False Claims in Sustainability Reports

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of Economics and Business Institute for Human Resources Management, we spent some time reviewing some (as yet unpublished) research that has been conducted by the Vienna team (in collaboration with Middlesex University London, with a team led by Dr.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

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

 

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

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

Let me just repeat that so it's clear:

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

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

Doesn't something sound a bit wrong here?

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

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

 

 

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

 

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

 

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

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

 

 

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

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

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

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

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

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

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

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

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

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

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Mind the Gap! in Sustainability Reporting

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

 

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

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

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

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

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

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

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

 

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

Dr. Sustainability examines G4

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

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

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

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

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

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

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

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

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

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

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

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

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

Dear Dr. Sustainability: When will G4 become obsolete?

Dear Optimist: Probably before it is launched.

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

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

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

Dear NitPicker: I don't think about that.

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

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

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

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

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

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

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

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

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

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

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)

CRRA'13 - here we go!

It's that time of the year again. CRRA time. The call for entries for CRRA '13 is now open. For the uninitiated, CRRA stands for Corporate Responsibility Reporting Awards (or CorporateRegister Reporting Awards!) and it's the brainchild of CorporateRegister.com,  the largest online directory site for Corporate Responsibility and Sustainability reports, numbering over 44,000 reports from over 9,000 companies to date.

 

CorporateRegister.com is the go-to place for reports and reporting information and is one of my absolutely favorite, and mostly used, sites.

 

CRRA '13 will be the sixth annual global online reporting awards and it is truly unique in its reach and scope. You can see the winning line-up for CRRA '12 on their website here, and read about it in my posts here (the winners) and here (the winning SME report from Beyond Business!).

 

This year, the contest is for reports published between 1st October 2011 and 26th October 2012 and profiled on CorporateRegister.com. There are also two important new changes for this year's format:

 

First: Change to the categories.

The SME category has slipped off the edge - which is a big shame - one of my fave categories and a sector badly in need of encouragement for Sustainability Reporting. I guess there are still too few SME's who are taking the plunge. But SME's can still enter the other categories.

 

There is a new category for Innovation in Reporting, designed to reflect new and creative practices "which may be adopted by other companies and help reporting evolve". Innovation can come in many forms - whether it be in structure or design, involvement of stakeholders, application of different guidelines and formats, infographics, new ways of presenting data and more. We are all seeking ways to make reporting more appealing, more accessible, more readable, more widely used and more impactful. Perhaps this category will help us get some new ideas for the reports of the future.

There is another new category - Best Non-Business Report - which is a very welcome addition and will enable not-for-profit organizations, government bodies or cities, universities or other academic institutions or trade associations - just about any organization that is not a business - to gain exposure. This is a great step forward, as non-business sectors have been slowly but steadily increasing their reporting output and there are some impressive reports around. Some of them are large organizations which, in addition to their often socially-oriented mission, must demonstrate accountability for the away they operate and the impacts they generate. Non-business reporters can also enter the other categories, but can now also compete in their own level playing field in this new category as well.

 

You can see the full category overview here.

 

Second: Changes to the selection and voting procedures.

After checking that reports are relevant for the categories they have applied to compete in, all valid entries will be assessed for overall quality by a panel of academics, using the CorporateRegister.com proprietary ‘3C’ framework (Content, Communications, Credibility). Each report will be rated against this framework, irrespective of the categories the reports are competing in. The ten highest rated reports for each category will be short-listed. These reports will then be presented to voters using the online voting platform that we are familiar with from previous year CRRAs. The winners and runners-up in each specific category will be determined by this open online voting process.

 

This is very different from previous CRRAs in which all reports entered were directly open to the public for voting, generating 20 or 30 reports in each category, or more, clearly making it impossible to review all reports and provide a balanced vote. This way, voters can decide amongst the very ‘best’ reports, after an independent, objective and balanced short-listing process, using neutral assessors working within a structured framework. Voters will see only ten reports per category, which offers a manageable possibility of reviewing each report prior to making a selection.  

 

I like this change, and while it will be disappointing for those not short-listed, it will probably offer a much more balanced competition.

As usual, CRRA will be maintaining a strict voting integrity mechanism which prevents people for voting for their own company and other multiple voting attempts which skew results. This is a strength of the CRRA platform and gives confidence that the final results are fair and representative.  

