What makes a Sustainability Report good or bad?

My friend and CSR & Sustainability Consultant Juan Villamayor, who writes a great blog, is also writing a dissertation on the quality of Sustainability Reporting. In return for the promise of loads of ice-cream the next time I am in Barcelona, I agreed to provide Juan with my thoughts in response to his question:

What makes a Sustainability Report good or bad?

After I had drafted my response, pretty much off the cuff, I thought I would share it, in case anyone else is writing a dissertation. More ice cream for me, right ? Here is more or less what I wrote:

What makes a Sustainability Report good?

Ultimately, the test of a good or bad Sustainability Report is in the value it adds to a business (and by implication, to the stakeholders of that business). This may be internal value (management processes, engagement etc.) or external value such as building trust and managing risk. Unfortunately, companies rarely measure the value they gain from Sustainability Reporting, though most confirm that they do gain value. I would love to see some research about the specific impact of reporting on companies.

Assuming the report adds value, what makes a report good or bad depends on who is interested in it. Most reports are written for a range of stakeholders and therefore try to cover a balanced set of issues. However, depending who you are, this may or may not be enough. If you are an environmental activist and cannot find clear, relevant environmental impact data, you will be disappointed. If you are in a local community which has been affected by the company's operations, and cannot find information relating to the company's local impacts in your area, you will be disappointed. If you are an employee and read about information which you did not previously know, you may become more engaged and proud, or you may feel disconnected to read in a report what you might have expected to hear through an internal communication process. If on the other hand, you are a professional reporter, and expect reports to reflect a discipline of transparency, measurement and provide data about the company's sustainability impacts, then you tend to look for (not in order of importance) :

The Company's Role in Society

One of the first things I look to a Sustainability Report to do is enlighten me as to how the company sees its role in society. Sustainability is not just about improving impacts and behaving ethically. It's about doing business in a different way which makes a social contribution. I like to see companies define that contribution before they get into the detail of how many tons of paper they have recycled. This provides context for the report.

Material Issues

A materiality matrix (see interactive example from BASF here) which identifies the specific most important issues that the company faces in sustainability performance which has been developed using input from external and internal stakeholders, is important. Specific companies are at specific risk and face specific opportunities, as well as having very specific impacts on people and planet. Materiality helps us understand what these are and react accordingly.

Outcomes

I look for the outcomes or impacts of the company's Sustainability activities, not just performance. So if a company has been investing in environmental technology, I look to see if environmental impacts have improved. If the company has been investing in the community, I look to see what community outcomes have been achieved. A simple "train timetable" of what we have done and how much we have spent is rarely satisfying.

Framework

Most companies today have adopted the GRI framework to compile their report and include a GRI Index. I find this very helpful for navigating the report and finding specific information that I require. With such a framework, it is easy to see what has been reported and what not, against a template of universally relevant key issues. Even if the GRI Framework is not used, another type of framework or structure may be fine, but the inclusion of a content index is most helpful.

Authentic Style and Tone

I look for a style and tone which is authentic and not obviously copy-written – one which explains technical terms and helps tell a story rather than just state the dry facts.

Clear Data

I look for data which is presented coherently and where the basis for calculations are clear, so that you know what's included and what's not. I was recently reading a report that provides a figure for Motor Collisions per 100 employees. There is no basis for the calculation. Does this mean all employees or only employees that have a company vehicle? Is it all collisions or only collisions caused rather than experienced? Data must be presented in a way we can understand, and it is interesting to see prior year data for more than one or two years, so that you can get a sense of continuity.

Targets, Progress and Future Plans

I look for SMART targets , and understanding of not only what progress has been made to achieve the targets so far, but also what plans are in place to continue to do so (see SCA's Report for a good example of this). Simply stating that the company will reduce carbon emissions by 20% by 2020 is not terribly convincing. What is convincing is the plan to achieve this.

Stakeholder Voices

I love to see people in the report – all businesses are about people – employees telling their stories, external perspectives and well-written real-life case studies all add to the credibility and easy-reading factor of the report. (Check out this fabulous report from Impahla Clothing)

How Sustainability is Managed

I believe there is importance in how sustainability is managed in an organization – whether there is a Board Committee, a dedicated Sustainability Leader and a corporate Steering Team of some sort. I always look in the report to see who is responsible for leading sustainability strategy and who is on the frontline of execution. A robust structure gives credibility and confidence that progress can be made and objectives can be achieved. (see page 48 of the Toyota Report for an example)

Accessibility

Easy navigation of all the report content – a hyperlinked downloadable PDF is my preference (see Cisco's example), as I can read it without an internet connection. Report-builder features for web-based reports are important (see Timberland's example). I hate flipbooks and other pyrotechnical web presentations, though opportunity to add comments, such as the SAP report , is a nice touch. A good report website is attractive and accessible to many. Either way, it must enable you to get to what you want fast. Not many people read a report from end to end in the order of the contents list.

And finally, I look for Linkage – the link between the company's sustainability performance and its business success. Most companies don't really know how to express this, and there is some expectation that Integrated Reporting might provide a route to expressing this meaningfully. Today, when I see it, it's a bonus, but my starting point premise is that I won't find it in Sustainability Reports, which is quite ironic really, when you think that many companies engage in sustainability in order to support sustainable positive business performance. (I like the way BT does this)

Finally, finally, I look for Assurance. Today, most companies do not use external assurance or verification and those Assurance statements I read are often partial or completely inadequate, so I tend to assume that I won't find a good Assurance statement which is the result of rigorous process and adds credibility to the report. Here again, when I find a great Assurance Statement, it's a bonus. (here is an example from Bureau Veritas, assuring the Nestle 2011 CSV Report)

Those are my shoot-from-the-hip things that work well for me in Sustainability Reports.

