Consistent creative reporting - a cone-worthy example

Every so often, you come across a company whose Sustainability Reporting is inspiring because of the creativity with which they get the message through, and the consistent delivery of high quality information. It's not so often you see an engineering and construction company deliver cutting-edge reports, but in this case, I have to award Cone Trio to Larsen and Toubro.

 

 

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest companies in India, founded in Bombay (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro. Both of them were strongly committed to developing India's engineering capabilities to meet the demands of industry. L&T is traded on the Indian Stock Exchange and employs over 50,000 full-time employees and over 300,000 contract workers, boasting a turnover of around $13 billion.

  

This was the first report in 2008

 

 

Leading with the theme of L&T's role in building Indian society, this GRI A+ Application Level Report is one of the best first reports you can find. Peppered with charmingly written short case studies, this Report shows the human face of engineering and construction.

This was the second report in 2009

The idea here, is, you guessed it, there are some conditions to our inhabitation of the planet and use of its resources. This is how they put it at L&T:

"This planet we call home is like no other in the galaxy. No other body in orbit has the cocoon of atmosphere that sustains life; nowhere else do waters flow from summit to sea, nourishing civilisations along the way. This unique, beautiful and bountiful world of ours has helped mankind flourish across time. It can certainly provide for us far into the future, but… conditions apply."

Each one of the company directors has their own space to make their own sustainability commitment and add perspective (this was also a feature of the first report). This is very good practice - it shows that all the leadership is committed, not just the CEO, and it makes their commitment public for both their employees and external stakeholders to see.

This report introduces a set of sustainability targets for a three year 2009-2012 period. Some are quantitative, others are more general, but the path is clear.

This was the third report in 2010

 

A more creative report, bolder in its messaging, bringing out the core elements of L&T's approach in the context of global changes and local challenges. Directors' messages, sustainability targets and clear, comprehensive  disclosures continue to characterize L&T's reporting, showing consistency in approach and in presentation of metrics.  

This is the latest report covering 2011.

 

This report blends continuity with another creative twist in the messaging, while remaining true to the core aspects of L&T's role in society and performance on improving impacts. Also, there is a certain maturity developing with this report, with use of case studies and visuals which are less stock and more about presenting company people and initiatives, all of which include a statement of outcome (though many of the outcomes presented are generally results - e.g. "Outcome: 200 women were provided with vocational training." This is not an outcome, this is an output, or result. The outcome is what happened to these women as a result of their having been vocationally trained.)

 

 

What's interesting is that L&T manages to achieve this performance with only 13% of female employees in 2011 - a rate which has more than doubled from the 6% in 2008, which shows progress albeit continuing underrepresentation of women. None of the executive team members are women. Think of what this company could do if it were to develop greater gender diversity :)

There are thoughts I would share with L&T for future reporting:

• It would be helpful to have a clearer picture of the "delta" - what has changed from one year to the next,  new initiatives, key areas of progress. It would be nice to see this quickly, upfront, without having to read the whole report, section by section.
• I would suggest tightening up the Sustainability Targets matrix. The targets have remained the same for the 2009 - 2012 plan, but the actual progress since 2009 in each area is not clear, as in each year, only partial responses are given. For example, progress against several targets is simply "ongoing".  Some of the targets themselves could be tightened up for the next 3 year period - for example, "conduct carbon footprint mapping" could be converted to a target which expresses an intent to improve footprint, not just count it. "Promote employee volunteering" could be more specific. 
• Supply chain impacts are under-reported by L&T. As a massive business with probably thousands of suppliers, many in the company's home country, it would be nice to see how L&T is expanding its influence right through the supply chain and encouraging its supply base to engage in sustainability initiatives and find their own form of accountability.
• I would suggest some inclusion of external and internal stakeholder commentaries. I think this always livens up reporting and adds credibility.
• I would love to know more about what L&T are doing to encourage the advancement of women in their business. Construction and engineering may not be the most obvious choice for most women, and there are only 940 females for every 1,000 males in India,  but with almost 600 million women to choose from, I am sure there must be some executive potential there somewhere which would be good for L&T's business and society in general. L&T glosses over this in their reporting, while declaring a commitment to diversity. If there's no commitment, why say there is ?
• Convert outputs to outcomes and report both. This is not as easy as it sounds, but it is a better measure of community investment effectiveness. Outputs tell you that the ladder is in place, outcomes tell you that it's standing against the right wall.

It is important for large companies to show leadership in sustainability performance and transparency. I think L&T do a good job... with some opportunity to sharpen up the impact of their reporting in future publications  :)

 

 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)

The P.R.I.C.E. of CSR

A few weeks back, I participated in a panel on the theme of CSR: The Way Forward at World CSR Day in India. The panel was headed up by one of the most prominent pro-CSR thought-leaders in India, Dr. Bhaskar Chatterjee, Director – General & CEO, Indian Institute of Corporate Affairs. Dr Chatterjee has a long and illustrious career, having held several positions of importance in the Indian government, and as Secretary in the Department of Public Enterprises (DPE), he led game-changing reform and change among Indian State Owned Enterprises laying special emphasis on Corporate Governance, revitalization of the MOU system, Human Resource Management, Sustainable Development and CSR.

