Saturday, December 20, 2008

Pacific sustainability Index - you gotta love it !

Today i came accross something i love... sustainability report rankings. I guess there can't be too many people for whom report rankings just does it ... but for me, they just jump off of my screen and make me stop and take notice.

So i came accross the Pacific Sustainability Index which is run by the Roberts Evironmental Center. The center ranks companies based on their online sustainability reporting information. They have a defined methodology focusing on social, environmental and human rights reporting. And they produce sector reports on a frequent frequency, frequently. Focus on fortune 500 companies. The rankings cover intent, performance and reporting in each section.

The latest batch includes the Electronics, SemiConductor and Peripherals Sectors. 62 pages of really interesting analysis. Panasonic, Toshiba, Sony and Royal Philips Eletronics come in 1,2,3 4 ... yes in that order. Interestingly Panasonic scores very highy on environmental issues but much less so on social issues. But overall is ranked winner.

By now you will have realised that i like to get things first hand - so i took a quick trip to and located the Panasonic 2007 Sustainability report on which most of the PSI analysis was based. On the cover of the report is Panasonic's wearable robotic suit with rubber man-made muscles to help people recover from limb paralysis. What a great thing! Looks quite futuristic. And the eco-friendly washer dryer. They put their "hearts and soul"into developing the heat pump. Soul in a heat pump ? But flippancy aside, this is a really great report. Its packed. The graphics are super with lots of pleasant and informative diagrams. Stakeholders pop up throughout the report, intrude with a question, or criticsm, and receive a reply on the same page. Nice touch. And to top it all, assurance by no other than the impresive Johnathon Porritt.

I think i am going to be a PSI fan. Hope it's not addictive.

Friday, December 5, 2008

Quotes from the reporting conference

What they said at the Ethical Corporation Conference Reporting and communications Summit, London, November 25-26 , 2008

The Ethical Corporation Conference and Reporting Summit (25-26 November 2008, London) was attended by a competent gathering of sustainability professionals, consultants and yes, you've guessed it, me! It's always interesting when people get together to talk about reporting, because the conversation never quite knows whether to focus on the art of reporting or the art of managing and implementing social and environmental responsibility in the business, i.e., the content of the report. When people talk about reporting driving performance, and I heard that many times in the conference, are they talking about the delivery of a social report, or are they talking about the responsible ways in which the company performs in order to be able to report? It's a little confusing for the average bystander, I daresay. Though as a seasoned reporter, I maintain that there is truth to the assertion that reporting is a catalyst for action. The very nature of raising the question: "What have you done about reducing your GHG emissions?" creates an insight that some action is required in that area if the answer is an embarrassing silence.

When it all blows over, how will we be positioned ?
The question was asked of Ernst Ligteringen, the CEO of the
Global Reporting Initiative. Ernst maintains that it is more important now than ever before that businesses maintain their social and environmental responsibility efforts. Because when things get back to "normal", (someone will define normal, one day) the underlying issues such as climate change, use of resources, poverty and so on will continue to be high on the agenda. And those businesses who can responsibly deal with those issues will be best positioned.

We haven’t written the last chapter on Social Responsibility
Another quote from Ernst, in response to the question: "Is the GRI a standard or a tool?" Ernst says the GRI continues to evolve and represents work in progress. But to all of the rest of us, it looks like a standard, it feels like a standards, it is used like a standard, and it’s the nearest thing we have to a comprehensive social and environmental reporting standard. So what's the harm in considering it to be a standard? Well, we wouldn’t want to tread on the toes of ISO, who are busy developing their 26,000 standard which should see the light of day sometime this millennium. But that doesn’t promise to add much value over the GRI, in my view.

It's just noise
Speaketh the irreverent
Mallen Baker, who has a very specific and rather uncomplimentary view on reporting. In its current form, it's bad, he muses. He compares it to regurgitated messages which are force of habit but have long since lost their meaning and value, like "Stay clear of the doors" when boarding a train. He maintains that the reason and the delivery of the communication have become disconnected. What is the point of reporting, Mallen asketh. What does it tell us about the potential of companies to generate future cash flows? Reports require companies to generate their own context because without context, whatever they write is meaningless. I agree with this point. Mallen ends up saying that the GRI is a wish-list from a bunch of different stakeholders so that when they sit in a committee, so that they can decide what they would like to see. This does not, he says, add real value to the engine of driving change in the business. Ernst rebuts with the assertion that the GRI, when used properly, does provide context and is intended to provide balanced reporting. Some do it well, some less well. Slight advantage for Ernst in this argument, I feel. The GRI structure is, on the whole, positive and does assist in focusing the mind about what is important to consider when reporting.

Longer reports win awards
Pronounceth once again our resident sceptic, Mallen Baker. I disagree. But let's get some data.

