainability Report and an Annual (Financial) Report. The Sustainability part takes up the first 55 pages and pages 61-131 are in the form of a traditional Annual Report. There are separate Auditor's Reviews for the Sustainability content and the Financial content. The Sustainability part contains a nice Materiality Matrix:

Cermaq - nice Materiality Matrix presentation

Cermaq have even created customized indicators for reporting on their own kind of sustainable aquaculture:

Cermaq's propietary reporting indicators

Deloitte LLP USA Fiscal Corporate Responsibility Report, 50 pages, GRI B

Oops! What' this doing here? This is a CSR Report and not an Integrated Report. How come it snuck into the Integrated Reporting category:). If this report wins, the IIRC will go a little crazy, I suspect :)

Clearly Deloitte are a little confused :). Perhaps their involvement in the IIRC Pilot program may help.

NOTE: UPDATE 23 December: Following my comments above, Deloitte has now confirmed that this report entry in the Integrated Category was an error and it has now been removed. However, Deloitte's report is still in the running in the Best Creativity Category. Clearly, Deloitte is not confused. Just a small error. These things happen. Thanks, Deloitte, for the clarification.

Flughafen Muenchen Sustainability and Annual Report 2010, Germany, 194 pages, GRI A+

The Munich Airport Sustainability and Annual Report is a fascinating look at the full scope of sustainability issues which are relevant to airport operations which are complex and cover a wide range of social and environmental impacts. This report nicely discloses on workplace, climate change and environment activities, community engagement and stakeholder interests, and includes a full Materiality Matrix. The consolidated management report, beginning on page 130, contains financials as well as sustainability risks. As far as integration goes, it does a good job, though as with all other reports in the integrated category, financial impacts and sustainability impacts are handled as separate entities and the connectivity between them is not clearly articulated.

Hyundai Engigeering & Construction Co, Korea, Sustainability Report, 88 pages, GRI A+

The Hyundai Report also seems to be misplaced in this category. There are two pages of headline economic or financial data in a total report of 88 pages. Hardly an Annual Report and hardly an integrated one. Hyundai should have read the fine print more carefully!

The report does include an explanation of the difference between a Triple Bottom Line Report and an Integrated Report and includes economic impact discussion and targets, though there is no direct linkage between these and other ESG performance areas.

The Hyundai Report includes a thoughtful Materiality Matrix which shows how issues have moved between one year to the next. This is a nice touch which most companies fail to consider.

The Hyundai report also features several external stakeholders and their responses to business and sustainability issues which are important to them as they consider their relationship with Hyundai. Overall, this is a great Sustainability Report showing consideration of social and environmental performance. The fact that some economic factors are mentioned and discussed does not make this a truly integrated report.

Indra Sistemas SA Annual Report 2010, Spain, 148 pages, GRI A+

Indra Sistemas offer a report which provides me with an opportunity to check out how much Spanish I don't know. I did try to use Google Translate, but when it converted a piece in Spanish to "The accountability that is presented below was carried out following the guidelines of the G3.1 Global Reporting Initiative application level A + and as AA1000 APS (2008), Accountability, including our behavior on the Global Compact principles with which we compromised ...", I decided to give up and let the Spanish speakers among us analyze the degree of integration of this report. (The GRI Index is in Spanish and English). I did discover the Indra Sustainability website which is in English with an online report which is rather pleasant, including a "Sustainability Balanced Scorecard" which presents all sustainability data in great detail for a six year period. However, the website was not entered in the CRRA '12 competition so it is not really fair to comment on that.

Korea Railroad Corporation 2010 Sustainability Report, Korea, 105 pages, GRI A+

This report is called a Sustainability Report and follows a classic structure of sustainability reporting, with economic performance, social performance and environmental performance making up the core sections of the report. The economic section includes 7 pages of business descriptions and profiles, but not a full set of financials and there is no reference to any other report which does include the full financial data. Here again, this report doesn't fit the bill for what I believe constitutes an Integrated Report, even using the "light" definition which may indicate a "combined" report.

MOL Group 2010 Hungary, Annual Report, 251 pages, GRI A+

This mammoth report by MOL Group oil and gas producer in Hungary, Slovakia and Croatia, includes a separate section on Sustainability non-financial performance which starts at page 175 and runs through to page 210 - 14% of the total report. More if you include the separate governance section which is a further 23 pages - bringing total sustainabiilty and governance content to 22%. One of the disturbing things about this report is the title of the sustainability section - "non-financial performance". Surely, in an integrated world, social and environmental performance can no longer be solely non-financial? MOL is not the only Integrated Reporter which uses this terminology which I think is misleading and not representative of integrated thinking. Aside from a mention of MOL's position in the Dow Jones Sustainability Index, sustainability issues are conspicuously absent from all discussion of MOL's business strategy and market performance. Sustainability data is assured separately from financial data.

The MOL sustainability component is very detailed and covers all transparency bases very well. However, the narrative is dry and factual and certainly not appealing to anybody other than those specifically searching for data and facts. In fact, MOL understands this, stating "While the Annual Report’s main audience is assumed to be our shareholders, investors and sustainability analysts, our webpage is tailored to answering the information needs of all stakeholders." The website is a little more friendly for us non-financial people - it has a few more photos and the language is a little friendlier, though the pages are long and very detailed.

One thing I have never seen before in a published report is a draft GRI Application Level Check statement!

MOL - getting ahead of themselves - confident of the GRI check!

Novo Nordisk Annual Report 2010, Denmark, 115 pages, GRI A+

Novo Nordisk is often held up as the go-to-company for Integrated Reporting excellence, and has been a winner of the Best Integrated Report category in CRRA several times. Certainly, Novo has been doing this a lot longer than most companies (since 2004), so one might expect them to have developed a methodology which works for the company and for all stakeholders, not just financial stakeholders.

Novo says about their own report: "We believe Novo Nordisk creates value in ways that are not captured on a balance sheet or income statement and this is one of the reasons we publish an integrated report. Managing a business sustainably involves looking at risks holistically and taking a long-term perspective. In our 2010 Annual Report we exemplify this in a number of ways: comparing our sales growth with CO2, emissions, water usage and waste to better reflect relative performance and setting and reporting on long-term targets for diversity and engaging corporate culture."

De-coupling business growth from environmental impacts, is excellent, though Novo Nordisk continues to refer to non-financial targets and does not make the direct linkage between business and sustainability issues.

At the risk of becoming repetitive (yawn, zzzzzzzzzzzzzz), how can employee turnover, energy consumption, water consumption etc, not include an element of financial impact? Since 2007, Novo has achieved big reductions in water and energy consumption (37% and 28%) - I am sure this has made a significant financial contribution which is not specifically identified in Novo Nordisk's integrated reporting.

However, perhaps there is light at the end of the tunnel. I noted in an interview with Lise Kingo of Novo Nordisk, included in the report, that she says: "Together with experts and with inputs from stakeholders we have developed a methodology that enables us to value the contribution of our Triple Bottom Line approach in a profit and loss perspective. We have called this initiative our Blueprint for Change programme, and we have conducted Triple Bottom Line reviews looking at our climate action strategy and our business approach in China." I found more about this Blueprint for Change in China on the Novo Nordisk website - this is indeed an excellent document showing how Novo built business while creating very positive social and environmental impact. Again, I miss seeing an assessment of the impact of significant environmental benefits on the profitability and affordability of diabetes healthcare as part of this initiative, but this report does go further than most in identifying economic, social and environmental impacts for value creation as an integrated strategy.

The consolidated financial and non-financial statements start in the Novo report at page 57, though both financial and "non-financial" figures remain separate, with 7 pages out of around 58 referring to social and environmental impacts.

Solar World AG Annual Group Report 2010, Germany, 327 pages, GRI A+

This report is very long - at 327 pages, it weighs in as the second longest report in the entire competition. The report structure goes from corporate background and profiles (often quite technical) and then to consolidated financial statements, followed by a sustainability section which is made up of the GRI Index, the UNGC Index and the KPI's of EFFAS, all of which take up a further 16 pages and is followed by some more detailed disclosures against performance indicators. There is little in the form of sustainability narrative - mainly data and while this is a business all about sustainability, I didn't detect too much overall integration in between financial and sustainability performance. It's quite a techy impersonal report in simple b/w design, making for a not terribly entertaining reading experience.

Siveco Romania SA, 2010 Annual Social Responsibility Report, Romania, 46 pages, not GRI

There is one page of economic narrative in this Sustainability Report. It's a Sustainability Report. Do Sustainability and Integrated sound so alike?

In fact, this report only barely qualifies as a Sustainability Report. It is so light on sustainability data that it would not make a GRI C Application Level. It's more of a marketing-oriented brochure that reflects Siveco's business performance with a couple of CSR themes thrown in for good measure.

While I commend Siveco for being one of the few Romanian sustainability reporters, and the only Romanian report entered in the entire CRRA competition, the Company needs to develop its understanding of what CSR and Sustainability really mean, and how this can be presented more effectively and transparently.

Syngenta International Annual Review 2010, Switzerland, 58 pages, GRI A+

Hah! This is the only report in this entire category which makes a connection between environmental impacts and financial results. Syngenta says: "We monitor energy use to identify opportunities to improve efficiency. Our energy strategy encourages local teams to select the best ways to reduce energy at local sites. By 2012, we aim to decrease global greenhouse gas emissions by 40 percent relative to EBIT from the 2006 baseline."

Energy consumption, GHG and other air emissions and water consumption all carry a $ value and are measured in terms of their impact on financial results as well as environmental sustainability.

The nature of Syngenta's business, developing seeds for more sustainable agriculture, advancing food security, lends itself well to a blended business and sustainability discussion, which makes the narrative in this report readable, informative and quite enjoyable. (Check out also Syngenta's Grow More from Less website).The people section is light, and I would have welcomed more discussion about responsible workplace practices and a similar assessment and measurement of sustainable people practices in relation to cost efficiencies. Much of this can be quantified, and it would be an interesting next step for Syngenta to incorporate measurable people impacts in their next report.

In the meantime, given that Syngenta is the only report in this category which has made the connection I was looking for, as well as providing an integrated view of the business in a readable and accessible manner, without too much financial geek jargon and headaches, this report has my vote as the category winner!

(At this point, I will overlook the fact that this is a self-declared GRI A+ level report, and that several core indicators are not fully reported, which to me seems to fall below the A level threshold.)

Takeda Pharmaceutical Company Annual Report 2011, Japan, 150 pages, GRI A+

Takeda is a 230-old corporation so I guess they must be doing something right that supports their sustainability as an organization, although 2010 marks the first year of "Transformation into a New Takeda" strategy, driven by innovation, culture and growth. The reports looks and feels more like a Sustainability Report than an Annual Report, and includes extensive interviews with company people, and a thorough explanation of a significant acquisition, Nycomed, including aspects of culture and management style. (Most company reports do not examine in detail the basis for and impacts of acquisitions - this is a nice approach).

Financial results and discussion takes up 41 pages (27%) of this report, and some of the business and market disclosures in the body of the report are rather too detailed for the lay stakeholder to read and engage with, but overall, the report hangs together nicely, even though, as with other integrated reports, I could not find and direct connectivity between environmental or social performance and business results.

Takeda has adopted the seven core subjects of ISO26000 as a basis for CSR policy and reporting and structures disclosures around these themes. Takeda also publishes a CSR Data Book which replicates all the information in the Annual Report and adds some, and also includes the GRI Index. So if you are looking for a more traditional standalone CSR Report, this is the one to view.

As with most Japanese reports, many messages are formulated into charts and diagrams. I liked this one which explains Takeda-ism and Takeda stakeholders.

Vancouver City Credit Savings Union (Vancity) 2010 Annual Report, Canada, 94 pages, GRI A+

Vancity is a member-owned, community-based credit union seeking to develop member and community value through everything it does. Vancity is Canada’s largest credit union, with $14.5 billion in assets, more than 417,000 members and 59 branches. Vancity calls this report "their first truly integrated Annual Report", and in my view, they have done a good job. Vancity's report gives a reasonably integrated business overview, with a financials taking up only 28 pages. One of the few integrated reports which has less bespoke financial content - and one of the few which is actually quite pleasant to read, with many nice visuals and a good storyline in the narrative. If you are wondering how Vancity manages to do this - I suspect I know why :) Take a look at the following shot of the Chair of the Board and the CEO! Women power is obviously the key!