The DPE released CSR Guidelines for Public Sector Enterprises and run workshops to assist companies in implementation, which includes an allocation of net profit of up to 5% for small companies and 2% for larger companies. Although CSR in this context refers to "CSR activities" which "may be planned in parallel to the business plan, looking at every possible opportunity to link and integrate business plans with the need based social and environmental concerns", rather than a more integrative model whereby CSR becomes the way of doing business, the heightened awareness and contribution to sustainability is important in this fast-growing economy and no doubt has a positive impact.

In the few minutes I had to present my own views on CSR: The Way Forward, I listed five key points: (you might call this The P.R.I.C.E. of CSR :-))

P is for Partnerships: The world's problems extend beyond the capabilities of any single company to solve. Supporting global or regional solutions to sustainability issues is important for businesses which wish to thrive for the long term. Partnership across sectors, and within industry sectors, offers a collective way forward which benefits companies and their stakeholders. The level of partnership activity is increasing - and this will continue.

R is for Reporting: Paul Scott, MD of CorporateRegister.com expects, after all the 2011 reports are logged, to see between 6,000 and 6,500 CSR/Sustainability Reports covering the year 2011 on a global basis. This doesn't include reports written in non-latin languages, of which there are also many (Chinese, Japanese reports etc), so, in reality, there are far more reports. Several countries are including sustainability disclosure in regulation (such as Denmark)  and Stock Exchanges are starting to demand disclosure as a condition of listing (such as South Africa JEC). Reporting - business transparency - is here to stay and will become even more important as part of the way forward. While there numerous Indian companies now  reporting on sustainability performance (watch out for the India Transparency Index 2012 - coming soon!), reporting as a way of life for Indian corporations will need to move into a higher gear.

I is for Integrate: CSR can no longer be a "project" based activity. It is no longer about philanthropy. CSR means creating sustainable business strategy in which CSR is embedded as part of the organizational culture and drives all activities. CSR is relating to the needs and aspirations of stakeholders and identifying business risks and opportunities in a holistic and fully integrated way. Indian business needs to make this shift as part of its way forward.

C is for Creating Shared Value: While the now ubitquitous notion of CSV is gaining ground - some say, too much ground, (see Dr Sustainability's opinion on  CSV), because the concept is being diluted to mean almost anything that a corporation sells that people want to buy, CSV can offer win-win's for business and society. Kevin Moss of BT wrote an interesting piece about what CSV is and what it is not. However, CSV at its core is an outcome of integration of CSR principles into business strategy, and offers a positive prism through which to drive sustainable business practices. Take a look at the Nestle CSV case study website for practical examples.

E is (of course) for Employees: With employee engagement in sustainability having gone viral, and for good reason, corporations today must understand that CSR begins at home. Companies which invest in the compensation, safety, diversity and inclusion, wellbeing, development, environmental awareness and community  involvement  of their employees are winning the War for Talent, the War on Climate Change and the War for Long Term Sustainable Growth and Profit. As they win, we all benefit. CSR is not just about being good to employees; it's the development and systematic adoption of Human Resources policies and practices which lead to the transformation of corporate impacts ON employees to the sustainability impacts OF employees on all stakeholders. Read more about this at CSRforHR.com.

So that's The P.R.I.C.E of CSR. However, it's not a one-way road. A corporation that pays the P.R.I.C.E. of CSR delivers many dividends - and not only for the corporation. In fact, the P.R.I.C.E. of CSR has positive returns beyond standard investment ROI approaches. An article in Marketing Week quotes Marks and Spencer as having contributed an additional GBP 50 million to profit  in 2010 as a result of Plan A, while Coca Cola made $100 million savings due to packaging reductions. 

CSR: The Way Forward also includes attention to many other important aspects of doing business sustainably - such as good governance, the use of technology, especially in the race to a low-carbon economy, implications of regulation, investor demands, supply chain outsourcing, disaster and emergency relief and even the way CSR is managed in organizations. The fascinating presentations by my co-panelists and ensuing discussion highlighted many of these issues.

World CSR Day  in Mumbai was a welcome opportunity to continue spreading the message. I get the feeling that with people like Dr. Baskhar Chatterjee, and Dr R.L. Bhatia, founder of World CSR Day, at the helm, India may just be finding The Way Forward.

 

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)

En route to the Taj

In honor of my forthcoming trip to Mumbai in India this week for the World HRD Congress, where I will be presenting on one of my favorite subjects, CSR for HR, and attending the World CSR Day ceremonies as a panelist on the subject of CSR- TheWay Forward, chaired by Dr Baskhar Chatterjee, the Director General and CEO of the Indian Institute of Corporate Affairs, I thought I would take a look at the Sustainability Report of the Taj Hotels, as I will be staying at the Taj Lands End. (I have fond memories of staying at the Taj Mahal Palace several years ago, so I have high expectations!- the Taj Mahal, as you may recall, made headlines in 2008 as the site of a brutal terrorist attack in which 175 people lost their lives, and the staff was subsequently commended for outstanding service beyond the call of duty, protecting guests and remaining loyal to their employer. Terror at the Taj has even become an HBS case study. Following the terror attack, the India Hotels Company set up the Taj Public Service Welfare Trust to assist the families affected).

