Condoms, Ice-Cream and Creating Shared Value

As a Person with a Passion for Reports, as you might have gathered, I have recently joined CorporateRegister.com as a member of the newly launched service reserved for Sustainability Reporting companies only: the CorporateRegister.com Full Membership Program!

 

Many of you will already be familiar with CorporateRegister.com, the largest site for hosting all forms of CSR and Sustainability Reports dating back to the early 1990s. In fact, the oldest report I could find on the site is a digital recreation of Shell Canada’s first "Progress Toward Sustainable Development" report, issued in 1991, a time during those dark days when most companies hadn't even heard of sustainable development, let alone thought about reporting on it. This was a time when there was no Global Reporting Initiative, no United Nations Global compact, no AccountAbility Assurance Standards and no ISO 26000 and almost hardly any relevant global points of reference for Sustainability Reporting. Surprisingly, or perhaps not, this 1991 report is not vastly different from many of the reports we read today in terms of the topics covered and the language used. The difference, however, is that today, CorporateRegister.com hosts 42,548 reports across 9,267 companies and 168 countries, many of which are impossible to find without laborious hours searching the Internet, and even then, 100% is not guaranteed.

 

In addition to helping you locate and view almost any (English Language) report that has been published since 1992 in the speed of light, the CorporateRegister.com Full Membership brings a fabulous array of tools for anyone whose profession has something to do with Sustainability Reporting, or for anyone who just likes to be in the know. Here are some of my fave features:

 

Statistics:

CorporateRegister.com has the largest, most comprehensive, most fascinating set of statistics available anywhere on Sustainability Reporting. Want to know how many reports were published in 2011? That's easy. 6,311. Want to know how many of these were published in the Netherlands? Also easy: 195 reports, 3% of the global total, following increases every single year in report output in this country.
 

Want to know how many of 2011's first time reporters (my favorites) were 10 billion Euro companies? At the click of a click, you can find that close to 20% of all the first time reports published in 2011 were some of the largest companies around, while the major increase is in the 1 – 10 Billion Euro companies, indicating, perhaps that Sustainability Reporting is starting to reach the suppliers of the largest companies, and a range of other companies who have realized they are no longer immune to sustainability scrutiny.

 

Want to know if reporters in your region use the GRI Reporting Framework?

 

If you are in South America, you will tend to be the odd-one-out if you don't use GRI, but if you are in North America, you have the opportunity to make your mark.

 

CorporateRegister.com's data includes detailed breakdowns of reports on a global basis by region, by country, by sector, and more as well as on a specific country basis by company size (revenue), by GRI adherence and by verification. You can even check how many Stock Exchange listed companies publish Sustainability Reports according to nine leading sustainability indices.

 

Want to know how many companies have published integrated reports? Or reporting companies participating in the UN Global Compact? A doddle. A couple of clicks and the data is at your fingertips.

 

As a Full Member, you also have access to very detailed sector statistics for your sector and a list of all the recent reports published.

 

Why is all this important? Sustainability Reporting is a dynamic field, constantly evolving, with new trends being established as we blog. Benchmarking the external reporting landscape is often an important factor in "selling in" reporting to senior management, or promoting your leadership in the reporting field externally. For example, if you are about to publish a Sustainability Report in Moldova, according to the CorporateRegister.com database, you will be only the third company ever to have produced a Sustainability Report, and if you are in Liberia, Antigua or Cuba, you will be the first reporter!

 

 

More than the trends in numbers and types of reports and countries and companies, the CorporateRegister.com Membership offers another fabulous feature which I just love.

 

 

PDF Search

This is the facility to search the contents of any Sustainability Report for any keyword over any period and any sector and any country. Suppose I am writing a Sustainability Report for a client in the electronics sector and I am interested to see who has reported on conflict minerals and how. Here we go with a PDF search for "conflict minerals" in reports published in the "technology hardware and equipment" sector during 2010 and 2011. Within seconds, I have a list of 57 reports which includes Lenovo's 2010-2011 Sustainability Report, Arm Holdings plc's 2011 Corporate Responsibility Report, Sun Microsystems Corporate Citizenship Report for 2010 (now Oracle) and a whole load more. A click on any of these report profiles immediately gives me some basic information about the report such as publication date, number of pages, adherence to GRI, AA standards and another click enables me to download the report PDF.

