Tuesday, August 31, 2010

Dow Chemicals CSR Report 2009

I recently reviewed the Dow Chemical Company CSR Report for 2009 for the CorporateRegister.com website. The most significant thing about this report, aside from it's content, is it's structure. Here is the first section of the  review as it appears in the CorporateRegister.com Expert Review section:

The Dow Chemical Company is a diversified chemicals manufacturer with specialist expertise in the electronics, coatings, plastics, health and agricultural sciences fields and more. The company operates at 214 sites in 37 countries around the globe, employing over 52,000 people and netting nearly US$45 billion in sales turnover. A veteran reporter, Dow published a first Environmental Report back in 1997 at a time when reporters were true pioneers. The uniqueness of Dow's reporting is that not only is it written in accordance with the GRI guidelines, it's actually named after the GRI framework and called a "Global Reporting Initiative Report", following the flow of GRI disclosures and indicators point by point and question by question (with the addition of a "GRI Read me first" section which provides highlights of Dow's sustainability activities during past years).

Aside from the GRI's own reports, I don’t recall seeing many others structured in this way. There are upsides and downsides to this approach. The upside is the absolute clarity and discipline with which the report is written, which adds much to its credibility. The downside is that Dow's overall predominant value contribution to global sustainability gets lost. Dow has apparently considered what issues are most material for the company and has translated these into Sustainability Goals to the year 2015, which, due to the structure of this report, are best reviewed as a group of goals on the Dow website. Exactly how these goals were developed, and whether they are the result of a structured materiality analysis, is unclear. In fairness however, Dow presents the most comprehensive set of quantified goals, described in plain language, that I have ever seen. They are grouped in three focus areas: Collaborate, Innovate and Elevate. The goals include: Local Protection of Human Health and the Environment, Contributing to Community Success, Product Safety Leadership, Sustainable Chemistry, Breakthroughs to World Challenges, Energy Efficiency and Conservation and Addressing Climate Change. I am just missing a goal related to the Dow workplace, but this is impressive nonetheless. However, in my view, what this report gains in credibility as a result of rigid tick-box style application of the GRI framework, it loses in terms of focus, resulting in a kind of fragmentation of the real Dow story. With an organization of this size, scope and diversity, the highlighting of some key material themes, with case studies and more in-depth exploration of impacts, would have brought a little life to this report.

This rigid structure, together with the impersonal nature of the report (only one photo of the Chairman and none of employees or any other stakeholders)  made me think of comparing the Dow report to a chemistry experiment - sterile laboratory conditions, detailed lab notes, exact measures of all materials, a process conducted in perfect sequence and an output which delivers a predictable result. A CSR Report is, after all, not just a report. It is a story. A story of how PEOPLE are doing sustainable business. Even chemistry labs need people.

However, my review concludes that:

Dow appears to have integrated a sustainability mindset into its core business, with product development driven with sustainability aspects at the fore, such as solar solutions and photovoltaics, water solutions for sustainable drinking water, a system to reduce usage of solvents and much more. The company seems to be doing great at sustainability. Now it's time to put the chemistry set back in the box and take a broader view of how the company's reporting can serve a wider range of stakeholders and truly assist Dow in leveraging its core sustainability strengths and key material issues.

If you want to read the full review, complete with my recommendations for The Dow Chemical Company's future reporting, go to CorporateRegister.com. But don't just take my word for it, take a look yourself  and send DOW your feedback :)

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

Monday, August 30, 2010

How do you measure sustainability?

How do you measure sustainability ? I have been fortunate to gain a little preview of the input supporting the soon-to-be-released report offering answers to this very question. The report has been compiled by  Ethical Corporation and is called "Social and economic impact: measurement, evaluation and reporting: A must-have guide for companies operating in emerging markets and vulnerable communities". This  report promises to offer answers to many of the questions that most CSR practitioners and observers have been seeking. If only there were a way to capture all of a Company's sustainability impacts in a clear and consistent measurement methodology, we would all be much wiser, and probably, much more sustainable. The Ethical Corp report promises to include "a break-down and analysis of impact measurement methods, tools and processes currently available" based on insights from a survey of 116 CSR professionals worldwide, 30 in-depth interviews, a review of 60 Sustainability Reports and will include case studies from Henieken, Vodafone. SAB Miller, Tata, Unilever, Nike and more. There have been some spectacular impact assessments produced, such as Unilever's economic impacts in Indonesia, published in 2005 and further studies in South Africa and Vietnam.  In fact, Unilever measure quite a lot, including their water footprint and more.

This focus on metrics and measurement is certainly welcome, as, beyond carbon footprinting and community giving, most companies haven't a clue as to how to calculate their sustainability impacts.

Some early results show that:   

67% of the 116 survey respondents said their do measure their company's impacts.
73% of respondents said they measure impacts primarily for the purpose of communicating to stakeholders.
72% of respondents said they measure impacts as a way to build reputation.

The top three indicators that are measured by comanies include (1) economic impact on communities, (2) community impact and employee engagement in volunteering activities within the community and (3)  job creation. Oops, only 9% measure gender equality.

There are many different measurement models out there, some more relevant than others, some partial, some more comprehensive, though there is very little consensus on metrics methodologies  that can be perceived from Company disclosures in the current state of CSR and sustainability communications.  However, I won't continue now. I will review this promising Ethical Corporation report when it is published and share more insights at that time.

In the meantime, what is YOUR company measuring ?

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

SCOOP! Karnani responds.

Many thanks to Professor Aneel Karnani of Michigan who has now responded to the myriad of comments, blog posts, commentaries, tweets and all other reactions to his article published in the Wall Street Journal of 23rd August. See the original article: The Case Against Corporate Social Responsibility" here.