Comparability is a myth
Aha. A voice from the crowd. One of the core objectives of the GRI framework is to provide comparability – a way of benchmarking businesses against different indicators. Anyone who has tried to do this, and I have, quickly finds that there is very little that is directly comparable because, although the indicators are mostly specific, the answers are mostly selectively narrow or obtusely broad. For the time being, comparability is only marginally possible.

Marketeers are not interested. CSR teams need to build the bridges
I forgot to note who said this. So apologies for lack of credit. And yes, most marketing teams are conspicuously not involved in CSR efforts, and many are not even consulted in CSR reporting efforts. They may provide data for the report, but they are not a core member of reporting teams. This is an indication of the lack of integration of CSR strategy in business strategy which drives marketing strategy. Who can change this? Not the CSR teams. The leadership teams. Who more often than not contain marketers but not CSR people. Chicken and egg stuff, right?

We identified 130 material issues and we reported on 8
Olaf Brugman, Senior Manager in the
CSR Division at Rabobank, describes their approach to materiality. It takes a lot of self-restraint (or in some cases, reflief!) to select a small number of most material issues and report in depth only on those. But this is the thing to do. Well done to Rabobank.

Too much information in a non-structured way is non-information
Ursula Mather, VP
environment and sustainabilty at Bayer. An impressive approach by Bayer to CSR and to reporting, with focus on material issues. A key watch-out when reporting is to ensure you don’t engage in telling everything you have in the interests of transparency. You have to tell what's material.

Every word was assured
Hilary Parsons, head of Corporate Affairs , describes the 15 month long assurance process of Bureau Veritas for the
Nestle "Creating Shared Value" Report. Every sentence was anlysed to ensure there is proof. Hilary believes Nestle gained true credibility value from this rigorous assurance process.

If you could ask Coca Cola any question, what would it be ?
Jo Franses of
Coca Cola UK talked about the innovative "Let's get together " approach to interactive stakeholder engagement and the new platform for delivering open and honest conversation about the brand. Since May 2008, 4,000 questions were posted, 900 unique answers were supplied and over 100,000 have visited the site. Sounds suspiciously like good practice to me.

Mouse-over glossary
Stiaan Wandrag of
Sasol cited this as an innovative approach to on-line reporting. And, it might not sound much, but it's actually quite a good thing. Every time they use an acronym a little window pops up with the full monty. I just checked it out. It works. I mean, who carries in their head GTL, CTL, UNFCCC, CCS, BEE, GEC, OHSAS… I could go on. I mean, do they talk like that at SASOL ? But, good for us people who get frustrated having to look things up every five minutes.

Our culture is performance driven, values led
This may not sound original but it is a neat and punchy way to describe the Cadbury philosophy which incorporates some wonderfully refreshing work on CSR and reporting, led by the impressive Allison Ward. ( I am not repeat NOT saying this because Cadbury handed out thick slabs of dairy chocolate at the conference). The Cadbury report is focused, clear , interesting and geared to different level of stakeholder competence and interest. is well worth a visit – it's quite an inspired approach to reporting. Allison says: Even the glossiest of websites is not relevant without content. So from Eco Eggs to considering the possibility of making biofuels from chocolate waste (I think that was a joke!), I make a vow of eternal loyalty to Cadbury. Guess I will just have to eat more chocolate … that’s going to be really tough….

You can tell about how serious a company is about CSR depending on who has accountability for the CSR function in the business
I attribute this to Charlotte Grezo, former head of sustainability at Lehman. This is a good point. Someone has to manage sustainability just as someone has to manage everything else that is important in the business. Those companies who just let CSR stroll in and out of the different functions in the business without direct accountability cannot truly hope to leverage csr opportunities in an optimal way. Investors are not interested in straightforward philanthropy. Charlotte said this too. Investors want to see some meaningful use of community investment that creates new value. Not just giving charity. I think most businesses understand this these days, no?

Integrated reporting helps drive internal alignment
Another impressive lady of Cr, Susan Blesener of
Novo Nordisk, described the Novo Nordisk approach to integrated reporting in an clear and enlightening way. I haven’t been a fan of integrated reporting but I was impressed by the Novo Nordisk presentation and could see the value of ensuring comprehensive alignment of all business and sustainability messages in one mindset and one report.

The truth is … everything is connected
Jo Confino of
the Guardian profoundly confirms that if the business is not understanding the complexity of all its connections, it is going to go nowhere. He advocates looking at the true purpose of reporting and not just get into the routine of reporting and lose the unique value it can bring. Makes sense, I guess.

Reporting is giving way to communication – these are not the same things.
Mark Weintraub.
Shell. Bingo. Well, whoever said they were the same things. Reporting is just one part of a comprehensive communications strategy. Whoever thinks they can produce a report and then shut up has obviously not got it. I am comforted that Shell has.
Mark says that there is a search for simpler, clear and cheaper ways for reporting. And here I will agree. There comes a point where reporting becomes over complex and defeats its objective. Back to Cadbury?

