Three G4 Reports under the microscope

Three more G4 reports under the #CSR Reporting blog microscope today. Thanks to Paul Scott of CorporateRegister.com for alerting me to these new releases! By the way, CorporateRegister.com now hosts 51,225 CSR reports across 10,428 companies and remains the largest hosting site for CSR and Sustainability reports anywhere. It's absolutely my go-to place for getting information on reports and reporters, and the PDF search-inside reports feature (members only!) is really useful, though sometimes it's delivers rather odd results. For example, I just did a search for "G4" and came up with this:

 

 

See the upper case 4 after the word building :))) This is from the Fraser and Neave 2012 Annual Report.

 

Similarly, G4 also brought up this:

 

 

Apparently there are some VoIP Adapters which incorporate G4 in their names :) Very next generation. This is from NTT West Corporation's 2012 Environment Report.

 

Needless to say, these weren't quite the G4's I was looking for. However, aside from a few funnies, the PDF search tool is excellent and saves me much time in research. However, as the saying goes, I digress... back to the G4 and the complexities of actually delivering a real G4 report. As you will see, life in the G4 era is not so straightforward.
 

Thomas Properties Group Inc. Sustainability Report 2012

Thomas Properties Group (TPG) is an American real estate company based out of the City National Plaza in Los Angeles, California. TPG has 129 employees, owns interests in and asset-manages 17 properties with 10.3 million rentable square feet and provides services for additional properties. This is TPG's third sustainability report. Chapeau! The report is 34 pages long/short and is split into three main sections: Responsible Investment, Sustainable Operations, and Stakeholder Engagement. 

 

What made us think that this is a G4 report is that TPG says so, in the Content Index.

 

 

TPG says the report was created "in accordance" with G4. But that's not strictly true. For those who don't yet know the G4 Implementation Manual off-by-heart, I can enlighten you that Page 50 includes instruction on what to write if you have declared your love for G4 but not married it.

 

 

TPG really means, I think, that this report contains G4 disclosures and not  is "in accordance". Even so, the content index doesn't pass muster, not for a G4 report and not even for a G3 report. It's a one pager and looks like this:

 

 

I tried to contact Thomas Properties but failed to reach them. Left to my own devices, I am going to put this down to a typing error. TPG means G3, not G4. This does not detract from the fact that the company has published three reports to date, and that demonstrates a commitment to stakeholders and to transparency, so well done anyway to TPG! 

Singapore Exchange Annual Report 2012-2013

The Singapore Exchange (SGX) has published a 165 page annual report which includes 11 pages which are defined as the "Sustainability Report". These 11 pages include sections on materiality, governance, and social and environmental impacts. Needless to say, it's a very compact Sustainability Report! However, it does include a description of the stakeholder engagement process and a matrix of material issues, of which there are 11, the most significant one being "economic performance".

 

In the introduction to the "Sustainability Report" section of the Annual Report, SGX believes their report is in accordance with G4 at CORE level. Hmm. I believe differently.

First, the report contains no GRI G4 Content Index. Second, the G4 indicators selected do not correspond with the material Aspects listed in the materiality matrix. Regarding economic performance, for example, the top material Aspect, none of the EC indicators are reported. Therefore this report qualifies as a G4-Referenced report, and not a G4 In Accordance report. But, it's en route, and that's good!

I will add that there is something that impressed me at least as much as SGX's reporting efforts, and that's their responsiveness. I wrote to ask about the missing G4 Content Index, and got a very rapid response, with a copy of the Content Index sent to me by email, and advice that SGX intends to publish this on the company website by end September. I was really appreciative of their response, as I write to many companies and it's like shooting paintballs into Niagara Falls. You get the feeling that your emails just dissipate somewhere in cyberspace. With SGX, the response was fast, clear and gracious. A personal one-scoop CSR Reporting cone is in order for Darrell Lim Chee Lek at SGX.

Drumroll for a G4 Report

 

By now, you might be doubting the possibility that any company ever might deliver a real G4 report. However, there is light at the end of the tunnel, and next up is a report which has secured my admiration and even a three-scoop supercone - the height of CSR Reporting Blog praise!

Environment Park s.p.a  Presentazione Bilancio di Sostenibilità 2012

Environment Park s.p.a was founded in 1996 by the Piedmont Region, the Province of Turin, the City of Turin and the European Union and is an original type of science and technology park in Europe, combining technological innovation and eco-efficiency. Environment Park is divided into two business units, one dedicated to the management of the real estate and the other, to "research and innovation". The park boasts green architecture and many environmentally friendly features and is run by a compact team of 45 employees. This is the fourth annual sustainability report and claims to be in accordance with the G4 guidelines at CORE level. Oh, and I almost forgot to mention, this report is in Italian, but with a little gelati and Google Translate, I won't let that bother me. Ice cream is the same in any language.