Then I thought about answering the question the other way around:

What makes a Sustainability Report bad?

Here, aside from saying the opposite of all the above, I think most of us know the answer to this – marketing orientation without substance, highly selective "good news" coverage with no context or substantiating data, and difficult, stiff, narrative with a tick-box approach to performance.

Truth is, most reports are neither totally good nor totally bad. but who am I to judge? I can say what works for me, but every stakeholder will have her or his own view.

A Sustainability Report is, simply put, what stakeholders make it.

And this brings me to my final point:

What makes a Sustainability Report really, really good?

Feedback.

Yes.

Feedback.

A Sustainability Report which gets no feedback hasn't hit the radar. And that's bad.

Be a great stakeholder. Give a Sustainability Report your feedback.

elaine cohen, CSR consultant, winning 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)

What is your feedback worth ?

I was taking a look at Deutsche Post DHL recently published Sustainability Report called Living Responsibility Report 2010 and came across their way to encourage readers to give feedback.

I wonder why Deutsche Post placed a cap on the number of feedback forms that would qualify for the Euro 5 donation (up to a limit of Euro 1,000) ? Were they worried that more than 200 people would provide feedback requiring them to donate horrendously large amounts of Euros to Plant-for-the-Planet? If 1,000 people took the time to read the report and fully complete the questionnaire, this would amount to a donation of Euro 5,000. Believe me, if 1,000 people genuinely took the time to do this, I believe it would be worth far more than Euro 5,000 to Deutsche Post. What do people think when they see this offer? Does it incentivize them to respond? Would they wonder if it is worth bothering to fill in the form, because if they are feeder backer number 201, no cash is thrown in the pot? Is the donation any form of motivator?

Deutsche Post is not the first reporter to offer incentives for providing feedback. OneSteel offered a 16 MB iPad for filling the survey response form on their first standalone sustainability report for 2010 (a much sexier offer, if you ask me :))

Of course, the problem with providing feedback on sustainability reports is that they always seem to end up in some black hole and you never quite know whether anyone ever read the feedback or did anything with it. This is one of the big breakthroughs of the SAP and the Guardian online report execution - feedback is open and online and gets a reply.

Most companies make a plea to receive feedback but it is hard to tell if this is lip service or genuine interest in what people have to say. I tend to get about a half 'n half response from the companies I write to directly with feedback - half respond, half don't.  I never get a response to any of the specific feedback forms I submit.

I believe that the best incentive for encouraging stakeholders and report readers to give more feedback is not the promise of an iPad or even the possibility of a donation to a good cause. It would be the promise of ACKNOWLEDGEMENT. I believe people want to see their feedback acknowledged and responded to. People provide feedback because they want to make a difference. They are not just taking the time to generously provide free advice to companies for the greater good. They want to have influence and impact. So come on reporters, if you want people to respond to you, make an upfront commitment to valuing their feedback. Let people know you are serious.

I found a nice example from DiGi.com Berhad, a Malaysian mobile and internet service provider. In their Sustainability Report 2009, they offer us the possibility of getting a response to our feedback. (I haven't tested this out yet, but let's give them the benefit of the doubt for the time being :)).

Of course, reporting companies could always make a commitment to respond, a promise of a Euro 5 donation to a good cause AND an iPad for the winning feedback..... throwing in a pint of Chunky Monkey would make it really effective.

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)

SAP 2010 Sustainability Report

I can't resist taking a few minutes out of an extremely heavy workload (it's reporting season, folks!) to record a few impressions from my conversation last evening with Peter Graf, the Chief Sustainability Officer of SAP, who talked me through the highlights of the SAP 2010 Sustainability Report, the online showcase for everything that SAP can do to "help the world run better." Moving from "having a sustainability strategy" to having a "corporate strategy which is sustainable", SAP seems to be doing and saying some great things, some of which managed to cause even me to be impressed, which takes some doing, and presenting them in a creative and innovative way in their second fully online PDFless twitterable facebookable report, complete with interactive customizable graphs and data. Whereas last year's report was more about the social media song and dance, I feel this year's report has matured and reflects a stronger focus on accountability for impacts rather than  actions. Indeed, the SAP Advisory Panel, which includes Aron BSR Cramer and Bill Cradle-to-Cradle McDonough, amongst others, together with online feedback on the last report, was instrumental in urging SAP to attempt to quantify to what degree they are helping the world to run better. The Advisory Panel engages in regular conference calls and meets annually with the SAP Board. That's good practice.

SAP's response to feedback is evident in SAP's attempt to define customer impact, claiming that SAP solutions have improved the safety and health of 800 million people. 800 million people? Skeptical? SAP thought you might be. So they included a pop-up describing how they calculated this not insignificant proportion of the global population.

The customer section reads like one big marketing campaign but there is some substance to the proposition that SAP's core purpose is about helping businesses to operate more efficiently and therefore save the world. If you have it, I guess you might as well flaunt it. Next to Ecomagination and Plan A, this is probably one of the best demonstrations of how a truly strategic approach to sustainability actually does pay off. It is encouraging that the business case for sustainability seems in no doubt at SAP, though this comes only after achieving a certain level of maturity on the sustainability continuum.