Vancity's reporting on Materiality is interesting. In fact, they produce a whole separate report about it - it's 4 pages long, and defines the materiality process undertaken and the specific priority responses received by stakeholders from different forms of engagement with them, and how these issues have been addressed in the Annual Report. While this is excellent practice and transparency, I do wonder about the decision to omit this, beyond a mention and referral to the separate report, from the Annual Report main document. Materiality process is so core to reporting, particularly integrated reporting - why push it out of the main document? Another nice touch I have always liked about Vancity's reporting is the way their targets are clearly laid out and the specific accountability for achieving each target is noted- once upon a time, Vancity included actual names of people but today, it's just the job title, such as VP Human Resources, CFO or other. Still, it's good to know who in the organization is accountable for what.

Wilderness Holdings Ltd, Integrated Annual Report, South Africa,
153 pages, GRI Undeclared level

Wow. You have to look at this report, just to see the spectacularly breathtaking photography! It's just too beautiful for words. The second reason you need to look at this report is to learn about the intricate details of cultural and sustainable tourism - the high level of detail this report provides is also breathtaking - some might say overkill - but it has a certain authenticity and charm which makes you want to read more. The report includes a list of issues raised by stakeholders and Wilderness's response to them.

Consolidated financial statements begin on page 108, however, so that is where I stopped :)

Wyndham Worldwide Corporation Sustainability Report 2009-2010, USA, 56 pages, GRI C

Oops! Another Sustainability Report. Not integrated. No vote in this category. It does include 2 pages about business performance and revenues, but this hardly constitutes a full set of financials. This report belongs in the Best First Time Report category. Phew! It's there. And also in the Best Carbon Disclosure Category. So that's alright then.

I couldn't resist taking a little peek, though! Two things caught my eye. First, is the Wyndham has a website dedicated entirely to women travelers. I will have to see what that offers the next time I am off somewhere. I wonder if they supply people to pack and unpack my bags. That's by far the worst part of travelling.

The second thing I noticed is Wyndham's Sustainability structure, which seems highly slanted towards Environmental Sustainability.

Wyndham - green is it

Overall, the Report is a lightweight GRI level C report, responding to just 11 performance indicators in full. But a nice first time effort, all the same. Hmm. Wonder how it got into that Integrated Category, though!

And to round it all off...if you got this far ....

Of the 18 Reports entered in the Best Integrated Report category, there are five which I believe cannot be classified by any stretch of the imagination as integrated. Reporting companies should be more careful about how they define their entries in CRRA in future years. Also, some more specific guidance from CRRA might be helpful.

Of the remaining 13 reports, all go some way to presenting financial information blended, to a greater or lesser degree, with social and environmental impacts. However, very few manage to make a connection between business strategy and sustainability material issues in a way which shows how value is created or destroyed in both financial and sustainability terms. This shows the true nature of the leap that Integrated Reporting needs to drive. It is more than developing green products or delivering new drugs. It's about truly connecting all aspects of all business initiatives in which the sustainability impacts of business are represented in financial terms (where possible) and the business impacts of sustainability are represented in social and environmental terms (where possible). I fully recognize that 100% integration may be hard to achieve, but, based on my review of the Integrated Reports that are showcased here, even some first tentative steps would be significant.

Oh, and by the way, my own company Sustainability Report, which is not integrated (phew!) is entered in the Best Report, Best First Report, Best SME Report and Best Creativity categories in CRRA 12. I would be delighted if you would consider voting for Beyond Business Sustainability Report. Check out the CRRA 12 Awards here. PLEASE vote for your fave Integrated Reports AND for the Beyond Business report :))

Are sustainability reports really that bad ?

2011-12-10T13:32:00.000+02:00

The shock-horror headline "Howlers and omissions exposed in world of corporate social responsibility" which first appeared in the Guardian on 24th November 2011, and then rapidly did the rounds of all online CSR news and information sites, morphing into "Lies, damn lies and CSR" by the time it got to Management-Issues.com the following day, alerted us to an important discussion which appears to have been somewhat sidelined in the efforts to mainstream sustainability reporting. The discussion about the quality of reports. Despite the fact that sustainability reporting is now the "de facto" law for business, as pronounced by KPMG in their 2011 survey of Corporate Responsibility Reporting, this is not an invitation to rest on our laurels. For mainstream reporting to become credible reporting, it needs to be ... well, credible. That means accurate, verifiable, consistent and clear.

The howler article, which claims to reveal "irrelevant data, unsubstantiated claims, gaps in data and inaccurate figures" after an examination of over 4,000 Sustainability Reports, certainly made a splash. The claim is "that every second company has major problems" which I assume to mean that 50% of reports include inaccurate or incomplete data. In general, I would not be surprised if there were some truth in this. In my (also fairly expensive experience) of analyzing Sustainability Reports, I would agree that there are serious errors, omissions and misrepresentations. Whether this is at the rate of 50% of reports, I couldn't say, so I will be interested to see the data when the full report is published in 2012.

So what should we make of this? Why would so many companies go to so much trouble to produce so many reports, only to do so in a sloppy or poor quality way?

I suspect that most companies do aim to deliver accurate data. There may be some which attempt to mislead in order to mask a problem, but in general, I believe reporters have a vested interest in accuracy. I can certainly say that all the companies I have ever worked with on sustainability reporting (hah, that doesn't come close to 4,000 ... yet :)), have earnestly tried to present accurate data. In some cases, sure, companies prefer not to disclose ALL data, i.e. they leave certain operations out of the report scope. This is acceptable as long as it is clearly stated. But I have never experienced working with a company which has knowingly reported inaccurate data.

The core issue for accuracy and fair representation of data and information in Sustainability Reporting goes back to the management of sustainability reporting and the degree of priority and professionalism it enjoys in the hierarchy of leadership decision making. Several factors contribute to reporting inaccuracies and misrepresentations:

Data collection processes in companies: Both for large global multi-nationals, and yes, even for smaller companies, sustainability data collection processes are challenging (note: euphemism for backbreakingly tough). Unless companies have invested in global ERP systems with built-in accuracy control mechanisms, the process for collecting data locally, transferring it to spreadsheets, aggregating and cutting, sorting, copying, pasting and charting is an invitation for error. To ensure the accuracy of global data, companies need check-steps at every step of the data collection process as well as consistency checks with prior reported data. Not all companies adopt this level of rigor. A small oversight, such as the loss of a zero (or two) in one of the aggregation steps, can make the difference between carbon neutral and carbon negative.

Conversion factors are complex: Most companies don't collect data in gigajoules. To report in gigajoules, you have to use conversion factors. To calculate carbon emissions, you need to use up-to-date emission factors. Reporting OSHA rates requires a lucid understanding of the methodology and what gets divided by what. Errors occur.

Speed reduces accuracy: Reporting is often a race against time. There is so much that needs to be done in order to get to that green go-to-print light, that consistent, rigorous checking of all datapoints may fall through the cracks in the rush to complete. Many companies will prefer to hit their deadline than to delay in the name of perfect accuracy.

Sustainability Reporting is just not that important: Yes, it has to be said. There are no mandatory auditors, no external regulations which require accuracy checks, no teams of accountants following audit trails until they fall from exhaustion. The Sustainability Report is not equivalent to the Annual (financial) Report. The CEO is not generally called to account for the quality of data in Sustainability Reports as s/he is with Financial Reports. There is no flurry of interest from external analysts who know how to dissect Sustainability Reports the minute they are published in the same way as there is when Annual Reports are published. The quality of Sustainability Reporting in organizations, whether internal or external, generally does not have the most senior leadership's full attention in the same way as Financial Reporting does. Often, the providing data for a Sustainability Report may be a necessary headache, relegated to a lesser level of importance than the reputational (marketing) value of the report which is narrative-based and easier to present. Until corporate leadership universally accepts that Sustainability Reporting is equal in stature and importance to Financial Reporting (and I don't believe that Integrated Reporting is the only answer - see below), assigns the right amount and quality of resources to produce the report and insists on the same degree of professionalism, then errors will continue to show up.

External assurance is inadequate: The Wild West of external Sustainability Report assurance has not yet reached the level of unequivocally adding to report credibility, in many cases. External assurance is often limited in scope and falls short of comprehensive verification of reported data. Despite assurance seeming to offer an additional stamp of approval for report quality and credibility, I suspect that there are more problems with the accuracy of assurance processes than there are with reports themselves. Assurance has to become full assurance and verification to be effective, and it needs to be performed by those who understand organizations and sustainability as well as audit processes and results.

There are not enough critical stakeholder voices: In the absence of regulation and comprehensive Sustainability Report auditing, those who pick up errors and misrepresentations are mainly academics, NGO's including environmental, labor representation and human rights organizations and CSR professionals. Consumers and members of the general public, even if many were to read Sustainability Reports, are not competent to understand the intricacies and the small print of reporting and make an informed assessment of whether 600,000 tons of CO2e is positive sustainability performance or not. At best, the lay reader gains an impression of a company's performance versus its own past disclosures or targets. Often, performance, even bad performance data, is so often shrouded in positive language (an increase in current carbon emissions may be presented as a reduction in overall emissions for the past five years, for example) so that it is easy for lay readers to be impressed by the words and showy report designs and less by the numbers. There are tools that are being developed to assist comparisons between company reporting, such as the Justmeans Insights database - see the following example of a comparison of Carbon Emmissions Intensity by four leading Computer and Peripherals manufacturers - Dell, IBM, HP and NEC - but even these tools rely on data supplied by corporations in their own Sustainability Reports and communications.

In a non-regulated Sustainability Reporting world, we need more people to become more competent at reading and analyzing reports, and more stakeholder voices to speak out.

NGO's often do this - see my post about the Alternative Hershey report - and an article I wrote for CSRWire.com about Shadow Reporting. Just this week, I was alerted to a critical assessment of Deutsche Telekom's GRI-based A+ level externally assured CR Report, produced by the Trade Union Advisory Committee to the OECD (TUAC) to coincide with International Human Rights Day.

A criticism of Deutsche Telekom's report : "D+"

The UNI General Secretary Philip Jennings made the comment: “Deutsche Telekom gives itself an A+ on its corporate responsibility but with so many holes in the report, we’d give it a D+”. (UNI Global Union is the global union representing 20 million workers in the private service sector worldwide, including more than 3 million workers in the telecommunications and IT industries.) This is the sort of pressure that will drive more accurate Sustainability Reporting. But, with thousands of reports produced annually, and more to come given the drive to mainstream reporting, these isolated voices are not sufficient. The drive to Integrated Reporting may help to raise the bar if full verification and external assurance is applied to the full contents of Integrated Reports, but even so, it is not yet clear how this will play out as the IIRC is still debating the issue, and in any case, it will take several years to embed, and the scope of sustainability data in Integrated Reports is likely to be more limited than current best practice Sustainability Reporting.

Perhaps what we need is a global NGO that focuses on report accuracy. It could be called the Complete Reporting Accuracy and Precision Organization for Universal Transparency (CRAP-OUT, for short). Now, there's a thought.

In the meantime, we shall have to continue to urge more companies to report while remaining vigilant regarding report completeness, accuracy and quality. Reporting companies should be more proactive in ensuring the integrity of their own reporting.

The howlers headline? Well, it may be just a little sensationalist, but if it's a Red-Alert for improving Sustainability Report quality, we could probably do with a few more like that.

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 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)

Sustainability for Breakfast

2011-12-09T00:44:00.000+02:00

This morning, we had the pleasure and privilege of hosting the Deputy CEO of the GRI, Teresa Fogelberg, in Tel Aviv. It is a rare treat to have someone of such stature come and share insights and experience with a group of local CSR practitioners. Today, over breakfast, that's what happened.

Sustainability for Breakfast in Tel Aviv

The meeting was hosted by the Embassy of the Netherlands in Israel, at the initiative of the Head of the Economic Section, Wendela Haringhuizen. The Embassy is no stranger to sustainability and has held several local conferences in recent years to raise awareness for sustainability issues such as green building, water conservation, waste and air quality, introducing Dutch technologies and offering practical advice. In general, the Government of the Netherlands is one of the more progressive on sustainability matters, as one might expect of the host government to the Global Reporting Initiative, based in Amsterdam. One interesting practice of the Netherlands Ministry of Economic Affairs, Agriculture and Innovation is the Transparency Benchmark, which analyzes in detail the quality of Dutch Sustainability Reports and awards prizes for the best quality reports.

