How to READ a CSR report

I regularly review CSR reports for CorporateRegister.com. The review format is compact, ie not very long and detailed, and focuses on Content (what they disclose), Communication (how they disclose) and Credibility (can you believe it). It takes around 3 hours to read, understand, analyse and review a report. Even the lightest weight reports. So far, I have completed around 37 reviews, across all types of Company and in most sectors. After a while, you begin to get the hang of what to look for in a report. So, for the 1,212,507 people who read reports, I would like to offer some guidance as to how to make your reading experience enjoyable and worthwhile (ok, just a touch of sarcasm there). And for the very few people who do not read reports, this may help you get started J . At this point, regular readers will expect me to say: "First, equip yourself with a Chunky Monkey and a really interesting report." Ha! Ok. We'll assume you did that already. I find CSR reports fascinating – and I strongly believe in their importance and relevance in driving the transparency of businesses around the globe. So let's get dug in. Here are some introductory insights to report reading:

Start with an open mind
It is so easy to have bad vibes about report from a Company you have bad vibes about. You know they are not really into CSR and you expect to find a whole load of irrelevance in the report. You're mind is made up, and you look to prove your point as you read the report. Well, don't. Remember that CSR is evolving in every corporation and that each Company is facing different challenges and progressing at its own pace. We can learn from each Company. Whatever the motivation or the quality, any report so better than none. Go with an open mind, evaluate on the basis of what your read, by all means do a little cross-checking , but take the report on its merits. Try to understand the context in which the report was written. BAT, for example. Many would claim that a Company who makes cigarettes cannot be responsible. So when their CSR report lands in your lap, your automatic reaction is WTF?!?! i.e. a teeny weeny bit negative. @MBernhart (Michelle Bernhart of True Blue Communications) reviewed BAT's latest report which tackles the question head on of whether a tobacco company can be sustainable. They may not be your model of sustainability, but they operate a legal business and report on some measure of positive impact.

People write reports, not companies
Remember that the Company name may be on the cover, but it is people, real people who are doing their best to do a good job, who are charged with writing and producing the report. These people are doing the best they can with what they have. Sometimes, they are people who work for a totally great company with lots to report and a disposition for transparency. This makes life for the reporters much easier. Sometimes the hardest thing about writing a report is managing the internal politics. Just how much to disclose and more importantly, what NOT to disclose. Whether to tell the whole truth or just a little less than the whole truth. What to do with colleagues who do not provide data. How to present bad data in a good light and more. CSR reporters are always torn between reflecting the Company's position in a fair and balanced way, adhering to management demands and working conscientiously within reporting frameworks. By remembering that people write reports, you will be more balanced in your criticism, if you have criticism. An example is the 2008 report from Seiko. Sorry, but it's everything a CSR report should not be. But somewhere in Seiko there is a CSR person trying to do his or her best with the limited scope the Company allows. In reading this report, we should try to understand some of the limitations of a Company CSR reporter who has a desire to present good corporate citizenship but has not been able to make the sort of progress that supports good reporting. We should try to understand the complexities for a reporter, suspend negative judgement for a while, see what works, and try to encourage a better effort next time around.

Read the opening remarks by the Big Chief
The opening remarks by the Chairman, CEO or President, or all three, are quite telling. Often regarded as mumbo-jumbo empty phrases to skip over, they actually set the tone for the report, and give you a heads-up on what you may or may not find, Often there is no substance to these remarks (" this is our CSR report for the year 2008, it describes our csr activities blurb blurb we welcome your feedback blurb etc ") and this should alert you what you will find in the report. More blurb. If the opening remarks have substance, the report probably has too. Compare these two examples: Delhaize Report for 2008 – the opening remarks by the Chairman and President/CEO add nothing to the report and contain the standard blurb about how great Delhaize is and how doing CSR contributes to making them wonderful. Vodafone 2008 –here the CEO gives us a flavor of what is material to stakeholders and to Vodafone in a concise and well thought-out summary which precedes the most transparent and comprehensive reporting effort ever.

