Sustainable Avon - lipstick by lipstick

Avon (the company for women) is rather a special business with quite a unique business model. Stop to consider the scale of Avon. It has 6.5 million Sales Representatives, selling $10.5 billion in cosmetics to over 300 million customers in over 100 countries. That's some network. The Sales Reps are mainly women who use the Avon earnings opportunity to help support themselves and their families, using $1 billion in credit, making Avon the world's largest microlender and promoter of women's economic independence. These Sales Representatives are the powerhouse of the Avon sustainability efforts, bringing the message directly to consumers, a challenge so many consumer-facing companies constantly struggle with. A staunch supporter of women's issues, Avon has leveraged this  massive network to drive a highly visible and successful Crusade against Breast Cancer which has reached over 105 million women since 1992, and the Speak Out Against Domestic Violence campaign launched in 2004 in support of the billion women worldwide who are victims of such violence. Avon likes to take on big issues that limit the sustainability potential of our society in a big way and make a big difference. The Company has an impressive track record, which leaves me in no doubt that the current cause that Avon has taken upon itself to advance will achieve the same degree of enhancing awareness, driving sustainable behaviors and contributing to a more sustainable world.

The Next Big Thing for Avon is the company's focus on ending deforestation.  I was fortunate enough to be able to have a chat with Tod Arbogast, Avon's VP for Sustainability and Corporate Responsibility, one of the most passionate people I have spoken with in a while, who describes himself as "amazingly optimistic and inspired by Avon Sales Representatives". Tod joined Avon in 2009, into a newly created role, after many years of sustainability related work including VP for Sustainability at Dell, and took on board the crafting and implementation of Avon's Hello Green Tomorrow program, designed to mobilize a global environmental movement to nurture nature and restore critically endangered rainforests in South America and Indonesia. See this page for many compelling reasons for this to be an important flagship program for Avon and for all of us.  The reforestation work will be carried out by Avon's partners at the Nature Conservancy and World Wildlife Fund with monies raised through Avon efforts worldwide. How will the money be raised? Partially through the sales of the Hello Green Tomorrow Reusable Water Bottle - 100% of net profits will be contributed to the reforestation program. 2011 is the second year of the program, and Tod told me: In 2010 we raised a total of $2.1 million. With over 50 countries participating we hope to match the 2011 number, and are doing our best to support all the Avon teams worldwide in their fundraising efforts. We are actively promoting the program to our Avon Sales Representatives, both to support fundraising as well as to drive education on the "5 Rs": reduce, reuse, recycle, rethink, replant. Through research, outreach and events over the past 3 years, we know that Avon associates and Sales Representatives are passionate about environmental stewardship. They want Avon to take a leadership position and serve as a change agent, as we have done for breast cancer and domestic violence, and they want a way to get involved and make a difference in environmental issues. The Hello Green Tomorrow program provides all of this." 

The other significant aspect of nurturing nature in the Avon program is the Palm Oil Promise. Palm oil is a common ingredient in many products, including cosmetics such as lipsticks, soaps and shampoos. Palm oil plantations have had a great impact on the destruction of tropical forests and peatlands, especially in Southeast Asia. Avon has joined the Roundtable on Sustainable Palm Oil (RSPO) to help continue the development, implementation and verification of credible global standards for sustainable palm oil and recently announced its commitment to purchase GreenPalm certificates covering all of Avon's global palm oil use which will help drive demand for sustainable palm oil, increase the supply for sustainable palm oil and maintain biodiversity and habitats for endangered species. GreenPalm is a certificate trading program endorsed by the RSPO. Avon claims to be the FIRST beauty company to commit to 100% sustainable Palm Oil. Tod Arbogast of Avon explained that this is groundbreaking because the Avon commitment is effective "right now" and not in 2012, or 2015, or 2020 which is how most companies frame their goals, and also the commitment includes all Palm Oil derivatives as well as Palm Oil as a single product. Also, the significance of Avon's commitment is in its potential to drive awareness and change behaviors and influence global practice. Tod explained: "Overall, 45 million tons of Palm Oil are produced each year, and 17 million tons of Palm Kernel Oil. Avon's total consumption of Palm Oil and derivatives is very small by comparison. Our biggest impact is awareness. The Palm Oil Promise also helps us to work more closely with our raw material suppliers - by committing to 100% sustainable Palm Oil and derivatives sourcing, we must have a robust method to account for the amounts we, and our suppliers, are using. This also serves as a tool to improve our management of the entire program and we are working with partners to put this in place. Despite costs involved for Avon, we do not expect this to result in a higher price for consumers".