Timeline

Entries are due for submission by 26th October. (Hurry if you are entering your report!) Voting will take place between November and January. The results will be announced at a Gala Evening in Spring 2013.

 

Published a report last year ?

If so, this is the time to seek some recognition. Reporting is not only a responsibility, it's an art. It's not just about reporting, it's about  compelling communication. It's not about the winning, it's about the doing. But if you get to win, well, that's pretty inspiring. We can all learn from great reports.

Watch this space for a review of the short-listed reports as soon as they are public. 

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)

10 reasons NOT to attend a Conference on Sustainability Reporting

Last year I gave you 45 reasons for attending the Smarter Sustainability Reporting conference which was held in London in May. As it turned out, the conference was a massive success, as you can see in my post-conference post. So much so, in fact, that organizers Sustainable Business and edie.net have invited me back to chair the conference a second time. A great honor and lots of fun! 

 

Now, I can give you 45 more reasons to attend the SECOND Smarter Sustainability Reporting Conference which will be held in London in February 2013 (5th February).

But I won't. I don't want to be accused of plagiarism. (Can you plagiarize yourself?)

Instead, I will give you 10 reasons NOT to attend.

10: You don't want to hear from  the top movers and shakers in the sustainability reporting world as you don't believe they can enlighten you with the most up-to-date information on the trends and issues that are shaping the reporting landscape as we move into another year and another reporting cycle. The world is not dynamic. Who needs to stay updated?

9: You don't want to hear about how environmental, social and corporate governance data is analyzed and how to avoid common reporting mistakes from Gregory Elders at the Bloomberg Environmental, Social and Governance Group. You don't make any mistakes at all, correct?

8: You have absolutely no interest in hearing Dr Steve Waygood, Chief Responsible Investment Officer, Aviva Investors talk about the impact of sustainability reports on investor decision making and gaining a first-hand insight into what investors are looking for in your sustainability report. If they want it, your investors will tell you themselves, correct?

7: You don't read reports. You don't believe anyone reads reports. You can't imagine that there is enough to say about reporting for a whole day. You don't believe that over 6,000 reports are being published each year with numbers increasing every single year. You don't think that sustainability reporting needs to be smarter. You think it needs to be dead. Even if your company is producing a Sustainability Report every year, you don't see much mileage in understanding more about how to get greater value from reporting. You are happy lagging behind the crowd. Sometimes not knowing is much easier. 

 

6: You can do without hearing from James Farrar, Vice President Sustainability, SAP on how to streamline information being requested from numerous stakeholders with varying needs. You are doing OK, producing numerous different reports in different formats at different times of the year and who cares if you have added another four people to your department to meet all this information overload?

 

5:  You don't see the point in engaging in a discussion with experts and peers about the implications of determining material topics. Materiality is such an easy thing. You just decide what you want to report about and call it material. The fact that the GRI is putting materiality at the top of the ladder in terms of determining content for GRI G4 reports, and this means materiality across the value chain and not just within the boundaries of your business, and the new Sustainability Accounting Standards Board (SASB) is creating materiality standards which they claim will revolutionize the way reporting happens and the way investors use reports, is not a sign that the entire reporting language and frames of reference are about to change. You don't see the need to invest in understanding materiality. You're happy faking it.

 

4: Why on earth would you give up a whole day to go to a conference where they don't serve ice cream? Come on. Can this be a serious event ?

 

3: You have no interest in learning about linking the on-line and off-line stakeholder engagement experiences from master-reporting-leader, Alberto Andreu Pinillos, Global Managing Director of Public Affairs, Telefónica. What's stakeholder engagement anyway? And on-line is more than it's cracked up to be.  The fact that more companies are engaging with stakeholders in a range of online formats than ever before shouldn't be of concern to you. What you don't Tweet can't hurt you, right ?

2: You have no plans to be in London in February 2013,  and your schedule is totally inflexible. Making room for one of the most interesting events on the sustainability reporting calendar in the UK in 2013 is absolutely impossible. You are overworked, overloaded, overtravelled, overconferenced and underbudgeted. Why change your plans for this one?  The fact that you will gain cutting-edge insights, learn from best-in-class leaders,  have an opportunity to reframe your thinking about sustainability reporting and  related processes, and generally have a totally fun and productive day is not relevant. Just keep going into the office and doing what you're doing. That's ok. Ostriches manage to survive somehow (though some ostrich species are listed as endangered).