Choose how you read
After the opening remarks, there are a number of ways you can go. You can keep on reading. You can look for something specific. You can go to a section of interest. You can go for a pizza. If the Big Chief has said something meaningful, you might want to pick a thread and follow it in the report. If you have a particular issue or prejudgement about the Company, you can dive in to see what they report about that. If something is currently topical, such as climate change, you might want to go there first. This is where an index comes in very useful. A GRI index is the best. Tells you exactly where to find exactly what you are looking for. (Though beware, not all that is indexed is present). But the point is, don't try to read the report as if it were a best seller. They are not written by Alexander McCall Smith (as far as I know) and do not make for great bedtime stories. Read the report as a report in a discerning way – its purpose is to provide a lot of information to a broad range of stakeholders. By definition, not everybody will be interested in everything to the same degree. Decide what you want to read about and go there.

Seek materiality
Whilst good corporate citizenship is made up of different actions in many parts of the business, the true impacts of a corporation are the ones that address material issues, which are often related to indirect impacts. A corporation who reports on direct impacts alone has not matured to the most significant level of CSR. Gap Inc 2005-2006 report always sticks in my memory as an outstanding report that addresses indirect impacts well. The report is called "What is a company's role in society?" How more indirect than that can you get? The report contains a good materiality assessment summary.

Be copy-paste and delete aware
For all but first reports, I always check back to the prior report, sometimes several prior reports. It is hard to believe just how much copy-pasting goes on in reporting. Sometimes you can read the same paragraph year after year. Surely the point of a report is to report new stuff. Not to regurgitate. If nothing new has happened in the reporting period, leave it out. Or say why not. Often a glance at prior reports can give you a better sense of context and evolution of the company's approach, and also what they are not reporting. The Aviva CR report for 2009 neatly omitted to report on social-benefit insurance products offerings that were proudly announced in the previous report. Clearly Aviva had not been able to meet the challenges of changing consumer perceptions and behaviours. Look at promises made in previous reports and how they are addressed in the current report. You sometimes need to assess the report credibility based on what was copy-pasted or deleted from prior reports.

Look for consistency (and inconsistency) in data
If Companies have been reporting for years, they should present data in charts showing at least 3 prior years. This provides context and understanding of the measure of performance over time. Where contextual data is lacking, there is always a reason. A closer look often leads you to the answers. Marks and Spencer, in their last Plan A report, which I reviewed here, made no mention of high numbers redundancies despite this being plastered all over the UK press. 1,000 people- that's a lot of livelihoods and was glossed over in the CR report. Compare data, look for inconsistencies in carbon footprint calculations, see how companies spend pages talking about energy consumption reduction and carbon reduction per product, per person or per location when overall they have increased, not reduced their footprint. Look for big declarations (we support equal opportunity) and results ( 5% women in management). Look for the data that isn't reported. And think about why.

Give feedback, ask questions, make comments, get engaged
There is nothing worst for a CSR reporter than no reaction. All reporters want feedback on their report, even if it's negative. I regularly make contact with the reporting companies whose reports I review, if something is not clear to me, and I regularly provide feedback directly to Companies. In almost all cases, I get a positive and comprehensive response from someone who is committed to the process. The best recent example is W.M. Morrison, the UK Supermarket chain. After writing about issues related to product packaging, I received a long response with explanations from the Company. Similarly Aviva, mentioned above, responded to me frankly and constructively about issues I raised in their report. I could cite numerous more examples. So all of you who sit there beefing about how CSR reports are bad, worthless and even misleading – I urge you to do something about it and WRITE to the reporting companies. Ask, tell, demand .. and listen to the response.

