Tag Archives: corporate responsibility reporting

Material that won’t lose the plot: part II

I’ve been blogging for a couple of years and according to my analytics, the most popular post I’ve written so far is on the topic of materiality.

It’s still a hot topic in the sustainability reporting field. As it should be. Materiality is central to the strategy and story that a sustainability report seeks to communicate to an organisation’s stakeholders.

I came across this GRI blog post answering a question about how materiality will be examined as part of the GRI’s development of the next generation of its reporting guidelines, the ‘G4‘.

Two points stood out from the GRI’s answer:

1. The Materiality Principle is not under question in the G4.

2. One of the main focus areas of the G4 is to ‘improve considerably guidance around the definition of what is material (from different perspectives)’.

Point #2 is important. Reporters need as much help and guidance as they can get on establishing a robust materiality assessment process that is effective yet practical and logical. I’m looking forward to seeing how this materialises (excuse the pun) in the G4.

I’ve registered to take part in the G4 public comment period; what about you?

Three big questions for every CSR Manager (and a few hints on the answers)

Leave a reply

So we’re off and running in 2012. Places to go, people to see. Work to do. Lots. So what should take priority for those with Corporate Responsibility reporting responsibilities? These three questions may help:

What are you doing to champion the value of integrated reporting within your organisation? It’s the latest push in the CSR/Sustainability field and for good reason. The case for greater integration between financial and non-financial performance is clear. Yet it’s always the how you go about adapting new concepts to your organisation’s strategy and culture that makes or breaks the change process. The IIRC’s discussion paper Towards Integrated Reporting includes some practical information on alternative pathways to integrated reporting (p20).
Is your materiality assessment process robust enough? Regardless of your approach to reporting (stand alone versus combined versus integrated), this is the cornerstone of any good report and it’s only as good as the inputs and the analysis and engagement process that supports it. Now is a good time to ask the hard questions: is your materiality assessment done frequently enough? Have you engaged the right people internally at the right time in the process? Have you linked your process to other strategic planning efforts within the organisation? Have you done our best to seek input from key external stakeholders? Can you prove it? Do you need to address gaps with further research? AccountAbility’s five-part materiality test is a good reference point for what information to consider and disclose as part of this process.
Are you communicating the right information to the right stakeholders in the right format and in the right forums? While the push towards integrated reporting is gaining pace, so too is the need to package up information for stakeholders that is relevant and accessible. So while the final reporting product is evolving into a more strategic, succinct and compelling performance narrative, there are additional demands to segment that story for key stakeholders. Communication planning is a core part of the CR reporting process and understanding stakeholder communication and engagement preferences should be a priority right from the start. What’s the point of all that work if no-one inside or outside your organisation uses the information?

If you’re still struggling with the answers to these questions and need a hand, let me know.

It’s what I do.

Sustainability, the media and holistic performance: a conversation with the ABC’s Dr Mike McCluskey (Part 1 of 2)

Leave a reply

In the wake of the News of the World phone hacking scandal in July this year, I wrote a post suggesting media organisations would do well to explore the Global Reporting Initiative’s (GRI) draft Media Sector Supplement (MSS). Why? Because it contains some important and timely signposts in areas such as governance, content quality and product responsibility that if adapted, could point some media organisations in the direction of building or rebuilding trust between themselves and their audiences.

Australian Broadcasting Corporation Chief Executive Officer, Radio Australia and former Head of Corporate Social Responsibility, Dr Mike McCluskey became a member of the MSS Working Group at its inception in 2009.

I spoke with him recently about the experience of participating in a GRI multi-stakeholder process and why he thinks the MSS is a valuable tool for assessing the sector’s performance through a more holistic framework.

How the ABC got involved with the GRI’s Media Sector Supplement

The ABC was involved with the Corporate Responsibility Index (CRI) through the St James Ethics Centre, and at that time while we were undertaking that Index I got to know a number of people. The St James Ethics Centre was asked if they knew any Australian media practitioners who would be interested in participating in the MSS. I didn’t know anything about it at that time and was put in touch with a number of people who were from the GRI and some associated organisations to see if the ABC would be interested. We discussed it extensively to see if there was merit in the ABC participating and agreed that there was.