We are apparently becoming a global community of Sappites. But this may not be such a bad thing, given the big strides SAP is making in environmental sustainability. SAP's absolute carbon footprint reduced by 6% in 2010 and is presented nicely, with the graph bars shown below the line, because emissions are always a liability and not a demonstration of positive impact. The shorter the line is, the lower the emissions are, and SAP appears to have been working hard to reduce the bar-length since their emission peak in 2007.

Graph options allow you to view this data by region, normalized to Euro revenue and number of employees and by GHG Reporting Scope 1, 2, or 3. But the best of all is the Abatement Cost Curve, which shows how SAP intends to reduce emissions to 2000 levels by 2020, generating not only emissions reductions but also significant cost savings, which will fund the purchase of energy from renewable sources and the generation of solar energy. This is a strong commitment and will require many changes in corporate and individual behavior.  I admire a company who makes clear plans and commits to them in a public report.

One of the changes relates to vehicles. 79% of SAP's Scope 1 GHG emissions are from company cars. One of the ways SAP is addressing this is through more virtual interactions (43 telepresence stations) and the use of electric cars. These cars are now being used in SAP USA, Germany and India and SAP is building 16 charge spots in the SAP Palo Alto site, the largest charging site in corporate USA at this time. SAP is even enabling 1,000 people to test drive the Nissan Leaf for short periods so they can get the feel of the future. Sometimes it pays to work for a large company.

The SAP strategy is defined in terms of three impact areas - operations, (which includes environmental impacts),  customers and social  and in each area, SAP defines key strategies, metrics and impacts. At the center of this is SAP's sustainability map, a very nice overview of what's on the SAP sustainability radar. (Yes, I "like" 'd it and gave it 5 stars!)

What's material about SAP's business? Again this year, SAP presents their
D-I-Y Materiality matrix in which you can see the way materiality has changed over the years and develop your own matrix of issues as a SAP stakeholder. It also has a very beneficial therapeutic effect, a little like Tetrix. If you look at SAP's materiality in real-time, you can see they have a lot to be thinking about!

The user interface of the report seems to be a little easier to navigate this year, or maybe it feels that way because it's the second time around. However, the best way to find what you are looking for is the GRI Index page. I understand that for PDF geeks like me, and print-it-out investment analysts, a 3 page Exec Summary will soon be produced.

However, one test the SAP report failed is my EN22 test. This is a core indicator and should be reported fully in a GRI A level report. See a previous post of mine on this subject. SAP's response to this indicator is not in line with the GRI requirement despite it being noted as fully reported. I have not checked the rest of the indicators one by one (maybe I will, one day, just for fun :)), but the EN22 test is an indication of a lack of rigor both in reporting and in verification.

Another poor performance area is SAP's advancement of women where the rhetoric is not aligned with the performance. "Diversity as a business driver" is the pronouncement, but despite all these wonderful Nissan Leaf cars, there is not much driving being done at SAP from the gender equality perspective. Women at SAP represent only 11.5% of top management which is 0.1% higher than the 2006 level. Clearly all the nice words around advancing women are not getting through to the male (chauvinist?) SAP leadership which  includes 16 Supervisory Board Members  of which one appears to be female, if am guessing the gender correctly based on members' forenames, and an Executive Board of 6 members which includes one women in the HR role who just made it into the report, having been appointed in 2010. Two out of 22 top roles makes 9% of women in the key leadership positions in the company. SAP says "In 2010, we established a global women’s program advisory council to promote career development for female employees".  I say that there needs to be more than a council. There needs to be a major mindset change among  men at SAP. Statistics prove that companies with women in leadership positions deliver greater shareholder returns. As I have often said, women do not need to be counseled, trained, mentored and fixed. They need to be promoted. SAP should stop womenwashing and get on with it. A good start would be to replace SAP's two male CEO's with one woman CEO providing a chance for both a cost saving and improved performance. :)

There are some other very nice features of the SAP report but time prevents me from elaborating here and now (it's reporting season, folks!), but I recommend you check it out. It has never been easier to provide feedback on a sustainability report so let SAP know you value this. I understand from Peter Graf that last the 2009 report generated over 100 meaningful queries and suggestions, many of which were incorporated in SAP practices and in the 2010 report content. Influence is a wonderful thing and SAP are making it easy for all stakeholders to grab a slice of the action.

My conversation with Peter Graf was fascinating and covered many points which I have not been able to expand on here, but I will follow up in additional posts as relevant over the next few weeks. Peter, of course, didn't tell me what to write about in this blog but I am sure he will be pleased to hear that I applaud SAP for an excellent demonstration of transparency and overall encouraging sustainability performance.

The only thing I forgot to ask Peter during our conversation was "What was it that SAP chose NOT to report?" . Hmm. Probably a good thing. Why burst the bubble ?

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)

The Personality of CSR Reports

Personality: per·son·al·i·ty

Function: noun

(one of four definitions) : the complex of characteristics that distinguishes an individual or a nation or group; especially : the totality of an individual's behavioral and emotional characteristics

Now, personality is a complex thing. So are CSR reports. But there is no getting away from it, CSR reports have a personality all of their own. They have a look, style, tone, and a set of specific traits that make up their personality. In psychology (not that I know too much about that, but the internet is a wonderful thing)  there are apparently FIVE BIG PERSONALITY TRAITS or dimensions of personality which characterize human behaviour.  Now, with a small stretch of the imagination, these characteristics can also apply to CSR reports. See the traits and the correspondingly traitful reports in the list below.

