By Elaine Cohen
It wouldn't be the beginning of the year without a flurry of year-end posts, among them my pick for the Top Ten Sustainability Reports of 2013. For previous selections, see posts covering the Top Tens in 2010, 2011 and 2012.
My selection is always based on reports that cross my radar throughout the year, not a scientific or strict methodical evaluation of the report quality. However, as I have done for the past couple of years, I use the AIM model to consider the reports that I found worthy of mention. It's always tough to restrict myself to ten reports. I browse, review, read and use hundreds of reports each year, and there is always something positive that can be said about every single report. Each report adds value in its own way, and each report is evidence of progress. Therefore, in mentioning a mere ten reports of the thousands that were published in 2013, I do reporting somewhat of an injustice. On the other hand, highlighting these ten reports and their unique elements may provide insights and inspiration for new reporters, or potentially better reporters. In any event, this is always a post I find both challenging and fun all at the same time.
Here is a quick reminder of my AIM model: Authenticity: I look for whether the company has reported in an honest way, using stakeholder voices to supplement performance data. Authenticity for me includes balance, accuracy and completeness. I look for targets and progress against stated targets.
Materiality: I look for whether the company has clearly defined the most important issues for the company and its stakeholders and described the way in which those issues have been identified and prioritized. Reporting materiality should also include a certain amount of contextual information which can assist us in understanding the issues and why they are material.
Impacts: I look for whether the company identified impacts rather than just presenting a shopping list of activities. This means discussing the outcomes of what was achieved. The outcomes are the achievement, not the activities. This is by far the most difficult thing for companies to address and very few, if any, do it well.
And, in alpha order by company name, my top-ten picks:
AGCO 2012 Sustainability Report
GRI B, 43 pages
This is a well-written and nicely laid out second report from this agricultural equipment company, and it contains all the elements of an AIM model report. There is a description of the company's value chain and a nice materiality matrix, which shows not only the different issues but also the level of control that AGCO has in managing these impacts.
Bharti Airtel India Sustainability Report 2011 - 2012
GRI Undeclared, 66 pages, first time report
A report which boldly aspires to help create a "happy, empowered and sustainable life for everyone" in big red letters on the cover page cannot fail to catch my attention. The colorful, playful design of this report reinforces the message and draws attention to the narrative.
It's a first report, so usually we cut a little slack since first reports are always backbreaking. However, Bharti Airtel doesn't need a lot of slack as it has done a great job. The Chairman and CEO each make a good case for sustainability in the mobile communications sector in India, and the company's materiality matrix focuses the issues the company must address in its sustainability program. Airtel presents its "Blueprint for Social Inclusion" in this report, which was developed after an investment of several "happy and energetic man-hours." The blueprint includes three pillars, each of which has both a vision and an action approach. A supplier eco-system chart helps understanding of the complex interfaces and partnerships needs to maintain sustainable operations, and the employee engagement section is a refreshing look at how this company supports and empowers employees. This is a well-constructed, well-written and well-designed delight of a report. Take a look.
City of Warsaw Integrated Sustainability Report 2013
G4, 13 pages
Although not a corporate report, and not even the best example of a G4 report, the City of Warsaw managed to deliver the first G4 report in the world, and that's an achievement. Despite a little clumsiness and short-changing of some of the more complex disclosures, it's a breakthrough report. Municipalities have great power in the example they can set for sustainable business, and the policy frameworks they can promote. This report delivered an earnest attempt to describe the city's journey to a more sustainable level of impact, and hopefully, is an encouragement to more cities and governments around the world to adopt both sustainability AND transparency.
Impahla Clothing: Integrated Annual Report 2013
GRI A+, 70 pages, second integrated report
Impahla has been in two of my last three Top Ten picks, and I never fail to be amazed and inspired by the quality of reporting consistently delivered by this small, privately-owned, forward-thinking award-winning sports apparel SME company, led by William Hughes, a modest Kenyan-born businessman profiled by Marc Gunther in 2010. In this 2013 report, Impahla demonstrates business expansion, improved results at all levels, and, a feature of Impahla's reporting through the years, great respect for the Impahla workforce. Directors of Impahla are hands-on shareowners, and this is one of the factors attributed to driving the company's success. Total transparency of the company's balance sheet and customer relationships shows a maturity that is rare in privately owned companies. Material issues are clearly stated and discussed in plain language, and the report is an enlightening, informative and interesting read. The play between high-level disclosures and details of operational activities, for example, incentivizing employees to turn up on time, is well done in this report, helping you understand the broad picture while remembering that the magic is in the detail. If Impahla ever chooses to add another business line, Sustainability Report creation just may be it. Read this report and be inspired.
ING Bank Slaski Poland CSR Report 2011-2012GRI B, 109 pages
You don't expect banks to be particularly creative or appealing in their sustainability reporting, so this report from ING in Poland stands out as an especially attractive. The artwork in this report is spectacular. See the stakeholder map below:
There are also some fabulous works of modern polish art that illustrate the report.
This is the first standalone sustainability report produced by ING bank, and it's a thorough presentation of sustainability issues and performance. The report content is structured in four main sections: clients, employees, community and environment. While there is no specific materiality matrix, strategic priorities with goals to 2015 are presented together with progress made in 2012 in all four areas. The nicely gender-balanced management board each presents a perspective:
Kingfisher Net Positive Report 2012 / 2013
Not GRI, 56 pages
Kingfisher's Net Positive approach has been widely publicized this past year and has gained quite a lot of attention in sustainability circles. It is indeed an impressive approach, branded and presented impressively. The Net Positive plan has four pillars and the report discusses these in detail, providing contextual background, actions, goals and targets through to, in most cases, 2020.