Environment Park has delivered a very nice G4 Content Index. It's prepared in accordance with the guidelines, and appears to me to be technically correct. Environment Park has selected 14 material Aspects from the G4 material Aspect table in 5 categories and has reported on a total of 24 Specific Standard Disclosures, almost half of which are environmental disclosures. At 76 pages, the report is manageable and only a tad longer than the previous GRI G3 Application Level B report of 2011 at 64 pages. As for material issues, these are prominently placed on page 5 of the report, set out in a chart which identifies each issue, whether the impact is internal or external to the organization, and how it was prioritized relative to other topics that were identified using the G4 recommended dual measure of size of impact and stakeholder relevance. This is about as technically accurate as it gets. Using the Content Index, it is a pleasure to navigate to the disclosures relating to each of these material Aspects.

I have not read the report in detail (Google Translate is not that brilliant) so I cannot comment on the quality of disclosure, and I also won't comment on the relevance, from my perspective, of the material issues selected. My microscopic focus in this post is the way the G4 framework has been applied, and it seems to me that this is the first corporate G4 report I have come across that makes the grade. Supercones all round at the Environment Park.

There is also something subtly intelligent about the way Environment Park has transitioned into G4. The 2011 report covered exactly 20 indicators required for Application Level B, which makes the 2012 G4 report not significantly more challenging with 24 Specific Standard Disclosures (performance indicators), plus 2 more if you add in the ones that are part of the General (profile and management) Standard Disclosures. Let's call this 26. Of these 26, exactly 13 indicators reported in 2012 correspond with those reported in 2011, demonstrating a good deal of continuity. The additional indicators added are mainly in the environment category, such as intensity measures for energy and emissions, which were not reported in 2011.

Now, having said this, I have an additional quick observation about the Environment Park report. The fact that it is technically correct, in my opinion, as far as the G4 framework is concerned, is fantastic. However, G4 reporting is not just about observing the reporting framework in a mechanical way. There's more to it than just the technicalities. The G4 report of Environment Park has exactly the same structure as the G3 report - same sections and same headings (with the exception of the addition of the materiality matrix). The report is not written around the impacts, it's written around the framework. That makes it G4, but less compelling for report users/readers. The big issues that Environment Park addresses are there, but they could be used to structure the report in a way which makes this organization's transformative role in business and society come to life in a more meaningful way for report readers. There are no internal or external commentaries, and as far as I can tell, no stories or case studies which illustrate in a more exciting way the true role and impact of Environment Park. Reporting at its best, in my view, is a story within a framework. Environment Park excels at the framework. It would be nice to have a little more story. (Disclaimer: I don't speak Italian. My comments are based on a general impression. I hope this is not misrepresentative. Supercones still relevant. ).
 

Summing up

G4 reporting is now evolving and I hope I will be able to keep pace with the anticipated flurry of new G4 reports. So far, of all the G4 claims that are flying around, not many are actually making the grade. The Global Reporting Initiative has not yet pronounced on its intention to develop a G4 Check, similar to the G3 Application Level Check. This decision was promised for September, so maybe we will hear some time soon. It seems to me that this is really critical. What's the point of having a wonderful framework if companies are misusing it by default or by design? I realize reporting is a journey, but saying we are going to Manchester and ending up in Honolulu doesn't help anyone, even if Honolulu is quite a nice place (Is it? I have never been.) Companies need help in applying the G4 framework accurately, that's my takeout. Understanding G4, my book, provides concise guidance. GRI may also be offering customized assistance to individual companies as they start to use the framework. But this is no substitute for a quality check on whether the output is as declared. I feel we have to start finding a better balance between quantity and quality of reports, and, in my view, GRI should play a pivotal role.

 

Oh, and by the way (how subtle), there is still time to  register here (send me an email or DM me on Twitter for a discount code) for the first Understanding G4 Master Class in London on 22 October. On the agenda:

Face Materiality with Confidence: Understand the value of materiality and the way it drives G4 reports, grapple with the complexity of selecting material issues and learn how to shape your report around material content.
Disclose with Relevance: Prepare meaningful management approach disclosures and select relevant performance disclosures for (CORE) G4 reports.
Get the Basics Right: Understand the less obvious challenges in G4 Standard Disclosures and how to deal with them.
Make a Plan: Understand how to prepare your first report as a G4 report or make the transition from G3 to G4; select CORE and COMPREHENSIVE options; get the balance of content right for your organization and align content with creativity.
Ice Cream: G4 tastes better with ice-cream!

 

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

The first G4 Sustainability Report in the World

What appears to be the first G4 Sustainability Report in the whole wide world has been published by the City of Warsaw. Wow! Hat's off to Warsaw! That's good news. But then, that's no less that we would expect with a women at the helm! Mayor Hanna Gronkiewicz-Waltz, the Mayor of the City of Warsaw, and a former Chairwoman of the National Bank of Poland, is showing leadership and foresight in publicly declaring a commitment to sustainability.  

