Beyond Reports - 11 insights

The GRI Conference has come and gone, and I have been so busy working on so many client reports that I have barely come up for air, let alone come up to post on the blog. More about some of the reports I have been working on in recent and upcoming posts.

Lots of water under the bridge since the GRI Conference in May 2016... including the not-so-surprising-to-many-of-us departure of Michael Meehan, the GRI CEO since 2014. A new era of collaboration and innovation will now be replaced with a new era of searching for a new CEO. The hunt is on... though, as is often the case, organizations look further than they need to.

Someone  I believe is eminently qualified to lead GRI into a new era of better and more impactful reporting is GRI's current Deputy Executive, Teresa Fogelberg. Teresa has been a reporting advocate for longer than most of us have been reporting, and has advanced the positioning of reporting around the world through her work with governments and advocacy organizations more than anyone else on the landscape. As a veteran GRIer, she's well positioned to put GRI back on course. Continuity at GRI is critical in this period to avoid onging over-commercialization of the GRI services and focus on advancing the true value of reporting as a process, an output and an impact on the way business gets done and the way economies are run. Just as we might hope for the USA in the forthcoming elections,  a woman (the right woman) at the helm of GRI will be a new era of not only collaboration and innovation, but also, getting things done.

But I digress.

This post is about podcasts. You may or may not have noticed, but GRI has been putting out a series of short podcast called Beyond Reports for some time now. In fact, there are 6 in the series to date. The podcasts include a brief update of reporting news over the past month, and an interview with a reporting personality from the GRI network.


It was fun for me to be one of the six podcasters so far. At the GRI Conference, GRI's charming Media Relations Manager Davion Ford asked me lots of questions about my favorite subject: reporting. and this was the result:

 

Five insights:
"A challenge that is significant for companies is about reporting impacts and outcomes rather than a whole shopping list of everything they have ever done. A report is not an activity agenda - it should be a focused material account of how companies are making a difference in our lives. Companies find it difficult to report how they are making a difference rather than simply what they did."

"The biggest thing that companies have a challenge with is: bad news. No-on wants to put bad news in a Sustainability Report. I always advise my clients to include good-bad news, which means that you should disclose a challenge or particular difficulty, but you can position that in a good way by describing what to have done to address that challenge or prevent recurrence of a problem."

"Legislation is always a great motivator but often it motivates to the minimum common denominator.....two drivers that will change the motivation of companies to report are large companies and CEOs. Large companies - the biggest multinationals - are more or less getting it. If they are able to drive reporting through their supply chain, that's a real motivator for their suppliers. The second thing is, if you want to motivate a business, convince the CEO. If the CEO is convinced that reporting adds value to the business, she will make it happen!"

"Your first sustainability report is not the absolute best report you could ever produce. It will take several years of perfecting your process in order to get a better quality report."

"A limitation of reporting today is that there tends to be bits of information presented in a fragmented way, which doesn't necessarily reflect a consistency of approach year on year. If I am reviewing the report of a company, for example, I always look at one or more prior reports. You can't take a single report in isolation. Our expectation is that we can read a report, and that's it. The big challenge is for companies is to develop consistency over time in reporting."


The first podcast in the series was with Nikki McKean Wood who heads up Corporate and Stakeholder Relations at GRI. Nikki talked about the new GRI GOLD community.

Three insights:
"The GOLD community members are really our core supporters so we strive to put them at the heart of GRIs network, shaping the future of sustainability reporting."

"We hope to achieve an active, engaged and diverse [GOLD] community."

"This is a new era of sustainability... we see business taking action towards a more sustainable world, but there's a lot to do and a transformational effort is required by all to unlock the real value of sustainability data."     

The most recent podcast in the series is an interview with Christina Burmeister of Deutsche Bank:

  

 

Three insights:
"The reporting process is relevant as much for management decisions as it is for investors."

"The Financial Services Sector has experienced a major shift in the last decade.. sustainability is becoming more and more of a strategic imperative."

"One can always improve the quality of reporting and the fact that a defined set of information will be mandatory [from the EU CSR Directive]  in the near future onwards will help that case.. there are sill some challenges ahead of us and we will take this opportunity to strengthen our internal process and get the adequate information."




I encourage you to have a listen to the Beyond Reports Podcast series of GRI  and pick up loads more insights from people who live and breath Sustainability Reporting every day. Of course, listening to podcasts with ice cream helps our brain understand all those wonderful insights.



