The Third Israel Sustainabilty Transparency Index 2011

You cannot have sustainability without transparency. It's like chunky and monkey. Or lap and top. Or CSR and HR. Or air and conditioner. Or foot and print. Transparency is both a window to a company's sustainability performance and impacts and also a driver of those performance and impacts. Companies who believe they can "do the right thing" and not tell anyone about it are in a Middle Ages mindset and will not be able to compete effectively over time in the current business climate. Transparency brings tremendous opportunities to engage with stakeholders in dialog which can support the identification of new business opportunities and mitigate risk. Am I preaching ? Perhaps. But in my home market, Israel, this is apparently what is needed, because for the third year in a row, Israeli companies FAIL at transparency. My company, Beyond Business, established the Israeli Transparency Index three years ago, with the objective of monitoring the level of transparency of the top 100 publicly traded companies on the Tel Aviv Stock Exchange. Back then, in 2009, the average transparency level of these top 100 companies, with a collective market capitalization of over $150 billion, was 31%. A year later, it was 33%. And now, in 2011, it is 35%. That's pretty dismal for a supposedly advanced market such as ours. Download the full report here.

There are some leading lights. The top three companies who have raised the Index for the past three years are:

Bank Hapoalim (with a hat trick of first place, achieving 99% transparency in 2011)

Bank Leumi (achieving 95% transparency in 2011)

Strauss Group (achieving 88% transparency in 2011)

The Top Ten are shown below.

Only these 10 companies (10%) achieve transparency levels of over 50%, and eight companies (8%) have no transparency AT ALL, as they have no website and produce no sustainability reports.

By design, our Transparency Index rewards the presence of a Sustainability Report which we believe to be one of the leading tools for establishing both transparency processes in the business and required transparency to external stakeholders. Of the full 200 points available for Transparency in the Index analysis methodology, a high transparency report such as one meeting the Global Reporting Initiative Application level A earns 100 points, whereas an Application level B report earns 80 points. Lower transparency reports, whether written according to the GRI framework or otherwise, earn lower points according to the level of transparency of their content. Therefore, it is no surprise that higher scores for transparency are significantly influenced by the presence of a Sustainability Report on the Company website, or similar transparent communication such as a Communication on Progress to the United Nations Global Compact, or an extensive CSR disclosure in an Annual Report. This is because we believe that reporting adds a rigor to transparency that is not present in general website disclosures. Consequently, Companies who lead in the Transparency Index are generally those who published Sustainability or Corporate Responsibility reports.

In the 2011 Index, a total of 14 companies reported in one form or another, up from 12 in 2010 and 5 in 2009. 2011 figures include three companies which achieved full points for a Sustainability Report at GRI level A, four Companies which received partial points for a Sustainability Report at GRI level B, and 7 Companies which received partial points for lower level transparency reports.

The Index methodology scores 4 dimensions: reporting, content, navigation and accessibility. The methodology requires no interpretation or personal judgment and the full scoring for each of the 22 data points is fully transparent (would you expect any less of a transparency index?). We devised this methodology in this way specifically to avoid issues of objectivity. If it's there, you get points. If not, you don't.   

It was encouraging this year, after we had announced that we would be analyzing websites during the month of March 2011, that several companies called us up to ask what they need to do to improve their transparency levels. Slowly but surely, we may be seeing transparency moving into corporate awareness as another dimension of competitive market conditions in the new sustainable era.

As we do each year, we awarded the Top Ten Transparent companies with a certificate at our annual Sustainability Reporting Conference.

We are excited that the Center for CSR Development in the Kyiv has decided to adopt our methodology for the development of a Transparency Index in the Ukraine. We are looking forward to helping out.

In the meantime, here's hoping that the Israel Transparency Results for 2012 will show some improvement. Does no harm to be optimistic, right?

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)

What is your feedback worth ?

I was taking a look at Deutsche Post DHL recently published Sustainability Report called Living Responsibility Report 2010 and came across their way to encourage readers to give feedback.

I wonder why Deutsche Post placed a cap on the number of feedback forms that would qualify for the Euro 5 donation (up to a limit of Euro 1,000) ? Were they worried that more than 200 people would provide feedback requiring them to donate horrendously large amounts of Euros to Plant-for-the-Planet? If 1,000 people took the time to read the report and fully complete the questionnaire, this would amount to a donation of Euro 5,000. Believe me, if 1,000 people genuinely took the time to do this, I believe it would be worth far more than Euro 5,000 to Deutsche Post. What do people think when they see this offer? Does it incentivize them to respond? Would they wonder if it is worth bothering to fill in the form, because if they are feeder backer number 201, no cash is thrown in the pot? Is the donation any form of motivator?