This is the full, unedited text of Prof. Karnani's response provided to me by email today 30th August 2010 for which he gave permission for me to post here:


As the author of this article, I am grateful for the amount of interest and commentary it has attracted. The world faces many social problems such as climate change, resource depletion, disease epidemics, and pervasive poverty. While there are no easy solutions, a good starting point is a widespread public debate on the appropriate approach to tackling these challenges. A critical element of that debate focuses on the roles that business, government, and civil society should play in solving these problems. I hope my article has helped stimulate this debate by challenging some widely held views.

I strongly believe in social justice and that companies should not be left free to pursue the greatest possible profits without regard for social consequences. So, how can we get companies to act to increase social welfare? Whether companies will do so voluntarily or have to be compelled to take such actions depends on whether private profits and public interests are aligned or in conflict.

Many of my critics have pointed out that CSR can and does drive profitability. That is absolutely true when private profits and public interests are in harmony -- the invisible hand at work. That is exactly why the capitalistic system is so good. In these instances, firms driven by the profit motive will also achieve social objectives. Equivalently, firms acting to increase social welfare will simultaneously increase profits. In these cases, the profit motive is the driving force, even though companies might trumpet CSR.

However, the 'invisible hand' argument depends on markets being efficient. We must also be aware of the limitations of markets. Market failures occur due to three causes: externalities (such as pollution), asymmetric information (such as in pharmaceuticals), and market power (such as in electricity distribution). Many of the social problems confronting the world are linked to market failures. In these instances, private profits and public interests are fundamentally in conflict. CSR, a voluntary mechanism, will not be effective in these cases. Then it is the role of government and citizen activism to compel companies to act to achieve social objectives.

It is true, of course, that much government intervention has not been effective either. A practical challenge is to weigh the costs of market failure against those of government failure. However, there is a big difference between market failures and government failures. For example, the externality of pollution is inherent in the nature of gasoline cars. But, incompetence is not inherent in the nature of government, and the costs of government failure can be reduced with improved management. The challenge is to design and implement an effective blend of government regulation, citizen activism and self-regulation that strikes the right balance between private profits and public interests. Government regulation, or at least the threat of such regulation, is a critical element of this blend. It is very unlikely that large social problems linked to market failures will be solved only through voluntary CSR.

Finally, a red herring of an argument is to claim that the conflict between profits and social welfare is caused by companies being short-term oriented. The shareholders collectively want the managers of companies to maximize long-term profits, not short-term profits. In cases of market failure, long-term private profits and long-term public interests are in conflict. In practice, there is, of course, much uncertainty about the long-term impact on both profits and social welfare. But, that does not change the conceptual argument about the role of business in society.


When Prof. Karnani talks about " an effective blend of government regulation, citizen activism and self-regulation [of corporates]" , I think we share a common ground. Clearly, no-one believes that voluntary CSR alone can solve all the world's problems. But it is my firm belief that CSR AS WELL is a critical element in doing just that.

Thank you again to Professor Karnani. Whether or not we agree with his original article, his willingness to respond and engage is in the spirit of ... well ..... CSR . Haha. 

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Saturday, August 28, 2010

Learnings from six first-time CSR reports

I love first-time CSR reports. A first report is an opportunity to create a new slate, set up a foundation for future reporting, position the Company's sustainability message in the most appropriate way, and establish a presence amongst the leading companies in the world that value transparency. It is a blank page, which you can fill to describe your most important impacts. You can be creative, innovative and have a little fun at the same time.

Unfortunately, the production of a first report is usually fraught with so many first-time issues for a Company to address, that, wonderful as first reports are, they sometimes fall short of seizing the opportunity. Common issues with first reports are around the substance of data and information available to include, whether to disclose or not ever if the info is available, what sort of a report to write (GRI or not GRI and at what application level). Report format in print, PDF or online or a combination of all three. Reporting period. Structure. Scope.  Style. Concept. Length. Summary report or not. Who approves the final version. Design issues. Print run. Many things to decide and not always easy decisions to make. Every first-time report provides a massive amount of learning for the reporting organization.  

I have taken a look at 6 first time reports published in 2010, randomly selected. (Thanks to CorporateRegister.com , as usual, a wonderful research source for all reports). Whilst I can't be sure what each company learnt in the process, I have tried, as an outside observer, to extract what I think WE can learn from THEM in this first cycle. Here we go, in no particular order:

94 pages, GRI A+ level

This leader in car production in India, the Indian subsidiary of Japanese Suzuki, has manufactured over 7 million cars since 1983 and in addition, has produced a very nice first Sustainability Report entitled "Give Get Grow", because, as they say, you have to GIVE in order to GET and to GROW. The report is nicely designed, clearly written, good on disclosure, includes a materiality matrix, a Japanese glossary of management terms and principles, GRI Index and verification statement. Despite quoting Mother Theresa for a little local flavor, this report reflects a decidedly Japanese culture. This is a male-dominated company with only 207 of the total 7,159 employees being women. It always makes me wonder when  a company claims they do not discriminate, how it is that there are so few women. However, this is one of the better first reports around, both in terms of transparency and content.

Key learning: A great concept always adds credibility and interest to a CSR report.

Office2Office plc CSR Review 2010
30 pages, not GRI

This is a business services supplier based in the UK, employing around 1,000 people. The report follows what I call the Quadrant Model - workplace, marketplace, community and environment -  and does a good job in covering core practices relating to corporate responsibility in each quadrant. It's layout is clear, language is readable and coverage comprehensive. However, it's a "good-corporate-citizen" report in the sense that it  reports (well) what the Company is doing (well), covering off all bases in the basic model of "we are ethical".  The Company explains its initiatives well, such as closed-loop paper recycliing - office paper supplied is returned and recycled, and re-supplied by the Company. Clearly the Company is earnest in its first base approach to Corporate Reponsibility.

Key learning: Method and system in reporting delivers good credibility.