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

Sustainability: What the Numbers Tell You

Sustainability is not only about numbers. When all is said and done, sustainability is about people, community, society, collective responsibility and action, stories and interventions. But, sometimes, the numbers form a picture, and pictures can help us develop new insights and change our paradigms. And this can lead to new action. So,  when the The Conference Board, a non-profit organization which creates and disseminates knowledge about management and the marketplace to help executives make the right strategic decisions,  published a deep-dive study - perhaps the most comprehensive study available - of Sustainability Practices of thousands of companies around the world, containing more numbers about Sustainability Practices than I suspect you have ever seen in one place, you have to sit up and take notice. Ready?

The study is called Sustainability Practices 2012 Edition and is a 176 page epic, containing more data than anyone can absorb in one sitting and a wealth of relevant information for anyone interested in sustainability numbers, trends, areas of focus by sector and by subject, and opportunities to make a difference. The report was prepared in collaboration with Bloomberg, who runs one of the most extensive real-time financial and non-financial information networks to hundreds of thousands of subscribers, and with the GRI - no introduction necessary.

Sustainability Practices 2012 Edition is based on a global sample of 3000 business organizations tracked by Bloomberg's Environmental, Social, and Governance (ESG) database and covers 72 environmental and social practices including: atmospheric emissions, water consumption, biodiversity policies, labor standards, human rights practices, and charitable and political contributions. For benchmarking purposes, Bloomberg ESG data is compared with the S&P 500 (large capitalization U.S. companies) and the Russell 1000 (market cap-weighted index of U.S. companies), and further analyzed across 11 business sectors, using the CIGS code, and four revenue groups (under $1 billion, $10 billion, $100 billion and over $100 billion). The findings of the report are split into three broad areas: Disclosure Practices, Environment Practices and Social Practices.

Now for the numbers. Sitting up and taking notice?

19%

This is the overall social and environmental disclosure rate for companies in the global Bloomberg ESG 3000 Index, which is made up of largely non-U.S. companies. Does that surprise you? Only 574 companies out of a total 3,000 disclose on the full spectrum of 72 sustainability practices analyzed. This compares with 15% in the S&P 500 and 10% in the Russell 1000, showing that U.S. companies are lagging when it comes to overall sustainability disclosure. Match this with the next number:

25%

This is the number of companies in the Bloomberg ESG 3000 Index which released Sustainability Reports - 747 companies. More companies are reporting than disclosing. What does that tell us? That Sustainability Reporting is not delivering full transparency. In other words, just because it's called a Sustainability Report doesn't mean that it's transparent. By comparison, in the U.S., 45%  of the S&P 500 and 24% of the Russell 1000 publish reports. However, these indices are smaller and include large-cap, often global, companies, headquartered in the U.S., versus the Bloomberg Index which includes only 510 U.S. companies, 17% of the total 3000 sample. Overall the Bloomberg 3000 is weighted towards Japanese companies who have 27% of the sample, and with strong representation from India, China and the UK, and a host of other countries.  So Sustainability Reporting is more widespread globally than it is in the U.S. But that's not news. Match this with this next number:

80%

This is the rate of Sustainability Reporting for companies with more than $100 billion in annual revenues. Not surprising, perhaps, that this is a high figure. The larger the company, the greater its impacts, the more extensive its resources, the greater its risk exposure, the higher the expectations from stakeholders. However, 20% of these mega-corps are still resisting the reporting opportunity. The rate of Sustainability Reporting drops to 63% for companies over $10 billion, 25% for companies below $10 billion and only 4% for companies below $1 billion. $1 billion is still a heck of a company size and has potential for some serious impact. Who is chasing the other 96%? Match this with this next number:

46%

This is the rate of companies in the telecommunications services sector which publish Sustainability Reports. This is the highest reporting sector in the Bloomberg 3000. Contrary to the long-held view (and data) that financial services companies and energy companies have been leading the fray in sustainability reporting, only 20% and 25% respectively in these two sectors are publishing reports at a global level.

