I published a review of PepsiCo's report - guess what happened next ....

Over the years I have written many reviews of Sustainability Reports for different publications, in addition to the comments and observations I make here on my blog. My most recent report review was published in the October edition of Ethical Corporation Magazine and it was all about food and bev giant PepsiCo's 2014 Performance with Purpose Report. As Ethical Corp. is a subscription-based publication, I won't share the entire review here. However, I will share two interesting things, one insight that particularly impressed me in the Performance with Purpose Report, and one after the review was published. 

The insight

I'll reproduce a short section from the published review:

"A very positive feature of PepsiCo’s reporting is the linkage between sustainability performance to business growth and profitability. Most companies keep financial and non-financial messaging conveniently separate and it is rare to find an economic expression of sustainability benefits in standalone sustainability reports. PepsiCo’s press release leads with a highlight of financial benefits: “Environmental sustainability programs, including efforts to use less packaging and energy, have saved the company more than $375m since 2010.” 

Throughout the report, these references are specific: in 2014, PepsiCo recycled and reused 90% of waste with estimated savings of $3.5m compared with 2009; decreased absolute water use by one billion liters, generating $17m in cost savings; removed over 89m pounds of packaging materials resulting in $48m of cost savings and improved energy efficiency delivering energy cost savings of more than $83m. This is good for the financial community who use sustainability reports, and for PepsiCo stakeholders who are interested in impacts on society, and it also serves as an encouragement to other companies, demonstrating that sustainable practice can also be profitable practice. 

In other areas, PepsiCo incudes outcome-type statements that show the impacts of performance which are less easily quantifiable in money terms. For example, in 2014, PepsiCo India supported water-saving programmes that benefited more than 50,000 people."

I think you get the picture. Sustainability helps a business make a positive contribution to society AND do business. While it's great to declare how we are doing on energy savings and other sustainability-type metrics because we value our future on the planet, positive economic value realized from sustainability activities is nothing to be ashamed of. The opportunity to link sustainability impacts in the business to the sustainability impacts of the business is still not considered deeply by most companies. Just because a report is a Sustainability Report doesn't mean it cannot mention money. In fact, it should. Only a handful of companies get this. Marks and Spencer has for years demonstrated the economic contribution of Plan A in a clever way.

BT also makes an explicit link between business and economic benefits of sustainble practice. In BT's Better Future Report for 2015, the company confirms that global portfolio revenue from products and services contributing towards BT's goal to help customers reduce carbon emissions by three times more than the carbon impact of BT's business was GBP 3.4 billion in 2014-5 FY.  And there is of course the Kering Environmental Profit and Loss model that turns everything into money to the point where just reading the report may well generate economic impact. UPS also makes an impressive connection between environmental and economic efficiencies in UPS's 2014 Sustainability Report.

The more we accept that it's OK - in fact, it's imperative - that sustainability benefits equal business benefits as well as social and environmental benefits, the more we will see these sort of linkages in Sustainability Reports and also in Annual Reports. I have often said that you should write a Sustainability Report with a financial hat on and you should write an Annual Report with a sustainability hat on. That's assuming you wear a hat when you're writing. PepsiCo, in the 2014 report, has made great progress in making this connection.

What happened next 

No less interesting than the linkage of integrated sustainability to business performance is what happened after my review was published in Ethical Corporation. I received an email from Camille Aylmer, Sustainability Communications Director at PepsiCo, who wrote: "......we really appreciate the careful attention you gave to reading through our materials....There was some great feedback in the article that has created a lively discussion internally. I’d love to grab 15 minutes with you by phone to discuss some of these items....." 

Now, while my review included praise for PepsiCo's best practice in creating aforementioned linkage, it also included a few criticisms and recommendations. (So you all know me by now, it's rare that I don't have something challenging to say)  (even though my intentions are positive!). Yesterday, I chatted with Camille and was impressed by her questions. She wanted to know about my approach in reviewing the report, whether I had looked at prior reports, what stood out for me as I reviewed the report, why I had highlighted certain aspects. I genuinely felt she wanted to learn about what was important to me, and that this might help PepsiCo in developing strategy and reporting going forward.

I am one of mbillions of PepsiCo stakeholders and my teeny weeny voice is hardly the loudest, coherentest, intelligentest or importantest among all the experts that I imagine PepsiCo engages with on sustainability matters. But the fact that Camille took the time to track me down (ok, that's not hard), and have a really positive conversation with me (that's harder) earns her and PepsiCo top marks (and ice cream) from me.

I was happy to respond to Camille and share my thinking. I was delighted to know that someone actually reads my report reviews (apart from the Ethical Corporation editor) and that maybe they do a little good. Kudos to PepsiCo for reporting and for not being too big to take note.

Oh, and while you're here, take a look at PepsiCo's 2014 Report. Give feedback. They listen. 

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 first / next Sustainability Report? Contact elaine: info@b-yond.biz  

Nine Magic Tricks in Sustainability Reporting

In many cases, the publication of a Sustainability Report can be likened to a magic performance. I was taking a look at the website  of Max Maven, an internationally renowned magician. He is currently featuring on a TV show in which amateur magicians present their tricks in an attempt to fool the Master Magician, Max Maven. Max then has to pronounce his verdict: either the trick fooled him or it did not, because he recognized the magic technique behind the trick. Imagine what Max Maven would say about Sustainability Reporting. Would he be fooled, or would he be able to see right through the tricks used in Sustainability Reports? Or would he take Sustainability Reports at face value, believing them to be accurate representations of corporate performance and impact?

Techniques used in magic are varied and incredibly creative. The Wikipedia Magic page lists several types of magic. All the magic types and descriptions below are reproduced from that page.

Production: The magician produces something from nothing—a rabbit from an empty hat, a fan of cards from thin air, a shower of coins from an empty bucket, a dove from a pan, or the magician him or herself, appearing in a puff of smoke on an empty stage—all of these effects are productions.