Edcoms Ltd Corporate CSR Report 2009
15 pages, not GRI

Who is Edcoms? Not sure. The "report" says they are a "leading communications and research agency working for the private, public and third sectors". But don't expect to find any diclosures in this "report", which follows what I call the Marketing Brochure Model. It a nice round-up of what this company is doing in their education and leaning programmes. There appear to be two initiatives of value - a staff survey on what CSR means to them  and a project to implement ISO 14,000, which at the time of publication they had not completed. Aside from this, there is plenty of opportunity to produce fuller reports in the future.However, I do think that, if it's not a CSR report, it should not be called a CSR report.   

Key learning:  Something is better than nothing - and even the most basic of reports can be a foundation for more in the future.  

Biogen Idec Inc 2009 Corporate Citizenship Report
14 pages, GRI C level

This report is called "Driving towards a sustainable future", a title which immediately made me think of a transport company, but Biogen is actually a "leader in the development of innovative therapies" for multiple sclerosis, lymphoma and rheumatoid arthritis, employing 4,750 people. This first report follows what I call the 3P model - split into three main sections - business, environment and society. It's short, but demonstrates evidencce of strong progress on sustainability issues. The report includes a high-level materiality matrix, evidence of serious thinking about the company's impacts. Biogen has developed their own risk-weighted environmental index which shows improved performance since 2007, though the methodology in not transparent. Biogen also makes a Sustainability Award internally for the best efforts and positive impacts of employees - a nice program. Indeed, this short report contains much about employee workplace responsibilities and impacts which is quite impressive. The report was printed using certified wind power.Whoosh!

Key learning: If you have a strong CSR program in place, you can deliver a meaningful, short, report, covering key bases, without going the full stretch on transparency.

Web based report with a PDF download of 55 pages, GRI C level

Tamro employs around 6,000 people in the pursuit of their mission which is to be a vital link in the healthcare system, as a pharmaceutical wholesaler and pharmacy operator. This is a report designed for web, not particularly interactive but with a good web structure. The PDF download is simply a copy of the web-pages, which doesn't work  if you are just reading the PDF, but adequate if your first point of reference is the website.The hyperlinks also take you to the annual report for relevant sections. There is a glossary and a feedback section. The report follows what I call the 3P model - economic, environment and social responsibility sections. The report is excellent, including a materiality index, and a table showing prioritization of stakeholder interests based on structured feedback solicited from stakeholder groups. (Incidentally, compliance is the most important, and energy consumption the least important!) . The web site includes case studies in each of the resport sections, with a video from employees and also from the Managing Director of a customer company. I had to smile at one of the videos of a Tamro Customer Service Director who says : "When it comes to Tamro’s weaknesses, Kaselaan cannot think of anything major." (As a woman in a business with no women on the Executive Team or Board, I would be able to think of something major haha) However, all in all, a very impressive web-based first report.

Key learning : A web-based first report can provide great possibilities for showing the faces of the company.

Web report with PDF download of 90 pages GRI C level

This is an Italian Food Group with 16,000 employees, bringing the Mediterranean diet to the world. This 2008 report, published in August 2010, follows a deep exercise in assessment of CSR strategy and core impacts, which took two years to complete and therefore delayed the timely publication of a first report. The report covers a systematic approach to stakeholder mapping, analysis, engagement in a transparent way and includes stakeholder recommendations and performance indicators adopted as a result. One of the most thorough treatments of stakeholder engagement you can find in a CSR report.  The report also includes targets in each section to the year 2014 - clearly a long term approach.  Actually, the PDF, not the web, works better for me in this report, which follows what I call a Materiality Model, structured around the prioritzation of material issues, taking in this case, nutrition as the first and supply chain as the second issue addressed in the report, followed by other topics such as environment, people, community etc. Each section is introduced with a philosophical and contextual commentary, which adds a personal touch to the report and also a certain charm.

Key learnings: Better late than never ! AND a great stakeholder mapping process.

So, to conclude, even the first- timers can teach us old-timers something. Considering the extra effort necessary to produce a first report, I say Bravo! to all these Companies. Support them by taking a look and giving them your feedback!

Actually, I planned this post to cover 20 first time reports but I found that doing justice to each is rather time-consuming and also, due to my August diet, I am suffering from a severe deficiency of Chunky Monkey.  Still, as we can learn from Edcoms,  30% of something is better than 100% of nothing.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness,  CSR Consulting and Sustainability Reporting firm). Elaine is the author of CSR for HR: A necessary partnership for advancing reponsible business practices.  

Wednesday, August 25, 2010

Will Karnani respond?

Sent to Professor Aneel Karnani at his email address at Michigan: akarnani@umich.edu  

" Dear Professor Karnani
Your op ed in the Wall Street Journal was incomprehensible to most, saddening to many and ridiculous to several. It generated much comment.

You may have seen a range of responses :

My own response:  http://bit.ly/dwvaOc

Aman Singh : http://www.vault.com/wps/portal/usa/blogs/entry-detail/?blog_id=1462&entry_id=11749

James Epstein Reeves on Forbes : http://blogs.forbes.com/csr/2010/08/24/an-open-letter-to-the-journal-why-csr-is-good-for-shareholders-and-society/  :

Perry Goldschein: http://sdialogue.com/csr/the-case-against-csr-not-four-csr-myths-debunked/

The New York Observer : http://www.observer.com/2010/daily-transom/wsj-be-evil

The Inspired Economist : http://inspiredeconomist.com/2010/08/24/wsj-the-illusion-of-csr/  

Ashley Hamilton http://blog.ashleyhamilton.ca/2010/08/csr-is-not-dead.html#more

Leon Kaye http://www.triplepundit.com/2010/08/the-case-against-csr-aneel-karnani-government-regulation/?utm

Mag Shapiro http://www.socialcapitalsa.com/sustainablemags/csr-is-business/

Nathan Sherdoff http://www.triplepundit.com/2010/08/the-case-for-corporate-social-responsibility-aneel-karnani/

Aron Cramer: http://blog.bsr.org/2010/08/wsj-takes-aim-atcorporate.html

Dave Douglas: http://www.greenbiz.com/blog/2010/08/24/perils-oversimplifying-csr

Nathan Bomey: http://www.annarbor.com/business-review/university-of-michigan-professors-case-against-corporate-responsibility-in-wsj-is-incomprehensible-e/

to name but a few.