I asked Tod about Avon's packaging policy and here again, I found Tod enthusiastic and clearly focused in his explanations. " Our packaging approach is three-fold: (1) minimizing the amount of packaging we use relative to product (in terms of weight) (2) increasing the use of sustainable materials in packaging and (3) driving awareness for end-of-life solutions for packaging. Actually, I believe Avon has one of the most efficient packaging to product ratios in the industry. This is because of the unique nature of our business model. Our products do not need to carry their marketing messages on their packaging to stand out on a retail shelf. When we sell a lipstick, it's a shrinkwrapped tube. Competitive products often have 2 or 3 additional layers of additional packaging. We continue to work to improve our sustainable packaging performance in all three focus areas."

Finally, everyone knows that I cannot have a conversation about sustainability without talking about reporting. Avon's last report was published in 2009 and the 2010 report will be published later this year. That's certainly a report which I will be intrigued to read. Watch this space!

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices http://www.greenleaf-publishing.com/productdetail.kmod?productid=3282 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 Footprint revolution

Once there was a footprint, which was an indication that you had been somewhere and left your mark. However, as the world of sustainability began to develop, footprints started to shoot up all over the place. There was the ecological footprint which soon became a carbon footprint. Then there was a water footprint and a social footprint and now, a new Oxfam methodology for a defining a poverty footprint. Sounds like we are in the midst of a real footprint revolution. The question is: how many footprints can a business have?

I think it would make sense for us to standardize our footprint lexicon in the interest of RATS (responsibility, accountability, transparency and sustainability) so here is the first, unique, globally relevant, applicable-to-all-businesses footprint guide.

The CSR Reporting Blog Global Sustainability Footprint Guide (CSRRBGSFPG)

Ecological Footprint: The overall impact a company leaves on the world's ecosphere which future generations may not be too pleased to inherit.

Social Footprint: A footprint which gets along with everyone.
Carbon Footprint: The thing every company has, many companies measure, some companies reduce and a few companies pay others in carbon offsets to take it away.  
Water Footprint: The mark you leave when walking on water. To date, there has only been one really famous person who has achieved this.
Poverty Footprint: The mark you leave on the world when you have no money.
Reporting Footprint: The lasting impression that sustainability reports leave in the minds of stakeholders before they end up in the recycling bin.
Philanthropy Footprint: The world-changing effects of donating shoes to the global (barefoot) poor. (footprint... philanthropy ... shoes.. get it ?)
Ice Cream Footprint: The inches left on your waistline resulting from the enormous volume of ice-cream you eat in a given day... errr... ok ... in a given hour.
Animal Footprint: The mark an animal leaves when it has been somewhere, using its feet. Snakes, for example, do not have animal footprints.
Biodiversity Footprint: The mark you leave when you tread softly so that you do not kill any rare insects.
Human Rights Footprint: The result of the basic right and freedom of all people to leave footprints wherever they wish as enshrined in global international human rights conventions.
Laptop Footprint: The mark you leave when you don't go anywhere without your laptop.
Coffee Footprint: The mark you leave when you spilled coffee on the floor and trod in it.
Geographical Footprint: The exact location where you left your footprint, as found in an atlas.
Psychological Footprint: The mark you THINK you left when you went somewhere.
Economic Footprint: The value placed on a footprint by investors and analysts, who don't quite know how to measure it.
Partial Footprint: A fraction of a footprint.
Timberland Footprint: The mark anyone leaves when wearing classic Timberland boots.
Digital Footprint: The mark left by a robot.
Sand Footprint: Something you leave after a walk on the beach.
Ellen DeGeneres Footprint:  Size 8.5
Fooprint Footprint: The mark that twins leave when they have trodden somewhere.

Anyway, I hope to be reading more about Footprints in Sustainability Reports in the future. In the meantime, if you are not sure where you left YOUR footprint, take a tip from Groucho Marx :

“I don't have a photograph, but you can have my footprints. They're upstairs in my socks.” 


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  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm) 

The new GRI 3.1 guidelines explained

One of the big advantages of being an Organizational Stakeholder of the GRI is the opportunity to attend no-charge webinars on diverse and interesting aspects of reporting. Sometimes the webinars are corporate Sustainability Officers presenting their experience of the challenges, successes, best practices etc of reporting, and sometimes it's the GRI expert staff providing news and updates. I try to attend every one and blog about as many as I can, time permitting. It's almost worth being a GRI Organizational Stakeholder just for these webinars :)

This week, I was online with Letshani Ndlovu and Bastian Buck of the GRI as they walked us through our paces on the new GRI Technical Protocol and the updated 3.1 Reporting Guidelines.

