Thursday, August 18, 2016

Beyond Reports - 11 insights

The GRI Conference has come and gone, and I have been so busy working on so many client reports that I have barely come up for air, let alone come up to post on the blog. More about some of the reports I have been working on in recent and upcoming posts.

Lots of water under the bridge since the GRI Conference in May 2016... including the not-so-surprising-to-many-of-us departure of Michael Meehan, the GRI CEO since 2014. A new era of collaboration and innovation will now be replaced with a new era of searching for a new CEO. The hunt is on... though, as is often the case, organizations look further than they need to.

Someone  I believe is eminently qualified to lead GRI into a new era of better and more impactful reporting is GRI's current Deputy Executive, Teresa Fogelberg. Teresa has been a reporting advocate for longer than most of us have been reporting, and has advanced the positioning of reporting around the world through her work with governments and advocacy organizations more than anyone else on the landscape. As a veteran GRIer, she's well positioned to put GRI back on course. Continuity at GRI is critical in this period to avoid onging over-commercialization of the GRI services and focus on advancing the true value of reporting as a process, an output and an impact on the way business gets done and the way economies are run. Just as we might hope for the USA in the forthcoming elections,  a woman (the right woman) at the helm of GRI will be a new era of not only collaboration and innovation, but also, getting things done.

But I digress.

This post is about podcasts. You may or may not have noticed, but GRI has been putting out a series of short podcast called Beyond Reports for some time now. In fact, there are 6 in the series to date. The podcasts include a brief update of reporting news over the past month, and an interview with a reporting personality from the GRI network.

It was fun for me to be one of the six podcasters so far. At the GRI Conference, GRI's charming Media Relations Manager Davion Ford asked me lots of questions about my favorite subject: reporting. and this was the result:


Five insights:
"A challenge that is significant for companies is about reporting impacts and outcomes rather than a whole shopping list of everything they have ever done. A report is not an activity agenda - it should be a focused material account of how companies are making a difference in our lives. Companies find it difficult to report how they are making a difference rather than simply what they did."

"The biggest thing that companies have a challenge with is: bad news. No-on wants to put bad news in a Sustainability Report. I always advise my clients to include good-bad news, which means that you should disclose a challenge or particular difficulty, but you can position that in a good way by describing what to have done to address that challenge or prevent recurrence of a problem."

"Legislation is always a great motivator but often it motivates to the minimum common denominator.....two drivers that will change the motivation of companies to report are large companies and CEOs. Large companies - the biggest multinationals - are more or less getting it. If they are able to drive reporting through their supply chain, that's a real motivator for their suppliers. The second thing is, if you want to motivate a business, convince the CEO. If the CEO is convinced that reporting adds value to the business, she will make it happen!"

"Your first sustainability report is not the absolute best report you could ever produce. It will take several years of perfecting your process in order to get a better quality report."

"A limitation of reporting today is that there tends to be bits of information presented in a fragmented way, which doesn't necessarily reflect a consistency of approach year on year. If I am reviewing the report of a company, for example, I always look at one or more prior reports. You can't take a single report in isolation. Our expectation is that we can read a report, and that's it. The big challenge is for companies is to develop consistency over time in reporting."

The first podcast in the series was with Nikki McKean Wood who heads up Corporate and Stakeholder Relations at GRI. Nikki talked about the new GRI GOLD community.

Three insights:
"The GOLD community members are really our core supporters so we strive to put them at the heart of GRIs network, shaping the future of sustainability reporting."

"We hope to achieve an active, engaged and diverse [GOLD] community."

"This is a new era of sustainability... we see business taking action towards a more sustainable world, but there's a lot to do and a transformational effort is required by all to unlock the real value of sustainability data."     

The most recent podcast in the series is an interview with Christina Burmeister of Deutsche Bank:

Three insights:
"The reporting process is relevant as much for management decisions as it is for investors."

"The Financial Services Sector has experienced a major shift in the last decade.. sustainability is becoming more and more of a strategic imperative."

"One can always improve the quality of reporting and the fact that a defined set of information will be mandatory [from the EU CSR Directive]  in the near future onwards will help that case.. there are sill some challenges ahead of us and we will take this opportunity to strengthen our internal process and get the adequate information."

I encourage you to have a listen to the Beyond Reports Podcast series of GRI  and pick up loads more insights from people who live and breath Sustainability Reporting every day. Of course, listening to podcasts with ice cream helps our brain understand all those wonderful insights.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting AND Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen) or via my business website (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm). Need help writing your first / next Sustainability Report? Contact elaine:

Tuesday, August 16, 2016

Nine things of note in Strauss Group's ninth report

The Sustainability Reporting journey is always so fascinating. The companies that I love to work with treat Sustainability Reporting as an opportunity for deep reflection, discussion, debate, consideration, revision, re-framing and renewal. While these processes often happen throughout the year, the choice to publish a Sustainability Report by a certain date ensures that these process streams are priority-funneled into one orderly alignment of content that becomes the company's account of its impacts and its unique sustainability story.

Strauss Group has been doing this now for the past nine years, and while you might think that it's easy to simply pick up with each new report where the last one left off, this is never the case. Our world is so dynamic, our days are so crammed with everything and great companies do so much in one year, that each new Sustainability Report is a new challenge and a new opportunity. Hence the reflection, debate and renewal. And this this case, Strauss Group's ninth Sustainability Report is a unique story, a creative presentation and a compelling read.  

1. Listening, Acting, Improving
This year, the focus for Strauss was Listening, Acting, Improving. It was driven by deep introspection throughout the year, and consultation with stakeholders, especially consumers, who provided important and insightful feedback to Strauss Group about things that go right to the core of the business and the way the business is conducted. Osnat Golan, VP for Communications, Digital and Sustainability at Strauss Group made the point: "During the past two years, we have learned that the highest priorities for our consumers are fair pricing and helping to curb the rising cost of living, as well as advancing healthy nutrition through our products." This year, Strauss Group's report reflects the actions the Group has taken in direct response to stakeholder concerns and expectations.