What it’s like to participate in the GRI’s multi-stakeholder process

I found it to be particularly good, actually. I think if we work in the media, we deal with multiple stakeholders every day. Whether it’s more than any other industry, I can’t say. But what I can say is that our total business is involved with stakeholder involvement and engagement one way or another. I think it’s tremendous for us to be considering the impact of media in its broadest context by considering the opinions of a wide stakeholder group. Is it wide enough or truly representative of the wider community or is it specific interest groups? Only time will tell but I think every effort is being made by the GRI and the working group to reflect as broad a cross section of stakeholder interests as possible.

We’ve had some wonderful debates and conversations that assisted us in addressing issues that some of us might not have thought about. While sometimes we may have got down into a narrow focus on a specific area, and even though many people come with a specific vested interest from a stakeholder group, what they bring to the table is a viewpoint that could be applied in a variety of different ways.

On the impact of the multi-stakeholder process on his approach to corporate responsibility

I’ve learnt an enormous amount. I think I’ve learnt a lot not just about how we operate in Australia but how the media operates universally. I learnt a lot about the struggles that many media organisations have in trying to be transparent, trying to apply the principles of ethics, independence, accountability, accuracy and balance. All easy words to say. Yet put yourself in a country where journalists’ families may be threatened if they do a story and it’s a totally different ballgame.

Here in Australia we have high governance principles at the government and corporate sector, we have open and huge debates when that governance is shown to be wanting, but in many countries that isn’t the case. Media organisations struggle to have that level of transparency, independence and accuracy; even finding people willing to talk is extremely difficult in some countries. So I think there’s nothing wrong with us understanding that it’s not a level playing field in the media across the world – it’s quite healthy for us to understand.

Nevertheless, it’s also important for us to acknowledge that the principles we aspire to are identical. We all aspire to have independent content that is accurate, balanced and demonstrates the plurality of thought that might be in our countries. Now I can’t say every country of the world and every media organisation, but everyone at the table shared that view and they wouldn’t be participating if they didn’t share that view. That was easy – coming up with the principles. The hard part is working out how you actually measure the impact of media organisations. We’re not just talking about news and current affairs, but a very broad cross section of diverse media organisations as well from gaming to entertainment organisations.

Part 2 of my interview with Dr McCluskey will be published on The Briefing Note soon.

The ABC’s Corporate Responsibility performance is included in its 2010/11 Annual Report.

The public consultation period for the final draft of the GRI MSS was between May and August 2011; release of the final supplement is expected in early 2012.

How to put stakeholder engagement on the board agenda, and keep it there

Leave a reply

Does your board of directors join the dots between quality stakeholder engagement, good governance, resilient reputation and robust corporate performance?

Or are you struggling to advocate the value of stakeholder engagement at the board level?

Tabling or presenting a board paper on the value of stakeholder engagement is one thing; demonstrating how you measure it — and track progress and performance over time –is another thing altogether.

This quote from the President of Oxfam America, Ray Offenheiser, quoted in The Ceres Roadmap for Sustainability (p25), sums it up for me:

“To operate successfully in a complex global business environment, forward-looking companies need to open their doors to diverse stakeholders and incorporate these perspectives into strategic decisions and sustainable development initiatives”.

So how do you get started or change course in order to educate the board on the value of stakeholder engagement and its relationship to overall strategy and organisational performance? Here are five suggestions:

Suggest the relevant board committee’s charter is expanded to include stakeholder engagement. For example, this may be the Corporate Responsibility or Sustainability committee. An foundation piece of work may be a policy or strategy outlining how senior leadership intends to engage with your most influential stakeholders and why.
Establish or review appropriate consultative or advisory bodies to assist management and the board broaden their perspective on material issues. I say ‘appropriate’ because every organisation is different and what’s fit-for-purpose varies by industry and organisation size and structure.
Present the results of stakeholder and reputation research. This used to be considered bold stuff, but in the age of transparency, 24/7 media and social media, it should be the norm on an annual or bi-ennial basis.
Present the outcome of an annual or bi-ennial materiality assessment process. This is already a key component of the GRI sustainability reporting framework and should be aligned with other strategic planning initiatives such as corporate plans; it should also be linked to the research mentioned in point #3.
Invite a key stakeholder (or two) in. Hearing a key stakeholder’s opinion on the risks and opportunities facing the organisation in a confidential environment can be powerful – for both parties. It can also send a clear message about the culture of the board and the organisation overall which is ‘we’re keen to listen and learn’.