The new GRI Technical Protocol

The Technical Protocol (TP) was created to provide process guidance on how to define the content of a sustainability report. This includes deciding on the scope of a report, the range of topics covered, each topic’s relative reporting priority and level of coverage, and what to disclose in the report about the process for defining its content. In defining content, we all know by now that "materiality" should be a prime consideration. The TP gives a detailed explanation of materiality, starting with: Material topics for a reporting organization should include those topics that have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large. Why is this important? Because: Sustainability impacts create both opportunities and risks for an organization. The ability of an organization to recognize opportunities and risks, and act effectively in relation to them, will determine whether the organization creates, preserves or erodes value. Each organization defines its own material issues, using feedback from stakeholders as well as internal and external scans of sustainability impacts.

Defining the reporting content is an "iterative" process which can be shown in the following diagram:

For details of how to apply all these stages, download the Technical Protocol from the GRI website. Note that the TP is an advisory document and supports reporters in providing responses to Profile Disclosure 3.5: "process for defining report content". This assumes, of course, that a reporting company uses a process to defining reporting content... and strange as it may seem, most do not. The TP should help companies move away from "shopping-list" mentality to a "what's material" mindset and guide reporting content accordingly. A defined approach should be used for prioritizing material issues and this should be "systematic, documented and replicable, and used consistently from year to year. Changes to the assessment approach, and their implications, should be documented." This should also help those providing assurance for Sustainability Reports. Note that the TP is a supporting document and does not directly influence the assessment of the report's Application Level.

The new 3.1 Guidelines

The 3.1 guidelines are a stepping stone to the big promise of G4 in 2013 and address just three specific aspects of the current G3 framework relating to: community impacts, human rights and gender equality.

Community impacts:

This replaces the former SO1 performance indicator with three new ones which refer to (1) the percentage of operations with implemented local community engagement, impact assessments and development programs, (2) those with significant actual and potential negative impacts on communities and (3) prevention and mitigation measures to address these negative impacts. The assumption is that everyone is always delighted to report about positive impacts (yes, we know!), so requiring reporting on negative impacts balances up the picture.

Note that the GRI does not define performance indicators for community investment in the form of strategic philanthropy, donations, pro-bono support or employee volunteering programs. Actually, this is one of the most commonly found elements in Sustainability Reports but the GRI does not consider this to be related to the core business model. Bastian Buck explained that these aspects are an "add-on" and therefore not an essential part of a sustainability program. I recently performed a benchmark study for a client on community investment reporting by 12 large companies in the hi-tech sector (more about that in a future blop), and it is notable that this is (a) always reported and (b) vastly inconsistent in the way it is reported.  I disagree that this is not core to a company's business model. Community investment is I believe quite a strategic element of sustainability programs, serving to help companies get closer to stakeholders, enhance reputation and most significantly, attract, retain, develop and engage employees. Even if the GRI does not consider this as material as the negative impacts, the fact is that every reporting company wants to report about this. Why not make the GRI framework a little more accommodating and provide guidelines and indicators for reporting on these issues as well? 

Human Rights impacts: 

The updates in the Human Rights section of the GRI Guidelines are based on the work of John Ruggie, the UN Special Representative on Business and Human Rights and his "Protect, Respect, Remedy" guidance. Several of the framework Management Disclosures have been updated to reflect this new thinking on Human Rights and two new indicators (HR10 and HR 11) have been added relating to (1) the percentage and total number of operations that have been subject to human rights reviews and/or impact assessments and (2) the number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms. The methodology for conducting human rights assessments is not prescribed, leaving companies to decide for themselves what a human rights assessment actually is and to what extent due diligence should be applied. Is a human rights assessment sitting round a table at HQ discussing potential issues or is it a third party verified audit of all human rights risks in all parts of the supply chain? Reporters will have to work this out for themselves, but I feel that new 3.1 indicators could have been a little sharper in their requirement of minimal accepted good practice in defining and assessing human rights impacts for reporting purposes. 

