Sustainability Reporting with Integrity

I have been involved in the writing of many Sustainability Reports. In fact, it's one of the main services I provide to clients and something I spend a whole lot of my time doing. Several of the reports I have worked on have gone through the GRI Application Check (including the report of my own company, Beyond Business Ltd). This week, I received the results of the GRI check of the fourth report I have submitted this year, 2011, one being our own and the other three for clients (reports not yet published).

Now, here's my conclusion.

It's always worth submitting a draft report for the GRI Application Check.

Despite the fact that the GRI check is limited and does not cover EVERYTHING that's reported, what is does cover is very thorough. As experienced as I think I am in working strictly to the letter of the GRI framework, which I think I know very well indeed, there is occasionally something, no matter how minor, that I overlook. The GRI check really does help me in ensuring that I support my clients in delivering a report with integrity i.e. if it says it meets Application Level A, B or C, it does. Even reports which are externally assured are often not rigorously checked for adherence to the declared Application Level.

Using the GRI Reporting Framework is a choice. It is perfectly acceptable (though, arguably, not leading edge) for any company to write a Sustainability Report without adhering to the GRI or any other guidelines that may exist. It is perfectly acceptable to go with your own sustainability reporting flow and just do it your own way. However, if a company chooses to report using the GRI guidelines, then my expectation is that they will adhere to the guidelines right down to the fine detail of the indicator and the indicator protocols. For me, the credibility of a reporting company really drops when the company declares adherence to a GRI Application Level, and after even the most briefest of checks, it is apparent that the company has not met the requirements.

I see this as a question of professionalism, thoroughness and yes, integrity.

In order to earn the prestige / reputation / goodwill benefits associated with GRI Reporting,  many companies rush to self-declare adherence to the GRI at some level or other but don't follow through with the rigor and discipline required. As we say in Manchester, ignorantia juris non excusat. This means that you cannot claim not to understand the guidelines - everything is perfectly clear and if it is not, my experience of the GRI is that any question gets a response within 24 hours. So not adhering correctly to the GRI guidelines (after making a declaration to the contrary)  is either a question of genuine misunderstanding, minor oversight, generally sloppy work or intent to deceive. Harsh ? Maybe. But that's exactly why the GRI check is available.

What does the GRI actually check?

The GRI Content Index is checked for completeness, correctness and usability. This means that the GRI checks whether the completed GRI Content Index in the draft report answers the required number and set of standard disclosures for the self-declared Application Level (completeness); that the way in which the reporting (or not reporting) has been addressed is in-line with the self-declared Application Level and accepted standards (correctness); and that the Index serves as a functioning navigation tool (usability) including whether page reference numbers are correct.

GRI checks a sample of the standard disclosures. GRI takes a sample of the standard disclosures and determines whether the reporting claims made in the Index can be substantiated. For this purpose, the GRI checks the text to see if a quantitative standard disclosure has been answered with a pertinent quantitative response and a qualitative standard disclosure has been answered with a pertinent qualitative response. You cannot know upfront which of the disclosures the GRI will actually check, so as a reporter, you must make sure that all the disclosures required for your declared Application Level are reported correctly.

The Content Index Check List is a very good tool for reporters, breaking down the reporting requirements by indicator into precise reporting requirements and the type of response required (quantitative, qualitative).

Reporting inconsistencies from my own experience

Some of the things I get pulled up for are quite minor. I had to laugh when I wrote in my own A level Sustainability Report that one person out of a team of four left the business during the reporting year. The indicator, LA2, requires a percentage as well as a number. I had to correct that disclosure to "one person (25%) of our workforce left the business".  In a micro-enterprise like mine, the percentage is rather insignificant. But take a company of several hundreds or thousands of people which you want to benchmark for turnover against peer companies. The percentage of employee turnover, not the number,  is what makes the data comparable. In another report, I wrote that the reporting company sources all electricity from the National Grid (Indicator EN4). Not enough. I had to add the details of the primary sources of energy for electricity production used by the National Grid. Another example relates to the scale of the reporting company. I had not included market capitalization. (Indicator 2.8). Tougher examples might include detailed disclosure of stakeholder engagement practices. This is tougher because, while companies want to report, they may not have documented effectively all of their internal and external processes relating to stakeholder engagement. (Indicators 4.14-4.17), especially if this is a first time report. Sometimes, an oversight may just be a matter of not indicating the correct page number for the relevant content in the body of the report.

Adding punch for consultants

I also find that, as a consultant writing reports for companies and advising them on content, the GRI check helps bring certain issues to a head. Companies often anguish over what to disclose and what not to disclose, or whether it's worth making the effort to supply certain content. I would rather not count the amount of times I have successfully used the line: "This is required for GRI Application Level B" or " If you don't provide this data, we will not be able to pass the GRI Application Level check". For companies for whom the GRI check is important, either because it helps create internal legitimacy or external standing, it works every time, thereby helping to increase the real transparency (and not only the declared transparency) of any report.

And finally....

The GRI Application Level check is not assurance and it not exhaustive. But knowing that an external body is going to check your adherence to the guidelines does make for a heightened degree of discipline. When writing a Sustainability Report, there is always a lot to think about and it's always a rush to get it all done at the end of the process. It's easy to miss minor details. It's easy to forget that you needed to go back and check that last point. It's easy to overlook that the pagination changed when you added a few extra sentences.

Reporting with Integrity is not just about reflecting your sustainability performance in an accurate and balanced way. Reporting with Integrity is also about being true to your word. If your word is that you have adhered to the GRI Framework at Application Level B, then I expect to see that you have done that.

