The Mystery of the 50 Angolan Sustainability Reports

KPMG published its 2013 Survey of Corporate Responsibility Reporting recently. For a reporting geek like me, that's like getting five helpings of ice-cream all at once. A positive feast of information all about reports. I love it.

I am still working through the entire thing (gotta do a little work once in a while) but there is something that struck me as rather mentionworthy.

Angola.

How many Sustainability Reports get published in Angola?  In the GRI reports database, there is not a single report from Angola since the start of the database. I looked in the CorporateRegister.com database, and there are 10 reports from 3 companies in Angola published between 2007 and 2011. Nothing in 2012 or 2013. Even the UN Global Compact has no participants from Angola. 

So how is it that, in the KPMG survey, 50% of the top 100 companies in Angola are noted as reporting on CSR?

That's a higher rate than 6 other countries: South Korea, New Zealand, Greece, UAE, Kazakhstan and Israel.

Not only that, in the KPMG survey, Angola is way up there with the GRI-based reporting leader companies, with over 80% of these mystery Angolan reports being GRI-based.

In the CorporateRegister.com database, I can find 16 reports from Kazakhstan, and as many as 585 reports from South Korea, with the other countries in between. So, how come Angola has achieved a 50% reporting rate? There is no stock exchange in Angola, as this is scheduled for 2016.

The KPMG methodology looks at the top 100 national companies in each country. A 50% reporting rate means that 50 of the top 100 companies in Angola have publicly disclosed their corporate responsibility performance in some form of corporate responsibility or sustainability report.

So where are all these reports? This is a mystery. I love mysteries. Just call me Agatha.

I realized that I know very little about Angola, so I am going to make this post a little Angola discovery journey.

Angola has a population of just over 18 million people living in an area of 1.2 million sq. km. Portuguese is the official language and Luanda is the capital. Angola's main claim to fame is its oil, with an OPEC quota of 1.65 million barrels per day. GDP per capita is $6,500 which ranks 144 in the world league table. There are only 9.4 million mobile telephones in use, so that's an opportunity for the telco sector, and only 0.6 million internet users, an even bigger opportunity. Human trafficking, drugs and forced labor in agriculture are mentioned as some of the transnational issues that Angola must address. The country has some spectacular sights and Kalandula Falls seems like it should be on everybody's visit-here-some-day list.

Doing business in Angola according to the World Bank Group is not a piece of cake, and Angola ranks low on the easy-peasy scale. In fact, Forbes recently gave Angola the big thumbs down as one of the worst 5 countries in the world to do business in. This is a great opportunity, therefore, for CSR and sustainability. 

However, when checking out the ice-cream scene in Angola, all I came up with was a list of ice-cream parlors in Angola, IN, which last time I checked, was in the U.S.  Maybe that's the Angola that's in the KPMG survey? 

But I am still wondering, where are those 50 reports? Now, now, Agatha, don't give up just yet.

I tried to find a reliable list of the largest 100 companies in Angola. Wikipedia lists a few notable companies in Angola. 36 companies to be exact. Are these the companies in the KPMG N100 list? Where are the remaining 64?

I shot off an email to the folks at KPMG to see if they could shed any light on the Angola mystery, and I am awaiting a response. In the meantime, I confess to being stumped. OK. You can stop calling me Agatha now. 

UPDATE (Dec 18): I just heard back from the folks at KPMG (thanks, KPMG) who say as follows: "Angolese companies included in the research in many cases are subsidiaries of large global companies that issue CR reporting in other countries (for example, Total, who publishes a group report in France). As all subsidiaries are included in such group reports, they count at the local (Angola) level as well, including the reference to the GRI."

Mystery solved. Sort of. Apparently Angola's reporting rate of 50% is entirely made up of global companies operating a subsidiary in that country. Ditto for other countries. No wonder the N100 global reporting rate is 71%. I wonder what it would be if KPMG took out the reports that were not written by companies headquartered in the countries surveyed. Any guesses?   

elaine cohen, CSR consultant, winning (CRRA'12) 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 at www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

A very tasty CSR conference

This time last week I was engrossed in fascinating conversations at the Justmeans  Redefining Value: Integrated Reporting and Measuring Sustainability Conference in London on 25th March 2011. But before I talk about content, I can't help but mention that the conference was held at the best conference venue I can ever recall in having visited in London - the Brewery - complete with a sustainability policy and gourmet food worthy of so many sustainability people, hungry for change and hungry for the best conference lunch in London. (OK, no ice cream, but what the heck!). The conference itself was serious, thought-provoking, no ribbons and bells, just 5 intensive sessions with lots of talking, many insights and a few challenges to the status quo. Some sessions were more valuable than others, as inevitably happens, but all were interesting. Lunch provided a welcome break for ribbons and bells, with the announcement of the Social Innovation Awards winners in a tastefully done ceremony where every winner got to say a few words about their accomplishments.

