Friday, December 9, 2011

Sustainability for Breakfast

This morning, we had the pleasure and privilege of hosting the Deputy CEO of the GRI, Teresa Fogelberg, in Tel Aviv. It is a rare treat to have someone of such stature come and share insights and experience with a group of local CSR practitioners. Today, over breakfast, that's what happened.

Sustainability for Breakfast in Tel Aviv
The meeting was hosted by the Embassy of the Netherlands in Israel, at the initiative of the Head of the Economic Section, Wendela Haringhuizen. The Embassy is no stranger to sustainability and has held several local conferences in recent years to raise awareness for sustainability issues such as green building, water conservation, waste and air quality, introducing Dutch technologies and offering practical advice. In general, the Government of the Netherlands is one of the more progressive on sustainability matters, as one might expect of the host government to the Global Reporting Initiative, based in Amsterdam. One interesting practice of the Netherlands Ministry of Economic Affairs, Agriculture and Innovation is the Transparency Benchmark, which analyzes in detail the quality of Dutch Sustainability Reports and awards prizes for the best quality reports.

Wendela Haringhuizen opens the meeting in the spirit of Netherlands' Sustainability
Following Wendela's welcoming remarks, and overview of the Embassy activities in Israel, I gave a review of the state of sustainability reporting in Israel. While reporting is always positive, and we should acknowledge some progress in recent years, the fact remains that only 25 reports were published by 23 companies during 2010-2011 in Israel. This is a very low count, given the size and state of development of our market. The reporting companies include local subsidiaries of global companies such as Motorola and Intel, large Israeli global companies such as Teva Pharmaceuticals, Delta Galil, Strauss Group and Elbit Systems, as well as local companies such as the leading banks and telecoms companies.

Of these 25 reports published, 14 were in accordance with the GRI Framework (with three being externally verified), all at Level A or B, demonstrating a certain competitiveness among local players who, it seems, perceive a higher GRI Application Level to be more important than the quality of the report itself. When analyzing the quality of the reports, we found wide variations. We analyzed section by section the disclosures against GRI-based performance indicators and without exception, found that there were serious omissions in the way companies reported on indicators they had declared to have fully reported against. For example, EC1 is the most reported economic performance indicator of all the Israeli GRI-based reports.

However, when drilling down to look at exactly how companies had reported on EC1, we found a different picture - i.e. that one company hadn't reported it at all, and four companies disclosed only partially. So, out of 13 reports declaring this indicator as fully reported - only nine (69%) made the grade.

Another interesting insight was the use of the famous N/A. How many indicators are truly Not Applicable to companies? One of the GRI-based B-level reports we examined noted in their GRI Index that 49 (out of a total 79 performance indicators) were not applicable. This included indicators such as EC7 - procedures for local hiring and LA7 - rates of injury and absenteeism. The company may not wish to disclose against these indicators, but stating that they are Not Applicable detracts from the report's credibility.

Concluding this presentation with the acknowledgement that sustainability reporting in Israel is both weak in quantity and patchy in quality, we recognized the massive opportunity that this represents for Israeli companies (gotta stay optimistic, right?).

This led nicely into the presentation of Teresa Fogelberg.
Teresa Fogelberg explains the global imperative of sustainability reporting
Teresa focused on the global imperative of sustainability reporting and talked about the advances being made all around the world to incorporate reporting into regulation, such as in the case of Denmark, where the Report or Explain approach appears to have had significant results. The Report on CSR and Reporting in Denmark which summarizes the Impact of the second year subject to the legal requirements for reporting on CSR in the Danish Financial Statements Act  informs us that 87% of the top 1,100 Danish companies now report, and that: "There has been a significant improvement in the businesses’ ability to translate policies into actions and to describe the achieved results. In the 2010 financial statements, more businesses report on policies at 71% (69%); on actions at 66% (60%); and on achieved results at 49% (37%)." Teresa also quoted additional studies which prove the value of mandatory reporting. But even without regulation, the reporting climate has changed, moving from "why should you produce a report?" to "why are you not producing a report?".

Finally, Teresa didn't fail to issue a wake-up call to the Israeli business community by reminding us that, of the 34 countries analyzed by the recent KPMG International Survey of Corporate Responsibility Reporting Report, Israel was at the bottom of the list. (and when you are at the bottom, the only way to go is up, right ?)

You can download Teresa's full presentation HERE.

Eli Abramov, CEO of Baran Group, committed to transparency
Finally, Elhanan (Eli) Abramov, the CEO of Baran Group, one of Israel's few pioneering GRI-based Sustainability Reporting companies, provided his perspectives on how, as a CEO, he understands the value of sustainability practice and of transparency in business. In particular, Eli reinforced the necessity of personal leadership in sustainability issues and confirmed that: "Reporting is a participatory and interactive management process which teaches us much about ourselves and the way we do business, and reinforces the accountability of all Baran employees."

You can download Eli's full presentation HERE.

Finally, we were delighted to be joined by H.E. Mr. Caspar Veldkamp, Ambassador of the Kingdom of the Netherlands in Israel.

Wendela Haringhuizen, Sohail Wahedi , Ambassador Veldkamp, Teresa Fogelberg, Elaine Cohen
To round off the morning, taking us from breakfast to lunch, we continued our discussion in the comme il faut restaurant in Tel Aviv port, housed in the newly reconstructed Bait Banamal, the socially-responsible, alternative consumerism, pro-women hub of creativity, inspiration and pretty good food!

Sustainability for Lunch
Participants at our morning conference included representatives from a wide range of companies including Teva Pharmaceuticals, Ormat Technologies, Israel Chemicals, Alon Holdings, Microsoft R&D in Israel, Intel Israel, Motorola Israel, Amdocs, Bank Leumi and more.

All in all, a worthwhile morning. I hope that Teresa comes back soon, as she threw down a challenge to Israeli business that by the time she returns, we should have triple the number of reports in Israel.

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  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

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