Openness : (inventive / curious). Appreciation for art, emotion, adventure, unusual ideas, curiosity, and variety of experience.

Take a look at this first report from Jain Irrigation Systems entitled Prosperity for Posterity (what a wonderful report title!) - it's a delightful first report demonstrating openness of thinking, great creativity, wonderful artwork and quality reporting. This report from WPP also comes in nicely with an openness personality trait - including great testimonials from a wide range of people,  super artwork, and a great pro-bono showcase.

Conscientiousness : (efficient / organized). A tendency to show self-discipline, act dutifully, and aim for achievement; planned rather than spontaneous behavior.

I think this report from Kesko is one of the most conscientious efforts around. It's high quality, very comprehensive and transparent, and demonstrates absolute detail in planning, acting and reporting on CSR.  

Extraversion : (outgoing / energetic). Energy, positive emotions, surgency, and the tendency to seek stimulation in the company of others.

Top candidate for this personality trait is of course the SAP 2009  online report. It certainly seeks stimilation in the form of interactive feedback requests on every page.

Agreeableness: (friendly / compassionate). A tendency to be compassionate and cooperative rather than suspicious and antagonistic towards others.

I would put the nice, creative report from Softchoice in this trait category. The report offers good advice on things to do and things to avoid from this IT solutions provider.  

Neuroticism : (sensitive / nervous ). A tendency to experience unpleasant emotions easily, such as anger, anxiety, depression, or vulnerability.

Hmm, I had a little trouble finding a CSR report with a neurotic personality trait. Perhaps the closest I could get is the British American Tobacco Report for 2009, where the home page includes questions such as : "Who would want to work for a tobacco company anyway ? "

But that's not all. With every personality there is a corresponding disorder.  More about that another time :) However, I will note that I have a compulsive-obsessive-addictive personality disorder when it comes to CSR reports and Chunky Monkey. What about you? Try the Personality Disorder Test. You don't need to share the results on Twitter. :)

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. 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)

13 takes on the SAP 2009 Sustainability Report

Finally, I have gotten around to doing what I love doing. Reviewing one of the great new CSR reports to be issued in the past few months. The SAP 2009 Sustainability Report.

It was hard to miss the commotion around the launch of the SAP report,  proclaimed by many as the most innovative and forward-thinking, hi-tech, interactive and engaging report in the history of CR reporting. I have bounced in and out of the online report a few times, findng the online format a touch cumbersome to navigate, despite its objective of delivering a compelling interactive experience. Now it's time to take a deeper look, and whilst I am at it, consider just how much interactivity this interactivity pioneer has interactivated in its first few months of issue. Let's do it this way: 5 things I like about the SAP report. and 8 things I dont ..err... 8 things I like less. Good news first, as always.

I like:

The Tour of the SAP 2009 Sustainability Report. If you can't be bothered to read the whole thing, then 7.43 minutes of highlights and insights for a Magical Mystery Tour of this report is  time well spent. Nicely done. An Executive Summary on video.

The open feedback facility on every page. "Issue Experts" and other SAP people conduct open dialogue in response to feedback and queries so that all of us folks who thought it and didn't feedback it can get the benefit anyway. Very nice feature which I hope will be adopted by many other Companies. Comments are not moderated which demonstrates great transparency in this Brave New CyberSpace World.  It kind of turns the report into one long blog. Hmm. Now there's an Idea ... a Sustainability Report in the form of a BLOG. What a great thought. Remember: you saw it HERE first. Also, when you post a comment in the SAP report, a pop-up enables you to share your comment to Twitter, FB and LinkedIn. Nice feature.

The materiality matrix. I LOVE materiality matrices. This one is great. Not only does it clearly MAP the SAP issues, it gives detailed descriptions including commentaries by external experts on each issue, describes the changes in materiality focus year on year AND it enables you to play around with the bubblewrap-style matrix and reposition everythng that's important to SAP so that it defines what's important to YOU, and feed it back to SAP. Really neat. I could play with this for hours. And when you save your new SAP Materiality Matrix, a little pop-up pops-up and says " Thank you for your valuable feedback!"  Such a polite report :)

The SiteMap: This is about the best way to navigate this report, enabling an overview of the different sections. It is, in effect,  the Report content list.

The Advisory Panel Statement:  I liked this statement, finding it to be balanced and astute in its commentary on SAP's advances in sustainability processes and also the limitations of this report. This adds a degree of credibility to Sap's efforts and reporting.

I less like:

No download: I find it soooo tiresome and time-consuming reading reports on line. Online reading is ok for blog posts and other articles with short bytes. The SAP report is long enough to make me tire of the online version after half a dozen clicks. Sorry SAP. A PDF download, as an additional option, is a format which I find much easier and much more efficient for reading the entire report. The online is great for dipping in and out but makes for a disjointed reading experience as moving around is interrupted with click and wait to load the page. Drives me insane. I like to work fast and totally online reports often slow me down and this SAP report is no exception.

Feedback feature: When you go to enter comments, the comment box expands and overrides the page you want to comment on. Since I turned 21, my memory just ain't what it used to be, and if I cannot see what I am commenting on, I forget what I wanted to say. Yep, fact of life. I had to comment with the report open in two web pages, and toggle between them. Rather tiresome.

