The Top Ten CSR Reports of 2012

Previous posts on the CSR Reporting Blog with my pick of the Top Ten Reports of 2010 and the Top Ten Reports of 2011 have actually been among some of the most popular posts of all time on the CSR Reporting Blog. Who am I to mess with a winning formula? 

What do I look for in a winning report? Authenticity, Materiality and Impacts. The AIM model. This is how it works (reproduced from last years' post)

 

Authenticity: I look for whether the company has reported in an honest way, using stakeholder voices to supplement performance data. Authenticity for me includes balance, accuracy and completeness. I look for targets and progress against stated targets.

Materiality: I look for whether the company has clearly defined the most important issues for the company and its stakeholders and described the way in which those issues have been identified and prioritized. Reporting materiality should also include a certain amount of contextual information which can assist us in understanding the issues and why they are material.

Impacts: I look for whether the company identified impacts rather than just presenting a shopping list of activities. This means discussing the outcomes of what was achieved. The outcomes are the achievement, not the activities. This is by far the most difficult thing for companies to address and very few, if any, do it well.

My Top Ten are reports that have caught my eye and stand out for me in some way. It's not an objective or methodological selection. But, I do use, browse, read and review many many many reports throughout the year, so you might say that the ones that stand out are hitting the mark in one way or another. By the way, you can also read Leon Kaye's Top Ten Sustainability Reports of 2012 on Triple Pundit.  His picks are all western global companies: Cisco, Coca Cola, Intel, Marks and Spencer, Microsoft, Nike, Philips, SAP, Unilever and UPS. All great works, and worthy of any top report list. My selection includes reports which are probably lesser known and reflect a more diverse group of companies from different parts of the world.  

Here... drumroll..... in alpha order are my Top Ten Picks of Sustainability Reports published in 2012.

 

(Becker Underwood, BT, CEMEX, China Mobile, Estee Lauder, Impahla Clothing, Larsen & Toubro, Maersk Line, Symantec and Tieto Corporation)

Becker Underwood Sustainability Report 2011
First report, GRI Application Level C, 81 pages

Becker Underwood is a privately-held multinational company, founded in 1982 in Ames, Iowa, that develops and produces a wide range of agricultural and horticultural solutions, including seed colorants and polymers, inoculants, beneficial nematodes, and mulch and turf colorants. Becker Underwood operates on five continents and employs over 430 people and generates $200 million in net sales. (Just in case you are wondering, as I was, what beneficial nematodes are, here's a definition: "Beneficial nematodes seek out and kill over 200 species of pest insect in the soil and will have no detrimental effect on species such as ladybugs, earth worms and other helpful beneficial insects." )

 

What I like about this report, in addition to the fact that it's a first, is its simplicity in reflecting a single overarching aim of this company: to have a NET positive impact from all direct and indirect business practices. That's easier said than done, but Becker Underwood, as a global but small-ish company, has taken the long view and developed a clear strategy to progress focused actions against seven strategic objectives. Actions include purchasing Renewable Energy Credits to offset 100% of electricity use, installing 84 solar panels at the company's Missouri site, energy efficiency improvements at several facilities and Becker Underwood has been working with Trucost to develop an environmental profit and loss account for the company's supply chain.  

 

If anything, this report adheres too rigidly to the GRI framework which has constrained its writing. Rather than help us understand the true impacts of the company's activities, the report follows the GRI profile disclosure elements in order, and bypasses the stories and case studies that would make this report come alive. Nonetheless, as a first report, it's a credible testimony to the company's approach and actions, and is carefully crafted,  modeling what can be done by businesses below $1billion revenues and 1,000 employees size.

BT Better Future Report 2012
GRI Application Level A, web-based report with 8 page downloadable summary

BT is one of the world’s leading communications services companies, operating in the UK and in more than 170 countries worldwide. Main activities are the provision of fixed-line services, broadband, mobile and TV products and services as well as networked IT services. BT employees over 90,000 people and has a total revenue of over GBP 19 billion.

BT has been reporting since the 90's and they always tend to do a good job. One of the best features of BT's reporting for some years now is the linkage of non-financial indicators and financial indicators. You can see this clearly on page 7 of the summary report. For example, one financial measure of the value of sustainability to BT's business is the value of customer contracts that BT competes for that have a sustainability element as part of the bid, which reached GBP 2.7 billion in 2012. This is linked to the underlying sustainability action of maintaining or improving BT's ethical index score.

Aside from this, BT's reporting is centered around their mission to "provide reliable and secure networks that help people and businesses to thrive". The web-based report contains a selection of interesting case studies which illustrate the ways in which BT lives this mission. For example, a story about how BT's emergency services 999-number wait time was reduced significantly shows how technology and new social media tools can be used in innovative ways.

BT's material issues are clearly laid out and a commentary from an external Leadership Panel adds extra perspective.

CEMEX 2011 Sustainable Development Report
GRI Application Level A+, 61 pages

Founded in Mexico in 1906, CEMEX, S.A.B. de C.V. is the world’s leading supplier of ready-mix concrete, and a leading cement and aggregates producer, with net sales of over $15 billion, selling to over 50 countries with 44,104 employees worldwide and an annual production capacity of 95.6 million tons of cement.   CEMEX operates 59 cement plants, 1,921 ready-mix concrete facilities, 377 aggregate quarries, 226 land-distribution centers, and 70 marine terminals. That's a heck of a lot of cement.

CEMEX began publishing annual environmental, health, and safety reports in 1996, and then in 2003 published its first Sustainable Development Report. Entitled "Building a Better Future", the 2011 Sustainable Development Report is CEMEX's ninth report that covers the range of environmental, social, and governance issues and performance.

What's great about CEMEX's reporting is a very clear approach to sustainability with three key drivers and seven priorities, and a materiality matrix which highlights the priority issues, which are reported in detail. Health and Safety, for example, the highest material issue, takes five pages in this 61 page report, and, while demonstrating improved safety performance, doesn't omit to mention that a whopping 44 individuals died in connection with CEMEX's activities. I am sure that's a painful disclosure. Not surprisingly, really, that all these 44 fatalities were contractor and third party employees. This reinforces the big differential between safety performance for own employees and safety performance for third parties. I see this pattern with many companies (Note to self: This deserves a post of its own. Sometime soon). Companies using contractor or third party employees must pay far more attention to safety training and supervision. In the same section, CEMEX reports a reduction in lost-time accidents among its own employees versus prior year.