Gender Equality:

The focus here is on non-discrimination against women and the advancement of women's rights. There has been much work done in recent years relating to women's rights which are enshrined in internationally accepted basic human rights documents and are internationally recognized as being fundamental to sustainable development. Yup. We agree, don't we gals? The 3.1 framework includes several changes to Management Disclosures to include more specific reference to gender equality, an update of LA14 Performance Indicator (this has been updated to refer to salary AND remuneration ratios between men and women, rather than just salary alone, recognizing that there can be major differences between the two), and a new Performance Indicator LA15 which covers return to work and retention rates after parental leave by gender. What constitutes "return to work" and "retention rate" is left to companies to decide. However, much of the complexity here is precisely in the nature of these definitions: Does return to work mean return to the same of similar job with the same prospects for advancement? Does retention rate mean one month, three months, one year or more after returning to work? In response to LA15 we will need to be aware of the small-print nuances in gender equality accounting and whether meaningful measures are used as a basis for reporting.

The 3.1 guidelines are available now (download here) but they will not become mandatory for the declaration of report Application Levels until they are incorporated into the new G4 which will replace G3. In declaring a reporting level, companies will be able to choose to continue to report against G3 or step up their game and report against 3.1, but in either case, A, B or C Application Levels are available.

 
Confused? No Problem. All you need is a good consultant :).

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)

Starbucks sustainability reporting challenges

Starbucks 2010  Year in Review  tenth Corporate Responsibility update is now online and downloadable, complete with separate scorecard (PDF).   2 out of 12 goals achieved, 6 on track, 3 needing improvement and one not achieved (reduce energy consumption in company-owned stores by 25% by 2010 using 2008 as a baseline - only 1.6% was achieved in 2010 - the target has now been pushed back to 2015). Not a totally bad picture, indicating the challenges of a continuing journey against measurable sustainability goals. The clarity of presentation and the honesty of the update against targets is positive. Also, I still love those little icons on the Starbucks online report site, which jump and wiggle about when you click on them. The report claims to conform to the GRI Framework at application level B+ with a downloadable index  and a (brief and rather limited)  assurance statement from Moss Adams Accounting firm, covering only coffee purchasing practices.  

Starbucks new report is exactly what it says it is - an update of the 2009 online report which I blogged about last year. Same format, roughly the same overall content, specific updates. A reference to stakeholder engagement, which was lacking in 2009, is still lacking in 2010. In fact, the three GRI profile disclosures which require a full response at GRI B level are not covered, because "there is no information available" or they are "not applicable". These indicators are:

4.15:   Basis for identification and selection of stakeholders with whom to engage.
4.16: Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
4.17:  Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

In addition, according to Starbucks GRI Index, the report responds in full to only 14 Performance Indicators, and not the minimum of 20 required for a B level report. This report does not appear to conform to Application Level B of the GRI. I find this rather startling, for a company who works hard to build trust and advance sustainable development. Integrity in reporting also includes representing your report in an appropriate way.  I may not know my Frappucino from my Macchiato but I do know how to analyze a GRI report.  

Some of you may accuse me of a tick-boxing approach to reporting by honing in on Starbucks adherence to the GRI framework, rather than focus on the material issues and sustainability performance. You may be right. In all the reports I read, write and review, I look for clues of honest representation of what we can expect to find and this includes whether the report meets its own declared standard. No apologies for that.

Anyway, moving on to look at Starbucks sustainability program, I started with coffee sourcing. Starbucks is not surprisingly one of the largest users of specialty coffee in the world purchasing 269 million pounds of coffee in fiscal 2010. 84% of that was from C.A.F.E sources (Coffee and Farmer Equity Practices) which are Starbucks guidelines for ethically sourced coffee.  This is a great achievement, shows commitment to an ethical supply chain, and progress is evident. Starbucks target is to reach 100%  C.A.F.E sourced coffee by 2015. Since 2008, Starbucks has moved from 77% C.A.F.E sourced coffee to 84% in 2010. That's 16% in 5 years to go,  (over 3% per year) after an achievement of 7% in 3 years (just over 2% per year). I am wondering how Starbucks plans to achieve this stretching target and the implications for Starbucks coffee sourcing and the cost of an espresso. I would have liked to have read more about this in the Starbucks report.

Similarly, in another major area, highly material for the Starbucks business - recycling and reusable cups - Starbucks is way behind the goals it set. For example, the Starbucks goal is to serve 25% of beverages in reusable cups by 2015. Today, in 2010, this stands at only 1.8%, up only by 0.5% in the past three years. I would have liked to have read more about how Starbucks believes it can meet this target in just over 4 years' time. In an interview with Starbucks VP for Global Responsibility, Ben Packard, posted on Triple Pundit, Ben says that the cup is "not the most significant environmental impact" that Starbucks faces - he stresses overall energy reduction and use of renewable energy as the key areas of impact. 58% of energy used in Starbucks owned stores comes from renewable energy, more than double last year, making Starbucks one of the "top five green power purchasers in the country". Starbucks now plans to have all 100% renewable energy at company owned stores by 2015.