The Taj Hotel Group recently released its eighth Sustainability Report, entitled "Beyond the Numbers". Beyond The Numbers is a way of expressing, for the Indian Hotels Company, owner of the Taj Hotel and other hotel brands, that doing business with CSR at the core is what defines the company as an organization and shapes its journey in responsible tourism by influencing every life that it touches.  The Indian Hotels Company is the largest hotel chain in South Asia, with a portfolio of 107 hotels and 12,795 rooms across 12 countries on 5 continents, selling almost 3 million room nights per year. The Company is owned by the Tata Group, one of the highly respected names in Indian industry.

The report is GRI Application Level A+, 88 pages long, with a clever design and a personal, inviting style. Each section begins with an anecdote or almost poetic story, such as how the turtle retreats to its shell for safety, as an introduction to the safety section, or the way workers spent hours fuelling a furnace or 12 hours bending over a conveyor in former times, as the backdrop to the section on how India Hotels is a great workplace, dating back to 1912 when the Tata Group introduced 8 hour shifts, the precursor to a productive work-life balance approach for employees.

This is a thorough report covering governance, compliance and risk management, with a discussion of key risks. The report does not contain a Materiality Matrix, but it does cover stakeholder engagement and offers a list of priority issues:
• Optimizing revenues
• Focusing on customer delight
• Ensuring safety
• Developing human capital
• Ensuring environmental excellence
• Creating sustainable livelihoods

The Indian Hotels Company places a strong focus on environmental protection and records energy, GHG emissions and water consumption per hotel room per night. It is interesting to note the gap between the luxury segment (with 202 kh CO2e emissions per night) and the lower-cost hotel options (18 kg CO2e emissions at the lower end). 23 hotels are ISO14001 certified. The group maintains a "War on Waste" with 16% of hotel organic waste being composted, and much of other types of waste are recycled. 3% of the Company's energy needs are met through renewable sources and 25% of water consumption is recycled water, with several hotels achieving zero water discharge.

Oddly, one thing I might have expected to read in this report does not gain air time: the whole question of human rights, child labor, human trafficking, prostitution and child sex exploitation. Just recently I caught a headline "Sex racket out of star hotels in Tamil Nadu busted", referring to arrests of pimps using local hotels to conduct their dealings. An internet report states that there are "estimated to be over 900,000 sex workers in India. 30% are believed to be children and that the number of children involved in prostitution is increasing at an estimated 8 to10% per annum. About 15% of the prostitutes in Mumbai, Delhi, Madras, Calcutta, Hyderabad and Bangalore are children and nearly half of them became commercial sex workers when they were minors. Conservative estimates state that around 300 000 children in India are suffering commercial sexual abuse."

One thing a responsible tourism player in India could do would be to become a signatory of The Code.org and establish a specific ethical code and policy regarding commercial exploitation of children, institute other measures to prevent such issues and report fully about the procedures in place. While the hotel and tourism industry may not be responsible for these issues, they certainly can be part of a solution which raises awareness, educates and ensures there is no degree of complicity in any of their activities.

In the meantime, I look forward to returning to India. It's been a while since I tasted Indian ice-cream :)


 

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

Sustainability is pure poetry

Larsen Toubro is a massive multinational conglomerate based in India. They published their second Sustainability report in December 2009,  entitled " * conditions apply ". This is what they mean, in their words, "This planet that we call home is like no other in the galaxy. No other body in the orbit has the cocoon of atmosphere that sustains life; nowhere else do waters flow from summit to sea,nourishing civilisations along the way. This unique, bountiful and beautiful world of ours has helped man flourish across time. It can certainly provide for us far into the future but ...... contitions apply". Isn't that poetic ? Wait, it's gets better.  Sustainability is not just "survivability" , it's "thrivability" . Now they are rewriting Websters. There are more poetic and linguistic twists throughout the report. I will leave you to pick them out.

Larsen Toubro is into everything including construction, power development, oil, gas, thermal power, metallurgical projects, mass transport systems, heavy engineering medical systems, insurance, banking, software, infrastructure, industrial machinery and the list goes on. Quite some business, employing over 35,000 individuals.

I haven't read this GRI checked A+ 112 page report in detail. I just wanted to point out a nice feature. The  8 members of the Executive Leadership Team each make their own statement about Sustainability relative to their sphere of responsibility, alongside their photo. This is nice, because it demonstrates a personal commitment by each of the leaders of the business. Each one of them is on record as being committed to sustainability. Just a shame that not  one of them is a woman ! How sustainable is that ?!

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm based in Israel. Visit our website at: www.b-yond.biz/en