CEMEX is involved in activities to "proactively contribute to the transformation of the construction sector" through a range of collaborations and research programs on the value of concrete as a sustainable building material. CEMEX has even become somewhat of a consultant to customers in construction of sustainable buildings. A life-cycle approach to concrete features in the report. The impacts of concrete in so many different aspects of our lives - construction, urban infrastructure, even road congestion, makes this report a fascinating read, very informative and even educational, as CEMEX provides relevant background information. Each section opens up with "performance highlights" and continues with a description of the company's management approach and a selection of challenges ahead. Clearly a report which has been carefully planned, it is well structured, and presents issues in a credible way. The report is bolstered by the commentary of an Advisory Panel.

The thing I wonder is why the materiality matrix is hidden away on page 45, instead of being right up front as an essential backdrop to the company's strategy and reporting approach.


China Mobile Ltd 2011 Sustainability Report
GRI undeclared level, 58 pages

 

China Mobile has over 176,000 employees, nearly 650 million customers and a 66.5% market share of mainland China telecoms services. The company was incorporated in 1997, and has mushroomed to be one of the largest mobile networks in the world. Just a list of the China Mobile wholly owned subsidiaries takes up a full page in this report. China Mobile was the first company in mainland China to publish a Sustainability Report in 2007 and this is their sixth. It is indexed to the GRI, the UNGC and ISO26000. 

China Mobile's vision is "Mobile Changes Life" and this report links the activities of the company with outcomes for a better society and environment. The company covers a broad range of issues relating to mobile technologies and consumer behavior and impacts, providing contextual information and background to this company's extensive reach. One small example: empty nesters. This is what China Mobile says:

"Mainland China is continuing to become an elderly society and the number of “empty nest” families has increased significantly. According to the statistics, currently “empty nest” families have surpassed 50% in both cities and rural areas, with the number increasing to 70% in some large and medium-sized cities. The question of how to care for the elderly becomes more pressing. We have fully considered the need of the elderly in their daily life and innovated on information services for them through customised terminals."

 

The Sustainability Performance key indicators are collected towards the end of the report and provide a great overview of China Mobile's performance. I like the fact that some of the performance areas are expressed in terms of impacts, and not just inputs (although there is room for even broader thinking in this area).

Estee Lauder Corporate Responsibility Report 2012
GRI undeclared level, 80 pages

The Estée Lauder Companies Inc. is one of the world's leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products, with sales of products are sold in over 150 countries and territories under the following brand names: Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, Tommy Hilfiger, and many more. The company has net sales of  almost $10 billion, and employs  approximately 38,500 people. The company was founded in 1946 by Estee Lauder.

The report is entitled "The Beauty of Responsibility" and this report is indeed a beauty. It projects a certain grace and refinement through its pleasing design, and well-placed imagery. Goals, progress in the reporting period and new goals are clearly set out up front, and issues such as diversity and inclusion, people development, advancing women, corporate philanthropy and environmental stewardship are well addressed. A large section is devoted to women's health and especially breast cancer, which has been the flagship cause of Estee Lauder for 20 years. Evelyn Lauder, who is credited with creating the pink ribbon, sadly passed away after battling with ovarian cancer in 2012 and a touching memorial page is devoted to her in this report.

While lacking some of the heavyweight aspects of Sustainability Reporting (stakeholder engagement processes, materiality analysis, value chain impacts, specific challenges etc), this report does present a credible picture of a company doing much to operate in a sustainable way as part of a core business philosophy. It certainly is the beauty of responsibility.
  

 

Impahla Clothing Integrated Annual Report 2012
Integrated Financial and Sustainability Report, GRI Application Level A, 64 pages.

Spring Romance Properties 34 (Pty) Limited, trading as Impahla Clothing (Impahla), is a company based in Cape Town, South Africa and manufactures clothing under a sole source agreement for PUMA, a world-class sport and lifestyle company. Impahla is a privately owned business that has grown organically over the last eight years from 60 employees in 2004 to 234 in February 2012. In 2012, Impahla supplied in the order of 445,000 garments for a total turnover of R38 million, 31% up from 2011. The most significant recent development in the Impahla business has been the move to manufacture exclusively for PUMA. 

 

Impahla started reporting in 2007 and this is their fifth report, and each one has been a gem. If anyone wants a role model for SME reporting, this is it. The open and inclusive style, the genuine and frank discussion of core issues, the well-written and carefully crafted messages, the conformance to the GRI framework without the appearance of a tick-box approach and the focus around material issues all make this company and its reporting one of the best, not just of 2012, but of several years. Design is always great too, with original photos of the operations and employees at all levels. Nothing Stock about this report. This discipline and degree of transparency does not come easy for a privately owned SME and is by no means an obvious approach. It requires absolute consistency and integrity by the company's leader-owners. We need more of this in business today. (Watch out for my DoShort book to be published in January about Sustainability Reporting for SME's in which I use Impahla as a case study, having interviewed the Managing Director, William Hughes).  

 

Larsen and Toubro Sustainability Report 2011
GRI Application Level A+, 112 pages

I covered Larsen and Toubro's reporting on the CSR Reporting Blog earlier this year with a Triple Cone Award for consistently compelling and creative reporting.

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest companies in India, founded in Bombay (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro. Both of them were strongly committed to developing India's engineering capabilities to meet the demands of industry. L&T is traded on the Indian Stock Exchange and employs over 50,000 full-time employees and over 300,000 contract workers, boasting a turnover of around $13 billion.

 

For more detail, read my post earlier this year. Suffice it to say here that this company has become one of the few that delivers a report which I look forward to reading each year.

Maersk Line’s Sustainability Progress Report 2011
Not GRI, 127 pages.