Deutsche Post is not the first reporter to offer incentives for providing feedback. OneSteel offered a 16 MB iPad for filling the survey response form on their first standalone sustainability report for 2010 (a much sexier offer, if you ask me :))

Of course, the problem with providing feedback on sustainability reports is that they always seem to end up in some black hole and you never quite know whether anyone ever read the feedback or did anything with it. This is one of the big breakthroughs of the SAP and the Guardian online report execution - feedback is open and online and gets a reply.

Most companies make a plea to receive feedback but it is hard to tell if this is lip service or genuine interest in what people have to say. I tend to get about a half 'n half response from the companies I write to directly with feedback - half respond, half don't.  I never get a response to any of the specific feedback forms I submit.

I believe that the best incentive for encouraging stakeholders and report readers to give more feedback is not the promise of an iPad or even the possibility of a donation to a good cause. It would be the promise of ACKNOWLEDGEMENT. I believe people want to see their feedback acknowledged and responded to. People provide feedback because they want to make a difference. They are not just taking the time to generously provide free advice to companies for the greater good. They want to have influence and impact. So come on reporters, if you want people to respond to you, make an upfront commitment to valuing their feedback. Let people know you are serious.

I found a nice example from DiGi.com Berhad, a Malaysian mobile and internet service provider. In their Sustainability Report 2009, they offer us the possibility of getting a response to our feedback. (I haven't tested this out yet, but let's give them the benefit of the doubt for the time being :)).

Of course, reporting companies could always make a commitment to respond, a promise of a Euro 5 donation to a good cause AND an iPad for the winning feedback..... throwing in a pint of Chunky Monkey would make it really effective.

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)

Thorny Issues for BT Sustainability

The telecom industry has its sustainability issues, just like any other sector. However, it is rare to hear them discussed so openly, and with such authenticity, as we heard earlier this week from Kevin Moss, Head of CSR, BT Americas, in a presentation to the Fifth Sustainability Reporting Conference in Israel. We were honored and privileged to have Kevin Moss as our guest speaker at the conference.

Kevin has responsibility for implementation of BT’s Corporate Social Responsibility (CSR) strategy for the company’s activities in North America. The role covers a broad scope of sustainability issues including environment and climate change impact, community investment and business ethics. Kevin’s interactions are equally divided between internal and external stakeholders. His involvement has covered helping produce the company’s annual sustainability report, to running community investment programs, to working directly with customers to help them understand how BT’s products and services impact their sustainability. In his prior role, Kevin was responsible for the management of all products sold by BT across the region as well as determining product strategy, new product development and geographic expansions - a great basis, I might add, for developing a deep understanding of BT's impacts on customer and consumers. Many of you who read this blog and mingle in the CSR Twitter community will know Kevin well from his blog and his many CSR tweets. In fact, Kevin is one of the top team of sustainability influencers and thought-leaders in this space that share generously on the web and in many other speaking engagements.

In his presentation at the Fifth Israeli Sustainability Reporting Conference, organized by my company, Beyond Business, Kevin was the real star of the show, presenting with charisma and flair, in language we could all understand (and I mean more than simply British English). He explained the entire cycle of sustainability practices at BT, including how sustainability is a business opportunity and leads to improved business results over time, how sustainability is managed, how risk is assessed and how materiality is determined, how KPI's are managed and reported and how they link to financial results and how BT addresses indirect impacts. You can read all about BT's responsible business policy, and download their 2010 report at their responsibility website here.

Selecting a few "thorny issues" to assist our understanding, Kevin helped us understand that the road to corporate responsibility is not always easy and presents real ethical dilemmas that companies must work through in a considered way. 

How does a telecom company manage content issues relating to freedom of speech versus the issues of protecting the vulnerable? Examples might relate to child pornography, for example, where, as Kevin said, "most people would agree that child pornography is not a good thing" and most people would like to see restrictions on child pornography content hosted on various ISP's. However, there is, apparently a serious market for child pornography (go figure) and recently BT reported that they block 35,000 to 40,000 attempts to access child pornography sites EVERY DAY.  The decision how to block sites, how many sites to block (i.e. how far do you go in your definition of pornography) and how to implement this is a serious ethical issue. Many say, for example, that exclusion filtering (blacklisting of websites) is not an effective way of blocking pornography and that BT should do more. Clearly, a thorny issue.