The Sustainability Map: This is a product marketing brochure for SAP solutions. It looks nice and organized well, but it's promotional rather that substantial. It's not reporting the IMPACT of SAP's sustainability solutions, it's describing SAP's offerings. I believe SAP must think in terms of measuring the way the company is creating a difference in the market place and reporting on that, rather than focusing on the way it maintains a presence.

It's Boring: This report may be interactive, but it is  boring. The style and tone is dry and consists of mechanical,  descriptive, often technical commentary. Where is the true spirit in this report? It seems to be taken up in the self-congratulatory smugness of the online presentation rather than the way sustainability comes alive at SAP. Where are the SAP employees in this report? What about a few faces and names of key players (beyond vids of the CEO's and Sustainability Director)? A few case studies. Anecdotes. Chunky Monkey. Something to inspire.

It's shallow in key areas: The report content doesn't dive deep enough into core issues that are of critical importance to SAP's culture and development as a sustainable business. The section on Women in Management does not adequately explain why SAP's results are consistently poor despite a string of initiatives to make women superwomen. The section on Employee Engagement which dropped 84% to 69% in 3 years - an alarming result - a third of the workforce are not engaged -  doesn't inspire confidence that SAP knows how to address this as an organization. Customer Satisfaction declined by two percentage points from 93% to 91% in 2009. Is this significant for SAP?  The commentary does not really describe specific efforts that will ensure higher levels of satisfaction in the future aside from a change to customer service options and no increase in service fees.

It's tactical not strategic: This Sustainability Report gets high marks for transparency and interactivity. However, it is focused on SAP inputs and not outcomes. Despite spending rather a lot of time in the report, I still fail to get a clear substantiation of the contribution SAP is making to advance a sustainable society. The few case studies from Lexmark, Rohm and Hahs and John Deere do not really provide clear measurable benefit, they are more like technical specifications for software solutions. This report lacks a concept and a theme which tells the story of SAP's sustainability. The Advisory Panel says that SAP has unambiguously embraced the role of enabler. Well, frankly, if they hadn't made this point, I am not sure anyone would have got it. SAP needs to stand back from the technological magic and think about what they really want to use this report for and how to project their  real contribution, beyond making money.

No Sustainability Action Plan: Contrast this report with the "we said, we have, we will " of master-reporters Vodafone and you realise that the SAP report really does not achieve clarity about its sustainability journey. I wasn't able to get a sense of overall plan, performance against that plan, or quantifiable future targets. Maybe I just got tired of clicking and waiting.

So, on balance, the "less likes" rule the day for me. I commend the team at SAP for the most significant feature of this report - open live unmoderated transparent feedback -  and for a report which meets the highest transparency level of the GRI framework. Clearly, much effort has gone into this report and it certainly is a worthy player which can proudly take its place amongst the better reports of 2010. Personally, however, as you can see, there is much about this report that I found less engaging and less mature in terms of what I might expect from a highly developed sustainably conscious company such as SAP. Still, any Company who is open to feedback will surely continue to evolve and improve, so I am confident that the SAP 2010 report will be an absolute blockbuster :) 

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en Beyond Business Ltd,  an inspired social and environmental consulting and reporting firm.

The GRI Barmitzvah

The sold-out  biennial GRI 2010 conference with 1,200 attendees from 77 countries was certainly a highlight of the 2010 #CSR calendar and the GRI did an impressive job of bringing such a large crowd of people committed to sustainable business and a sustainable world together for discussion, reflection, presentation, exhibition, interview, debate, LOTS of sandwiches, tweets, awards and networking. The conference was an important landmark in the coming of age of sustainability, a sort of barmitzvah party, attended by the parents and grandparents of the GRI movement, infused with a kind of euphoric sense of achievement coupled with a knowledge that what happens next will be even more significant, propelling the GRI teenager into adolescence with several duties, obligations and  a vision of how to make a difference in the world.  There were several very clear overriding themes dominating the conference which could not possibly have gone unnoticed by any of the participants.

Integrated Reporting

From the opening of this conference, with the announcement that "GRI proposes that ESG reporting and financial reporting need to converge over the coming decade. GRI advocates that a standard for integrated reporting should be defined, tested and adopted by 2020. GRI is working with leading global organizations in financial markets, accounting, corporate responsibility, ESG reporting, and civil society to establish the International Integrated Reporting Committee. The committee’s purpose is to promote integrated reporting, and to facilitate and coordinate collaboration between key institutions to develop an integrated reporting standard" right through to Mervyn King's closing remarks with the announcement  that the Johannesburg stock exchange will require integrated reporting as a condition of listing, it was hard to hear the word reporting at this conference without its new prefix- integrated.

Sustainability as Climate Change

From the words of Mathis Wackernagel, President of the Global Footprint Network in the opening plenary "Humanity is running down the planet" to the words of Kumi Naidoo at the closing plenary "We have no planet B", the meaning of sustainability at the GRI conference was overridingly environmental sustainability and the effects of climate change, at the expense, I feel, of many other social, product, marketplace and supply chain impacts, though breakout sessions were diverse.   

Technology and data

The new ways of gathering, analysing and disseminating sustainability metrics and data via Bloomberg terminals and other technologically supported metrics analysis from firms such as CRD analytics, which is used as the basis for the Nasdaq OMX Global Sustainability Index, XBRL reporting language and taxonomies (note new sustainability upcoming buzzword)  and software for gathering sustainability data in companies such as that delivered by SAP or Credit360, were all prominently featured throughout this conference. Technology is up front as the key to developing transparency and integration of data for use, primarily by analysts and financial data experts, but also as a business decision making tool. Excel, apparently, is passe. 