1: And finally, the number one reason not to attend the Smarter Sustainability Reporting Conference is that the 5th of February is your birthday and you make it a rule not to attend conferences on your birthday. Of course, if it is your birthday, I am sure that we can arrange a modest celebration (please let me know how many candles). But if it's a matter of principle, or you actually have something better to do on your birthday, then of course, you should not attend. Although all rules have exceptions.

If you found  yourself identifying with any of the above reasons not to attend this conference, then I expect you won't be saying hi in February. Thankfully, the CSR Reporting Blog readership is quite an enlightened, open and curious crowd, so I am sure that at least 9 of the above ten reasons won't apply to you (number 4 is the weak link).  I am optimistic that a bunch of you will want to attend, so I can offer you a discounted rate which you can DM me on twitter or email me to receive.

In the run-up to the conference, I will be chatting with some of the key speakers and introducing some of the themes of the conference in a series of blog posts to whet your appetite. Looking forward to seeing you in London in February! Please don't not attend!

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)

Application Levels: For and Against

Building on the obvious interest in G4, based on the fact that my post, The G4 Exposure Draft Explained, has become the most popular post ever! of the CSR Reporting Blog, with over 3,400 page views to date, I have decided to offer a more detailed review of the question of Application Levels, which if the G4 is approved as is, will fade away into reporting historical oblivion, never to be seen again.

 

The elimination of the A,B,C reporting levels system is controversial. One the one hand, there are obvious abuses of this aspect of the GRI Framework and it can be quite misleading. On the other hand, the competitive nature of what is perceived as a corporate sustainability ranking system may have galvanized organizations into higher levels of transparency and provided a roadmap for strategic sustainability performance development and reporting.

 

Much has already been blogged about Application Levels:

 

Rebecca Gunn, on the ACCSR blog, csrconnect.ed writes: "Most of us who have experience with the Guidelines agree that the existing Application Levels denoted as, “A, B, C” create a level of misrepresentation about the quality of the report or the level of performance of the organisation."

Robert Axelrod on the Fleishman-Hillard Sustainability Blog writes: “You don’t know what you’ve got till it’s gone.”, explaining that it's the Application Level A,B,C terminology that has created confusion and led to a tick-box mentality, and that a grading system of sorts would still be relevant. He adds: "Keep the Application Levels, but tweak them to reflect some of the great concepts found in G4."

 

A letter to the GRI from the German Institut der Wirtschaftspruefer addresses Application Levels saying that "Although we generally support this goal, we believe that the “in accordance” approach might prevent SMEs and other small and medium sized organisations from preparing a sustainability report according with GRI guidelines."

Even before the G4 Exposure draft was published, Alexis Lindsay of the Briefing Note published a for-and-against for Application  Levels, asking "who'd miss them if they were gone" and answering "no-one"!

I also posted on the hype of Application Levels and the way the coveted A or even A+ is abused for the purpose of making companies look good and reports look better than they are.

Feedback in the first GRI G4 Public Comment Period which asked for general input to the development of the G4 Exposure Draft contained some reference to Application Levels. Of the 691 individuals who responded to the question of how the Application Levels system could be improved:

• 89 respondents suggested that the naming of the Application Levels should be changed to remove the grade connotation that is generally linked to the letters A, B and C.
• 76 respondents were of the opinion that the current system works well and does not require any changes.
• 28 respondents said that fundamental changes were needed to the Application Level system and another 28 were of the opinion that GRI should get rid of it altogether.
• 25 respondents suggested that the number of levels should be increased and 16 suggested that a specific SME level should be added.
• 24 respondents were of the opinion that the Application Levels should be sector based.

This is a surprisingly small number of reactions to the Application Level system, and hardly a broad-based mandate for abandoning any form of differential application of the GRI Framework. Only 28 individuals suggested eliminating application levels and 76 said don't change anything. The GRI has now gathered in the feedback on the G4 Exposure Draft, and I suspect the Application Levels question will be one of the harder nuts to crack in the debate as to where the G4 final version will come out.