PS:

I would add at this point that I believe there is room for a revision of the GRI checking system. I think the GRI should offer a check which includes the entire content of the GRI Index, and not a sample check. Assuming that the A, B, C or some other type of transparency differentiator will be adopted in the new G4  guidelines, I believe the GRI should also offer a solution to ensure that declared adherence is correct in a more comprehensive way.  This will enhance the credibility of the reporting companies and also in the guidelines themselves. Who cares if that will make my life so much more difficult :)

PPS:

The GRI did not ask me to write this post! I am a GRI Organizational Stakeholder but otherwise have no connection to report-checking other than professional interest in a more robust reporting system.

elaine cohen, CSR consultant, Sustainability 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)

Heineken reporting: the parts it doesn't reach

Heineken commercials just have to be the funniest and most creative. Take this one:




(If you want more, see the top ten funniest Heineken commercials here).

While the Heineken Sustainability Report for 2010 doesn't quite reach these levels of creativity and humor, it is a good and thoughtful report, which I reviewed for CorporateRegister.com. You can find the full review here. Here are some of the review highlights:

Heineken is a Dutch Beer Company, with 250 brands, 140 breweries in 70 countries, employing 55,000 people and delivering a turnover of Euro 16 billion in 2010. The Heineken 2010 Sustainability Report starts out with a great introduction from the Chairman/CEO which is nicely balanced and gets to the key issues for Heineken. It's almost apologetic, referring respectfully to 14 fatalities in Heineken’s newly acquired Mexican business and other countries and loss of stardom in the Dow Jones Sustainability Index. However, it does set expectations with the Heineken "Brewing a Better Future" initiative, which is a "comprehensive and integrated sustainability strategy for the next decade. It increases the scope and scale of our work on sustainability and gives substance to our long-term ambition to be the world’s greenest brewer. It also allows us to balance our need for financial sustainability with the role we play in society." Clearly, deep thinking has been going on at Heineken, and a new model with 23 programs grouped into six initiatives: Green Brewer, Green Commerce, Engaging Employees, Heineken cares, Responsible Consumption and Partnerships for Progress lends a structure and a certain credibility to Heineken's way forward. The CEO statement is followed by an executive summary of the report content by the "Chief Corporate Relations Officer". This is an outstanding overview, including frank comments on shortcomings, for example, the fact that a 3.84 score out of 5 in a reputation survey for responsibility and sustainability is not good enough and needs work. So far, so good.

When thinking about beer production, you don't automatically think about agriculture. But key ingredients in beer production are barley, corn starch, hops and for cider, cider apples, and agricultural practices are a critical element of any brewery's overall impacts. Heineken owns half a million apple trees in the UK for example. I wonder how many they own worldwide? Heineken reports on initiatives to advance reduction of chemicals in agriculture and local sourcing wherever possible. Heineken also refers to several Economic Impact Assessments that the company has conducted in Sierra Leone, Rwanda and Burundi, with new assessments in 2010 for Egypt, Croatia and the Bahamas. Heineken maintain that in Croatia, 8,800 jobs are in some way related to Heineken while in Egypt, local sourcing of barley has resulted in up to 6,000 jobs. These are important numbers. It's a shame that the Economic Assessment Reports are not available to the general public (I couldn't find them on the Heineken website).

An interesting example of how sustainability has benefited Heineken is at the Elblag brewery, where the amount of non-segregated waste was reduced from 793 tons in 2006 to 55 tons in 2010. In 2010, Heineken's Polish branch sold its waste at a profit of EUR3 million. That's a huge figure, demonstrating once again that sustainability practices make good business sense.

Finally, with regard to responsible drinking, Heineken tells a nice story of the management team visiting a hostel for drink dependency victims and as a result, decided to delist Strongbow Black cider, a higher strength cider with an increased risk of irresponsible use.

Heineken's report is easy to read and projects strong credibility, reflecting good thinking about sustainability. It's well structured, comprehensive in scope and explanations, case studies and descriptions of issues are clear, easy to understand and balanced (including areas of challenge and sensitivity).

The real issue with this report is that it focuses on responsible practices but not on sustainability opportunities. Heineken's "Brewing a Better Future" is all about doing what Heineken does now more responsibly. I would have liked to see some progression toward a sustainable value creation type of model where sustainability is embedded in Heineken's core business rather than managed as a set of distinct initiatives. Notably absent is a description of material issues and an analysis and prioritization of those issues, which begs the question of how the 6 core initiatives were developed and using what stakeholder input. In this sense, Heineken's report doesn’t quite reach the parts that other reports reach (Heinken's advertising tagline for years has been that Heineken reaches the parts that other beers cannot reach), but it does do a basically good job of reporting key direct impacts in a nicely presented way.

And I can't resist leaving you with one more responsible drinking commercial from Heineken:




elaine cohen, CSR consultant, Sustainability 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)

How to set sustainability goals

A recent piece of research from GreenResearch ^TM, a research, advisory and consulting firm focusing on cleantech, alternative energy and sustainability, looks at the trends and best practices for defining, managing and communicating sustainability goals. This is an interesting subject. The quality, quantity, scope, "softness" and "hardness" of sustainability goals as presented in sustainability reports varies widely, from those which are clearly measurable (and therefore manageable) to those which are broad directional aspirational type statements which offer no clue as to how progress will be assessed.  (The researcher David Schatzky notes in the GreenResearch ^TM report "Aspirational goals can bring excitement to a sustainability strategy, but can engender grumbling from mid-level executives if they are held accountable for achieving them."

Mostly, I believe, the type of goals a company sets and commits to in a Sustainability Report will have to do with the company's approach to sustainability. Those companies who have a clear sustainability strategy with clear action plans will find it easier to define SMART goals. Those companies who are just doing stuff, and want to report on it, find it harder to formulate a set of quantifiable goals. There tends to be quite a clear correlation here.