Wendela Haringhuizen opens the meeting in the spirit of Netherlands' Sustainability

Following Wendela's welcoming remarks, and overview of the Embassy activities in Israel, I gave a review of the state of sustainability reporting in Israel. While reporting is always positive, and we should acknowledge some progress in recent years, the fact remains that only 25 reports were published by 23 companies during 2010-2011 in Israel. This is a very low count, given the size and state of development of our market. The reporting companies include local subsidiaries of global companies such as Motorola and Intel, large Israeli global companies such as Teva Pharmaceuticals, Delta Galil, Strauss Group and Elbit Systems, as well as local companies such as the leading banks and telecoms companies.

Of these 25 reports published, 14 were in accordance with the GRI Framework (with three being externally verified), all at Level A or B, demonstrating a certain competitiveness among local players who, it seems, perceive a higher GRI Application Level to be more important than the quality of the report itself. When analyzing the quality of the reports, we found wide variations. We analyzed section by section the disclosures against GRI-based performance indicators and without exception, found that there were serious omissions in the way companies reported on indicators they had declared to have fully reported against. For example, EC1 is the most reported economic performance indicator of all the Israeli GRI-based reports.

However, when drilling down to look at exactly how companies had reported on EC1, we found a different picture - i.e. that one company hadn't reported it at all, and four companies disclosed only partially. So, out of 13 reports declaring this indicator as fully reported - only nine (69%) made the grade.

Another interesting insight was the use of the famous N/A. How many indicators are truly Not Applicable to companies? One of the GRI-based B-level reports we examined noted in their GRI Index that 49 (out of a total 79 performance indicators) were not applicable. This included indicators such as EC7 - procedures for local hiring and LA7 - rates of injury and absenteeism. The company may not wish to disclose against these indicators, but stating that they are Not Applicable detracts from the report's credibility.

Concluding this presentation with the acknowledgement that sustainability reporting in Israel is both weak in quantity and patchy in quality, we recognized the massive opportunity that this represents for Israeli companies (gotta stay optimistic, right?).

This led nicely into the presentation of Teresa Fogelberg.

Teresa Fogelberg explains the global imperative of sustainability reporting

Teresa focused on the global imperative of sustainability reporting and talked about the advances being made all around the world to incorporate reporting into regulation, such as in the case of Denmark, where the Report or Explain approach appears to have had significant results. The Report on CSR and Reporting in Denmark which summarizes the Impact of the second year subject to the legal requirements for reporting on CSR in the Danish Financial Statements Act informs us that 87% of the top 1,100 Danish companies now report, and that: "There has been a significant improvement in the businesses’ ability to translate policies into actions and to describe the achieved results. In the 2010 financial statements, more businesses report on policies at 71% (69%); on actions at 66% (60%); and on achieved results at 49% (37%)." Teresa also quoted additional studies which prove the value of mandatory reporting. But even without regulation, the reporting climate has changed, moving from "why should you produce a report?" to "why are you not producing a report?".

Finally, Teresa didn't fail to issue a wake-up call to the Israeli business community by reminding us that, of the 34 countries analyzed by the recent KPMG International Survey of Corporate Responsibility Reporting Report, Israel was at the bottom of the list. (and when you are at the bottom, the only way to go is up, right ?)

You can download Teresa's full presentation HERE.

Eli Abramov, CEO of Baran Group, committed to transparency

Finally, Elhanan (Eli) Abramov, the CEO of Baran Group, one of Israel's few pioneering GRI-based Sustainability Reporting companies, provided his perspectives on how, as a CEO, he understands the value of sustainability practice and of transparency in business. In particular, Eli reinforced the necessity of personal leadership in sustainability issues and confirmed that: "Reporting is a participatory and interactive management process which teaches us much about ourselves and the way we do business, and reinforces the accountability of all Baran employees."

You can download Eli's full presentation HERE.

Finally, we were delighted to be joined by H.E. Mr. Caspar Veldkamp, Ambassador of the Kingdom of the Netherlands in Israel.

L>R:
Wendela Haringhuizen, Sohail Wahedi , Ambassador Veldkamp, Teresa Fogelberg, Elaine Cohen

To round off the morning, taking us from breakfast to lunch, we continued our discussion in the comme il faut restaurant in Tel Aviv port, housed in the newly reconstructed Bait Banamal, the socially-responsible, alternative consumerism, pro-women hub of creativity, inspiration and pretty good food!

Sustainability for Lunch

Participants at our morning conference included representatives from a wide range of companies including Teva Pharmaceuticals, Ormat Technologies, Israel Chemicals, Alon Holdings, Microsoft R&D in Israel, Intel Israel, Motorola Israel, Amdocs, Bank Leumi and more.

All in all, a worthwhile morning. I hope that Teresa comes back soon, as she threw down a challenge to Israeli business that by the time she returns, we should have triple the number of reports in Israel.

25 examples of Creativity in Sustainability Reports

2011-11-19T21:41:00.001+02:00

25 Sustainability Reports are entered in the Creativity in Communications category in CRRA 12, the largest online annual Sustainability Reporting Awards. To enter this category, one assumes the reporters believe their report is meaningfully creative. What's creative in terms of Sustainability Reports? Well, according to CorporateRegister.com, it's this:

Which report is a real pleasure to read, because the authors have given thought to both the content and the reader? Do you find the report engaging and informative, or boring and unimaginative? This award is for the report which best succeeds in getting its message across, using creativity as a defining factor.

What does Merriam Webster say about creativity?
The quality of being creative
The ability to create
Hmm, that didn't get us very far, did it ?

So what better way than to look at the reports entered in the Creativity in Communications category to see what we can find that make them elligible for a creativity award. Let's take 'em in alpha order.

(NB: All report links go to CorporateRegister.com Report Profiles - you need to be registered to view - but then - you need to be registered to vote :) And you are planning to vote, right?)

Aggregate Industries UK Ltd Sustainability Report 2010 (GRI A+)

This report is called the "Seven Ages of Aggregate Industries" and opens up with an introduction that starts like this: " Having been part of the sustainability reporting process for around 10 years, we know that a corporate sustainability report isn’t the sexiest of reads and yet here we are for another year. You have made it to the introduction and we would like you to keep reading. After all, we have so much that we want to share. Many a sleepless night has been spent devising a way of turning 34 pages of information into a story that we hope will both inform and entertain." Yep. That's original, for sure. The report is structured around a kind of storyline that goes from Birth to a further six stages: Growth and Leading, Youth, Starting Out, Middle Age, Old Age and Retirement. In the Birth section, for example, Aggregate Industries talk about the birth of a pre-cast modular rail platform solution. I guess that explains why reporting isn't sexy. Ha-ha. The report is an entertaining read, and certainly is more creative than the standard marketplace, workplace, community and environment approach.

Birth from Aggregate Industries

Banco Bradesco Sustainability Report 2010 (GRI A+)

Banco Bradesco's 61 page report is packed with charts and figures and tables, so that your eyes jump around from narrative to visuals rather frequently. The different thing about this report is the way it handles glossary and links. Throughout the report, whenever there is something Banco Bradesco wants to explain, it has a call-out box which contains the information or link.

Calling out for more information at Banco Bradesco

On page 19, there are almost more call-outs than narrative. That's pretty creative.

Bank Sarasin and Co Sustainability Report 2010 (GRI A+)

This report is spectacular and stands out from the crowd. You can probably sense that it's going to be a different sustainability report experience when you see the cover - Michael Leibundgut holding the violin of a close friend that passed away. Not your standard hands-holding-a-globe, babies smiling or green pastures graphics.

The first 30 pages of this report is a magazine - a kind of cultural and environmental immersion with a sustainability flavor. Interesting pieces on art in Duesseldorf, pollinating bees, Switzerland's role in sustainability and electric cars, and more. The second 30-page section is the GRI report.

British American Tobacco Sustainability Report 2010 (GRI Undeclared)

BAT are by now seasoned reporters and aim to present another face of the tobacco industry than the one which gets all the hard hits. Some might say - that's creativity! However, one of the approaches in this 219 page report is Answering Challenging Stakeholder Questions, such as :

# Should a tobacco company aim to be sustainable?

# Do you engage with stakeholders who are most critical of the tobacco industry?

# Isn't this all "PR spin"?

# Do you concentrate on developing markets that have less tobacco regulation?

# Can you be responsible when you need to compete?

Maybe BAT's responses are also creative? However, sustainability reporting should be about responding to stakeholders and not just we-did-this-aren't-we-great brochures, so in that respect, BAT are doing what it takes. You can send them any question and they will consider responding to it in their next report.

British Sky Broadcasting Group plc The Bigger Picture Review 2011 (GRI C)

This is a 118 page report which follows a repeat sequence of priorities and progress and next steps in each section. The interesting thing about this report which breaks the mold is the two sections devoted to Sport and the Arts, and the way broadcasting can empower sports and a range of festivals, art events, ballet, books and more. Short case studies illustrate the narrative. Arts has to be a creative thing, right ?

Capital Power Corporation Sustainability Report 2011 (GRI A+)

This has to be the most creative report for use of icons. Everything has an icon. A reindeer for wildlife monitoring. A windtower for wind farms. A syringe for free flu-shots. A briefcase for long term debt. A pylon for electricity. A hard-hatted person for employees. A coal cart for a coal project. And what seems like hundreds more. Icons = creativity? I am sure there is a connection somewhere. Overall, the report is has an attractive design with some nice info-graphics. It's an example of how great design can turn sustainability narrative into a creative report.

Creative presentation at Capital Power

Coca Cola Enterprises Inc. Corporate Responsibility and Sustainability Report (GRI B+)

This report is Creativity in Red. No points for guessing why red is the dominant color for Coca Cola reporting. The report is peppered with colored balloons with interesting data and facts.

Coca Cola Ent. balloons

Of course, as far as I know, Coca Cola Enterprises is the only company to call CSR "CRS". Perhaps that should count for a creativity award.

Danisco Sustainability Report 2010/2011 (GRI A+)

Following Danisco's acquisition by Du Pont last year, this is the last sustainability report to be published independently by Danisco. It's nice to see the company went ahead and published this report entitled "Ingredients for a Changing World" after the acquisition was announced. They could have taken the easy option to skip it. Danisco has a materiality matrix which takes up a whole page. Now, there's something creative!

Danisco's full page materiality matrix

Dell Corporate Responsibility and Report 2011 (GRI A)

Over 55 team members throughout 12 departments within the Dell organization were engaged in the collaborative creation of this 60 page report. This report was created in-house, for the first time. Hmm, personally, I recommend consultants :) However, engaging staff in the writing of the report requires great process which I am sure involves a lot of creativity along the way. The conversation at Dell doesn't stay in house. They invite everyone to join the conversation.

Join Dell's sustainability conversation

Deloitte LLP Fiscal 2010 Corporate Responsibility Report (GRI B)

This is the third Deloitte report . It closes with a section called "Want to know more?" which pulls together all the relevant links to further information about issues highlighted in the report. This is the first time Deloitte uses the GRI framework and they cautiously claim to be the first among the “Big Four” organizations to issue a GRI report in the United States. They comment: "As might be anticipated for a private organization whose customary approach to sharing information is on a “need-to-know” basis, the road toward transparency is not always comfortable. As we move forward, we expect our GRI reporting to be more robust and comprehensive." That's a good disclosure and a differentiating aspect of Deloitte's reporting.

Gas Natural SDG SA 2010 Corporate Responsibility Report (GRI A+)
This is a serious 212 page report with plenty of detail . Some of the charts are so detailed that they take a while to digest.

Digesting data at Gas Natural

This 212 page report contains a special chapter entitled "How to Read the Corporate Responsibility Report" which serves as a reader guide. This is a nice touch, even though it appears only on page 40, by which time you have either worked it out or given up. The GRI Index is also cross linked with both the UNGC Principles and the Millennium Development Goals.