How many ladders? How many walls?

This debate is further complicated by the fact that G4 proposals promote reporting being tailored to material issues. Instead of being a one-size-fits-all framework as now, the new G4 option to select the most material issues and report only on those (what I am calling "material transparency") means that simply reporting on more stuff is no longer the target. Reporting on the right stuff is the new target. How can a differentiation system work when not everyone has their ladder up against the same wall? How do you assess the transparency and quality of a report when every company picks and chooses their own reference points? G4 does not prescribe a minimum, nor a maximum, number of material issues to report on. A company could select two material issues or thirty, making for a very different kind of report in either case. The GRI Sector Supplements, of which there are very few, having got lost in the general hubbub of GRI priorities, offers a partial response to materiality focus by sector. The new Sustainability Accounting Standards Board is taking the task of pre-defining material issues for a range of sectors into their own hands. But even so, material issues may be framed by sector-specific or geography-specific factors, but they can only ever be company-specific and time-bound to current issues that business strategy and stakeholder input determine. Back to square one. Sustainability Reporting of the future, according to G4, is a pick'n'mix job: "In Accordance" with general disclosures and "self-service" for material disclosures. The assumption may be that no-one wants to know more than the most important issues. But that's a big assumption.   

There are three broad questions here:

• Is there a need for some form of differentiation to indicate different levels of application of the GRI Framework or should it be a simple yes or no (as proposed in the G4 "In Accordance" approach) ?
• If there is a need for differentiation, should A,B,C be replaced and if so, with what?
• How does the question of materiality fit with the need for differentiation? Should Sustainability Reporting be limited to "need-to-know" transparency?

The Need for Differentiation

Let's face it, we live in a competitive world. We make comparisons. We love rankings. We strive to be the best, the leader, the role model, the top of the list. Sustainability Reporting is no different. It's another arena where competition between companies plays out and another channel for companies to demonstrate their prowess. Unless our entire economic system changes, this is not going to change. Companies will look for every opportunity to stand out from the crowd and to show they are better than the rest, or at least, no worse than the worst. Sustainability Reporting cannot ignore this. Arguably, one of the drivers for the spread of sustainability reporting has been this very thirst for competitive leadership and recognition. Without the A, B, C Application Levels, the rise of Sustainability Reporting may have been unremarkable and perhaps even a little boring. 

The challenge arises in the area of differentiation when you try to separate sustainability performance from sustainability reporting. While there is some correlation, you can perform on sustainability and report badly. Or vice versa. The GRI Reporting Framework is about the integrity and quality of reporting, and the level of transparency demonstrated, not about inherent sustainability performance, and this is where the A,B,C has often been abused to create the impression that the company performance is top grade rather than its reporting of it.

 

It's not the system, it's the practice, that's problematic

What purpose, beyond beating your peers, does this differentiation serve? It does have a purpose. It's shorthand for a degree of transparency which corresponds to the sustainability issues that are generally accepted  to be the ones that stakeholders universally find to be important. It's a snapshot of what you can expect to find in the report. It's a promise that the report will contain certain levels of disclosure. It's almost like a brand. A means full transparency, no holes barred. B means getting there. C means boarding the train.  If applied correctly, and all reports actually did deliver the promise, and communications about the different levels were clear and honest, then this may actually be a good system. Those companies which raise the bar create a new standard for other companies to aspire to. This could continue to create momentum for reporting.

 

The problem is in the practice. The minute you define the groundrules, companies start to  cut the corners to get more marketing traction and recognition for less work. Rather than using the Application Levels system as a driver for improved performance and reporting, it has been used primarily as a marketing tool with convenient workarounds for less convenient disclosures.

 

The G4 proposal has responded to the problems of Application Levels by deleting them. That's hardly a creative approach. Instead, the GRI G4 proposes the "In Accordance" threshold which requires all companies to do G4 or not, enabling only one aspect of differentiation. To be or not to be G4. I think this fails to respond to a market-driven need for broader differentiation, which I believe is a legitimate need for companies in competitive markets.

 

What to differentiate?