 

It's a 14-page self-declared CORE level "integrated sustainability report" covering the City of Warsaw's activities in calendar year 2012. Highlights include retrofitting of Warsaw's public buildings  at an investment of Euro 230 million, investments in renewable energy worth Euro 151 million, boosting biomass energy production, an EU co-funded water treatment facility modernization at a total investment of Euro 769 million and funding of many social, educational, health, sport and cultural activities. Significant progress has been made in fighting crime and improving road safety. Warsaw also boasts the largest percentage of LEED and BREEAM-certified new building construction in the Central and Eastern European region and a new city-wide automated bicycle rental system which is used an average of over 10,000 times per day.  

 

I'll use this example of a public agency report to reflect on the value of G4 reporting in the public sector. We have every right to hold governments and municipal leadership to the same high standards we expect of corporations when it comes to transparency, accountability and management of sustainability impacts. We might argue that it is even more imperative for governments and municipalities to do this, both because they should practice what they preach (if they are encouraging businesses to be more transparent, through legislation or purchasing practices, for example) but also, because governments and cities frame the business environment in which companies operate, and therefore have a primary role in determining the level of sustainability practice that is applied in their geography. So far, very few municipalities around the world have taken up this approach and very few national governments have demanded it from their local municipalities. We even tend to bypass public agencies when thinking about sustainability - we don't see them as having a primary aim of lining the pockets of shareholders and consequently plagued by an inherent conflict between profit and public good, as private corporations tend to be regarded. Yet, legislators at national and local levels have a massive opportunity to drive increased sustainability awareness and practice at so many different levels. Why would we not expect them to lead the way?

That's the context in which we should consider the Warsaw report. It delivers many important messages both with what's written and with what's not written.

First, it advances trust. This report earns my trust. It appears to be authentic in reflecting the city leadership's desire to make sustainable progress and improve quality of life. It's written in plain, simple language, as though you were speaking to one of the city officials. It's to the point, nothing more than the minimum, but it covers some important aspects of sustainable municipal operations. No report is easy to write, and I suspect there have been many hours of discussion and deliberation in the production of this one.

 

Second, it's transparent, up to a point, and as a first report, it's a major breakthrough. If every city produced a report just like this, I believe our world would be an entirely more positive place.

 

Third, it demonstrates leadership. The City of Warsaw is one of the few cities to deliver this kind of report. Even the choice to adopt G4 is the demonstration of a desire to lead an approach which is considered to be best practice and an example and inspiration for all.

 

Fourth, it's there. I always say that 80% of something is better than 100% of nothing. Whether this report is 80% or any %, it's out there. And for that, I give Mayor Hanna and the City of Warsaw a massive triple CSR-Reporting Blog ice-cream cone award.
 

The City of Warsaw's timing is fortuitous. It's due to host the UN climate Change Conference (COP 19) in November 2013. No doubt, the City's first G4 Integrated Sustainability Report will soon be appearing on the COP19 website!

 

The less good news is that the report doesn't quite match up to the great hopes we all have for Next Generation Sustainability Reporting. It's easy to work through this report and say what's wrong about it. We could assert that the report takes a tick-box G3 approach, responding to all indicators in turn, often inadequately, indicating some lack of understanding of the scope and breadth required by G4 reporting, making reference to some of disclosures which are incomplete and sometimes unclear. We could refer to the lack of process demonstrated in determining materiality or to parts of the content which appear to be more about marketing the City's services than about reporting specific sustainability impacts. We could create quite a list of suggestions for improvement.

For example, I would like to see the City of Warsaw continuing to deliver an annual Sustainability Report and doing so with increased  evidence of process and depth. I would like to see more substance to the selection of material issues and a report structure which give these issues more presence in the way that G4 intends, with Disclosures on Management Approach which are more balanced and comprehensive. I would like to see data presented with greater clarity and consistency. Ultimately, I would like to see a report that is self-declared by the City to be G4 CORE to actually be G4 CORE. This one is not, on several levels, and that's rather a shame.

Any organization that delivers a report that claims to be In Accordance with G4 carries a great responsibility to deliver on that promise. In general, misrepresentation of the GRI Reporting guidelines does a disservice to all of us in the reporting world. We saw many abuses of the GRI G3 Reporting Framework and many claims of G3 reports that, when you took the time to look, were not actually G3 reports at all. G4 is an opportunity to use the framework well and represent it with accuracy and integrity. The appeal of being the "first G4 report in the world" or even "any G4 report in the world" should not be at the expense of delivering an accurate, balanced G4 report that matches up to its own product label claim.

I hope this report from Warsaw will be viewed and used by a wide range of stakeholders and perhaps most importantly, the ones who are most directly affected - the city's population. The efforts of the Warsaw municipality to be transparent are an invitation to the people of Warsaw to provide their feedback and input. Additionally, with the European Commission now driving legislation that will require corporations in Europe to report on sustainability, many other cities in the European Union will be well advised to follow Warsaw's lead and set an example to businesses in their areas that will be obliged to produce some form of transparent reporting in the future.

Warsaw is on the right track. Now they need to maintain the pace, drive up their game and leverage the opportunities that sustainability, accountability and transparency will inevitably bring to the ninth largest city in Europe and the capital of Poland.
 

 

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: The Concise Guide to Next Generation Sustainability Reporting AND Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)