Regulation

The voluntary nature of CSR and sustainability efforts is giving way to greater pressure for regulation and legal requirements for sustainability disclosures. Apparently, voluntary is not achieving the scale and pace of change towards transparency that our planet needs. Governments, regulators and stock exchanges around the world will be urged to play a much greater role in driving companies to disclose, though little was said about the processes that will be needed to enforce such new regulation.

Partnerships for standardisation

The GRI has established many high level partnerships to ensure the reporting voice in moving towards greater alignment of the global direction of sustainability transparency - the UNCG partnership to strengthen collaboration, work with several other UN agencies, the OECD, NASDAQ and other exchanges, big NGO's such as Greenpeace, the big accounting companies, think tanks and more, the Integrated Reporting Committee etc. Partnerships for greater global alignment is clearly the way forward.  

Brazil

How did Brazil end up with 6 out of a possible 6 awards in the Readers Choice Report Awards , sponsored by last time Award winner Petrobras, also Brazilian, was the question on everyone's lips at the end of the Awards Gala. What is Brazil doing that no one else is ? Clearly, a point of significant interest for all the other 59 countries whose reports were represented  in the Awards this year.

Tweets

The impact of social media as a whole and in particular the use of the #griconference hashtag, encouraged in every session, and the high quality of tweets  flowing throughout the 3 days, including reactions and questions from those not attending, signalled the arrival of the GRI, previously only a moderate voice on social media, into the upper league of real-time microblogging and an ackowledgement that social media is where the voices of today are meeting and influencing. Social media cannot be ignored as a place to engage stakeholders.  

It seems that this conference heralded move of the GRI  into a new era. Beyond the Bar Mitzvah . The establishment of sustainability reporting and GRI leadership in this field has lent a certain power to the GRI which one senses was bolted into place, not without some dramatics, at this conference. The GRI is moving out of its idealist, start-up, optimistic, improve-the world platform towards a bolder positioning, aligned with where the money is, this time, not to simply to create a better world, but assuming a responsibility to save us all from disaster. From the carrot to the stick, to paraphrase the title of a report launched at the conference on Trends in Voluntary and Mandatory Approaches to Sustainability Reporting, the GRI has lost the infectious, youthful, pioneering enthusiasm of the early days and has moved to where the stakes are more serious, money talks and the currency is planet or no planet.  This may not be noticeable to the casual observer, but the shift is there. Perhaps this is not a bad thing. Perhaps this is the only way to create the mindset transformation that was so often pronounced "urgent" by the conference speakers. Perhaps, after all, the triple bottom line really is only one bottom line, as Henk de Bruin of Philips said in a session on integrated reporting. But perhaps, in moving forward, the risk is that the GRI loses sight of the cause and inevitably adopts the behaviours of  those big businesses  it seeks to change. Perhaps the risk is that, by focusing on financial stakeholders, as the key to all stakeholders, the resulting reality will  relegate non-financial stakeholders to the level of recipients of the hand-me-downs of big finance, whose voice is heard at low-volume unless they happen to have the charisma of Kumi Naidoo 

Alongside the massive and unequivocal success of the GRI Reporting Framework and the warm applause at the end of the conference, the GRI will have to be careful to ensure its roots are solid as it cultivates new directional offshoots. Let's look at reality:

Over 4,000 "sustainability" reports of sorts are issued annually. GRI say that around 1,300 of these are GRI reports - 30% -  though many others are "inspired" by the GRI framework. So whilst the GRI framework is the biggest single reporting framework in use today, the reality is that it is still not applied by the vast majority of reporters.

Sustainability reporting, whilst growing year on year and adopted by a majoirity of leading global businesses, the 5,000 or so businesses that report today  remain a drop in the ocean compared to the 82,000 transnational corporations operating worldwide (quoted in "Carrots and Sticks" mentioned above) and the significantly larger number of non-transnational corporations.   The reality is that reporting, regrettably, is nowhere near mainstream, even thought we might like to think it is.

The quality of GRI reports varies substantially from the outstanding indicator-by-indicator disclosure-by-disclosure reporters to those reporters whose use of the GRI framework is no more than abuse. "We are not policement" says Ernst Ligteringen. "The GRI does not police the quality of the reports."  But perhaps it is time for the GRI to make a fundamental assessment of how, and not only how much, the GRI report framework is applied - how companies are reporting on indicators, how many indicators, how Companies report what they claim to report, the consistency of application of the framework in so many ways. A comprehensive study such as this might reveal a pareto picture - that 20% of the reporters are delivering 80% of the quality, and that 80% of reporters are at best inadequately applying and at worst actively misusing the reporting framework. The reality is that overall, the quality of sustainability reporting using the GRI framework is inconsistent and often inadequate.

The level of integrated reporting remains low at 5% of reports issued and here again we see massive variance in approach and quality, ranging from the simple combination of two types of largely unconnected reports within one cover to the more holistic approach attempted by Novo Nordisk and others. The proclamation of integrated reporting as the ultimate goal is the start of a new path, representing, in my view, the evolution of financial reporting and not of sustainability reporting. The reality is that integrated reporting has hardly taken off, despite the strong drive to buzz it up.