In Sustainability Reporting terms, the production is the report itself. Some companies produce reports as though they are the subject of a magic trick, appearing in a puff of PR in an email alert somewhere. In other words, companies which have not pursued a sustainability program, and have no sustainability performance results of note to disclose, or simply want to get on the reporting train without actually wanting to be transparent, suddenly produce a Sustainability Report, as if by magic. We all know by now that Sustainability Reporting is part of a process, and not the first part by any means. In order to produce a Sustainability Report, you first have to produce results. A Magic Sustainability Report would not fool Max Maven. And it doesn't fool us, either. In the case of McKesson, it also didn't fool William D'Alessandro, who reviewed the McKesson Fiscal Year 2011 Corporate Citizenship Report for CorporateRegister.com. In this review, William says: "Taken together, the information McKesson metes out is too weak to alleviate any but the mildest stakeholder concerns about the corporation’s social and environmental affairs." Sounds like the McKesson report contained a little magic dust.

Vanish: The magician makes something disappear—a coin, a cage of doves, milk from a newspaper, an assistant from a cabinet, or even the Statue of Liberty. A vanish, being the reverse of a production, may use a similar technique, in reverse.

In Sustainability Reporting terms, the vanish is the information that the reporting company doesn't want you to know. It is the very careful omissions that the sustainability reporters stealthily slide under the reporting radar. In Kathee Rebernak's Ethical Corporation review of Shell Coorporation's 2011 Sustainability Report, she refers to several items that have vanished, for example, the lack of discussion of oil's contribution to climate change, the impacts of hydraulic fracturing (fracking) and the relative pace of biofuel production in comparison to global fuel demand. It all just vanished, as if by magic!

Transformation: The magician transforms something from one state into another—a silk handkerchief changes color, a lady turns into a tiger, an indifferent card changes to the spectator's chosen card.

In Sustainability Reporting terms, the transformation is the way sustainability reports create good performance out of bad performance, or present an exaggeratedly positive version of the truth about their sustainability results. Peter Mason, in his Ethical Corporation critique of the 2011 Sky Bigger Picture Review , writes: "More evidence of Sky giving itself an easy ride emerges in the environment section, where the review describes the company’s 10 green targets as “very challenging”. Figures in the data section suggest otherwise. Sky has set itself a target of a 20% increase in energy efficiency by 2020 on a 2008-9 baseline, yet it has already comfortably exceeded that figure – with eight years to go. It wants to cut CO2 equivalent emissions by 25% by 2020, yet had already made reductions of 19% by mid-2011."  Similarly, in my review for Ethical Corporation of the Boeing 2012 Environment Report, I made the following point: "The report says: “Boeing has reduced its environmental footprint at a time of significant business growth.” The company makes reference to “unprecedented increases in airplane production”. With mainly negative revenue growth and largely flat average aircraft delivery levels noted in this report, Boeing’s environmental goals don’t seem to be breaking the sound barrier." 

Another example of transformation can be found in Raz Godelnik's mince-no-words Triple Pundit review of Chevron's 2011 CSR Report. Raz writes: "The problem starts with the general tone of the report which is positive to an almost ridiculous degree.........Chevron didn’t manage to create a balance, providing almost only good news. ........in too many parts of the report, the positive information is either presented in a biased way or is missing some important parts."

It certainly needs some sort of magic wand to make poor performance sound like great performance. Magic wands should not be standard-issue for sustainability reports. Sooner or later, when the magic trick is over, we end up seeing the company as it truly is.

Restoration: The magician destroys an object, then restores it back to its original state—a rope is cut, a newspaper is torn, a woman is sawn in half, a borrowed watch is smashed to pieces—then they are all restored to their original state.

In Sustainability Reporting terms, the restoration is the presentation of a comeback after a disaster, or the upside of a downside. For example, my review, published in the Sustainable Business Forum,  of  Chrysler's first Sustainability Report for 2010,  offers a frank review of how Chrysler has emerged from the past couple of years a different company, with new management, a new strategy and a strongly Italian flavor. The report expresses Chrysler's change of heart (and almost everything else), getting the message over loud and clear that, for Chrysler, it is definitely not business as usual. By 2011, the restoration magic had not completely worked and instead of reverting to its original state,  Chrysler's second report for 2011 is now called Fiat.

Teleportation: The magician causes something to move from one place to another—a borrowed ring is found inside a ball of wool, a canary inside a light bulb, an assistant from a cabinet to the back of the theatre, a coin from one hand to the other.

In Sustainability Reporting terms, teleportation is the use of fabulous case studies which transport us from the drab world of recording energy consumption and carbon emissions, to the life and soul of community involvement through the use of glorious case studies, amazing imagery and personal stories of inspired or inspiring people. Some sustainability reports are actually works of art in themselves. For example, the Kuoni Corporate Responsibility Report for 2010 takes us on a journey through the Lost Islands in the Maldives, Tuvalu, Kiribati and other exotic places.

When the magic wears off, however, the raw facts and candid discussion about sustainability impacts are still what makes the Sustainability Report a document of value.  

Escape: The magician (an assistant may participate, but the magician himself is by far the most common) is placed in a restraining device (i.e. handcuffs or a straitjacket) or a death trap, and escapes to safety. Examples include being put in a straitjacket and into an overflowing tank of water, and being tied up and placed in a car being sent through a car crusher.

In Sustainability Reporting terms, the escape is the assurance process. You invite an independent third party into your organization and, if they do their job well, they might just make you feel like you are being put through the car crusher. The escape is their Assurance Statement, because the minute they write that nothing has come to their attention that might not indicate the fact that there might not be anything that doesn't comply with the principles of materiality completeness and balance, you can breathe easy. Of course, not every assurance process is that rigorous, and not every Assurance Statement will feel like an escape, Sometimes it will just be another tick on the to-do list. But when it's done well, it adds value to the reporting company. See a good review of the Assurance Process by Joss Tantram of Terrafiniti  and also, an admission from the UPS Sustainability Communications Manager, Lynnette McIntire, writing for Triple Pundit, who confesses to enjoy the assurance process, describing it in this way: "a bunch of accountants come into your world for a rigorous review of your numbers. They require (gasp) documentation to prove your “facts.” They find those discrepancies between last year and this year. They challenge your subject matter experts on the methodology of their charts and graphs. And to be honest, they take a lot of glee in your mistakes."