 

Maersk Line, headquartered in Denmark, is the largest shipping company in the world with a global market share of 15%. Maersk Line employs 25,000 people with 325 offices in 125 countries around the world and operates a fleet of more than 600 ships which sail every major trade lane on the globe, and make about 35,000 port calls every year.

This is Maersk Line's second report and what I like about it is the vision and long-term thinking it projects. Entitled "Route 2", the name of Maersk Line's sustainability strategy, the report's introduction kicks off with "Towards 2050" and an overview of the challenges facing the shipping industry in the light of global issues and mega-trends. The report is structured around five core issues that are at the heart of Maersk Line's strategy, and includes fascinating insights. For example, the report includes a description of the Indian banana trade based on a socio-economic impact study conducted by Maersk Line, and examines the risks to this sector in light of the different findings. Maersk Line's cold-chain shipping is an important part of the global perishable food distribution network.  

 

Maersk Line also presents good environmental data, including the impacts on its customers' supply chains. For example, Maersk reports that 169 key customers saved over 748,000 tons of carbon emissions by shipping with Maersk versus the industry average. In fact, overall, this report is one of the most fascinating reports I have read this year. It's immensely readable, with each section providing context, case studies and highly informative content. Maersk covers issues ranging from energy efficiency to illegal trade, from biodiversity to the floorboards in containers and from waste handling to exhaust gases from ships.

 

While I miss the structure of the GRI framework (an index, for example, and certain key indicators), and a materiality matrix, and this report is a little light on process for engaging with stakeholders, overall this is a great example of high-quality narrative and visionary sustainability performance.

Symantec Corporation 2011 Corporate Responsibility Report
GRI Application Level B+, 43 pages

I reviewed this report for the December edition of Ethical Corporation Magazine, and gave it a thumbs-up. These are the first two paragraphs of my review:
 

"Symantec’s latest report reflects a step-change in the company’s thinking and presentation of its corporate responsibility approach and performance. For the first time – the company has been reporting since 2008 – the report is organized around Symantec’s three strategic responsibility priorities: people (employees), world (environment, human rights, sourcing and community) and information (online security). These three focus areas form the basis of the structure of this report, which, at 43 pages, covers a healthy breadth of information in a crisp, coherent and intelligent way, while retaining focus. As reports go, this has all the positive elements: materiality matrix, input from internal and external stakeholders, clearly laid-out performance data over three financial years, and even a few failures frankly discussed. In fact, this is one of the few reports that lend themselves to reading cover to cover without inducing sleep." Enough said. Read it!

Tieto Corporation Corporate Responsibility Report 2011
GRI Application Level A+, 45 pages.

Tieto is an IT and product engineering services company headquartered in Finland and operating mainly in Nordic markets, Russia and Poland, with net sales of close to EURO 2 billion and employing 18,000 people.

 

This is Tieto's third CR Report, and it covers the spectrum of CR issues well. There is a detailed (and colorful) materiality matrix covering 25 issues, of which 10 are more material than others. Tieto clearly links its role as a business to the context of Green IT, about which there has been much research and clear conclusions drawn about the environmental benefits of online living. Providing good context, Tieto describes the ways in which it supports the online transition and offers customers lower-carbon lifestyles, calculating that in 2011, Tieto helped customers reduce carbon emissions by over 160,000 tons.  Tieto has a vision to achieve carbon neutrality in its own operations, and provides detail on carbon performance including specific multi-year targets.

Tieto reports authentically, for example, detailing non-conformities found in quality audits and corrective actions taken. Similarly, customer satisfaction, a key material issue, is reported both in terms of the positive aspects mentioned in customer feedback, and also in terms of points for improvement.

While the Tieto report could be livened up with a little more in the way of case studies and stakeholder voices, and a greater shift from inputs to outcomes, it is a good example of clear, straightforward, well-structured GRI-based reporting.  

Special Mention:

All the above reports are published by corporations. I wanted to make a special mention of another excellent report published in 2012: CEFIC's Towards Sustainability 2011/2012 Report.
 

 

The world of business is moving into a future of sectors, not just individual corporations. More and more, we need to consider value chain impacts by sector because there is a minimum threshold of sustainability performance is required by all companies in a sector to enable meaningful systemic collective progress. The more advanced companies understand this and the more advanced sectors are already organizing themselves around sustainability themes. CEFIC (The European Chemical Industry Council "the forum and the voice of the chemical industry in Europe") is not the first sector association to publish a Sustainability Report - there are many, some geography specific as well as sector specific. However, I highlight the CEFIC Report because it is a good, serious example of a strong considered approach to sustainability by an industry sector, and as a first report published in 2012, represents another breakthrough on our collective sustainability journey.

Note: To be fair, as in previous years, I did not include published reports of clients which my company, Beyond Business, served this year. These include:
GSK Romania Sustainability Report
Netafim Ltd Sustainability Report
Novus International Sustainability Report
Liberty Global Corporate Responsibility Report

Wishing everybody Happy Reporting in 2013!


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 proposed GRI G4 GHG Emissions draft - explained

The plot thickens. After presenting the G4 Exposure Draft available for comment between 25th June and 25th September, the GRI has now published what it's calling Thematic Revisions, for public comment between 14th August and 12th November. I think that's what they call eating the elephant in two easy slices. Of course, the CSR Reporting Blog is here and ready with our analysis of one of the two new Thematics  - Greenhouse Gas Emissions - to make your life a little easier.  The other one (Anti Corruption) will be the subject of my next post.

First, download the draft GHG Thematic document here. It's 55 pages. Get them all. You're gonna have your work cut out as you go through this document.

According to the draft, the proposed revisions align with the GHG Protocol, jointly released by the World Resources Institute and the World Business Council for Sustainable Development, and the ISO 14064 Standard. The proposed GHG Emissions Indicators are fully aligned with the GHG Protocol’s grouping of emissions into three subsets (Scopes 1, 2, and 3), as well as the ISO 14064 grouping. Energy Indicators have been modified to align with the GHG Emissions Indicators and intensity Indicators were added for both energy and GHG emissions. More about intensity later....