 

You can have a bit of fun with the PDF search too. I did a search for "condom" and got 1,147 results. What does that tell you? Well, two things. First, that in some companies, distribution of condoms to employees and their families is part of their Corporate Responsibility program, as reported for example by Rangold Resources in their 2010 Annual Report. When I download that report, the internal PDF search takes me right to that condom reference.
 

The second thing I discovered when I searched for condoms was that many of the 1,147 returned results are not only condoms, but condominiums! Haha. But that's an interesting subject as well!
 

Of course, I couldn’t not search for my most favourite words in the world – ice cream. Of all the reports published between 2000 and 2011, only 354 refer to ice cream. But wait, another 76 reports refer to ice-cream, the hyphenated version. And a further 23 reports refer to icecream, the one-word version. This doesn't affect the taste, however, so I am quite comforted that ice cream and ice-cream and icecream are so well represented in the world's Sustainability Reporting landscape.

 

Here's a little quiz – out of a selection of five classic Sustainability Report keywords, which appears in the most reports published in since 2000?

 

Environment - Employees - Community - Ethics - Carbon

 

 

And here are the answers:

 

• Environment: 26,057 reports

• Employees: 24,861 reports

• Community: 23,482 reports

• Carbon: 19,050 reports

• Ethics: 12,591 reports

Here's another interesting thing. Creating Shared Value. The new Sustainability Buzzword appeared in 46 reports in 2011 but only in 13 reports in 2010 and just 2 reports in 2007 (one of which was a Nestle report), following publication of the famous Michael Porter and Mark Kramer article in HBR exposing this concept.

Anyway, before I get carried away, the point is that this PDF search tool is an invaluable resource to know what's going on quickly in the reporting landscape and find out who's reporting what and how things are changing.

But if you are not a Full Member of CorporateRegister.com, don't despair. You can still get free access to many of the reports by signing up for a personal account which enables you to view a range of reports (up to a certain limit), access Expert Report Reviews of a range of Sustainability Reports using the CorporateRegister.com "3C" framework of Content, Communication and Credibility, offering sharp insights from reporting experts and commentators (including myself) and also view entrants and vote in CRRA, the largest global annual online report awards.

This post might sound like an advertisement for CorporateRegister.com, and perhaps it is. It's unsolicited, however, though I did request permission to share the proprietary data and charts used in this post. The way I figure it, some things are worth sharing. My request also prompted a discount for The CSR Reporting Blog readers. If you send in your Application Form quoting the code CSRBLOG before end September 2012 you will receive a 5% off published early-bird prices, and if you apply between 1st October and 30th November 2012, quoting the same code, you will receive a 10% discount off published prices, from CorporateRegister.com (No, I don't get a commission, just trying to be nice to my faithful blog followers). You can apply for Full Membership here.

Off I go now to read the 453 reports which contain ice-cream, icecream and ice cream.

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Part Two: Sustainability: What the Numbers Tell You

Since my recent Sustainability: What the Numbers Tell You post was so resoundingly successful, I have decided to maintain the momentum and  take a look at some more numbers. This time I am going to look at environmental metrics that were covered in the Sustainability Practices 2012 Edition, which I fairly glossed over in my previous (resoundingly successful) post. The Report covers a range of environmental metrics including those relating to: emissions, energy, water, waste, recycling, packaging, purchasing and spills and fines. Let's start with this number:

39%

of companies in the Bloomberg ESG 3000 Index report having a Climate Change Strategy. This compares with only 26% of the S&P 500 and 16% of the Russell 1000. (Just to remind you, the Bloomberg ESG 3000 covers a range of global companies while the S&P and Russell indices cover large-cap U.S. companies. So when the Bloomberg is higher than the S&P/Russell, it means that the world is doing better than the U.S.) In this case,  U.S. companies have not yet caught up on climate change as something they need to be making decisions about.