Good example

The Cooperative Group Sustainability Report  2010

The Cooperative Group has a clear strategic approach to sustainability and SMART quantified goals in each of the three core strategy areas: social responsibility, ecological sustainability and delivering value. Some goals span several years. Here is an example of the goals in the Social Responsibility area:

Example of targets from the Cooperative Group Sustainabilty Report 2010 (page 9)

The top two on this list (as it's quite hard to read on this blog) are:

• Ensure that 10% of the profits available for distribution is made available for community investment by 2013, with £5m deployed per annum to tackle UK poverty around stores and branches.
• Stores and branches will act as a focus for 10,000 community initiatives per annum.

You can see how these are very specific and define measurable outcomes. All the Cooperative Group's 14 key targets are similarly expressed.

Less good example:

Mauser Sustainability Report 2010

The Mauser Group  has a list of targets in its Sustainability Report for 2010 and while the company should be commended for publishing targets, it is easy to notice the difference - the targets are not entirely quantifiable. They are just specific enough to guide the work but not specific enough to measure success. "Work on market introduction of light-weight packaging" provides an item on the action plan but hardly defines measurable outputs. Will the fact that people work on light-weight packaging be enough to meet the target? Or is the delivery of light-weight packaging the goal? And how much light-weight packaging? One item? All items?

Example of targets from Mauser Sustainability Report 2010

Another less good example

Occidental Petroleum Corporation (Oxy) Social Responsibility Report 2010

Oxy also should be commended for making commitments to targets in its Sustainability Report, however these are also quite vague. "Continue to engage with key stakeholders on Oxy’s corporate governance, HES and social responsibility efforts" doesn't really describe the kind of step-change activity or desired result. Sounds a little like a more-of-the-same soft-option target. What will people do differently? How will success be measured?

Another of Oxy's targets is "Maintain efforts to make Oxy’s workforce reflect the communities in which the company operates, through national, regional and local hiring practices and equal opportunities for women and minorities." Any time a target or goal starts with "maintain efforts", it is describing the effort, not the result. It's hard to measure efforts. Stakeholders don't buy efforts. They buy results.

Anyway, the above-mentioned research had 32 respondents (senior executives at major corporations in USA, Europe and Asia) from companies which are considered to be leaders in sustainability. The research therefore targeted to represent best practice, not all practice. Additionally, interviews were conducted with with 14 companies including Alcatel-Lucent, Barclays, Dell, Edelman, Johnson Controls, Kraft Foods, Nokia, Unilever and Telefonica  and more. Key questions addressed by the research are:

• What is the right way for companies to establish sustainability goals?
• How should companies manage sustainability performance to ensure they achieve their goals?
• When and how should sustainability goals be communicated to the public, and what is the place of internal sustainability goals?

The research shows that several factors influence the establishment of sustainability goals:

Factors influencing the selection of sustainability goals from GreenResearch 2011

Interestingly, the top factor relates to environmental impact goals, arguably the easiest and most quantifiable area of sustainability practice (though I believe all other areas of sustainability performance can be quantified in clear goals). The research shows that 79% of respondents have publicly declared goals on carbon emissions, 57% on overall energy consumption, 45% on solid waste, water and renewable energy consumption and 41% on recycling.

55% of respondents indicate that goals are set annually with only 3% setting goals on a 3-5 year horizon. This may be indicative of approach or of semantics. Sustainability requires longer term thinking, so annual goals are inadequate. However, multi-year goals with annual milestones which are adjusted along the way is a good approach. Sometimes milestones may be expressed in terms of annual goals.

Another interesting aspect of goal-setting includes the degree to which executive compensation is tied to sustainability goals. The research shows that very few companies mandate that all leaders and managers should have part of their compensation package related to sustainability, and only 7% of companies indicated that some or all Board members are compensated on this basis. 

Link between compensation and sustainability from GreenResearch 2011

Finally, the research around Sustainability Goals refers to the debat about publication of goals externally versus the use of goals at an internal level only. Why would a company (which reports on sustainability externally) not publish goals externally? Some suggestions thrown up by the research:

• Belief that this is not very relevant to external stakeholders.
• Lack of good tracking systems or credible data for measuring performance.
• Lack of confidence in their ability to meet their goals, sometimes because of a dependence on third parties to achieve a goal.
• Regional factors affect goal-setting such that an overall global goal would not be realistic.
• Competitive considerations, including a reluctance to see competitors outpacing the company by setting more ambitious goals.
• Creating a sustainability report (with goals) would be redundant, time consuming and costly (a direct reference to Apple's statements relating to Apple's (misguided) reluctance to report on sustainability).

I agree with GreenResearch that publicly stated goals have power and making an external commitment should really be the best practice that companies aspire to both as a management tool and as a route to gaining trust and credibility with stakeholders. No-one expects perfection, it is understandable that some goals may not be achieved, but as a minimum I think we should expect transparency. If sustainability reporting is about building trust, reporting needs to address what companies WILL do not just what they HAVE done.

The conclusions shared by GreenResearch are:

• Companies should craft sustainability goals in consultation with internal and external experts and stakeholders, combining bottom-up and top-down analysis to produce goals that are material, achievable, quantitative and time-bound. A quarter of sustainability executives at leading companies have “aspirational” sustainability goals without a clear plan to achieve them.
• CEO support, operating executive accountability and regular progress reporting are the best practices of managing sustainability goals. Fifty percent of sustainability leaders tie part of C-level executive compensation to the achievement of sustainability goals. But over forty percent say progress on sustainability goals is reported to senior management only semi-annually or annually.
• Public sustainability goals demonstrate commitment and help galvanize internal staff and drive results. Seventy-nine percent of sustainability leaders have public greenhouse gas emissions goals while 45 percent have public waste and water goals. Companies with immature management or measurement practices should start with internal goals but aim to go public in short order.

So, time for a review of your sustainability goals?

Learnings from GreenResearch's report might indicate it might be a worthwhile exercise.