Specifically the draft contains:

• New disclosures and guidance for the Energy and Emissions Aspect (Environmental Category)
• Edits to Indicator EC2 (Economic Performance Aspect, Economic Category)
• Edits to Indicators EN3 – EN7 and Indicators EN16 – EN20 (Energy and Emissions Aspects, Environmental Category)
• New indicators under the Energy and Emissions Aspects, Environmental Category

Before discussing the changes in detail, it might be worth listing the new EC2, EN3-7 and EN16 -20 and new indicators proposed in this section. First point to note is that 11 indicators now becomes 13 indicators, and this includes two intensity measures, energy intensity and GHG emissions intensity. As promised, more about that later.

• CORE EC2: Financial implications and other risks and opportunities for the organization’s activities due to climate change
• CORE EN3 Direct energy consumption
• ADD EN4 Indirect energy consumption
• CORE G415 Energy intensity
• ADD EN5 Reduction of energy consumption
• ADD EN6 Reductions in energy requirements of products and services
• CORE EN16 Direct greenhouse gas (GHG) emissions
• CORE G416 Energy indirect greenhouse gas (GHG) emissions
• CORE EN17 Other indirect greenhouse gas (GHG) emissions
• CORE G417 Greenhouse gas (GHG) emissions intensity
• ADD EN18 Reduction of greenhouse gas (GHG) emissions
• CORE EN19 Emissions of ozone-depleting substances (ODS)
• CORE EN20 NOx, SOx, and other significant air emissions

So what's different? Intensity, as we've seen.  But more about that later.

GHG Protocol framework

A key difference is the clarification in definitions for energy and emissions reporting. The GRI has aligned itself with the leading carbon reporting standard - the GHG Protocol in which direct and indirect energy are classified into three scopes of emissions.

• Direct Energy > Scope 1 emissions
• Indirect Energy > Scope 2 emissions
• Other Energy > Scope 3 emissions

You probably already know this, but for those of us who are not environmental experts, it does take some getting your mind around. Scope is a classification of the organizational boundaries where GHG emissions occur.

• Direct (Scope 1) refers to emissions are created by sources owned or controlled by the organization. For instance, a coal-powered power plant which makes electricity.
• Indirect Energy (Scope 2) refers to emissions resulting from the generation of the electricity, heating, cooling, and  steam that is purchased by the organization. Scope 2 emissions occur at facilities which are owned or operated by other organizations. For example, using electricity purchased from the coal-fired power plant (probably via a national grid) is classified as Scope 2, because the emissions were generated in producing the electricity and not in your organization.
• Other Indirect  Energy (Scope 3) refers to emissions resulting from the organization’s activities, but are not created by the organization. This includes emissions from outsourced activities, such as the transportation of goods by haulage companies using vehicles that are not owned or controlled by the organization.

In other words, most companies report fuel and coal as direct energy sources and purchased electricity as an indirect energy source. In environmental reporting, the  energy source and what you do  with it is less important than where you do it. If the emissions occur in your factory, cue Scope 1. If they occur in someone else's factory, cue Scope 2 and if they happen on the bus to work or on a truck to China, cue Scope 3 (provided you don't own the bus or the truck).  

The John Lewis Partnership CSR Report for 2011 contains a good graphic that makes this all crystal clear:

Which emissions to account for: Control or Equity
The key to defining what to count is the precise scope of where emissions occur. On the face of things, it sounds straightforward, but in practice, there are two definitions are available: the equity or control method.

The control method calls for a company to account for the total GHG emissions from operations over which it has control, whether this be financial or operational control. It does not account for GHG emissions from operations in which it owns an interest but has no control. In other words, if you lease a factory, and you run it, and all the people working there are your employees, and all the materials used in the factory are sourced by you, and the final output is your products, then you have control.

The equity method calls for a company to account for GHG emissions from operations according to its share of equity in the operation. For example, if you have a 51% financial share in an operation, or even a lower financial share but full management control, you would report your emissions proportionately, according to the percentage share, and not full control.

This is an important distinction and must be applied consistently throughout the entire reporting spectrum. It could significantly change the level of emissions reported, so watch for the fine print when you are reading reports.

Alignment is Good
Closer alignment with the GHG Protocol (which is also used as the basis for CDP reporting) clearly makes sense, and hopefully will encourage greater comparability in energy and emissions reporting. At present, there are still wide variations but some do it well. ENEL, the energy company, for example, reports  for 2011 in classic textbook G4 style:

ENEL 2011 reporting EN3

ENEL 2011 reporting EN4

ENEL 2011 reporting EN16 Scope 1 Emissions

ENEL 2011 reporting EN16 Scope 2 emissions

ENEL 2011 reporting Scope 3 other emissions

Oh, did we mention intensity ?
G4 includes two new indicators relating to Energy Intensity (G415) and GHG Emissions Intensity (G417). This is a way of normalizing consumption and impacts to a common denominator which may be financial ($ of revenue), human (per person), physical (per square meter of factory or office space, or per vehicle) or per product (units sold, units produced) or, in fact, any other factor that you can imagine which is relevant to your business (or which makes your numbers look better than the absolute numbers). In most cases, my experience tells me, the intensity figures will always look better than the absolute figures - companies use more and more energy and generate more and more emissions, but on a per something basis, they proudly show a major reduction.  Take these examples:

Air China reports in the 2010 Corporate Responsibility Report on fuel consumption and carbon emissions by PTK (per ton/kilometer), stating that they have achieved "remarkable results" as they have reduced fuel consumption PTK by 6.6% in 2010 versus 2009. We do not know what the total fuel consumption was during this period.

Delhaize, the Belgian supermarket chain, shows fabulous energy intensity results per m2 sales in the company's 2011 CR Report. A 7.5% percent reduction over three years. (It is not clear whether this is all three Scopes, but I assume just Scope 1 and 2)

Delhaize 2011 reporting on emissions intensity

Delhaize does not disclose the total number of carbon emissions. Delhaize also reports to the Carbon Disclosure Project and you can access their report (after several clicks and registration on the CDP website) but you will find that the 2011 report covers 2010 data, and is therefore not comparable to the CSR Report 2011 period. After a quick calculation, I note that Delhaize absolute Scope 1 and 2 emissions increased by 3%, using 2008 as a baseline. Turning an increase into a decrease is the power of the intensity measure. This might have been achieved by increasing some prices, changing the sales mix or recording some currency adjustments and wow, suddenly the carbon emissions performance looks actually quite positive.

