The 10 Best Austrian Sustainability Reports

Earlier this month I was honored to give the keynote speech at the Austrian Sustainability Reporting Awards (ASRA). I spoke about the importance of reporting, the challenges of reporting and the dynamic world of reporting and current trends. I likened publishing a Sustainability Report to winning the World Cup.

Here's a section from my speech:

"We often think of reporting as such a tough process, fraught with so many complex issues – organizational issues, emotional issues, collaborative issues, time pressures, different opinions, checking, taking out, adding back in, debating, encouraging, proofing, begging, crying, laughing…. publishing your report is like winning the World Cup. In other words, it's an almost impossible task.

Photo:Worldcupbuzz.com

It's a long process which represents much more than the written, or online, report you have as a result, or the cup which the team holds when they win. It's an individual effort but it's also a team effort. It requires lots of preparation, and you never quite know that you are ready until you get out there on the field and start to run. Once your report is published, once the referee announces the winning team, you breathe a big sigh of relief and look forward to getting some sleep. Deep down, you know, however, that the end of one report is the beginning of the next. Winning one World Cup is the trigger for winning the next.

With reporting, though, we always seem to dwell on the difficult aspects. We rarely think about reporting in positive terms. Working towards winning the World Cup has many benefits along the way. Everyone – the team and the individuals in it enhance their performance, learn new things, and achieve higher levels of dialogue, teamwork and effectiveness. Even if they don't win the World Cup, each team has gained through participation in the process. One of my favorite experiences when I am writing sustainability reports for clients is when, during the reporting process, people say to me: "We didn’t know that about our company!". Sustainability reporting is a journey of discovery and empowerment, not just a dreaded task that we must complete. With the World Cup, no-one ever asks – Why are we doing this? No-one says: Why on earth should we compete?

 And yet, with sustainability reporting, there is always someone who asks the inevitable question:

Who reads Sustainability Reports?

My answer, which you know by now, is: reports aren't meant to be read, they are meant to be used.

They achieve at least 50% of their value before they are ever published, because of the internal engagement that is required to develop the content for such a report. You cannot deliver a sustainability report without having conversations, or without asking questions. These interchanges are what make your reporting valuable. The more you dialogue, the better your sustainability performance and internal accountability will become, and the more compelling your report will be. Despite the fact that everyone bemoans the fact that no-one reads reports, more and more companies are reporting.

 

In Austria, there are around 100 companies which have produced Sustainability Reports over the years, but less than 15 which have been reporting consistently every year for the past three years. As Austria is one of the richest countries in the world, this means that a lot of wealth is being created through business, and Austrian stakeholders should have an interest in how it's being created and where it's all going. This is a good time to ask those questions, with probably EU legislation on the horizon, as well as several other fascinating developments in the world of reporting.

All of this is why the hard work of the Chamber of Public Accountants in Vienna, in collaboration with several other organizations, including respACT, the Austrian Business Council for Sustainable Development, an organization doing fabulous work to promote CSR in Austria, is so important. Through the annual ASRA awards, greater awareness for transparency in business and voluntary reporting is advanced. ASRA is an important tool in driving this market forward. Kudos to the winners, who were:

Large Enterprises:

Palfinger : GRI-checked A+ Report, 105 pages. Palfinger is a large group, with 47 companies in 23 countries and 5,600 employees. They make industrial cranes and forklifts (lifting, loading and handling solutions). This report is their fifth. Four-year comparative data is presented and Palfinger has more than halved CO2 emissions per ton of product in the past two years.

Verbund : GRI A+ Report, 96 pages. Verbund is Austria’s leading utility and one of the largest producers of hydroelectricity in Europe, operating 123 hydropower plants in Austria and Germany and employing over 3,000 people. Verbund generates around 40% of Austria's total electricity output. Verbund has been producing reports since 1997. This is an interesting report with much local color and context.

OeKB : GRI A+ Report, 85 pages. Oesterreichische Kontrollbank Aktiengesellschaft is Austria's main provider of financial and information services to the export industry and the capital market, employing 400 people. This report contains a specific response by OeKB to the first 27 Articles of the Universal Declaration of Human Rights.

SME's

Austria Glass Recycling (AGR) : GRI A+ Report, 55 pages. AGR has 9 employees and organizes the collecting and recycling of used glass packaging throughout Austria. AGR is a non-profit company. In 2010, AGR collected 227,000 tons of glass waste of which 85% was routed for recycling.  This is an informative report with much information about the state of glass recycling in Austria.

Voeslauer :  GRI B+ Report, 40 pages. Founded in 1935 with 170 employees, Voeslauer has sales of around EUR88 million and produces natural mineral water. This is the first time the Voeslauer report follows the GRI guidelines.