Another Thorny Issue relates to the question of conflict minerals.

Coltan is a mineral used in manufacturing electronic circuits used in cellphones. It is mined in the Congo, often by children, and the proceeds go to fund arms for rebel militias. Often called Blood Coltan, this is as thorny an issue as you can get. How can a company like BT continue to market its products while avoiding complicity in the illegal activities of armed bands in the Congo? Clearly, BT has strict policies on protecting human rights, supply chain controls and responsible sourcing, but this issue goes to how how vigilant all companies must be in ensuring that all aspects of their business are thoroughly assessed for all forms of risk and relevant safeguards established. 

On a less thorny note, BT maintains a range of programs to support digital inclusion and developing products and technologies which help BT customers reduce their carbon footprint. One example includes BT's redcare technology for vending machines  which provides real-time data about replenishment levels and therefore enables vendor service providers to avoid making uneccessary journeys, saving both cost and considerable carbon emissions. Oh, and by the way, if you have a few idle minutes, you can always try out BT's interactive games to learn more about how to save the world - another element of BT's commitment to informing and influencing the public towards greater awareness of sustainability issues.

You can download Kevin's presentation at the conference website here.

And you can view some pics of Kevin from the conference on Flickr here.

And if ever you get the chance to hear Kevin speak about BT and CR, jump at the chance!

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)

My favourite sustainability reporting conference

This conference continued our tradition, as a small consulting firm who makes a big impact, of practitioner-oriented, sustainability reporting-focused annual conferences in Israel for those who are serious about sustainability and want to gain both inspiration and guidance. The conference is free of charge to all who register, and those who show up are the hard core of committed sustainability managers, consultants, activists and academics. This year, the conference was kindly hosted by Microsoft R&D Center in their fabulous auditorium earlier this week, in Herzliya, Israel.

Kevin Moss, Head of CSR, BT Americas, was the **star** of the conference. He made an ultra turbo impressive presentation of BT's Corporate Responsibility practices including reporting. He is one of the best speakers on sustainability we have hosted. Don't ask me. Ask EVERYONE who attended the conference.

The program included talks by Dov Khenin, an Israeli Member of Parliament, who has been seriously active for many years in driving social and environmental legislation, stressing the role that companies must play in creating positive impacts and being accountable, and Alona Shefer Karo, the Israel Director-General of the Ministry of the Environment, a long time activist on environmental matters, having headed up the influential environmental umbrella NGO Life and Environment for many years prior to joining the government. Alona explained how the Ministry for Protection of the Environment is demanding higher quality environmental reporting and will be using sanctions and fines and aligned mandatory reporting frameworks to ensure a step change for reporting by public companies on environmental risks. Important work.

Dr Daniel Federson of the Institute of Quality Control (IQC), a specialist standards training and auditing company, presented on the use of standards including ISO 14000 , ISO 18000 and SA8000 as drivers for sustainability.

My business partner Liad Ortar, presented on the subject of a new tool for measuring sustainability impact of companies using three local rankings.

Iris Rakovitzky, Sustainability Analyst at Beyond Business, presented the results of the Third Israeli Transparency Index, which resulted in a marginal improvement in sustainability transparency by the 100 top publicly traded companies in Israel, at 35%, which we still call FAIL. The Top Ten companies for Transparency were presented with Transparency Index certificates :)

I myself me presented on the state of Sustainability Reporting.

I have uploaded my presentation to Slideshare and you can view it here. My key points relate to navigating the many different dynamics of sustainability reporting today, with the multitude of options and developments in approaches to reporting and changes on the horizon. The big question companies should be facing today is not whether to report but HOW to report.

Sustainability Reporting

View more presentations from elaine cohen.

As this was a sustainability conference, we also ordered special waste bins for organic waste which was then used for compost (after the conference!)

All in all, this was another successful conference which provided inspiration, practical assistance, meeting of minds, meeting of people and hopefully, a platform for further growth and development of sustainability and sustainability reporting awareness and practice in Israel. The only thing we didn't provide was ice cream. Oops. Forgot to put that on the menu. Hmph. 