2. Fair product pricing
There are few, if any, food companies that address pricing policy in their Sustainability Reports. What is the responsibility of a food company to price food products so that a broader spectrum of the population can afford to buy them? How many companies acknowledge this as a responsibility? I suspect that Strauss Group is pioneering in its approach to respond to the rising costs of living and the affordability of basic foodstuffs by reducing consumer list prices across a range of products in the order of between 2.5% and 22.8% in its home market in Israel in 2015. In a year when consumers were continuing to assertively state that food pricing has put certain products beyond their reach, Strauss became the first company (and the only one to date) in the local market to listen, act and improve. These price reductions are significant. After all, corporate responsibility and sustainability is not just about saving the planet. It's also about contributing to the quality of life on the planet. Fair pricing is a highly sensitive, subjective and complex issue - it takes a bold company to accept "fair pricing" as an objective and take measures to implement a fair price policy for consumers.

3. Supporting employees
The second initiative that ran alongside support for consumers in 2015 was support for employees. Employees are consumers too, and if the cost of living rises, they feel the pinch just as other consumers do. Many companies today accept the concept of "living wage" and implement policies to compensate employees in line with a target wage level. At Strauss in Israel, following the direct input of hundreds of employees in feedback meetings over the past two years, Strauss understood the need to protect lower income employees and took this seriously as an element of the company's approach to corporate responsibility and its social license to operate. In the past two years, Strauss boosted benefits for employees at the lower end of the income scale and in 2015, set the way for several very significant additions, including a fixed proprietary minimum wage around 7% higher that the legally mandated level, child care support worth thousands of dollars per year for eligible employees and the opportunity to contribute to an employer-matched tax-free savings fund that helps employees protect their future with an accessible savings program. In addition, employees receive a host of other benefits to help them cope with the economic challenges of simply making it through the month in the black.

4. The Kitchen
The progress made at The Kitchen is worthy of note in Strauss Group's ninth report. The Kitchen is a pioneering initiative by Strauss with the support of the Chief Scientist of Israel, designed to advance food-tech in Israel to deliver new technologies that improve the sustainability of food production or deliver new benefits for consumers. This is a contribution to the advancement of the food industry - the technologies that are developed will not necessarily used by Strauss Group in their operations. With an investment of $25 million over 8 years (40% funded by Strauss, the remainder by the Israeli government), in its first year of activity, the Kitchen has already propelled three amazingly innovative food-tech startups into a new sphere of development and commercial activity. Entrepreneurs would have a hard time accelerating their development without such support. Enabling them to get on the map is a significantly positive sustainability impact.

5. The performance
In one year, since the last report, Strauss Group has made significant progress on several fronts, and the performance highlights are delivered up front for readers who want an overview and not an extensive read. One summary infographic for each main section of the report does a good job in pointing readers in the direction of what's most significant.

6. The design elements
Of course, Sustainability Reports are about content, not design. But design that brings reports to life makes it fun for us to read the content. It demonstrates an intent to produce a document that will encourage readership, rather than a stuffy old PDF crammed with text that turns you off before you get to page 2. In 2015, the folks at Strauss Group's long-standing report designer, Studio Merhav, have excelled themselves in creative design that supports the narrative and makes this report a delight to read. Infographics blended with photos and freehand design cause you to stop and look at the imagery as you read the report, giving you time to consider the meaning and the messages that they reflect. A world away from the Stock era and hand-cupped globes of the early days of reporting. Here are a few examples. Aren't they fabulous? 


7. Environmental data presentation

Another design feature in this ninth report is the presentation of environmental data. Instead of the usual graphs and charts, environmental data is presented in a way which makes it fun to actually look at the numbers. This presentation supplements the detailed performance tables over several years that are included in the report for those who want the specific numbers. But for most of us who want to see the big picture quickly, this presentation does the job. 

8. The credits
Not many companies include credits to those who work on the report. Strauss Group has always done that. Credits to providers who have worked on the report is an expression of the respect Strauss has for other businesses, small businesses, as it happens, and demonstrates another aspect of both transparency and social responsibility. (At this point, it's appropriate to disclose that I worked on this report, together with my team at Beyond Business - the fourth report we have supported for Strauss Group alongside additional consulting work on different aspects of strategy development. It is always a pleasure and an honor to work with Strauss.)

9. Daniela
The achievements of Sustainability Reporting Managers often go unsung in our reporting world. A few present at conferences, a few write blogs, but most of the hard work in reporting is driven by passionate, skilled and impressively dedicated individuals who mobilize entire organizations in order to get a result their companies can be proud of - most of whom we never get to know. The achievements of Reporting Managers are no small thing, and real credit is due to them. So it is with Daniela Prusky-Sion, Strauss Group's Sustainability and Internal Comms Director, who has led this work for several years. Daniela is a dynamo, never tiring in her efforts to do things better, do things right and do more things to advance Strauss Group's strategic approach to sustainability and improved contribution. Reports under her watch get better and better.

As usual, take a look! Give feedback!

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine: 

Friday, July 29, 2016

Liberty Global: Empowering more than digital

There is something empowering about Liberty Global's 2015 Corporate Responsibility Report - and it's not only the title. While Liberty Global may be referring to "Empowering Positive Change through Digital", the truth is that this report is an empowering experience for most who read and publish reports. 

Once again, the folks at Liberty Global set themselves a challenge... at 22 pages, this is the shortest, but probably the most powerful report yet from Liberty Global. It's a full 10 pages shorter than 2015, and less than half the length of the (first) 2011 Report .. all the while the company has been growing, expanding, acquiring, developing and connecting more and more millions to the digital world. There is a certain skill to delivering more performance, writing fewer words and, at the same time, producing a Corporate Responsibility Report that gets the message through, is G4-compliant and actually, very interesting. Liberty Global not only continues to improve sustainability performance; with every report, the reporting team demonstrates greater skill in articulating it succinctly.

In my post about the 2015 report, I offered four process points that explain this winning formula.