Kaerntnermilch : GRI A Report, 50 pages. Kaertner, founded in 1928, employs 169 people, supplying milk and white and yellow cheeses, working with over 1,600 supply farmers in the Austrian region. This is the company's second report.

Integrated Reports

VBV Vorsorgekasse AG : GRI-checked A+ Report, 76 pages. This is the sixth integrated report from the Vorseogekasse, founded in 2002, which employs 32 employees, administering provident funds. The report contains a detailed stakeholder dialogue reported in the form of an interview with a stakeholder panel.

oekostrom AG : GRI A Report, 63 pages. oekostrom has 28 employees and is involved in the supply of energy production and trade as an Austrian investment company owned by approximately 2,000 shareholders. The company was founded in 1999 with the aim of building a sustainable energy future, to supply customers across Austria with "green" energy and the expansion of renewable energy sources in Austria. The report contains some great shots of oekostrom employees who are obviously having fun being green!

EVN AG : GRI A+ Report, 185 pages. EVN has 8,250 employees, of which 2,500 are in Austria. EVN is an energy and environmental services company, offering electricity, gas, heat, water, waste incineration and related services to more than one million customers in Austria and with additional operations in Bulgaria, Macedonia, Albania, Germany and Croatia, serving more than 3.7 million customers in total. The report is entirely online with chapter downloads.

(In addition to these nine corporate reports, the Vienna University of Agricultural Sciences won the public agency reporting category with an impressive report which you can see here. At GRI level A+ and 164 pages, this is a highly detailed report which even contains sections for kids!) 

Interestingly, all winning reports are GRI based, all but one at Application Level A. As with many markets, the line-up includes a predominance of energy companies (30%) and financial services (20%), with other sectors in ecological services, food and beverage and industrial equipment.

 

These are the companies that are leading the way in the Austrian reporting scene. I hope the fabulous attendance at the ASRA awards ceremony is indicative of an intention by more Austrian companies to take the plunge and report in 2013.

 

I would like to thank respACT, the Austrian Business Council for Sustainable Development for inviting me to speak at ASRA (and also run a workshop about the implications of G4 reporting for members of the Austrian network on the previous day). It was a pleasure for me to take part in such positive events, meet some fabulous people and, as always, learn something new.

See the summary report of the ASRA Awards Ceremony in German here.


I can't round off this post without mentioning the best chocolate in Austria, which my hosts presented me with at the end of my visit.

Zotter chocolate is not only totally delicious, it is also organic, fair trade and green. Such a shame they don't make ice-cream as well :)

elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

A Conference Too Good to Pass Up!

Some conferences sound just too good to pass up. This one, the Sustainability Leaders Forum 2012 is one of those. Taking place on 5th December in London at the CBI Conference Centre, the one-day  agenda is crammed with what promises to be a host of interesting and innovative insights and aproaches to old and new challenges, from which I hope to learn and have the opportunity to discuss. "The Sustainability Leaders Forum has been developed as a platform for  forward-thinking professionals who want to collaborate, challenge the status quo and drive progressive change across their organisation and supply chain." Sounds good to me! 

Among others, the following six companies, which have been widely recognized for their sustainability achievments, offer the possibility for us to:

 

Hear first-hand how Procter & Gamble links vision to purpose to ensure security of supply, sustainable sourcing and product innovation. Speaker: Dr Peter White, Director of Global Sustainability, Procter & Gamble

Find out how M&S is thinking differently about the business 5 years after the launch of Plan A. Speaker:  Mike Barry, Head of Sustainable Business, M&S

Learn how Asda is driving sustainability across suppliers’ businesses projected to save over £100m a year. Speaker: Julian Walker-Palin, Head of Corporate Sustainability, Asda

Find out what engagement and behaviour change approaches Vodafone used to break down cultural barriers to drive sustainable development in an emerging market. Speaker: Luisa Gentile, Sustainability Leader, Vodafone

Gain insight into how Kingfisher is moving beyond sustainability foundation to become net positive. Speaker: Nick Folland, Group Corporate Affairs Director: Net Positive, Kingfisher

Learn how Novo Nordisk, voted the most sustainable company in the word, promotes innovation through strategic global stakeholder engagement. Speaker: Charlotte Ersbøll, Corporate Vice President, Global Stakeholder Engagement, Novo Nordisk

If you are haven't booked your place, now's the time! Readers of the CSR Reporting Blog can write to me for a 15% discount code!



elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

The Reporting X Factor

I popped over to London this week on my way back from another engagement to catch the second day of the action-packed Ethical Corporation Annual Reporting Summit. I arrived just in time to catch Anne-Marie Flannagan, Director of Corporate Social Responsibility at Fazer, hand out a whole pile of her company's products and pass them around the room. That was quite fortuitous. You might be wondering, as I was, who on earth is Fazer? Well, it's a chocolate company, founded in 1891 and privately owned to this day. After you tasted their products (and I did, all of them), you don't forget the name. Fazer is pronounced Fat-Sir, by the way, which is probably fairly appropriate :) Anne-Marie shared with us the processes of stakeholder engagement this company has undertaken to get into line with expectations from NGOs and consumers to address fair cocoa sourcing and traceability, which, as Hershey found to their discomfort, never goes away.