(Disclosure: I have no relationship with GreenResearch and do not benefit from sales of the company's reports)

 elaine cohen, CSR consultant, Sustainability 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)

Wasting paper #CSR #FAIL

I have finally gotten around to speaking out about a pile of paper that arrives in my mail each month. It's my cellphone invoice. Well, it's all my cellphone transactions. We have three active phones (me, my husband, my daughter), one cellular modem for my laptop and one micro-sim for my iPad. All these charges are paid from my one account. I need at least one printed invoice because my accountant says I cannot submit an electronic version for my business accounts, and my phone and peripherals are a business expense. So, in a normal, reasonable, environmentally conscious world, I would expect to receive one envelope, with one piece of paper listing all the charges that will be deducted by standing order from my account.

This is what I received from my provider, Pelephone:

Seven envelopes and eight pieces of paper.

All for one account.

Every month.

Paper, ink, postage, handling ... seven times more than required. Multiply this by hundreds of thousands of subscribers and the amount of resource wastage is mind boggling.

This is despite a declaration on the Pelephone website that they are committed to environmental protection, although this is as minimal as you can get.

I wrote to Pelephone, asking what they could do about this wastefulness but have yet to receive a response (after 24 hours). An email query promises a response within SEVEN working days while a query on the Pelephone Facebook page promises a response within TWO working days. I decided not to wait. This is the age of instant.

Israel is often cited as having one of the highest per capita usage rates for cellphones worldwide (this may be explained by the link to security concerns and many schoolchildren carry cellphones for this reason). There are three main cellular providers in Israel: Cellcom, Partner (Orange) and Pelephone. It's hard to say that any of them present a good option for sustainability. All have been taken to task by the Israeli government in the past year for anti-consumer policies including prohibitive interconnection charges, lack of transparency regarding fees and connection speed rates, grossly high prices and lack of customer responsiveness. Service is abysmal at all three companies (and I have been a customer of all three at different times). I believe the telecommunications industry is one of the least trusted in the country though, regrettably, one of the most indispensible. As far as sustainability is concerned, Partner, with 32% market share, has produced two sustainability reports, the last one covering 2009. Cellcom has produced one sustainability report covering the year 2008, and Pelephone has produced zero sustainability reports and is the least transparent in all respects of all three companies. 

However, even without a commitment to sustainability, saving resources just makes common sense. Perhaps that's the secret ingredient that is lacking in our celluar industry in my home market. Perhaps common sense is the more difficult thing to achieve than improvement in 3G connection speeds.    

elaine cohen, CSR consultant, Sustainability 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)

GRI in the USA - reporting here we come!

I attended today  a GRI webinar for Organizational Stakeholders in which Mike Wallace, who heads up the GRI US Focal Point, presented an update of what is happening with GRI US. I was very impressed. (Disclosure: I don't impress that easily).

GRI Mike is taking a very strategic approach to advancing sustainability reporting in the US and it sounds as though it will make a difference. With 90% of US companies NOT reporting, clearly there is a big opportunity. A considered, strategic approach to broadening awareness, providing platforms to help companies get on the reporting map and reinforcing the strong business case for reporting will surely deliver a return for the GRI.. and for sustainability. 

The US actually is the largest country in terms of GRI Organizational Stakeholders with 88 members.

The Top Ten GRI Organizational Stakeholder country memberships

Reporting in the US and Canada has been on the increase for the past few years. Using data contained in the GRI Reports List, and analyzing only those reports published through to end July each year, the picture is as follows:

Data based on the GRI Reports list updated as of 20th July 2011

In total, there were 183 reports published in the US and Canada in 2009 and 250 in 2011. Assuming the mid year trend holds true, we should expect this number to reach over 300 by end 2011. The GRI strategy to ensure this happens, increasing the quantity and the quality of reporting in 2011 and in  years to come, includes:

• Establishing a very strong foundation in the US. You will probably know that the US Focal  Point was established through the assistance of the Big Four Acocunting firms Deloitte, Ernst and Young, KPMG and PWC and is hosted in the facilities of The Conference Board. 
• Leveraging the GRI Training Partners program to reach a large number of organizations. The world's largest GRI Training Event was recently held in Cleveland by BrownFlynn. 
• Speaking at conferences, webinars and many other venues
• Closely monitoring press coverage - 844 articles in the US press in the first quarter of 2011.
• Closely monitoring US interest in the GRI website - 656 G3 Framework downloads in the US in the first quarter of 2011.
• Working closely with Professional, Industry and Sustainability organizations to leverage their memberships. Working from a lean resource base in the US, the approach is to get to much larger groups via their existing network mechanisms. Such groups include ASSE (The American Society of Safety Engineers with 80,000 members) , USGBC (the US Green Building Council and the LEED certification program) , NAEM (a prominent organization advancing EHS practices), ICMM (The International Council on Mining and Metals) and more.
• Focus on connecting with government authorities who have massive reach and power to convert markets such as the SEC, the GSA (the US General Services Administration, which, according to Mike has bigger purchasing power than the largest corporations), the US Army, the Postal Service and more. 
• Development of a US Sector Leaders program. This is a brilliant approach to which Mosaic and Clorox have already signed up. It means working the market sector by sector and engaging one company in each sector to support familiarization with the sector and help the GRI expand reporting in that sector. The idea is to have 10 - 15 Sector Leaders by the end of next year.  

There can't be many bases left uncovered in this approach and I have no doubt that results will justify the effort. Remember though, that any company starting a first reporting journey may take well over a year to deliver their first report, so there will be a delay factor in the number of reports published.