First, get the strategic framework right. 
Second, be completely selective about what to include and what to exclude. 
Third, once you have selected the content and stories, keep the narrative compact, minimal, and avoid repetition. 
Fourth, where you can, use visuals to tell the story and save on words. 

I think today, I would probably add a fifth element: Plan and stick to the plan. Starting your report by clearly envisioning the outcome, planning the page-by-page content and making choices before the keyboard starts to rattle, is the key to maintaining the discipline required of all the four other steps. In this way, the process becomes empowering. It enables all the players involved to focus on what's really important and wastes less time in often unproductive debate. Also, a shorter report means fewer words to proof and correct, fewer drafts to revise, fewer content-providers to herd in to approve their sections and far less overall time investment than most longer report counterparts. And, stakeholders still get to know what they need to know.

This year, Liberty Global published a new strategic framework. It builds on the legacy framework that Liberty Global created four years ago, and still plays in the space of opportunity, positive impact and doing good with digital. With an overarching theme of Connected Purpose, the new framework has two clear pillars: Digital Imagination and Responsible Connectivity. 

You will also see the connection to the material impacts reported by Liberty Global, that informed the new strategic framework.

The 2015 Corporate Responsibility Report follows the structure of the strategic framework. Learning about Digital Imagination, we read about how Liberty Global is helping share skills that are needed in the digital economy, investing in innovators and entrepreneurs to use digital technology to inspire social change and bringing people together to use digital technology to solve the most pressing issues facing society. A few select case studies show that it's not all (just a few) words. It's (just a few) words that are underpinned by real actions. 

In Responsible Connectivity, Liberty Global walks us through how the Company is improving customer service, protecting customers’ personal data and helping keep children safe online. In the section on Sustainable Growth, Liberty Global demonstrates strong progress against 2020 environmental goals and describes how it connects with industry colleagues to reduce grid dependency and improve the emissions efficiency of the telecommunications sector as a whole. In Empowering People, the narrative describes how Liberty Global continues to invest in and develop its workforce which has now grown to more than 65,000 employees (including outsourced employees). Here again, a light sprinkling of case studies adds credibility.

In this case study, the picture shows Crystal Crawford, Liberty Global's CR
Manager (left), and Marta Pagan, CR Reporting Team Member (right)
one of the smartest reporting teams I know
The report finishes up with Liberty Global's signature Performance Summary - two pages packed with four years of environmental, workforce and other social data points, the most essential ones for most stakeholders. Presenting data in such a concise and well-ordered way is yet another element of skilled, focused reporting. This presentation empowers report users to get to what they need fast, and easily see trends and performance ups and downs.

As in prior years, Liberty Global publishes a separate GRI Content Index, also available for download. This includes one of my favorite tables - the G420-21 table - providing a road-map showing the route from material impacts to performance indicators. So many G4 reports still fail to make this bridge - and leave a list of material issues hanging in mid-report with no connection to the performance indicators actually reported. Every G4 report should have a table like this.

As far as reports go, Liberty Global has again produced a report that is both short and empowering in more ways than one. I'd love to write more but I am worried that this post might actually become longer than the report itself .. haha.

And, as usual, a little disclosure: Liberty Global is my client and I worked on this report.

And, as usual as usual, take a look. Give feedback.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine: 

Monday, May 23, 2016

Comrades. It's all about jobs.

One of the most memorable moments in the 5th Global GRI Conference last week was when the Minister of State for International Development (United Kingdom), The Rt Hon Desmond Swayne TD MP took to the stage and opened with the greeting: Comrades! It's all about jobs. 

That woke us all up. Minister Swain continued to elaborate, loudly, deliberately and perhaps even a little flamboyantly, in the following way, more or less. (Apologies, I may have missed a sentence or two in my transcript below)

"Let me give you my take on the Sustainable Development Goals.. or as we must now learn to call them, the Global Goals. Fundamentally these will, of course, deliver the disappearance of absolute poverty by 2030, and in doing so, will have created a more prosperous more stable and safer world. But ultimately, these goals come down to one thing: It's all about jobs. It's all about jobs in the end. A livelihood, a job - being able to put a roof over your head, putting food on the table, educating children, providing healthcare, generating the tax revenue which governments require to provide social services - it's all about jobs and if you look at the world, you will see that people are going to enormous lengths to secure a livelihood, a job or a better job. 40,000 people a day are going to the extraordinary lengths of leaving everything they are familiar with, everything they know, leaving their homes in pursuit of a job. Even if we take those who are being driven primarily by conflict, just look at that behaviour.

"Let's take Zaatari, on the verge of becoming the world's largest refugee camp, look at the conditions - they're much better than in many cities around the world with security, safety, reasonable accommodation, sanitation, clean water, food which the World Food Program provides, UNICEF will educate the children. But these people will nevertheless leave because the one thing that it cannot offer is a job opportunity. For a job, these people will risk absolutely every penny they have. It's all about jobs in the end. The world needs 600 million new jobs over the next decade if we are going to avoid a growing army of frustrated, despairing and angry young people who are unemployed or underemployed - exactly the sort of raw material, the circumstances, that generate conflict and instability which is the enemy of any kind of employment. So it's all about jobs.

"Now, I confess as a young economic student to having been enthralled with a right-wing economics professor in my University and his catchphrase was: Well, after all, there's only one thing worse than being exploited by capitalists and that's not being exploited by capitalists. HaHa. He reinforced his ignorance with another of his catchphrases: After all, surely any job has to be better than the alternative, which is daytime television! showing his clear ignorance of circumstances in the real world. If only it were so. So it is not any job, comrades. What if your job literally enslaves as many jobs do in all sorts of different forms? What if your job is breaking your health, poisoning the air or water or the land in which your community lives? What if your job literally costs you your life?It's not any job. We require inclusive growth - those kinds of jobs are actually job destroyers because what they do is generate the very sense of grievance or injustice which is the raw material for conflict which is utterly destructive of any prospect of employment.