 

Then, a little later, the showstopper of this Reporting Summit was underway. Three reports, with three company representatives presenting their report highlights. Two judges who brought their own soapboxes, evaluating which, if any, of these reports have The X Factor. And Toby Webb, the smart guy that leads Ethical Corporation, was moderating and casting the deciding vote.

 

We knew this would be an interesting session when Ellen Jackowski, Head of Reporting at HP described the HP 2011 Global Citizenship Report  (which is 186 printed pages and even more on the web) as "a kind of a beast". Being the largest technology company in the world demands a certain level of transparency and HP aimed to make that level maxmum. The report includes data dashboards which tell number-hungry stakeholders about the performance and trends in all areas of HP sustainability. Ellen noted that the next report will be just a touch "more concise."

 

Ruth Woodall gave a sharp presentation about the Cooperative Group's 2011 Sustainability Report, which is their fifteenth, not forgetting to mention that in a poll by Ispsos Mori, 60% of people had read the Cooperative Report (I guess they must have polled the Management's immediate family members), which she concluded to mean that people are finding the information the Coop presents to be useful. She said that reporting both drives performance and becomes the bedrock of all other sustainability communications.

 

Dr. Márcia Balisciano, Director of Corporate Responsibility at Reed Elsevier started out with a song... yes, she actually did sing... I think she took the X Factor title of this session a little too literally. Simon Cowell would have probably turned whiter than he did when Susan Boyle first rendered "I Dreamed a Dream", listening to Marcia put sustainability reporting into song, but heck, maybe this is a new direction for The X Factor. They could call it the Reporting ZZZZZZZZZZZZZ Factor. Anyway, Márcia presented the shortest report of the three at 57 pages, advising that Reed Elsevier's 2011 Corporate Responsibility Report tries to focus on their "unique contributions" in the area of access to information, promoting the rule of law and more. She admitted that one of the biggest challenges is how to tell the bad news as well as the good news.

So, presentations made, the judges had a field day, using this opportunity to regurgitate anything negative  that has ever been said about sustainability reporting.

Mallen Baker, a long-time  respected voice in the sustainability and CSR communications arena, said he didn't enjoy reading any of these three reports and that "generically all three reports live within the paradigm of the current state-of-the-art, which is not satisfactory". He didn't quite explain what is not satisfactory about that, but he did go on to say that all the reports show a body of good work and that it's a sign of leadership that the three companies are on the Reporting X Factor stage at all, prepared to put themselves in the hot seat. And it got hotter.

Mallen criticized one report for presenting meaningless statistics and inadequate, unchallenging non-credible targets, noting that he had "lost the will to live by the time he had reached page 100." He said that the question in his mind was at which point you admit to being less than perfect. Mallen has the view that you only make progress by failing. He spoke about one of the longer reports using dense, corporate speak, without which the report could have been about two thirds shorter in length. About the Coop, Mallen said he expected more, because "they have done more for ethical business than any other retailer", but he also mentioned that there was too much verbiage. He also looked for the warts, something which I blogged about a while back, and he did find a few small ones. Mallen was not impressed with the target setting and lack of narrative explaining poor data in one of the reports, but he did find one report with clarity of communication and the clearest structure.

Mike Tyrell, a former Sustainable Investment analyst and founder of SRI-CONNECT, a web based tool for SRI engagement, announced that his role is to "connect your talent to the money", making no bones about the fact that he views reports from an investor standpoint. His expectation: "I want the investor to come and get me - I want detail about contacts,  the timetable for reporting, an investor summary, an SRI page, and clear presentation of numbers." He took the opportunity to replace Triple bottom Line thinking with a Quadruple Bottom Line (even though that doesn't roll off the tongue quite as easily). This is Environmental, Social, Economic and Financial, where economic is the contribution the company makes to the health of the economy and Financial is the return of financial value to shareholders. Paradoxically, of course, sustainability reporting has traditionally left out the financial element, as this is the job of the Annual Report, so it's not clear if Mike is advocating for Integrated Reporting or he forgot that he was in a Sustainability Reporting X Factor debate. He also called himself a data-hater - he doesn't want all the data, he wants materially relevant data which connects sustainability performance to financial impacts.