Lawyers in the other company allowed them to do it already
Mark Weintraub again, on the question of to what extent they scrutinize other companies in the same sector as part of their report preparation. If other companies have reported, and their lawyers have allowed them to do it !, then it appears that Shell management would also be convinced to make similar disclosures. I suspect the competitiveness in reporting drives many companies to look for reassurance and also the opportunity for a competitive edge amongst peers. This is a good thing.

There was a trickle-down effect
Andrea Smith on the
Carbon Disclosure Project on Supply Chain Reporting. Great Project. Questions to suppliers trickled down to their suppliers and so on. The driving of responsibility through the supply chain – a great example of making things happen differently. The change driven by the CDP ( mouse- over please, Sasol) is quite impressive.

Now ICT is the sound byte of the month
Penny Shepherd of
UKSIF on the apparently sudden emergence of a host of sustainability issues in the ICT sector. She's right. It's there. Don’t let peer pressure pass you by, if you are an ICT company, better get on the train.

Reporting is like a Russian doll
Andrew Wilson, MD of that great company,
Corporate Citizenship. He is referring to a Babushka doll. You know, you keep opening it up and there's another doll inside, smaller. And another and another …. Andrew was expressing his view that reporting has to be global AND local, and that she shape and form should be the same but the content should be made relevant at local level by a country or regional focus or an issues focus relative to local priorities. I wish more globals would get this. A global report may be right for analysts but it misses most of the local stakeholders. Fortunately, there are many companies reporting today at both levels.

200 indicators per country
Sofia Fernandez described how
Telefonica manages global reporting and local reporting. Whilst there is scope for each local operation to report in its own way, each is required to contribute to the global picture and the local CFO's are the ones charged with making sure that each local subsidiary delivers data on a number of agreed global indices. Good approach. Babushka.

This was a good conference.
Guess who said that ? Got it. Me again. I enjoyed the conference. On the whole. It did provide an opportunity to hear good practice from around the world, and talk to those responsible for it. I would have welcomed a little more focus on some of the reporting skills and innovations, but broadly, there were lots of opportunity for insight and the quotes about are merely a small selection of the various issues that arose.

Saturday, November 15, 2008

The Shiseido Way: beautiful, cute and animated

I was intrigued to read Shiseido's Social Report. I came accross the fact that they had issued a report, and had a sudden surge of nostalgia caused by several years working in the cosmetic industry, time spent in Japan, and the reverence earned by shiseido as a master cosmetic innovator and developer, using the most expensive raw materials and producing the classiest and most predigious line of products. So how do they do on CSR, i asked myself, after the nostalgia has subsided.

Straight to website, download PDF.
Darn. It's in Japanese. Now why would that surprise me? Well, their CSR website is all in English. Couldnt they have been 無理がきく ? (that means willing to go the extra mile). (I hope!). And produce the report in English ? Wonder what proportion of Shiseido customers are not Japanese speakers? (I know a little Japanese, domo arigato). A quick trip to corporate data shows that 63% of their business is in Japan.

OK, let's take a quick look at their web. Straight to the gut. Stakeholder dialogue. Shiseido has an interesting model here. Once a year, it seems, they invite experts and hold a facilitated discussion which is fully transcripted on the website. This is a nice approach, interesting to hear what appears to be the unedited comments of stakeholders. I looked into how Shiseido dialogues with customers, and found quite a range of ways to sollicit customer feedback, including "chatterbox", where employees talk to customers in an on-line live chat enviromment. it's GREAT fun. Why ? Because it offers "The ability for participants to transform themselves into cute animated characters keeps the interview enjoyable." I think i would be a cute animated CSR consultant.
But the nice, and i think, rather unusual thing about this is that the site also gives examples of where Shiseido has modified products and packaging design as a result of consumer feedback. The value of dialogue proves itself once again.

Their report is a self declared GRI B. That self-declared thing again. Must do a post on that.
It's sort of assured - by one of the stakeholder panel participants - but there is no indication that this is anything more than an informed opinion rather than a full verification or assurance process.

The thing that strikes me most about the Shiseido web report is that it's a little like going back in time. Inside one of their nano-capsules. Their approach to CSR is really about doing good - making people feel happy because they can be beautiful by spending a lot of money on shiseido products and receiving expert advice on how to use them. Shiseido has a very benevolent approach, and works to provide products for all types of skin concerns and "irregulaties "etc. What i miss is any sense of materiality. What's material to Shiseido ? What about their role in the beauty industry which creates manipulated and distorted views of women in the name of beauty ? To what extent are they perpetuating myths about beautiful people to drive sales, that creates the sort of society where women feel they have to be stereotypically "beautiful" to be valued ? what about pricing ? What about animal testing ? What about manufacturing conditions?