"So we need inclusive growth. From where is it going to come? Well, my ideological prejudice will tell you that it certainly won't come from governments. Governments create the circumstances in which there can be inclusive economic growth - by providing a relatively benign investment environment, the rule of law, contract law, light-touch regulation - all those things that are essential to Global Goal number 16 and the targets that underpin it. Equally, the greatest enemy of employment can be a government where there is no rule of law, where there is arbitrary and unpredictable taxation, where there is no creation of successful enterprise, where people get jobs because they are somebody's cousin rather than because they are efficient. Any number of things, I assure you, governments can screw up and drive jobs away.

"I only know of one engine that can release initiative, enterprise and hard work of ordinary people to generate jobs and that is private-sector-led investment - the only sustainable engine of inclusive economic growth. But how do we ensure that those enterprises spend as much time addressing the impact of their enterprise as they do maximizing profit? That is where organizations such as GRI come into being. I think it's a huge compliment, a huge achievement, that just recently the Japanese Stock Exchange has made the GRI standard a mandatory requirement of membership. A huge leap forward in this vitally important set of guidelines for promoting transparency and collaboration. That's why the Department of International Development is so passionate in our support for this kind of initiative.

"May I make three suggestions for ways that we can drive this agenda forward. Firstly, with respect to new technology - let us harness new technology to make those reporting standards ever more up-to-date, ever more relevant and drive that agenda forward. Secondly, let's find ways of ensuring that this agenda - the environment, human rights and these proper concerns of enterprise are brought into the main effort, the mainstream, the core of the enterprise and not tucked away in a compliance department or in a department that ticks the boxes to show that the enterprise is meeting all its requirements. Finally, and most importantly, how do we address and engage those who are not already in this room? The reality is I'm preaching to the converted, otherwise you wouldn't have come to this conference in the first place. How do we engage those enterprises and draw them into this initiative so they too can be transparent and accountable? I know our best brains are working on it."

The message is clear. It's all about jobs. Creating and maintaining jobs, I believe Minister Swain was saying, is the core of a corporation's social impact and therefore accountability. In G4, soon to be reborn as a standard, job creation is not identified as a core material Aspect. There are references to inclusive hiring - but that's about diversity (G4-LA1). There is a reference to jobs supported in the supply chain as part of an organization's indirect economic impacts (G4-EC8). But there is nothing about creating jobs, sustainable jobs, as a core objective for corporations. Should there be? Job creation is often the outcome of successful business, rather than the driver. Companies will tell you they do not do business to employ people but that they employ people to do business. There is nothing about layoffs in the GRI framework and most companies do not tend to report layoffs. Should this be a new performance indicator? In the U.S. in 2015, Forbes reports almost half a million job cuts. I recently heard a talk on a webinar by a Manager at social enterprise Greyston Bakery, whose mission is: "Greyston is a force for personal transformation and community economic renewal. We operate a profitable business, baking high quality products with a commitment to customer satisfaction. Grounded in a philosophy that we call PathMaking, we create jobs and provide integrated programs for individuals and their families to move forward on their path to self-sufficiency." Job creation is as central to Greyston's mission as baking cookies is central to their operation. 

In any event, I thought Minister Swain got his point across very effectively, while demonstrating a sound knowledge of the issues at stake and the global environment in which we live and work. Is it all about jobs? Maybe it is, and maybe it isn't. But I could add that it's not only all about jobs. It's also about an ecosystem that enables people to get to the jobs, develop and thrive, and, ultimately, enjoy an ice cream here and there. I'd like to thank Minister Swain for one of the most powerful speeches at the GRI Conference. IMHO.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine:  

Friday, May 13, 2016

The GRI STANDARDS Exposure Draft explained

It's official. G4 is now becoming a STANDARD. GRI is looking for input to the new Exposure Drafts for GRI Sustainability Reporting Standards (GRI Standards) in the Public Comment Period which is taking place NOW and will continue until 17th July. Of course, for all of you attending the 5th GRI Global Conference next week (come and say hi!) you will be hearing a LOT MORE about that, so you might want to hold off on your comments until after the event. In the meantime, I decided to translate the technobabble into a digestible version of the changes for those of you who want to know more about what it means, in addition to what it means, if you know what I mean.  

I also took the opportunity to have a chat with the two folks who are key to making this change happen - Chelsea Reinhardt, GRI's Deputy Director of the GRI Standards Division, and Bastian Buck, GRI's Director of the Standards Division - both of whom shared some fascinating insights. Chelsea has a strong background in standards, having led a full supply chain standards review for the Marine Stewardship Council in a previous role. She also has great taste in ice cream - cappuccino chocolate chip is her thing. Sounds good to me. Their insights are included through this post, which is LONG. So grab your Chunky Monkey and let's get started. 

A GRI Standard - how scary is that?
I suspect that for most of us, hearing the word STANDARD brings a sense of almost regulatory-like scary officialdom to sustainability reporting - after all, what we have had so far from GRI is a periodically-updated set of guidelines in the form of a framework - and that doesn't sound particularly threatening. It's a credit to GRI that the voluntary uptake of this framework has been so widespread by so many companies around the world - although the cynics (or realists) among us might suggest that because the application of the framework has been so pick'n'mix-ish, it's been easy for many reporters to claim adherence to the framework without actually investing the rigor that adherence requires and without actually adhering. Adherence without adherence has been a major blow to the credibility of Sustainability Reporting over the years. As the CSR Reporting Blog has often pointed out. 

Now, with G4 becoming a STANDARD, is all that going to change? Are we going to enter the era of ISO G4 that requires an administrative army, a battalion of auditors, a paper trail to Antarctica and a list of corrective actions as long as the Great Wall of China in order to report GRI? Is reporting going to become a headache, rather than the FUN we all have today? (What? Not fun? Then you are not doing it right!) Well, you know what, I am not going to say it's not a little scary as I think there is a little more to the transition to Standards than we might believe at first glance. It's positioned as G4 same but better... but when you read the small print.. it's actually G4 with many new twists. We'll still be in the same ball park but the ball will be a little different. Stay tuned.