Mike said that one of the reports was a tease, because it referenced revenue opportunities arising from sustainability practices but did not provide enough information. Mike was most disappointed, personally insulted even, when one report states at the outset that is is not targeted at investors but at other stakeholders. Nonetheless, he valiantly continued to read on and found that and ultimately the report gives good coverage of diverse activities in a credible way and engenders trust. On reading another report, Mike confessed to being in "agony" because the report omits to address sustainability issues which is are at the heart of the business model.

The panel, including Toby Webb, selected The Cooperative Group's report as the best of the three, and this was confirmed by the audience popular vote, which was a show of hands. There was no time for texting.

A perspective of my own:

I always maintain that reports are not meant to be read, they are meant to be used. So, sitting down to read over 300 pages of Sustainabilty Reports in one session is an excercise which would turn anybody's mind into jello. This is clearly what happened with the judges, who made their pronouncements, in part, on the basis of sensationalism rather than balanced opinion.

Too long, said the judges. The fact that, by their very nature, Sustainability Reports are designed to reach a wide and diverse audience, and are not intended to be a replica of an Annual Report, means that much of the criticisms leveled at the three reporters were, in my view, a little uncalled-for. A 186-page report is not meant to be read end-to-end, and suggesting that all the most material information could be crammed into 60 pages may leave certain stakeholder groups unable to find what they need. I am not advocating for long reports, but I don't believe reports should be judged on length. What they should have is a clear structure where information can be easily navigated and the most important information well highlighted.

Too many case studies, said the judges. Often, case studies are what make reports come alive and these tend to be the most sought-out parts of reports. Clearly, the case studies must be connected to performance and offer substance, but reports without case studies is like trifle without sherry. 

Wishy-washy targets, said the judges, referring to targets which define process rather than outcomes. I have some sympathy for this, but too often in reporting, we see companies declare targets which are just long-range numbers which are very challenging versus current performance. Process-based targets, which show what a company is intending to do to achieve these targets, are useful milestones and support credibility.

Not enough bad news, said the judges. This is an unrealistic expectation. No company goes the Full Monty. Ever. Just get that. Sustainability Reports will never be a list of failures. It is reasonable to expect companies to present challenges and issues they are attempting to address, as well as explain actual dips in performance, but if we are expecting Sustainability Reports to read like John Steinbeck's "The Grapes of Wrath", described as one of the 10 most depressing novels ever, then maybe that is what we should read. Sustainability Reports must be optimistic, sustainability at its root is an optimistic exercise, otherwise none of us would do it. Reporting must be authentic, it must present a balanced picture, but looking for the Bad News is always going to be a fruitless endeavor.

What I didn't hear consistently from the judges, is whether these reports ultimately created greater trust. Trust is what reporting is about. Whatever stakeholder group you belong to, and whatever specific information you seek, when you use a Sustainabilty Report, you want to come away feeling that you trust that company just a little more. Mike Tyrell made this point about the Cooperative Report. He felt that report did promote trust. Perhaps, at the end of the day, that's what swung the overall vote in their favor.

The Reporting X Factor was one of the best Reporting Conference sessions I have attended in a while, and both the judges and the reporters engaged in an entertaining and thought-provoking way. The perspectives were interesting and all companies, I am sure, received valuable feedback, while the judges got an opportunity to go public with everything they think is wrong about Sustainability Reporting using three willing sitting ducks.  It was a fun-serious session and I am already looking forward to the next one. Maybe then, Ethical Corporation can invite Simon Cowell, who, in his inimitable way, will say something like:

"There was one great part to your report - it was the end!

 

elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

False Claims in Sustainability Reports

During my visit last week to Vienna and my discussions with the fabulous leadership of the Vienna University of Economics and Business Institute for Human Resources Management, we spent some time reviewing some (as yet unpublished) research that has been conducted by the Vienna team (in collaboration with Middlesex University London, with a team led by Dr. Sepideh Parsa and Dr. Ian Roper) on the differences between claims made in GRI Sustainability Reporting and what actually gets reported. 

The team had selected the 131 companies of the Forbes 250 list, which had published a Sustainability Report. Focusing on nine Labor Indicators (LA1, LA2, LA4, LA5, LA7, LA8, LA10, LA13,LA14) and six Human Rights Indicators (HR1, HR2, HR4, HR5, HR6, HR7), the Vienna team led by Professor Michael Muller-Camen,  analyzed which indicators were fully reported in all elements in line with the GRI Indicators and protocols, versus the claims made by companies in their GRI Index.