Give some leeway to first-timers
The first CSR report is a real challenge. It is often written at a stage where the Company has started on the journey of CSR, but is still developing its approach. Not all data may be available. The mammoth exercise of aligning the Company in a way which fits into a reporting process is not to be underestimated. The first report requires the Company to address issues that have probably never before been discussed. Cut these companies some slack. Understand that the only way to gain reporting experience is to report. The best two examples for first timers I came across in the last year are Jumeirah Hotel Group in Dubai and Central Textiles of Hong Kong.

If you have read to the end of this post, congratulations! You are now qualified as an Advanced CSR Report Reader. Go read some reports! And don't forget that Chunky Monkey makes even the awfullest of reports more palatable.

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

33 Applications of a CSR report

They say the best way to beat your adversaries is to get to know them. CSR reports have many adversaries. In an attempt to get to know them, and understand how to better position the valuable process of CSR reporting, here is a list of useful applications of CSR reports which I imagine reporting adversaries could have generated. Of course, you all know that I am a strong advocate of CSR reports, and this list absolutely does not represent my personal views. Absolutely not. No way. Not. No. Anyway, here is their list:

1. Build trust with stakeholders (just in case there is a remote possibility that they don't trust you)
2. Increase trust with stakeholders (you built it with your first report)
3. Demonstrate to shareholders that you are doing good things with their money (you know what's best for them)
4. Use as basis for recommendation a bonus for the CSR Manager (you are the CSR manager)
5. Expand CSR reports numbers so that we can be confident that climate will change
6. Use as an audition piece for Shakespeare plays (if they can make a CSR report sound exciting, Shakespeare is a doddle)
7. Indirectly generate business for the carbon offset industry through reporting carbon neutral operations
8. Give journalists something else not to write about
9. Give analysts something else not to analyse
10. Give marcom hotshots something else not to marcom about
11. Give CSR critics a raison d'etre (the French ones)
12. Teach Human Resources that there is more to the business than office parties
13. Provide justification for sitting around while you eat (more) Chunky Monkey
14. Provide case studies for MBA programs (how to present every aspect in the business in the best possible light)
15. Support greenwash (everyone else bashes it , and as Loretta Lyn said: if you can't be first, or best, be different )
16. Donate spare reports for origami classes (works best in Tokyo)
17. Offer as material for translation practice in language schools (basic level, you only need around 76 core phrases)
18. Use as an entry point into social media (Tweet: we produced a CSR report RT : they produced a CSR report)
19. Use to ensnare willing young graduates who don't know what working at your company is really like
20. Bundle them all together and put them in your backpack for cross country running training (if you get tired, you can always dump them – far away so no one will know)
21. Provide occupation for your local community (consultants, assurers, stakeholder panel participants) (strong community, strong business, right?)
22. Ensure everyone has lots of reports to fill their bookshelves (full shelves gather less dust)
23. Provide material for investor roadshows (so they won't notice the size of the executive bonuses)
24. Provide material for girl scouts camps bonfires (nothing burns like a good report, except a bad report)
25. Help your CEO defend accusations of exploitation in your supply chain (report that you audit all your outsourcing factories, it works every time)
26. Support human rights (come on, you HAVE heard that humans have rights…)
27. Justify the existence of the GRI (conferences alone don't cut it)
28. Demonstrate that your organization is highly creative (distribute your report with an eco-self-destructing mechanism)
29. Provide material for reporting blogs
30. Provide material for reporting blogs
31. Provide material for reporting blogs
32. Provide material for reporting blogs (ok, carried away again)
33. Provide material for my next post: a tutorial on HOW to READ CSR reports

because writing them is one thing, producing them is another, but reading them, well, that's like eating Chunky Monkey with chopsticks – you can pick out the chunks quite easily, but you have to work really hard to get to the true flavor.

And now we know many of the adversarial arguments relating to CSR reports, I feel much more confident that we will be able to counter these with calm, cool, clear rational justifcation for this important CSR process and communications tool. Convinced ?

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

CSR reports. Read or recycle ?