I was wondering if you would be kind enough to publish a response to all these critics of your position. As a Professor in a respected business school, your voice has the potential to be of great influence.

I will publish your response, if you reply directly to me, otherwise I, and many others, would be happy to see your response on the WSJ or elsewhere.

Many thanks, elaine cohen"

Now that Aneel Karnani is famous, will he respond ?

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Monday, August 23, 2010

Response to the Case Against CSR

I suppose a response on this blog is preaching to the converted, but I still couldn't let pass the professorial post from Dr. Aneel Karnani, associate professor of strategy at the University of Michigan's Stephen M. Ross School of Business.. Dr. Karnani explains why CSR is flawed in his article of 23rd August 2010: The Business Case Against CSR.  The flavour of his piece, which at the time of posting already generated 52 responses, some for, some against, can be seen in the following excerpts:

"Can companies do well by doing good? Yes—sometimes. But the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed. Large companies now routinely claim that they aren't in business just for the profits, that they're also intent on serving some larger social purpose."

"Irrelevant or ineffective, take your pick. But it's worse than that. The danger is that a focus on social responsibility will delay or discourage more-effective measures to enhance social welfare in those cases where profits and the public good are at odds. As society looks to companies to address these problems, the real solutions may be ignored."

"Still, the fact is that while companies sometimes can do well by doing good, more often they can't. Because in most cases, doing what's best for society means sacrificing profits."

"Executives are hired to maximize profits; that is their responsibility to their company's shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority."

"In the end, social responsibility is a financial calculation for executives, just like any other aspect of their business. The only sure way to influence corporate decision making is to impose an unacceptable cost—regulatory mandates, taxes, punitive fines, pubic embarrassment—on socially unacceptable behavior."

So, ok, stop, think. It amazes me actually how many business people actually think like this, that money is the sole thing that interests shareholders. It frightens me that a Michigan professor thinks like this. I doubt that any amount of rational retorts will change the mind of this CSR-dissenter, and I guess he is entitled to his opinion and I guess the Wall Street Journal is entitled to print it. For the record, the Wall Street journal is owned by the Dow Jones Company, who has both a Code of Conduct and a Corporate Environment and Safety section on its website, which includes voluntary contributions. Not a wholehearted leap into CSR practices and transparency, but a toe in the water.

The fact that regulation, taxes and fines will not comprehensively change corporate behaviour and never have done, should be clear enough to a Professor of Strategy, I would have thought. The fact that CSR is a financial calculation, just like any other aspect of the business, is not really in dispute - CSR should support delivery of stronger financial returns over time, and data shows this to be the case. The key flaw in this prof's argument is the trade-offs between short and long term. Many generally believe that shareholders want to maximinse SHORT-TERM profit at almost any expense (though there is a growing body of evidence that this is not the case) whilst CSR is by definition focused longer term. Yes, there is an element of sacrifcing short term profit for greater long term profit, which continues to be in shareholder real interests. Talk to Ray Anderson of Interface, Stuart Rose of Marks and Spencer, Jeff Immelt of GE and many others, and they confirm that CSR-type activities repay themselves many times over. How can a professor of STRATEGY be so hooked in the short-term vision box? Perhaps he is a professor of monthly strategy ?

The other core flaw in Dr Karnani's writing relates to the fact that the adoption of business of social policies will delay governments doing it themselves. Excuse me ? Is not the response by business to social and environment global issues required precisely because governments have not resolved these issues, and almost certainly never will. The essence of this argument pits businesses against governments and civil society, ie that each has a role and each should stay in their own corner, ne'er the twain shall meet. What we are seeing today as the concept of CSR matures, is the convergence of these roles, the fuzzying of these boundaries and the coming together of the complex interplay and multiple influences in which law influences business, business influence law, and both are influenced by effective NGO activism. In fact, I have just read an outstanding book (my review to be published soon on www.CSRwire.com)  called The New Corporate Accountability - Corporate Responsibility and the Law in which these issues are discussed intelligently and cohesively. I recommend this book to Dr. Karnani. The more we try to keep business in splendid isolation to make as much money as possible, governments in splendid impotence to prescribe social and environmental regulations and NGO's in splendid righteousness, accusing and condemning, our planet will not be sustainable. CSR is much more than a business strategy, it is a convergence strategy of partnership within and across sectors, and across narrow-minded artificial boundaries.

The good news is that the arguments of short-termists are good only as long as their thinking lasts. Fortunately for us, and the world, in the case of Dr Karnani, this is about a month. Then we can get back to doing the business in a way which benefits people and environment, in other words, we can revert to the case for CSR.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Friday, August 20, 2010

39 CSR reporting keywords

The Business Civic Leadership Center of the US Chamber of Commerce is celebrating its 10 year anniversary, and has put together a series of interesting videos in their TEN campaign  linking the number 10 with core CSR themes. The 10 most common words they selected got me thinking a little. The 10 most common words in CSR today according to the BCLC  are

1.  Sustainability
2.  Stakeholders
3.  Green
4.  Value Add
5.  Core competencies
6    Best Practices
7.   Leverage
8.   DNA
9.  Philanthropy
10. Accountability

Now, you might find some of these a little surprising, as I did, so I thought I would do a little check of my own. I analysed 12 CSR recently published CSR reports (listed on CorporateRegister.com) for a selection of 39 keywords, including the 10 that the BCLC selected. With interesting results.