Should differentiation be around the level of transparency of the report? Or should differentiation adopt some other quality parameters? The "+" which has been used to indicate differentiation through assurance is not addressed in G4. There is no "In Accordance + " and assurance is not part of the minimum G4 threshold. There doesn't really seem to be any other basis for differentiation without getting into complications of how to compare report content. Differentiation on the basis, then, of transparency seems to be the only way to go. Transparency is a catalyst for performance improvement. Companies which report on material issues and disclose on other issues can gain some advantage, as certain stakeholders are interested in issues other than only those deemed most material, and companies can create value and opportunity from addressing issues which may not have hit the top of the materiality radar screen. Sometimes, public disclosure is what drives internal commitment and progress. Materiality, therefore, in G4, could be a minimum, not a maximum.

 

An option for not throwing the baby out with the bathwater

Accepting a greater need for differentiation might lead us to consider another option, which would first require lowering the "In Accordance" threshold to enable wider participation in G4 by all kinds of companies, including the smaller businesses. After all, GRI's mission is to increase the number and quality of reports published. Too high an "In Accordance" threshold will undoubtedly discourage small, new and possibly existing reporters. A lower "In Accordance" threshold should include a core set of disclosures and performance indicators that are truly universal and top priority. Something close to the current C level report of today, with about 25 predefined performance indicators. Beyond this, differentiation can happen. But how?

 

One option might be to use a percentage system. If the G4 has 73 Profile Disclosures, 44 Material Disclosure Aspects and 95 Performance Indicators, there could be a Percent Reported  approach, which would include all the disclosures mandated by the lower "In Accordance" threshold. This could look something like this:

 

• Company A: 132 of a total of 212 disclosures reported = 62% reported
• Company B: 198 of a total of 212 disclosures reported = 93% reported
• Company C: 107 of a total of 212 disclosures reported = 51% reported

Which company is the most transparent? Company B. Could this be confused with the quality of the company or its performance? Unlikely. It's a factual, not judgmental, grade. The problem here is that all disclosures carry equal percentage weight - though some are unquestionably more important than others. This could be addressed by the lower "In Accordance" threshold and its requirement for the minimum Percent Reported to include some of each of the different types of disclosure.

 

Minimum Materiality

This still does not address the issue of materiality. Reporting more stuff is not what G4 claims to be about. If transparency were the only common denominator, this system could work well. How do you factor in the materiality aspect into the differentiation system, when there is no prescriptive guidance for how many material issues to disclose? My response is this: G4 should prescribe that each company select a minimum of five most material issues to be reported on, and this should be part of the "In Accordance" minimum threshold. There is no company that has less than 5 material issues. Companies that wish to go for "Maximum Materiality" can still do so and gain points in the transparency league table.

 

Wrapping it Up

Thinking about Application Levels, Materiality, Transparency and Differentiation, I am led to conclude that G4 should offer a lower but different "In Accordance" threshold which is relevant for every company everywhere, in order to maintain the Sustainability Reporting momentum for all companies. I conclude that differentiation is a good thing and a differentiation mechanism should be available for companies who can and wish to disclose more than minimum, for various internally or externally driven reasons, leveraging it for competitive advantage while establishing new standards that other companies may follow. The Go-No-Go G4 proposal is unimaginative in this respect and could become a blocker for more and better reporting in the future. The option proposed here is just one suggestion. I am sure there are other possibilities, probably better ones.

 

Place your Bets

As the GRI Governing Bodies battle this out between now and the May 2013 launch of G4, we can try a little poll of our own. Click to vote.

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)

Embed CR Better. 20 insights.

Ethical Corporation, one of the leading players in CR business intelligence, news and commentary, not to mention conferences, has recently published a new report entitled: "How to embed Sustainability and Corporate Responsibility in Management Processes." And it's temptingly subtitled: "Save money, minimise risk and generate new business." Actually, this report came as no surprise to me: the lead writer, Judy Kuszewski, had been in touch with me a while back to interview me for my thoughts for Chapter16: Embedding CR in Human Resources. I know a thing or two about that!

 

This Report is a sequel to the very successful first 2009 Embedding Report, which I blogged about in 2009. With Judy at the helm, I knew this would be another great publication. Judy is an independent sustainable business expert with over two decades of working with companies on sustainable development, corporate responsibility and strategic communication challenges. She was previously Director of Client Services at SustainAbility, founding director for the Global Reporting Initiative, and Corporate Programmes Director at the Ceres coalition.