Insight from Chelsea
"One of the main challenges in transitioning the standards has been the size of the task. Going through more than 300 pages of very dense content in the G4 guidelines, the Implementation Manual and the FAQ document. We have been sifting through line by line, under the oversight of the GSSB, tying to make decisions on which content rightfully belongs as a requirement in the new Standards and what should be rightfully positioned as guidance or recommendations. We are really trying to bring it all together in one place and this often involves considering the historical context in which the content was developed and going back to the output of the G4 working groups as well."

Insight from Bastian
"The discussion about adherence to the Standards and quality of reporting has come up frequently. One of the main struggles for GRI is that the Standards are voluntary and adherence in the current context is first and foremost a claim that a reporting organization makes. There are probably a range of mechanisms needed to introduce rigor. Certainly GRI should be more proactive about bringing the users of reported information into this discussion. But the priority right now is the Standards with a very clear signal from the Standards Board that credibility is something to look at and that is high on the agenda."

Materiality still center stage
The new Standards retain the principle of materiality as a core element to shape the entire disclosure, in the same way as in G4. We have seen in many G4 reports, however, that materiality can be whatever you want it to be - and the detail of how companies convert stakeholder input into a dot on the matrix is often non-existent. I had wondered if the transition to GRI Standards might not have taken the opportunity to add some requirements for more disclosure about how materiality is determined.

Insight from Chelsea
"The process for prioritization of material issues in the Standards has not changed fundamentally. The principle has not changed but we have strengthened the guidance to give more specificity about what we expect to see reported against the materiality principle. We are currently preparing a guidance document that will be released with the Standards about identifying and prioritizing material topics and applying the reporting principles. In some cases, we have seen that the materiality matrix has been misinterpreted and we are trying to improve the consistency of reporting materiality in the new Standards."

The skinny
Here is the short version of what's going to change. Instead of G4 being two documents - the Principles Manual and the Implementation Manual - there will now be to be a set of multiple modular Standards:

The first three - SRS 101, 201 and 301 - are what we today know as the Reporting Principles / In Accordance criteria, General Standard Disclosures and Disclosures on Management Approach (DMA). The remaining standards each cover an individual topic, based on the G4 Aspects, and include all the Performance Indicators we love so well. Sector Disclosures still exist, but in the new Standards they are referenced as guidance, not as a requirement.

The In Accordance options remain the same in this new setup - you need to report against SRS 101, 201 and 301 and one disclosure for each material topic for CORE and every disclosure for each material topic for COMPREHENSIVE, just as now in the G4 framework. 

Selection of standards from the 400, 500 and 600 series are determined by the selection of your material impacts - just as now. If you don't want to go the full monty, you can use one of the Standards - say SRS 505 for reporting emissions - and reference that in isolation - just as in the current setup, you can include "disclosures from G4" without claiming In Accordance with the entire sustainability reporting framework. Note that all the Standards now have their own numbering, so Disclosure 403-2 in the SRS 400 series is the new version of G4-EC8 in the Indirect Economic Impacts of the Economic category. There are several changes in the order of the different disclosures so in making the transition, some application will be required to work out what's moved and where it's moved to.

Insight from Chelsea
"There were many compelling arguments to take away the (Economic, Environmental, and Social) categories altogether, as so many issues are cross-cutting and have both social and environmental implications. But on the other hand, there’s a benefit in having categories to help users navigate and understand the new structure. Ultimately we took away the sub-categories – but this is subject to change with feedback we may receive."

Insight from Bastian
"With regard to the Sector Disclosures, what we have learned over time is that one of the big struggles is grouping – companies’ activities often cut across different industries and are not directly comparable. The other thing is we don’t want to establish several levels of the Standards going forward, the vision is to be global, comprehensive across the board of potential sustainability impacts of corporations. What we have on the horizon is guidance around issues that you might want to consider if you have a certain business activity… and that would work in the new structure going forward. Having been around in these discussions for so many years, I am still hopeful that we can build that out. It is a big stretch and requires more resources but our priority today is to get the Standards in place. Reporters can also of course make use of the sector guidance from other sources in conjunction with the GRI Standards - they have been written to allow this."

Insight from Chelsea
"The options of core and comprehensive are definitely a point of discussion and continued debate. The decision was made at this point in time to maintain both options as consistent as possible throughout the transition to Standards. There is already going to be some transition work for companies but it is one of the priorities for future review. We will be consulting on this, probably later this summer. There is no consensus here that these are perfect options but once we see how companies are using the Standards, we will be able to consider that what changes might be best for a review and redesign. These will be really exciting conversations for us to consider."

Insight from Bastian
"Looking at the GRI Standards, going forward, they will be more appropriate for use by policymakers. Take the EU Directive for instance. GRI Standards are aimed to attract a new audience not just retain the ones we have. There may be specific requirements in different jurisdictions for companies to report on ESG issues that can be fulfilled by individual GRI Standards or sections of GRI Standards not necessarily against the entire set of standard relating to specific core or comprehensive options."

What's in the box? 
The Exposure Drafts of these documents are here and the party pack includes: 
  • The first part of each of the three universal standard proposals SRS 101, 201, 301
  • One example topic-specific Standard in the Economic, Environmental, and Social categories
  • A revised Glossary of Terms
There is also a 77-page background document which you can find here which provides a blow-by-blow account of all the changes. 

All in all, you have 207 pages of documentation and 77 pages of explanation. Time to order more Chunky Monkey.

Insight from Chelsea
"There were some definite debates among members of our Standards Board about the nature of the content and the outcome we are trying to get to with these specific disclosures. There is actually a public record of all these conversations and outcomes on our GSSB website. There were also some structural debates – members had different opinions about the structure of the content, for example, do we create a structure of one standalone standard or should that be five separate standards. In the end, we settled with one standard but that was not necessarily a unanimous vote. This might be revised further depending on stakeholder viewpoints."