Another form of escape is when the sustainability report gets a good review or wins an award. Regular reviews of sustainability reports can be found on CorporateRegister.com or in the Ethical Corporation Magazine, and occasionally on other sites such as Triple Pundit or those of different sustainability bloggers. Producing a sustainability report is always a risk. Transparency always makes you vulnerable, no matter how strong your performance is. Getting a good report review is like coming out of the car crusher unscathed. My review, for the Sustainable Business Forum, of De Beers Family of Companies Report to Society for 2010 notes: "The De Beers report is a delight to read, it is intelligently structured, well-cut, polished and completely aligned with the report's title "Living up to Diamonds". Getting an award for reporting is like escaping out of the handcuffs to safety. See the winners of the annual online reporting awards, CRRA, in 2012: "The star ... was Coca Cola Enterprises Inc., U.S. who took two awards with overall Best Report and Best Carbon Disclosure categories, and a runner up in the Best Relevance Category."

Levitation: The magician defies gravity, either by making something float in the air, or with the aid of another object (suspension)—a silver ball floats around a cloth, an assistant floats in mid-air, another is suspended from a broom, a scarf dances in a sealed bottle, the magician hovers a few inches off the floor.

In Sustainability Reporting terms, the levitation is  when the report contains no context whatsoever. It just remains suspended, in air, with no anchoring points of reference. I am referring to general context, such as prior year data, regional or sector benchmarks or relevant background information about the company's role in society or sustainability objectives. Emily Hayne's Ethical Corporation Review of the John Lewis Partnership Report for 2011 makes this point: "...the report as a whole fails to tell a compelling story. Rather than setting out performance in the wider context of the issues and challenges identified, it simply lists issues, indicators and activities. Individually many of these seem impressive, but the report fails to pull them together into a meaningful long-term strategy."

Penetration: The magician makes a solid object pass through another—a set of steel rings link and unlink, a candle penetrates an arm, swords pass through an assistant in a basket, a saltshaker penetrates the table-top, a man walks through a mirror. 

In Sustainability Reporting terms, the penetration can be likened to the report within the report. For example, in HP's Corporate Citizenship Report for 2010, and entire sixteen photo account of A Day in the Life of an HP Auditor enabled us to penetrate the detailed workings of the supply chain monitoring process.

Penetration might also be linkened to the mutliple types of Sustainability Reports produced by one company. Reports which link and unlink. Separate, yet part of a whole. This might include local reporting, for example, ArcelorMittal , where global and local reporting live side by side, linked by core strategy and messages, but very different in local flavor.

Prediction: The magician predicts the choice of a spectator, or the outcome of an event under seemingly impossible circumstances—a newspaper headline is predicted, the total amount of loose change in the spectator's pocket, a picture drawn on a slate.

In Sustainability Reporting terms, the prediction is, of course, the targets, future outlook and/or what we will do next section. Many reports do not contain predictions. Many of the predictions that some reports contain are also not predictions, because the targets are so vague as to be rather meaningless or, they always remain goals and never results. David Schatsky of GreenResearch did some analysis of sustainability goals and benchmarking and found, for example, that just five of the 11 largest global oil and gas companies have announced public environmental sustainability goals. There is no magic in setting good sustainability goals. But there is magic in delivering on specific targets. The Unilever Sustainable Living Plan includes some goals which, if they are achieved, will be truly magical. In the area of Greenhouse Gases for example, one Unilever target is "By 2015 we aim to reach 200 million consumers with products and tools that will help them to reduce their greenhouse gas emissions while washing and showering. Our plan is to reach 400 million people by 2020" but, Unilever say,  "We are finding this target challenging and our progress is modest." If Unilever does eventually manage to crack this, it will be nothing short of magic and Max Maven will be duly impressed, I am sure.

This concludes my round-up of Sustainability Reporting Magic. I am sure there are many companies with a few tricks up their sleeve that I haven't covered, and many more which think that the Sustainability Report will magically transform their reputation and protect them from all evils.

The truth is that there is no magic in Sustainability Reporting. Just as Max Maven knows, behind every magic trick is an accumulation of strategy, innovation, creativity, hard work, performance development, perfecting the script and flawless delivery. Behind every magic trick is methodology. Behind every Sustainability Report should be proven practice. Nonetheless, when you do come across that Sustainability Report which appears to do the best job possible, you can't help feeling that there's a little magic in the air.

 

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)

Deutsche Post, Adidas and Gazprom. Three reviews.

Three companies, three sectors, three sustainability reports, three sustainability report reviews. Every couple of months I publish a report review on Ethical Corporation. Here are the last three:

Deutsche Post DHL CR Report 2010
Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):  

Deutsche Post DHL’s 2010 online corporate responsibility report is designed like a complex logistics network navigated via a sleek online route map. It starts with a home page overview showing possible routes to a mass of information in a cleverly planned navigation hierarchy. You can start at the beginning or go directly to what interests you. Amply signposted, your journey is supported with infinite hyperlinks, in-section menus and an online mouse-over glossary for those bits of Deutsche Post DHL jargon that you might not be entirely familiar with. The complete content of this report is downloadable in a 246-page PDF or an at-a-glance overview of 21 pages. Report assurance is indicated online on each assured page. Accessibility and seamless navigability are best-practice features of this presentation, complete with an online feedback questionnaire and a promise that Deutsche Post DHL will make a €5 donation to Plant-for-the-Planet for each of the first 200 fully completed questionnaires received.