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices   Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

The GRI Year in Review 09/10

Nope, it's not a Sustainability Report (that's due later in 2011), but it is a comprehensive summary of what the GRI has been getting up to between July 2009 and June 2010. It's the GRI Year In Review Report for 2009/2010, released today.

The 09/10 year for the GRI was quite a memorable one which included the outstanding third GRI conference in Amsterdam in May 2010 (1,209 attendees, dubbed "the largest multi-stakeholder conference focusing on the role organizational transparency plays in achieving a sustainable global economy") at which the GRI declared its visionary goals including:

By 2015, all large and medium-size companies in OECD countries and large emerging economies should be required to report on their Environmental, Social and Governance (ESG) performance and, if they do not do so, to explain why; and by 2020, there should be a generally accepted and applied international standard which would effectively integrate financial and ESG reporting by all organizations.

Despite the fact that the achievement of these goals still seems light years away, and, let's face it, 2015 is right in front of our noses, the GRI has made considerable progress as the only global comprehensive sustainability reporting framework available, translated into 25 languages and increasing in uptake year on year.    The GRI says that the data shows that more companies are having their sustainability reports assured, resulting in more accurate and trustworthy data and that statistics for 2010 reflect a global upwards trend in sustainability reporting, suggesting an increase in the use and awareness of GRI Guidelines. In 2010, 1,818 reports were recorded as using the GRI Framework (up 22% from 2009). The GRI recognizes that this does not include all sustainability reports which are estimated by CorporateRegister.com to reach close to 6,000 in 2010, but the GRI says that the GRI database and their Reports List which is freely downloadable is indicative of overall reporting trends.

The Year in Review opens up with an introduction by Elaine Cohen :-) (go on, take a look), and follows with an overview of updates to the GRI Framework undertaken in 2009/2010 leading up to the GRI 3.1 update and a review of sector supplements. Also in 2009/2010 the GRI made (welcome) strides to achieve greater partnership and alliance with a range of other organizations which promote sustainability and in some cases, reporting: the UNGC, the OECD, CDP, Earth Charter, IFC and ISO (for the ISO 26000 development). These alliances are important on the journey towards standards harmonization which the G4 framework overhaul will (hopefully) address over the coming year.

The Year in Review outlines the strides made in sustainability reporting and how reporting has been a catalyst for performance improvement in  many companies, as well as the developing technology focus to support more efficient reporting processes. The GRI has also advanced a successful partnership program for SME's in supply chains,  a project which should be scaled up with many more MNE's, in my view. The globalization of the GRI with the increase in Focal Points and partnership projects around the world, including the 179 times GRI staff were asked to speak at external events, and the engagement of 564 Organizational Stakeholders (members, in lay-language),  completes the picture of the penetration of the GRI Framework in many countries. The GRI's position on informing government policy change is also covered, and though tangible results are still a somewhat lightweight, the GRI is working hard to engage policy makers to put sustainability on their agenda.

Finally, what's next?  The GRI highlights expansion of its network in new geographies, translation of more publications, the G4 upgrade, collaboration with the IIRC, and the Next Big Conference in 2012. So far, so good, but personally, I believe this falls short of a concrete plan, with milestones, to deliver the visionary goals mentioned above. The GRI has less than 4 years to have companies required to report on ESG in OECD and emerging economy countries in order to to achieve their first goal. I would like to see more specific plans as to how this might be achieved because, aside from a few pioneers (Denmark, South Africa etc), I don't yet see significant strides towards this worthy goal.

Additional data on reporting status and trends from the GRI reports database shows an increase in GRI based reports every year since 1999 (see table on left). A GRI based report must contain a GRI content index. There are many reports published which use the GRI Framework as a guideline but do not include a content index and these reports are excluded from this data.

Europe leads the pack in GRI-based reporting at 45% of all reports published globally in 2010 (Spain is the largest reporting country in Europe). Asia follows at 20% and the USA and LATAM tie in third place with 14 % of reports published in 2010.

Looking at data by country, the USA, Spain and Brazil top the list for absolute numbers of GRI-based reports published in 2010, but Sweden, Spain, The Netherlands and Japan top the list for numbers of GRI-based reports per country GDP which is a much more relevant measure.