A demonstrated willingness to listen to, and learn from stakeholders will allow organisations to move from a defensive/risk business case approach for stakeholder engagement to one of opportunity and innovation.

Are you a board director? Do you think these five suggestions have merit or would you suggest other avenues for influence?

Will phone hacking be the media sector’s watershed corporate responsibility moment?

4 Replies

The profession of journalism has News International and News of the World to thank for launching a period of intense global scrutiny of the media sector – who regulates, owns, manages and creates content and to what ethical standards.

So will this crisis of credibility in journalism be the media sector’s watershed moment in relation to corporate responsibility? Pretty much every other sector of the economy seems to have had theirs or moved onto the next one.

It may be too late for the media sector to avoid the regulatory stick. However I would argue that those companies that have already made serious attempts to demonstrate and communicate a commitment to corporate responsibility – accountability and transparency above and beyond compliance – will be in a far better position to be heard within a hostile stakeholder environment.

Perhaps the inevitable inquiries and reviews may have a positive outcome – we may start to see more corporate responsibility or sustainability reporting from the sector.

As luck would have it, the Global Reporting Initiative (GRI)’s latest sector supplement is designed specifically for the Media Sector and is open for comment until 4 August 2011 (note for Australian readers, the ABC is represented on the global working group). This presents an obvious starting point for those media organisations that want to learn more about how to start or further develop their reporting approach and in the process, share information and practices with stakeholders that builds (or restores) trust.

Yet reporting alone will not guarantee any improvement in reputation, corporate culture or ethical standards. In fact, corporate responsibility reporting that follows hot on the heels of crises inevitably raises eyebrows. Authenticity and motivations are questioned. Rightly so. Stakeholders expect to see evidence of real change and improvement in performance and not a tokenistic effort that tells them what they want to hear.

The Guardian in the UK and it’s “Living our Values” sustainability report is an excellent model to examine. Not only does it report extensively on its sustainability performance, it has its performance externally assured and publishes this statement on its website. Read the introduction to its 2011 Sustainability Report and you’ll get a seat in the front row feel for the complexities of managing a media business these days. Or if you don’t have time, they’ve even written a condensed 15-minute version. Nice. The important point to note is that the Guardian has been doing this for a while and it shows, not only in their performance but in their governance.

In Australia, it appears our media sector has still got its trainer wheels on in respect to consolidated external reporting on its corporate responsibility or sustainability efforts and governance of these issues at the Board level.

Australian media organisations should be encouraged to adopt corporate responsibility reporting as a means of demonstrating accountability and transparency to their audiences, employees and external stakeholders.

The only way is up.

Should I stay or should I go now? Parental leave retention rates a new addition to the G3.1

1 Reply

There was a scene in the recent ABC production Paper Giants where Cleo Magazine Editor Ita Buttrose steeled herself to announce to her powerful media magnate boss, the late Kerry Packer, that she was pregnant. In the drama that unfolded, he says all the right things to her face and all the wrong things behind her back.

This mini-series was based on events that happened in Australia in the 1970s. Yet three decades on and ask any working mum-to-be about breaking pregnancy news to her boss and I’ll bet she’ll recount her own anxious experience. It’s a vulnerable time for women and their partners. I’ve been there. Twice.

Parental leave retention rates (by gender) has recently been added to the latest version of the Global Reporting Initiative’s Sustainability Reporting Guidelines (the G3.1) under Labour Practices (LA15, Core).

It’s an important and timely addition for Australian organisations given our first fully Government funded paid parental leave scheme started in January this year, about the same time ASX gender and diversity reporting changes became effective for listed companies.

Large Australian companies such as the ANZ report parental leave data (32% of Australian staff who took parental leave in 2009/10 returned, as compared to 30% in New Zealand and 100% in India).

There are many factors that will influence a new mother or father’s decision to return to work and when, such as their employment status (part-time/ full time/ casual) and what this means for eligibility to the organisation’s parental leave policy (which may or may not exceed government requirements), availability and access to quality childcare, the number of children they have and personal and financial circumstances.