Deutsche Post DHL has 467,000 employees and operates in 220 countries. By far the most interesting aspect of its business is how the company could use its massive infrastructure and influence to transform the transportation landscape across borders and influence customers to adopt resource-efficient practices through new business models and collaborative initiatives.

Go Help is Deutsche Post DHL’s programme to address disaster relief, the new de rigueur corporate responsibility platform for logistics and technology companies, given the frequency of major natural tragedies that are occurring around the globe. Deutsche Post DHL has established disaster response teams, which have been deployed in many countries, providing local assistance in ensuring relief supplies get through. DHL has even developed an innovative form of waterproof packaging – “DHL Speedballs” – which can hold up to 25 kilograms, withstand airdrops better and stay afloat longer than other containers. They have been used in several relief efforts.

Overall, however, it is not easy to get to what really counts in this GRI B+ level report. There is no distillation of core issues raised by stakeholders about different aspects of Deutsche Post DHL’s business and no materiality prioritisation. The three pillars of the company’s strategy are surely worthwhile, but the lack of analysis of stakeholder expectations on a broader range of Deutsche Post DHL impacts and performance is an omission. Apparently materiality is the road less travelled on the Deutsche Post DHLhighway to CR transparency in an otherwise impressive report.

Adidas Sustainability Report 2010

Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):

The title of Adidas Group’s 11th sustainability report is: In the Real World, Performance Counts. And an intensive 116 pages of performance it is. Light on design creativity but heavy on content, the Adidas report is an example of attention to detail and thoughtful preparation. Complete with analogies from the world of sport, giving the air of a disciplined approach to sustainability, this is probably the group’s best report yet.

In the world of sustainability, performance is only part of the story. What counts are impacts. Adidas rarely ventures into the world of reporting impacts that describe what has happened as a result of their performance in terms of consumer impact, supplier training and even community engagement. This report stays very much at the level of the home game with the spotlight on what’s taking place on the Adidas field, but far less on the way Adidas is driving substantive and systemic change for stakeholders.

While it’s nice to see how many warning letters outsourced suppliers have received for not complying with ethical standards, some perspective of how Adidas has managed to change the game in over 10 years of focused working with suppliers would be welcome. In addition to data, the overall KPI score aggregating audit results in Adidas’s outsourced factories’ is lower than it was in 2007. The percentage of 3C (60% KPI score) or higher scoring suppliers is lower than it has been for the past two years and the number of warning letters issued to suppliers is higher.

An ethical supply chain is one of the most material issues and Adidas discloses how the group has responded to issues raised by stakeholders, including freedom of association issues in Cambodia, workers’ rights in Bangladesh and labour standards in El Salvador. But just how Adidas justifies the massive level of resource to support a sub-compliant supply chain is something that can be explored more fully in future reports. Performance is not only conducting audits. Monitoring is not the end result. Of greater interest is the effectiveness of such training, auditing and warning-letter activity and discussion of the outcomes of such changes.

Adidas is improving sustainability performance and does a serious job with this report. However, while the group is making progress, a step change in strategy and disclosure could reasonably be expected in future reports to achieve the standard required, in Adidas’s terms, for completing a marathon rather than running a sprint.

Gazprom Sustainability Report 2008-09

Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):

Gazprom’s first sustainability report portrays a rather different story to the one told in Roman Kupchinsky’s 2009 paper: Gazprom’s European Web. This alleges secrecy around Gazprom’s potential control of the European energy landscape via nameplate gas companies throughout Europe as well as links to organised crime and political corruption. Clearly these are not activities Gazprom would relish disclosing in a sustainability report. The question is whether Gazprom is a puppet of the Russian political machine – the Russian government still holds a 50.002% controlling stake in the company and is represented by six members on the 11-strong board. Or, has Gazprom been able to transition into a western-style market competitor that plays by the rules of a sustainable market environment?

The world’s largest natural gas producer, Gazprom has been issuing environmental reports since 2002, nine years after its break from full government ownership to become an open joint stock company in Russia. This now is the company’s first full sustainability report, covering years 2008 and 2009. Gazprom’s main activities are the geological exploration, production, transportation, storage, processing and marketing of gas. It is a giant in the Russian economy, employing nearly 400,000 people, holding 18% of global gas reserves, operating 600,000km of pipeline and supplying nearly 70% of Russian consumers and export markets with more than 400m cubic metres of gas.

The implications of Gazprom’s transformation are not trivial by any means. Establishing a global position in a competitive capitalist market and contributing to local socio-economic stability while distancing its reputation from former Kremlin political dictates will have demanded more than the average level of leadership skills. Gazprom’s report is an impressive 104 pages with no frills and no special effects, just plain, direct disclosures. It’s a rather dry read – hardly any stories, case studies or warming community photos – but it is detailed and meticulous. An example of this attention to detail is the chronicle of a safety incident. At 10.23am on July 24 2008 in Moscow, an explosion followed by a gas blaze took place at the Petrovsk to Novopskov gas trunkline. By 11.05am the following day, Gazprom teams completed repairs and resumed gas supplies to consumers. Forty-four metres of pipe were replaced during the repairs.

The report contains a comprehensive assurance statement written by the council for non-financial reporting of the Russian Union of Industrialists and Entrepreneurs. RUIE has done as good a job as any with a four-page assurance statement including recommendations for future reporting. However, a more neutral voice on assurance might have offered greater credibility. RUIE is the mouthpiece of Russian industry associations and might be expected to provide positive assurance for the member companies it represents. Overall, Gazprom presents a comprehensive, transparent picture of its operations and offers a credible picture as a global competitor in (sustainable) energy markets. Assuming of course that there is nothing hidden between the lines.

Three companies, three sectors, three sustainability reports, three sustainability report reviews.

Ice cream, anyone ?