NH Hoteles 6th's CSR Report includes both absolute emissions and intensity rates per guest per night. Absolute emissions fell by 8.82% while intensity emissions fell by 11.9%.

What did NH Hoteles choose to highlight in its reporting narrative ? Intensity, of course.

 

 

CapitaLand's Sustainability Report for 2011 also shows a similar picture, in one handy graph.

Again, you can see that on an absolute basis, there is an increase of emissions by 39% since 2008 but intensity on a square meters basis reduces by 11.1% since 2008. CapitaLand's emissions target is an intensity target reduction of 20% by 2020, but there is no absolute target.

BT uses yet another model for calculation of emissions intensity and that is emissions per GBP million value added - which is EBITDA plus employee costs.  This formula is what BT has called its Climate Stabilization Intensity Target - a measure of carbon emissions in relation to its (financial) value added as a company and the contribution it makes to a country's GDP. Hmm. Make more profit, improve your carbon emission performance. BT's absolute emissions reduced 53% versus their 1997 baseline, and intensity improved by 61%.

What would be interesting to know is what specific factors contributed to this intensity improvement. BT report that they have improved energy efficiency, invested in renewable energy generation and purchased low-carbon energy. Wonder how much of what went into that 61%? And how much was a change in profit and employee costs?

Ericcson, on the other hand, report a different type of intensity. According to Ericcson's 2011 CSR Report, the carbon dioxide emissions associated with the lifetime operation of delivered products totaled approximately 24 Mtonnes in 2010. This is the measure used for carbon intensity. Don't worry about the fact that while carbon intensity was reducing every year, absolute emissions were increasing by 8% between 2008 and 2011.

Procter and Gamble have a lofty goal, stated in the P&G 2011 Sustainability Report: of powering their plants with 100% renewable energy. In the past few years, however, total carbon emissions (Scope 1 & 2, Scope 3 is off the radar) have increased  by 5% in 2 years. This doesn't prevent  P&G from proudly displaying the intensity figures:

As you can see, P&G refers to intensity per unit of production. Hmm. Now would that be a 5kg pack of washing powder, or a tube of Crest toothpaste, or a pack of Eukaneuba for dogs Denta Defense®, a type of micro-cleaning crystals that help reduce tartar by up to 55%?

Enough of intensity. By now you get the picture. Carbon emissions can be normalized to practically anything at all, depending on what a company wants to manage or what it wants to show to the world. In almost every single case you can find, intensity measures will always beat absolute measures. If only the planet would respond to intensity and become more sustainable. If every company were emitting carbon emissions relative to the number of expense claim-forms submitted, or the value of bottle-caps sold or the number of emails sent per hour, we might find carbon reporting much more interesting but it would hardly be saving the planet. If only we could become more sustainable by becoming less intense.

Why would the GRI choose to add two intensity measures to the G4 reporting framework? The GRI says this: "In combination with an organization’s absolute GHG emissions, disclosed with Indicators EN16, G416, and EN17, GHG emissions intensity helps to contextualize the organization’s efficiency, including in  relation to other organizations."
 
Normalizing energy consumption or carbon to financial values - turnover, sales or profit - or to other operational values - may be a way of comparing the performance of companies of different size in a similar sector. The carbon footprint of a cellphone is comparable whereas the manufacturers of cellphones may be very different in size and scope of operation. This might help investors (the ones who understand) to make decisions. Similarly, whatever the normalization factor, if a company consistently uses this to benchmark its own performance, it can be a management assessment and decision making tool. However, the trick is in the selected normalization factor. If such a factor has no direct relationship to whatever causes or influences the level of emissions, it may simply be a way to present good-news numbers. If my operations are the same size and my turnover increases because of a price-hike, or a change in currency exchange rates, I may still be generating equal or more carbon emissions but all of a sudden, my intensity plummets. We will have to be vigilant of the way that intensity measures are used in reporting, and ensure they are never  a replacement for absolute measures.

Some Less Intense General Points
The environmental disclosures as with, I think, all other disclosures in the proposed G4 framework are not time-specific. This means that the reporting company could report data only for the declared reporting period. I believe it would make sense to require organizations to present 5 years data on these critical data points. Of course, those who do not have 5 years data cannot do this. But of the many companies who have been producing sustainability reports over the years do have the data available (and several already include this). As we look at sustainability with a long-term lens, it is often frustrating when companies report only current and prior year data. We should require a little more perspective in G4.

Similarly, I believe that the G4 could be tightened up by requiring explanations of how performance has been achieved. For example, it would make sense, if energy consumption has decreased by 20%, to know what the organization has done to reduce this. The G4 proposals  in the updated EN5 (Reductions in energy consumption) and EN6 (Reduction of energy requirements in products and services) require listings of the reductions achieved but not a full explanation for HOW they were achieved. Adding such information would be helpful both for internal review and for external stakeholders. Companies who have made serious efforts to reduce carbon emissions should be able to say what actions caused the reduction. Unless it was all a lucky strike!

The Last Word (it's not intensity)
Overall the new GHG Reporting Thematic Revision tightens up environmental reporting and makes several aspects both clearer and less overlapping. G4 also ups the stakes a little (a lot). The G4 framework requires reporting on all three scopes of carbon emissions as core indicators (EN16, EN17, EN18). This is also the case in G3 (EN16 and EN17), but in G3, companies had the option to report at Application Level B or C, reporting Scope 1 and 2 emissions under EN16 and avoid Scope 3 emissions in EN17. With G4, every company which includes climate change as a material issue will be required to report all three Scopes in order to be In Accordance with the G4 framework. Sounds like there's gonna be a lotta scrambling around for data going on, and suppliers of goods and services to In Accordance reporters are going to feel the heat.