Embedding is as much of a challenge today as it was back in 2009. The report notes: "Embedding CR in business demands a thoughtful process to ensure CR awareness, tools and thinking are present and active in normal company operations, and not a bolt-on or afterthought." I think it goes even beyond "active and present". CR has to be completely and fully integrated into every action by every employee both on and off-duty, in order for all stakeholders to gain optimal benefit. It is the lens which colors every decision, the basis for every interaction and the inspiration for every business solution. That might sound a little poetic and Utopian, which may be somewhat of a break from my usual informative and factual style (yes, I am ambidextrous), but the more I work with organizations, the more I realize that, just as CR is all-encompassing, so Embedding must be all-encompassing also. Employees need to connect with CR thinking and approaches at many different levels. I was recently discussing the benefits of engagement with investors with a large, global client, who is well advanced on the CR road and has a very credible record. The company's investor relations communications, however, make no mention of CR. The company is embedding CR internally but failing to leverage it externally. I can count numerous examples of similar situations where CR is working in one part of a business but not in another. This is all about Embedding. This is about ensuring that CR is the baseline, everywhere, in every function, in every interaction. That's why this 2012 Embedding Report by Ethical Corporation is timely, relevant and serves to offer insights for companies on how to Embed better.

The Report is structured in three parts:

Part One: Embedding Activities: this includes aspects such as identifying the issues, engaging with stakeholders, making the business case, setting goals and targets, developing a roadmap and communicating CR.

Part Two: Case Studies: this includes fabulous insights from GE, IBM, M&S, Petrobras and Unilever.

Part Three: Embedding CR in Corporate Functions: This includes a deep-dive into different functions such as governance, R&D, Value Chain Management, Human Resources and looks at internal processes and community involvement and ends up with a set of conclusions and recommendations.   

I have picked 20 insights that I found to be refreshing, reinforcing and valuable from this report, in no particular order and in no particular hierarchy of importance. Just things I found worthwhile repeating. The following TWENTY insights are all quotes from the Embedding Report.

ONE: In an Ethical Corporation survey, 93% of companies recognize the value of embedding CR into business processes yet only 49% of companies confirm that CR is a clear component of overall company strategy, and 49% or companies do not believe that they  understand what is necessary to do to embed CR into their business.

TWO: Embedding requires a simultaneous top-down and bottom-up approach – to ensure consistency and shared values at the same time as local ownership of issues and impacts.

THREE: Healthy stakeholder relationships can provide a rich source of ideas and enthusiasm that can help tap your company’s innovation potential. They can help you gauge changes in company direction or product offerings. And if relationships are authentic and responsive, stakeholders can help protect your company’s reputation and licence to operate during difficult times.

FOUR: Companies that successfully embed CR in their business practices know that the toughest critics are often internal.

FIVE: Corporate responsibility requires communication throughout the process – with different audiences, for different purposes, using different tools. CR communications can help to bridge the divide for colleagues and management, helping them to understand and feel part of the CR agenda.

SIX: While much effort has been spent on corporate-level sustainability communications, there are many different things stakeholders – internal and external – want and need to understand about sustainability performance. One recent example is the rise in product-related sustainability information. General Motors’ Chevrolet company has instituted a product eco-label, debuting in North America throughout 2012 on the company’s vehicles. Dubbed Ecologic, the label is intended to put clear and substantiated product sustainability information in the hands of consumers where they need it most – the showroom floor.

SEVEN: Join-up communications. Ensure high-level internal and external communications are clearly linked to the company’s CR goals, objectives and strategy, to ensure alignment throughout the company’s activities.

EIGHT: Don’t neglect commercialisation considerations; sustainable R&D needs to be married up with marketing, so make sure you anticipate challenges in introducing more sustainable products into your mainstream product offering, and capitalise on the knowledge and experience of marketing professionals to guide your efforts.

NINE: A company’s sustainability risks and impacts – and its CR potential – may be closely tied to its activities up and down the value chain. Working with raw materials sourcing, contract manufacturing, logistics, distributors and customers can greatly increase your control over your CR objectives. For an increasing number of industries, such value-chain activity is essential to meeting consumer needs, reducing risk and expanding opportunity.