The quality of assurance processes, once again, unpoliced and unchecked, remains as I termed it some time ago, a Wild West. The new AccountAbility standards are a mystery in their pedantic complexity and assurance statements beg more questions than they answer. The assurance market is controlled by the accounting companies, and by and large lacks the depth and scope of a process which can truly assure stakeholders on report integrity. Who assures the assurers ? The reality is, that with only 20-25% of all reports currently being assured, and many badly, the assurance process has not taken firm root.  

The success of the GRI must be viewed alongside these challenges, and as the new era of the GRI takes shape,  the GRI must be alert and remain true to its broader constituency. As integrated reporting takes off, the GRI must take care to establish a solid platform around quality sustainability reporting that attracts more than just the financiers. The GRI must take care to ensure the rhetoric is founded in reality.  The GRI must not let the euphoria of the barmitzvah party mask the responsibility the organization has to the extended family, who represent more than cash and climate change. As  transparency takes hold, the GRI must ensure that this is more than just carbon emission data on Bloomberg terminals, and as the GRI expands its influence, it must assume responsibility to align itself not only with those who count in Euros and Dollars, but also with those who count in principles and values.

Well done to the GRI for coming thus far, and for delivering an unmistakeably positive impact on sustainable business processes through reporting. Good luck to the GRI as it faces the challenges ahead. We should continue to be participative and supportive. And watchful.

elaine cohen is co-founder and co-CEO of Beyond Business, a leading social and environmental consulting and reporting firm. Visit our website at www.b-yond.biz/en

Don't ditch CSR reports

Quick Quiz: Reporting and Communicating. What's the difference ?

Apparently there are quite a few people around who don't know that there is a difference between reporting and communicating. Apparently these people believe that a CSR report is a failure because it fails to attract a readership worthy of Jackie Collins, Agatha Christie and William Thackeray Shakespeare all rolled into one. Apparently, the fact that droves of consumers don't rush to seek out every single PDF sustainability report download on a company website indicates that the entire reporting movement is a total failure. Apparently, reporting has BECOME communications and it has FAILED. Why do I say this ? Well, this week, we saw two more "down with CSR reports" posts from two people whose knowledge, writings and experience I respect tremendously, but, nontheless, have fallen into the trap of, wrongly IMHO,  pointing an accusing finger at CSR reports as inadequate failings of the sustainability process. 

The first was Mallen Baker in his post entitled Why CSR Reporting is still ugly. Mallen writes that "CSR reports have become the equivalent of avant garde art. Experts queue up to declare it beautiful, whilst ordinary people stand in front of it slightly baffled wondering just what it is meant to be." In other words, he says that " reports don't work for ordinary stakeholders". He doesn't define what an "ordinary stakeholder" is .... an investor ? an employee ? a supplier ? a community activist ? an environmentalist? a human rights specialist ? a consumer ? a socially conscious consumer ? a professional CSR person? a manager? a Chairman of a Board ? a regulator ? Who on earth is an "ordinary" stakeholder ? And for whom exactly don't reports work ? Only 4,000 reports are issued every year  around the globe. The annual double digit growth of CSR reporting numbers is much stronger that the growth of any of the reporting Companies over the past 15 years. 20% of all reports issued each year are first reports from Companies getting transparency for the first time. More and more companies are following, as reported by Jennifer Hicks on Triple Pundit in which she claims that CSR Reporitng is gaining steam.  So much steam about something no one knows what it is meant to be ? Come on.

The second was Olivia Khalili in her post entited : Want consumers attention? Ditch the CSR report.  No doubt this sensationalist headline will attract many readers and retweeters, and maybe, many will look at it and think : "Yes, absolutely!". Apparently, these are also people who don't know the difference between reporting and communications. How does Olivia explain this attention-grabbing headline ?  "The contents of a CSR report almost never reach consumers’ eyes because they’re not visible on the company’s website and they aren’t relatable or engaging. Companies write CSR reports for their stakeholders, but few take the critical steps to engage consumers in their accomplishments (and shortcomings!). And so they leave tremendous value on the table........ Don’t write a report. Reports are read in the boardroom and the classroom, not by consumers and employees. Create something that celebrates what your company has done and gets stakeholders excited about the future challenges you’re set to tackle."   I suspect that not many Sustainability Reports are actually read in the Boardroom, frankly. Despite good governance practices which everyone talks about, Directors are still way off being fully engaged in sustainability dialogue. And why can't you issue a report AND get stakeholders excited about future challenges?

These posts are sensationalism and attention grabbing but they lack substance and, I believe, an understanding of the difference between reporting and reports and communications. Let's put this into perspective:

First, a report is the summary of all the material information about a company's sustainability information in one place. There is no other document in any business which serves this same purpose. If it's not complete, its not a report. If it's partly on a consumer label, partly on a website, partly in a round table discussion with employees, partly in a cause marketing campaign, partly on a supplier order form, it's not a report. It's  pieces of communication. A report is a document, whether printed, PDF'd or online, it's an integrative document which shows at a given point in time, where a  Company is on the sustainability journey. Not every stakeholder will be interested in every part of the report, but because it's a report, it must contain the complete scope of the content. If it does not, it is  impossible to gain a balanced view of the Company's performance - it may be abusing human rights in one part of the world, whist communicating happily on green innovations to consumers somewhere else. This is the point of reporting versus specific communications. Anyone who has an interest can see all aspects of a Company's impacts. It seems obvious that if the report is online, rather than just an Acrobat icon for download, it stands to attract more attention. However, not everyone has round the clock internet access (HP report in their 2009 Global Citizenship Report that only 20% of the world's population is currently online), and the ability to download to hard-disc and read a report during a flight to the GRI conference in Amsterdam, or whenever the connection is down, is big advantage.