Starbucks is clearly serious about sustainability and doing much more than many. Starbucks has set ambitious targets and does not hide the complexities of meeting them. The massive potential to influence consumer practices through the billions of customers who visit Starbucks all over the globe each year is both a responsibility and an opportunity for Starbucks and it's squarely on the agenda. The far-reaching impact Starbucks has on coffee-growing communities is also a central element of Starbucks sustainability and the Company is active in this area too.

Overall, I think the Starbucks 2010 Report is evidence of the challenges any company faces when setting ambitious targets and aligning the organization, as well as external stakeholders, to meet them. It shows that Starbucks is making progress, though I feel the Company's reporting could be more forward looking and disclose more specific plans to achieve tough targets. In addition, I would recommend that Starbucks be more comprehensive in terms of the level of transparency of its reporting and more rigorous in terms of the way the GRI framework is applied.

And now, time for coffee. Or should that be a caramel frappucino? Or a gingerbread latte ? Or an espresso con panna? Or a peppermint mocha? Or a pumpkin spice latte? Or even a Tazo® Green Tea Crème Frappuccino® Blended Beverage? Hmm. Seems like choosing what to drink at Starbucks is no less challenging than implementing a sustainability program.

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 Spirit of Reporting

A press release about a company I had never heard of caught my eye. The headline was VeeV Açaí Spirit Releases First CSR Report  Having a soft-spot for first time reporters, I couldn't resist taking a quick look. Fortunately, this report is only 10 pages long (with lots of pictures), so quick it was.

VeeV®  is an interesting company built around one "cool" brand (Does the fact that I had never heard of it make me not cool ? ). VeeV® is an alcoholic drink made from the Açaí Berry which apparently can only be found in the Brazilian Rainforest and is sustainably and wild harvested there. The berry has high antioxidant properties which makes it a healthy fruit which forms the staple ingredient in the diet of many Brazilians. The two founders of the VeeV® company are environmentalist types and wanted to bring to the market a sustainable product in a sustainable way. This first report, after four years of activity, demonstrates this commitment with $1 per each bottle sold donated to  Brazilian rainforest preservation, a distillery powered by renewable energy and overall carbon neutral activity. Seeds of the Açaí berry are made into fashion-statement jewelry promoting living wage and fair trade for Brazilian workers. The company has 32 employees and sends them a Green Tip of the Week by email to get them started on another week full of environmental inspiration. This apparently works because all employees have Personal Sustainability Programs and report on them quarterly and what's more, part of their bonus is dependent upon green performance.

All this is very nice indeed, and I have no doubt that this first Corporate Social Responsibility Report is a source of pride and a reflection of a genuine social-enterprise environmentally-activist small private business. It's great to see such a passion for sustainability embedded into the core business strategy. However, the 10 pager is a more like a marketing brochure than a report. Had this been called a "review" or an "activity summary" or anything but a report, I would be able to read it for what it is, and be impressed. Calling it a report implies a willingness to be transparent, to share data, to account for impacts on stakeholders in a rigorous way. This document showcases the way the VeeVers have put their personal sustainable philosophy into action, but it does not report in a complete way on sustainability impacts. For environmental data, we are referred to the Climate Action Registry but all that appears there is a report from 2007 when the operation was run from the home of one of the partners and generated just over 12 tons of carbon emissions.

We all appreciate and understand the challenges of  voluntary SME reporting, the resources required and the time needed to write a first report, whether the GRI framework is used or not. Nonetheless, sustainability reporting is a serious thing, (and yes, I can now speak from experience of producing my own company SME first report), and while no-one has patented the use of the word "report",  it should not be bandied around for every document a company issues that happens to have the words eco-conscious or recycle included somewhere in the narrative.

The spirit (and practice) of reporting should be more in line with the GRI definition which is: "A sustainability report refers to a single, consolidated disclosure that provides a reasonable and balanced presentation of performance over a fixed time period."  Companies who assign the name "CSR Report" to a marketing document, even if their practices are sustainably minded, lose credibility points in my view.

Anyway, let's give this exciting little business the benefit of the doubt and hope that this first CSR Report is the start of a reporting journey which will become a fuller articulation of sustainability impacts in the future.