Whew! Glad that's covered. I hope  Anti-corruption is not so complicated. Watch this space.
   

 

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)

16 Great Corporate CSR Blogs

These past few years have witnessed a multitude of corporate CSR and/or Sustainability blogs. These are immensely valuable for companies as a way to update all those who might be interested in the way the focus on CSR is maintained throughout the year and not just at Sustainability Report time. Blogs are also a way for companies to tell their stories through the faces and voices of employees (and most seem to be genuine, rather than ghosted), thereby gaining both internal momentum as well as an external presence. Also, corporate CSR blogs are an opportunity to elicit feedback. We should not be concerned that very few people actually engage on blogs. As I know from experience with my own blogs, posts spark the discussion but very often, the conversation takes place off-blog. Companies who share via their blogs demonstrate that they are open to these conversations. A case in point is the great example of my interaction with Microsoft a few weeks back.

Here, in alfa order, are ten of the companies whose corporate CSR Blogs are on my radar.

adidas Group Blog
This is a nice blog from members of the adidas team, headed up by the adidas Chief Communications Officer, covering, as you might imagine, all things related to sport, adidas brands, and often, things related to CSR and community involvement. While the blog has a broad scope, clicking the Sustainability Aspects category via the Category Search function brings up some interesting material including the latest post about German TV's visit inside adidas factories in China and a frank look at working conditions. The Community Involvement Category showcases adidas's volunteering and other projects for society.

Applied Materials Blog
The "About this Blog" page explains that the Applied Materials Blog is "dedicated to a global discussion about the ideas, actions and products changing the world as we know it.  Here we will provide insight into the innovations being created by our employees, technologists and global workforce as well as continue to drive the conversation about the role clean technology can play in saving our planet, while also creating jobs and other economic benefits by helping promote energy independence. We will also discuss the importance of being a leading global citizen and operating in an environmentally and socially responsible manner." Bloggers include members of the Applied team, including the CEO, though he has obviously been rather busy of late as his last post was in 2010. For those interested in renewable energy, this is quite an interesting blog.

BT Better Future Blog

This blog is subtitled "Join the Debate, We Want your Views". However, there are not yet any comments on any of the  posts so far, dating back, as far as I can tell, to February 2012.  The BT blog is a hybrid, containing posts from BT people and also external stakeholders, such as this post about "Embracing all in the digital revolution" by John Fisher, Chief Executive of Citizens Online, or this one, from a  Year 10 pupil at a school in Northern England, who participated in BT’s Big Voice competition gives young people the chance to make short films on inclusion and diversity issues. It's a nice touch to have external stakeholders on the blog. I always say that there is a great credibility advantage in letting others help tell your  story. The BT blog is not so active - only 10 posts in around four months - but it's a presence and the material is interesting and informative. Suggestion for improvement: Add an "About this Blog" page, tell us what you are trying to do with the blog and provide the bios of the key regular contributors.  Who is writing the blog is as important as what they are writing :).

(N.B. Kevin Moss, BT Americas CSR head also maintains a private-business BT blog at CSR Perspective, which is always a worthwhile read.)

Centrica's Blog
Centrica, with its vision to be the most trusted energy company, has been running a blog now since 2008, managing to maintain around three to four posts per month.  It is populated with a range of CSR related stories, news about Centrica's Sustainability Reporting, and market developments which affect energy consumption and practices. Authors have a short profile on the blog, on their landing page. The blog forms a part of Centrica's overall communications strategy  to get more online more frequently, with a plan for weekly updates throughout 2012. A good example of how blogging can be used to change or correct perceptions is this post on the value of windpower in cutting CO2 emissions. Following a public report that the economic and emissions benefits of windpower are just hot air (ha-ha, couldn't resist), Centrica provides their own perspective on why windpower is an important alternative renewable energy source.

Citi Blog from Citi group

This blog covers information about Citi's citizenship and community activities, and other topics relevant to Citi's role in society. Some of the posts are rather finance-geek oriented, through many of more general interest for CSR fans. Despite the topical relevance of this post, entitled "Executive compensation at Citi", no comments were left by readers. On the other hand, this post, entitled "You Spoke. We Listened" generated 385 comments, many of which were complaints and requests for better service. To Citi's credit (no pun intended :), a post responding to the 385 was published soon thereafter. This is the power of the blog and  one instance in which I see a blog truly engaging customers and responding to them in a considerate way. Citi celebrated its 200th anniversary with a series of posts from the Bank's history, including this latest one about what is probably one of the earliest graduate training programs on record, the hiring of 20 graduates in 1915 to train for careers overseas, to boost the Bank's international presence.  

Delhaize Group Blog - Feed Tomorrow

This is a lively and informative blog which covers a wide range of topics related to CSR, offering information about food, eating and nutrition habits, food preparation, environmental tips and more, as well as updates about what's going on in the world of Delhaize CSR activities. Archives go back to June 2011 and the blog has maintained a good stream of content since then, using pictures and videos to liven things up, and even the occasional smiley. There is an About Us page, which describes the blog's purpose, but no details of who is doing all the writing. In fact, all the posts are anonymously authored. Suggestion for improvement: Let us know who is behind the Delhaize posts!  Even if the blog is authored by a professional communications company, it's still pretty good!   

FedEx CSR Blog

This is part of the FedEx corporate blog and the CSR bit represents the posts that are tagged with CSR. However, the overall blog tag cloud has CSR, sustainability, environment, disaster relief etc as the most prominent keywords, so the CSR elements of the FedEx blog dominates. Posts are written by FedEx people and clicking on each author's name takes you to a bio page so that you can see who you are reading. The FedEx blog is followed by FedEx people as is evidenced by frequent comments, many of which express pride at being part of the FedEx company. What a great way to showcase this organization's culture.