TEN: According to Elaine Cohen, author of the book CSR for HR   – a guide to embedding sustainability through the HR function – “The two aspects of human resources management in sustainability are: how does HR contribute to a business becoming sustainable, with the help of tools and processes that the HR function owns; and how does the HR function itself manage itself sustainably?” In other words, HR is both an agent for implementing a traditional sustainability programme within a company, and as a corporate function is itself subject to corporate responsibility issues, via their role in identifying, hiring and integrating people into the corporate structure.

ELEVEN: Often, the most important first step in incorporating a CR perspective into your operations is to understand your baseline performance against key criteria, though complex global operations and disparate supply chains can still render this analysis exceptionally difficult.

TWELVE: Immediate neighbours or “fenceline communities” are often what companies think of first when they think of CR in the community. Local people in the towns, cities and settlements where companies are active and have a presence are among the most immediately affected by company operations. ... Especially in areas of lower economic and social development, a company’s presence can have an enormous impact on local people and society.

THIRTEEN: Companies should be aware of the role of social media in giving voice to stakeholders, including local communities. Social media allows groups – even small community groups – to extend and magnify their messages, reaching much more influential audiences than they might have otherwise.

FOURTEEN: Consider how NGO partnerships can help you meet community needs and aspirations while making use of your core strengths and position as a business.

FIFTEEN: Corporate responsibility can get pretty complex at the best of times – what with complex scientific aspects such as biodiversity, cultural and managerial practices such as human rights, and issues that span the technical and political such as water use, it’s inevitable that there will need to be some specialisation. ... Colleagues in nearly all parts of the business need to have some basic shared understanding and commitment to ensure that all the disparate parts come together in the end. CR cannot be seen as the responsibility of the CR function.

SIXTEEN: The way to do it, as the adage says, is “a bite at a time”. Some sustainability challenges can seem so immense and overwhelming that people – and companies – can find themselves tuning out in despair, or minimising the scale of the problems as a means of rationalising their failure to solve them.

SEVENTEEN: Setting and delivering on targets requires a fuller implementation plan – a road map – to bring together a clarification of the company’s objectives with the physical, financial, human and intellectual resources required to get there.

EIGHTEEN: Green lens: Looking at the business through a different “green lens” means people spot new opportunities to reduce impacts and costs by less obvious means. (M&S Case Study)

NINETEEN: There are clear and growing examples of board and executive failures to meet stakeholders’ expectations on CR issues, which may sometimes come as a surprise to the companies involved. From allegations of nurturing a culture of risk-taking to the excessive executive pay packages that were the target of the “shareholder spring” of 2012 annual meetings, many boards appear caught out by stakeholder expectations.

TWENTY: Achieve a few early CR successes, and you might be excused for wanting to rest on your laurels. But CR isn’t something that can be “done” and left on a shelf – it’s a continual part of risk management and market creation.

Great gems of wisdom and advice, and nuggets of thought which lead to action to Embed better. Ironically, the report closes out with the statement: "Perhaps the larger goal is to stop doing “corporate responsibility” in favour of just doing business."  Here we have the Catch 22: One the one hand, we need to retain focus on CR in order to ensure that "just doing business" doesn't mean business which is inequitable, lacks accountability for social and environmental impacts and makes short-term profit the main goal, while on the other hand, we need to embed CR to such an extent that it is so well integrated in everything a business does that it's barely noticeable. That's the challenge. Embedding without the join showing. Not many companies have achieved this yet.... but there are a few en route, such as those identified in the case studies in the Ethical Corporation Report "How to embed Sustainability and Corporate Responsibility in Management Processes." If you are struggling to embed without the join showing, this report offers many more insights that the twenty I have shared.

While you are thinking about that, my next mission is to embed some ice cream. The challenge is to do that without the join (calories) showing. Perhaps CR is an easier option after all.

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)

GSK Romania: Valuing your Trust

"Valuing your Trust" is the title of the first local CSR report of GSK Romania, a report which conforms to Application Level B of the GRI framework, and which was launched this week at a well-attended press conference in Bucharest. At a time when trust in business is often thought of as an oxymoron, GSK Romania has gone public with a very clear statement on what it means to be a business which is worthy of trust. Pascal Prigent, General Manager of GSK Pharma in Romania, explained in his opening remarks to the press: " In order to survive, businesses today need to work in collaboration and partnership, and strive to create shared value, so that they can deliver economic and social benefits simultaneously. Trust is an essential ingredient of survival."