Learn the new language
GRI is known for creating its own language and the lingo associated with G4's introduction was somewhat unwieldy to say the least. All of a sudden we had to get used to Specific Standard Disclosures, Aspects, Aspect Boundaries, In Accordance and a whole lot more. In the transition to the GRI Standards, we will have to adjust once again. First, each is standard is now an SRS. We can handle that. But just as we had got used to calling everything Aspects, the new proposal kicks that out and replaces that with the term, "topic", no longer making the distinction between a GRI prefab material impact (Aspect) and any old material impact (topic). In addition, the GRI Standards adopt the aceptable lingo for standard-setting practice - we now need to understand the nuance between what we shall report, what we should report and what we can report. If the disclosure says you shall disclose, then it's required in order to be In Accordance. If the disclosure says you should disclose, or you can disclose - then this is not required - it's a recommendation or guidance. The new Standards are full of shalls, shoulds and cans.. You too should, shall, can adapt to the new language of the GRI Standards when you prepare your reports in the future.  

When is an Aspect not an Aspect?
When it becomes a STANDARD of course. In the new era of SRSs, Aspects have no home. They have become topics. Just like any other topics. You all have this table of Aspects committed to memory.

 Now it looks like this: 

GRI has whittled down the total number of Aspects ..errr topics.... from 46 to 35 and, as you can see, things have moved around a little lot - anti-corruption and anti-competitive behavior are now in the category of economic topics rather than social topics, for example, and many Aspects which had been duplicated in G4 - such as three different supplier assessments for labor, human rights and society have been boxed into one Supplier Social Assessment topic. All the grievance mechanism Aspects that were introduced in G4 have not been continued as individual GRI Standards - they are now to be part of the DMA and only disclosed if material. Another big change here is that there are no sub-categories for social topics.  

In many ways, this change to the Aspect-topic table makes a lot of sense - it's almost as though GRI is correcting the mistakes of G4 by tidying up the set of predetermined topics we can choose from. Some of them were indeed rather awkward. On the other hand, this list of 35 is not extensive enough and we might have expected GRI to dig a little deeper at this stage and develop a more comprehensive list of topics that help align the language and performance reporting around similar issues. If this list were broader (and I understand it can never be exhaustive), companies would be more easily able to match issues that are material to their business to the list of available topics. This would encourage more consistent reporting around more issues. As it stands, social issues such as access to products and services, animal welfare, digital inclusion and many many more are left to the vagaries of SRS 403-2 (G4-EC8 in a former life) - significant indirect economic impacts -  a sort of catch-all disclosure where nothing quite fits exactly but it's used because it's the nearest thing when you want to align your materiality within the G4 framework and you have topics that do not fit anywhere else. SRS 403-2 has more guidance clauses than Liberace had sequins. Guidance, that means, can, not should or shall. 

In essence, this goes right to one of the core weaknesses of G4. The framework should be about reporting impacts, but in fact, many of the topics and performance indicators are about reporting actions. Almost every company that uses the framework has indirect impacts far far greater than all of its direct impacts added together. Yet, in G4, so little space is given to these type of impacts that it drags reporters back to "what we did" rather than "where we made a difference to people's lives". Significantly enhancing the table of topics and providing guidance for disclosing on these would make the GRI Standards more robust and relevant to more reporters and report-users than the current proposal. I understand that one of the great benefits of the new Standards structure is that new topics can be more easily added in the future, and that this will be a priority for GRI once the Standards are in place.

When is a Boundary not a Boundary?
When it becomes a STANDARD of course. In G4, one of the most difficult things we had to get our mind around was the requirement to state Aspect Boundaries. The Boundaries, we were told, were where impacts occur.

From G4 Framework Glossary

The G4 framework requires reporters to describe where an impact occurs, including the geographical location, whether this is either within your organization or outside your organization, and then define who it affects. For example, child labor may be a problem in certain geographies and the impact maybe outside your organization because the child labor occurs at your supplier locations and not in your own factories. So, the material issue is child labor, but the Aspect Boundary might be external in country X. You might be tempted to think that it's material for you, but that, because it's external, you are not accountable. 

In the new Standard it has been clarified that the Boundary relates to the entities which cause the impact, wherever the impact occurs. Child labor may be the issue, and even if the impact occurs at your supplier's factory, you are still the cause of that impact insofar as you hired the supplier to do the work. No question here about accountability. Your supplier, your problem. In the proposed GRI Standards you are required to disclose which of the entities inside or outside of your organization are causing the material impact - no geography required (SRS 301-1). However, the new Standards do give you a little room for maneuver with some guidance: "If the Boundary for the material topic is defined as outside the reporting organization, it can be difficult to report the topic-specific disclosures. This can happen if, for example, the Boundary for a topic includes part of the supply chain, and the organization does not have access to supplier information to report the topic disclosures. In these cases the organization is still required to report its management approach for the topic, in order to claim that the report is in accordance with the GRI Standards."

This is all rather tiresome, somewhat confusing and probably not even all that relevant. The entire concept of Boundaries is a little off-putting. In my view, the simpler version would be to require (shall) companies to disclose material impacts using their entire value chain from sourcing to market as a start-point and leave out Boundaries altogether.

Insight from Chelsea
"The Boundary change is one of the things we want to be communicating about during this consultation period. The clarification around the definition of Boundary is very consistent with the intent of the definition in G4 and with the outcomes of the original working group that developed that content. One of the main references are the UN Guiding Principles on Business and Human Rights and this together with the OECD Guidelines established this concept that companies should take responsibility for the impacts they link into not just their own direct impacts. We didn’t provide enough explanation in the G4 text to help companies interpret that consistently. We have had many reporters who asked for clarification. Fundamentally the STANDARD offers a clarification which is not in contradiction with G4, but we probably didn’t do a complete enough job in explaining it in the first place. The other misconception was the geographic interpretation of this, that’s not really a real issue for this particular disclosure."

And now to the fine print
The remaining changes in the transition to Standards are largely about terminology, improved consistency and clarity, and by and large, this works. More to follow on this as I scrutinize the fine print, but in general, the changes seem positive, for example a slightly clearer version of the "describe your supply chain" disclosure and more.