GlaxoSmithKline (U.S) More than Medicine

This is a very interesting blog, rooted in GSK's U.S. operations, which covers the role of Big Pharma in healthcare, appropriate for the company which heads up the Access to Medicine Index.  The purpose of the blog, which has been running consistently for a few years now, is stated as "Our goal is to encourage an open, productive discussion about a range of topics related to the US healthcare system and how it can be improved. And we're going to try and do our best to provide a GSK perspective that doesn't sound like it's written in "legalese." But the blog doesn't cover only healthcare issues. It includes a wide range of posts on different aspects of GSK's CSR programs and employee volunteering events. The blog also has an "About this Blog" page so you know the rules and who is doing the editing and posting.

Intel CSR Blog

No summary of CSR Blogs would be complete without the Intel CSR Blog. I don't know if it's the longest running, but it started in 2007, when very few corporates had even heard of the Internet, let alone think of blogging on it. The Intel blog has maintained a consistently high quality of posts at the rate of about 8 posts per month since then, and is still going strong, also being used as a platform for sharing "bite-sized" pieces of the annual CR Report. Contributors to the Intel CSR blog are a range of Intel execs from all over the world, and from a range of business functions. You can get to meet them on the "Meet the Bloggers" page, where each has a short bio and there is also an About this Blog page. What's nice about this Intel Blog is that it covers a broad spectrum of topics under the CSR umbrella and often includes special posts, such as this one,  from Intel volunteers  with the Intel Education Service Corps, who tell first hand of their experiences in different countries around the world. Quite an inspiring program.  

Johnson and Johnson BTW Blog
The "About BTW" page on the J&J BTW blog starts with the line: "Everyone else is talking about our company, so why can’t we?" How true! This is also one of the veteran blogs, which joined the blogosphere in June 2007, and its blog tag cloud clearly makes citizenship the number one topic. We are introduced to the bloggers  on a separate page. From disease to diversity to greening the healthcare system, the J&J blog covers a lot of ground and is well written, mainly by the J&J team, presenting personal views and perspectives on CSR and healthcare related issues, using plenty of videos and infographics to make the reader experience a little more fun. It's a serious, intelligent blog which offers good information and an occasional external post from a relevant expert. 

McDonald's Open for Conversation Blog

The blog is Open for Conversation and conversation it gets. Most posts yield several comments, including this one, about  McDonald's bold decision to stop gestation stalls for sows. The blog is sponsored by McDonald's VP for Sustainability, Bob Langert,  and is edited by McDonald's Community Manager and appears to have been running since July 2011, which is the first archived post, in which Bob Langert outlines the three big shifts in business that underpin sustainability. It's an interesting blog and one which, you will be surprised to find, hardly mentions hamburgers, though the juicy double cheeseburger and chips on the blog graphics reminds you where you are. A good blog and worth a look in for important insights and yes, discussion.

Microsoft's Corporate Citizenship Blog

Dating back to February 2008, the Microsoft blog is a combination of technical tips and updates and other aspects of Microsoft's CSR performance.  Posts are coordinated by the Microsoft Citizenship team but names are not named and bios are not bio'd. This blog is of less interest to the general CSR reader, though anyone wanting to keep up to date with the latest software for non-profits will enjoy it. Suggestion for improvement: Expose the Microsoft Citizenship Team!

Microsoft also maintains an excellent environmental blog called Software Enabled Earth which is the official blog of Microsoft's environmental sustainability team. It's a great round-up of everything environmental and includes a weekly post of what's topical.

Netafim Blog- Pioneering Irrigation
This is a great blog from a great company with a great story to tell. The impact of drip-irrigation on sustainable agriculture is powerful. The blog is written by Netafim's CSO, Naty Barak, and contains a range of perspectives and updates on Netafim's activities to advance agricultural productivity around the world.  The blog started in 2010 with a short but sweet post on how Netafim broadened its outlook from a small desert Kibbutz to global sustainability, and has maintained a flow of one to two posts per month since then.

Telefonica Public Policy Blog
"With this blog, Telefónica wishes to share its views on global policy issues concerning Digital communication, Internet, Broadband and Sustainability, but also receive your feedback and ideas."  This is a line from the "About this Blog" page, where the key authors and their bios are also provided. Archives go back to January 2011, and the top post ever got close to 7,000 hits on the subject of "Europe leading social innovation".  The Telefonica blog is highly informative about public policy issues, as its name suggests, with a focus on European Commission and changes and developments of legislation in the ICT sector. A very useful blog for those with an interest in this field. I particularly liked (and learned from) this recent post about the new European Commission strategy for making the internet safer for children.

Timberland's Bootmakers Blog

This blog is for stories from the Timberland community about the Timberland brand, business, products and passions. The blog has archives back to mid 2008 which makes this another veteran corporate CSR blog. Posts are by Timberland people who have a landing page with their job title and personal information such as what they do in their spare time. This is a blog for those who love the Great Outdoors, though it also covers different aspects of Timberland CSR performance and initiatives, such as this post which describes how a Timberland jacket is made from recycled plastic bottles and even recycled coffee grounds. Coffee grounds are, apparently, excellent at absorbing odor. If you can't wear it, as they say, drink it!

Beware though if you are a CEO Blogger. If you leave the company under a cloud, your blog gets taken down. Brian Dunn, the former BestBuy CEO blogger,  knows this from first-hand experience.

Finally, there are many other great corporate CSR blogs out there, and all differ  in style, tone, content and focus. I have covered but a few. I feel sure that all companies reap major benefits from blogging, and it's an informal and inviting way to communicate, personalize the business and create trust.

Disclosure: Netafim in Israel, Intel in Israel, GSK in Romania are clients of my company, Beyond Business.

elaine cohen, CSR consultant,  winning Sustainability Reporter (CRRA '12 Best SME Report), 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, an inspired CSR consulting and Sustainability Reporting firm)

What makes a Sustainability Report good or bad?

My friend and CSR & Sustainability Consultant Juan Villamayor, who writes a great blog, is also writing a dissertation on the quality of Sustainability Reporting. In return for the promise of loads of ice-cream the next time I am in Barcelona, I agreed to provide Juan with my thoughts in response to his question:

What makes a Sustainability Report good or bad?

After I had drafted my response, pretty much off the cuff, I thought I would share it, in case anyone else is writing a dissertation. More ice cream for me, right ? Here is more or less what I wrote:

What makes a Sustainability Report good?