Hewlett-Packard Company A connected world. The impact of HP global citizenship in 2010-and beyond (GRI B)

HP's 244 page report is not called a report at all. That's creative. It's also includes 17 pages of product descriptions - a kind of mini-product brochure inside the report. That's even more creative. However, no-one can fault HP on its comprehensive, intensive reporting for yet another year. It is clear that the company invests many resources into producing its sustainability report and my pick for the most creative innovation in this one is a 16-photo Day in the Life of a Factory Auditor, showing the process of an experienced environmental health and safety auditor and how she goes about her two-day audit. Great creativity for a Sustainability Report.

HP auditors at work in China

Kuoni Travel Holding Limited Corporate Responsibiltiy Report 2010 (GRI Undeclared)

This report will not fail to impress you with its creative design which contains illustrations from the Atlas des îles perdues, an artwork by Marie Velardi. "The Atlas depicts islands that could one day sink into the ocean due to rising sea levels caused by climate change. It is a clear illustration of the vital role of mitigating the negative impacts of Kuoni’s operations on the environment while at the same time enhancing the benefits of its actions at the destinations for now and the future. "

One of the lost islands from Kuoni's report

Created entirely in black and while, with pencil illustrations - aha! no photos at all in this report- and large white spaces and full page section introductions with quotable quotes, this report is certainly a uniquely styled presentation and well worth a look.

Quotable section heads from Kuoni Travel Holdings

The report also contains "webcodes". By inserting the webcode on the company's website, you can navigate directly to points of specific interest. A thoughtful report focusing on serious aspects of sustainability in the tourism industry in a striking way.

La Trobe University. Sustainability Report 2010. Responsible Futures (GRI B+)

Universities have a major role to play in sustainability and La Trobe University’s inaugural sustainability report is one of only a few universities worldwide that have reported in accordance with the GRI framework and, La Trobe claims, is the world’s first university sustainability report to be externally assured to AA1000 standards. This is one of the few reports I have seen that has responded adequately to GRI LA14 indicator by providing a ratio for male: female pay and confirming a gender gap. We all know that women are paid less than men for same work in almost every industry but somehow, thousands of sustainability reports don't disclose on this issue or simply spurt equality policy. La Trobe's approach is very creative - they admit they have an issue.

LA Trobe- it's so honest, it's creative

Loyalty One Inc. Accountability Report 2011 (GRI C)

This is the only company in this category to call their report an Accountability Report. The creative difference in this report is the link to the corporate brand - at Loyalty One everything is one. One responsibility, one environment, one community, one culture. You get the picture. The report is called One Step Further.

Microsoft 2011 Citizenship Report (GRI undeclared)

Microsoft's report (81 pages) is creativity in its simplicity. The report is structured section by section in four parts: Challenges, Opportunities, What we're doing, What's next. This is supplemented by "Spotlights" on specific issues and "Viewpoints" from external stakeholders. Pleasant visuals. Clean. Neat. Get's the job done. That's creative.

National Grid plc Social Purpose Report 2010 (GRI Undeclared)

This 38 page report is made up of full page images representing 26% of the report content, plus other visuals throughout the narrative pages. Someone at the National Grid is obviously very camera-happy. It's a first report so that's always something special. Focusing on social purpose (Our job is to connect people to the energy they use, safely and reliably) is a good way to express the sustainability motivations of this company. This is how it looks without words:

Creativity in connecting energy to people from the National Grid

Newalta Corp. Sustainability 2011 (Not GRI)
This is a 29 page report, the Company's second. But you don't have to take my word for it. You can take advantage of this company's creative innovation by checking it out via their QR code.

QR straight to Newalta

Qualcomm 2010 Social Responsibility Report (GRI B+)

This 103 page download is an export of the online report website and is called Sending a Strong Signal: Stepping up, reaching out and making responsibility quintessentially Qualcomm. Any Sustainability Report which has a 16-letter word in the report title has to be a candidate for a creativity award.

Royal Dutch Shell plc Sustainability Report 2010 (GRI A+)
Not many companies have 10 years of sustainability data to boast of. Shell does. They present this data in a fascinating chart. Getting 30 different metrics year by year for 10 years onto one page is creative. And impressive.

10 years of sustainability data at Shell

Teck Resources Ltd Sustainability Report 2011 (GRI A+)
Some companies go totally overboard with photos and design in sustainability reporting. Teck doesn't. This 96 page report has three photos, and one is the cover page. The rest is mainly narrative with some charts, with the exception of a nice visual showing the cycle of mineral use in a sustainable society.

Camping out after mine closure at Teck

Teck Resources' report is very detailed and includes fascinating case studies. One of my favorites is how Sphinx Creek watershed was turned into a thriving habitat for rainbow and bull trout follwing reclamation of a mined pit.

The Coca-Cola Company 2009/2010 Sustainability Review (GRI undeclared)
Coca Cola contains a lot of water, but you knew that. This report includes the water footprint of beet sugar as part of Coca-Cola's sustainable agriculture initiative. We have come a long way when downstream companies are disclosing such detail about upstream impacts. I haven't seen too many companies disclosing water footprints of single raw materials to date. I am sure we will see more. This is a differentiating factor in the Coca-Cola Company's report.

Coca-Cola's sustainable agriculture initiative

The Walt Disney Company Corporate Citizenship Report 2010 (GRI undeclared)

The Disney report is a journey into the wondrous and magical world of wholesome and fun entertainment. The report contains many case studies about ways in which Disney uses the power of entertainment to advance sustainable lifestyles and improve environmental impacts. The World of Color, for example, is a water-conserving nighttime attraction. Looks pretty creative to me!

A sustainable water attraction from The Walt Disney Company

Waggener Edstrom Worldwide Inc: Corporate Citizenship Report 2010 (GRI B+)

This 81 page report has a great design and invites the reader to get stuck in. Use of infographics to introduce sections help to focus reader interest. But by far the biggest aspect of creativity has to be:

Women get to high places at Waggener Edstrom

Any company with over 60% of VP level-and-above execs who are women just has to be great at creativity.

And one more

So these are 24 examples of creativity in Sustainability Reporting. But I promised 25. Ah, well, you see, the remaining report in the Creativity in Communications category is my very own company's report - Beyond Business Sustainability Report 2010 - How a little consulting firm makes a BIG impact (GRI A). So, now that you know that my report is a contender, in competition with all these other creative reports, you can judge my comments accordingly. But I also invite you to take a look at my report and check out how mindbogglingly creative we have been. And if you would like to vote for the Beyond Business Sustainability Report, it would make me as happy as a very large helping of my favorite ice cream.

In any event, I urge you to reward this bunch of great reporters and use your five votes in this category to acknowledge those you think lead the pack in creativity. Vote NOW (or until 21st January) here.

Making Reporting Relevant: Two sustainability databases

2011-11-12T15:52:00.000+02:00

As businesses become more transparent, so databases populated with the information that businesses now disclose are becoming more sophisticated and opening up wondrous possibilities for discovery, comparison, benchmarking and all sorts of interesting facts and figures compilations. Hot off the press is the new GRI Database of Sustainability Reports, which is a repository of over 7,600 sustainability and integrated reports (GRI-based and non-GRI-based) which is searchable and offers possibilities for interesting benchmarking options. Another fascinating data base which drills right down to source ESG data, sector by sector, is the new Justmeans Insights platform which is a data visualization and performance dashboard. (see the Press Release here).

The new GRI Sustainability Report Database is the product of several years work and broad collaboration with the GRI Data Consortium (my company, Beyond Business is the Data Consortium Partner for Israel). It is still in pilot phase, but is looking pretty good. The Database site was launched officially this week with a press release and a launch webinar which you can view here (Webex recording). Many bloggers have already rushed to report on the key features of this new database, such as Raz Godelnik on Triple Pundit, and Environmental Leader and Sustainable Planet. Here is an extract from the GRI Press release:

"The new Sustainability Disclosure Database includes data on the sustainability and environmental, social and governance (ESG) transparency of over three thousand companies worldwide. Sustainability performance data is increasingly important to markets worldwide. In 1975, on average 80 percent of a company’s value came from tangible capital – finances and assets. Today, on average 80 percent of a company’s value is intangible – for example customer trust, brand value and stakeholder relations. The database is a hub for sustainability disclosure, featuring sustainability reports that use the GRI Guidelines and those that follow other guidance. The database includes references to sustainability guidance from different organizations, including the Carbon Disclosure Project, ISO, the OECD and the UN Global Compact. GRI plans to expand the scope and depth of its data collection and analytical functionality over time."

The GRI Reports Database

Here is an example of what you can do with the GRI database:

First, you can take an interest in the latest published reports or those which have been featured in the GRI communications service

Alternatively, using the search function, you can search for any report by organization name, report type, publication year, sector, region or country. Each organization and each report has its own profile page. This is currently still being populated (largely dependent on reporting companies completing their own data via own access), but most of the reports are already available to view. However, the benchmarking is where it has the potential to get most interesting ... so far, in the benchmark, only reports published since Jan 1st, 2011 AND which have been checked by the GRI as conforming with the GRI Application levels are included in the benchmark option - that's around 100 reports to date .. so a meaningful benchmark is still a little premature. However, as more reports are included, this could become quite useful. To give you an idea, I looked at 2 sectors which have a more than just a couple of reports : the Chemicals sector (5 reports) and the Energy sector (10 reports).

This chart shows that the Chemicals Sector reports are way ahead in reporting against more performance indicators. To make this clearer, 80% or more of companies report against 78% of the EC indicators, 73% of the EN indicators and only 21% of the LA indicators and so on. In the Energy Sector, overall reporting by most companies is much lower, showing that 80% or more of companies report against 22% of EC indicators, 23% of EN indicators but much more against LA indicators with 43%. What is it about the Chemical Sector that causes a dip in Labor Indicators, and the Energy Sector which makes that set of indicators more relevant? The GRI Database won't tell us that but it does allow reporters and report-readers to gain new insights and consider interesting questionsabout how companies report.

This basic analysis of just a small sample of the database took quite a lot of manual calculation. The data cannot be exported so analysis is manual. However, for companies looking to benchmark their sector, or country or region to see who is reporting what, the database could provide a very useful guide (once it is more fully populated). Companies wishing to do a deep-dive analysis can go back to the source reports for each indicator and check on who said what.

Useful Now but More Useful in the Future

The benchmarking database does have its limitations. It doesn't show actual performance data nor assess the quality of the disclosures against any indicator and despite the GRI Application Level Check, there remain great discrepancies in reporting quality, as we all know. The linkage of the benchmark data doesn't easily hook back to the level of the reports themselves - to know if the benchmarked group reported at GRI Level A, B or C requires going back to each of the individual report profiles in the benchmark and checking that out individually.

Therefore, in the initial stages, until more functionality is added, the main advantage of the database is the growing collection of reports in one place and a basic overview of what companies are reporting on most frequently. This has been a massive undertaking and congrats! to the GRI for coming so far. This is a database to watch in the coming months. I am sure it will become more relevant as it matures.

Justmeans Insights Platform - Another Layer of Transparency

The other database that is worth watching takes transparency a step further. Data Visualization from the Justmeans platform is quite spectacular. Take a look at this blog post by Harry Stevens to get an impression of what the platform can do. The Insights platform uses data collected by the CRD Analytics Global 1000 Smartview (R) 360 methodology (which powers the Nasdaq OMX Sustainability Index) for sustainability reporting companies with market capitalization of at least $1 billion. Insights makes a wide range of performance data available sector by sector, in comparable form with instant graphic visualization. So far, three sectors are available (Pharma, Computers and Peripherals and Semiconductors) and over time, more sectors will be added. This presupposes that analysis by sector is the way to go and there is some merit in comparing apples with apples, or in the case of the Pharma industry, drugs with drugs.

How Do Pharma Companies Compare?

There are 24 companies in the Pharma database, with Allergen shooting up to first place from seventh place in 2009, edging out Novartis from the top spot (now ranked 6).

Looking at the indirect energy consumption of 4 companies in this database, the figures show that in 2010, Merck actually used more total indirect energy that the other benchmarked companies, overtaking GlaxoSmithKline by a short measure.