Insight from Chelsea
"There are a number of more subtle but important changes and our job is to call them out in a way which is clear and digestible. For example, the content index will be more outcome based and we no longer prescribe the use of a specific table format. The intent is that it will make it easier for reporting companies. I would say for companies that were previously working off the guidelines and not consulting the Implementation Manual, there is a lot of additional guidance and this is a good thing for them to dig into and understand. This may look new to some organizations who have not used the Implementation Manual thoroughly, but we think it will be very helpful."

More insight from Chelsea
"Comparability is of course harder across companies with the concept of materiality. I think you will see some improvement in the Standards that leads to greater comparability with improved clarity. In some parts of the Standards we have more specific information about what should be reported where in the past it was less clear. We believe that companies want to do the right thing and report fully and correctly. The Standards make a clear distinction between what is mandated to report and the guidance and coaching that can help you to get there."

GRI STANDARDS: Good, bad or indifferent?
The main challenge with the GRI Standards, targeted for implementation for reports published in 2018, is that it comes so close on the heels of the G4 introduction. Most reporters are just getting their minds wrapped around G4, and whoosh, in comes STANDARDS with SRSs, topics, shalls, shoulds and cans and a different look and feel. I doubt it will be a very easy transition. GRI says the Standards are more user-friendly - they weren't all that user-friendly in the first place - but there are some welcome changes and clarifications. The big advantage will be that GRI can play around with the individual standards without having to revamp the entire standards suite which will enable updates, revisions and the addition of new topics more quickly, efficiently and effectively. Of course, I still suspect that the main motivator for GRI was not to improve G4 but to convert it into the currency of the leaders. Self-respecting organizations in this space have to have a standard. But if that makes reporting clearer, easier and better, it's progress. Time will tell if GRI Standards will have such an effect - in the meantime, we can be cautiously optimistic. 

Insight from Chelsea
"Everybody in our Standards Division and our Board would agree that it is complicated. It is harder to transition content into a new structure than we perhaps originally anticipated. The positive is that it will be a better product – we have done a lot of clean-up work and editing along the way. For reporters, almost all of the fundamental concepts of G4 carry through – there are no major shifts in the reporting process or additional work needed to report in the standards. What will be required is some time invested to understand the nuances of the changes and which changes impact different companies. We will be developing some detailed mapping documents showing exactly what has changed as well as a new training module. A guidance document is in development and we are going to create an ecosystem of resources to help companies manage this change. But we believe the overall impact on the reporting process will be fairly minor."

And on that positive note.... see you in Amsterdam for lots of interesting standard-type debates!

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine:  

Thursday, April 28, 2016

7 challenging questions on CSR

I am looking forward to my first trip to Bratislava on May17th to take part in the annual CEE CSR Summit as the guest of the Pontis Foundation - the leading organization in Slovakia promoting CSR, philanthropy and capacity development. The annual CEE CSR Summit is the oldest and largest event on corporate responsibility in Central and Eastern Europe, and is attended by almost two hundred experts on CSR, sustainability, the environment, and human resources.

One of the great things about speaking in different countries is that you are able to spread the word in so many different languages. In preparation for the conference, I was happy to be interrogated by the conference team and by local press. This interview was published recently.....

To spare you the pains of Google Translate, here is the interview in full .. in English. Thank you to journalist Veronika Sokolová for challenging me with these questions:

You are leader of a consulting agency, which focuses on issue of corporate social responsibility. Can you describe your working day? 
If I had a job where I could describe my working day, I would probably look for another job! My days are never the same. One the one hand, I am very hands-on in strategy and reporting projects for clients, on the other hand I try to stay ahead of the curve on the developments in the sustainability world. I do a lot of talking with people to hear about their activities in the sustainability area, and I do a lot (a lot!) of writing. My work includes a host of different activities with clients around sustainability reporting – ranging from interviewing anyone from a CEO to a maintenance manager in a company, taking part in conference calls or client meetings, analyzing spreadsheets, developing concepts, creating narratives, proofing, helping align design to content and supporting PR and comms. A not insignificant amount of time is taken up with preparing offers for client projects or bids for reporting contracts – some of which are successful! 

At a more general level, I spend a lot of time scanning new sustainability reports that come across my radar and reviewing several in detail for publication of expert reviews, for articles for my blog or as part of a benchmarking exercise. Several times a year I find myself preparing for speaking engagements at conferences or running workshops while several times a day I scan CSR news from a range of sources. I always try to make time to check what's happening in my social media channels and try to stay involved as much as time permits. I guide the work of my small team and spend time reviewing the status of their work and planning next steps. Many times a month I speak to people who want to find work in the CSR field or with companies that haven't quite decided how they want to move forward in sustainability and seek general advice. So every day is varied, all days are very full and almost(!) all days are really fun.

Which standard should company follow, to work in accordance to CSR? What are the main criteria or measurements, on the basis of which you report? 
The leading global standard for sustainability reporting is the Global Reporting Initiative G4 Standard. While this presents some challenges, it is a good framework and structures the reporting process well. It is possible to report without using any standard in particular, but the use of a widely known standard such as G4 makes it far easier for users of the report to navigate the content and understand the scope of what's reported. One of the big improvements that the G4 standard introduced over its predecessor versions is the focus on what is called in sustainability jargon – materiality – meaning the most important sustainability impacts of the business. A report should not be what I call a "shopping list" of activities. It should focus on the most important impacts of the company and their relevance to stakeholders. I think we are seeing shorter and more focused reporting today, replacing the very very long (and boring) reports of the past.