The GRI approach in the US is to focus squarely on the business case and there is ever more data which suggests that more attention is being paid to reporting by investors, more analysis is being done of sustainability reporting data and companies who advance sustainability practices, including reporting, are outperforming their peers. Mike Wallace shared an excellent presentation with some useful data  which you can find on Slideshare:

Measuring Sustainability Performance June 2011

View more presentations from Mike Wallace - GRI Focal Point USA

The issue that didn't get much airtime in the discussion (and I wasn't quick enough to ask the question) is about quality of reporting. It's important to increase the quantity of reports but no less important to improve their quality. The extensive training programs that the GRI is promoting will certainly help, but for reporting to be meaningful, Sustainability Reports have to be more transparent (less than 20% of reports published in the USA and Canada in the last few years meet Application Level A requirements), more closely aligned with the GRI framework (even checked and verified reports are often lacking in rigor and accuracy in their adherence to the framework) and more credible (less than 10% of reports are externally verified). This may be the bigger challenge, though there is no doubt that getting companies on the reporting track is the key.

elaine cohen, CSR consultant, Sustainability 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)

Dr Sustainability is back!

Doctor Sustainability is a busy woman. She spends her time trotting the globe (carbon neutrally of course) offering advice to the CEO's of global corporations, senior government officials and movers and shakers in major organizations such as the United Nations, United Biscuits and United Manchester .. err.. Manchester United. You can imagine how delighted I was when Dr. Sustainability agreed to answer, once again, readers' questions on the CSR Reporting blog. You will all recall Dr Sustainability's sound advice last year.

*******

Dear Doctor Sustainability: I have been hearing more and more about Creating Shared Value. What does this mean ? 

Dear Ponderer: Creating Shared Value is another way of saying that sustainability must make money. This is not to be confused with Creating Shareholder Value. The latter is about making rich people richer. The former is about making everybody rich. Of course, there are no guarantees. Except for the latter.

Dear Doctor Sustainability: I was in the middle of reading an online sustainability report and suddenly I felt a migraine coming on. Actually, I have noticed that this often happens when I read sustainability reports. Can you recommend a treatment for this ?

Dear Sufferer: I have treated many people with a similar complaint. Basically, the only thing that can be done is to take a three week daily dose of an antibiotic, ant-depressant, anti-histamine and anti-suicidal drug which can be supplied at your local pharmacy. But don't worry, it comes in Chunky Monkey flavor.

Dear Doctor Sustainability: I have decided to reduce my energy consumption to zero. What would you recommend ?

Dear Energized: Die.

Dear Doctor Sustainability: Surely women can't be good Chief Sustainability Officers ? Isn't sustainability a man's thing ?

Dear Chauvinist: Of course women can be great CSO's. Female leadership skills such as listening, caring, sharing, smiling, collaboration, inclusiveness, appreciation and a sharp analytical as well as creative mind will always give the female CSO  an edge over her male counterpart. Unfortunately this cannot be proven because, with the exception of a very few, all CSO's are male. But don't despair, if you are an aspiring female CSO, your time will come. But you might have to wait for a giant black hole to rip a star apart. 

Dear Doctor Sustainability: I want to write an Integrated Report. But I am not sure quite how to integrate what and where. Should I start off with an Annual Report and include a sustainability paragraph on every alternate page, or should I start off with a Sustainability Report and add reams of financials at the end ?

Dear Integrated: This is quite a dilemma which most Integrated Reporters have not yet resolved effectively. The best way is to rewire your processes to create an integrated approach to business. You can then produce a fully integrated report which includes all the relevant information jumbled up together so that all stakeholders will not be able to find exactly what they are looking for. When you realize this doesn't work, you can split it into two reports to keep everyone happy.

  

Dear Doctor Sustainability: I really don't know what to call my next report. CSR report ? Sustainability Report ? Corporate Citizenship Report ? Positive Impact Report ? Shared Value Report ? Corporate Responsibility Report ? Accountability Report ? Sustainability Review ? Triple Bottom Line Report ? What would you recommend ?

Dear Reporter: How you call your report is a reflection of how you approach sustainability strategy. Sounds to me that you haven't quite got it together. In that case, my recommendation would be to call it a CSR Sustainability Corporate Citizenship Positive Impact Shared Value Corporate Responsibility Accountability Triple Bottom Line Review Report. Nothing like covering all bases.

Dear Doctor Sustainability: No-one reads my Sustainability Report. How can I get people to read it ?

Dear Unread: Kidnap them, bribe them, coerce them, whip them, point a gun at them, torture them. If all that doesn't work, add some pictures of children holding up a globe or saplings blowing in the wind. If you still have no luck, you might try calling it News of the World. 

Dear Doctor Sustainability: My company has decided to use a celebrity to promote our sustainability reporting efforts. Right now the choice is between Susan Sarandon, Bette Midler, Woody Allen and Ben Stiller. Who do you think would be most appropriate ?

Dear Stargazer: I do believe celeb endorsements of sustainability reports is the Next Big Thing in sustainability communications so well done for getting ahead on this. As for which celeb to select, use one who can talk coherently about global sustainability issues such as climate change, water scarcity, poverty, the digital divide, a low carbon economy and human rights abuses in supply chains. (Hint:  It's ok if you decide to drop this idea). 

Dear Doctor Sustainability: I want to write our Sustainability Report for last year, but we had a massive environmental disaster in our business which caused several deaths, destroyed much wildlife and many natural habitats, created a major hole in our market capitalization and seriously damaged our reputation. Do you think I should mention any of that ?

Dear Reporter: Of course. But express it all in a way which makes it sound really really really positive.    

elaine cohen, CSR consultant, Sustainability 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)

10 reasons not to write a CSR report

I suspect most people could come up with 3,483 reasons not to write a CSR report and all are probably true, but some are truer than others. I suspect there are more companies asking themselves why not write a report today, rather than asking why. The pressure to report is increasing and more companies are joining the reporting pool each year. So here are 10 reasons not to write a (first) report.

ONE: You have nothing to report.

