More reports, more standards, more questions, but achieving what? Is sector benchmarking the way forward?
GRI gathers pace
Ford, Diageo, SABMiller and Novo Nordisk are among the 17 companies judged by the Global Reporting Initiative to be reporting “in accordance” with its June 2002 guidelines. The total number of companies referencing GRI in their reports, however, now amounts to over 300 – double the total number of self declared GRI reporters from this time last year. Companies can claim full compliance without an audit by GRI, although the organisation does issue a preliminary quality check to ensure that reports which are self-declared as compliant include a content index and the signature of the chief executive or a Board representative. Contact Alyson Slater, GRI, on 00 31 20 531 0000 (http://www.globalreporting.org)
Responsible care
The UK chemical sector has collaborated to produce an impression of the industry’s collective impact in respect of health, safety and the environment. A survey by the UK Chemicals Association of its members reveals that major injuries to employees rose from 69 in 2001 to 84 in 2002. The analysis also reveals that waste recycling across the sector has increased from 25.6% in 2001 to 27.4% in 2002, while landfill reduced by 4%. The impact assessment forms part of the industry-wide Responsible Care strategy. Now in its twelfth year, the programme aims to improve the industry’s health and environmental performance through the spreading of good practice and effective management systems. In terms of its economic impact, the chemicals industry created an annual surplus of over £5bn in 2002 and directly employs 235,000 people. Contact Neil Eisberg, CIA, on 020 7834 3399 (http://www.cia.org.uk)
Silence is golden
Nike has decided not to issue its corporate responsibility report externally for the fiscal year 2002, and will limit its participation in public events and media engagement in California, following an out of court settlement of the Nike vs Kasky case. Activist Kasky was suing Nike for issuing false statements regarding employment practices in its factories in China, Vietnam and Indonesia. The courts have not addressed the truth or falsity of any of Nike’s statements, and no liability is admitted in the settlement. Nike is to make additional workplace-related programme investments worth $1.5m. The contribution will go to the Fair Labor Association for programme operations and worker development programmes, focusing on education and economic opportunity. Contact Jill Zanger, Nike, on 00 1 503 532 0316 (http://www.nike.com)
East is east
The disclosure practices of central and eastern European listed companies in regard to corporate social responsibility are the subject of a first-time study by Partners for Financial Stability Programme, a joint initiative between USAID and East West Management Institute. Reporting on CSR by CEE Listed Companies investigates English language information available in the 2002 annual reports and websites of the ten largest listed companies in each of the six CEE countries scheduled for European Union accession in 2004 – the Czech Republic, Estonia, Latvia, Lithuania, Slovak Republic and Slovenia. Contact Geoffrey Mazullo, Partners for Financial Stability Programme, on 00 36 1 269 7888 (http://www.ewmi.hu)
How to be good
The Good Corporation standard, a framework to help organisations develop, manage and monitor their corporate responsibilities, has been updated to include issues that have emerged since the original design, such as corporate governance. The original standard, based on a set of principles devised by the Institute of Business Ethics, was launched three years ago and piloted by ten organisations. It has been applied over 50 times in 12 countries, using 17 verification companies. Contact Adrienne Margolis, Good Corporation, on 020 7924 3994 (http://www.goodcorporation.com)
Rate your responsibility
Business in the Community issued the survey for its 2nd Corporate responsibility index on September 9. Two major improvements on the first survey are that more credit is given to companies for what they do, and there is more scope to report on issues specifically material to their own business. The results of the second CR index, which incorporates the 8th Environmental Index, will be published in March 2004. The survey is open to FTSE 100, FTSE 250, Dow Jones Sustainability Index sector leaders and national BITC members. Contact Elizabeth Forbes, BITC, on 020 7566 8769 (http://www.bitc.org.uk)
Charting a way forward
New guidelines for corporate management of social, environmental and economic dilemmas have been published by the SIGMA Project (Sustainability – Integrated Guidelines for Management). The guidelines, officially launched on September 23, are designed to help organisations in meeting such challenges and to “become architects of a sustainable future”. The SIGMA project was initiated in 1999, backed by the DTI and spearheaded by AccountAbility, British Standards Institution and Forum for the Future. Supporters of SIGMA include Marks & Spencer, Boots, The Co-operative Bank, Innogy and Northumbrian Water. Contact Rosalind Oakley, BSI, on 020 8996 7488 (http://www.projectsigma.com)
in brief
Over half (132) of the FTSE 250 companies report on environmental, social or ethical performance, according to a new study by consultancy firms, SalterBaxter and Context. Contact Nigel Salter, SalterBaxter, on 020 7401 9401(http://www.salterbaxter.com)
Editorial Comment
The number of companies issuing some sort of non-financial report is growing exponentially. Alongside, the proliferation of standards, guidelines, indexes, questionnaires and ‘kitemark’ certifications continues unabated. Many are starting to ask what all this is achieving. In the US, the questioning is likely to grow louder, with the muddled outcome of the Nike case leaving great uncertainty: trying to be transparent on difficult issues and dilemmas may still leave you open to being sued.
America aside, for companies themselves, one must presume their reporting satisfies some sort of communication or stakeholder need, if only to avoid being singled out as a non-reporter. For external (and often internal) audiences, even the most self-congratulatory of these reports do shed some additional light on individual company practice. So far, so good.
However, the driving force behind many of the external standards etc etc is to allow comparison and rating. Is company X better than company Y, if one wants to invest in a sustainable business or work for an ethical company or buy a socially responsible product? The problem is that making these assessments requires gross simplification and lots of comparing apples with pears.
BITC got into hot water last year when companies complained of being marked down for lack of attention to issues that were simply not relevant in their industry sector. Following extensive consultation, this year’s CR Index is more flexible, but will still end up in a quintile league table, listing oil companies alongside computer firms, to cite just two very different businesses. Many readers of Briefing will be struggling this month over their 60+ page CR Index submissions, doubtful whether the effort is going to be worthwhile.
We’ve commented before that GRI is having to go down the route of sector supplements to address the fact that its main indicators can only go so far – somewhat undermining the point of having a single global reporting standard. Of all the ethical investor indexes, we like Dow Jones the best: both because it focuses on the positive aspects of sustainability, rather than excluding ‘bad’ behaviour, and, pertinent to this discussion, because it presents the results by sector – the top ten percent in each industry category. We report on this year’s update later in this issue (see page 15).
Comparing like-with-like in sector must be the way forward, both for external audiences and, just as important, for the companies themselves – their need is to use benchmarking techniques to identify areas where improvement is practically possible. The chemical industry’s Responsible Care initiative is so much more enlightening than a clutch of individual reports all focusing on different issues or using slightly different measures even on the issues they agree about. Work is underway in other sectors too – supermarkets, media and finance as we’ve reported before, and property as we profile later in this edition. Individual reporting is a good starting point, but it’s time to be moving on.
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