These 39 keywords appeared a total of 12,648 times. Here are the additional 29 words I looked at:

**award ** biodiversity ** carbon ** climate ** community ** consumption ** customer ** dialogue ** diversity ** emissions ** energy ** engage(ment) ** environment ** employees ** ethics ** feedback ** governance ** impact ** leadership ** materiality ** offset ** partnership ** recycle ** risk ** target ** volunteer ** waste ** water ** women **

My analysis  of the top ten words are:
1.  Environment (1,288 times, 10% 0f total)
2.  Sustainability  (1,194 times, 9 % of total)
3.  Employees (989 times, 8% of total)
4.  Customers (875 times, 8% of total)
5.  Energy (806 times, 7% of total)
6.  Community (651 times, 5% of total)
7.  Impact (545 times, 4% of total)
8.  Waste (510 times, 4% of total)
9.  Emissions (486 times, 4% of total)
10. Water (450 times, 4% of total)

Clearly the environmental agenda is dominating CSR report content, though employees and customers, and, pleasingly, impact, are up there with the waste, water and emissions.

The BCLC ranking in my analysis works out like this:

Rank 2.  Sustainability (Hurray! we agree on one word!)
Rank 14.  Stakeholders
Rank 17.  Green
Rank 34.  Value Add
Rank 39.  Core competencies
Rank 36    Best Practices
Rank 38.   Leverage
Rank 37.   DNA
Rank 35.  Philanthropy
Rank 33. Accountability

Most of the top ten words the BCLC selected rank jut nowhere in twelve 2010 published reports, appearing less than 50 times each in a total of 1054 keywords per report on average. Wonder how the BCLC made their selection.

My analysis yielded some disappointments : "women"  appeared only 161 times (rank 23) and materiality appeared only 61 times (rank 31) and "leadership appeared only 152 times (rank 24). Stakeholders were mentioned  only 366 times, less than 3% of the overall total keyword usage.

Within the numbers, there are some interesting facts:

The top 25% (10) words account for 61% of all mentions of the 39 keywords. That's kind of Pareto-ish, right ?

Ten of the twelve reports analysed had environment as their most used word amongst the keywords

Two reports had no mention of "dialogue", 6 reports had no mention of "materiality" and one report had no mention of "customers" 

But apart from  a little fun in crunching the numbers, what does this tell us about the status of sustainability reporting? Can the focus of the organization be correlated to the frequency of keywords used?  Can we tell from an organization such as The Cooperative Group, whose top 5 keywords are sustainability, customer, employees, community and diversity, that they are more social-centric in their approach to CSR versus Ball Corporation whose top keywords are enviro-centric  sustainability, energy, employees, water and recycle ?  What about the approach to sustainability of BAE Systems who is the only one of the 12 companies who has "leadership" in the top 5 keywords? or Provident Financial, where the keyword "customer"  accounted for 32% of this Company's keyword usage, more than any other report of those analysed ? And what does it tell us that Kinross used the keyword community  for 16% of its total keyword usage, double that of any other report?

So maybe there's a case for keyword analysis of CSR reports, which reveals more about where the Company is placing its focus than the actual commentary? Of course, my analysis is a little rough and ready and relies on a consistency of language which is not always available - many companies refer to employees as colleagues, associates, team members or other such encouraging terms, so a search for employees might not reveal the true picture. But, on the whole, maybe CSR reporting keywords are a predictor of a Company's CSR mindset.

However, if you want to prove my analysis is totally screwy, all you need to do, when you are writing your next report is add this sentence at the start of each section:

Our award for best practices in biodiversity, relies on our DNA and  core competencies related to the management of carbon emissions, energy, waste and water, which we recycle, in order to provide value add for customers, whom we engage in dialogue about the climate and the environment, because they are stakeholders, and we target to get their feedback, which is in line with our governance and ethics principles, and our desire to be a green company with high impact and leverage in matters of high materiality, in order to mitigate risk and offset high consumption, so that our community can benefit from greater diversity, and sustainability, and our employees can volunteer in philanthropy activities in partnership with our leadership, which is composed mainly of WOMEN, because we value accountability.

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

Friday, August 13, 2010

The Personality of CSR Reports

Personality: per·son·al·i·ty
Function: noun
(one of four definitions) : the complex of characteristics that distinguishes an individual or a nation or group; especially : the totality of an individual's behavioral and emotional characteristics

Now, personality is a complex thing. So are CSR reports. But there is no getting away from it, CSR reports have a personality all of their own. They have a look, style, tone, and a set of specific traits that make up their personality. In psychology (not that I know too much about that, but the internet is a wonderful thing)  there are apparently FIVE BIG PERSONALITY TRAITS or dimensions of personality which characterize human behaviour.  Now, with a small stretch of the imagination, these characteristics can also apply to CSR reports. See the traits and the correspondingly traitful reports in the list below.

Openness : (inventive / curious). Appreciation for art, emotion, adventure, unusual ideas, curiosity, and variety of experience.
Take a look at this first report from Jain Irrigation Systems entitled Prosperity for Posterity (what a wonderful report title!) - it's a delightful first report demonstrating openness of thinking, great creativity, wonderful artwork and quality reporting. This report from WPP also comes in nicely with an openness personality trait - including great testimonials from a wide range of people,  super artwork, and a great pro-bono showcase.

Conscientiousness : (efficient / organized). A tendency to show self-discipline, act dutifully, and aim for achievement; planned rather than spontaneous behavior.
I think this report from Kesko is one of the most conscientious efforts around. It's high quality, very comprehensive and transparent, and demonstrates absolute detail in planning, acting and reporting on CSR.  

Extraversion : (outgoing / energetic). Energy, positive emotions, surgency, and the tendency to seek stimulation in the company of others.
Top candidate for this personality trait is of course the SAP 2009  online report. It certainly seeks stimilation in the form of interactive feedback requests on every page.

Agreeableness: (friendly / compassionate). A tendency to be compassionate and cooperative rather than suspicious and antagonistic towards others.
I would put the nice, creative report from Softchoice in this trait category. The report offers good advice on things to do and things to avoid from this IT solutions provider.  