A short while ago, @Timberland_Jeff tweeted: "Does anyone really read Corp CSR reports? Steelcase's 2009 report is very impressive: http://bit.ly/NRQne "

Let's leave Steelcase out of this post for the time being and focus on the question: does anyone read CSR reports?

Oy! How many times have we all heard this question?
And how many times have we all heard the auto-pilot response: (altogether now>>.) no-one.
This is usually followed by a tirade of how irrelevant reports are, not worth the paper they are written on, how they do not fulfil their purpose, and how they are greenwash, whitewash, blackwash and hogwash, end up in the recycle bin (well, at least they are contributing to improve recycling targets).

Now why does this frustrate me so?

• Because I am a naturally frustrated person ? (oops, let's not go there …)
• Because I make a living (kinda) from writing reports ?
• Because my hobby is reviewing reports for CorporateRegister ?
• Because I am passionate about reporting (it takes all kinds, right ?)
• Does it have something to do with Chunky Monkey? (haha! you saw that coming)
• Or does it have something to do with the fact that I empirically, emphatically, especially, eternally, everlastingly, enthusiastically everso-everso believe that this (a) is untrue and (b) the wrong question. (sorry if I have understated this a little).
  

Who reads CSR reports?
(Clarification: Read includes reading part of the report not necessarily cover to cover – we aren't talking about Kathy Reichs, remember)

• The people who write them – in 2008, according to Corporate Register stats page, 3,336 reports were published worldwide in 2008. This follows a year on year double digit increase almost every single year since 1992. If we assume that for each report, there are at least 50 people in the Company who participate in the reporting process and read the report prior to publication, then in 2008, around 170,000 people read reports
• The people who assure them – in 2008, same stats source, around 28% of published reports were assured – and assuming only around 5 people on the assurance team for each report, another 5,000 people read reports
• The report checker at the Global Reporting Initiative who checks the 40% or so of reports which are GRI based – lets count this as 1,500 reads.
• The people who evaluate reports – there are many different services and raters of CSR reports. This includes The Roberts Environmental Center, excellent work done by Radley Yeldar here and here, the CSR report analysis by Sustainability Services in South Africa, sites such as Zumer.com and my fellow report reviewers at CorporateRegister.com … lets assume that there are at least 5,000 people involved in this work in one form or another around the world in any given year
• The people who vote for reports in the several reporting competitions, the most significant being the CRRA Awards which are included in the 26,000 registered report readers of CorporateRegister.com
• The people who tweet and retweet about reports …. I see a quite a few each week … let's assume they and their followers amount to 100 per week = 5,000 or so per year
• The stakeholders – this is an unknown quantity of course, but we can safely assume that there is a certain percentage of directors, managers, employees, customers, suppliers, community partners, social and environmental activists, journalists, analysts, investors, students, csr consultants, family members of employees, mom's of the report writers etc read at least some of the content. I will assume a conservative 300 people per report – that makes an additional 1 million or so readers in 2008. In my experience, at least this number of people read reports, based on reports I have been involved in writing or assuring.
• Me and my team – well, that's another half a dozen or so, depending on the month.
• My husband – he reads everything I write. He has no choice. He wants dinner.
• Me.
  
  So all in all, I conservatively estimate that, in 2008, 1,212,507 people read CSR reports. Is this a high number? Or is it a drop in the ocean. Consider it this way, 1.2+ million consumers, employees, activists, investors, analysts, journalists, managers, CSR professionals and members of the general public had an opportunity to gain new CSR insights. And maybe something good came out of some of those insights.

Therefore to say no-one reads CSR reports is W-R-O-N-G.
Or to put it another way. G-R-W-O-N.

Now here is the right question.

