Do you trust Sustainability Reports?

This follows my post about trust and the Top 100 Thought Leaders in Trust. Which got me thinking.

There are some questions that are apparently very simple to ask but not so simple to answer. Do you trust Sustainability Reports? Of course, there are reports and reports. Maybe you trust part of what's written in a report, and maybe not other parts. Bottom line, however, if you don't trust it all, you don't trust it.

What makes sustainability reports trustworthy? We often talk about credibility when referring to Sustainability Reports, and this is defined as "the quality of being worthy of trust". So I guess it boils down to the same thing. Do we believe what we read? If yes, trust is the outcome. If not, mistrust is. But it's not quite as simple as that. Reports are not just about what is written. They are about who is writing them. When you pick up a report of a company that you don't trust, the credibility start-point of that company's Sustainability Report is already in the red. The report has to work much harder to be believable. But it's not quite as simple as that. One report doesn't do it. I have often said that what makes sustainability reports credible is the fact that they are one of a series ... one report is a drop in the ocean, a series of annual Sustainability Reports that display consistency over time is what builds trust. Consistency is a big trust differentiator in reporting. But it's not quite as simple as that either. Here are some more factors that influence whether we trust reports.

The CEO: Leslie Gaines Ross, with whom I had the honor to share a stage in Berlin last year, says that the reputation equity of a company is influenced by the reputation of the CEO at a level of 50%. When you get a CEO or a senior leader that makes non-trustworthy statements, this has a direct impact on the Sustainability Report credibility of the company. When a company's Chairman makes a public statement which is anti-gay, as in the case of Barilla, you have a hard time believing anything that is written in the company's Sustainability Report. When a CEO openly discriminates about people who do not match a beauty stereotype, as in the case of Abercrombie and Fitch, you are likely to have a hard time believing the Sustainability Report. Write whatever you want in your Sustainability Report, if no-one trusts your CEO, no-one will trust your report. 

The Bits you Leave Out: Reporting is often as much what you don't report as what you do report. If you have had a major scandal, major restructuring or major crisis, and this is not referenced anywhere in your report, what IS referenced in your report is treated with suspicion. One of the first things I generally ask my reporting clients is: what do you not want to report? Every company has these. Every company wants to minimize the negatives. Yet it's these very issues that create credibility and trust in your report. After the big celeb scandals in the UK, the BBC did not avoid reporting the impact on its organization.

After the horsemeat scandal in Tesco frozen beefburgers, Tesco did not shy away from referring to its actions to increase food trust in the 2013 Tesco and Society Report.

The bits you leave out are the bits everyone wants to read. There is a likelihood that there is even an expectation that you will report  on exactly those things. Not doing so erodes trust in your reporting and in your company.

The Reporting Ecosystem: GRI was devised to create a common platform for reporting so that we would have a measure of comparability that would also make it possible to know which reports are green-washing and which are serious about reporting the issues that matter. While comparability has never truly been achieved, the overarching framework of GRI sets an expectation of the scope of reporting and the basic elements of a report that are considered to meet the needs of a wide range of stakeholders. Reporting whatever suits you, without referring to a broad set of stakeholder expectations can often erode trust, as readers believe that you are reporting what's easy or shiny and not what matters. 

The Buzz Ecosystem: Whether you trust a Sustainability Report can often be influenced by the buzz on the street and not the report itself. When the buzz about your company is negative, your report has to work much harder to generate trust. So, for example, companies such as Walmart, Gazprom, Chevron and a range of other companies that feature in the Public Eye Hall of Shame have to overcome gross mistrust before they can build trust. Reports such as Behind the Brands expose the issues that companies are addressing, or not, in their supply chains, and these can influence the way you read the reports of the companies reviewed. On the positive side, we might argue that rankings and ratings (if they themselves are credible) create a more positive disposition regarding whether you are prepared to trust a company's report. The DJSI rankings are often held to represent a solid guide to sustainable corporate practice and high-rankers tend to gain a head-start in trust.  And lets not forget the Twitter community and other online forums, bloggers and commentators. They all create the reporting buzz ecosystem and influence the way you relate to a report by setting expectations, positive or negative.  Managing your buzz ecosystem is part of managing trust in your Sustainability Report. 