 Great work by telcos. What's driving this industry's reporting prowess? Match that with this number:

48%

This is the rate of telcos which use the GRI guidelines to report. Again, this is the highest rate of all sectors, with an overall average being 30%, generally lower than the hype would suggest. Consumer Discretionary and Information Technology companies have the lowest uptake rate of the GRI guidelines, at 27%.  Again, we find that the highest revenue companies are more likely to use GRI guidelines (66% - 23 companies) versus the lowest revenue companies (10% - 109 companies). The picture in the telecommunications sector is both of high disclosure and high use of the GRI guidelines. Telcos also have the highest rate of report verification and assurance at 26% (versus an overall average of 13%).  Match that with this number:

24%

telcos. No wonder it's so expensive to connect.  But take a look at these numbers:

54% - 43%

The numbers of women employed in the workforce and the numbers of women in management in the telco sector. Hah! One of my favorite indicators.  Not so rosy in the IT sector, where women make up 13% of the workforce and only 9% of management. Across all sectors, the lowest revenue group of companies has the highest proportion of women in management - 24%. Telcos stand out for positive diversity in other respects too - with 26% disabled employees, and 7% of minorities in management. Apparently, if you are a disabled woman from a minority group,  you stand the best chances of advancing your career in a telco. If you are a man, the materials sector is for you. A median 86% of managers are male, and 85% of the total workforce. Match that with this number:

7%

This is the proportion of companies reporting employee fatalities in the Bloomberg 3000. Only 197 companies out of 3000 disclose this figure (even less in the U.S. large company Russell 1000, where only 36 companies disclose). The average rate of fatalities across all those companies reporting is 2, but the Information Technology Sector inflates this average with a total of 6 fatalities. Conclusion: don't go into IT if you value your life. Match that with this number:

59%

This is the proportion of companies that disclose their Health and Safety Policy. This includes 58% of Information Technology companies where six people died. Just think how things might improve if 100% of companies had a Health and Safety Policy. Would things get worse, or better? Match that with this number:

1,367

This is the average number of workforce accidents reported by the 12% (364) companies who disclose this information. I calculate this to be a total of  almost half a million accidents in this small sample. Only 5% of companies report how many lost workhours result from these accidents, reporting an average 56,111 lost hours across only 137 companies, but this is much higher than the average in large U.S. companies, which report an average of 36,121 hours (13 companies) in the Russell 1000. This might indicate that it is safer to work in the U.S.  Or that you have your accident, and get back to work pronto. Even so, the Russell 1000 indicates the lost-time equivalent of 18 employees per year per company that do not come to work as a result of an accident. Rather shocking, don't you think? The impact on families and communities of such safety issues can be quite significant. Match that with this number:

36%

This is the proportion of companies which disclose their charitable giving. I would have expected this number to be higher. Companies like to tell their good news. Match that with this number:

$161,522,597

This is the average community spending reported in the energy sector in the Bloomberg 3000. This is by far the highest rate of charitable giving, comparing with an average across all companies which disclosed of almost $28 million. The healthcare sector is the second largest giver with an average of $98 million reported by 47 companies. Industrial sector companies have not been bitten by the bug to this extent, apparently, with the giving average at a mere $10 million reported by 232 companies. Match that with this number:

$66,800,000

This is the median total corporate giving reported for 21 companies with in the highest revenue group - over $100 billion. If ya got it, share it. Seems to work for them. Companies with under $1 billion revenues give a median of $88,552. Yes, that's thousands, not millions. Match that with this number:

$1,000,353

This is the average utilities sector spend on political lobbying, more than double that of any other sector in this study. Overall, in the Bloomberg 3000, the average amount spent on lobbying is $226,065 per company (though only 14% of companies disclose this information). Interestingly, in the U.S. alone, the amount spent is three times that much. The politicization of business in the U.S. is quite some investment, it seems, if you are a utilities company. Wonder if it's worth it?

I am going to stop here for now, while I continue to study this report. You can read a great review of key findings and  broader conclusions of this report  in the Conference Board's Press Release. Or you can wait for my next post, as I will definitely have more to say about this in the coming week, after getting to the rest of the numbers that I have not looked at yet in detail. 

In the meantime, you might now like a little light relief, by watching the Sustainability Practices 2012 Edition authors, Matteo Tonello, Director of Corporate Leadership at the Conference Board and  Thomas Singer, Conference Board Research Associate, talk about the importance and relevance of this study and what this means. It's short and to the point and contains no numbers.

Thomas Singer rounds off with this perspective: "To a large extent, sustainability is about long-term risk management. It's about making sure that, if you are a company that is dependent on finite resources, you make sure that those resources are available, that they are clean and that you have access to them in the long haul. However there is a very important second part to sustainability which is ensuring innovation and new products, new markets. It is those companies that actually go beyond seeing sustainability as a risk strategy and more of an innovation strategy, those are the companies that really become sustainability leaders in the long term"

Final Tip: ice cream is a great remedy, if your eyes are getting a little fatigued from figures and percentages. Any flavor will do.