I would also suggest that how a boss responds to his/her employee’s pregnancy news – setting in motion the organisation’s maternity and paternity leave policies (assuming they have some) will speak volumes for the corporate culture and play a big role in their organisation’s parental leave retention rate.

A 2009 report from the Productivity Commission on Paid Parental Leave found that of mothers in paid work prior to childbirth, 11 per cent return to paid work within three months of childbirth, 26 per cent within six months, 57 per cent within 12 months, and 74 per cent within 18 months.

Yet recent research suggests that for some Australian women, it’s not a case of will I stay or will I go now, it’s will I go somewhere else? Increasingly it’s to work for themselves (I’m a case in point).

According to research from Bankwest, the number of women setting up their own small business in Australia is growing at twice the rate of men. One of the reasons cited for the trend was women’s preference to work part-time whilst raising small children.

It’s clearly in the interests of organisations to keep their talented women and the link between flexible working arrangements, corporate culture and corporate policy is critical.

A letter to the editor from The Sydney Morning Herald (March 12-13, 2011), written by Dr Anne Reeckmann, captured this point so succinctly:

“Having children is not inconsistent with a career at the top of the corporate ladder, as most men will attest, but it is still the filter that removes a lot of women. Unless corporations have flexible working arrangements and actively support the needs of their women who choose to have children on the way up the corporate ladder, they will find their promising women leaving or opting out of the leadership track.”

The opportunity for competitive advantage in maintaining a strong parental leave retention rate is pretty obvious. Yet in Australia, ask any working mother or father about the effort their organisation makes to ensure employees return after parental leave, and you’ll find there are still some dramas unfolding. We still have a long way to go in changing attitudes and corporate culture to support parental leave policies before performance on this indicator improves.

I’d like to learn more about your experiences – whether it’s in Australia or elsewhere – about parental leave policies and what you think contributes to the decision to return (and when) or not.

Four reasons why journalists should pay more attention to CR reports

2 Replies

Corporate responsibility reporters frequently nominate ‘media’ as one of their company’s key stakeholder groups. Yet it’s often a one-way relationship as the reports themselves rarely generate news media coverage (the traditional kind, where a news editor makes an editorial decision about newsworthiness). This is despite the fact that CR reports are full of topical data and analysis about the state of business and society.

When I studied journalism in the early 90s, digging up good information sources was a key part of the news gathering process.

There’s not a lot of digging required to find a CR report these days. They’re readily available on company websites or sites such as CorporateRegister.com (which recently launched an Australian page).

Here are four reasons why I think journalists should pay more attention to CR reports:

Leaders make commitments in CR reports. One of the most telling sections of a CR report is the Chairman and/or CEO’s statement summarising their company’s non-financial performance over the reporting period. Best practice CR reports are about balance so you should learn what they thought they did well and what they intend to improve and why. CEOs also nominate their key measures and targets for the year ahead. These are important commitments and they know their stakeholders will hold them to it.
CR reports are full of data. Companies publish data on local and international policy issues that are important and topical. Take greenhouse gas emissions, for a start. The Government’s proposed carbon tax is at the top of the policy agenda in Australia. To find out more about what leading Australian companies think about a low-carbon economy, the quantitative impact on their business and what they’re doing about it, check out the Environment section of a company’s CR report. You should find a GHG inventory of their Scope 1 and 2 emissions and get a better understanding of the company’s key environmental impacts (and therefore a better understanding of how they can reduce their emissions). Other significant policy issues covered by reporters include diversity, gender equity, workplace safety, privacy and customer satisfaction.
CR reports are about people. How much more human interest can you get than what companies are doing to try and make their workplaces more equitable and safe places to work? Measures and targets that indicate whether they are succeeding or not (Employee engagement up or down? Harassment complaints up or down? Proportion of women in senior leadership roles up or down? LTIFR up or down?) are surely material issues for business journalists to stay on top of.
Potential readers are being drawn to alternative sources of information and have formed new communities of interest. Websites such as JustMeans and CSRwire and a community of sustainability bloggers including Elaine Cohen and Jen Boynton provide information, commentary and analysis on corporate responsibility initiatives and reports. Social media is amplifying and extending the reach of these content providers and curators.

In the UK, the Guardian newspaper has a site Guardian Sustainable Business which sources content from a professional network including experts and bloggers. I think this is a great initiative. Australian media organisations should pay attention to this and perhaps take a leaf out of their (e)book.