The Quality of the Content: Reporting quality impacts the way we trust reports. If we get past the trust barrier and actually read the report. If the content is poorly written, if the report is poorly constructed, if there are many errors in the report, if the data is not clear, if there are gaps in data presentation... everything influences how you read a report and how you trust it. Also, companies that translate their reports into English are to be commended, but if that translation is just awful, it reduces our trust in the report and the company.  

The Timing: Who trusts a report that is published more than 12 months after the end of the reporting period? Enough said.

The Person Behind the Report: Behind every report is a person who created it. Often there were many people involved in the creation of the report. But there is always one person who has the ultimate responsibility for a report and its contents. If we trust the person, we trust the report. Very few people put themselves on the line and admit to writing and being responsible for a report and very few people who are reporters allow us to get to know them. I say that reporters in companies should make themselves more accessible, identify themselves with the reports they have created and be available to the report-reading public. These days, there are many online opportunities to get to know corporate sustainability reporting leads, with CSRChats, webinars and so on. A couple of examples spring to mind - Kathrin Winkler of EMC puts herself out there - she is often interviewed, writes a great blog, and generally helps us get to know her and what she stands for. Before I even open EMC's sustainability report, I am inclined to start with a bag-load of trust. Dave Stangis of Campbell's is another great Sustainability Officer who lets us get to know him. And Nikki Kelley King, who leads the Campbell's CSR Report compilation, tells her story in the latest report. Getting to know Dave and Nikki through their willingness to talk about themselves and what's important to them is a big plus in the trust scale for Campbell's reporting.  

These are just a few thoughts about Sustainability Reports and trust. It's not an exhaustive list and I am sure there are many other factors that impact the way we trust Sustainability Reports or otherwise. One of the key takeouts is that reporting is just part of your corporate reputation and your corporate communications. Reporting is not everything. It is part of a holistic approach to sustainable and responsible business behavior that must be reflected across all stakeholder touch-points. The downside is that, even if your report is super-trustworthy, people may not trust it. The upside is that when you manage your reporting as part of an integrated approach to sustainability communications and aligned corporate behavior, it can contribute significantly to positive reputation, credibility and yes, trust. 

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing YOUR Sustainability Report? Contact elaine: info@b-yond.biz   

Dripping Sustainability

I was pleased to read a great article by the fabulous sustainability writer @LeonKaye on the Guardian Sustainable Business Water Hub about how water stewardship provides a return on investment and that The Campbell's Soup Company has gained competitive advantage from investing millions in water management projects. You can read the article here.

This is the sentence that caught my eye :

"The company urges the growers of its top five agricultural ingredients – tomatoes, carrots, celery, mushrooms, and jalapeno peppers – to adopt more efficient practices such as drip irrigation and the construction of retention basins to curtail rain runoff."

You may not realize it, but this sentence demonstrates an exemplary approach in supply chain management by a food manufacturer who is zooming in right to the basic building blocks of the company's value chain to encourage more sustainable practices at ground level. In this case, driving a change in agricultural practice to include drip irrigation represents a major shift in the way such crops are grown and yields major environmental benefits and productivity gains. This leads to greater and more efficient food supply, far beyond the direct benefits to Campbell's Soup. Drip irrigation is currently used only in about 4 - 5 per cent of world irrigated fields. Moving the agri-sector to drip is truly a step towards advancing sustainable food production for a 9 billion world.

Quick course in drip irrigation.

What is it: Drip irrigation is an irrigation method which saves water, fertilizer and nutrients by allowing water to drip slowly to the roots of plants, either above ground or sub-surface, through a network of valves, pipes, tubing (driplines), and drippers.