If transparency is a demonstration of trust, then GSK shows leadership as the first local pharma company to publish a CSR Report and also the first Romanian company to become an organizational stakeholder of the GRI. This is highly significant in a market in which  very few companies have ventured to report on Sustainability: the GRI Sustainability Disclosure Database shows only 6 companies that have reported using the GRI Framework (5 at Level C and one at Level B), while CorporateRegister.com shows thirty reports published in Romania by just seven companies between 2006 and today.

 

In this first report (Disclosure: I was GSK Romania's reporting consultant and assisted in writing the report) which is available for download in English and Romanian here, GSK Romania explains the ways in which this significant local pharma player is building and sustaining trust with local stakeholders, including regulators, customers, patient advocacy groups, community associations and of course, employees.

GSK in Romania is comprised of four different entities a Pharma company, a Consumer Healthcare Company, a Distribution business (Europharm) and a Manufacturing Operation which exports to over 80 countries. In Pharma, GSK Romania  delivers innovative medicines and vaccines in 13 therapeutical areas, with over 2,000 vaccines per day being administered, and distribution of products to over 6,000 Points of Sale throughout the country. The entire GSK operation in Romania employs just over 1,000 people and is the most diversified pharmaceutical business in the country, and the only pharma company to manufacture innovative drugs locally. GSK Romania aligns with GSK's global mission  to improve the quality of human life by enabling people to do more, feel better and live longer, while making this specifically relevant to Romanian stakeholders by adding the objective to contribute to increasing the life expectancy of the Romanian people which is currently the lowest in Europe, and to support the transformation of the healthcare sector in Romania which suffers from a weak political leadership, under-budgeting and many problems which restrict access to medicine. GSK Romania is a major contributor to the state budget, with EURO 75 million paid in taxes during the last 2 years.

Some highlights of the GSK Romania CSR performance over 2011:

• EURO 719,940 invested in the community in Romania.
• EURO 29,000 provided to support  11 Patient Associations.
• Over 3,000 hours in employee training.
• Developing Romanian professional talent: six GSK Romanians are working in management GSK roles abroad.
• 40% reduction in carbon emissions per ton of product delivered.
• 23% reduction in manufacturing waste.
• Absolute energy consumption reduction of 7.5% in manufacturing, despite 9% increase in output during the same period.
• Zero lost-time injuries recorded.
• Gender balance with 61% female employees, 62% women in management and 50% women in executive leadership positions.
• 68% of employees engaged in volunteering in the community with over 6,000 volunteer hours.
• Main community partners: Save the Children Romania, United Way, Save the Delta and Danube Association, Habitat for Humanity, and Hospice Casa Sperantei. One example of an inspiring community partnership is with Save the Children in a five year plan to reduce child mortality in Romania with a new programme called “Every Child Matters”. Over 600 children and 400 pregnant women were supported by this programme in 2011, in 16 rural areas of Romania.

It is always a pleasure to work with an organization that oozes passion and commitment to a more sustainable future, and my experience with GSK in Romania is of a company built of individuals who live the value of trust and are working hard to improve perceptions about the pharma industry by putting patients first and creating new standards of ethical behavior in the sector in Romania.

Take a look at GSK's report, and as always, please give feedback :)
 

 

For interest, a small selection of links to press coverage (in Romanian):

• Finantistii: GSK a lansat primul raport de sustenabilitate al unei companii farmaceutice din Romania
• Cariere: În 2011, GSK România a investit 719.940 de euro în comunitate
• Media Academica: GSK România a prezentat primul raport de responsabilitate socială din industria farma
• CommunicateMedicale: Primul Raport de Responsabilitate Corporativa al unei companii farmaceutice in Romania
• Green Report: GSK, primul raport de CSR din industria farma autohtona
• SfatulMedicului: GSK publica primul raport de sustenabilitate al unei companii farmaceutice din Romania
• CSRMedia: GlaxoSmithKline a realizat primul sau Raport de Responsabilitate Corporativa 
• Manager.ro: GSK publica primul raport de sustenabilitate al unei companii farmaceutice din Romania

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)