Converting this to an intensity measure, gigajoules per $US million revenue, we get different picture. Merck and Glaxo are about equal in indirect energy intensity, while Allergen, who ranks number one overall in ESG performance, shows much higher in energy intensity, exceeding the much larger company, Roche.

Roche, Glaxo and Merck are all similar in terms of revenue size ($40-50 billion) while Allergen is much smaller with $US 5 billion.

Instant Relevant Benchmarking

This is a fascinating and instantly useful compilation of ESG data in a way which enables the perspective and context of relative performance accross different companies. Absolute energy consumption is affected by so many things beyond internal processes - size of production facilities, acquisitions, growth in production etc. - though ultimately, it's absolute measures which make a difference to the sustainability of the planet. By looking at absolute figures, you can see how companies' impacts have changed over time. In the first chart above, for example, data shows that Glaxo has been slightly reducing consumption year on year while Merck took a big jump from 2008 to 2010 (probably due to acquisition of Schering Plough). The other data you can pick up is which companies are not reporting on certain ESG indicators- which also tells a story. The intensity comparison gives the picture of where companies are in their peer group - I selected to include only 4 companies in the charts above - but it is possible to benchmark all or any selection of the 24 companies in the sector for every single performance indicator. ESG areas covered include environmental, social (workforce, human rights etc.) and governance data.

Making Reporting Relevant

Taken together, the GRI Reporting Database (free) and the Justmeans Insights Dashboard (subscription) are a major step forward in our ability to make sense of the much broader sustainability transparency that we are experiencing these days. The KPMG 2011 Reporting Survey, published to coincide with the database release, confirms that sustainability reporting has become the "de facto law" with 95% of the G250 now reporting. Reporting quality aside, GRI and Justmeans are now offering tools to help us make sense of it all. And when it makes sense, it will be much, much more relevant.

Dr Sustainability is back. Again.

2011-11-11T08:56:00.001+02:00

Every so often, Dr Sustainability pays me a visit. Her last visit was many months ago, which is not surprising as she is a real globetrotter, flitting from C-suite to C-Suite, educating and inspiring executives about all aspects of sustainability. Once again, Dr Sustainability answers the CSR Reporting Blog's readers' questions in her inimitable way, sharing pearls of wisdom that will benefit our grandchildren's grandchildren and their great-grandchildren's great-grandchildren. Here goes:

Dear Dr Sustainability: Would you say that sustainability is a trend or is it here to stay?

Dear Trendy: I would say that it is a trend that is here to stay.

Dear Dr Sustainability: I really can't decide what to call my next Sustainability Report. My reporting team says it should be called "Sustainability Report" but I think that's too drab. I would rather call it: "Enhancing our Reputation while Reducing our Marketing Budget". What do you think?

Dear Reporter: In my experience, the name of your sustainability report is crucial. First impressions are important. Saving money on marketing is certainly an attractive proposition but why give your competition the heads up? Call it "Sustainability Report". That will fool everyone!

Dear Dr Sustainability: I was trying to complete the G4 survey for the revision of the GRI Reporting Framework but the questionnaire is very long. I found myself wondering that, by the time I complete the G4 survey, they will already be on to G5. Do you think that's a risk?

Dear Survey-freak: I understand this could be a problem but if you try to type with two fingers instead of one, it might just go a little faster. And look on the bright side. When G5 comes around, you won't have to add your input all over again.

Dear Dr Sustainability: I really wanted to attend the BSR conference this year but, due to budget limitations, I had to content myself with reading the session summaries and following tweets. The problem is that all the tweets seemed to be about Ofra Strauss. Do you think it's fair that one person should dominate a whole conference ?

Dear Jealous: Honey, if you think life is fair, it's not the BSR conference you should be attending. I suggest you try the 2nd Bergen Conference on the treatment of psychopathy.

Dear Dr Sustainability: Can you please help? What does IIRC stand for?

Dear Puzzled: Utopia

Dear Dr Sustainability: My company is starting a new sustainability program to reduce energy consumption while travelling to work. It is now prohibited to turn on the air conditioning in the car while driving. I think I will just stop taking my car to work and use my bicycle instead. Do you think this would be a problem?

Dear Air-conditioned: Of course this would be a problem. Do you want to clog up our cities with bike congestion? Do you want to have car manufacturers go out of business? Do you want to injure your knees while cycling and cause our medical insurance to sky-rocket? Cycling to work is an idea whose time has not come. My advice would be to buy a Nano car - they have Nano air-conditioning. It's the next best thing to cycling.

Dear Dr Sustainability: My boss says that sustainability reports are going out of fashion and the latest fad is to produce quarterly disclosures and post them on our website. Do you agree?

Dear Follower-of-fashion: A fad is a fashion that is taken up with great enthusiasm for a brief period of time. I hardly think quarterly disclosures could yet be termed a fad. It's the great enthusiasm part that gives it away. Tell your boss that if he is looking to be fashionable, I hear Burberry is making a comeback.

Dear Dr Sustainability: My 9 year old son has threatened to sue me if I don't use recycled washing powder to do the household laundry. I have checked at all the supermarkets in our town and I can't find biodegradable washing powder. Can you please advise?

Dear Parent: Tell you son to get a group of friends together and turn it into a class action. That way you can form a parents' support group and you won't feel so alone as you stand trial.

Dear Dr Sustainablility: My cousin works as a Chief Executive on Wall Street and all the people campaigning in OccupyWallStreet are giving him one big headache. He told me that he won't get a bonus next year and he and his family have cancelled their vacation (Luxury Safari in Tanzania). I think it is right to campaign for greater economic equality, but why affect the lives of innocent people? Isn't there a way to reform Wall Street without affecting my cousin's bonus?

Dear Cousin: This is a very interesting point. Just think of the poor people in Tanzania whose tourist trade has plummeted due to cancelled vacations. How fair is that ? Perhaps you could use some sidewalk chalk to voice your opinion. Sidewalk chalk is the new Twitter. Perhaps you could invent a new hashtag: #owsbutleavebonusesalone. In any event, it's probably time to tell your cousin that his bonus is probably not the only thing that is going to be affected. It about time he started thinking of selling his yacht.

Dear Dr Sustainability: People are always making jokes about sustainability. It's as though sustainability weren't the most serious challenge mankind has ever had to face. It's as though we wouldn't all perish due to reckless consumption, raging poverty, mindless abuse of human rights, chronic water scarcity and lack of women in Boardrooms. How can I convince people that sustainability IS a serious issue?
Dear Joker: Put more women in Boardrooms.

Thanks, Dr Sustainability for your awesome insights. Come back again soon. And bring ice cream.

(BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

16 Tips for Reading Sustainability Reports

2011-11-05T18:07:00.000+02:00

By now, you all know how I love reading sustainability reports. The sheer variety of approaches to reporting, content, presentation, design, quality and creativity is as great as the number of companies which report. Sustainability reporting has become a true differentiator and not only because of a report's existence (which is now, for the larger companies at least, is at "license to operate" level) but also because of the way a company reports.

A while back (in 2009), I posted tips on How to Read Sustainability Reports , and these remain valid today. A quick refresher:

Start with an open mind : don't let prior impressions of the company color an open-minded impression of the report content.
People write reports, not companies : remember that people are always doing their best.
Read the opening remarks by the Big Chief : the CEO sets the tone for what's in the report.
Choose how you read : decide if you want to read bestseller-style or pickn'mix.
Seek materiality : check out if the company has reported on the most important issues.
Be copy-paste and delete aware : how much info is fresh.
Look for consistency (and inconsistency) in data : does it all add up?
Give feedback, ask questions, make comments, get engaged : help them make it better.
Give some leeway to first timers : the first is always the toughest.
Always eat ice cream when reading reports : OK, I didn't say this, but I meant it.

These days, I am reading and reviewing more reports than ever, and getting more feedback than ever from companies whose reports I review. Last month, I started writing an exclusive series of in-depth report reviews for the Sustainable Business Forum under the title: Reporting: how they do it. In this series, I go beyond a short overview and go for the jugular, aiming to bring out the best and less-best practices of a range of corporate sustainability reports while opening up some avenues for further exploration. It's easy to make a bad report good. It's less easy to make a great report outstanding. So, in addition to the 10 tips above, I will add some new ones, based on experiences of writing the How They Do It series:

Don't be fooled by diagrams, tables, images and charts : In my review of Showa Denko Group's 2011 CSR Report, I was challenged to find enough data of substance that would justify the presence of a host of charts and diagrams which give the impression of a highly structured approach to CSR. In the same way as this report claims to have "referenced" ISO26000 and other guidelines, without ever referring to them in the body of the report, I found that diagrams and charts were graphically interesting but left me wondering where the true data is hidden.

Follow the tough issues : Companies which report on how they are approaching sticky challenges, rather than just doing nice things, gain in credibility. In my review of Merck's 2010 Sustainability Report, I make the point that the company underwent a 17% downsizing following a merger with Schering Plough. This represents thousands of people which were laid off. While we can debate the responsibility of business in job creation, rather than job elimination, what is more important is the way a company manages downsizing. I would have expected to read quite a lot in the Merck report about this tough issue which I suspect took up significant amounts of management time in the reporting period, and affected the entire organization and external communities. Absence of disclosure begs questions and reduces credibility.

Examine how companies are setting targets : Sometimes targets can seem extremely challenging but when you take a look at the fine print, you realize that they may be less impressive than you thought. This is one point I mentioned in my review of Procter and Gamble's 2010 Sustainability Report. The company has a target to increase the proportion of Sustainable Innovation Products, having sold $40 billion of same during the past 3 years. Reading the fine print, I noticed that Sustainable Innovation Products fit the bill if they meet a 10% improvement in just one design parameter from a selection of energy, water, transportation, amount of material used and renewable energy or materials. Overall, such Sustainable Innovation Products appear to be a very low percentage of P&G's total sales, and a 10% improvement on one parameter per product seems to me to be rather a soft target. Sustainable Innovation sounds much more impressive than the fine print.

If a report wins an award, perhaps it deserves it : While there are many different approaches to reporting awards, and many ways to evaluate the quality of reports, perhaps those reports which actually surface to win a Reporting Award do deserve it. Such was my experience when reading and reviewing the De Beers 2010 Sustainability Report which recently won the ACCA South Africa Reporting Awards. In fact, I decided to review that report precisely because it won the award (wouldn't we all like to know the winning formula?). Without knowing which other reports were also-rans, I did find the De Beers report impressive on many counts and worthy of recognition. Maybe the Wisdom of Crowds (thanks, James) really does work.

Look at what a company is doing for its people: One of the things I found most impressive in my review of the Ferrero 2010 CSR Report was a strong heritage of family values which infuses the corporate culture in a way which respects and cares for people including a large group of retirees. Sustainability begins at home and rests on embedding a culture which supports employees becoming champions of sustainability actions and ambassadors of sustainability messages. If this doesn't happen, sustainability simply doesn't gel. Companies which devote energy to reporting extensively on sustainability-minded employee practices are ones which are apparently doing it right.

Check for impact : It's not enough to define material issues and not enough to describe what actions a company is taking to improve its own sustainability and that of the planet. A sustainability report should be about impacts, not just about actions. You are probably tired of hearing me say this. Almost all the reports I read and review are totally disproportionate in the amount of space used to recount activities versus space assigned to describing impacts. Almost all of them leave us guessing as to how a range of noble actions actually made a difference. This is not surprising. Assessing sustainability impact is not a task for the faint-hearted, and there is no single methodology that takes precedence. However, reporting is, in general, getting more professional and the better reporters are moving to a higher plane where stakeholder engagement, materiality analysis and impact evaluation are gaining ground. In my next piece in the Reporting: How They Do It series, I give an example of a truly excellent company with a strong report which covers a vast range of company activities in meticulous detail and with great authenticity, but falls short of describing impacts in most areas. Which company? Ha-Ha. Check back next week!

I daresay the above list of 16 tips is still not exhaustive. Reading sustainability reports does have its pitfalls (mainly because writing them has its pitfalls). However, every single report has value and careful reading both on and between the lines, combined with a healthy level of optimism, skepticism, criticism and icecreamism should help good reporters get better and better reporters get great :)

The CRRA 12 Navigation Guide

2011-10-26T20:41:00.000+02:00

The CorporateRegister.com Annual Reporting Awards - CRRA 12 - is now open for voting :-). See the press release here.