 

The results are quite astounding. Of 86.2% of companies that declared disclosure against the indicator LA1 (Total workforce by employment type, employment contract, and region broken down by gender), only 10.7% of companies were found to have a full and complete disclosure. The same story, give or take a few percentage points either way, applies to every single one of the LA Indicators, with an average of over 70% declared reported and an average of 12% actually reported in practice. The starkest difference was found in reporting against LA13 (Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity.) where 90.8% of companies declared they reported against this indicator and only 1.5% were found to have fully reported. The LA indicator which was found to be fully reported most frequently is LA4 (Percentage of employees covered by collective bargaining agreements) with a full disclosure rate of 38.2% by companies.

In the area of Human Rights, generally, the level of declared disclosure was lower - between 50% and 69%, averaging 62%, and the average rate of full disclosure was also higher, averaging close to 20%. The indicator that was most frequently fully disclosed is HR6 (Operations and significant suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor.) with 31.3% of companies assessed as fully reported.  

Let me just repeat that so it's clear:

Labor Indicators: 86% of companies claim they report and only 11% actually do.

Human Rights Indicators: 62% of companies claim they report and only 20% actually do.

Doesn't something sound a bit wrong here?

I was chatting this week to one of the distinguished thought leaders in the sustainability arena, Richard Boele, founder and  principal of Australian-based Sustainability Consulting firm, Banarra. He mentioned some similar research that his company had conducted in 2010 on behalf of the CFMEU Energy and Mining Division, which is the leading union that represents workers in the mining, oil, gas, port and power industries. The CFMEU's interest in this research was shaped by a sense that unions and workers are vital stakeholders in the sustainability reporting process, but are generally not engaged in this process in the Australian context. The feeling was that reporting was not meeting the expectations of local stakeholders.

The results of this research using ten Australian Sustainability Reports matched almost exactly the findings developed by my colleagues in Vienna. There was a vast inconsistency in the claims made about what was disclosed and the actual disclosures. See the summary table below from Banarra's report.

 

 

Even reports which are GRI-checked and/or externally assured contain these inconsistencies.

 

Why tell lies in reports?
Why are companies making inaccurate and perhaps even deceptive claims in their Sustainability Reports? What interest do companies have in producing false reports?  We can speculate:

 

• The reports are prepared in an unprofessional and sloppy way, without due attention to the detailed GRI protocols.
• Company reporters, or their outsourced consultants, never read the protocols and simply don't know what's expected of them in reporting against each indicator.  
• Companies are competing for the GRI A Level "accolade" and don't mind if they cut a few corners along the way.
• Companies are being deliberately deceitful in order to achieve a reputation boost, without due consideration of the consequences of being found to be making false claims.
• Companies don't think anyone will notice - no-one reads reports.
• Companies don't care if anyone notices - the main thing is that they published a report.
• Companies don't think it matters - what's a little inaccurate detail here or there? Hey. We are reporting. Isn't that good enough?
 

Did I miss anything? Whatever the reason, to claim you have reported, and then not report, is defeating the purpose of sustainability reporting, which is all about building trust. If companies cannot get this right, what trust can we have in them and their reports? Not more than 20% trust, apparently.

 

 

Is it enough to have a good framework?
Microsoft says that the browser is only as good as the OS it runs on. Hmm, they might have a vested interest there, I suspect. In reporting, the report is only as good as  the accuracy and relevance of its content. The GRI Framework was developed as a set of voluntary disclosure requirements that are generally found to be universally relevant to a representative range of stakeholders in the context of  the sustainability impacts of global business activities. If it's in there, it must be relevant and someone wants to know. But then, what's the point of having a leading global framework if companies are abusing it? How can the GRI Framework be credible if the reports that companies produce are not?  Can the GRI have absolutely no ownership for creating a situation in which companies are abusing the reporting framework, unknowingly, deliberately or for whatever reason? If you knew that every report you read is only 20% accurate, would you ever take the time to open another report again? Surely this cannot be the outcome that the GRI wishes to see.

Reporting Accountability
In the most recent  GRI's own GRI 2011-2012 Annual Report,  CEO Ernst Ligteringen, opens with: "Sustainability reporting is a rapidly growing practice, and GRI provides guidance and support to all organizations worldwide that want to report their sustainability performance. We see a vital shift in sustainability reporting, moving from an experimental practice of pioneering companies to a rapidly widening adoption in the mainstream." More importantly, he goes on to say that the range of users of sustainability is widening. More reports, more interest. There is no mention of the quality and integrity of the reports that are published and this doesn't appear as a material issue in the GRI's own materiality analysis. While I have heard the GRI in the past say that it is not their mandate to  "police" reports, I continue to believe that complete avoidance of the issue of report quality is not sustainable. This is like tobacco companies saying they are have no responsibility for the people who get sick or die after using their products. Perhaps the GRI should aspire to be the Unilever of Sustainability Reporting - changing consumer behavior so that the way their products are used can make a more positive contribution to sustainable society.