Use of infographics to describe the issue, what Kingfisher has done so far, and how the company will reach each goal is attractive, and shows a well thought-through strategy.
In addition to the four Net Positive pillars, Kingfisher has set targets in three additional areas: employees, suppliers and partners and environment. Quantitative multi-year targets are established in all three areas and 2012 progress is recorded.
The report is also a celebration of employees and employee contribution to sustainable goals.
With monthly Net Positive progress reports being submitted to the Group Board, according to the report, the chances of making significant headway appear to be high. Kingfisher's approach is described by CEO Ian Cheshire: "We don’t have all the answers for how we’ll reach our goals. We need to find different approaches and business models, and to collaborate both internally and externally. By asking ourselves ‘How can we have a Net Positive impact?’ we will find new answers and ideas that will change our business for the better." That's one of the interesting things about sustainability. Just asking the question makes room for a different type of answer. The Net Positive approach of Kingfisher has all the ingredients of a smart way forward: clarity, focus, branded promise, action-orientation and consistency of communication. This builds trust in the Kingfisher program and in its report. It's a great example of good strategy, well articulated.
Marks and Spencer Plan A Report 2013
GRI B, 56 pages
A regular award winner and focused reporter, the M&S Plan A Report does not mince words. It cuts straight to the chase of its multi-year, multi-action, seven pillar progress report, delivering results and outcomes, with just enough supporting narrative to allow you to understand the numbers. The PDF is fairly stuffed with data, while the online report offers a wealth of additional information in areas you may with to know more about. For example, if you want to meet the farmers who grow the asparagus that you buy in M&S foodhalls, click here.
The massive impact M&S has throughout its value chain - including recreating a part of the English language with shwopping (described here on Greenbiz.com) and engaging millions of Brits who shwopped 3.8 million garments - is indisputable. From sustainable food supply, to sustainable retail outlets, traceability, store refrigeration, business travel, waste management, the M&S report is an example of what a determined retailer can do to advance sustainable business on many fronts. The consistency of reporting against Plan A over the years builds credibility and leadership in sustainability reporting. In 2013, M&S reports that Plan A generated its "biggest net benefit" to date, £135 million. If anyone thinks that being a responsible business is not worth the effort, then this is 135 million reasons to think again.
NGK Spark Plug Group 2012 CSR Report
Not GRI, 70 pages
I had to include this report this year as an example of a great report from a company that produces a product that most of us wouldn't really associate with improving the quality of life and saving our planet: the spark plug. We all know what spark plugs do, sort of, and we have all probably been without the right one at the right time as some stage in our lives. However, I am not sure how many people realize just what a significant role they play! The NGK Spark Plug company celebrates this modest little electronic component in a respectful and comprehensive way, presenting its 10 year plan to become a distinguished, highly profitable, and progressive manufacturing company. This demonstrates that CSR is relevant to any company and any product, even the ones we tend to take for granted. Any company who thinks the fact that their product is not Coca Cola, Vodafone, General Electric or any other Big Brand means that sustainability doesn't apply to them should read the NGK Spark Plug report.
The PDF includes little yellow sticky note explanations of key terms - an afterthought maybe - but at least we know what they mean. There is also a glossary at the back of the report.
An interesting feature of the report is the description of the portfolio and the relevance of spark plugs and other products in people's lives. You'd be surprised what this little things get into, as well as making car engines more efficient.
The report is dotted with "voices" - insights and perspectives from employees of the NGK Spark Plug company. It is always more credible to hear directly from company employees, rather than read long chunks of narrative. This gives spark plugs a face as well as a voice.
As is often the case in Asian reports, NGK includes a "Message from a Stakeholder." This is usually a positive commentary, and this is true of NGK's stakeholder commentary too. Even so, inclusion of external stakeholder comments is always a positive element in any report. NGK also includes responses to a feedback questionnaire from internal and external stakeholders about the prior report and the way the company has responded. A nice additional touch would be the number of responses received.
PUMA Business and Sustainability Report 2012
GRI A+, 223 pages PUMA had a tough year in 2012 with profit decline culminating in the departure of the CEO, Franz Koch. However, the pioneer of the Environmental Profit and Loss Account managed to deliver an upbeat report with great transparency in many areas. The absence of a statement about materiality in this report, despite the fact that the report assurance statement explicitly states that adherence to the materiality principle was assured, is rather irksome, but nonetheless, I feel that the work PUMA is doing and the clarity of its reporting is worth a Top Ten listing this year.
The report is an integrated report, written for shareholders "and friends," covering the spectrum of sustainability-related themes and all financials, which is why, at 223 pages, it's still a manageable read if you do so selectively. For example, the People@Puma Section is a good discussion or organizational development and people empowerment, and the PUMA.Safe Humanity Section covering the outsourced supply chain operations is a strong review of related issues. The PUMA.Peace section is an inspiring look at the way PUMA uses its business strengths to promote a more peaceful world.
The Crown Estate Annual Report and Accounts 2013
Not GRI, Integrated Report, 122 pages
This report stick in my mind as one which delivers clarity, authenticity, material focus and reporting of outcomes. In fact, it's an excellent example of the AIM model. The graphics are well-delivered, support the narrative, and the theme of the report, "Imagine," is rather uplifting. The materiality disclosures are well described, including explanations of why the issues are important, what the Crown Estate is doing about them, and where performance metrics and additional narrative can be found in the report.
NB As usual, to be fair, I did not include reports that I have worked on or from other clients or affiliate or parent companies. If I were to do that, I wouldn't have room for any other reports ha-ha. But it also shows you how magnanimous we are on the CSR Reporting Blog :)) Gotta give 'n take a little in life, right?
Happy Reporting in 2014, everyone! Here's to the next Top Ten.
A version of this piece was originally published on the CSR Reporting Blog.