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 :)
Hi Elaine,
ReplyDeleteThanks again for a thought-provoking column.
I've often wondered myself why Japanese company reports aren't more successful, especially in light of how good they are on the environmental dimensions (in fact, back in the olden days when we were reading strictly 'environmental reports', they enjoyed more success). Rarely does a western company report provide the same sort of detail on the sources of environmental impacts, performance breakdowns and explicit commitments to impact reduction as are common in Japanese reports.
To some extent, this detail (often in the form of graphs and charts), is, as you point out, hard to understand. Moreover, these reports lack what to western sensibilities would be deemed 'emotional appeal'. That is a problem for anyone wanting to be seen as the world's best.
But it must also be said that in general, Japanese reports are very lopsided in favor of the environment, and very under-representative of the social and economic aspects of strategy and performance. When an international award or assessment scheme goes to evaluate them, this gap is often seen as a fairly acute absence.
A Japanese contact once explained to me that the Japanese attitude toward corporate governance is very different from that of a western company, in part because Japanese shareholders are so passive that companies are unaccustomed to thinking in terms of investors' needs when it comes to communications like reports. Western companies are much more keen to present their CR activities as contributors to a more robust and successful company - and therefore to demonstrate an integration of sustainability factors into core business. On the other hand, the Japanese culture and mentality are geared toward the role of CSR in creating a strong and harmonious society (NOT companies), and therefore more drawn to philanthropic and community-oriented activities rather than internal social responsibility efforts.
My bleeding heart worries about tripping over into gross generalizations and national stereotypes, but these observations have tended to ring true in my own experience. There must surely be cultural differences that strongly determine how companies conceive of CR reports - what they are for, and what they should reflect - everywhere you go. I have to think this plays a role in the awards phenomenon you point to here.
And it is a shame, because these are some very strong reports in many respects.
Judy
thanks for mentioning this Elaine... I am always struck by the fact that it is very easy to find the CSR section when I visit the websites of Korean and Japanese businesses... not exactly the case in the USA.
ReplyDeleteDominik Zynis
hi Judy, thank you for your great insights. The question of cultural differences in CSR is a very interesting one. Looking at all the reporting awards etc that are around, it tends to be European and American reports who win (with one notable execption at the GRI awards last year when Brazil took all the awards). I quite agree that there are some great reports coming out of other countries.
ReplyDeletewarm regards,elaine
hi Dominik, thanks for reading and commenting. Interesting point about website accessibility - I will ook out for that in future.
ReplyDeletewarm regards, elaine