Ultimately, the test of a good or bad Sustainability Report is in the value it adds to a business (and by implication, to the stakeholders of that business). This may be internal value (management processes, engagement etc.) or external value such as building trust and managing risk. Unfortunately, companies rarely measure the value they gain from Sustainability Reporting, though most confirm that they do gain value. I would love to see some research about the specific impact of reporting on companies.

Assuming the report adds value, what makes a report good or bad depends on who is interested in it. Most reports are written for a range of stakeholders and therefore try to cover a balanced set of issues. However, depending who you are, this may or may not be enough. If you are an environmental activist and cannot find clear, relevant environmental impact data, you will be disappointed. If you are in a local community which has been affected by the company's operations, and cannot find information relating to the company's local impacts in your area, you will be disappointed. If you are an employee and read about information which you did not previously know, you may become more engaged and proud, or you may feel disconnected to read in a report what you might have expected to hear through an internal communication process. If on the other hand, you are a professional reporter, and expect reports to reflect a discipline of transparency, measurement and provide data about the company's sustainability impacts, then you tend to look for (not in order of importance) :

The Company's Role in Society

One of the first things I look to a Sustainability Report to do is enlighten me as to how the company sees its role in society. Sustainability is not just about improving impacts and behaving ethically. It's about doing business in a different way which makes a social contribution. I like to see companies define that contribution before they get into the detail of how many tons of paper they have recycled. This provides context for the report.

Material Issues

A materiality matrix (see interactive example from BASF here) which identifies the specific most important issues that the company faces in sustainability performance which has been developed using input from external and internal stakeholders, is important. Specific companies are at specific risk and face specific opportunities, as well as having very specific impacts on people and planet. Materiality helps us understand what these are and react accordingly.

Outcomes

I look for the outcomes or impacts of the company's Sustainability activities, not just performance. So if a company has been investing in environmental technology, I look to see if environmental impacts have improved. If the company has been investing in the community, I look to see what community outcomes have been achieved. A simple "train timetable" of what we have done and how much we have spent is rarely satisfying.

Framework

Most companies today have adopted the GRI framework to compile their report and include a GRI Index. I find this very helpful for navigating the report and finding specific information that I require. With such a framework, it is easy to see what has been reported and what not, against a template of universally relevant key issues. Even if the GRI Framework is not used, another type of framework or structure may be fine, but the inclusion of a content index is most helpful.

Authentic Style and Tone

I look for a style and tone which is authentic and not obviously copy-written – one which explains technical terms and helps tell a story rather than just state the dry facts.

Clear Data

I look for data which is presented coherently and where the basis for calculations are clear, so that you know what's included and what's not. I was recently reading a report that provides a figure for Motor Collisions per 100 employees. There is no basis for the calculation. Does this mean all employees or only employees that have a company vehicle? Is it all collisions or only collisions caused rather than experienced? Data must be presented in a way we can understand, and it is interesting to see prior year data for more than one or two years, so that you can get a sense of continuity.

Targets, Progress and Future Plans

I look for SMART targets , and understanding of not only what progress has been made to achieve the targets so far, but also what plans are in place to continue to do so (see SCA's Report for a good example of this). Simply stating that the company will reduce carbon emissions by 20% by 2020 is not terribly convincing. What is convincing is the plan to achieve this.

Stakeholder Voices

I love to see people in the report – all businesses are about people – employees telling their stories, external perspectives and well-written real-life case studies all add to the credibility and easy-reading factor of the report. (Check out this fabulous report from Impahla Clothing)

How Sustainability is Managed

I believe there is importance in how sustainability is managed in an organization – whether there is a Board Committee, a dedicated Sustainability Leader and a corporate Steering Team of some sort. I always look in the report to see who is responsible for leading sustainability strategy and who is on the frontline of execution. A robust structure gives credibility and confidence that progress can be made and objectives can be achieved. (see page 48 of the Toyota Report for an example)

Accessibility

Easy navigation of all the report content – a hyperlinked downloadable PDF is my preference (see Cisco's example), as I can read it without an internet connection. Report-builder features for web-based reports are important (see Timberland's example). I hate flipbooks and other pyrotechnical web presentations, though opportunity to add comments, such as the SAP report , is a nice touch. A good report website is attractive and accessible to many. Either way, it must enable you to get to what you want fast. Not many people read a report from end to end in the order of the contents list.

And finally, I look for Linkage – the link between the company's sustainability performance and its business success. Most companies don't really know how to express this, and there is some expectation that Integrated Reporting might provide a route to expressing this meaningfully. Today, when I see it, it's a bonus, but my starting point premise is that I won't find it in Sustainability Reports, which is quite ironic really, when you think that many companies engage in sustainability in order to support sustainable positive business performance. (I like the way BT does this)

Finally, finally, I look for Assurance. Today, most companies do not use external assurance or verification and those Assurance statements I read are often partial or completely inadequate, so I tend to assume that I won't find a good Assurance statement which is the result of rigorous process and adds credibility to the report. Here again, when I find a great Assurance Statement, it's a bonus. (here is an example from Bureau Veritas, assuring the Nestle 2011 CSV Report)

Those are my shoot-from-the-hip things that work well for me in Sustainability Reports.

Then I thought about answering the question the other way around:

What makes a Sustainability Report bad?

Here, aside from saying the opposite of all the above, I think most of us know the answer to this – marketing orientation without substance, highly selective "good news" coverage with no context or substantiating data, and difficult, stiff, narrative with a tick-box approach to performance.

Truth is, most reports are neither totally good nor totally bad. but who am I to judge? I can say what works for me, but every stakeholder will have her or his own view.

A Sustainability Report is, simply put, what stakeholders make it.

And this brings me to my final point:

What makes a Sustainability Report really, really good?

Feedback.

Yes.

Feedback.

A Sustainability Report which gets no feedback hasn't hit the radar. And that's bad.

Be a great stakeholder. Give a Sustainability Report your feedback.

elaine cohen, CSR consultant, winning 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)