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)

BBC, Cummins, Mauser CSR reports highlights and insights

Random selection of recently published CSR / Sustainability Reports and my totally frank opinion. Hah!

The BBC 2010 Corporate Responsibility Report

Period: 4/9-3/10 GRI: not. Assured: yes. UNGC: not  Pages: 45 Reporting since: 2001

One Liner: Very impressive report indeed, reflecting impressive performance.

Talk about responsiblity. The BBC says their audience reaches 233 million people EACH WEEK. That's some responsibility. What does the BBC see as its role in creating news and entertainment which makes the world a better place ?  After brief intro by CEO Mark Thompson, the bulk of this report works through 6 core sustainability themes ("public purposes") (divergent) before giving the low-down on the business's direct impacts (convergent). The key themes are : sustaining civil society, promoting education, stimulating learning and cultural excellence, presenting the UK, bringing the UK to the world and vice versa, supporting emerging communications. This is quite an impressive list showing the overall value a broadcasting company can add to society. In each section, the BBC describes a range of initiatives and in most cases, includes quantitative data showing the impact of each program. Equally, enviromnental measures are reported clearly (and all, incidentally show improved performance in this reporting year). Key disappointment: the BBC employs 17,000 people and they barely get a mention in this report - aspects of the BBC as a responsible employer seem to be outside the scope of this report which is an omission, in my view. NB: The Assurance statement from "The Virtuous Circle" is one of the best I have seen.

Cummins Sustainability Report 2010
Period: 2009 GRI: not. Assured: not. UNGC: not Pages: 116 Reporting since: 2000

One Liner:  Long but worth the read

Cummins is an industrial engineering firm with turnover of around $10 billion, employing 36,000 people in 51 countries (with an expectation of 30% increase in employee numbers over the next 3 years. This report is called "Meeting the challenges of global sustainability" The company's vision is "Making people's lives better by unleashing the Power of Cummins" and this report is a testimony to a powerful approach to social responsibility where the philosophy, the activities and the data are throroughly presented. The report is presented "in the spirit" of the Global Reporting Intiiative, though exactly what that means is unclear to me. The report has five main sections (environment, governance, corporate responsibility (society), employees and finance), each one followed by a case study of Cummin's community partnerships and activities. These include the flagship Earth University designed to create ethical agricultural engineers, a college of engineering for women in India, and another project in India where Cummins developed a way to power a rural village of 65 households by using Cummins generators running on a locally available renewable energy source – non-edible vegetable oil produced from the seeds of Pongamia trees. Amazing! The report is nicely padded with case studies, quotations from a range of Cummins' employees and snippets of context, such as the following background to the Cummins decision to ban cell phones while driving: "Nearly 80 percent of all crashes in the United States involve some form of driver distraction within three seconds of impact, according to the National Highway Traffic Safety Administration." Another  interesting aspect of this report is the description of the Six Sigma system which Cummins reports has saved them over $3 billion in 10 years. A nicely transparent report which, if a little long, is truly worth the read. Inspiring progress!

Mauser Group 2009 Sustainability Report
Period: 2009 GRI: B. Assured: not. UNGC: not Pages: 38 Reporting since: First report

One Liner: A good start but many promises to deliver on in coming years

Mauser, headquartered in Germany,  is a provider of industrial packing solutions, selling over 1 Billion Euros worth of solutions to the chemical, lubricant, pharma and other sectors, and employing 4,000 people. Mauser calls sustainability a "key business driver" and it is part of their new vision formulated in 2009.  What is nice about this is clearly this company has come to the realization that sustainability is strategic and represents a different way of doing business. More importantly, a key element of this is "strengthening their HR department" As my regular followers will know, this is a point on which I have a lot to say and regrettably Mauser don't elaborate on what they are doing with their HR Managers to equip them to address this new direction. Mauser do confirm that they have conducted a stakeholder analysis, and consulted with stakeholders but none of this is disclosed  though promised for further reports. As a minimum, in this first report, a list of key stakeholders would have been advisable. Mauser has made progress in mapping out its key environmental impacts and establishing directions for the future (though not targets). Key areas of impact are use of post-consumer resin in the manufacturing process and the development of Life-Cycle Anaylses for total product impact evaluation and reduction. This report is in my view a little lightweight for a GRI B report, but it is a good start and time will tell as to how Mauser deliver on their promises to expand, develop and report annually  in the future.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)