As most of you will know, the CRRA annual awards is the largest annual online sustainability report awards around the globe, organized now for the fifth time by CorporateRegister.com, the global CR resources website which hosts the world’s most comprehensive directory of corporate non-financial reporting, profiling over 36,000 reports from over 8,400 organizations. The go-to place for sustainability reports.

As usual, CRRA attracts a collection of excellent reports, 93 in total this time around, from 29 countries including Turkey, Romania, Ukraine, Israel, Hungary, Japan, Greece, Singapore, Korea, Switzerland, Denmark, Portugal, Brazil and more. This is a whole 15,668 pages of CSR information (excluding the L'Oreal entry which is an online report and not downloadable). There are reports representing big firms, small firms, universities, municipalities and non-profits. A great collection of worthy reports, all published in the year prior to October 2011. This year, in addition showcasing the report itself, companies were asked to provide a brief narrative about the key highlights of the report, in their own words. Most reporting companies have used this opportunity to provide more details for the readers during the voting process and it is well worth looking at these highlights if you don't have time to read all the 93 reports (!) to help you select which reports to look at in more detail.

Some quick facts:

Sanofi Aventis takes the prize for the longest report - 400 pages
Royal Dutch Shell takes the prize for the most number of entries - six in total - every category except first time report, SME report and integrated report.
27 of the 93 reports entered in CRRA 12 also serve as a Communication on Progress to the UNGC.
Around 20 of the 93 reports entered in CRRA 12 are integrated (but only 18 are entered in the Best Integrated Report category)
Only 9 reports are more than 200 pages long and 7 reports are 30 pages or less.
The USA has the most number of entries - 35 voting opportunities - representing 22 reports. The UK follows with 19 entries representing 7 reports.
HP and Coca Cola Enterprises, first and second place winners in the Best Report category last year are both entered in the Best Report category this year. Bayer, third place winner in the Best Report category, is not entered this year in any category.
The Support Services sector (legal, consulting, marketing services etc) is represented by 19 entries (11 reports), followed by the banks with 15 entries (6 reports)
The only report in the tobacco sector is British American Tobacco, which is entered in 5 categories.
The only Stock Exchange to enter the reporting awards is Deutsche Boerse with a report called "Positions". This is the third report by this organization but the first time they have entered CRRA.
The report with the least number of pages is M4C with an eleven page report, entered in the SME category.

And a quick look at the 9 categories:

Best 1st time report:

We know that for the past few years, about 20% of all reports are first-timers and in many ways, these are some of the most interesting and the most innovative. CRRA 12 entries include 18 first time reports from 10 countries across 15 sectors. 13 out of the 18 reports (72%) are GRI-based, one is integrated and 5 (28%) are assured. The average number of pages is 64 with the highest page count going to Bloomberg with a whopping 235 pages.

Best SME report:

Surprisingly (and disappointingly), this category attracted only 5 entries this time around. Wonder why? Are fewer SME's reporting? The five reports are from five countries and three sectors and have an average of 55 pages, ranging from 11 to 160 pages. Four out of five are GRI-based reports, and one is an intergrated report.

Best integrated report

18 integrated reports are competing in this category, with over 2,200 pages of narrative and data. Reports come from 14 countries with USA, Korea, South Africa and Germany having two reports each in this category. 18 sectors are represented with the leisure, software, transport and pharma leading in integration. Only two reports in this category are not GRI based (Siveco, Romania and Syngenta International of Switzerland) and of the others, only Wilderness Holdings Ltd of South Africa does not declare a GRI reporting level. 8 out of the 18 reports are at GRI A level and 10 (56%) are externally assured. Normally, we could expect to see a higher level of assurance for integrated reports, though the assurance of CSR related information is not always comprehensive.

Best Carbon Disclosure:

9 contenders this year in the Best Carbon Category which was won last year by Hewlett Packard's 2008 Report. Reports come from 6 countries with USA and Brazil in the lead, and from 7 sectors, with the banking sector trying for three of the nine report entries. The longest report is Banco Santander of Brazil with 144 pages and the shortest, Vodafone Group plc with 23 pages. All reports are GRI-based, and all at A or B level with one exception (Wyndham Worldwide Corporation) which is a C level, and, the only report that is not externally assured.

Creativity in Communications:

24 reports are aspiring to with the Creativity Award, of which over half come from USA (9), UK (3) and Canada (4) and others from a further 7 countries. 15 sectors are represented with the Support Services sector contributing 5 reports out of the 24 which are entered. 22 reports are GRI-based, with Newalta Corp and Dell Corp being the odd two out. HP contributes the most pages (242) to the 1,892 pages in this category, which is 13% of the total.

Relevance and Materiality:

25 reports in this category, from 18 sectors, with banks and pharma taking three reports each. 18 sectors are represented with banks and pharma at the top (3 reports each). 12 companies also report to the UNGC in this category. 17 countries contributed reports and all but three are GRI-based.

Openness and Honesty:

This is probably one of the hardest categories to judge as one has to guestimate what is not disclosed in order to assess the degree of openness! The 20 reports in this sector are from 19 different industry sectors, which shows that openness and honesty are universal values. However, only 10 of the 29 countries entering the Reporting Awards are represented in this category, with UK reporters believing they are the most open and honest of all, with 25% of reports here. Honesty, however, is not always best left to chance, so 13 of the 20 reports in this category have used external assurance. Natura Cosmeticos of Brazil has the biggest offering in terms of openness with a 250 pages, the longest report in this category.

Credibility through Assurance:

14 reports have entered this category, bringing their assuring vendors along with them. 12 countries and 12 sectors are represented in this category, and the assurer who had the most work, apparently, was Ernst and Young UK who worked on the British American Tobacco report which is 216 pages long. None of the other reports in this category topped 151 pages.

Best Report:

And finally, the largest category of all, in which you have a choice of 44 reports from 22 countries. All but 7 reports are GRI-based (which is 85% GRI) and of the GRI reports, all but 3 declared a reporting level. 25 of the total 44 reports (57%) are externally assured, 15 (34%) serve as UNGC COP's, and 6 are integrated reports. Reports in this category have a 90 page average, with the Vodafone Group report being the most compact at 23 pages.

All in all, a great selection. Congrats to all reporters who have entered the awards and good luck to all! Every report is an effort, every report is a production and every report is worthy of recognition (even if there is some ... or massive ... room for improvement). As usual, I am already excited to hear the results, but I think I will refrain from making predictions this year as I never quite get it right.

Voting is open until Friday 27th January 2012 and voters (anyone freely registered on the CorporateRegister.com website) may select up to 5 choices in each award category. Those voters with a first choice for each award category are then entered in the Voters’ Prize draw and can win cash prizes. A total of £2,500 will be awarded to voters. Ha-Ha - it PAYS to VOTE!! But remember, if your report is entered in the competition, you and other employees cannot vote for your own company report! Which, I think, is fair. Tough, but fair!

Ahem! One more thing.....

While you are voting, please consider voting for my own Sustainability Report - How a little consulting firm makes a big impact - which is entered in four categories: Best Report, Best First Time Report, Best SME Report and Best Creativity in Communications.

Additionally, you might also please consider reviewing and voting for the Baran Group report - which I worked on - which is entered in two categories: Best Relevance and Materiality and Best Openness and Honesty.

And now, all that remains is for me to stock up on loads and loads of ice cream as I sit down to read 91 reports (Ha-Ha, I have a head start- I don't need to read the two reports that I worked on :)

Disclaimer: The analyses presented above are my own - I may have miscalculated here and there - apologies in advance - my blog posts are not externally assured - so use my numbers as a guide and not as the absolute truth.

And: WATCH this SPACE for more posts in the CRRA 12 Navigation Guide.

My personal sustainability trip

2011-10-19T06:50:00.000+02:00

My mother is 87 years old and having lived through years of wartime and austerity, she tends to know what sustainability is all about. Leave a light on, throw out a morsel of good food, buy anything more than is strictly necessary and you always got a lecture which oddly resembled the anti-consumerism and environmental stewardship themes of our current times. My childhood seems to have been one long sustainability education. Everything was reused, nothing was surplus, nothing was extravagant, nothing was unnecessary. Somewhat fixed in her ways, these habits have lived on and every time my kids leave a light on in our home, I hear my mother telling them to switch it off, even though we now live thousands of miles away. My mother lives in Manchester (UK), and visiting her this week, I realized that, not only is her old-style sustainability as relevant as ever, but she is also taking up Manchester's new style sustainability with gusto. Recycling, rubbish and waste in Manchester is now a regular topic of conversation. Each household has four refuse bins : green for paper, brown for glass, tins and cans, blue for plastic and black for organic.

Photocredit : http://uclanhannahgw.wordpress.com/

All waste in my mother's home is now sorted so that it can get disposed of in the appropriate bin. During the few days my daughter and I visited with my mother, we made several trips to throw out the garbage. Every trip was preceded by a twenty minute explanation of which rubbish to throw in which bin. Every meal we concluded ended in a debate about some of the waste and which colour bin it should end up in. And even over a family dinner on Friday night at my niece's home, the main topic of conversation was the new organic waste caddy she had just received, for making food left-overs collection in the home more practical. Although none of my family have yet signed up for home composting master classes, there is certainly a new culture of waste disposal and recycling which has gripped the city and even my 87-year old mother is doing her bit.

My mother and my daughter Eden - the garbage masters

Another sustainability experience in Manchester was our trip to Tesco's supermarket, where I always stock up on Tetley's tea bags and Bisto (see blog from another trip!). However, this time, we enjoyed earning extra bonus points for my mother's Tesco Clubcard because we used our own shopping bags. At the checkout, the checkout-lady asked us how many of our own bags we had brought and duly recorded them in order to ensure my mother got a bonus for environmental awareness.

My daughter Eden with our Beyond Business shopping bags outside Tesco supermarket

Finally, the end of our trip came all too soon and we found ourselves in Manchester airport awaiting the flight home. Even here, sustainability was the theme of the day as we entered the Environment Zone:

Manchester Airport gets it!

The airport has a Vision for Sustainability and has published a Sustainability Report in 2011 (GRI B level, GRI checked). It looks pretty good, too, demonstrating a range of energy-efficiency schemes and a carbon challenge for all onsite businesses to reduce their carbon footprint.

Overall, I was impressed with sustainability in Manchester, both in the way it penetrates the home and urban living culture, raising awareness and changing people's habits. In fact, I was so involved in sustainability issues during a brief family holiday, that I am wondering if I can charge my travel as a business expense! haha.

31 ways of looking at materiality

2011-10-12T17:46:00.000+02:00

If everything is material, it's not material. Everything cannot be top priority. Everything cannot be most important. The complexity of sustainability, especially for large, global businesses, is vast. A list of potential material issues can run in to hundreds of issues. Ford, for example, started out with a list of over 500 issues and whittled those down to a mere 57 issues which the company considers material. Identifying and prioritizing material issues is one of the most difficult tasks of companies on the sustainability journey. Most ignore it. In Sustainability Reporting, most skip over the materiality piece, presenting instead what I call a shopping list of activities which includes just about anything which can be crammed into the heading of CSR. However, some do it better. The best reporters include a Materiality Matrix, which, arguably, is the most important part of any Sustainability Report, and certainly the thing I look for as soon as I have finished reading the CEO statement.

That's why the new report, Materiality Futures, from the recently formed consulting firm, Fronesys is a fascinating look at how companies report materiality. Chris Tuppen, formerly BT CSO, together with Jyoti Banerjee, a business application software professional, partnered up to found Fronesys and start making a material impact.

For those of you who can't remember what a Materiality Matrix looks like, here is the basic format that is included in the GRI Reporting Framework:

Issues appearing in the top-right part of the matrix are the most important ones which both impact the business results and are important to the organization's stakeholders.

Materiality Futures analyses the Materiality Matrices of 31 sustainability-reporting companies for reports published before August 2011, presenting a refreshing and innovative look at how materiality gets reported. Overall, Fronesys discerned 140 separate issues listed somewhere on these 31 matrices, quite a low number when you think that the companies analyzed listed between 8 and 65 issues with the overall average being 27 issues per company. The analysis whittles this down to 50 core issues which were listed by at least 5 companies, and are not industry sector specific, and mapped these issues in what Fronesys calls the Matrix of Matrices.