In terms of  sectors, the Financial Sector leads the field in 2010, followed by Energy, Energy Utilities, Food and Beverage and Mining. The GRI database shows that 12% of reports published in 2010 were Integrated Reports, and 33% of reports are sent to GRI for the Application Level check.  29% of reports published in 2010 reports achieved an Application Level A.
A whopping 47% of GRI based reports receive external assurance, though we all know that assurance remains somewhat of a Wild West. Another interesting piece of data shows that reporting by SME's has been increasing year on which is a welcome development and one which I expect to fully continue.

The Year in Review 09/10 is a nice summary of where the GRI is up to and is worth a look. GRI is staying very much on the radar on Sustainability Reporting and no conversation on reporting can take place today without reference to the GRI Framework. That's quite some achievement for what is still a relatively young organization, even though there is still so much more to do. The future agenda should include not only an increase in the quantity of reports, but also greatly improved quality of disclosures and accountability for impacts (not only actions). While we must value the drive towards greater transparency of business, and the GRI Framework is an essential stepping stone to transparency, we must all retain  focus on the fact that what the world needs is sustainability and not only sustainability reporting. Having said that, by now you all know that I am a strong supporter of the GRI and perhaps you might also know that I was born eternal optimist (that comes just after the fact that I was born an ice-cream addict), so with more hard work, clear direction and the vitality of the GRI team, there's a chance that it's all gonna work out.  

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)

Интервью с экспертом по отчетам по устойчивому развитию Элейн Кохен

I was recently interviewed by the Center for CSR Development in Kyiv, Ukraine, following my visit there to speak at a conference on CSR for HR.

For those of you who speak Russian, here goes:

Элейн Кохен, международный эксперт по отчетности по устойчивому развитию и комментатор по отчетам по устойчивому развитию для CSR Wire предоставила Центру «Развитие КСО» эксклюзивное интервью по нефинансовой отчетности и отчетности по устойчивому развитию.

CSR Review: По-Вашему, какая ситуация сложилась с нефинансовой отчетностью в мире?

Э.К.: Я считаю, что сегодня нефинансовая отчетность находится в состоянии постоянного изменения. Хотя отчеты об устойчивом развитии стали привычной практикой среди компаний-лидеров и все большее количество отчетов ежегодно публикуется по всему миру, всего их делают только около 6 тыс. компаний. Впереди еще долгий путь к тому моменту, когда нефинансовая отчетность приобретет поистине массовый характер. Существуют некоторые факторы для увеличения количества нефинансовых отчетов: повышенное внимание законодательной власти или фондовых бирж к разглашению компаниями нефинансовой деятельности, инициатива «Сделай отчет или объясни» (Report or Explain) и движение по направлению к Интегрированной Отчетности (Integrated Reporting), которую многие компании ошибочно рассматривают как сокращенный вариант полноценных отчетов по устойчивому развитию.............. and as for the rest .... click here

Want the English version ? Click here or read on.

Here it is:

CSR Review: In your opinion, what is the global situation with non-financial reporting?

E.C.: I believe that non-financial reporting is in an interesting state of flux today. While sustainability reporting has become common practice among leading companies, and increasing numbers of reports are published globally each year, there are still only around 6,000 companies who report despite over hundreds of thousands which are prime potential for reporting. There is still a long way to go before non-financial reporting is truly mainstream. There are some drivers for increasing non-financial reporting which are gaining ground today – the heightened focus by legislative or stock exchange authorities to see more non-financial disclosures with “Report or Explain” initiatives now gaining ground, and the move towards Integrated Reporting which many companies might, mistakenly, see as a short-cut to full sustainability reporting. Overall, these elements will create more pressure for more companies to report.

Around the globe we are seeing different levels of non-financial reporting uptake with the UK, US and Japan leading in terms of numbers of reports, though emerging economies such as China and India are starting to gain ground. Eastern Europe, Middle East and many African countries are still lagging.

CSR Review: What are the perspectives of sustainability reporting in 5 years?

