Nine things of note in Strauss Group's ninth report

The Sustainability Reporting journey is always so fascinating. The companies that I love to work with treat Sustainability Reporting as an opportunity for deep reflection, discussion, debate, consideration, revision, re-framing and renewal. While these processes often happen throughout the year, the choice to publish a Sustainability Report by a certain date ensures that these process streams are priority-funneled into one orderly alignment of content that becomes the company's account of its impacts and its unique sustainability story.

Strauss Group has been doing this now for the past nine years, and while you might think that it's easy to simply pick up with each new report where the last one left off, this is never the case. Our world is so dynamic, our days are so crammed with everything and great companies do so much in one year, that each new Sustainability Report is a new challenge and a new opportunity. Hence the reflection, debate and renewal. And this this case, Strauss Group's ninth Sustainability Report is a unique story, a creative presentation and a compelling read.  

1. Listening, Acting, Improving
This year, the focus for Strauss was Listening, Acting, Improving. It was driven by deep introspection throughout the year, and consultation with stakeholders, especially consumers, who provided important and insightful feedback to Strauss Group about things that go right to the core of the business and the way the business is conducted. Osnat Golan, VP for Communications, Digital and Sustainability at Strauss Group made the point: "During the past two years, we have learned that the highest priorities for our consumers are fair pricing and helping to curb the rising cost of living, as well as advancing healthy nutrition through our products." This year, Strauss Group's report reflects the actions the Group has taken in direct response to stakeholder concerns and expectations.

2. Fair product pricing
There are few, if any, food companies that address pricing policy in their Sustainability Reports. What is the responsibility of a food company to price food products so that a broader spectrum of the population can afford to buy them? How many companies acknowledge this as a responsibility? I suspect that Strauss Group is pioneering in its approach to respond to the rising costs of living and the affordability of basic foodstuffs by reducing consumer list prices across a range of products in the order of between 2.5% and 22.8% in its home market in Israel in 2015. In a year when consumers were continuing to assertively state that food pricing has put certain products beyond their reach, Strauss became the first company (and the only one to date) in the local market to listen, act and improve. These price reductions are significant. After all, corporate responsibility and sustainability is not just about saving the planet. It's also about contributing to the quality of life on the planet. Fair pricing is a highly sensitive, subjective and complex issue - it takes a bold company to accept "fair pricing" as an objective and take measures to implement a fair price policy for consumers.

3. Supporting employees
The second initiative that ran alongside support for consumers in 2015 was support for employees. Employees are consumers too, and if the cost of living rises, they feel the pinch just as other consumers do. Many companies today accept the concept of "living wage" and implement policies to compensate employees in line with a target wage level. At Strauss in Israel, following the direct input of hundreds of employees in feedback meetings over the past two years, Strauss understood the need to protect lower income employees and took this seriously as an element of the company's approach to corporate responsibility and its social license to operate. In the past two years, Strauss boosted benefits for employees at the lower end of the income scale and in 2015, set the way for several very significant additions, including a fixed proprietary minimum wage around 7% higher that the legally mandated level, child care support worth thousands of dollars per year for eligible employees and the opportunity to contribute to an employer-matched tax-free savings fund that helps employees protect their future with an accessible savings program. In addition, employees receive a host of other benefits to help them cope with the economic challenges of simply making it through the month in the black.

4. The Kitchen
The progress made at The Kitchen is worthy of note in Strauss Group's ninth report. The Kitchen is a pioneering initiative by Strauss with the support of the Chief Scientist of Israel, designed to advance food-tech in Israel to deliver new technologies that improve the sustainability of food production or deliver new benefits for consumers. This is a contribution to the advancement of the food industry - the technologies that are developed will not necessarily used by Strauss Group in their operations. With an investment of $25 million over 8 years (40% funded by Strauss, the remainder by the Israeli government), in its first year of activity, the Kitchen has already propelled three amazingly innovative food-tech startups into a new sphere of development and commercial activity. Entrepreneurs would have a hard time accelerating their development without such support. Enabling them to get on the map is a significantly positive sustainability impact.

 

5. The performance

In one year, since the last report, Strauss Group has made significant progress on several fronts, and the performance highlights are delivered up front for readers who want an overview and not an extensive read. One summary infographic for each main section of the report does a good job in pointing readers in the direction of what's most significant.