Wonder what a Chunky Monkey + Veev® Açaí Spirit float would taste like?

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)

Why don't Japanese reports win awards?

One of my favorite annual publications is the Global Winners and Reporting Trends published following the Corporate Register Reporting Awards (CRRA). This year's version, CRRA '11, as its predecessors, is choc-a-bloc with data and insights about reporting and reports and how the winners won. Produced as a PDF on a diskonkey and not as a printed brochure, it offers a great view on how reporting is progressing.

In Paul Scott's (CoprorateRegister.com CEO) introduction, he notes that there has been an increase in the quantity of reports, but that we should "await the increase in quality". Global reporting output reached almost 5,000 reports, but the true figure including reports published in different languages is closer to 6,000. This follows a very consistent year-on-year increase in reports published every year since 1992, and is a testimony to the appreciation of transparency as a key business practice. Even if the quality is not quite there, efforts to be more transparent are crucial.

Europe is way out in the lead on reporting, producing around half of all reports published globally. The top 3 all-time reporting countries are the UK, the USA, Japan, Germany and Australia, in that order. Japan is a prolific reporter and would actually be top of the list if all Japanese language reports not available in English were included. Let's see whether recent tragic natural-disaster-related events in Japan create a change in this picture for 2011.

First-time reports (my faves) continue to represent around 20% of all reports while integrated reporting remains at 5% of total global output, despite all the buzz and talking up of this approach. Brazil and South Africa are showing greater interest in integratedization, with 15% and 18% of all reports showing up in the one annual document. The Jo'burg Stock Exchange's requirement for integrated reporting should boost the number of South African integrated reports in coming years. Less than 25% of reports are assured each year.

CRRA '11 shows a continued uptake in GRI reports (those which contain a GRI content index) which reached 40% in 2010, with Spain, Portugal, South Africa and Brazil being out in the lead.

Whichever way you cut the data, reporting is very much in the frame, though, of course, there are far more companies that still do not report than do. Will the 2011 reporting year bring us any closer to mainstream?

Anyway, the CRRA awards are a great annual event. This time, there were nine winning reports from nine companies (in previous years, reports won in more than one category). In CRRA'11 you would have had to read 843 pages of sustainability reporting to read all the first place winning reports, but only 699 a year ago. And despite Japan being out there with the reporting leaders, not one Japanese report made it to the top ten in any category.  I wonder if that is because Japanese reports are always loaded with diagrams. Take a look at the Fujifilm Holdings Corporation Sustainability Report 2010 , one of the Best Report category entrants. This report, GRI undeclared (with a GRI online index), externally assured, the Company's fourth, is packed with diagrams. Here is one of my faves:

It takes a while to figure this out, but actually, it's very good and provides great detail of environmental impacts in the life cycle of Fujifilm products. This is one of thousands (ok, a slight exaggeration) of diagrams in this report.

Another very interesting thing in the Fujifilm report is their Environmental Cost Accounting Balance Sheet.

This shows the Fujifilm investments in environmental conservation in 2009  (Yen 49,460 million) and the environmental conservation benefits  inside the Group (Yen 21,811 million) due to energy savings and other elements, and energy conservation outside the Group (Yen 69,948 million) which is based on reduced emissions and environmental cost benefits realized by customers resulting from purchases of new products. This is a very interesting calculation which I have rarely, if ever, seen expressed so clearly.

Overall, this report from Fujifilm is meticulous and detailed in a way which reflects the reporting style of many Japanese reporters. While it's not an easy read, its a model of transparent reporting and shows consideration for the reader by introducing some Japanese art at the start of different sections to enable us to contemplate on the beauty of Japanese culture as we dive into the next diagram-laden section. Fujifilm deserves a thumbs up for being one of the more deserving reports entered in the CRRA Awards.

I will now sign off with a 16th century Japanese crane which introduces the report's "Enhancing the quality of life" section  ... enjoy :)

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)

Praise for sustainable packaging: HP

My kids had been wanting a printer (for absolutely essential and non-negotiable-needs-to-be-printed homework for educational purposes only) so I invested in a small HP deskjet printer. I was pleasantly surprised on unpacking the box to see the ecologically conscious and creative way the printer was packaged. The printer was NOT packed in big blocks of environmentally-yucky expanded polystyrene as shown in the pic below:

Insteead, HP now pack using  board made from post consumer recycled waste and industrial paper waste and place the printer itself in a reusable shopping bag. See pics below:

See what HP say about packaging in their 2009 sustainability report and the reductions of packaging levels per product. Not only did I gain a printer, I also gained a bag for my shopping to add to my weekly shop collection, and I have less stuff the throw into my garbage. 