And while we are on a feminist roll, Shiseido employes over 6400 female beauty consultants (and 6 males). 276 of a total of 1798 managers are female. 15%. Amazing really. The Company sells to women. Makes products for women. No way of knowing how many women are on the Board or in the executive suite. But wouldn't you have thought that there would be a few more capable women available to assume some leadership responsibility ?

Anyway, all in all, i can't help but feel a little positive towards Shiseido. (Is it that nostalgia again ?). their report seems an earnest attempt to reflect a basically solid csr position and a genuine attempt to do the right thing. Modern CSR would suggest they ought to be doing a little more soul-searching to review those areas which are more difficultly material, and also expand the scope and depth of their reporting .

For the time being, sayonara . Or, as they say in Japan, bai-bai.

Saturday, November 1, 2008

Fast food or fast service at McDonalds ?

So why do you go to McDonalds. For food or fast service ?

McDonalds have released their new interactive digital virtual on-line hyperlinked fourth CSR report. The last was in 2006. Took them 9.5 months, they said, in
an article in PR Week.

Now by now, you know that I am not a fan of digital formats. Give me a searchable, off-lineable, unhyperlinked PDF any day. So I was pleased to discover that there is a downloadable
minireport which I immediately downloaded.

The first thing I liked about the McDonald's mini is the key performance indicators from 2004 – 2007. This gives PERSPECTIVE and shows progress over a 4-year period. That, after all, is what sustainability is all about, right? The long haul. The 24 page minireport is well-written and targeted at the consumer – descriptive, plain language, not much data but exactly the sort of thing I expect people will be interested to read. It does contain interesting insights, the "did you know" section in each chapter offers 4 or 5 core pieces of information ,like the fact that McDonalds have a chef! ("Most people are surprised to find that McDonalds have a chef!), the first green restaurant in Sweden was opened in 2000, Nutrition Information Initiative for informing the consumer of all nutritional data of foods, Rainforest Protection Policy etc. Producing a readable summary in this way I suspect will encourage lay readership. And in so doing, will assist in broadening overall awareness for sustainability issues. But, as a professional, my thirst for data was not quenched by a mini 24 pager.

So I went to the cr report site: I soon began to tire of the long scroll-downs and I don’t have time to watch the videos so imagine my joy when I discovered you can download the FULL report – 92 pages.

I like the McDonalds report. Their treatment of the
Greenpeace onslaught where McDonalds admit they were "taken by surprise" and entered into dialogue with Greenpeace to develop sustainable solutions shows responsiveness and honesty in reporting. The section on employment experience is comprenehsive and shows good progress in development of the employment value proposition, something McDonalds has been criticized heavily for in the past.

The report was produced with guidance from CERES, it's GRI indexed but not assured. There is no declared reporting level, though this looks to me like a high B or an A.

McDonalds also takes care to note where the Company reports
around the world which I believe is an important element for global businesses. Global reporting for local stakeholders doesn’t work. A global framework is fine, but multinationals must recognize that their impacts are different each national location around the globe, so McDonalds 9 local reporting locations is good news.

Actually, I am appalled to find that I haven’t found anything terribly critical to say about this report yet. So here is the thing. When I take my kids to McDonalds, it's because it’s a FAST option. Fast food, right ? I can't find anything in this report about customer service and the way McDonalds manages to ensure both food quality, variety and the safety of Happy Meals as well as doing it all fast, so that we don’t have to wait in line for eons. Nothing about the customer in-restaurant satisfaction. The report is heavily slanted to supply chain issues. But I guess, and probably agree, that these are the most material.

So all in all, well done to McDonalds for a great report, well formatted, readable, material, specific on goals and targets and actually, fairly optimistic. Wow, now I am sooo hungry!

Friday, October 24, 2008

Cradle to market in 6 months

Interesting piece that caught my eye this week in "McDonald’s USA recently recognized Smithfield Foods, a pork supplier for the McDonald’s system, with the company’s first-ever Sustainability Award. The award, which will become an annual honor, recognizes the supplier that best exemplifies the McDonald’s vision, principles and values for sustainable supply. "

Smithfield has been reporting since 2001, starting out as many companies did with environmental reporitng and then moving by 2005 to full blown corporate social responsibility.
Smithfield employes 57,000 people in the supply of 50 different types of pork, beef and turkey products, and other gourmet foods. Apologies if this offends vegetarians. I am not much of a pork fan myself, actually. My first taste of a pork pie was a surreptitious bite at an after-ballroom-dancing-class party when i was a kid. Being Jewish,that's a bit like eating two Magnums after a Diet Club weigh-in. I was so consumed with guilt that I swallowed so quickly I didnt even taste it.