In the run-up to G4, the proposed "In Accordance" threshold creates demand for even broader disclosure and more disclosures and indicators to report on. What chance does G4 have of changing the world if the reality is that G3 is not being used reliably?

The Stakeholder Police Force
The GRI might say that it's the stakeholders who should be picking this up. Stakeholders who perform research on reports may do this, as the two examples I mentioned above. The stakeholders should be the police. But are they? Can they be? If every stakeholder has to double-guess every report, and spend hours checking whether the indicators are correctly reported, then we are going backwards not forwards. In this case, voluntary reporting could be deemed a Big Flop.

The solution?
The solution should be that companies take responsibility and ensure their reports are accurate. Utopia. You do not need a Ph.D. to understand the GRI Framework protocols and apply them correctly, though it is possible to make mistakes or overlook some detail or other. In this case, companies have the option of seeking external support.  This could come in the form of external verification or part of an assurance process. Similarly, my consulting company, Beyond Business, offers a Sustainability Report pre-publication review service in which we analyze every aspect of a report prior to publication including detailed compliance with the GRI (or other) frameworks. Invariably, this exercise identifies inconsistencies which can be corrected before publication. Companies which do this are demonstrating accountability - they want their report to be accurate. 

The other current option for reporters is the GRI Application Level check. This is an easy option because it covers only a sample of disclosures and indicators reported. It is not a complete check, but the GRI Statement which is issued to companies which "pass" the check says: "GRI Application Levels communicate the extent to which the content of the G3 Guidelines has been used in the submitted sustainability reporting. The Check confirms that the required set and number of disclosures for that Application Level have been addressed in the reporting and that the GRI Content Index demonstrates a valid representation of the required disclosures, as described in the GRI G3 Guidelines." Ahem, it seems that in many cases, this statement is not correct either.

Maybe it is time for the GRI to bite the bullet and offer reporting checks which confirm that every disclosure and indicator has been reported in the correct and complete way, as defined in the GRI Framework, when claimed to have been reported by the reporting company. Anything less is misleading and serves to perpetuate this report-bad-feel-good euphoria that Sustainability Reporting seems to have succumbed to.  

The Big Picture
I hear some of you object: Surely this is cosmetic? Reporting is not about ticking boxes. The Framework is an enabler, not a shackle. The contents of reports often include far more information than the GRI Framework requires. Shouldn't stakeholders focus on the Big Picture, rather than nitpicking about GRI accuracy? That's one way of looking at it. Another way would be to say that sloppy or careless or misleading reporting is not good enough. Even if the report contains the fanciest materiality matrix in the world, this does not compensate for inaccuracies in the application of the GRI framework. False reporting breaks trust. Period.

Trust
One of the most difficult dilemmas of Sustainability Reporting has always been the degree to which we can place our trust in the voluntary disclosures of companies. If companies are  not telling the truth about what they have not reported, how can we be sure they are telling the truth about what they have reported? Using the GRI Framework is not mandatory. The choice to use the GRI framework implies a responsibility to do so correctly. Companies who want to have their ice-cream and eat it are damaging both their own reputation and that of Sustainability Reporting in general. As a frequent report reviewer for CorporateRegister.com and for Ethical Corporation, one of the first things I check is whether the company has accurately used the GRI framework. If I find an inconsistency, my trust in that company plummets.

The Future
There is a lot of hype about Integrated Reporting as the universal solution to the inadequacies of today's sustainability reporting. Perhaps, instead of Integrated Reporting, we should be aiming for Integrity Reporting.
 

 

elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Mind the Gap! in Sustainability Reporting

As a Sustainability Consultant and Reporter who is quite accessible here on the net, I am often approached by students from all corners of the world, sometimes corners which I didn't know existed, to help them with their research and studies on many different aspects of CSR and Sustainability and Reporting. I do my best to respond to all - apologies if anyone has written to me and I didn't. Such interactions both give me the opportunity to make a modest contribution to advancing sustainability thinking and also, invariably, help me learn new things. Occasionally, some of those who have asked for my advice or help, come back to update me about how their work has gone, which is always a delight.