The top 10 issues which emerge as important both for businesses and stakeholders in terms of number of times mentioned and relative importance to business and stakeholders are:

1 Sustainable Products
2 Product Carbon Footprint/Energy Efficiency
3 Economic Development/Emerging Markets
4 Customer Relationships/Satisfaction
5 Economic Stability/Recession
6 Climate Change (policy/strategy)
7 Energy Use/Own Greenhouse Gas Emissions
8 Employee Retention and Attraction
9 Legal Compliance
10 Product Safety

It is interesting that Sustainable Products takes top place. Perhaps this is an indication that companies are hoping to make some money out of sustainability. The fact that Legal Compliance appears in the top ten is perhaps an indication of the efforts companies need to make simply to keep up with changing legislation in the area of sustainability. Although compliance is often thought of as a precondition for voluntary sustainability efforts, the fact is that compliance is by no means something to be taken for granted.

Issue number 50, right down at the bottom of the materiality ranking list, is Senior Executive Remuneration, something which is starting to affect more companies as shareholders, not only stakeholders, are taking a stronger stand and demanding more proof of performance and bang for the executive buck.

The two issues which were mentioned somewhere on the matrix by most companies (irrespective of their positioning) were Health and Safety (25 times) and Climate Change (24 times). This is what the overall matrix of companies looks like for climate change - you can see that most companies have it right up there with the leading issues.

Fronesys also offers two additional ways of looking at materiality:

Issue Coherence Level: This is the degree to which companies (and their stakeholders) agree that an issue is material. In any given set of companies, each will note specific material issues in at different points on the Materiality Matrix. The degree to which all companies are synchronized regarding the relative importance of the issue as noted on their matrix, is the Issue Coherence Level (ICL). Across the 31 companies analyzed, the highest coherence is achieved for Economic Stability / Recession, Stakeholder Engagement, Employee Retention and Attraction, Customer Relationships/Satisfaction. Sustainable Products, however, has a much lower level of coherence, demonstrating that, although many companies include this on their matrix, not all agree about how important it is. The lowest level of coherence is biodiversity. This is indeed an issue which is either high on the radar or or very low, depending on sector, I think, so it doesn't surprise me to see companies placing this in different corners of the matrix.

Materiality Convergence: This is another metric invented by Fronesys which shows the degree to which a company and its stakeholders agree or disagree on the relative importance of a particular issue. For example, a company might rate customer satisfaction, as Cisco does in their 2010 materiality matrix , as very important to the business but not so important to society.

Fronesys says that total convergence of issues between a company and its stakeholders would be "odd" where as "a total lack of convergence would suggest the company is out of touch."

So far, this is all very interesting, but ...err... what's the point? Why is comparing materiality of different companies important? Well, first, Fronesys says, this represents a benchmark for all companies battling with materiality prioritization. If each company in your sector (and its stakeholders) confirms that renewable energy is one of its most material issues, but it's nowhere on your radar, perhaps you should be asking why not.

However, there is another important motivator for this analysis - the run-up to integrated reporting. Fronesys maintains that the integrated thinking which necessarily precedes integrated reporting will require good materiality work.

"It is hoped that the IIRC framework will not only lead to a consolidation of the reporting of a companyʼs most material issues, but also lead to more forward looking reports that illustrate a more strategic alignment between sustainability and conventional business objectives. For any company adopting the IIRC framework, the process of materiality determination will need to be at the core of their thinking."

I am not so sure. Right now, the materiality matrices contained in sustainability reports are based on sustainability issues and do really address core (financially material) business issues. There is some overlap, but broadly, sustainability matrices do not truly serve Integrated Reporting in their current form because they mainly address sustainability as separate from the business. For Integrated Reporting, a business materiality matrix containing financial and sustainability issues will need to be created. As mentioned in a previous post, I hope that when all the issues are put together, the issues which are primarily sustainability driven won't drop off the bottom of the matrix. However, maybe the development of Materiality Matrix Muscles will help and I concur that companies need to get better at "the process of materiality determination".

The issue that the Materiality Futures Report does not cover is whether, having developed the Materiality Matrix, a company adequately discloses on the material issues in the Sustainability Report. I often find that a Matrix is stuck somewhere in the report but the actual issues are not addressed in any depth. The whole point of identifying material issues is to understand them, make decisions about them and report on them to stakeholders. If you see a Materiality Matrix in a Sustainability Report, look for disclosure on the highly material issues.

There is another whole debate (which Materiality Futures references) and that is the process for determining material issues, stakeholder inclusion, diversity of stakeholder voices and how issue are prioritized. The fact that a Materiality Matrix exists is not necessarily an indication of good process, which Fronesys highlights as another area where disclosure should be improved. Sustainability is as much about the "how" as it is the "what". If you see a Materiality Matrix in a Sustainability Report, look for disclosure on how the Matrix was developed.

If I were to do a materiality matrix of issues in my life, I would probably find that 24/7 Ice Cream Supply probably comes out as the top issue, but don't ask me about process or the convergence score or the coherence level.

Sustainability: the Yom Kippur lesson

2011-10-08T09:53:00.000+02:00

As Yom Kippur kicks in for another year, it's time to atone for everything we did wrong. You know, sorry for this, sorry for that, apologies, I regret, I am filled with remorse, I repent, I didn't mean it. We are sorry for all our negative impacts this year and we promise to do better. In the Jewish religion, getting through Yom Kippur successfully means you earn a signature in the Book of Life, so that you can live another year. Judging by the not-so-remorseful state of most Sustainability Reports (and corresponding underlying corporate performance), few such signatures would be distributed. Sustainability Reports have become the epitome of self-congratulatory declarations of pride in all that companies have done that can loosely be categorized under the heading of sustainability. They are, often, full of self-satisfaction and conveniently bypass addressing sustainability failures in a frank and honest way.

BP's 2011 Sustainability Report could hardly avoid mention of the small Gulf of Mexico blip in the company's history. Bob Dudley, post-spill CEO says "We are so very sorry for what happened". That's an apology, of sorts. I am sure BP has lots of regrets. Yes, it happened. They are sorry about that. Not sure that quite earns them a signature.

So maybe signatures should be handed out for the good things that get done and not the absence of bad things. In this case, we would not need to atone but simply keep on going doing more good things and shouting about them. That would certainly make life simpler, though, in terms of Sustainability Reporting, it wouldn't go far enough in advancing sustainability. Because, ironically, the things that advance sustainability most are probably the things that companies omit from their sustainability reports.

So why is it that companies find it so hard to share their problems? Is a failure a sign of weakness and an apology equivalent to a drop in share price? After many years of working with multinational corporations, I got used to avoiding the word "problem" and referred only to "opportunity". Perhaps this is representative of the mindset which pervades Sustainability Reporting. If we were to be presented with all the outtakes of sustainability reports, it would make for the most interesting reading of all.

Realistically, we probably would not be right in expecting much more from Sustainability Reporting. Framing "failures" in terms of "challenges" and "opportunities" is the corporate world's way of saying we acknowledge the issues and we are trying to work on them. Going the Full Monty is counter-intuitive. Nonetheless, we learn far more about sustainability performance in Sustainability Reports than we would were they not to exist and disclosure, of sorts, is definitely a driver of improved performance. As long as we understand each other. Transparent sustainability reporting is rarely transparent, it's only part sustainability and it's incomplete reporting. But that's why it works. We should continue to drive for better sustainability performance and higher quality reporting. But we should also remain vigilant and look for clues about what companies are not telling.

As far as Yom Kippur is concerned, the main issue I have is that no ice cream is allowed for a full 25 hours. But don't ask me to make any disclosures about that ......

Heretical thoughts on Integrated Reporting

2011-10-07T13:14:00.000+02:00

I have been hesitant to add my voice to the Integrated Reporting debate because, as one who writes Sustainability Reports for a living, I might find that the requirement for dedicated Sustainability Reports slowly disintegrates as Integrated Reporting takes over. Therefore, I have had to examine my own concerns in the light of potential bias and fear that my passion for Sustainability Reports as standalone documents may get in the way of an objective analysis. However, as a reporter, I cannot stay on the sidelines, and heck, who is objective these days anyway?

To acclimatize myself for the debate, I re-read two excellent analyses of the new discussion paper that the International Integrated Reporting Committee published recently (download here). James Farrar, an outstanding commentator, takes the considered view and lists the oportunities and the challenges, asking whether Integrated Reporting can solve the information gap. Another superb analysis came from Richard Welford of CSR Asia, who comments that the IIRC document "raises some huge questions as to whether the IIRC is being so ambitious that it risks actually damaging what it is setting out to do." Both of these accomplished and influential writers motivated me share my thoughts, which are still work in progress.

I find great fulfillment in writing Sustainability Reports because I firmly believe they add value in a way that Annual (financial) Reports can not. I believe Sustainability Reports speak to different kinds of stakeholders - ones who are interested, not (only) in the financial stability and forward projections of the firm and how much (more) profit it will make, but in the impact of companies on their lives and on the planet, almost regardless of a company's profitability.

I believe that most stakeholders want to know about the soul of a company, about its practices, its stories and its relationship with the planet and its dwellers. For most stakeholders of companies, the fact that a company makes more profit is almost incidental. We know it's there, we know, somewhere in our consciousness, that companies exist to make profit. We understand the free market economy. We are ok with that.

But sustainability stakeholders, and that includes everyone outside of the financial services and investment professions, want the money thing to take care of itself. They don't want to be bothered with financial balance sheets. They want to know about the company and their life. The company and their children. The company and their local park. The company and the air pollution that is affecting their asthma. The company and the Amazon Rainforest that may be so far away but rainforest destruction is just heartbreaking. The company and how it treats its employees, some of whom are relatives. The company and its gender equality policy and why a colleague was not promoted despite clearly being the best for the job. The company and our smartphones and whether someone committed suicide on the production line due to stress at work. The company and how it raises the price of cottage cheese out of all proportion to the cost of its manufacture.

Sustainability is about people, not about balance sheets. It's about aspirations, not about cumulations. Companies need to make enough money, that's clear. But if sustainability becomes subordinate to the restlessness and greed of the financial markets and sustainability reporting is taken over by the brilliant minds which created the Great Financial Crisis, the shameful economic inequalities around the globe, the bonuses of senior executives, each of which is enough to keep a village in rural India in food and clothing for a year or two and even, the Integrated Reporting Framework, then we are likely to transform sustainability into a cool and calculated numbers game, where $ count instead of impacts, and reports count instead of values.

Now, don't get me wrong. There is a linkage between financial performance and sustainability. The so-called non-financials are actually very financial, for the most part. They cost money, they save money, they build business or they present risk. In most cases, sustainability performance can be calculated and as such, it makes sense to present them in a company's annual financial accounts. Sustainability is about risk, and safeguarding risk carries cost. Sustainability is about opportunity, and investing in the future often comes with a price-tag. And as consumers and purchasers of goods and services, we are all complicit in making the economy what it is today. Many of us have chosen to enjoy the benefits of today's economic wonderland without considering the true cost.

But, wasn't sustainability reporting borne out of a desire to reflect those imbalances in a way when everyone could understand, not just Finance PhD's? Didn't sustainability reporting serve to fill a gap that financial markets ignored? The Integrated Report should reflect, so the discussion paper says, integrated thinking. But at the same time, the current focus of the Integrated Report is the needs of Investors. In other words, the Integrated Report will become just another financial tool, serving the needs of those who want to get richer, by providing them with a modern methodology to evaluate whether sustainability performance makes more money or less. And if it makes less?

Yes, I agree that financial accounting needs to reflect elements of sustainability practices. Carbon accounting for example seems to be a no-brainer. Yes, I agree that we should move to quantify and integrate some aspects of ESG risk in financial reporting. Yes, I agree that integrated thinking could well lead to new integrated business models, rather than traditional models which equal "make money + do sustainability projects". Those are good things.