Anyhow, Smithfield has a pretty good sustainability record and declares a core value to be "advance animal welfare". I took a quick peek at their latest CSR report to see how they are doing on this score. page 44. Fascinating. Did you know that the life-cycle of a pig is 6.5 months from birth to market! Except for 243 pigs who didnt make it to market due to transportation accidents along the way . Their life cycle was 6.5 months minus about 2 days, i reckon. But .. from birth to market! A pig's natural life-cycle appears to be from birth to market, not from birth to grave. (I can't help but feel a twinge of sadness here, because in Chinese Astrology i am, yes, you guessed, a PIG!) .

Smithfields say "We are the world’s largest producer of pork, with 445 hog production farms and
approximately 1,700 contract hog growers in the U.S. alone." Growing hogs - the language surprises me a teeny little ... it would soften the blow if they said raising hogs. you know, a little respect.

My favourite sentence is:
"Ensuring the health of the pigs we produce is one of our top priorities. Our staff geneticists identify animals with superior characteristics to develop breeding programs that minimize deleterious physical characteristics." I had to Webster deleterious. It means
harmful. Guess breeding harmless pigs does ensure their good health, until it is time to market, right ? However, being a feminist, i was pleased to read that Smithfield has moved to group housing of pregnant sows by phasing out individual gestation stalls at an investment of, wait for it, hundreds of millions of dollars over the next 10 years. I guess pig-gender issues are safe with Smithfield. And feminists everywhere can now enjoy porkburgers at Mcdonalds knowing that they are in good hands.

Flippancy aside, Smithfields open and transparent reporting is commendable. The long descriptions of all the measures taken at each stage of Porky's life-cycle appear to reflect genuine best practice and first class reporting. After all, Miss Piggy is a key stakeholder, right ? Oops, i said flippancy aside.

I find Smithfield to be no less impressive in their approach on other issues. Their GRI checked B report is clear, comprehensive and marred only by a lack of assurance. I would have liked to see a clearer analysis of stakeholder dialogue and material issues, but the report does relate to what i would expect to be core for a business such as Smithfield - food safety, animal welfare, food insecurity, use of antibiotics in animal treatment, health etc. I like this report.

So back to McDonalds. And their Supplier sustainability Award. Understandable that Smithfield was selected.

This all caused me to wonder how many multinationals make sustainability awards to their suppliers . And whether reporting is part of the sustainability criteria. I am aware that many globals now rate and rank suppliers in terms of value offered, service etc.. but how many rank them for sustainability ? I think i will check that out - would welcome feedback if anyone knows who does what.

Oh, and next time you're tucking into a pork sausage triple decker , please remember that if Smithfield grew it, it probably died smiling.

REPORTING AWARDS: please vote!

The corporate register reporting awards are open for voting.YEAH !!!!!.

Please go to to vote.

And a special request:
Please vote for the comme il faut report in the Best SME category.
This is a breakthrough report - first in Israel at GRI level A checked, first private company report, first fashion business report, amazing design and comprehensive content. I am NOT objective. I wrote it! But it's a great report. And i would really like to see my client win an award. This is also the only Israeli report in the competition.

The Corporate Register is the best reference point for reporting. It stores over 18,000 reports and boasts 23,500 users. There are 120 reports in ths years competition, and some of them (!) are absolutely exceptional.

This is the second Reporting Awards. Last years competition included 300 reports. To see who won, take a look here:

Please vote!
Reporting is a critical tool in the development of transparency in business. Any report is better than no report, but the awards is an ackowledgement that reporting requires more than just a desire to be transparent, it requires the existence of true csr processes in the business (otherwise there's nothing to report, right ?) and a professional and methodical approach to describing csr approach and performance. The awards offer recognition for the leaders in this field, and broader awareness for reporting companies and csr issues.
Reporting in itself is a catalyst for action, and regonition for reporters is a catalyst for reporting.

Well done to the corporate register for this initiative!

Tuesday, October 21, 2008

Quick update:

See my comments on two Ethical Corporation posts:

Interesting article by Toby Webb entitled: CSR in a recession, what may be in, what may be out

Review of online reporting formats by Kathee Rebernak entitled: New media – Online reporting’s virtues and pitfalls

As usual, i am rather argumentative. I wonder if i was born that way, or if reporting did it to me!

Report or be reported.

Ok, so i promised a post on self-declaring. Rain check till next post. Please.

Because i had this thought: report or be reported.

It is possible to consider sustainability reporting as a from of pre-empt. Because what a corporation doesn't report, someone else apparently will. This thought came as my inbox was bombarded with details of new reports, surveys and studies about the corporate responsibilty of businesses.

For example:

Interbrands 2008 Value of Brands report - a great read - with an interesting view of brand value link to sustainability.

The 2009 corporate equality index - about the way businesses address Human Rights.
Wal-mart scored a whopping 40%, losing out mainly on gender discrimination practices.
Nokia scored 50% - losing out on diversity training, LGBT equality and support and other benefits for same and opposite sex partenrs.