E.C.: Five years is not a long time, but as mentioned, the move towards greater integrated reporting will be tangible, I believe, though the results will not yet be entirely satisfactory. There will continue to be incremental increases in the number of companies disclosing non-financial data, with companies in countries where legislation is adopted gaining a significant lead. The format of reporting will change from paper-based to web-based, as it has been doing now for some time, and the leading companies will probably use their websites to host social and environmental data which is updated more frequently than once per year, thereby reducing the need to rush to produce an annual publication by a certain deadline. My hope would be to see more local country reporting by multinational companies, more sustainability reporting of events and more reporting by brands, as well as a much larger pool of companies of all sizes deciding to embrace sustainability reporting as a core element of their business communications. In terms of the quality of reporting, we should expect to see more focus on stakeholder engagement which is starting to be understood as a critical basis for sustainable performance, as well as more emphasis on impacts and outcomes rather than inputs. The Global Reporting Initiative upgrade to G4 should help to drive these changes.

CSR Review: In your opinion, isn’t the GRI Reporting Framework too complex for companies and readers?

E.C.: No, I believe the GRI Framework is accessible and workable for all companies. At the lowest level of transparency, the C reporting level, a company is required to disclose mainly policies and processes, without too much detailed information about actual performance, so that is a viable start-point for companies which have not yet embedded practices for more comprehensive reporting. Use of the framework at the highest transparency level, Level A, certainly requires much more detailed work, but if the company is good at sustainability performance, the reporting framework will be an advantage and not a hindrance.

The writing of a sustainability report does not need to be rigidly aligned to the GRI framework and it can be as creative or original as a company would like, as long as the performance data is in there somewhere, in line with the selected report transparency level. I use the GRI Framework for almost all GRI reports I write for clients, even small SME businesses, and the challenge is never the GRI framework, it is the company’s ability to define a strategy, measure progress and disclose data.

Reading a GRI based report is almost always much easier for the reader than a non-GRI report as there is a logical flow to the narrative defined through the progression of disclosures that the GRI Framework requires.

CSR Review: What is your perception of the beginning of the G4 process development?

E.C.: I believe the G4 is getting off to a promising start and has the right objectives. The GRI Framework, excellent as it is, is not perfect and there are several elements which should be addressed to improve the scope and usefulness of the Framework and align it to new directions in the field of sustainability. I hope the process will be successful in delivering its objectives.

CSR Review: What country, according to your experience, is the leader in the non-financial reporting?

E.C.: It depends what you mean by leader. Objectively, statistics show that the UK and the USA lead in numbers of reports, but when comparing numbers of reports to country GDP, the picture is a little different. South Africa, Finland, Chile and Portugal feature highly on this list (2009 analysis). If you look at legislation, then Denmark has to be out in front with their “Report or Explain” legislation which “encouraged” most of the top 1,100 Danish companies to practice sustainability reporting. If you look at report assurance, then the USA and South Africa appear to have the highest rate of external verification. In terms of report quality, then it is hard to make a generalization. There are many cultural factors which influence local country reports and it is hard to compare.

CSR Review: Should the NGOs and universities make non-financial reports?

E.C.: Yes, of course. In fact, any organization which has stakeholders should use sustainability reporting as a platform for dialog and engagement. Sustainability reporting is a highly useful tool for all organizations, not just those which are traded on the stock exchange. There is a growing pool of NGOs, academic institutions and also Trade Associations and local government authorities which are now reporting on sustainability and I believe this will grow.

CSR Review: In your opinion, what company has done the best non-financial report ever?

E.C.: There are several companies who report outstandingly well and it is hard to single one report as “the best ever!”. However, if I am pressed, I always come back to Vodafone and their “we said, we have, we will” reporting theme which was introduced, I think, in 2004, and which set a new kind of standard in accountability in sustainability reporting and communication. Vodafone has produced consistently good reports over the years, both at global level and at individual country level.

CSR Review: How can companies be stimulated to prepare non-financial reports?

E.C.: The CEO needs to get it. The CEO needs to understand that reporting is a business process which contributes to delivering improved business performance. However, sustainability reporting is the outcome of sustainability strategy and first, CEO’s need to embrace sustainability as a new way of doing business. If they do, reporting becomes a necessary part of this. External “stimulation” for enlightening CEOs is becoming more pronounced these days with increasing regulation, shareholder pressure, competitive pressure and customer demands, but there are still many CEO’s who resist. Sooner or later, however, they will realize that they will have no viable alternative than to be transparent about their sustainability practices.

CSR Review: What are the ways to popularize the non-financial reporting as now not many people read them?