Many people probably don't know the difference between a climate change strategy and reducing energy consumption. In the Sustainability Practices Report, a climate change strategy is defined as: "a set of risk management procedures designed to mitigate the impact on business operations of climate change". Typically, as defined in the report, such a strategy will include: an assessment of the energy efficiency of the business, a commitment to capital investment in environmentally preferable technologies and a search for new sources of capital through commodity trading of GHG emissions or government subsidies for GHG emission reductions. 71% of big companies (over $100 billion revenues) have apparently given this some thought as they do have a climate change strategy. Only 22% of companies under $1 billion have done the leg-work in this area. The rest of them either they have a policy and are not disclosing (unlikely) or they don't have a policy and they are ostriching (likely). That's a shame, because "if you think mitigated climate change is expensive, try unmitigated climate change", (a quote from Dr Richard Gammon) .

And now for a little quiz: How many of the Bloomberg ESG 3000 actually report their total carbon  emissions?
A: 83%
B: 72%
C: 65%
D: 48%
E   34%
F:  21%

Yes, great, you were either wrong or right. The correct answer is:

 34%

That's it. Just over a third of the world's leading companies disclose their total carbon emissions. But this is not really the world's companies - it's Japan. In the Bloomberg 3000, there are 644 companies from Japan of which 80% disclose CO2 emissions, which is required by law. In the U.S., for example, only 8% of the 70 U.S. companies in the 3000 Index disclose CO2 emissions, which is the lowest rate of disclosure across a range of countries. The Netherlands and Sweden do better at 70% and 62% respectively, but France and the UK are lagging with 39% and 30%. This might be changing fairly soon in the UK with new legislation which will require large listed UK companies to disclose GHG emissions.  But disclosure is one thing and sustainable performance is another.  Think about this next number:

16,536,533

which is the average total CO2 emissions in tons from the 36 disclosing companies in the S&P 500 Index. This is a whopping 5 times higher than the total emissions from the 1,033 disclosing companies in the Bloomberg ESG 3000.  Utilities and energy companies reported the highest level of emissions, as you might expect. It takes energy to produce energy, apparently. Double whammy. When normalized per employee, we find that the utilities sector produces 1,473 tons of CO2 emissions per employee (median, not average). This is equivalent to emissions per employee resulting from powering 167 homes with electricity for a full year, or running 262 passenger cars for a full year. Wonder if all those employees think about that on their morning commute: "Hah, wonder how many cars on the road the carbon emissions resulting from my working today will equate to?" Perhaps this could be the next stage in sustainability-driven Employer Branding. It might work for the Financial Services Industry, where CO2 emissions are a mere 3 tons per year per employee (median). "Do you feel you have a personal responsibility for protecting our planet? Come and work for us. Your work will generate only 3 tons of carbon emissions per year, which is less than the equivalent of keeping one car on the road. You can manipulate interest rates with hardly any impact on the environment".  

But, enough of CO2, let's go deeper and look at energy efficiency. Consider these numbers:

 1,933  -  249  -  321

These are the actual numbers of companies in our three reference indices of 3,000, 500 and 1,000 companies which declare that they have an energy efficiency policy. 64%, 50% and 33%. I find that incredible. Forget sustainability, just think about energy costs. Heck, we even have an energy efficiency policy in our home! (Well, I admit, it's not a written policy, but if the kids leave the lights on in their bedrooms, they know there will be unpleasant consequences). Why wouldn't businesses have an energy efficiency policy? Ah, you might say, "companies which are primarily office based have more significant sustainability impacts to think about and more important cost considerations". Ah, I might say back to you, "and pigs can fly".  Even the financial sector, primarily office based as it may be, has a higher rate of energy-efficiency policy disclosure at 52% of companies than the energy sector itself at 46%. Energy efficiency is the second most material issue for companies everywhere, based on a study that was done last year on materiality issues. So how come so few have a policy? Possible they are just doing it because it's in their DNA. (A friendly reference to Oliver Balch, who tweeted "Please, one piece of advice to all companies: ban the phrase 'In our DNA' from your corporate lexicon"). Consider this number:

5%

which is the percentage of companies in the Bloomberg ESG 3000 which report using renewable energy. That's just 164 companies. For all the others, renewables are apparently not yet in their DNA.