Neuroticism : (sensitive / nervous ). A tendency to experience unpleasant emotions easily, such as anger, anxiety, depression, or vulnerability.
Hmm, I had a little trouble finding a CSR report with a neurotic personality trait. Perhaps the closest I could get is the British American Tobacco Report for 2009, where the home page includes questions such as : "Who would want to work for a tobacco company anyway ? "

But that's not all. With every personality there is a corresponding disorder.  More about that another time :) However, I will note that I have a compulsive-obsessive-addictive personality disorder when it comes to CSR reports and Chunky Monkey. What about you? Try the Personality Disorder Test. You don't need to share the results on Twitter. :)

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Monday, August 9, 2010

19 textile sector companies sustainability profiles

Alongside the very worthwhile Sustainability Initiatives study benchmarking of 100 top-notch Companies and what they are doing to save the planet and us, Sustainable Life Media also released at the end of last month another fascinating report entitled: "Exporting Textiles: March to Sustainability. Preview of the coming decade: Textile Supply chain Sustainability Plans by Brands and Retailers." And as if that title weren't long enough, it has a subtitle: "Getting Manufacturers to Create Business Value through GHG (Energy), Water and Waste Conservation". The report was produced by cKinetics, and supported by SLM and Nitra. Anyway, now we know what it's all about, let's take a look.

We start off with a bit of context taken from the intro-page: "The 1990s was about the march towards manufacturing quality as the textile industry worldwide raced to adopt lean manufacturing and ISO driven quality practices. The 2000s were about ensuring ethical sourcing and labour practices. The coming decade is going to be about sustainability and optimally using natural resources to generate value in the textile supply chain. This report previews activities already underway that are harbingers of this coming movement." The report examines aspects of sustainability which concern the textile supply chain from the raw material (natural fiber or man made fiber) to the point that it is converted to finished product. The focus in the report is primarily on energy efficiency, greenhouse gas emissions, water and chemcial footprints and logistics. This is important as, the report says, the textile industry is the number one fresh water polluter on the planet, and is high in carbon intensity. In India, for example, 10% of the country's energy is consumed by the textile industry. 10% . Think about that for a minute................ OK. Stop. Move on.

The report provides detailed profiles of brands and their supply chain sustainability initiatives of 19 leading textile sector companies. Those that have programs under way are: Adidas, Carrefour, Gap Inc, H&M, Ikea, Levi Strauss, Marks and Spencer, Nike, Otto, Walmart, Continental Clothing. Those companies whose (supply chain environmentl) initiatives are at the planning stage are: Phillips-van-Heusen, Timberland, Inditex, Grupo Cortefiel, John Lewis Partnership,  Primark, Lindex and Tesco.  None of the Companies studies are in the unfortunate position of not having anything in progress or in the pipeline, which is a good thing, I suppose.

A few interesting initiatives: Gap are extending their environmental footprinting assessment right throughout the supply chain , including the mills that convert cotton into fabrics. This is great. Marks and Spencer are going big on Fairtrade cotton with a target of 20 million garments by 2012. Levi Strauss have extended Global Effluent Emissions guidelines to second tier suppliers. And more and more .....

The report profiles each of these manufacturers using the following parameters:

*  Overall approach and key initiatives
*  Aspects of supply chain sustainability the Company measures (eg energy, water, emissions etc)
*  Standards and Frameworks used (eg GRI, GHG PRotocol, Oeko-Tex or proprietary framework)
*  Sustainability intiatives relative to the Company's suppliers.

Some Company reports are highly detailed, with some, such as Primark and Lindex, did not fill a page.

(NB: The report does not analyse reported data or benchmark or rank Company performance; it describes what the Company is doing and which processes it has adopted). (Sorry, I know you all like rankings, but this report doesn't go there. Hah! Gotcha!)

In addition, the report summarizes the provisions of the key standards and certifications for sustainability (environmental) initiatives in the textile supply chain and ends up with some predictions. The report's key conclusion is that "evidence pointing to a new wave of sustainability is quite clear". The report predicts that (environmental) sustainability intiatives in the textile supply chain will be adopted by all major players, and will become a differentiating factor in supplier selection.

I might add a couple of predictions myself:

First, the word "traceability" will necessarily be on the lips of every manufacturer sourcing textiles and suppliers will need to be able to operate systems which give total supply chain transparency and accountability.

Second, manufacturers will need to change their own internal procedures. It will not be enough to require suppliers to be more environmentally friendly. Manufacturers will need to review the way they manage consumer demand and production planning which in turn affects the way suppliers can respond, and impacts the production, waste and logistics activities. Whether or not the 18 companies benchmarked will succumb to the pressures of slow fashion remains to be seen, but even if they continue fast fast fast fashion, they will have to start doing it a little differently to generate greater total supply chain effiiencies.

Third, as a result of all these brilliant supply chain efficiencies, manufacturers will pay their suppliers a fair wage and also share their supply chain savings with consumers, and we will all be able to afford a new wardrobe about six times a year. Oops. You don't believe that, do you ? Just kidding. :) Only 5 times a year.

The big advantage of this report is the ability to review 19 of the top players in the sector side by side and gain an overall  insight into what is driving environmental sustainability initatives in this sector. The textile sector is fascinating and contains many lessons for different industries. The challenges of environmental sustainability in the massively complex textile supply chains are incredible. This report is a useful addition to our body of knowledge and hopefully will serve to accelerate progress.

By the way, most of  the data provided in this report was sourced from Corporate Responsibility Reports. YEAH!  I told you CSR reports were good for something!

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Saturday, August 7, 2010

BBC, Cummins, Mauser CSR reports highlights and insights

Random selection of recently published CSR / Sustainability Reports and my totally frank opinion. Hah!

Period: 4/9-3/10 GRI: not. Assured: yes. UNGC: not  Pages: 45 Reporting since: 2001
One Liner: Very impressive report indeed, reflecting impressive performance.