What do you think? Has your CR report generated media coverage? Or is media coverage not an objective of your reporting efforts at all? Do you get more value out of direct engagement with your stakeholders?

GRI Application levels – who’d miss them if they were gone?

Leave a reply

The value and future of GRI application levels has always been a hot topic for CSR reporting types.

I think application levels should be left out of the next version of the GRI’s Sustainability Reporting Guidelines, known as the G4 (to be launched in 2013 for use by reporters in 2015). I don’t think the majority of stakeholders would miss them. I think evidence of a materiality assessment and a detailed GRI content index are two factors that contribute more to report quality. But that’s just me. What about other stakeholders?

I’ve brainstormed the topic and jotted down what I think some of the key stakeholder groups would answer if asked ‘would you miss application levels if they were left out of the G4’ on a scale of probably, maybe and unlikely. For those of you in a hurry, here’s a snapshot of what I came up with:

	Probably	Maybe	Unlikely
Assurers	●
Employees			●
Investors			●
External stakeholders			●
Mature reporters		●
Government			●
Consultants (me)			●
First time reporters			●
GRI	●
CEOs/ Board directors			●

For those of you with a bit more time, here’s the extended version.

Assurers? In the ‘Probably’ category. But they shouldn’t miss application levels. Their absence would place more scrutiny on report content and accuracy of data. Perhaps another key or scale could be incorporated into the G4 which more accurately reflects which data and information was assured and by whom. Some reporters declare a plus + alongside their application level, but upon reading the assurance statement, you learn that only a section of the report was assured, not the entire document.

Perhaps a plus + could be incorporated into the GRI content index beside each reported indicator that was subject to assurance?

Employees? Unlikely. Most CSR professionals would say that one of the difficulties of the job is engaging more employees in strategies and programs that promote sustainability. Reporting should be a vehicle to engage more people from across the reporting organisation and application levels are either confusing or completely irrelevant for internal stakeholders.

Investors? Unlikely. Yet an easy to navigate and sufficiently detailed GRI content index (the kind that takes you directly to the information that supports the relevant indicator and not on a wild web goose chase), ideally providing linkages to other reporting frameworks (such as the UN Global Compact) would be valuable.

External stakeholders? Unlikely. Unless they’re peer CSR professionals who want to compare and contrast their A’s, B’s and C’s. But we’ve got plenty of other material to compare when aided by a GRI content index that also incorporates related reporting frameworks.

Mature reporters? Maybe. There’s no doubt that the application levels have been a source of competitive advantage for some organisations. But I would suggest that it’s more impressive for reporting organisations to compete on performance in key areas as opposed to the number of indicators reported.

Government? Unlikely. Sustainability reporting is voluntary in Australia and the uptake of reporting by government departments and agencies compared to corporates has been slow.

Consultants like me? Can’t speak for my colleagues but my response is unlikely. I would prefer to spend more time advising my clients on their material issues, adopting a GRI reporting framework that reflects those material issues and engaging employees and other key stakeholders throughout the reporting process.

First time reporters? Unlikely. The GRI has, and I’m sure will continue, to develop resources for first-time reporters to make the initial reporting year/s a worthwhile and valuable learning experience.

The GRI? Probably. Application level checks are offered as a service and are a revenue source (non-organizational stakeholders are charged €1750 for the service, for organizational stakeholders it’s free). However the GRI has extended its five day application check turnaround to 10-15 days due to an increase in requests so maybe they wouldn’t miss the workload associated with application checks!

CEOs and board directors? Are you kidding me! Unlikely.

So in summary, in my opinion, application levels wouldn’t be missed in the G4.

A detailed GRI content index is very important and adds a lot of value for stakeholders.

A scale or key to demonstrate which reported indicators have been subjected to assurance (and perhaps what type of assurance) could strengthen readers’ assessments of accountability and transparency.

Over to you. What do you think? Would you miss application levels?

Not all stakeholders are created equal

1 Reply

Every organisation has a stakeholder pecking order. Every organisation needs one. Otherwise they try to be everything to everyone and end up engaging with no-one in particular.

Conducting a stakeholder identification and segmentation exercise will provide the evidence (and confidence) that the time and resources dedicated to engagement activities are being well spent.

