Tag Archives: sustainability reporting

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

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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:

  1. 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).
  2. 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.
  3. 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.

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

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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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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?

10 things I like about mecu’s winning report

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The 2011 Australasian Annual Reporting Awards were announced recently and their special awards category for Sustainability Reporting was won by Australian credit union mecu (142,877 members, $2.43b in assets, $26.8m net profit before tax, 371 staff and 33 service centres across Australia). This is the second time mecu has won this award.

Here are 10 things I like about mecu’s 2009/10 Sustainability Report structure and approach:

  1. This is their sixth Sustainability Report. Chairman Peter Crocker’s introductory statement references mecu’s commitment to responsible banking and I think it’s important to hear this message from a credit union via their corporate reporting given the dominance of the big four banks in Australia.
  2. Their Sustainability Covenant. A series of commitments have been made between mecu and the Victorian State Government agency EPA Victoria in a voluntary covenant arrangement, which is reviewed regularly and renewed every three years. To my mind, this partnership and agreed goals and commitments (and public accessibility of the document) further ups the ante on transparency and accountability. This can only be a good thing for management in both organisations as they strive to achieve stated goals.
  3. Things you can do. The Covenant includes a goal to assist members to live more sustainable lifestyles and there is a neat theme through the report which reinforces practical tips in a ‘be the change you want to see in the world’ kind of way across the categories of communal, food, garden, goods, house, recreation, services, transport, waste and work.
  4. Sustainability governance. mecu’s Board structure includes a Sustainable Development Committee which meets quarterly. This is best practice and in line with one of the 20 key expectations for the 21st Century Corporation as outlined in Ceres’ excellent Roadmap for Sustainability which states “a committee of the board will assume specific responsibility for sustainability oversight within its charter”. Governance also includes a staff Sustainability Reference Group called ‘Footprints’ which indicates a commitment to integration of sustainability principles throughout the organisation.
  5. Global commitments. mecu is a signatory to the UN Environment Program Statement by Financial Institutions on the Environment (UNEP FI), the UN Global Compact and the UN Principles for Responsible Investment (UN PRI). It appears mecu aims to leverage these leadership initiatives for responsible investment accreditation for some of its products, which would be a good move in order to promote innovation and product differentiation.
  6. Their honesty. In the ‘reporting structure’ section which describes how mecu sought feedback on its 2008/09 report, the company conceded a low response rate to the reporting section of its online Sustainability Strategy and Reporting Survey with “the majority of questions only answered by three respondents”. Ouch. That must have been difficult to disclose. However, what I would hope for as a reader is that mecu seeks to find other ways to engage their stakeholders to obtain a more robust level of feedback in the future.
  7. Only five of mecu’s 142,877 members reportedly lost their cards in 2009/10 – impressive! The Card Fraud table under ‘Ethics and Governance’ discloses the total cost of reported fraud at $307,659 which impacted on 312 of its members. The significant line item in the table is ‘fraudulent use of card number’, affecting 238 members at a total cost of $156,576, which explains why mecu invests in fraud awareness training with its staff and participates in public awareness campaigns to reduce their members vulnerability to fraud.
  8. Hyperlinked materiality table. The materiality assessment is segmented by environment, community, workplace and marketplace and is hyperlinked to the relevant section of the report which makes it easy to cross-reference and investigate further. There doesn’t appear to be any external stakeholder involvement in determining material issues, which is something I advocate to clients to ensure internal assessments of what’s important to the future of the business is compared and contrasted with expectations of key stakeholders.
  9. Its brevity. The report is succinct, easy to read and written in a plain English style. Report navigation is good, aided by the break out headings on the right hand side of the page. A separate summary report is available as well.
  10. If it wasn’t for their Sustainability report, I wouldn’t know as much about mecu as I do after reading it. mecu’s Victorian heritage is strongly reflected in its membership base with only  5% of its members residing in my home state of New South Wales. We Aussies tend to be a parochial lot. Sustainability reports can fulfil an important reputation and branding role in the marketplace, which has certainly been the case for me in the case of this organisation.

I referred to the hyperlinked material issue table in point #8. It was a shame the GRI G3 Content Index didn’t follow this format as it’s very handy when you’re benchmarking company performance.  Next year perhaps.

Who doesn’t love to bask in the warm glow of peer and industry recognition for a job well done? Have you won a report for your sustainability report lately or read any award winning reports you think warrant a look?

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

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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.

Four reasons why journalists should pay more attention to CR reports

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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:

  1. 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.
  2. 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.
  3. 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.
  4. 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?

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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?