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)

What they said at the CSR conference

Here I am back from the Ethical Corporation Reporting and Communications Summit held in London on 25th and 26th November. Promising to provide answers to whether one-way CR Reporting is dead, what integrated reporting means in real life, whether stakeholder engagement adds value, what good CR practice looks like online and more, this conference presented an array of CSR practitioners from the best of companies such as Vodafone, M&S; JS Sainsbury, Sony and more. Below is the conference in quotes which I have tried to reflect fairly and not take out of context (much). These are things that I wrote down. There were many more insights to be gained from listening to the entire presentations and debates, but this should give you a bird's eye view. Background on the speakers and companies can be found at the conference link in the first line of this blop.

Andy Wales of SABMiller
"Sustainable development is part of everything we do"
"For every job we create in Uganda, 100 additional jobs are created"
"I remain unconvinced that analysts are looking at the long term issues "
"Less than 10% of people [visiting our site] download the [CR] report"
"People have a completely bizarre view of how our bisiness works"

Chris Burgess of Vodafone
"It's very difficult not to report these days"
"The main value of sustainable reporting is more of an internal one"
"We're not really clear who reads our reports"

Rowland Hill of M&S
"The best reports are considered to have a compelling story to them"
"A report should be the tip of an overall communications iceberg"
"A report has done 90% of its job by the time you've got it signed off"
"Our employees have never been as engaged as they are now.. but when we gave the [sustainability] report to our employees, it hit the recycling bin faster than we could say something short."
"Key external opinion formers are the target of our reporting"
"An Ipsos Mori survey in September 2010 showed that when asked "Which sustainability reports have you read?", 40 respondents from the NGO and CR expert community responded M&S (68%), Tesco (65%), Coop (65%) Sainsbury (55%), Next (8%) Debenhams (8%) " (actually this was more of a slide than a quote but it's close enough:)
"Integrated reporting is an interesting thing"

Marcelo Esquivel of Anglo American, Chile
"The first challenge [of writing reports] is to make sure they are read"
"I definitely believe integrated reporting is the immediate fture"
"We are proud of the net positive impact we generate in communities"

Simon Braaksma of Phillips
"Sustainability is part of our company strategy"
"Our report is not written by one person, it's a military operation"
"[Our report] helps employees understand the business strategy"

Judith Moore of the World Bank
"Stakeholder engagement and feedback [on our report] is disappointing"
"[Reporting] has actually made our job a lot easier  - it creates a lot less dissonance in our work and makes it easier to raise money in capital markets"

Louise Tyson of BP
"You get caught up in a discussion about share price and environmental issues - but is important to remember that 11 people died"
"Most crises are much shorter .. this one lasted several months"
"Targets we set for the next BP report are transparency (using accessible language), balance (not being defensive), commitent to the Gulf of Mexico and a roadmap for BP and the way forward"
"The big challenge is who's going to read our report "

Chris Harrop of Marshalls
"The UNGC is a very good roadmap to organise our own sustainability actions"
"We use the UNGC framework to fame our discussions with stakeholders"
"Our CR report is easy to write"

Toby Webb of Ethical Corporation
"cutting edge" "authentic" "genuine"  (talking about the Patagonia CSR website)
"Timberland talks about issues they don't know how to solve"

Marjolein Baghuis of the GRI
"Stakeholders need to see results from their inputs"

Emily Nicholl of Sony
"First forget social media .. this is about being social..."
"We have to shift from smiley baby reports to development and data-heavy and rigorous reports"

Jeffrey Oathan of Centrica
"Reporting can be prety boring"

Revital Bitan of Intel
"Our localised CSR reports create a link between Intel and national issues"
"A CSR report is like a reference guide"
"Think integration not subsitution"
"Be prepared to engage"
"Employees are trained in blogging but blogs are not censored"

EDF Energy (marketing slogan) (I love this)

If we save today, we can save tomorrow. 

Finally, the only thing I was hoping to hear but unfortunately was not articulated even once during this informative and  thought-provoking two day conference was:

"And now it's time for an ice cream break - free Chunky Monkey for everyone!" 



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, CSR consulting and Sustainability Reporting firm)

Is one-way CR reporting dead?

I like Ethical Corporation conferences. I have attended several over the years and have never been disappointed. I go to conferences to learn from practitioners and hear the latest thinking on different aspects of CSR and reporting. I feel it has been worth my time when I come away with new information and ideas and an up-to-date feel for what is going on in the CSR space. (Meeting people is fun too, of course!) I have always come away from Ethical Corp conferences with added value. (haha, at one conference,  when Cadbury's had a stand presenting their CSR Report, I also came away with about 3 kg of Dairy Milk chocolate). So later this month I am off to the Ethical Corporation Annual CSR Reporting and Communications Summit.  In fact, I have also been asked to speak at one of the conference plenaries. (I am not showing up yet on the speaker list so I will keep you in suspense as to which session I am speaking in :)  

In the opening plenary, which I am not speaking in, (well, except for a little heckling from the stalls, maybe) SABMiller, Vodafone and Marks and Spencer will be debating whether one-way CR reporting is dead. Of course, we know the answer to that. It's not. By far the majority of companies are still pushing out their CR reports in standard PDF format, and not providng platforms which engage stakeholders in a participatory dialogue.

SABMiller have a nice online sustainable development site which includes detailed performance charting in a special metrics portal, and downloadable reports including prior years reports from way back when. The Company produces several sustainability-related reports each year. One is their full annual Sustainability Report, but others are issue or region specific.This report, for example, called "Working for South Africa - the contribution of SABMiller to the South African economy" , is a thorough, transparent and fascinating look at the beer and liquor industry in South Africa, the direct and indirect impacts SABMiller is reponsible for and the multiplier effects of SAB activities in the local economy. However, getting back to the opening plenary, and one-way communciations, SABMiller are doing it two ways, with the "Views and Debates" section, in which you can find the SABMiller sustainability blog whch has been on air with a spurt since June 2010, slowing down a little in recent months, with the most recent post being from Andy Wales, head of SABMiller Sustainable Development sharing his experiences from the BSR conference.  Despite the fact that all the recent posts I looked at do not appear to have generated any engagement in the form of comments, and provided that the SABMiller blogging team can keep up the pace, this is a good platform for dialogue. It does, however, show how tough it is to maintain this kind of platform  and generate some interaction.. Anyway, I left a comment, haha, couldn't resist.