The tricky part is that segmenting stakeholders by importance or influence requires analysis and judgement calls. The basis of such analysis and judgement calls can and will change so it’s worthwhile establishing a methodology for the exercise so it’s:

a) easy to repeat

b) readily explained to stakeholders (internal and external) who may have an opinion or contribution to make, and

c) ready for inclusion in external reporting efforts.

For example, G3 GRI reporters will know this as 4.14 and 4.15 of the Standard Disclosures which asks for the ‘List of stakeholder groups engaged by the organization’ and ‘Basis for identification and selection of stakeholders with whom to engage. This includes the organization’s process for defining its stakeholder groups, and for determining the groups with which to engage and not to engage.’

Here are some thoughts on where to source the information to assist in segmenting stakeholders by importance and/or influence. There are others and I recommend Peter Bruce’s recent post on a similar topic which draws on the AA1000SES.

Mandatory or legislated responsibilities. Governance structures will help to identify the stakeholders that must be engaged with regularly and probably fairly formally. These may include shareholders, regulators, the Board, Ministers, departmental heads or employee/community councils.
Business priorities and corporate plan. There are key business objectives, projects, issues or risks that an organisation has pinned its strategy on for the next 3-5 year or 10-year business plan. It makes sense to engage with the stakeholders that can and will influence the organisation’s ability to achieve these objectives.
Material issues. Organisations that publish sustainability or corporate responsibility reports using the GRI’s G3 Sustainability Reporting Guidelines should be conducting regular materiality assessment processes (see my recent post on the topic). This means they should have a methodology for determining the issues that matter most to their business and their stakeholders. Many of these issues should align with the ones from point 2). I think SAP is a great example to review.
Industry engagement. Work out which industry organisations/experts in your sector are working on the issues that correlate with point 2). Your organisation may already be a member and it could be an opportunity to increase levels of engagement.
Hot issues. There are probably loads of people commenting on issues of importance to your organisation in the press, on talkback radio, in the blogosphere or in peer networks and industry forums. It’s worth identifying those who are credible and legitimate on issues of mutual interest.
Market intelligence. Stakeholder, brand, reputation, customer satisfaction research and complaint registers are very useful in stakeholder and issue identification.

The natural tendency in this exercise is to cast the net as wide as possible so as not to miss any opportunities to engage with stakeholders. Yet it’s wise to keep asking yourself, is this issue and therefore this stakeholder group/individual material? There has to be a threshold or cut-off point until something significant changes the basis of your analysis. Or you’re ready to repeat the exercise. Whichever comes first.

Otherwise you may finish up where you began – a mythical operating environment where all stakeholders are created equal.

Material that won’t lose the plot

Leave a reply

Have you ever started reviewing a corporate responsibility report only to find you’re a bit lost after a few pages?

It could be that material issues haven’t been woven into the organisation’s strategy and reporting story. There are characters and dialogue but not much of a plot.

Material issues give corporate responsibility report readers (and writers) a sense of purpose – they provide context and a rationale for why certain issues/topics were included and why others were not.

Identification of material issues helps to achieve a balanced report because they explain why certain performance indicators were chosen and therefore how the organisation performed in areas that were the most challenging. Overall, a focus on the most material issues should ensure the report is relevant and useful to a range of key stakeholders.

Easier said than done. So where do you start?

A good place is a picture of where you want to end up, such as a materiality matrix. This is a diagram illustrating how you’ve mapped stakeholder concern with business impact (which may be a combination of financial and non-financial impacts), and agreed upon some type of threshold where an issue is deemed to be material and therefore included in the report.

Vodafone Group plc won best report and the relevance and materiality category at last year’s CorporateRegister.com Awards and the materiality matrix from their latest report looks like this:

There are some great resources to assist in determining materiality such as the Materiality Report from AccountAbility.

The GRI is currently reviewing the Report Content and Materiality sections as part of its G3.1 update with a view to releasing a protocol as part of the revised guidelines. The GRI focal point in Australia is hosting briefings on the GRI’s strategic objectives in Melbourne today and Sydney tomorrow. I’ll be attending the Sydney one and am keen to find out where they’re up to on Materiality. You can follow me on twitter @thebriefingnote

Perhaps another chapter on materiality beckons.