Talk about responsiblity. The BBC says their audience reaches 233 million people EACH WEEK. That's some responsibility. What does the BBC see as its role in creating news and entertainment which makes the world a better place ?  After brief intro by CEO Mark Thompson, the bulk of this report works through 6 core sustainability themes ("public purposes") (divergent) before giving the low-down on the business's direct impacts (convergent). The key themes are : sustaining civil society, promoting education, stimulating learning and cultural excellence, presenting the UK, bringing the UK to the world and vice versa, supporting emerging communications. This is quite an impressive list showing the overall value a broadcasting company can add to society. In each section, the BBC describes a range of initiatives and in most cases, includes quantitative data showing the impact of each program. Equally, enviromnental measures are reported clearly (and all, incidentally show improved performance in this reporting year). Key disappointment: the BBC employs 17,000 people and they barely get a mention in this report - aspects of the BBC as a responsible employer seem to be outside the scope of this report which is an omission, in my view. NB: The Assurance statement from "The Virtuous Circle" is one of the best I have seen.

Cummins Sustainability Report 2010
Period: 2009 GRI: not. Assured: not. UNGC: not Pages: 116 Reporting since: 2000

One Liner:  Long but worth the read

Cummins is an industrial engineering firm with turnover of around $10 billion, employing 36,000 people in 51 countries (with an expectation of 30% increase in employee numbers over the next 3 years. This report is called "Meeting the challenges of global sustainability" The company's vision is "Making people's lives better by unleashing the Power of Cummins" and this report is a testimony to a powerful approach to social responsibility where the philosophy, the activities and the data are throroughly presented. The report is presented "in the spirit" of the Global Reporting Intiiative, though exactly what that means is unclear to me. The report has five main sections (environment, governance, corporate responsibility (society), employees and finance), each one followed by a case study of Cummin's community partnerships and activities. These include the flagship Earth University designed to create ethical agricultural engineers, a college of engineering for women in India, and another project in India where Cummins developed a way to power a rural village of 65 households by using Cummins generators running on a locally available renewable energy source – non-edible vegetable oil produced from the seeds of Pongamia trees. Amazing! The report is nicely padded with case studies, quotations from a range of Cummins' employees and snippets of context, such as the following background to the Cummins decision to ban cell phones while driving: "Nearly 80 percent of all crashes in the United States involve some form of driver distraction within three seconds of impact, according to the National Highway Traffic Safety Administration." Another  interesting aspect of this report is the description of the Six Sigma system which Cummins reports has saved them over $3 billion in 10 years. A nicely transparent report which, if a little long, is truly worth the read. Inspiring progress!

Mauser Group 2009 Sustainability Report
Period: 2009 GRI: B. Assured: not. UNGC: not Pages: 38 Reporting since: First report

One Liner: A good start but many promises to deliver on in coming years

Mauser, headquartered in Germany,  is a provider of industrial packing solutions, selling over 1 Billion Euros worth of solutions to the chemical, lubricant, pharma and other sectors, and employing 4,000 people. Mauser calls sustainability a "key business driver" and it is part of their new vision formulated in 2009.  What is nice about this is clearly this company has come to the realization that sustainability is strategic and represents a different way of doing business. More importantly, a key element of this is "strengthening their HR department" As my regular followers will know, this is a point on which I have a lot to say and regrettably Mauser don't elaborate on what they are doing with their HR Managers to equip them to address this new direction. Mauser do confirm that they have conducted a stakeholder analysis, and consulted with stakeholders but none of this is disclosed  though promised for further reports. As a minimum, in this first report, a list of key stakeholders would have been advisable. Mauser has made progress in mapping out its key environmental impacts and establishing directions for the future (though not targets). Key areas of impact are use of post-consumer resin in the manufacturing process and the development of Life-Cycle Anaylses for total product impact evaluation and reduction. This report is in my view a little lightweight for a GRI B report, but it is a good start and time will tell as to how Mauser deliver on their promises to expand, develop and report annually  in the future.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Thursday, August 5, 2010

Sustainable thank you

Thank you. Two little words that go a long way.  Writing Sustainability Reports take quite some effort and I was wondering how Companies go about publicly thanking those who have contributed to improved performance and to the production of the sustainability report itself. A little common courtesy and appreciation makes a big difference and adds a human face to reports. Even to the most boring of reports (mentioning no names :))

Who should you thank in a CSR Report?

Employees who have done their stuff
Stakeholders for reading the report and for (hopefully) providing feedback
Consultants, advisors, designers, assurers, copywriters etc who have worked with the company and/or on the report (yes, we are people too!)
External organisations who have supported the Company's sustainability initiatives
The CSR Reporting Manager ?

Who are the best thankers?

Thank (you) appears 6 times in the EasyJet Annual Report and Accounts (integrated CSR report) for 2009. Twice for retiring Board Members, once for the CEO, once for everyone who helped produce the report (by name) and a nice thank you to Easy Jet pilots (page 16) : We have outstanding people, including our front line cabin crew and pilots who are highly trained and professional. They all make a crucial contribution to our success and help to create an easyJet personality which is an important competitive advantage. I would like to thank them all for helping to deliver such a resilient performance in very difficult economic circumstances

Thank (you) appears twice in the Verizon 2009/2010 Sustainability Report - actually it's the same thank you to all employees from the Chairman and CEO which appears once in his opening remarks and once again, highlighted, at the end of the report. That's good enough for me. Twice.

Thank (you) appears once in the GoLite 2009 first sustainability report, and this is addressed to readers who are apparently as passionate about sustainability as the GoLite company is . 

Thank (you) appears once in the Zeon Corporation Report 2009 of Japan. Again addressed to report readers as it does in the Union Pacific Report for 2009.

Thank (you) appears once in the Bacardi Report for 2009, thanking readers in anticipation of their feedback.

Thank (you) does not appear at all in the Barilla 2008 CSR report (published August 2010) though there are 9 instances of the phrase thanks to .. thanks to the collaboration of, thanks to the team of ... but thanks to is not thank you. So I don't count it. Tough, aren't I ? 