But no, I am not yet sure that the Integrated Reporting model will lead to a fair and balanced representation of a company's sustainable practices as they affect ALL stakeholders, especially when those practices deliver impacts which cannot be readily squeezed into a mathematical number-crunching exercise. I am not yet sure that the lay stakeholder will find interest in the predominance of CFO-dictated jargon-ridden legalese that will be prevalent when The Integrated Report becomes the norm. I wonder if the non-financial stakeholder will be marginalized and will eventually become irrelevant in the heydey of integrated reporting, bringing things back full circle to when sustainability reports were not even on the horizon, with only a slightly modified epicenter.

So where I am, I guess, is in a sort of hybrid model. Let's call it Venn Reporting. It's kind of like Financial Reporting with a Sustainability Boost, and Sustainability Reporting with a Financial Boost. To follow an integrated strategy, a company must do the sustainability work. To deliver a good sustainable business strategy, a company must do the financial work. But like a Venn diagram, where both circles overlap is only part of the story and not the whole story. We need to make business strategy more sustainable, which means changing the models and the thinking, and we need to make sustainability strategy more business-like with more quantified targets, impacts and yes, financials. My concern is that force-fitting them both into one model delivers only one model. The financial model. Slightly padded, maybe, but still a financial model.

By now, I get to reading the IIRC discussion paper. I like the proposed framework for the Integrated Report which follows 6 key sections.

Organizational overview and business model: What does the organization do and how does it create and sustain value in the short, medium and long term?

Operating context, including risks and opportunities: What are the circumstances under which the organization operates, including the key resources and relationships on which it depends and the key risks

and opportunities that it faces?

Strategic objectives and strategies to achieve those objectives: Where does the organization want to go and how is it going to get there?

Governance and remuneration: What is the organization’s governance structure, and how does governance support the strategic objectives of the organization and relate to the organization’s approach to remuneration?

Performance: How has the organization performed against its strategic objectives and related strategies?

Future outlook: What opportunities, challenges and uncertainties is the organization likely to encounter in achieving its strategic objectives and what are the resulting implications for its strategies and future performance?

However, it's all in the fine print. What's value? Financial value? What's risk? Financial risk? What are material issues? Financially material issues? Will "reduce our carbon emissions" ever be as material as "launch a new product"? Against the massive weight of financially driven development, marketing, sales, employment imperatives, how will the true interests of non-financial shareholders emerge strongly enough to create a balance? How can we ensure processes are in place to ensure sustainable business decision-making and sustainable practices which are at the base of integrated thinking?

There are some businesses which are inherently sustainable - cleantech, water and waste management technologies, for example. The indirect impacts of these businesses far outweigh the direct impacts of how much carbon they emit in their process or how much waste they send to landfill. By advancing their core business proposition, these companies advance sustainability. Integrated Reporting is easy for these companies. They don't have to establish a sustainability program - their business is the program. But 95% of all other businesses need to integrate ESG considerations in to every business decision and weigh up the financials. For these businesses, integrated reporting is well beyond current capabilities. For these businesses, the Venn model may work best. Report on sustainability performance and reflect the truly financially material elements in the Annual Report. As linkage capability (connectivity, the IIRC calls it) improves, so we will see more complete Integrated Reports. But there will always be a need for a document which reflects the spirit and soul of the company to a broader span of stakeholders, and that will be the detailed Sustainability Report.

That's not to say sustainability reporting is perfect. It is not, in so many ways. Despite the valiant efforts of the GRI, it is still not mainstream and the quality of reports published varies so widely that true comparability is almost impossible. The leap from inadequate sustainability reporting to adequate integrated reporting (really integrated) is like reinventing the cotton gin.

I have no doubt that Integrated Reporting will move forward and there will be uptake, of sorts. It's the sexy thing in reporting today. It has the weight of all the most dominant financial powers in leading markets behind it and many influential individuals. Of course it has. It serves their interests. I just hope that, as integration integrates, sustainability doesn't disintegrate.

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)

Reporting awards CRRA '12: call for entries

2011-09-24T09:30:00.000+03:00

This is the time of the year that I love in Sustainability Reporting. It's the start of the CorporateRegister.com Reporting Awards, CRRA '12, now entering its fifth cycle. The CRRA have earned a global reputation as credible and authoritative awards for sustainability reporting drawing thousands of voters on a broad range of globally published Sustainability Reports. What could be more exciting that voting for great Sustainability Reports? Ha-ha. Whatever your answer, CRRA is an exciting event, culminating in a grand award ceremony for the best of the best, drawing attention to some of the most impressive work around in Sustainability Reporting, showcasing not only the big and bold reporting efforts of leading multi-nationals but also the lesser known reports of SME's and first time reporters. I am particularly excited about CRRA '12 because this is the first year that I actually have been able to submit my own company's Sustainability Report. If you believe, as I do, that Transparency is the Key to Sustainability , then you will welcome the CRRA '12 as a platform which advances transparency and inspires companies to (better) reporting.

This year, the Call for Entries for reports published between 1 October 2010 and 30 September 2011 is open until October 7th 2011 and there are a limited number of slots in each category, so those wanting to assure a place in the line-up should act quickly. The numbers of report entries are limited so that voters are not overwhelmed with thousands of reports - after all - reading and voting for reports is not the ONLY thing we will be doing until the voting closes, right ? Oh, voting closes in January 2012 and results will be announced at the Gala Ceremony in March 2012. Here is the link for submission of your report.

All reporters entering the Awards get feedback about the voting and comments on their report after the results are published. This is quite detailed showing the distribution of votes, which categories of stakeholder viewed the report and all the comments received. Take a look at a sample feedback report here. And if you have not published a report, don't worry, because CRRA is the only reporting awards event (I think) that actually offers prizes for voters and not just entrants :)

As in previous years, there are nine categories:

Best Overall Report: Voters are encouraged to consider CorporateRegister.com's 5 C framework : Content, Communication, Credibility, Commitment, Comparability.

Best 1st time report: For a company’s first non-financial report. The first is always the toughest.

Best SME report: The CRRA definition of SME (small and medium enterprise) is fewer than 250 employees and annual turnover of less than EUR50m.

Best integrated report: For the report that most successfully integrates the financial and non-financial disclosures - emphasis being on integration rather than juxtaposition.

Best Carbon Disclosure: For the best disclosure of the carbon emissions, implications for climate change, and the mitigation measures.

Creativity in Communications: CRRA say that this award is "for a report which is a real pleasure to read, because the authors have given thought to both the content and the reader, delivering a document which is engaging and informative and not boring and unimaginative." A sustainability report which is a real pleasure to read is NOT an oxymoron. Ha-ha.

Relevance and Materiality: This award is for the report which cuts to the chase and tells us about the material issues (ie those specific to the company performance and sector, the risks and opportunities), clearly and succinctly. A short report which gives us the relevant information should win over a blockbuster of several hundred pages.

Openness and Honesty: This award is for the report which comes clean, tells both the good and the bad news, and which convinces us that this is a balanced picture.

Credibility through Assurance: This award is a joint award for the reporting company and the external assurance body and is awarded for the assurance statement which adds the most credibility to the overall report.

However, there is one welcome addition to this year's' entry requirements. Reporters are asked to submit Key Report Highlights, to help readers get to the key differentiating points that make the report vote-worthy.

I have been pestering CorporateRegister.com for years now to include a reporting award for the report which has the most mentions of ice-cream but somehow this suggestion has not been popular. I can understand that. Ten categories would be rather stretching.

And if you want to see last year's entrants and winners, click here.

And if you want to see what I said about last year's entrants and winners, click here.

So, if you have published a Sustainability Report, worked on a Sustainability Report, assured a Sustainability Report or know a Sustainability Report which you think should have a chance of global recognition, now's the time to make sure it gets in the CRRA 12 line-up.

Transparency is the key to Sustainability

2011-09-22T13:36:00.000+03:00

You can't underrate transparency. It is the catalyst for driving sustainability performance. This is why sustainability reporting is so critical. Once a company makes a commitment to transparency, the rest must follow. The commitment to publish carbon emissions, employee turnover, community impacts and more leads a company to ask itself searching questions about its performance. This is why I have made made it my mission to drive awareness of the importance of corporate transparency and spend most of my time involved in activities which are connected with advancing transparency in one way or another. One of these activities is our investment in the development and publication of the Transparency Index which is now becoming a truly global comparative ranking.

We developed the Transparency Index methodology three years ago as a way of assessing the sustainability transparency level of publicly traded corporations via their corporate websites. We tested the methodology for three years in my home-base market, Israel, and have now broadened our scope to include additional countries.

The Transparency Index follows a rigorous methodology which, once determined, leaves almost no scope for judgment - the methodology defines what should sustainability information should be present on a corporation's website, following, broadly, the Global Reporting Initiative reporting framework. This includes information relating to all the sustainability dimensions that would normally be included in sustainability performance reporting. If the information or website feature is present, the company gains points. If it is not, it doesn't. That means that we can be sure of delivering a neutral, unbiased view of corporate transparency as we perform our analyses.

Transparency Index Scoring Table

Our analysis covers four dimensions: Reporting, Content, Navigation and Accessibility. The Reporting dimension provides half the total points available. An Application Level A report, for example, earns 100 out of a total 200 points. The web-site analysis can then deliver up to an additional 100 points. The final score is an overall transparency percentage. Clearly, we make no judgment about the quality of an organization's sustainability performance - we focus on the quality of its transparency. This is because we believe that transparency is the key to improving sustainability performance. Oops, did I say that already?

Of course, you may take issue with the methodology and believe that points should be allocated with different weightings. You may even believe that the reporting element is overstated. If a company has all of its sustainability performance on its website, why should it only get half the points? Well, we believe that the process and discipline of working towards a Sustainability Report way outweighs the publication of performance data on a website. A Sustainability Report (of good quality) ensures a comprehensive view of the entire sustainability impacts of a company, reported for one period, in one place, in a structured way. A company which produces a sustainability report and ensures that all sustainability information is easily accessible and navigable on the corporate website (without having to download the sustainability report) achieves optimum transparency in our view. As it stands, I believe The Transparency Index is the only ranking of corporate sustainability-performance website transparency in the world which is completely applicable across sectors, industries and geographies, enabling a true comparison of corporate commitment to transparency.

After having published the Transparency Index for three consecutive years in Israel (2009-2011), covering the top 100 publicly traded companies on the Tel Aviv Stock exchange, we have become expert in analyzing corporate websites and have amassed quite some data about transparency performance. In Israel, leading companies now approach us for details of our analysis of their websites and ask for advice on where to focus in order to improve transparency, as well as publishing their transparency ranking in their own Sustainability Reports.

You can download all the three year Israel reports from our website here.

South Africa sets a benchmark

This month we published the Transparency Index of the largest publicly traded companies in South Africa. See the full report here and the Press Release here.

These large South African companies set a new benchmark in transparency, achieving an average of 78% (versus an average of 48% for the top 25 companies in Israel). The highest ranking was AngloGold Ashanti Ltd with 95% (though the highest ranking in Israel was Bank Hapoalim with 99%).

Ukraine joins the Transparency Index

We have been delighted to welcome the initiative of the dynamic Center for CSR Development in Ukraine to apply the Transparency Index methodology and measure the transparency level of the largest companies in Ukraine. See the Press Release here. (a full report will follow).

The average level of transparency of the top 106 companies in Ukraine was 21% (35% for the top 100 in Israel), demonstrating that there is much work to do in both countries. DTEK, a large Ukraine energy company, achieved the highest ranking in Ukraine at 80% sustainability transparency.

Transparency Index Global Comparison

In addition to our work in Israel and South Africa, our friends in Ukraine performed a comparative analysis of thirty additional companies - ten from Russia and twenty leading global corporations.

Using the Ukraine analysis and our own analyses, we can come up with a semi-global league table which presents the top 20 companies out of the 260 + company sites analyzed:

In this top 20 so far, we have 9 South African companies, 5 global companies, 4 from Israel and one from Russia and one from Ukraine. The overall average of these leading companies for Sustainability Transparency is 88%, a very respectable benchmark for other companies to aspire to.

In the coming months, we will be adding UK, USA, Canada, India and other countries. As we grow our global transparency database, we will perform industry and sector analyses, as well as analyses relating to the sustainability content which is most widely published on websites and that which is not. At present, this information is only provided in country level reports.

Transparency is key to sustainability. Watch as the Transparency Index grows in scope and use it to influence companies toward greater transparency.