Vodafone is a master reporter having changed the game with the "We said, We have, We will" motto which has been emulated by many in various forms. Vodafone's reports are always clear, carefully crafted and focussed well on material issues. The Vodafone website doesn't have much that is  any other way than one-way, though. All their reports, including several local country reports, are available for download as PDF's. The thing that appears to come closest to interactiveness is the page on their CSR website called CR Dialogues.  Actually, though, these aren't dialogues, they are monologues - posts by non-Vodafone people expressing their opinions, with no room to comment, despite Vodafone saying they want our views.  

Marks and Spencer Plan A (Doing the Right Thing) website is nicely branded. See how they talk CSR without even mentioning the word ? Most of this site is the one-way version with nice presentation of all M&S  sustainability ... errr...oops... Plan A initiatives. However, the M&S two-way comes in the form of getting people to make promises... pledges...  so that M&S can turn customers into Plan A customers through involvement in social, personal and environmental initiatives. Each of the possible pledges are explained in an easy style, advising readers what they can do and what a difference it makes. It's good. The website shows 18,580 people have signed up with their own individual pledges. That's quite a number. Wonder how many people have kept their pledge? However, aside from pledging, there doesn't seem to be much opportunity for interactive dialogue on the M&S site.

So, there we have it. Three speakers... two with no dialogue and one possible dialogue .. talking about whether one-way reporting is dead.. Should be an interesting session .... or a very short one. Haha. However, all three companies do maintain outstanding CSR programs and consistently report  well, and I am sure what they have to say will be fascinating. I  will be interested to hear how these companies do spark dialogue around their CR initiatives in forums which are not necessarily on their online reporting site, and how they see their own company's reporting evolving. I will be interested to hear what they have tried in terms of communication with different stakeholder groups and what has worked or not. The other interesting aspect which is often debated is to what extent the CR report itself is a vehicle  for communications. Maybe the CR report is the catalyst but the communications (read: dialogue) of necessity must take place elsewhere.

If you plan to be at the Ethical Corp Annual Reporting and Communications Summit on 25th and 26th November in London UK, do let me know or come up and say hi during the conference.  I wonder if this time they will serve Chunky Monkey during the breaks :)

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,  CSR consulting and Sustainability Reporting firm)

CDL and the sustainable Singapore skyline

A colleague of mine, Rajesh Chabbara, who is the Asian Editor of Ethical Corporation Magazine and writer of an excellent blog, CSR Works, alerted me to an interesting report from Singapore,  published by City Developments Ltd.  I reviewed this report for CorporateRegister.com. You can find my full review here.  You can download their report here.

The first few paragraphs of the review are as follows:

"City Developments Ltd (CSL) is a property and hotel conglomerate operating out of Singapore. The company is one of the biggest landlords in Singapore with over 7 square miles of leased and rented properties, and extensive interests overseas in a range of locations. This report covers Singapore only where the company employs around 300 people. The first thing that strikes me about this report is its pleasant design using pastel-shaded vines as the core theme. I love their bar charts of data designed in the form of leafy vines. Managing Director Kwek Leng Joo (brother of the Company Chairman) says: "The CDL Sustainability Report 2010 is aptly entitled “Grow”. The vines symbolically articulate the rapid expansion of the sustainability movement in our Company." Indeed, this is one of the nicest designs I have seen – creative but not over facing, bold but modest, and one which blends perfectly with the spiritual undertones of this report, as in the opening sentence "We set our sights on higher standards, remain nimble and strive to reach for the skies".

Beyond the aesthetics, this report is of high quality and claims to be the first Sustainability Report that has been assured using the AA1000 AccountAbility Assurance Standard (AA1000AS Type 2 Assurance) in Singapore. It is the Company's third report, complies with GRI application level B+ and has 5 main sections: Marketplace, Environment, Employees, Community and Governance. What is apparent early on in this report is that CDL targets to be somewhat of a leader in Singapore with a desire to spread the CSR message and drive the market forward. This is a declaration which we do not always see in sustainability reports, and several examples of how CLD put this into practice make this more than just an empty promise. This is the first company I have seen reporting use of the ISO 26000 framework as a guiding document for its CSR planning and development. I wonder if it offered them any new insight. "

Aside from the really great report design, and advanced progress in green building and prominent position in developing a sustainable Singapore skyline, including the 11 Tampines Concourse, the first carbon neutral development in Singapore,  what is interesting about this company is the way it leverages its strong position in Singapore through the real estate, consumer and business markets to influence key stakeholders (indirect impacts) . CDL encourages business tenants to Go Green! and issues them with an Eco-Office Kit which encourages them to engage in environmentally friendly practices in their business. Similarly, homebuyers are offered Green Home tips. In CDL's shopping mall, shoppers are incentivised to buy eco-friendly products and can check the latest emmissions level of the mall or solar energy usage as they engage in modest consumerism. What would round this off for me is whether any of these excellent initiatives are actually making a difference, not only in making Singaporians more aware of environmental issues, but in whether any are changing their practices in business and the home, before being required to do so by law. I would like to see CDL present  data about what impact they are having, in addition to the focus on what they are doing. However, what they are doing is a good start and appears to demonstrate leadership in this market. Globally, the Company has achieved a certain recognition, being the only Singapore developer to be included in the FTSE4Good index. City Developments is ranked number 296 out of 1000 in the Global 1000 published by CRD Analytics on Justmeans, a pretty good position, and is also ranked 81 in the Corporate Knights Global 100 list for 2010.

As an aside, the CDL website links to the Clean and Green Singapore (CGS)  website, where there is a CGS song. I have posted before about sustainability songs (my blop called Sing Sustainability with Henkel),  and this one is also well worth a little singalong.