Second, a report is the cumulation of a reporting process which is the thing that drives change in the business. The very need to report, the very need to publicly commit to targets, to transparency, to explaining the context and the impact of the Company's actions is a real tangible driver of decision making in the businesss. Talk to any SERIOUS reporter and you will find this to be true. Of course, if you talk to the PR-style reporters, the ones who fuel the blog posts such as those mentioned above, you will find that nothing happens between one report and the next, and that performance remains static. This is because they are not serious about sustainability, which is the first premise of reporting. You must have sustainability performance in the business before you can report about it. If you do, the reporting process, which involves many internal and external players, focuses the business and the decisions that need to be  made. My experience is that this works. Categorically and unequivocally.

Third, a report is a PLATFORM for communication, it is not the communcation process itself, and it is not the end of the process. It is the beginning of the process of stakeholder engagement. What do you engage stakeholders around ? Around your sustainability impacts and performance. How do stakeholders know what your sustainability performance looks like. They have a report they can read. But just hanging a report on your website and hoping that enlightened and enthusiastic consumers will race to download it at the earliest opportunity is like hoping that the Queen of England will start eating Chunky Monkey for breakfast.(Oops, maybe she does!) Aside from a few reporting freaks like me, NO-ONE will download your report unless you incentivise them to do so, by engaging their interest in what makes them tick. This means using the report as a PLATFORM for creating a conversation with different stakeholders. It means talioring your communications process by working with different stakeholder groups on parts of the report content that are relevant to them, in different ways and via different channels. Marcus Chung wrote a post about how he read a United Airlines CSR report as he was  on a flight and it was in the seat pocket. A banking client of mine puts copies of their report in their branches for people who are waiting in queues to read. Another client of mine who runs a cafe has a pamphlet on the tables next to the menu advising of the report and key messages. Everyone who orders a coffee gets Coffee and Report. How many Companies are bringing their reporting to their stakeholders ? CSR Reports is getting the message OUT. Communications is getting the message THROUGH. To get people interested in your reporting, you have to take the message to where they are, and do it in a compelling way. This may be as simple as putting your report in a place where your stakeholders will find it and will have time to read it, or it may require a little more effort, such as producing special product labels for consumer goods, sending out teazers, running a competition, setting up an Earthkeepers dialogue as the innovative Timberland does, polling your readers as Adidas does,  getting people to make a pledge as Marks and Spencer, Starbucks and others do. Establishing a presence for your report on Social Media. How many Companies have a CSR Report page on Facebook ?  This is engagement and communcation. You have to go where your stakeholders are. For more ideas, see my post called 27 ways to make your CSR report buzz. This kind of engagement can happen when a Company has got its sustainability story sorted out, which is significantly helped by the reporting process and the report.

My point is that reports, in and of themselves, are worthless. Like your new hybrid Mercedes if you never drive anywhere in it.  But, the fact that  companies are not doing what it takes to create the communications and the dialogue around the reports  is not a reason to say ditch reports. That's throwing the baby out with the bathwater, as my mom says. Instead of indulging in yellow journalism, and blasting the internet with headlines like reports are ugly and ditch them, I would like to see headlines that say "CSR reports are a basis for engagement", "CSR reporting should be more fully exploited by Companies" "We are not yet seeing the full potential of CSR Reporting" or even "CSR reports are fascinating". Why don't we see more conversation about what needs to be done to ensure that the investment in CSR reporting actually delivers? What are the naysayers doing to feed back their specific comments to Companies about how they could improve their reporting and what they, as ordinary stakeholders, are looking to see? Sigh. No answers. Apparently it is easier to moan and groan, rather than take a responsible approach to helping Companies report more accurately, more transparently, more succinctly, more engagingly. As I write, I notice a post by the Guardian on their blog, in which they ask readers "for help" in determining what  the Guardian should be reporting about this year. Nice.  Yes, I agree, reports need to get better. Yes, I agree that many are too long. Yes, I agree that following the GRI framwork in a mindless way delivers boring and stilted reports. Yes, I agree, that reporting must be more interactive, more real-time, more contextual, less self-flattering, more connected to the business reality.  But no, I do not agree that reporting is ugly, or that we should ditch reports or the reporting process. 

Rant over. Mallen thinks I take this too personally. Well, what's not personal in this world ? Of course, I have a vested interest as I make a  living (of sorts) from , in part, reporting. However,  I write based on  an absolute conviction that sustainability reporting serves an important purpose in driving sustainability and a positive contribution to business results.I have seen it. I hear reporting companies  confirm it. I believe my work in reporting  serves a valuable purpose, not just because of the reports themselves, but because of the transformation I witness in Companies that report.  

Finally, as I complete this post, I notice that the SAP 2009 sustainability Report is now online. The one referred to in the Ditch Reports post. Certainly looks interesting. An example of how more accessible reporting is evolving. More on that another time! But, where can I download it ? Hahaha.

elaine cohen is co-founder and co-CEO of Beyond Business, a leading social and environmental consulting and reporting firm. Visit our website at www.b-yond.biz/en