It's never perfect. There is always more you can do in terms of sustainability performance before you launch the process of writing your first report. There is always a balance to be found between a lightweight report and a content-rich report. You shouldn't wait until you have got everything nailed down before you report (because you never have everything nailed down). But frankly, if you have no sustainability performance to report in any of the core areas of your business operations, then producing a compilation of CSR marketing-oriented mumbo jumbo and calling it a Sustainability Report won't cut it. By all means, produce a CSR brochure, or a CSR statement or a CSR policy paper ... but a report should contain disclosures of PERFORMANCE and not just intention. So if you ain't got it, don't report it. Work on getting it.

TWO: Your sustainability performance is really awful

So you measure your carbon footprint and it's been increasing year on year. You had 5 fatalities in your operations last year. Employee engagement survey results show that more are disengaged than engaged. You just paid a $30 million lawsuit for gender discrimination. Your supply chain audit showed that most suppliers are not compliant. Your CSO has just resigned. Now is not the time to publish your first sustainability report. Get working on addressing the issues. Get some good process in place. Then think about reporting.

THREE: You have no data-collection processes in place

Your first report should not stress out the organization in a way which immobilizes it because none of the data flows that measure sustainability performance are in place. If you have no data at all in your business - you have been recycling but you haven't measured the volume, you have reduced waste but you don't know by how much, you have had calls to your Ethics Hotline but you don't know how many, you have reduced employee turnover but you haven't measured turnover rates... then you have to concentrate on getting data infrastructures in place. It is better to postpone publishing your first report than to publish one with inadequate basic data - concentrate on getting a robust data-collection process in place.

FOUR: Your data is not reliable

You still work on excel and your data aggregation relies on many different individual inputs from around your company's globe. You have no formal internal auditing procedures in place and you cannot be sure that the data is reliable. Why publish it? You will only have to issue corrections down the line, which can create credibility issues. Make sure your data is robust and accurate before publishing your first report.

FIVE: You are in your first year of business

No matter how strong your commitment is to sustainability and even if your business was founded along sustainability principles, one year is not enough to demonstrate performance in all three triple bottom line areas of sustainability. You might have had a good first year, but wait to see if your second year is similar. Publish a first report only after two full years of business.

SIX: You have no budget

Yep, sorry to tell you this, folks, but reporting costs money. It may come as no surprise that I recommend using a consultant who specializes in writing sustainability reports (yes, ok, like me!), especially if this is your first report. This is based on experience. I have several clients who have produced their own report in-house and then come to ask me to turn it into, well, a report. One client recently confirmed that their management said they "can now appreciate what a quality report looks like" after using our report-writing services, the first time they have used an external provider. There is no getting away from the fact that reporting is not something anyone can do just because they work in the sustainability area and can string a few coherent sentences together. Sustainability reporting, for it to benefit both the company and speak to its stakeholders, requires experience and skill. For a first report, allocate some money to make that happen well.

SEVEN: You have no time

Clients come to me saying "We want a report in three months." For a seasoned reporter, whose data flows are well oiled and who have very detailed logging of sustainability events throughout the year, I suspect this may be possible (though I have never been part of a reporting process which has been completed from start to publication in three months). For others, well, reporting is not an off-the-shelf product. The reporting process takes time. It has to. It requires a different approach to the presenting the business performance and a different set of stories and data-points. These take time to develop. It involves many people for whom reporting is not their most urgent priority and who have many other things to do. People go on vacation. People are sick. People just don't get around to it. You have to have enough slack in your process to allow for all of this. If you have no time in your schedule for whatever reason to allocate a realistic timeframe for the report, then postpone your first report for another year.

EIGHT: You have no buy-in

A sustainability report doesn't belong to the CSO or to any individual manager in the business. No-one can publish a quality sustainability report alone. Even if the CEO decides there should be a sustainability report, it cannot happen without the buy-in and active collaboration of the senior management team and their teams. If you find that you are just not able to generate enough support to ensure a respectable flow of content, then stop. (This doesn't mean EVERYONE has to be behind it. There will always be those on a management team who question the value of reporting). But if everyone is against, and uncooperative, hold that first report and focus your energies on helping some of them come around.

NINE: You want to maintain a reputation as non-transparent, non-accountable and unsustainable

Most companies wouldn't declare this as an objective but not reporting defaults to this. RATS (Responsibility, Transparency, Accountability, Sustainability) is the way leading companies work these days. Fact. None are perfect but most are on the journey. Not reporting is equivalent to declaring that RATS is not important to you. If that's really the case, then don't go for that first report.

TEN: You have no ice-cream

Reporting is not an easy task. Ice cream always makes it easier. If you have problems securing a regular supply of ice-cream for the reporting team, postpone that first report until you can get it organized. 

elaine cohen, CSR consultant, Sustainability 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)

Tweet Release

Do you think of #Twitter as a #lens or a #megaphone? Are you a #Twitter #wallflower? Do you see #Twitter as helping you to become a better #communicator? 

Ok, enough of the #hashtags. #youcangetalittlecarriedaway....

I just wanted to update you on the new "Short and Sweet" Twitter Guide for communications professionals published by Fenton Communications.  I may not formally be called a communications professional but I try to communicate professionally and professional communications form a large part of my work in the sustainability arena. Whilst I have not yet written a Sustainability Report in tweets (yet) (hmmm, that's an idea) (has anyone?), Twitter has fast become an indispensible platform for communicating in business in general and in sustainability in particular. I have been quoted as saying that “Twitter has done as much for corporate responsibility as the great thought leaders through sheer accessibility" and I stand by that. I also posted about the role of Twitter in sustainability communications some time ago in a post called "What Twitter does for CSR".

Fenton believes in the power of Twitter for professional communications and with this publication they urge you to make Twitter your lens and to immerse yourself in Twitter as a media tool. The Guide provides information about what Twitter is and how it works for you, how to use twitter and aha! a Tweet Cheat Sheet to make you lives easier when while you are immersing yourself. Go on, twimmerse yourself.