Anyway, now that I can count on you to join the local Sustainability Choir, take a look at CDL's report and yes, you guessed it, send them your feedback!

 

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices http://www.greenleaf-publishing.com/productdetail.kmod?productid=3282 Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness,  CSR consulting and Sustainability Reporting firm)

Measuring socio-economic impacts : new report

Social and Economic Impact : Measuring Evaluation and Reporting. A must-have guide for companies operating in vulnerable communities. This is the title of the fascinating new research paper written by Peter Davis and published this month by Ethical Corporation, and which I promised to blog about when released. Now it the time to deliver on that promise :)

Ethical Corp sent me a free review copy but they didn't tell me (or ask me) what to write.

"Corporate interest in socio-economic impact is increasingly driven by much more important drivers than simply external reporting. Certainly reporting remains important, but more and more companies are realising that understanding socie-economic impact - the interrelationships beteen the company and the societies in which they operate - is also a vital tool for strategic and operational management and decision making."

This quotation from the introduction to this study of socio-economic impact proves that it's not just about numbers for numbers sake. It's about deriving value from measurement and reporting. This is quite heartening, despite the fact, as is also mentioned in the report, that at present, there is only a very small pool of (primarily large) companies who even get close to the level of measurement and reporting that actually delivers value. However, the authors of this report point to a fundamental redefinition of the role of business in society and the engagement of business in what otherwise might be known as "development projects" (as the NGO community tends to refer to them) such as poverty reduction, healthcare and human rights.

The report was developed using data from a wide range of sources including a literature review, 2 anonymous surveys of CSR professinals and practitioners (116  and 50 respondents), a round table discussion atended by 100 experts, review of 60 MNE's CSR communications and reporting and around 30 telephone interviews with key CSR practitioners. Enough to get a good overview of the key issues, I would have thought.

The report identifies four models of socio-economic impact monitoring:

Meeting global standards - selecting which performance indicators to measure, eg. the GRI

As we all know, there is a plethora of external standards and indicators used by companies ranging from the loosely structured UN Global Compact, through various specific initiatives and indexes such as DJSI, CRD Global 1000 and more, and culminating in the  "ubiquitous" Global Reporting Initiative which claims that over 1,500 companies use its framework. Most companies use some sort of framework in deciding how to measure and report their social performance and economic impacts. There are upsides and downsides to this approach, described in the report.

Managing supply chains - standards which govern labor and procurement such as Sedex

This tends to be prevalent in apparel, coffee, tea, timber, chocolate and footwear industries, to name but a few, with a focus on human rights rather than wider economic impacts. There are well known frameworks including the ILO Labor Conventions and others which address these issues, with auditing being one of the most widely spread tools. Sedex offers a plaform for inputting audit data so that customers can evaluate the manufacturer's performance in this area.  A case study from Nike described in the report helps understand the implementation and issues surrounding such auditing processes. Another case in point is the recent hullabaloo around the Hershey's cocoa sourcing supply chain, which you can read in my blop here, and the supply chain sourcing standards established in this industry sector.

Assessing integration into the local community -  such as the Anglo American SEAT toolbox

This type of assessment tends to be used by companies which have a strong socio-economic footprint in a particular geographic area and is particularly relevant for the extractive sector. The report cites the Anglo American Socio-Economic Assessment Toolbox as one of the best-known tools to help companies understand their local impacts. In addition, a number of multi-stakeholder partnerships operate in specific sectors or industries to ensure consistent development of standards, management of expectations and a sort of level playing field for all. The report assigns primarily a commercial interest to the development of this type of assessment becuase the proximity to local communities creates a kind of interdependency which is critical to the success of the project or venture.

Contributing to social and economic development -Unilever in Indonesia or Heineken in Rwanda 

This type of assessment is rare, and adopted by companies who have a sustained long-term interest in coutries or territories in which they operate. Unilever, Procter and Gamble, Vodafone  and Heineken are cited as examples in this area. Heineken for example employs 1,000 people directly in Rwanda but estimates that its activities in that country provide employment for over 35,000 people. This is a significant level of influence and Heineken has developed a tool to help them understand their impacts in more detail which is discussed in this report. You can also read about this in Heineken's Sustainability Report.

One of the things that surprised me in this report is the assertion that, whilst there are various states of play in measurement and evaluation of socio-economic impact by the corporate players, as mentioned above, there is much greater discipline and advancement in this area by the NGO community, including the DCED Standard for Results Measurement in Private Sector Development programmes, which focuses on the scale  of initiatives, the increase in income by the targeted enterprises and the net additional jobs created. This seems to be a very interesting tool, though the extent to which  it is effectively used is not quite clear to me. Other frameworks such as the WBCSD model which was published in 2008 are also discussed in some detail. The use of these tools in the corporate sector is extremely fledgling, though there may indeed be some relevance to the argument  that there is learning to be gained from NGO's in this area.

Some of the key findings which are quoted in the Summary Report which can be downloaded free from the Ethical Corpporation website include:

67% of 116 corporate sustainability professionals who responded to an Ethical Corporation survey said their company “measures social and/or economic impact of their business on the communities where they operate”

 

73% of respondents indicated that communication of their business impacts is one of the main reasons for conducting the studies. 71% of survey respondents said that the results of impact studies directly affect their

business strategy.

What are the things most companies are measuring ?

The summary report also covers some practical information which gives some benchmarking value to practitioners as they decide to embark on their own impact study. 30% of those who have performed such studies confirm they are not a five  minute job, but take longer than 20 days to develop. (This surprised me, I would have thought that any serious study would take significantly longer than 20 days!) . 28% pay $10,000 or less for such a study, and 18% pay between $30,000 and $100,000 (40% didn't spill the beans).