Why it saves water: Most agricultural irrigation is done using furrow or flood irrigation. Essentially this means that water is pumped or transported to the fields and is allowed to flow along the ground among the crops. Flood irrigation is inefficient as too much water gets to certain parts of the field and not enough to others. In fact, about half the water doesn’t actually reach the crops. The drip irrigation method channels water directly to the crop, and using specialist technology, ensures that the crops get exactly the right amount of water, no less, no more, and at the exact time they need it.

Amount of water saved:  Depending on the method, drip irrigation can be up to 100% more water efficient, though a general average would be 50 – 70% water saving versus traditional methods.

Why it saves fertilizers and chemicals: Chemigation and nutrigation work on the same principles. By drip-dosing fertilizers and nutrients to crops, none is wasted, doses are accurate and far smaller quantities are used. As much as 50% of chemicals can be saved using this method.

It is probably not necessary for me to explain why all this is so important, but I will.

Drip irrigation is a truly sustainable method for agriculture which minimizes water consumption, minimizes energy use through efficient operations, minimizes use of chemicals, delivers improves yield quality with low crop waste levels and in general offers many farmers a cost-effective solution to develop a viable agri-business, thereby enhancing local community development and quality of life. In developed markets, this can be of major assistance in reducing the burden of resources required by the demands of our consumer society. In emerging markets, it can mean the difference between poverty and a respectable livelihood for many local farming communities.

It probably is necessary for me to tell you why I am so interested in this, so I will.

Netafim Ltd. is a client of my company, Beyond Business Ltd. Netafim has been a world leader in drip irrigation technology and application since its founding in 1965 , delivering drip solutions to thousands of farmers in over 100 countries. The more I learn about drip irrigation and the different technologies involved, the more I find it fascinating. I won't go into too much detail here (you will have to wait for Netafim's first Sustainability Report to be published in 2012 :)), but a one example to give you the general idea:

Netafim has developed a Family Drip System, which is perfect for the small farmer for use in plots of up to 2000 sq. meters. It works on gravity with no pump or other energy requirements in open field or greenhouse crops. Being a relatively simple system, it is low cost making it accessible to most small farmers. This system is now used widely in Africa and other emerging markets.

Take a look at this short clip about how this system has transformed the lives of a settlement in Kamale, Kenya. The livelihood of everyone living in Kamale depends on farming. Prior to using an irrigation system, the women of the settlement would wake at 5 am to fetch water from far-away sources. One women tells how she was not able to breastfeed her child because she spent so many hours per day just fetching water. Incredible!.  

So the question remains, when the world is crying out for water efficiency and when the food security of future generations is already under threat, why is this seemingly perfect solution used only for 4-5 % of global irrigated fields? Why is this not an absolutely no-brainer? In Israel, Netafim's home base, over 75% of crops are grown using drip irrigation. In the past 30 years, agricultural output in Israel has increased fivefold without any increase in water consumption. "Greening the desert" has been both a necessity and a major achievement, as only 20% of Israel's land is arable. Today, more than 50% of Israel's crop exports come from semi-arid areas such as the Arava desert.

Despite major advances using drip irrigation in recent years, there seems to be two main reasons for the lack of uptake at mainstream level. First is that irrigations systems require an initial investment, which given the often small scale of farms, may be too hefty for family farmers to afford without government assistance or NGO support. Second, so I've heard, is that the farmers are by nature a conservative and tend to use methods which have been taught through generations and unwilling to risk a crop in the hand for two in the bush.

This is why the Campbell's initiative is so important. By making sustainable farming methods a condition of supply, and by partnering with farmers to help them adopt new technology, major sustainability changes can be achieved. This approach offers incentives right throughout the value chain: Campbell's get a more cost-enviro-efficient raw material, farmers get better yields and access to customers and markets, we all get higher-quality, less chemicalized food, and more if it, and Planet Earth lives on to support our descendants.

By the way, as an ice-cream addict, I am thinking of having Netafim make me a special drip-irrigation system to deliver ice cream to my spoon at a constant rate 24/7. Bet they didn’t think of that one! (ahem.. my patent, please).

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)