Moving on to water consumption, consider this:

3.72

is the ratio of average water consumption in the U.S. based S&P 500 to the average in the Bloomberg ESG 3000. The average water consumption per S&P company in the U.S. sample (104 companies disclosing) is 3.72 times higher than the global sample (1,111 companies disclosing). Clearly, size does matter, as the bigger companies have higher water consumption.  Yet still only 74% of the companies in the $100 million revenue category disclose total water consumption, despite the fact that the median water consumption for this group is over 35 million cubic meters in comparison to a $1-10 million revenue company which uses 1.4 million cubic meters per year. With water scarcity becoming the number one resource issue globally, it seems incredible that disclosure for such large corporate users should not be mandatory, leaving 26% of the largest companies in the world to decide for themselves whether to manage water consumption transparently or not. But it gets worse. Consider this:

2%

is the number of companies which report that they use recycled water. 74 companies in a sample of 3000. But it gets worser. Waste is also one of the big drags on our economies and quality of life, not to mention sustainability. Here's another number:

31,739,944

is the average waste in tons generated by companies in the materials sector (which is made up of companies that manufacture chemicals, construction materials, containers and packaging, paper and forest products, extractives etc) which is more than the total average waste of all the other sectors added together, yet only 36% of companies in this sector report on the total levels of waste generated. Waste is cost. More often than not, it's unnecessary cost. How are investors using this information? Companies which are generating so much waste are also wasting investors' money.  Which brings us to the next number:

$997,299

which is the average amount that companies in the Bloomberg ESG 3000 spend on environmental fines each year. In the S&P 500 index, this becomes a whopping $2,224,831.

I could go on, but I won't. The Sustainability Practices 2012 Edition Report is an encyclopedia of data and comparative numbers. I have given you a jump start. You'll have to do the rest of the leg-work yourself :)  

By now, I think you get the picture. It's one of desperately poor levels of disclosure. Despite the growing momentum of voluntary disclosure and Sustainability Reporting, frameworks, measures, surveys, CEO commitments, investor pressures and all the hype that this brings with it, the picture on transparency is still bleak. Most of the largest companies in the world are barely disclosing most of the most important sustainability metrics. And this low level of disclosure gets proportionally lower and lower as company size decreases. In the U.S., performance is generally lower in comparison to the rest of the world. So it's fabulous that the U.S. is now leading the Medals League Table at London 2012 (39 Gold Medals as I write), but sooner or later, even that performance will not be sustainable without stronger and more transparent behavior by American corporations.

There is something about numbers. They clarify our reality. In this review of environmental sustainability and transparency-by-numbers, that reality is rather depressing, because there is a stark realization that, for all the talk, the results are pretty shameful and perhaps, voluntary disclosure is not all it's cracked up to be. Self-regulation is more self than regulation. When the authors of this Sustainability Practices benchmark report maintain that "there is significant room for improvement", I think we can safely agree that this is more than a mild understatement. With Paragraph 47 not promising to be massively instrumental in driving change in transparent disclosure, we have to wonder just what will propel corporations around the world into a different paradigm, before something else propels them out of ostrichland.

An eternal optimist, I believe change will happen. As a realist, I see it's painfully slow. As a pragmatist, I accept that we have to move on and, as the amazing Pema Chodron says, Start Where we Are. As an icecreamist, I know there is always comfort just around the corner.

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

100 companies benchmarked for CSR initatives

There are so many reports on CSR and Sustainability published by so many different people, companies and groups that it is hard to keep up with all of them. I find myself having to skim many of them, and even that's usually not before around 2 in the morning. Many offer minimal net additional value to the wealth of words and numbers reaching my screen. So when a report is produced that makes me stop everything and study deeply, I am thankful because it means I am learning something new and important that contributes to my knowedge and thinking about sustainability, and that makes me a better consultant, a better CSR blogger and a more critical and contributing member of the professional CSR community. This was my experience with the new Sustainability Initiatives 2009 Report from SLM Insights, a division of Sustainable Life Media, and Zumer.com. An Exec Sum can be downloaded here.