Even if we assumed that no-one reads CSR report, do they have value?
ONE: In order to write a report, even the most miserable of reports, with very little in the way of transparent, clear and progressive content, the organization needs to ask itself questions. In doing so, people need to get engaged with the context of corporate social responsibility and start thinking about organizational performance in a different way. These conversations and new thoughts lead to new possibilities for CSR actions by the business. They create a CSR momentum which builds up in the organization. The process of creating the report drives changes in strategy and performance. CSR reporting is a catalyst. This really really really does happen, from my personal experience, with every single Company I have worked with on CSR reporting. So whether or not people read the finished product, most of the benefit is gained by producing it.
TWO: The report forces a structure around csr performance review which does not take place in any other way in standard business, financial or organizational reporting frameworks. The report ensures a core body of data about the Company which supports target setting and tracking of data year on year. Often, the fact that the report requires some form of future promise is enough to drive the organization to commit to improvement targets. The fact that csr targets are stated in the report is a commitment for all external stakeholders to hook up to, and which the organization feels obliged, once having publicly declared its intention, to uphold.
THREE: The report is a management tool for monitoring and evaluating performance in a consistent way. It forces data flow processes in the organization. Some reports even include the names of managers responsible for actioning certain projects as a way of reinforcing engagement and commitment by those Managers.
THREE and a HALF: You will note I don't list all the other reasons reports have value – transparency as a goal in itself, reputation building, employee engagement, encouraging trust with stakeholders, setting standards for other companies etc. All these are valid. But there is little data to prove their efficacy.

A word about other ways of disclosing csr information – a report is one tool in a corporation's total spectrum of csr communications and should not be the only one – there are many fine examples of corporate transparency via websites, stakeholder dialogue calls a la Timberland, meetings, investor briefings, participation in csr conferences, interviews in newspapers, journals, magazines and participation in social media such as JustMeans and Development Crossing, Facebook, Twitter and more. A report is a snapshot of performance and we should avoid seeing it as the sole mouthpiece for CSR disclosures.

To sum up, if you didn't get it, people read csr reports and csr reports have value. That's it. People read csr reports and csr reports have value. I am not paranoid. People read csr reports and csr reports have value. Not convinced? Repeat after me. People read csr reports and csr reports have value. I' m just stating facts. Grit your teeth, take a walk in the sunshine, grab a Chunky Monkey and, if you are not one of the enlightened 1,212,507, reach out for the nearest report and take a look. You might just get addicted …..

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

Why go paperless when you can have crap?

Warning: This post is not for the offensive-languagely sensitive

What do wombats, kangaroos and sheep have in common?

1. they have all survived the global financial crisis (so far)
2. they all sleep standing on their heads
3. they all produce shit from which specialty paper is made
4. they all devour Chunky Monkey when given the chance

And the answer is: errrrrrrrrrr. yes. it …..is………………..(3). and (4)
Sustainability in the paper industry has now reached an all time high. Or should I say low. The most environmentally friendly version of paper to hit our Shaeffer nibs is made from the excrement of our friends in the animal kingdom. Roo Poo Paper made from Kangaroo dung is a major innovative leap (pun intended!), Wombat paper made from the droppings of this furry Australian marsupial is contributing to the health of the Australian economy, and Sheep Poo Paper is made from super-fresh sheep feces, collected with care from the rural Welsh mountainside. You can even pre-order your Reindeer Poo Paper as Christmas gifts for all your loved ones! (Darling, here is a gift to remind you of me. A piece of shit . But it comes in handy if your copmuter is broken)
So what is this fixation of paper makers with.. err … crap ? And more often than not, CSR reports are accused of containing crap rather than being printed on it. I thought I would just check what CSR reports are actually printed on, to see if this innovative crap technology has reached the most advanced of reporters.