This is not just a standard layman's guide to what to include in your Tweets. It's an important education on the way information flows. This is essential to understanding how to leverage information flows to help spread your message more effectively. Fenton's description of  "Twitter as the new press release" is no exaggeration. Learning how to deploy Twitter for improved positioning of your company or organization is an essential communicators' skill in this, the twitteronic century. Doing your daily 30 minute Twitter workout is probably habit for Twitter veterans but for those who haven't got there yet, the Fenton guide gives you the heads-up. The Tweet Cheat Sheet may sound pretty basic for the more tweetified among us, but for those who have not yet mastered tweet-art, it may be just what you need.

Fenton are not just preaching about Twitter. They do it. Susan McPherson, SVP at Fenton, is the mind behind the bi-weekly Twitter chats on CSR (#CSRchat) which draw tens of professionals in each session to share views on a range of issues in an intensive hour of fast-moving, high-quality, content-rich, informative and insightful 140 character blasts. And a few jokes too. To see summaries of #CSRchats to date and get updates of forthcoming #CSRchat topics, check out the Fenton CSR blog or search the #CSRchat hashtag on Twitter. (If you don't know how to do that, check out the Fenton Twiter Guide :)).

So, the only thing that isn't mentioned in the Fenton Twitter Guide is that, for CSR and sustainability, you just have to follow @Fentonprogress and @susanmpc1. Oh, and the fact that Tweeting and Ice Cream go very well together.

elaine cohen, CSR consultant, Sustainability 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  (Beyond Business, an inspired CSR consulting and Sustainability Reporting firm)

GRI + CDP = headache

Being an Organizational Stakeholder (OS) of the GRI, along with all the other OS, I get advance updates of new things such as ... publications.

This time it's a GRI publication which explains the link between the GRI FRamework and the CDP which answers the question: How do the Global Reporting Initiative Reporting Guidelines match with the Carbon Disclosure Project questions?

The purpose is to provide a tool which will make the reporting process more efficient for reporters.

This is of course an important connection. The CDP is fast becoming the global standard for carbon reporting, just as the GRI has become the global standard for sustainability reporting. Over 3,000 organizations in some 60 countries around the world now measure and disclose their greenhouse gas emissions and climate change strategies through CDP. Understanding the way these two frameworks link together has probably not been a key element in sustainability report planning to date, but as most leading companies are now doing both, it is perhaps an interesting idea to try to address the CDP requirements through the sustainability report (just as many sustainabilty reports include the UN Global Compact Index). This is another building block in the complex attempt to achieve harmonization, which is a key consideration in the new G4 guidelines development.

The new Bayer Sustainable Development Report for 2010  (just profiled on CorporateRegister.com) has a reference to Bayer's CDP submission which is hyperlinked from page 27 of the report.

I tried to make a quick comparison between the CDP submission and the Sustainability Report using the new GRI linkage table in the document. I went to a simple comparision. GRI EN4 should be CDP 12.2.

In the Bayer Sustainability Report (page 56, table 16) direct greenhouse gas emissions is stated as 4.57 million metric tons of CO2e. 

In the CDP submission, total gross Scope 1 emissions is stated by country, so I added it all up and it comes to 4.57 million metric tons (which is actually the answer to CDP 12.1.) but compares with the direct emissions stated in EN4. So that makes sense.

However, CDP also appears as a correlation with EN3, which compares with CDP 12.2 and 12.3. But when I tried to find CDP 12.3 in the Bayer CDP submission, it was not there :). It looks like it had been cut off in the conversion of the form to PDF format. Funny.

Anyway, there seems to be some connection! However, this linkage document only works one way - if you first look for the GRI indicator and want to know what is the corresponding CDP question. Actually, I would have thought that it would be  useful to have this both ways, as more companies report to CDP than they do to GRI and  CDP disclosures may be a preparatory step ahead of full sustainability disclosure. Reporters may wonder what they need to include in their Sustainability Report to make it also CDP compatible (even if they still have to fill out the CDP form separately).

Therefore, if you want to check this out as you prepare for your own GRICDP Report, here is my distillation of the GRI Linkage Report.

EN16, by the way, in the GRI Framework is: Total direct and indirect greenhouse gas emissions by weight. Here you can see the level of detail in the CDP disclosures versus the GRI indicator and an indication of the complexities of harmonization. The comments provided in the Linkage  document attempt to shed some light on the detailed differences.

However, until the G4 becomes reality, assuming it does manage to integrate different reporting frameworks successfully, harmonization is still a big stretch.



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)

Deutsche Post, Adidas and Gazprom. Three reviews.

Three companies, three sectors, three sustainability reports, three sustainability report reviews. Every couple of months I publish a report review on Ethical Corporation. Here are the last three:

Deutsche Post DHL CR Report 2010
Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):  

Deutsche Post DHL’s 2010 online corporate responsibility report is designed like a complex logistics network navigated via a sleek online route map. It starts with a home page overview showing possible routes to a mass of information in a cleverly planned navigation hierarchy. You can start at the beginning or go directly to what interests you. Amply signposted, your journey is supported with infinite hyperlinks, in-section menus and an online mouse-over glossary for those bits of Deutsche Post DHL jargon that you might not be entirely familiar with. The complete content of this report is downloadable in a 246-page PDF or an at-a-glance overview of 21 pages. Report assurance is indicated online on each assured page. Accessibility and seamless navigability are best-practice features of this presentation, complete with an online feedback questionnaire and a promise that Deutsche Post DHL will make a €5 donation to Plant-for-the-Planet for each of the first 200 fully completed questionnaires received.