E.C.: Someone said that sustainability reports deliver value the day they are printed, whether or not anyone actually reads them! This is because the process of developing the report is just as valuable as the report itself. We shouldn’t expect people to read reports as they read bestseller novels. More realistically, we should expect people to “use” reports rather than read them end-to-end, in order to understand more about a company’s specific performance so as to make informed decisions as stakeholders of that company. As an investor, a potential employee, a customer or even a competitor, I can use the sustainability report to check out a company’s position on issues which I feel strongly about. As far as “popularizing” reports is concerned, I feel this is the wrong objective. What companies should be doing is “popularizing” the dialog and the interaction with stakeholders. Companies should use the information contained in sustainability reports to provide different opportunities to engage with different stakeholder groups on matters of relevance to them. The report serves as the platform and a successful dialog may take place without actually “forcing” stakeholders to read the entire report. But it is important to remember that meaningful dialog cannot begin unless the company has first committed to a process of collating, measuring, analyzing and publicly communicating its sustainability performance.

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)

CSR and uninvited guests

Preventing the unwanted visits of bugs, insects, rodents, ants, cockroaches and other uninvited guests in our homes, offices, factories, schools and museums is the backbone of  Rentokil Initial plc's business. In addition to declaring war on these offen irritating phenomena of the earth's biodiversity and their interference with our modern-day living, the company also offers a wide range of cleaning and other services associated with the inhabiting and maintaining of buildings. Overall, it's not a small business, with over 66,000 people generating over $4 billion in revenue in 50 or more countries. Rentokil has been reporting on sustainability for 10 years now, and their CSR report is an interesting look at an industry which most of us have regretted having to experience at some point in time.

I recently reviewed  2010 Rentokil's CSR Report.

The full review appears on CorporateRegister.com. Here are the highlights:

At the outset, the Rentokil report looks and feels like an authentic report on performance, without understating challenges and setbacks, but devoid of a broader contextual link to sustainability and material issues. The page which lists the "potential corporate responsibility impact areas" is generic (waste management, water management, emissions, health and safety, customer satisfaction, community activity etc.) though in the section on environment, there is a brief discussion on what I would consider to be one of the most material issues for Rentokil: the environmental impacts of the use of pesticides and rodenticides (toxic chemicals, biodiversity, safety). Rentokil has reduced its Authorised Product List (APL) from 2,286 SKU's in 2007 to 96 in 2010, a massive achievement which ensures that pest control procedures avoid use of unacceptable toxic products, chemicals usage is controlled in line with regulations and excessive dosage (with the risk of leaving residue which may damage other species) is minimised. Rentokil supports the CRRU (the Campaign for Responsible Rodenticide Use), to ensure responsible and effective rodent pest control while minimising negative impacts on wildlife, and the RRAC (Rodenticide Resistant Action Committee), which promotes using smaller quantities of higher toxic materials instead of larger quantities of lower toxic materials whose large volumes are likely to leave behind a resistant population of the target pests. This is the most fascinating aspect of Rentokil's sustainability impact. In the Product Stewardship subsection of the report, Rentokil mentions the development of new pesticide technologies such as a new chemical-free pest control process and Contained Atmosphere Technology (CAT), using high concentrations of nitrogen and carbon dioxide to kill insects.

Rentokil presents an authentic picture, albeit somewhat selective, of managing corporate responsibility and accounting for direct impacts and indeed, the Company should be commended for maintaining a commitment to high quality annual sustainability reporting over many years. The report itself presents a rather inside-out view, focusing on responsible practices, often strong on details but not on the overall picture. The explanation for this can perhaps be found in Rentokil's approach to Corporate Responsibility which "emphasises action to match the needs of individual businesses, while ensuring compliance with group wide policies in areas such as health & safety, conduct, environment and product management." This perhaps helps us to understand why the report is populated with isolated examples of practice from individual business units rather than overall coverage of the key material issues that Rentokil faces. Aspects relating to broader quality of life and sustainability impacts of services on customers and the general public, for example, are not addressed. I feel this makes the sustainability communication rather fragmented, often jumping between issues which have been addressed through only one brief practice example, making it difficult to gain a fuller perspective of the scale and scope of specific topics across the entire business.

Anyway, having learned much more about bugs and rodents than I thought I wanted to know, I leave you to form your own opinions about the Rentokil report and the business of pest control and its contribution to sustainability. I don't want to bug you about it, but don't forget to send Rentokil your feedback. And now I have ants in my pants which means it's time for yes, you guessed it, ice cream. Wonder if bugs like ice cream.....

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)