6. The design elements

Of course, Sustainability Reports are about content, not design. But design that brings reports to life makes it fun for us to read the content. It demonstrates an intent to produce a document that will encourage readership, rather than a stuffy old PDF crammed with text that turns you off before you get to page 2. In 2015, the folks at Strauss Group's long-standing report designer, Studio Merhav, have excelled themselves in creative design that supports the narrative and makes this report a delight to read. Infographics blended with photos and freehand design cause you to stop and look at the imagery as you read the report, giving you time to consider the meaning and the messages that they reflect. A world away from the Stock era and hand-cupped globes of the early days of reporting. Here are a few examples. Aren't they fabulous? 

 

7. Environmental data presentation

Another design feature in this ninth report is the presentation of environmental data. Instead of the usual graphs and charts, environmental data is presented in a way which makes it fun to actually look at the numbers. This presentation supplements the detailed performance tables over several years that are included in the report for those who want the specific numbers. But for most of us who want to see the big picture quickly, this presentation does the job. 

8. The credits

Not many companies include credits to those who work on the report. Strauss Group has always done that. Credits to providers who have worked on the report is an expression of the respect Strauss has for other businesses, small businesses, as it happens, and demonstrates another aspect of both transparency and social responsibility. (At this point, it's appropriate to disclose that I worked on this report, together with my team at Beyond Business - the fourth report we have supported for Strauss Group alongside additional consulting work on different aspects of strategy development. It is always a pleasure and an honor to work with Strauss.)

9. Daniela

The achievements of Sustainability Reporting Managers often go unsung in our reporting world. A few present at conferences, a few write blogs, but most of the hard work in reporting is driven by passionate, skilled and impressively dedicated individuals who mobilize entire organizations in order to get a result their companies can be proud of - most of whom we never get to know. The achievements of Reporting Managers are no small thing, and real credit is due to them. So it is with Daniela Prusky-Sion, Strauss Group's Sustainability and Internal Comms Director, who has led this work for several years. Daniela is a dynamo, never tiring in her efforts to do things better, do things right and do more things to advance Strauss Group's strategic approach to sustainability and improved contribution. Reports under her watch get better and better.

As usual, take a look! Give feedback!

elaine cohen, CSR consultant, 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 Twitter (@elainecohen)  or via my business website www.b-yond.biz   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine: info@b-yond.biz 

Strauss Group: a special 7th report

I am always delighted to showcase reports we have worked on for our clients, and this month, Strauss Group published its seventh annual Sustainability Report.

Strauss Group is an international corporation with a portfolio of five companies in the food and beverage sector, headquartered in Israel, active in 24 countries and generating $2.35 billion in consolidated sales in 2013. The Group directly employs over 13,500 people.  

7 is a very special number in many ways. It's the lowest natural number that cannot be represented as the sum of the squares of three integers. 7 is the aliquot sum of one number, the cubic number 8 and is the base of the 7-aliquot tree. 7 is the only dimension, besides the familiar 3, in which a vector cross product can be defined. 7 is the lowest dimension of a known exotic sphere. Of course, if you understood all of that, you are way more intelligent than I am. Or probably than anyone I know. I copy-pasted these 7-facts from Wikipedia. Impressive, right? In the Jewish religion, 7 is special in different ways. More copy-paste - here we come: 7 is one of the greatest power numbers in Judaism, representing Creation, good fortune, and blessing. The Bible is replete with things grouped in 7. Besides the Sabbath, the 7th day, there are 7 laws of Noah and 7 Patriarchs and Matriarchs. Several Jewish holidays are 7 days long, and priestly ordination takes 7 days. The Land of Israel was allowed to lie fallow one year in 7. The menorah in the Temple has 7 branches. There's more from the Rabbi ... check it out here. In numerology, the number 7 is the seeker, the thinker, the searcher of Truth. The 7 doesn't take anything at face value - it is always trying to understand the underlying, hidden truths. The 7 knows that nothing is exactly as it seems and that reality is often hidden behind illusions. More for numerologists here. In gambling, number 7 is really lucky. According to the Psychic Library website, on July 7, 2007, the casinos were full up as hopefuls tried to beat the lucky date 07/07/07 (maybe they also went at 07:07 in the morning!) Someone even wrote a book about the magical, amazing and popular number 7. 

So, having established that 7 is special, we might then expect something special from Strauss Group's 7th Sustainability Report. Here are 7 special things about Strauss Group's 7th Sustainability Report.