Deutsche Post DHL has 467,000 employees and operates in 220 countries. By far the most interesting aspect of its business is how the company could use its massive infrastructure and influence to transform the transportation landscape across borders and influence customers to adopt resource-efficient practices through new business models and collaborative initiatives.

Go Help is Deutsche Post DHL’s programme to address disaster relief, the new de rigueur corporate responsibility platform for logistics and technology companies, given the frequency of major natural tragedies that are occurring around the globe. Deutsche Post DHL has established disaster response teams, which have been deployed in many countries, providing local assistance in ensuring relief supplies get through. DHL has even developed an innovative form of waterproof packaging – “DHL Speedballs” – which can hold up to 25 kilograms, withstand airdrops better and stay afloat longer than other containers. They have been used in several relief efforts.

Overall, however, it is not easy to get to what really counts in this GRI B+ level report. There is no distillation of core issues raised by stakeholders about different aspects of Deutsche Post DHL’s business and no materiality prioritisation. The three pillars of the company’s strategy are surely worthwhile, but the lack of analysis of stakeholder expectations on a broader range of Deutsche Post DHL impacts and performance is an omission. Apparently materiality is the road less travelled on the Deutsche Post DHLhighway to CR transparency in an otherwise impressive report.

Adidas Sustainability Report 2010

Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):

The title of Adidas Group’s 11th sustainability report is: In the Real World, Performance Counts. And an intensive 116 pages of performance it is. Light on design creativity but heavy on content, the Adidas report is an example of attention to detail and thoughtful preparation. Complete with analogies from the world of sport, giving the air of a disciplined approach to sustainability, this is probably the group’s best report yet.

In the world of sustainability, performance is only part of the story. What counts are impacts. Adidas rarely ventures into the world of reporting impacts that describe what has happened as a result of their performance in terms of consumer impact, supplier training and even community engagement. This report stays very much at the level of the home game with the spotlight on what’s taking place on the Adidas field, but far less on the way Adidas is driving substantive and systemic change for stakeholders.

While it’s nice to see how many warning letters outsourced suppliers have received for not complying with ethical standards, some perspective of how Adidas has managed to change the game in over 10 years of focused working with suppliers would be welcome. In addition to data, the overall KPI score aggregating audit results in Adidas’s outsourced factories’ is lower than it was in 2007. The percentage of 3C (60% KPI score) or higher scoring suppliers is lower than it has been for the past two years and the number of warning letters issued to suppliers is higher.

An ethical supply chain is one of the most material issues and Adidas discloses how the group has responded to issues raised by stakeholders, including freedom of association issues in Cambodia, workers’ rights in Bangladesh and labour standards in El Salvador. But just how Adidas justifies the massive level of resource to support a sub-compliant supply chain is something that can be explored more fully in future reports. Performance is not only conducting audits. Monitoring is not the end result. Of greater interest is the effectiveness of such training, auditing and warning-letter activity and discussion of the outcomes of such changes.

Adidas is improving sustainability performance and does a serious job with this report. However, while the group is making progress, a step change in strategy and disclosure could reasonably be expected in future reports to achieve the standard required, in Adidas’s terms, for completing a marathon rather than running a sprint.

Gazprom Sustainability Report 2008-09

Here are selected paragraphs from my review of this report (you can find the rest here, online, on Ethical Corporation's website):

Gazprom’s first sustainability report portrays a rather different story to the one told in Roman Kupchinsky’s 2009 paper: Gazprom’s European Web. This alleges secrecy around Gazprom’s potential control of the European energy landscape via nameplate gas companies throughout Europe as well as links to organised crime and political corruption. Clearly these are not activities Gazprom would relish disclosing in a sustainability report. The question is whether Gazprom is a puppet of the Russian political machine – the Russian government still holds a 50.002% controlling stake in the company and is represented by six members on the 11-strong board. Or, has Gazprom been able to transition into a western-style market competitor that plays by the rules of a sustainable market environment?

The world’s largest natural gas producer, Gazprom has been issuing environmental reports since 2002, nine years after its break from full government ownership to become an open joint stock company in Russia. This now is the company’s first full sustainability report, covering years 2008 and 2009. Gazprom’s main activities are the geological exploration, production, transportation, storage, processing and marketing of gas. It is a giant in the Russian economy, employing nearly 400,000 people, holding 18% of global gas reserves, operating 600,000km of pipeline and supplying nearly 70% of Russian consumers and export markets with more than 400m cubic metres of gas.

The implications of Gazprom’s transformation are not trivial by any means. Establishing a global position in a competitive capitalist market and contributing to local socio-economic stability while distancing its reputation from former Kremlin political dictates will have demanded more than the average level of leadership skills. Gazprom’s report is an impressive 104 pages with no frills and no special effects, just plain, direct disclosures. It’s a rather dry read – hardly any stories, case studies or warming community photos – but it is detailed and meticulous. An example of this attention to detail is the chronicle of a safety incident. At 10.23am on July 24 2008 in Moscow, an explosion followed by a gas blaze took place at the Petrovsk to Novopskov gas trunkline. By 11.05am the following day, Gazprom teams completed repairs and resumed gas supplies to consumers. Forty-four metres of pipe were replaced during the repairs.

The report contains a comprehensive assurance statement written by the council for non-financial reporting of the Russian Union of Industrialists and Entrepreneurs. RUIE has done as good a job as any with a four-page assurance statement including recommendations for future reporting. However, a more neutral voice on assurance might have offered greater credibility. RUIE is the mouthpiece of Russian industry associations and might be expected to provide positive assurance for the member companies it represents. Overall, Gazprom presents a comprehensive, transparent picture of its operations and offers a credible picture as a global competitor in (sustainable) energy markets. Assuming of course that there is nothing hidden between the lines.

Three companies, three sectors, three sustainability reports, three sustainability report reviews.

Ice cream, anyone ?



elaine cohen, CSR consultant, Sustainability 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)