Novo Nordisk's annual report for 2008 is printed on paper from recycled fiber, from well managed forests and controlled sources.
General Electric 2008 report is made from 100% post-consumer waste recycled FSC-certified paper. The emissions from the electricity used to manufacture this paper are offset with credits from windpower projects.
Coca Cola 2008 is printed on FSC certified recycled paper from mixed sources from well managed forests, recycled wood or fiber
ArcelorMittal's 2008 report is printed on ECF (Elemental Chlorine Free) and FSC certified pulp from well-managed forests and printed using vegetable based inks.
State Street Corporation's 2008 report is not printed or paper-type not disclosed (could it be crap?!) BAT's 2008 report is FSC certified and CarbonNeutral®. The paper used Revive 50:50 Silk, comprising 25% post-consumer and 25% pre-consumer waste, and 50% virgin wood fibre sourced from well managed forests independently certified according to the rules of the Forest Stewardship Council. And its recyclable.
Vodafone's 2008 398 page mammoth report is not printed but the very very very short 25 page summary report is printed on FSC Certified Revive 75 Silk, manufactured in the EU at mills with ISO 14001 accreditation and comprising 50% de-inked post-consumer waste, 25% pre-consumer waste and 25% virgin fibre. Printed in accordance with the ISO 14001 environmental management system using vegetable-based inks.

Well, as you can see, I scored a duck. Leading CSR reports are not (yet) printed on crap-based paper. What can we do to encourage report producers to adopt this new sustainable shit technology? Perhaps we could make a real-time video of kangaroos, wombats and sheep producing their raw material ? Perhaps we could parcel up a load of wombat nuggets (that's what they call original wombat droppings) and send them to leading csr managers with a letter on crappy paper entitled: Please print a crap report. hmmmm. Maybe some of them already got that letter….
But seriously, how do reporters select the paper for printed reports? And more importantly, I wonder if this super duper FSC-certified-post-pre-recycled-consumer-waste-carbon-offsetted-de-inked-non-virgin-wood-fibre-everything-sustainable paper that is used for reports is used for any other printed materials in their business? It seems to me that the height of csr hypocrisy would be to print the csr report on this special paper and everything else on regular un-FSC un-everything un-sustainable paper. Just a thought.

Anyway, I am now going to write tomorrow's to-do list. Let me go get a sheet of that crap-type paper. Or to put it another way, I 'm going for a cr**p.

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

Bahai CSR activism

Did you know the Bahai faith are CSR activists? During our short vacation last week, we visited the Shrine of Bahá'u'lláh, the founder of the Bahai faith. This Shrine is just a short ride away from the ancient city of Acre, and is a breathtaking pocket of peace and tranquility in the midst of bustling urban surroundings. We enjoyed the picturesque gardens and a shoe-less silent visit inside the shrine. We learnt about the religion and its 6 million followers.

The Gardens

The Shrine (oops, my kids got in the way, sorry about that!)

Bahá'ís believe the crucial need facing humanity is to find a unifying vision of the nature and purpose of life and of the future of society. The key teachings are that all humanity is one people, that men and women are equal, and that all racial, national economic or religious prejudice should be overcome, and that economic problems are linked to spiritual problems. Actually, it was the gender thing that caught my eye (go girls!) . The Bahai make equality a core tennet of their faith and act to promote the advancement of women for social and economic reasons. I noticed that the Bahai, through their non-profit organization, are very active in advancing a range of social and environmental causes. And then I saw the Bahai European Business Forum whose mission, under the banner of "people inspiring responsible business", is To promote ethical values, personal virtues, and moral leadership in business as well as in organizations of social change. Sounds like CSR to me! Here is a publication on CSR by the Eurporean Bahai Business forum produced as early as 1997. And Bahai bloggers do a great job here. So I got to thinking that the Bahai ought to be producing a CSR report. And lo and behold, I find they have produced an annual report, available on line since 2001. Here is the 2008 report. Whilst it is not GRI, or designed in the familiar structured way of CR reports, it is certainly an account of the impacts of the Bahai business forum in a kind of triple bottom line sense and a transparent view of the activities of the Bahai business activists in researching, discussing, participating and partnering the responsible business initiatives, gender equality and human rights causes.

And the Bahai recipe of csr with tranquility, humanity, equality, inclusivity and ice-cream (ok, the ice-cream bit is my contribution), it seems to me that religion and business can actually have a positive impact.

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