This report analyses over 6,000 individual sustainability iniatives from 100 companies in 10 sectors, producing detailed results showing: the relative rankings of each company in each sector based on the quantitative (cost-reduction driven) initiatives and qualitative (revenue-generating) initiatives.  There is also a comparison of the nature of the initiatives in each sector, showing where most  companies are putting their time and energies. The sectors analysed (and the three top-ranked companies in each sector)  are:

*  airlines ( Quantas, British Airways, Cathay Pacific)

*  alcoholic beverages (Anheuser Busch, Foster's Group, InBev)

*  automotive (Daimler, Honda, Toyota)

*  clothing (Gap, H&M, Inditex)

*  consumer electronics (Sony, Samsung, Toshiba)

*  diversified foods (Nestle, Kraft Foods, Danone)

*  footwear (Timberland, Adidas, Puma)

*  oil and gas (Royal dutch Shell, Total, Suncor)

*  paper products (Weyerhaueser, Norske SKkog, Catalyst)

*  personal household (Procter and Gamble, Kimberley Clark, SC Johnson)

Each sector is a mini-report in itself, and offers a comparable study of the focus and achievements against 38 different data points accross 4 categories:

*  Environmental Initiatives

   (leading iniatives here are GHG reduction, energy use and impact of products on the environment)

*  Social Responsibility Activities

   (leading initiatives here are community impact, employee benefits and  employee health and safety)

*  Product Responsibility Activities

   (leading initatives here are consumer health and safety, customerr satisfaction and marketing ethics)

*  Corporate Citizenship activities

   (leading initiatives here are transparency of political contributions, anti-corruption and CEO compensation).

What is also interesting in this report is the feedback from 1,700  consumers surveyed. In each of the consumer goods sectors, consumers were asked what is important to them,  data that can be contrasted with wthere the sector is actually focussing its efforts. In the Personal Household Goods sector, for example, energy efficiency is of most interest to consumers (42%) whereas the sector focuses 17% of its efforts in this area, with GHG reduction and material use being prominent iniatives. In the consumer electronics sector, consumers are most intersted in recycled materials used in product manufacture (48%) rather than the level of GHG emissions. Overall this report shows there is "significant discord between industry activity and consumer demand". A stark contrast reported in this context  is that Companies see community giving as an integral part of their sustainability program whereas consumers see corporate philanthropy as "old fashioned" , rarely affecting their purchasing decision. These are most interesting insights which could assist compaines in considering how their sustainability efforts address consumer  concerns, rather than more generic sustainability considerations, for added consumer engagement.

Findings and conclusions from this report are multiple. Some are:

Consumer interest in sustainability initiatives differed across industries - as a result, companies must address the specific consumer pain-points  for each industry

Minimal inter-industry collaboration occurred; opportunity exists for companies to share and learn best practices

Consumers only prioritize GHG emissions reductions in categories where there is a direct, visible output, for example in the automitive sector, where fuel efficiency was mentioned by 81% of consumers and GHG Emissions levels by a further 16%. In the clothing and apparel sector, for example, GHG emissions were not mentioned by consumers.

Waste reduction and recycling is an increasing priority

Companies are reporting on their sustainability activity more frequently and releasing shorter, targeted reports as a result

Companies are prioritizing supply chain efficiencies and seeking ways to reduce costs by improving energy use, water use and waste recycling programs

and perhaps one of the most significant conclusions of all, and one of the most disturbing, is this:

Few companies view sustainability as a core part of their global strategy; most still view sustainability policy as a means to mitigate risk and achieve operational efficiencies.

This means that CSR and sustainability is still at the level of short-term project-focused thinking and less at the level of creating true long term triple bottom line value - but more about this in my editorial for CSRwire.com  which will be published later this month.

I have lots more to say about the implications and insights this report raises and hope to find time to blog more with specific insights in coming days/weeks. In the meantime, these headlines should serve to give you an an appreciation for the richness of this study.

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)