 

Today, I got the fabulous news that a group of  Masters students with whom I spent some engaging time in discussion on their research, have won the top award for their thesis in the area of Sustainability Reporting. Edwin Janssen, Selene Kfoury and Rutger Verkouw submitted their thesis for the completion of Master of Strategic Leadership towards Sustainability, Blekinge Institute of Technology, Karlskrona, Sweden, and will receive a prestigious award from the Sparbankensstiftelsen Kronan later this month. Wonderful recognition for their hard work, and also the quality of their thesis, which is highly topical these days, as we debate whether G4 will be the Next Big Thing, or whether Integrated Reporting will serve anyone other than investors, and whether Sustainability Reporting is actually helping us to change the world.

The thesis is entitled: "Mind the Gap! Strategically Driving GRI Reporting Towards Sustainability", and can be downloaded here. The writers make a case for an integrated process to support Sustainability Reporting.

Here is the abstract:  "Sustainability reporting is a vital tool to communicate an organisation’s sustainability performance to stakeholders. Sustainability reporting also allows an organisation to communicate its vision, goals and strategic plans. In order to be strategic towards sustainability, an organisation should have a vision of where it wants to go, and assess where it is today, so as to take the right initiatives towards its vision. This thesis focuses on how GRI sustainability reporting and strategic planning towards sustainability can be combined in an integrated process to help organisations move towards sustainability. The Integrated Process allows an organisation to gain a better understanding of its sustainability context; design resilient strategies in light of that context using a backcasting from Sustainability Principles approach; and report its sustainability performance and progress in bridging the gap towards sustainability, transparently to internal and external stakeholders."

Doesn't that sound compelling? There is a difference between Integrated Reporting and Sustainability Reporting using an integrated process. The former may be an outflow of the latter, but not necessarily. On the contrary, I can very easily buy into the integrated process concept, but I have a harder time buying into the Integrated Reporting concept.

The writers come down very strongly on there being a strong interrelationship between sustainability context, sustainability strategy and sustainability reporting and that sustainability reporting is most effective when driven by a strategic approach to sustainability. Sustainability strategy should be determined against a backdrop of four core principles articulated here:

In order to support the route to more strategic sustainability reporting, the authors offer a Framework which has four steps and uses the process of backcasting (identifying the vision and working back to determine what needs to be done to align with the vision) to help create strategic sustainability reports. The authors examine the GRI framework and how it makes a contribution, as well as creating some limitations.

As usual, it was a pleasure to engage with our new generation of committed future business leaders, and I am sure we will be hearing much more from Edwin, Selene and Rutger in the future!

 

elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Dr. Sustainability examines G4

What a surprise to have another visit from Dr. Sustainability this week, which was unexpected and unforeseen and completely out of the blue. The last time Dr. Sustainability visited, she made quite an impact, especially when she confirmed that Rio+ was likely to change mankind for the better. This visit, Dr. Sustainability is mulling over the new GRI G4 Exposure Draft, having read all 325 pages, and she thought that the CSR Reporting Blog readers might benefit from her insights about the implications of G4. Ever gracious and generous, Dr. Sustainability agreed to respond exclusively to CSR Reporting Blog reader questions. Here are Dr. Sustainability's G4-isms.

Dear Dr. Sustainability: We have been preparing a GRI Application Level A+ Report for some years now. We have managed to get this system to work for us. Now that G4 is imminent, we will have to make changes - include our value chain, select material issues, disclose more about our supply chain. Frankly, I am not sure we will be able to do all this. Do you think the GRI really understands how difficult G4 will be even for experienced reporters?

Dear Worried: Yes, of course the GRI understands. It's like this. There are not enough high quality reports in the world. Instead of lowering the bar, or even encouraging better performance against the current bar, the GRI has created a higher bar. This is so that, when everyone fails to reach the higher bar, everyone will love the lower bar and G3 will be reinstated and everyone will breathe a sigh of relief. As an experienced reporter, this is absolutely in your interests. Just make a mess of G4 and whoosh, G3 will be back like lightning.

Dear Dr. Sustainability: Does the new definition of boundaries in G4 mean that my next report will have to be twice as long as my prior report? I understand that the boundary has been extended.

Dear Extended: Yes, indeed. Now you have so much more reporting scope. The boundaries in your value chain are boundariless. You can now tell stories about your supplier's supplier's supplier and your customers' customers' customers. Your value chain is a hidden trove of goodies for your next report. Just make sure you add six more people to your reporting team.

Dear Dr. Sustainability: I found it very hard to read the G4 Exposure Draft because there are so many lines crossing out the text out all the way through the document. Trying to read behind the lines has given me acute conjunctivitis. Can I claim on my insurance for this condition?