Nokia's 2007 CR report says " In 2007, 71% of employees participating in our annual employee survey felt that all employees of Nokia are treated as individuals regardless of age, race, gender or physical capabilities - an increase of 2% from 2006. We also conducted a survey in 2007 to find out how our policies on inclusion affect our employees' work lives. We are implementing an action plan on diversity across all business units. " If i were Mrs Nokia, I would challenge the 2009 euality index score.

So many aspects of corporations and their non-financials are under scruting today, so many surveys, so many comparisons and benchmarks, so many corporate-watch type websites, so many brand and reputation indices ... that the only way a Corporation can tell the comprehensive story about its performance and balance the spectrum of data is through the CSR report. Typically, surveys and benchmarks are focussed on specific aspects of a corporation's activity. Often, these are taken out of context and stacked up against a set of external parameters.

The CSR report is an opportunity to establish context, balance and perspective in reporting data. Clearly, the report should be authentic and tell the truth. It should include the good news and the not-so- good news . (Ok, bad news). But the ability to present all this data in CONTEXT and with PERSEPCTIVE and in line with the Corporations objectives is valuable.

Take the Nokia example above. With so many Companies achieving 100% in the equality index, many of whom i do not associate with a good human rights record, Nokia's 50% was a shocker. Wal-mart didnt surprise me all that much, but Nokia did. And as i read Nokia's CR report, I see that they are undertaking substantial work on Human Rights, Diversity and Gender. Whichever source I choose to believe, the fact is that Nokia has pre-empted a position in context on this issue which balances external reports about their conduct.

So, report or be reported. Pre-empt or be pre-empted. Proact or be proacted. (Hmm, does that work ?). This post is a pre-empt for all those who maintain that CSR reporting is just about PR.

Monday, October 20, 2008

How to almost report: the paradox of level C reporting

The GRI is a great framwork but i sometimes wonder if it has set itself up for a few own-goals.

Reporting levels A B and C are designed to give some degree of choice about the level of disclosure when reporting. I typically view "C" level as a vehicle for a first reporter, who is unsure about the risk of reporting or perhaps doesnt actually have all that much to report. "B" level is a good choice for most first timers in my view, as it ensures some degree of substance to the report without demanding the full Monty. "A" level is for seasoned reporters, but by no means out of the reach of businesses with some established csr practices.

So let's take a closer look at "C" level. Some Management Disclosures required (this is usually the easy piece) and only 10 indicators. This really is more of a declaration of policy than a report of performance. A bit like going skiing on an indoor slope with self-guiding extra-wide skis, automatic braking system and air cushion front and back.

I did a zoom-in on what look to be a really great little report by imc2. Their first self-declared "C" level report can be viewed here.

First, i will restate one of my mantras: Any report is better than no report. Any Company who chooses to report for whatever reason must be commended. So my full commends to imc2. A first report is always difficult, always full of tough choices and new considerations, sometimes politics, so getting to the stage of the press release is quite an achievement.

This being said, we cannot ignore quality. Let's take a closer look at the Imc2 report.
IMC2 is an online marketing services business, digital tools and the like. Turning over less than $100 million ("we are a private company so we do not disclose turnover"), with 523 employees based mainly in Dallas USA, it is one of the few companies i have come accross of this profile to actually go the home run with a csr report. The report is called Positive Impact report, and the Company declares its non-financial mission to be about building relationships.

The report is written in chatty style, stragtforward, no pretense, no sustaino-eco-corpo-jargon, and is a truly refreshing and pleasant read. Anecdotes about the president's boyhood charity activities, how you spend your day in the office and why the world is at environmental risk are quite entertaining and mildly informative. But its not the nitty gritty. And whilst this report is cleanly written, flows well and touches on a number of interesting and even material points (can you really trust advertisers? how can a small business make a big impact? how do you really measure all this ssustainability stuff?), the lack of hard numbers and sustantial evidence of adoptionof csr practices is very very limited. About the only quantifyable numbers in the report at those relating to employee carbon emissions. Even data which appears to be readily available, such as the results of regular employee surveys are not disclosed. Why would a Company who wants to "change the world" go so minimal on data ?

This reminds me of another almost report - the Deloitte inaugural report - "we are defined by our responsibilities" - which, whilst not pretending to be any level GRI and has no referenced standards - is a collection of PR blurbs and mildly disguised advertising copy, despite the fact that the company actually appears to do a lot of positive things. I tried to look for numbers in that report too, and the best i could come up with was the page number on each bottom footer.

Has the GRI created an almost-reporting framwork by establishing application level C? Is this actually an own goal ? For if the objective of reporting is to build trust with stakeholders, the almost-reports which beg more questions than they answer surely do not advance this aim. In some cases, they positively reduce trust. The imc2 report is so charmingly written that its hard to be critical. But at the same time, reporting should be reporting, not a policy booklet.