The European Parliament imposed a directive which obliges thousands of companies to disclose information about their social responsibility. Is it right to make reporting on CSR a duty for company? Don't you think that this will cause companies, not interested in CSR, to start faking the data for reports? 
Yes, I believe it is absolutely right to legislate for companies to be transparent. I believe the impacts of business on our lives are so broad and so profound that we have a right to know how companies do business. I do not believe that the way to report needs to be prescribed in detail, although some minimum expectations should be set. In this way, companies who want to do more because they genuinely believe this can realize benefits for them can do so, while companies who wish to disclose the minimum can also do that. The experience of the Danish framework of "report or explain" for the 1,100 largest companies that was established several years ago has shown that most companies, once they get on the train, find that they enjoy the ride. There will always be companies who break the law.. for example, the big story of Volkswagen cheating on greenhouse gas emission measurements from their vehicles that was exposed last year. Generally, I do not believe that it is the nature of most companies to deliberately falsify data in order to report positive performance. But I might be naïve. The idea is for us all, as stakeholders of companies, to be vigilant and examine what we are hearing from companies. I always think that sooner or later, the bad guys get caught.

When an entrepreneur sells services and goods and customers voluntarily buy them, logically both of them are better off- it is a win-win situation. Many companies also offer various discounts for disadvantaged groups because it is an advertisement for them. Customers know about it. At the same time, companies use an arbitrator like your agency to prove or certify that the firm brings benefit for society. Why do they do that? Is it kind of PR for them? 
There is a branch of CSR that is called cause-related marketing and it is exactly this. Everyone wins. The business sells, the consumer feels good about having bought a product with added social value and the community or social cause benefits. At the same time, companies have something to put in their CR Report. There is nothing wrong with this – provided everyone actually does win. The social contribution should be something that's meaningful and the way of engaging consumers should be appropriate in relation to the social cause that's being promoted. When Kentucky Fried Chicken made a promotion to support Breast Cancer Awareness, for example, it didn’t go down too well and they were attacked for contributing to the problem by producing food which has carcinogenic byproducts rather than supporting a worthy cause. 

CR is a way of doing business, it shouldn’t be a separate charitable project, so using marketing and gaining some good PR from CR is fine.. as long as it's appropriate, balanced and transparent. 

You have a lot of experience, how does the process work? First, customers start to look for, let's say, ecologic goods and then companies adapt their corporate values or rather companies bring new trends and educate their customers? 
I am not sure I buy that argument that mass consumers are driving the change in demanding sustainable products from companies and I certainly don't think we have anywhere near a critical mass of consumers that are prepared to buy "sustainably" sourced products at a price premium. I think the dynamic comes more from company innovations which impact the entire competitive landscape, and governments, NGO's, academics, investors, sustainability experts and entrepreneurs who keep the conversation going about what's good for consumers and create new pressures to support collective efforts to meet sustainability standards. Did Toyota produce the first hybrid car because consumers asked for it, or because they could, and take a reputationally-positive leadership position at the same time, increasing awareness and expansion of consumer demand rather than being driven by it? Did General Electric form Ecomagination, now a multi-billion dollar business, because consumers asked for it or because it was the right business opportunity "with benefits"? 

I think it is the professional movement that creates innovation targeted to address a social or environmental challenge or opportunity that moves the needle, and this in turn creates the demand. Having said that, there are examples of where consumer influence has changed the behaviour of corporations or led to innovation such as the new sharing economy of AirBNB and Uber that show how consumers can change markets in different ways. 

How many agencies like yours are currently operating in this sector? Is demand for such reports more in Western society, where companies may afford to invest more to CSR? 
I couldn’t guess how many Sustainability Reporting consulting firms there are … there are different types of firms that specialize in different aspects of sustainability consulting, with or without reporting, and there are other branding, communications and PR firms that compete for a slice of the reporting business. Our business is not PR or comms-driven, we are expert in the way companies can progress the sustainability agenda and report their impacts and performance professionally and transparently. Sometimes reports that have too much of a PR spin without enough sustainability substance do not succeed in building trust, which is the objective of every report. The idea is not to gloss the language and embellish the stories but to present a balanced picture in an engaging way. 

Reporting has steadily increased over the past 20 years and is continuing to do so. The cost of producing a report can be modest or highly invested. I don't think it's always about what companies can afford, it's about what they want to achieve. 

U.S. universities tend to refuse money from tobacco companies which want to contribute to various research. Are there any ways for tobacco and alcohol companies to make a better reputation, according to CSR standards? 
This is a tricky one. CSR today has evolved to refer to the positive impact a company has on society through its core business and not just through initiatives to save energy or volunteer in the community. If you subscribe to this view, the core impact of a tobacco company on people's health and even on the cost of healthcare as result of tobacco-related diseases is not so positive, whichever way you look at it. Therefore, many would say that a company in this sector has no business talking about corporate responsibility as its core product causes undisputable damage. 

However, a different view of CSR relates to how you do business – irrespective of the product you sell (provided it's legal), the focus is on doing your business in an ethical and responsible way – responsible marketing, energy management, treating employees with respect and more. In this case, tobacco, alcohol and all companies in controversial industries can do business in a positive manner and often go to great lengths to prove that they are doing so. 

The problem with the first argument is where you draw the line – tobacco damages people's health but so do the products of many other industries – foods that can lead to obesity, addictive drugs, toxic chemicals used to make toys or clothes… not to mention energy intensive industries that contribute to climate change and are the indirect cause of many health problems. San Francisco became the first state in the U.S. to ban the sale of plastic bottles – but I don't recall seeing that it banned the sale of cigarettes….There are laws banning many harmful products – but I am not aware of a country that bans cigarette sales. (Update: It seems that Turkmenistan has actually banned sales of all tobacco products) I believe tobacco companies have long since realized that they can never have a positive reputation – in my view, their efforts will always be about having a less-bad reputation. By behaving as responsible citizens in every other way and achieving high scores in many sustainability rankings and indices that measure sustainable companies, and by reporting as transparently as they can on everything but the harm that smoking causes, they manage to mitigate some reputational damage.

elaine cohen, CSR consultant, Sustainability Reporter, HR Professional, Ice Cream Addict. Author of Understanding G4: the Concise Guide to Next Generation Sustainability Reporting  AND  Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND CSR for HR: A necessary partnership for advancing responsible business practices . Contact me via Twitter (@elainecohen)  or via my business website   (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm).  Need help writing your first / next Sustainability Report? Contact elaine:  
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