Well done to HP! Thanks for being environmentally conscious and helping me to be too!  

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)

Sustainability in any language

An interesting article about the power of language to determine thought  (and we all know that thought leads to action) was posted by Lis Duarte on Twitter. The article quotes linguist Benjamin Lee Whorf who first posited in the 1930s that language is so powerful that it can determine thought. Certain words, it seems, can shape our thoughts and feelings, depending on the language in which they are presented. For example, you may read the words:

This may not create much of a reaction . But then you read the words:

These words, on the other hand,  may make you rush to read the latest sustainability report published. This might take you to General Mills' Sustainability Report 2011, a company which employs 33,000 people in the pursuit of Nourishing Lives (funny, I thought Campbell's Soup had cornered that concept). Anyhow, General Mills' report starts out with the words "We made a lot of progress in 2010 and have a lot to be proud about". Not lacking in modesty, then, Ken Powell, CEO, then talks about how General Mills has improved the health profile of products and increased corporate philanthropy and employee volunteering, as well as some interesting initatives on renewable energy sourcing and a new oat burner which both makes products and provides steam for heating.  Back to health, I was caught on the progress GM has made in reducing sugar content of breakfast cereals advertized to children which is now under 10g per serving. What I don't know here, not being a nutritionist,  is whether 10g is good or bad (it's better than previously) but compared to industry norms, existing regulations and recommended serving sizes, whether this is good enough, or just good, or not even scratching the surface. General Mills provides a separate brochure called the Benefits of Breakfast Cereals which goes some way to explaining the context around breakfast cereal food properties.

The GM Sustainability Report is not aligned with the GRI framework but GM has established a cross functional team to evaulate the merits of GRI based reporting. While this report covers a lot of ground in its 86 pages, it seems rather light on data and is mostly about stories and policies. A more rigorous (and assured) framework for GM reporting would be welcomed. Still, we were talking about words....

If you read the words:

you might not be motivated to rush out to prepare your company's first Sustainability Report, despite the fact that the mainstreaming of sustainability reporting is now a clear mission for the GRI and many stakeholders. However, if you read: 

you may start putting pen to paper immediately. 

If  you read the words:

you may be prompted to contact me. Hahahaha. Who said I am not allowed to shamelessly promote my report reviewing and writing services on this blog (very) occasionally? However, if you read :

you might consider contacting a Sustainability Reporting consultant in Moscow. And then contact me. Haha.

(Disclaimer: If the above does not mean "We need help writing our sustainability report", please refer to Google Translate. The writer bears no liability for the consequences of whatever the above translated sentence might mean!)

On the other hand, if you read the words:

you may be prompted to forget all about reporting and go back to dealing with the more important things in life . Chunky Monkey is the same in any language.



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)

Reporting by association

Another trend we can see building momentum in susty reporting these days is the number of industry associations that report on sustainability. Industry sector reports are a fascinating breed. They are a sort of publication du jour for these associations, offering them a fun marketing ride on the back of sustainability. At one level, the industry association's purpose is to promote the sector - that's what members pay them to do - so inevitably sector reports are good great news and marketing oriented.  At another level, their reports address the collective sustainability challenges that sectors face and therefore may loosely be described as some kind of sustainability report. By and large, they tend more toward the marketing end than the reporting end, but they are often nice publications which can give you a good overview of the material issues in a particular sector and the general approach being taken to address such issues. They also help you to become familiar with the sustainability jargon of the sector. Great for jargon geeks.

The Consumer Electronics Association (CEA) published a 2010 Sustainability Report, its second, in which it highlights how the "consumer electronics industry is acting boldly and continuing to raise the bar in addressing environmental and societal challenges." (No surprises so far, right?).  The CEA promotes growth in the $170 million U.S. consumer electronics industry through its 2,000 members and the report includes data and case studies from published fiscal year 2009 sustainability reports for the 10 largest companies in CEA membership from a global revenue perspective (Dell, HP, LG Corp.,Microsoft, Nokia, Panasonic, Philips, Samsung, Sony and Toshiba). Well worth a look to get a quick view of the nitty-gritty issues for this sector. And as for jargon, the CEA has an eCycling initiative, sales growth of EPEAT products, green lubricants for shredders, the green grid, power islands and more.  

