Monday, October 20, 2008

How to almost report: the paradox of level C reporting

The GRI is a great framwork but i sometimes wonder if it has set itself up for a few own-goals.

Reporting levels A B and C are designed to give some degree of choice about the level of disclosure when reporting. I typically view "C" level as a vehicle for a first reporter, who is unsure about the risk of reporting or perhaps doesnt actually have all that much to report. "B" level is a good choice for most first timers in my view, as it ensures some degree of substance to the report without demanding the full Monty. "A" level is for seasoned reporters, but by no means out of the reach of businesses with some established csr practices.

So let's take a closer look at "C" level. Some Management Disclosures required (this is usually the easy piece) and only 10 indicators. This really is more of a declaration of policy than a report of performance. A bit like going skiing on an indoor slope with self-guiding extra-wide skis, automatic braking system and air cushion front and back.

I did a zoom-in on what look to be a really great little report by imc2. Their first self-declared "C" level report can be viewed here.

First, i will restate one of my mantras: Any report is better than no report. Any Company who chooses to report for whatever reason must be commended. So my full commends to imc2. A first report is always difficult, always full of tough choices and new considerations, sometimes politics, so getting to the stage of the press release is quite an achievement.

This being said, we cannot ignore quality. Let's take a closer look at the Imc2 report.
IMC2 is an online marketing services business, digital tools and the like. Turning over less than $100 million ("we are a private company so we do not disclose turnover"), with 523 employees based mainly in Dallas USA, it is one of the few companies i have come accross of this profile to actually go the home run with a csr report. The report is called Positive Impact report, and the Company declares its non-financial mission to be about building relationships.

The report is written in chatty style, stragtforward, no pretense, no sustaino-eco-corpo-jargon, and is a truly refreshing and pleasant read. Anecdotes about the president's boyhood charity activities, how you spend your day in the office and why the world is at environmental risk are quite entertaining and mildly informative. But its not the nitty gritty. And whilst this report is cleanly written, flows well and touches on a number of interesting and even material points (can you really trust advertisers? how can a small business make a big impact? how do you really measure all this ssustainability stuff?), the lack of hard numbers and sustantial evidence of adoptionof csr practices is very very limited. About the only quantifyable numbers in the report at those relating to employee carbon emissions. Even data which appears to be readily available, such as the results of regular employee surveys are not disclosed. Why would a Company who wants to "change the world" go so minimal on data ?

This reminds me of another almost report - the Deloitte inaugural report - "we are defined by our responsibilities" - which, whilst not pretending to be any level GRI and has no referenced standards - is a collection of PR blurbs and mildly disguised advertising copy, despite the fact that the company actually appears to do a lot of positive things. I tried to look for numbers in that report too, and the best i could come up with was the page number on each bottom footer.

Has the GRI created an almost-reporting framwork by establishing application level C? Is this actually an own goal ? For if the objective of reporting is to build trust with stakeholders, the almost-reports which beg more questions than they answer surely do not advance this aim. In some cases, they positively reduce trust. The imc2 report is so charmingly written that its hard to be critical. But at the same time, reporting should be reporting, not a policy booklet.

Another thing we see with first-time reporters is the choice of report timing. Better to go earlier despite leaving many reporting gaps (if i see "not material" more than 75 times in a GRI Index then i know that someone hasn't understood the meaning of material), or better to implement more and report later ? Hard choice. I tend to favor the former, but i see no reason not to include more data. Both imc2 and deloittes have more data than they chose to disclose, without compromising speed to report market. Why not take transparency just a little further in the first report, even if application level "C" provides a neat exemption ?

Final point - self declaration is problematic. Why ? haha.... NEXT POST. :-)

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