The conference started out with a powerful panel session moderated by Justmeans CEO, Martin Smith, intended to be a catch-up with what's happening in the world of non-financial reporting, with leading players in the form of the GRI (Nelmara Arbex), A4S project (Jessica Fries) and the CDP (Paul Dickinson) .There is a consensus that sustainability reporting is not mainstream, despite the daily Sustainability Report announcements that fill our RSS feeds. The GRI, as my regular readers will know, is moving towards G4 which should address some of the current shortfalls of the GRI framework while A4S is planning a pilot program to enhance non-financial reporting without increasing complexity and length, among other things. The CDP has now completed 9 reporting cycles, demonstrating that "repetitious normalization" is gaining the attention of 551 investor groups who represent $71 trillion in funds, more than the GDP of the world. 3,000 companies reported to the CDP, rather less than the number who issued sustainability reports, last year. The single biggest challenge for reporting is mainstreaming sustainability reporting in a harmonized way (GRI), providing data to shareholders (CDP) and getting the right systems in place (A4S). The point was made that reporting should not only be about the past but how a company intends to create its sustainable future. It is true that this often gets lost in backward looking reports and even companies who express targets do not often explain how they expect to achieve the targets in their reporting .

"What is driving the growth of international standards?"  was the question that led the next panel session , led by Judy Kuszewski whom it was nice to meet in person after our twitterous acquaintance to date. The fascinating takeout of this panel was the collection of perspectives from Carsten Ingerslev, the Director of the Danish Government Center for CSR, who said that "if we leave things up to the market, they won't happen quickly enough". It is certainly a good thing to see a government body taking initiative to drive CSR, and of the 91% (I think) of the top 1,100 companies in Denmark who chose to report following the law which came into effect in FY2009, 43% were reporting for the first time. (The Danish law, which was an amendment to the Financial Statements Act, requires companies to report on non-financial matters or give a reason why not. Of course, not too many companies are happy to say they don't give a hoot about sustainability, even if they are not sharing sustainability prime-time, so reporting becomes the only viable alternative.). Carsten said that the companies who did report confirmed that they gained benefit and were able to understand risks and opportunities for their businesses in a way they had not before. The Danish motto: you can't fly below the radar. Sustainability reporting is the radar. The "comply or explain" model is surely one which will be emulated, I suspect. Wim Bartels made the point that building the systems required for good non-financial reporting needs accountants. But who would have expected less from a partner in sustainability services at KPMG. He has a point, but some pushback was felt from the audience who suggested that sustainability reporting needs anything BUT accountants. This, when you consider that the IIRC is comprised of almost exclusively accountants and financial specialists, may already be a lost cause.

The next session showcased reporting leaders from Novo Nordisk, Novozymes and the data collection systems company Enablon. The best quote from this session was "you can't internally manage unless you externally report" (Dan Vogel of Enablon) . The question of how far you can monetize sustainability in integrated reporting was one of the interesting aspects raised, as the drive to fit sustainability into financial reporting frameworks may just create pressure in this direction. All agreed that better models to measure impact and the cost-benefits of sustainability impacts are required.

Toby Heaps of Corporate Knights and the 100 Best Corporate Citizens posed the question: Will social change happen through capital markets? and then proceeded to answer it by explaining that radical transparency is the key. Wow. Sounds so easy. The 100 Best Corporate Citizens has honed in on 10 core indicators which are the clue to radical transparency. Caution. This is a buzzword. Use it sparingly. Considering that only 2% of UNPRI signatories, according to Toby, disclose non-financial information, transparency has apparently not reached radical levels quite just yet. Bloomberg, in the form of Curtis Ravenel, align with Denmark in the belief that regulation is the only way forward.