Another mine of interesting information (if you're a beef geek) is the National Cattlemen's Beef Association  (NCBA) who recently published the Cattlemen's Stewardship Review, which as far as I can tell is their first.  It is dedicated to "the nearly 1 million U.S. cattle farmers and ranchers who work hard every day to raise good food, keep their animals healthy, protect the land and environment and build strong communities". An interesting fact is that 97% of all cattle ranches are family owned -  we tend to think of beef as a highly commercialized industry but when you get down to where it all comes from, its about good people trying to make a  sustainable living with "cattle-raising traditions passed from generation to generation". More than 10% of cattle farmers and ranchers are women :). The U.S. Beef industry produces 20% of the world's beef with only 7% the cattle. For the health-minded, you can also learn that a sirloin steak has 34% less total  fat today than it did in 1963. The report is a nice overview of the beef industry and the key sustainability issues relating to beef life-cycle, animal care, educating consumers about beef and healthy diets, antibiotics use and disease, and environmental aspects such as use of land and water, managing manure though methane emissions from cattle are barely referenced. And for the jargoneers, BQA , the Code for Cattle Care, beef fabrication innovation opportunities, retail meat case knowledge, beef shoulder clod, the DASH diet and more should enrich your vocabulary. 

My final example today is where green turns to yellow, or vice versa, with the Yellow Pages Association's first Sustainability Report. The YPA is the "largest trade organization of a print and digital media industry valued at more than $31 billion worldwide" and it's report is a 16 pager, which goes straight to the jugular of the YPA's main business to consider the Life Cycle Assessment of a Telephone Directory (what's one of those, remind me?) though disappointingly, the report does not reveal any data from a directory LCA assessment that the was conducted by the National Council for Air and Stream Improvement (NCASI). The key conclusions are that the main components of a Telephone Directory Life-Cycle are paper production, printing,  and end of life management (interestingly, distribution is not mentioned). But this is report is flimsy and not terribly informative and closer to the bon ton marketing brochure which any self-respecting trade association cannot now be without. Jargon lovers will enjoy consumer search habits, recovery rate of directories, coldset ink, ZIP code, waste paper landfill leachate and more.  

Despite Sector Sustainability Reports being interesting, they provide only a very shallow and high level view of what's happening in an industry sector. Indeed, this is one type of report that the GRI framework accommodates less well. Often the direct impacts of the Association itself are limited. The power of an Association is in the leverage of its membership and its ability to influence new directions. I think this is an something that could benefit from a GRI sector supplement to help address the different ways Industry Associations could report more effectively on sustainability.

In the meantime, I wonder if the Global Ice-Cream Manufacturers' Association will be publishing a Sustainability Report this year? Free ice cream for everyone who reads it ?

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)

Inflating community impacts

Once again, the clarity of sustainability reports often leaves me with more questions than they answer. I was reviewing AT&T's 2009 report for a client benchmarking project I am working on, and came to their section on Community Involvement. AT&T has 282,720 employees, but the Company records volunteers including retirees, and notes that there are 325,000 volunteers in total. AT&T has more volunteers than it has employees! (Incidentally, 325,000 was the number that AT&T reported also in its 2008 report). Additionally, AT&T records a total of 8.5 million hours volunteering in the community for the year 2009.  8.5 million hours means that every single employee in the company volunteers for 2.5 hours every month. This is possible but it's not likely. What we are not told is what proportion of the total volunteers is represented by retirees, and what proportion of the total hours volunteered was actually volunteered by employees. Did any current employees actually spend volunteer time in the community? There is no contact point for queries listed in the report, so if any AT&T people are reading this blog, I would appreciate being enlightened.

As a general point, I do not believe that recording retiree volunteer hours combined with employee hours is appropriate. Just as adding in volunteer hours by employees' family members, friends, friends of friends, neighbors or even local golf club members is equally inappropriate. A sustainability report including community investment should specifically focus on identifying employeee community involvement, and record the numbers accordingly. This is important information for stakeholders.

If a company includes others in its community programs, in essence, this is a good thing. Providing retirees with a framework in which they can volunteer is positive and may well serve to enhance the quality of life of retirees as well as strengthen the local community fabric. Including employee families in community programs is positive as this may provide emotional support and positive family experiences about the workplace for employees.  It makes sense for a company to want to share this in a sustainability report - it's a part of their total impact - but I would prefer to see the numbers separately.

Otherwise it looks as though a company is inflating its community impact. 

Now why would a company want to do that?  

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)

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)