csr-reporting: A Crown among Reports

Monday, December 9, 2013

A Crown among Reports

I am already getting excited about the third annual Smarter Sustainability Reporting Conference, which will take place in London on 25th February 2014. This year, we have a fabulous line-up of speakers and a great agenda addressing the critical issues influencing the Sustainability Reporting landscape, ranging from the emerging regulatory frameworks to the global versus local reporting, to reflecting material issues and more. There's going to be a BIG RUSH for places, so better book early :) (Contact me for a registration discount code.)

Each year, I try to engage with some of the key speakers prior to the conference, and also check out what they have been doing in the sustainability space. First up this year is Mark Gough.

Mark is the Head of Sustainability at The Crown Estate, and is responsible for developing, delivering and driving innovative ways of embedding sustainability into the business. He is on the Natural Capital Committee (Landowners Group) and is a Sustainability Champion of the Scottish Public Sector Climate Leaders Forum (PSCLF). Previously he was the Global Environmental Manager at Reed Elsevier and has sat on a number of national and international sustainability committees, including the steering committee of the United Nations CEO Water Mandate, the Board of the Alliance for Water Stewardship and has chaired the publishing sector's Environmental Action Group.

The Crown Estate is a fascinating organization - not a typical publicly traded type of corporation. It is a diverse property business with a capital value of £8.6 billion, and a total property value of £8.1 billion. The property managed by the Crown Estate is owned by the Crown but is not the private property of the monarch. The Crown Estate is governed by an Act of Parliament and works supportively with government in Westminster, Scotland, Wales, Northern Ireland and at a local level. In 2012/13, a net surplus (profit) of £252.6 million went to the Treasury for the benefit of the nation.

The Crown Estate employs approximately 460 staff, at ten different locations throughout the United Kingdom. The Crown Estate is formally accredited as an Investor in People (IiP) - a national quality standard which sets the level of good practice for improving an organisation's performance through its people. IiP recognises an increased focus on training, employee involvement in the business and communications throughout the organisation.

In 2013, The Crown Estate published its first Integrated Report. Prior to that, the Crown Estate had already integrated much of its thinking about sustainable business in alignment with the concept of Total Contribution. The Crown Estate published a first Total Contribution Report for 2011/2012 together with a detailed methodology description. This seems to me to be a great kind of SROI type of approach which looks at impacts and outcomes, rather than just activities. I recommend you all take a look! Here are some of the key findings:

The 2013 Integrated Report of the Crown Estate is one of the most interesting I have come across. Everyone knows I have not been a fan of Integrated Reporting, mainly because I have felt it focuses too much on the financial stakeholders and leaves all the rest behind. This report by the Crown Estate is a little more accessible to the non-financial genius, and creates many links between sustainability aspects of performance and financial outcomes both for the company and for society.

The report contains a description of how The Crown Estate creates value and a list of 14 material issues described in some detail. For example, the material issue of Attracting Talent is described as follows, and the narrative and data supporting the defined issue is located later in the report.

The material issues include elements relating to business performance, organisation and people, environmental impacts and customer relationships and more.

By the way, the 2013 Integrated Report of The Crown Estate is shortlisted in this years online CRRA '14 awards, in the Integrated Reporting category, so it you take a look, and think it's great, please vote!

Here is my interview with Mark Gough, a key member of the team behind the report.

Tell us about your professional background and how you came to be Head of Sustainability at The Crown Estate.

I started out in sustainability, as many people do, by noticing something was not working and trying to fix it. I was doing some part time work for a publisher while looking for a change in career. At the end of the working day, there was a big pile of paper and no recycle bin, so I took it home. The next week I noticed that every desk had a big pile of paper on it, so I put them into a white sack and carried them home. The next week I came in and the police were waiting for me. Some computers had been stolen and when they had checked the CTV they saw me leaving the office with this big white sack. They did not arrest me as I explained I was recycling. But I was told ‘you are a temp, we are not interested, and stop doing it’!