Another thing we see with first-time reporters is the choice of report timing. Better to go earlier despite leaving many reporting gaps (if i see "not material" more than 75 times in a GRI Index then i know that someone hasn't understood the meaning of material), or better to implement more and report later ? Hard choice. I tend to favor the former, but i see no reason not to include more data. Both imc2 and deloittes have more data than they chose to disclose, without compromising speed to report market. Why not take transparency just a little further in the first report, even if application level "C" provides a neat exemption ?

Final point - self declaration is problematic. Why ? haha.... NEXT POST. :-)

Tuesday, October 14, 2008

Small businesses: BT shows them that its good to talk

I came across this interesting article in the UK Independent , entitled "Sustainability cannot just be put aside during an economic downturn" . I fully agree that small businesses hold the keys to our future. First, large businesses are dependent on them. Second, they are the major employers in most markets. Third, their collective influence on financial markets is significant and fourth, i am one ! haha.

What is also encouraging is the slow realisation that large businesses must help small businesses in their supply chain to become more sustainable. The GRI led program of sustainability inthe supply chain was impressive and should be a model for other corporations to follow. Not only do MNE's (multinational enterprises) gain benefit from their supply chain becoming more transparent and more efficiently managed, entire markets gain benefits from improved sustainablility of a broader based of businesses and business practice. And the GRI gets more GRI reports.

Can't fail, right ? Even in a downturn. So come on, all you MNE's. Let's see more of you picking up the gauntlet.

According to the article in the Independent, British Telecom is chairing a round table to help small businesses understand how they can get sustainable. A core BT environmental benefit is the elimination of transportation emmissions and energy consumption by offering telephone and other virtual tools to enable distance communication. They didnt say if the round table is being run by video-conference. Guess not, huh ? We all have limits ...

Scoop on Ben and Jerry's social report: destined not to be read

I decided to check out Ben And Jerry's latest social report. Not only because i am an icecreamaholic, and a csrreportaholic, but because I was looking for some specific information about social misisons for a new piece I am writing for a local professional journal.

Actually their last "Social and Environmental Assessment "was for the year 2006. (Guess they still have time to upload 2007, right ?)

First off, as usual, I looked for the PDF download. Oops. none to be found. Basically, you have to read the report on-line. OK. So i go to the highlights for 2006. The "short and sweet version" is 13 page-downs long and littered with hyperlinks and several videos. Definitely not short and not so sweet, as to read this page, including checking out the links and watching the videos, would take about the time it would take to eat a 35 pints of Chunkey Monkey packaged in new bleached paperboard containers supplied by an expert in sustainable forestry practices. And in that time I could easily scan a PDF (one chunkyMonkey time-unit) . Looks to me that Ben and Jerry's dont really expect anyone to read their report. Or, it's a sly ruse to get people to eat more Chunky Monkey.

Which brings me to a couple of questions:

Who are reports meant for ? Who do the writers expect to read them ? And how do they create the report in such a way that it can be read easily ? I will blog about this some time.

How do people read reports ? Sitting down in an armchair with coffee and Cherry Garcia, for a nice long read ? Or dip in to the highlights of interest and linger over the attention-catching points? Or are they simply a reference manual - need some data on social missions so look for that specifically in the report ? I suspect that most readers are in the latter two categories. As a professional report-reader, that's about where i am. So Ben and Jerry's on line thing doesn't do it for me. I cannot quickly scan the entire report, and getting to the data is painful. Not least because each link leads to another link, which leads to another link ... you get the scoop.

I have great admiration for Ben and Jerry's business and I often quote them in things I write and lectures I give. As part of Unilever, their disclosure is restricted - I had to smile as I read that their annual revenue for 2006 was between $200 million and $500 million. I mean, how large is a scoop of sorbet ? They say they used the GRI guidelines in disclosing this detail, but I was not able to locate a GRI Index or any other reference to reporting against GRI parameters. (Note: G3 is my bible). But the report is so hard to navigate that I gave up pretty soon after that. But not before I noticed their Fair Trade Vanilla. Sounds fairly delicious.

On another note. I was amused by the extent to which some activists go in suggesting that businesses go sustainable to unsustainable proportions: People for the Ethical Treatment of Aminals is reported as requesting B&J to use breast milk in their ice cream production rather than cows milk. Well. That would certainly open up a whole new area of creativity in naming ice cream brands: Titilating French Vanilla, Mom's Natural Milky Blend, Organic Strawberry - for Suckers Only, Fair Trade Boob Flavor, Peanut Butter Cup 36B underwired, Bosom Peach and more .... I mean, are these PETA people really serious ? Or is it just a cheap PR stunt ? I wonder how many of them eat their morning cornflakes drenched in breast milk ? hmmm ?