Thank (you) does not appear at all in the Cooperative Group Sustainability Report for 2009, nor in the National Bank of Abu Dhabi's first report for 2009, nor in Vodafone's Report for the year to March 2010, nor in Dong Energy's report for 2009, nor in AEP's 2009 Corporate Accountability Report, nor in P&G's 2009 report.  Intel's 2009 Report doesn't thank anyone directly either, though it does refer to employee programs in which employees are thanked for every day performance. 
Actually, this surprises me. After I have worked on a report with a client, I feel soooo grateful to all those who have helped put it together, that it seems obvious that thanks are in order. Putting thanks in print is a positive thing to do - everyone like their efforts to be appreciated even if it is not individually by name. Thanking them in some other way (nice letter, box of chocs, bunch of flowers, life-time supply of ChunkyMonkey) are good too, but do not replace the impact of public recognition. Let's remember that it's people who run companies and people who write reports. Well done to EasyJet and Verizon for being the winners in my brief random analysis.

Thank you for reading this post.
Thank you for reading this post.
Thank you for reading this post.
THANK YOU for reading this post.

Ok, you can overdo it a little as well. :)   

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

Tuesday, August 3, 2010

100 companies benchmarked for CSR initatives

There are so many reports on CSR and Sustainability published by so many different people, companies and groups that it is hard to keep up with all of them. I find myself having to skim many of them, and even that's usually not before around 2 in the morning. Many offer minimal net additional value to the wealth of words and numbers reaching my screen. So when a report is produced that makes me stop everything and study deeply, I am thankful because it means I am learning something new and important that contributes to my knowedge and thinking about sustainability, and that makes me a better consultant, a better CSR blogger and a more critical and contributing member of the professional CSR community. This was my experience with the new Sustainability Initiatives 2009 Report from SLM Insights, a division of Sustainable Life Media, and Zumer.com. An Exec Sum can be downloaded here.

This report analyses over 6,000 individual sustainability iniatives from 100 companies in 10 sectors, producing detailed results showing: the relative rankings of each company in each sector based on the quantitative (cost-reduction driven) initiatives and qualitative (revenue-generating) initiatives.  There is also a comparison of the nature of the initiatives in each sector, showing where most  companies are putting their time and energies. The sectors analysed (and the three top-ranked companies in each sector)  are:

*  airlines ( Quantas, British Airways, Cathay Pacific)
*  alcoholic beverages (Anheuser Busch, Foster's Group, InBev)
*  automotive (Daimler, Honda, Toyota)
*  clothing (Gap, H&M, Inditex)
*  consumer electronics (Sony, Samsung, Toshiba)
*  diversified foods (Nestle, Kraft Foods, Danone)
*  footwear (Timberland, Adidas, Puma)
*  oil and gas (Royal dutch Shell, Total, Suncor)
*  paper products (Weyerhaueser, Norske SKkog, Catalyst)
*  personal household (Procter and Gamble, Kimberley Clark, SC Johnson)

Each sector is a mini-report in itself, and offers a comparable study of the focus and achievements against 38 different data points accross 4 categories:

*  Environmental Initiatives
   (leading iniatives here are GHG reduction, energy use and impact of products on the environment)
*  Social Responsibility Activities
   (leading initiatives here are community impact, employee benefits and  employee health and safety)
*  Product Responsibility Activities
   (leading initatives here are consumer health and safety, customerr satisfaction and marketing ethics)
*  Corporate Citizenship activities
   (leading initiatives here are transparency of political contributions, anti-corruption and CEO compensation).

What is also interesting in this report is the feedback from 1,700  consumers surveyed. In each of the consumer goods sectors, consumers were asked what is important to them,  data that can be contrasted with wthere the sector is actually focussing its efforts. In the Personal Household Goods sector, for example, energy efficiency is of most interest to consumers (42%) whereas the sector focuses 17% of its efforts in this area, with GHG reduction and material use being prominent iniatives. In the consumer electronics sector, consumers are most intersted in recycled materials used in product manufacture (48%) rather than the level of GHG emissions. Overall this report shows there is "significant discord between industry activity and consumer demand". A stark contrast reported in this context  is that Companies see community giving as an integral part of their sustainability program whereas consumers see corporate philanthropy as "old fashioned" , rarely affecting their purchasing decision. These are most interesting insights which could assist compaines in considering how their sustainability efforts address consumer  concerns, rather than more generic sustainability considerations, for added consumer engagement.

Findings and conclusions from this report are multiple. Some are:

Consumer interest in sustainability initiatives differed across industries - as a result, companies must address the specific consumer pain-points  for each industry
Minimal inter-industry collaboration occurred; opportunity exists for companies to share and learn best practices
Consumers only prioritize GHG emissions reductions in categories where there is a direct, visible output, for example in the automitive sector, where fuel efficiency was mentioned by 81% of consumers and GHG Emissions levels by a further 16%. In the clothing and apparel sector, for example, GHG emissions were not mentioned by consumers.
Waste reduction and recycling is an increasing priority
Companies are reporting on their sustainability activity more frequently and releasing shorter, targeted reports as a result
Companies are prioritizing supply chain efficiencies and seeking ways to reduce costs by improving energy use, water use and waste recycling programs

and perhaps one of the most significant conclusions of all, and one of the most disturbing, is this:

Few companies view sustainability as a core part of their global strategy; most still view sustainability policy as a means to mitigate risk and achieve operational efficiencies.

This means that CSR and sustainability is still at the level of short-term project-focused thinking and less at the level of creating true long term triple bottom line value - but more about this in my editorial for CSRwire.com  which will be published later this month.

I have lots more to say about the implications and insights this report raises and hope to find time to blog more with specific insights in coming days/weeks. In the meantime, these headlines should serve to give you an an appreciation for the richness of this study.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)
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