After that, with some other like-minded colleagues, we set up a Green Team and found recycling solutions that the company could implement and started helping to develop a sustainability strategy. I started going to night-school to learn more about it. I continued to work for the publishing company, moving up to advise the head office and then the global head office where I became Global Environmental Manager. I stayed there for 13 years, working on several other projects including with the UN on the CEO Water Mandate and chairing the publishing industry Environmental Action Group.

What specific experience prepared you for this role?

In terms of the property industry, specifically, we had a very big global estate in my previous role, so I had spent 13 years working on improving assets. The magazine I was working on at the beginning was a leading property magazine, so I was familiar with the key issues relating to sustainability in property. But, I don't think it's about the product that a company deals in that makes you a good or bad Head of Sustainability. It is about helping develop a strategic direction, being able to identify trends, risks and opportunities and helping the company to become successful long into the future.

You were appointed in early 2012. What have been your priorities in the first 18 months in the job? And looking toward the next few years?

The first thing we did was to rip up our previous sustainability strategy. We have since been working to develop one single business strategy that has sustainability at its heart. Sustainability should not be a bolt-on but at the centre of decision making and we are clear that by doing this we will be more successful.

So what is our approach? To have only one strategy with sustainability at its heart, to develop the tools to embed sustainability into decision making and to pass responsibility for delivery to employees rather than committee and experts like me. We are very clear that our ambition should be to fully integrate sustainability by the time our ten year vision concludes.

How does the unique position of the Crown Estate lend itself to the sustainability agenda? And where are the conflicts?

The Crown Estate is unique. We are an independent property company set up under an Act of Parliament. We hold some great assets. We also have a very clear commercial mandate, so like many companies we have to make commercial returns. The way we do this though can be different. We take a long term approach, recognising that making a positive impact in all material areas of our business is fully aligned with our commercial ambitions. We are keen to ensure that we create greater opportunities, not less, for a shared future with our partner, customers and our broader stakeholders. We have been looking at how we can measure the broader value we create through a process we call Total Contribution and this is helping us to redefine our approach. We are not allowed to borrow money so this raises some interesting challenges and has meant that we have had to work collaboratively on joint ventures with partners who share our values. Also, helping people to understand that we have this commercial remit to return all of our net revenue to the Treasury each year is something we are continually trying to get across. Proving then that sustainability increases this revenue is really important.

This year you delivered an integrated report. In what ways did the development of the integrated reporting movement influenced your thinking? What have been the benefits for you in this approach?

It has been great to be able to share ideas and thoughts with other brave companies who are attempting to grapple with integrated reporting. Being part of the pilot programme, testing out some of the ideas and helping to contributing to the framework has been an essential to our success. We also have worked with an excellent design company (Radley Yeldar) and a critical friend (EY) to make the principles of IR relevant to us.

What are the most significant challenges for you in the reporting process? How do you ensure all sustainability issues are reflected in a balanced way?

In the past we focused on reflecting all sustainability issues in a balanced way, but this created a homogenized approach where everything has the same value, which is just not true. One of the most important steps we took through working on an integrated thinking approach was to focus on what is material. For example already 98% of our waste is diverted from landfill, a great sustainability result from lots of hard work, but this is not material to our business, so you will not find this in our annual integrated report. You can though go online and find out more about it. It is after all integrated reporting and not just an integrated report so it should run through all of the communications.

Who do you expect to be the main audience for your integrated report? How do you ensure that your report gets noticed?

Integrated Reporting was set up with investors as the main audience. We don’t have investors in the same way as other publicly traded companies, but it is important for us to explain our license to operate to all of our stakeholders. Integrated reporting is a much better way of doing this. Let’s face it, very few people actually read our sustainability reports. The best compliment we have had is "I really enjoyed reading your integrated report".

Thanks, Mark!

So, don't delay, sign up RIGHT NOW for the Smarter Sustainability Reporting conference and come and hear more from the Crown Estate and many more fascinating companies.