Dear EyeSore: Yes, I know what you mean. After reading the G4 Exposure draft, I had a series of anxiety attacks which caused me to be very anxious. Even Bach's Rescue didn't help. I think your insurance might cover it this under the "occupational disease" section. This is good because it gives you another piece of data to disclose in the Health and Safety section of your report. And don't worry, what's behind the lines is irrelevant. It's what's between the lines that counts.

Dear Dr. Sustainability: I am an investment analyst and I have been told that, when G4 is launched, my life will change. Can you say how?

Dear Moneygrabber: When G4 is launched, and companies start reporting against the new framework, you will have so much information, of such high quality, covering all material issues and providing reams of data about supply chains, that you will have no choice but to factor this information into your investment  recommendations, and say how you have done this. This will create so much additional work for you that you will probably suffer from stress. To relieve the stress you will have to have more sex, as sex is an effective stress-reliever. Having more sex will probably distract you from your work and cause you to become less productive, which will ultimately mean that you will get laid off from your job. This will send you into a deep financial crisis and your home will be repossessed. Ultimately, you will end up sleeping on park benches. So yes, G4 will change your life. It will bring you closer to nature.

Dear Dr. Sustainability: The new G4 Value Chain assessment talks about upstream and downstream impacts. Will I have to take a course in marine navigation in order to use the new G4 Framework?

Hello Sailor: No, you will not have to sail the high seas in order to use G4. But maybe you will want to go on a long voyage after you realize what you will have to do to be "In Accordance" with G4.

Dear Dr. Sustainability: I hear that G4 is abandoning Application Levels and moving to a one-size-fits-all "In Accordance" approach. Will this mean I will not be able to gain significant marketing advantage by ticking all the A boxes and adding a comment that "this is not material for our company"?

Dear Box-Ticker: Don't worry about this. In the run-up to G4, there will be lots of pressure from companies who want a way to differentiate themselves and gain marketing advantage. At the launch, there will be several versions: "In Accordance A", "In Accordance B", "In Accordance C", "In Accordance SMEs", "In Accordance The Absolute Best" and "In Accordance.. Seriously?".

Dear Dr. Sustainability: When will G4 become obsolete?

Dear Optimist: Probably before it is launched.

Dear Dr. Sustainability: I hear the GRI received 3,095 formal feedback submissions by sustainability experts, organizations and professionals on the G4 Exposure Draft. Will this feedback make a difference?

Dear Statistics:  Yes,  of course.  Over 3,000 people made the effort to log onto the online feedback platform and type in all their answers. This has already made a difference. The online feedback technology company has made a profit and the ICT sector carbon footprint has doubled in three months.  

Dear Dr. Sustainability: One of the objectives for G4 was to align the G4 Framework with the new Integrated Reporting proposals. However, I see that this has not been done. What do you think about that?

Dear NitPicker: I don't think about that.

Dear Dr. Sustainability: We are an SME and we would like to start Sustainability Reporting. We have developed a first draft which we hope is "In Accordance" with the new G4 proposals. We have identified 83 material issues across our value chain and have disclosed on each of them in full. The problem is that our report is now 3,473 pages long and every time we try to load the PDF to our website, our entire system crashes.  I was wondering, is there something we should do differently?

Dear SME: Absolutely. Get a new IT person who can fix your website.

Dear Dr. Sustainability: Do you think more people will read G4 reports than read G3 reports?

Dear Reader: Yes. At least four people will read G4 reports. That's a 100% increase.

Dear Dr. Sustainability: I have studied the G4 proposed framework and believe it offers a great improvement on previous guidelines. Everything is now clearer. Materiality is emphasized, value chain is central, supply chains gain more ground, there is a degree of choice about what to report. All these are good things. My question is: will this make the planet more sustainable?

Dear Skeptic: That's a great question. After all, reports reflect sustainability performance and the positive impacts of companies. Reporting is a catalyst for improving performance. Better reports = better performance = better reports. It's that simple. Err. Isn't it?

Dear Dr. Sustainability: I am an employee of a large multinational company. Our company reports on sustainability year after year, but in reality, what happens in our company is nothing like what we read in the reports. Our workplace is awful, full of stress, low pay, internal politics, poor safety practices, no concern for employees. How will G4 change all of this?

Dear Critic: G4 won't change all of  this. It will just make your reports inaccurate in a more complete way.

Dear Dr. Sustainability: How do you manage to distill the key points of G4 ? How do you manage to keep abreast of all the trends in reporting ? How do you manage to keep your knowledge so up to date ?

Dear Knowledge-Seeker: That's easy. I read the CSR Reporting Blog.

elaine cohen, CSR consultant, winning (CRRA'12) 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  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)