All in all, this 55 page report provides a very interesting overview of most of the key points in this vastly complex area of CSR and Sustainability practice, which is growing in importance. To quote the report, "Where the leaders lead, others follow", and there is no doubt that some of the advanced practices by the more forward-thinking companies are catching on. The report offers suggestions as to the directions this enitre field of  activity is taking and some recommendations for those thinking of developing their own practices. It's a good piece, informative, thought-provoking and educational. I personally gained important new insights from this report. I hope many companies will do also.  

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, 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  CSR consulting and Sustainability Reporting firm)

How do you measure sustainability?

How do you measure sustainability ? I have been fortunate to gain a little preview of the input supporting the soon-to-be-released report offering answers to this very question. The report has been compiled by  Ethical Corporation and is called "Social and economic impact: measurement, evaluation and reporting: A must-have guide for companies operating in emerging markets and vulnerable communities". This  report promises to offer answers to many of the questions that most CSR practitioners and observers have been seeking. If only there were a way to capture all of a Company's sustainability impacts in a clear and consistent measurement methodology, we would all be much wiser, and probably, much more sustainable. The Ethical Corp report promises to include "a break-down and analysis of impact measurement methods, tools and processes currently available" based on insights from a survey of 116 CSR professionals worldwide, 30 in-depth interviews, a review of 60 Sustainability Reports and will include case studies from Henieken, Vodafone. SAB Miller, Tata, Unilever, Nike and more. There have been some spectacular impact assessments produced, such as Unilever's economic impacts in Indonesia, published in 2005 and further studies in South Africa and Vietnam.  In fact, Unilever measure quite a lot, including their water footprint and more.

This focus on metrics and measurement is certainly welcome, as, beyond carbon footprinting and community giving, most companies haven't a clue as to how to calculate their sustainability impacts.

Some early results show that:   

67% of the 116 survey respondents said their do measure their company's impacts.

73% of respondents said they measure impacts primarily for the purpose of communicating to stakeholders.

72% of respondents said they measure impacts as a way to build reputation.

The top three indicators that are measured by comanies include (1) economic impact on communities, (2) community impact and employee engagement in volunteering activities within the community and (3)  job creation. Oops, only 9% measure gender equality.

There are many different measurement models out there, some more relevant than others, some partial, some more comprehensive, though there is very little consensus on metrics methodologies  that can be perceived from Company disclosures in the current state of CSR and sustainability communications.  However, I won't continue now. I will review this promising Ethical Corporation report when it is published and share more insights at that time.

In the meantime, what is YOUR company measuring ?

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict and author of CSR for HR: A necessary partnership for advancing responsible business practices available now on Greenleaf, Amazon and other online sellers. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness,  CSR consulting and Sustainability Reporting firm)

Feedback makes CSR sustainable

This is the first of three posts about feedback to companies on their CSR performance and CSR reporting. Anyone who tracks my conversations around cyberspace will know that I talk a lot ( a LOT) about this. In fact, I think the GRI should include an indicator which specifically requests the number of individual pieces of feedback that companies get on their reports (currently clause 4.17 of the GRI framework refers only to the "key topics and concerns that have been raised through stakeholder engagement". For some companies, this might mean 3 stakeholders. For some companies, 3 is generous) . 

Feedback is  what makes CSR sustainable. The CSR Feedback Series will cover: (1) (this one) Report Reviews  (2) The way companies report about feedback (3) CSR Reporting and Employee Feedback. Stay tuned. Here's part 1:

I was delighted to notice in the Verizon CSR Report for 2009 the inclusion of a mention of my feedback in the form of an Expert Review of their 08 report published on CorporateRegister.com. Verizon noted the three external independent assessors who had reviewed their report: BSR, AccountAbility and Beyond Business, my consulting company. See a photo shot of the section in their report below:

This was particularly gratifying, not only to appear in such revered company as BSR and AA, but also because Verizon clearly reviewed my feedback and took it seriously. This, after all, is the way we influence companies to do better.

During the past 16 months or so, I have completed over 40 Report Reviews both for CorporateRegister.com and for Ethical Corporation (which I started with the May 2010 magazine issue with my review of the Bacardi report). 

The most recent reviews were H&M 2009 report, which I called "Good substance, bad style"  (I reviewed their report also in 2008) and IMC2  2009 report, which I called "Charm with outcomes" , reflecting a certain increasing maturity of their reporting. ( I reviewed both prior reports).

Report reviews are my way of providing considered feedback to companies about their reporting. A good throrough read of a report, even a shorter one, and a careful assessment takes some hours to compile. All in all, I calculate that my investment in formal reviews accounts for about 2  working weeks per year. In addition,  I write this blog, of course, which offers a lot of feedback on many reports, without the detail of a full review. I also write directly to many companies, some of whom respond, and I fill in feedback forms where provided by companies. There is nothing that makes me happier than companies who ackowledge and use this feedback. (All this is voluntary, unpaid investment in providing feedback. I am not including  here the paid service I provide to companies for pre and post publication  reviews of their reporting). 

Many Companies take the initiative write to me or engage me in informal discussion about my report reviews. Mostly, they are grateful to receive feedback. Sometimes I may have been a little more critical than they deserve, though, more often than not, modestly, they tell me that I have identified the gaps or difficulties they themselves were aware of. This is nice, because it shows that reporting issues do show up in reports, no matter how companies try to gloss over certain issues (for, perhaps, understandable reasons). More importantly, companies who engage in feedback about their report show that they are proactive about engaging stakeholder views and are open to hear things that may help them improve their presentation of their sustainability performance, transparency and accessibility of their reporting. This, for me, is the ultimate objective, as I repeat: Feedback is what makes CSR sustainable. (I kinda like that sentence.)

That's it for Part 1. Part 2 just as soon as I can get to it. In the meantime, I will be reviewing the current Verizon report mentioned above. Though the fact that they mentioned my last review in their report will not buy them any traction, I will be just as mean and nasty as I usually am hahahahahahahhahahahaha

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 or tweet me at www.twitter.com/elaiecohen