Anyway, Ben and Jerry's - I raise my scoopful of my personal favourite coffee -flavor ice cream to you in the hope that your reporting accessibility will become as brilliant as your business concept, execution and products.

Thursday, October 9, 2008

Israel : finally waking up to sustainability reporting

After what has been a saddeningly dormant market in terms of sustainability reporting, the Israelis are now wakening up to the delights of revealing all to the public at large. Up until this year, an intermittent trickle of low-key reports characterized the market (such as the Egged Bus Company environmental report) , and the awareness of the industry. This year, 2008, albeit rather late in the year , an absolute flood of reports has revolutionized the market: FIVE reports between July and September:

comme il faut: sustainability report, GRI A checked, 85 pages
Partner Communications: sustainability report, GRI B checked, 56 pages
Strauss Group: Sustainabilityreport, GRI A checked, 126 pages
Bank Leumi : interim environmental report, non-GRI, 32 pages, HEBREW only
Motorola Israel : sustainability report, GRI-referenced, 76 pages, HEBREW only

Interesting to note that all reports are quite different in nature and represent different industry sectors – within this diverse group, 5 distinct industries are represented, and 5 different business models.

The first to break through the glass ceiling was
comme il faut – a medium-sized, privately-owned feminist fashion business with a social and environmental agenda. Their report is a masterpiece in creative design as well as professional content at a high level of disclosure, both in terms of transparency, materiality and issues for which the business has been criticized.

Next came Bank Leumi's Environmental Report, an interim report (Leumi, one of the two largest banks in Israel, was the first GRI reporter with a full sustainability report in 2006) detailing environmental advances (direct impacts) and carbon management policy – the first and only bank in Israel to develop and disclose in this field.

Third to hit the headlines was Partner Communications, with a GRI checked B level report full of superlatives and cringingly positive declarations but, sadly, lacking in measurable performance-related content. One of those reports that leaves you wondering: Is that really it ? Surely there must be some more data on the website. But then you look and find there isn’t. Partner is the second largest cellular provider in Israel marketing under the Orange brand, and a major local employer, renowned for bold marketing and innovation. We expected a beefier report.

Following on Partner's heels – Strauss Group. Strauss is an Israeli based global foods and bev business – salads, snacks, confectionery, coffee etc – traded in Israel and one of the few Israeli Companies with over $1 bn turnover worldwide, produced an interesting, professional report focusing on narratives of direct impacts with a reasonable degree of disclosure which admits to the Company being in the first stages of the sustainability learning curve but which conveniently fails to mention some of the less positive issues the Company has been associated with during the past year such as lysteria found in salads and industrial action by employees regarding their rights.

Finally, Motorola Israel , the leading Motorola subsidiary outside of the US, produced their third local report, a highly detailed account of Motorola's impressive activities in Israel as part of global Motorola Inc. This report is not a full GRI report, given reliance on the global reporting of the mother company, but it does reference GRI indicators and is the first report to have been assured in Israel.

The fact that this group of reports all appeared around the same time in 2008 is hopefully, not just a splash in the ocean or some csr bug in the air. It's the sign of a market starting to develop into a stage of maturity where transparency holds some attraction. The low degree of public engagement and activism in Israel creates little pressure for Companies to report. But the potential for good PR and reputation enhancement is now becoming a driver of corporate interest in sustainability.

Notwithstanding, a lack of deep understanding of reporting and its purpose is evident in these pioneer reports. Only the comme il faut report produced a materiality analysis and explored material themes in detail. Others were transparent to a degree but not material. The impact of cellular phones on society was not explored in any detail in the Partner report, and the issues of obesity, food safety and sustainable food supply chain were not tabled in the Strauss report. Stakeholder engagement is not clearly understood, and there is little evidence of true efforts to identify material issues for core stakeholder groups, aside from employee satisfaction surveys, which are less than adequate as a tool for measuring stakeholder concerns and aspirations.

This is more or less where the global reporting markets were around 5 years ago. A desire to be seen to be transparent, and a public shopping list of company policies and selected data was a good first step. The advent of normative frameworks such as the GRI, Global Compact, AA1000 standards and stakeholder processes have helped global Companies move from direct and broadly internally focused csr to externally focused sustainability approaches - the move from "What are we doing" to "How do we impact". This is the maturity evolution we can expect in the local Israeli market as Companies move to second and third reports.

But first, we need to see a critical mass of reporters in Israel – in many ways, any report is better than no report, and in Israel, the potential for 250 annual sustainability reports is not exaggerated.

Let's hope that 2009's reporters will abound, whilst at the same time, learn from years of reporting experience and avoid the pitfalls of the nearly -early adopters.

(For the record, as a local consultant, I was involved in writing the first Leumi social report 2006, comme il faut report 2007, and i assured the Motorola Israel 2007 report)

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