First, it's prepared in accordance with GRI G4 (core), a first for Strauss. So far, worldwide, just a few hundred companies have ventured into G4 territory. Actually, the stretch was not overly significant for Strauss, as a deep materiality review had been conducted in 2012 and presented in Strauss's 2012 report. In 2013, in preparation for this report, further consultation with stakeholders was conducted and resulted in a revised focus on six core material issues. The main narrative of the report is aligned with these six material themes. 

Second, each materiality-based chapter presents the core issues, aligned strategic goals, GRI G4 material Aspects and reported Performance Indicators. As you will know if you have read my G4-Game-changer series, this is a critical element of a G4 report. There must be an audit trail from strategy to materiality to performance. The Strauss Group report ensures this is as clear as you can get. 

Third, this report presents Strauss Groups's 2020 Sustainability Strategy. Strauss Group has been assimilating sustainability practices into its operations for many years. This is the first time the Group has worked across company-boundaries and created a global corporate multi-year strategy with measurable targets. The strategy has two elements: impact and performance. Each has three dimensions.

In the Impact element, the three dimensions relate to the direct connection of stakeholders to the company. Colleagues (employees) are the first degree of impact. They are the first to experience the way the company behaves toward them, and they are also the ambassadors of the company and define the way the company impacts other stakeholders. Consumers are a much larger group, of course, and they are directly impacted by the product quality, choice, availability, access and messaging of Strauss Group. The way Strauss impacts consumers has a direct result on the quality of their lives and the way they connect to the company's products. Finally, the Citizenship dimension represents Strauss Group's impacts on society, the environment and all relevant stakeholders. By improving impacts in a spirit of citizenship, ethical behavior, efficient resource management and transparency, Strauss Group continues to make a positive impact as a good corporate citizen. 

In each dimension, the 2020 Sustainability Strategy defines 3 levels of performance - meet, exceed and lead. Meet refers to meeting the basic performance expectations of society and all stakeholders in relation to commonly accepted standards of responsible behavior including governance, compliance and ethics. Exceed represents continuous improvement, exceeding prior performance in certain strategically defined performance areas. Lead refers to a smaller number of performance areas where Strauss aspires to make significant progress and achieve levels of impact that can be considered leading performance at a global level. In this way, the Sustainability Strategy defines the scope and scale and degree of impact improvement that Strauss Group plans to achieve in the next few years. 

Fourth, Aron Cramer, CEO of BSR and one of the leading thinkers and opinion-leaders in sustainability today, reviewed Strauss's material issues and strategic direction and provided guidance. "Strauss should be focused on real issues that are driven by core products. These could include enhancing consumer choice, helping consumers understand the health implications of consumption habits, through product labeling and other means, and sustainable sourcing." His full commentary can be found in the report.  

Fifth, the people. Strauss people appear on many pages of this report and they are the ones that make it all happen. Working with Strauss Group, we are privileged to meet many employees in the course of our varied interactions with Strauss around the world, and we can testify to the Strauss spirit and values that motivate and inspire employees to do great things. Employee engagement at Strauss reaches 92% in parts of the Group, based on employee surveys, and that's what makes this 7th report (and all previous ones) special. 

Sixth, the infographic. It's always good to get the report highlights all in one place. If you are a numbers person, this is the page for you.

7th, is the fact that it's the 7th. Delivering a sustainability report year after year is no easy task. Strauss Group is the only Israel-based company to date that has published  7 reports, year after year, since 2008, demonstrating not only a commitment to transparency and continuous improvement, but also a commitment to local leadership and best practice. 

For us at Beyond Business, supporting clients such as Strauss, as we do around the world, is a privilege and we are delighted to have been able to help create this 7th report. 

Oh and by the way, I should also mention that the number 7 is very relevant to the world of ice cream too. I happened to come across, in my search for all things 7, this announcement by Perry's Ice Cream of 7 new flavors for 2014.  They all sound delicious. As 2014 is nearly over, I had better start tasting.....

elaine cohen, CSR consultant, 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)

Sustainability due diligence... over coffee

One of the things I always wonder when I hear about acquisitions of smaller companies by larger companies is to what extent sustainability due dilligence formed part of the acquisition deliberations and whether an assessment of social and environmental risks was included in the analysis and final decision to buy. So when today, I learned of Strauss Group's acquisiton of the Russian Ambassador Coffee brand, my first thoughts went to whether this new purchase will be a sustainability asset or a sustainability liability. Strauss Group is developing its sustainability journey and coffee is an important and highly strategic part of the company's portfolio. Strauss's most recent sustainability report can be found here.