Finally, a large lunch, a few exquisite muffins and some delightful pastries later, (N.B. Don't diet at Justmeans conferences), BP (Nicholas Robinson) took center stage and explained what it's like not to sleep at night when you need to produce a sustainability report when everyone is accusing you of being about as sustainable as a rabbi at the Vatican. After being slapped with the largest class action law suit in history, trying to produce sustainability report sounds like something only Merlin the wizard might attempt. However, without Merlin's assistance, apparently, but with a strong dose of Triazolam, BP has done it (see here - more on that in a later post). The complexities of reporting for companies who are dual listed (US and UK) were interesting to hear about from BP, who took four years to combine their different submissions into one report that meets both requirements. Hmmm. And that's only financial reporting. At that rate, integrated reporting should be with us by the time my great-great-grandchildren will wonder whether separate reporting was ever an option. Another interesting discussion in this panel was about what happens when Greenpeace decide you are the bad guys and viralize a gory video about endangered orang-utans, attacking one of your iconic brands. Invite them to the table, was the answer from Niels Cristiansen, the Public Affairs guy at Nestle. I just hope the conference room refreshments did not include Kit Kat. Greenpeace asked Nestle to develop an auditing plan for their rainforest impacts and Nestle agreed. Not only this, but the Head of Operations at Nestle is reported to have said "I am glad they did because it made us a better company." Who needs McKinsey when Greenpeace can help you improve your bottom line?

By this time, my head was reeling with  many old and new concepts, and my waistline was begging for relief, so it was probably a good thing that Justmeans didn't cram any more into this day. I will certainly be happy to attend another Justmeans conference, but only if they hold it at the Brewery.

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, an inspired CSR consulting and Sustainability Reporting firm)

The GRI Report Survey Report

You will all recall the GRI Readers's Choice Awards last year and the reporting survey that formed part of the competition. Some of you may recall how the Brazilians cleaned up, winning six first place awards out of a total of six first place awards (see the awards brochure here).

Well, now you can read what went on behind the scenes. The Reporting Change : Readers and Reporters Survey 2010 has just been published by Futerra, KPMG and Sustainability. The key thing about the survey was its simultaneous focus both on the readers of reports and those who write them, to assess whether there is an expectation match and a mutual alignment of needs. Three great sustainability minded firms have analysed the results. Here are their conclusions:

The first conclusion is that the future of  reporting is global. This is immediately followed by a revelation that over 70% of the (5,227) respondents were from Brazil (73% actually, with 10% from India, 5% from the USA and 12% form the rest of the world). Maybe the future of reporting is Brazilian? However, the report makes the point that the emerging strong presence of BRIC countries in the reporting arena shows that "appreciating cultural differences vitally important in reporting".

The second conclusion is that purpose of reporting is performance. "Reporting is driving performance worldwide .....Above any other business case for reporting, making real progress on sustainability is the priority". This is a very important assertion, putting to bed once and for all the cry that "No-one reads reports" as an excuse for not writing them. Reporting, as I too have always maintained, is a catalyst for performance and for engaging employees and others in the sustainability effort. 

The third conclusion is that reporting isn't stakeholder engagement. Reporters apparently, see reports as an engagement tool, but readers do not. Of course, if reporters do nothing to proactively engage stakeholders around the report, and just dump it on their website for people to (maybe) find, then this mismatch is understandable. 

The fourth conclusion is that reporting is trusted. But then, the report goes on to say, less that 10% of readers believe that reporting presents a complete picture. So readers believe what they read, but think it's selective. Partial trust, I guess, is better than none.  

The fifth conclusion is that standards have value. This means that the GRI framework improves comparability and transparency. This is true, up to a point.

The sixth conclusion is that all assurance is not equal. Aarrrgh.. Don't get me started on assurance. This is the understatement of understatements. Assurance quality is more diverse than the biodiversity in the tropical forests of Panama.

The seventh conclusion is that readers influence each other. Stakeholders share information with each other. Some even blog about reports. Like me. Though they didn't mention that in the Reporting Change Report.

The eigth conclusion is that reporting changes behaviour. Hear this: "Readers are investing, seeking employment and buying Reporters’ products and services based on sustainability reports. One-third of Readers are also inspired by reports to take further actions that contribute to the broad sustainability agenda." I also believe that the reporting process changes the internal behaviour of people in the business. More about that in coming months.

The ninth conclusion is that ... haha .. gotcha... there were only eight conclusions. Though I do wonder why ice cream didn't figure in any of them.  

Overall, this is a nice overview and presents the positive aspects of Sustainability Reporting from an audience which is already tuned in. There are no real "dissenting voices" in this survey, with the exception of about 10% of American readers who say that reports don't influence them at all. The survey really didn't ask any tough questions such as "Is sustainability reporting really worth the effort?" or "Can you really survive another reporting cycle without a nervous breakdown?".  

Notwithstanding (love that word), we can all be encouraged by the survey results which show that "60% of Readers claim their commitment and connection to an organisation is positively influenced by reading a sustainability report." That's a nice piece of quotable data if you are trying to convince your CEO to make the move towards reporting. Especially if she lives in Brazil.

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, an inspired CSR consulting and Sustainability Reporting firm)