A review of the Ambassador brand website reveals values:  Professional, Open minded, Ethical, Trustworthy, Competitive, Smart and also that all coffee processing from harvesting to transportation of beans is certified by the FNC (Federacion Nacional de Cafeteros de Colombia)- a Columbian state body, founded in 1927 as a business cooperative that promotes the production and export of Colombian coffee, representing more than 553,000 coffee growers, most of whom are small family owned farms of less than about 4 acres.

What is also interesting about the FNC is their Sustainability Report, which covers eight decades! Yes, that's right. Most companies have trouble reporting sustainability performance for one year, but the FNC has managed to cram the years 1927 - 2010 into one report of 175 pages. You can download it here. It's a first report of the Federation and includes a GRI Index and actually, probably anything you ever wanted to know about Columbian coffee. One learns so much from Sustainability Reports, as I have said before on this blog.

So here's an example - a  little Columbian coffee quiz (Answers below. No prizes. Just answers):

1. What is a coffee cherry?
2. What is Juan Valdez's mule called and what does she remnind us of?
3. Who is Juan Valdez?
4. What effect did corn and bean intercropping have on coffee growers' income in 2010?
5. What is intercropping?
6. What actions can be taken to preserve coffee quality and contribute to the sustainability of coffee growing regions ?
7. What is the most popular flavor of ice cream in Columbia?  

The FNC report is primarily a good news report about the activities of the Federation to preserve, protect and promote the Columbian coffee industry, ensuring fair prices and added value options for specialty coffee and sustainable livelihoods for the coffee growers of Columbia, as well as encouraging the development of environmentally friendly cofee growing. After a brief glance at the report, it does seem that the Federation is making a positive difference. While this type of report does not quite conform to the GRI framework as it refers to a sector rather than one company, and relies on case studies and stories rather than actual data about the impacts of the sector, it does offer some interesting insights into sustainability issues and challenges in the coffee business in Columbia. Perhaps the real power of a Federation such as this whose members are small family operations would be to actually harvest data from the member companies on certain social and environmental parameters to measure sustainability impacts accross the board. I have written about association- type reports also in the past. It's a delicate balance between a sector marketing effort and a materiality driven sustainability performance report. The FNC's report is pretty much like most of the others, tending towards the marketing end.

Anyway, I wonder if the team at Strauss Group who finalized the Ambassador deal read this report or considered sustainability aspects of this newly acquired business prior to signing away $10.4 million. Perhaps in terms of coffee sourcing, there maybe cause for optimism, but this, of course, is only one aspect of the overall deal. 

And for those of you who have waited patiently for the Quiz Answers, here they are:

1. The fruit of the coffee plant which is picked when ripe. Each cherry contains 2 coffee beans.
2. The mule is called Conchita and she is a reminder of the challenging mountain topography that produces mild Colombian coffee.[Sic].
3. The icon of Columbian coffee, created in 1960, representing trust and family values. 
4. It made them an additional $123 million.
5. Coffee trees can be planted in an overlapping, inter-mixed fashion, called intercropping, with other plants such as tamarillo fruit trees, plantain, blackberry and cocoa trees, among others. Some of these crops, such as corn and beans, help to increase the productivity of the land.
6. Planting across slopes to help avoid soil erosion; reliable seeds; ecological seed-beds; pest, disease and weed control; shade-systems for coffee cultivation; environmentally friendly milling processes which use less water and result in less waste water.
7. Chunky Monkey. Coffee flavor. Of course.  

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Starbucks sustainability reporting challenges

Starbucks 2010  Year in Review  tenth Corporate Responsibility update is now online and downloadable, complete with separate scorecard (PDF).   2 out of 12 goals achieved, 6 on track, 3 needing improvement and one not achieved (reduce energy consumption in company-owned stores by 25% by 2010 using 2008 as a baseline - only 1.6% was achieved in 2010 - the target has now been pushed back to 2015). Not a totally bad picture, indicating the challenges of a continuing journey against measurable sustainability goals. The clarity of presentation and the honesty of the update against targets is positive. Also, I still love those little icons on the Starbucks online report site, which jump and wiggle about when you click on them. The report claims to conform to the GRI Framework at application level B+ with a downloadable index  and a (brief and rather limited)  assurance statement from Moss Adams Accounting firm, covering only coffee purchasing practices.  

Starbucks new report is exactly what it says it is - an update of the 2009 online report which I blogged about last year. Same format, roughly the same overall content, specific updates. A reference to stakeholder engagement, which was lacking in 2009, is still lacking in 2010. In fact, the three GRI profile disclosures which require a full response at GRI B level are not covered, because "there is no information available" or they are "not applicable". These indicators are:

4.15:   Basis for identification and selection of stakeholders with whom to engage.
4.16: Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.
4.17:  Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

In addition, according to Starbucks GRI Index, the report responds in full to only 14 Performance Indicators, and not the minimum of 20 required for a B level report. This report does not appear to conform to Application Level B of the GRI. I find this rather startling, for a company who works hard to build trust and advance sustainable development. Integrity in reporting also includes representing your report in an appropriate way.  I may not know my Frappucino from my Macchiato but I do know how to analyze a GRI report.  

Some of you may accuse me of a tick-boxing approach to reporting by honing in on Starbucks adherence to the GRI framework, rather than focus on the material issues and sustainability performance. You may be right. In all the reports I read, write and review, I look for clues of honest representation of what we can expect to find and this includes whether the report meets its own declared standard. No apologies for that.

Anyway, moving on to look at Starbucks sustainability program, I started with coffee sourcing. Starbucks is not surprisingly one of the largest users of specialty coffee in the world purchasing 269 million pounds of coffee in fiscal 2010. 84% of that was from C.A.F.E sources (Coffee and Farmer Equity Practices) which are Starbucks guidelines for ethically sourced coffee.  This is a great achievement, shows commitment to an ethical supply chain, and progress is evident. Starbucks target is to reach 100%  C.A.F.E sourced coffee by 2015. Since 2008, Starbucks has moved from 77% C.A.F.E sourced coffee to 84% in 2010. That's 16% in 5 years to go,  (over 3% per year) after an achievement of 7% in 3 years (just over 2% per year). I am wondering how Starbucks plans to achieve this stretching target and the implications for Starbucks coffee sourcing and the cost of an espresso. I would have liked to have read more about this in the Starbucks report.

Similarly, in another major area, highly material for the Starbucks business - recycling and reusable cups - Starbucks is way behind the goals it set. For example, the Starbucks goal is to serve 25% of beverages in reusable cups by 2015. Today, in 2010, this stands at only 1.8%, up only by 0.5% in the past three years. I would have liked to have read more about how Starbucks believes it can meet this target in just over 4 years' time. In an interview with Starbucks VP for Global Responsibility, Ben Packard, posted on Triple Pundit, Ben says that the cup is "not the most significant environmental impact" that Starbucks faces - he stresses overall energy reduction and use of renewable energy as the key areas of impact. 58% of energy used in Starbucks owned stores comes from renewable energy, more than double last year, making Starbucks one of the "top five green power purchasers in the country". Starbucks now plans to have all 100% renewable energy at company owned stores by 2015.

Starbucks is clearly serious about sustainability and doing much more than many. Starbucks has set ambitious targets and does not hide the complexities of meeting them. The massive potential to influence consumer practices through the billions of customers who visit Starbucks all over the globe each year is both a responsibility and an opportunity for Starbucks and it's squarely on the agenda. The far-reaching impact Starbucks has on coffee-growing communities is also a central element of Starbucks sustainability and the Company is active in this area too.

Overall, I think the Starbucks 2010 Report is evidence of the challenges any company faces when setting ambitious targets and aligning the organization, as well as external stakeholders, to meet them. It shows that Starbucks is making progress, though I feel the Company's reporting could be more forward looking and disclose more specific plans to achieve tough targets. In addition, I would recommend that Starbucks be more comprehensive in terms of the level of transparency of its reporting and more rigorous in terms of the way the GRI framework is applied.

And now, time for coffee. Or should that be a caramel frappucino? Or a gingerbread latte ? Or an espresso con panna? Or a peppermint mocha? Or a pumpkin spice latte? Or even a Tazo® Green Tea Crème Frappuccino® Blended Beverage? Hmm. Seems like choosing what to drink at Starbucks is no less challenging than implementing a sustainability program.

elaine cohen, CSR consultant, Sustainabilty 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  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)