Title: Sustainability Reporting
1Sustainability Reporting Sd3 Ltd
Sustainability advisors Dan Holmes dan.holmes_at_sd3
.co.uk www.sd3.co.uk
2What we do
- We help organisations improve their performance
and create value by adopting business
sustainability practices and through integrating
economic, environmental and social management
3Our clients
- Vauxhall Motors
- General Motors
- Nationwide Building Society
- Shell International
- Intel
- DTI
- London Borough of Ealing
- Society of Motor Manufacturers and Traders (SMMT)
- Royal Mail
- Royal Sun Alliance
- Motorola
- Project SIGMA
- Welsh National Assembly
4Vauxhall and Sd3
- 6 year relationship covering the evolution of
Vauxhalls reporting - 1997 - Annual Review Annual Report First
Environmental Report (won ACCA UK first time
environmental reporting award) - 1999 - First Sustainability Report combined
Environment Report with Annual Review. First
combined report for car company in world first
sustainability report by European car company - 2000 - Printed report reduced from 80 to 32 pages
plus new website with full info. Placed in top
10 by DT global auto reports survey - 2001 2002 - same format as 2000. 2001 report
shortlisted for ACCA sustainability reporting
awards
5But
- Vauxhall was not starting from scratch
- 1995 BS7750 /ISO14001 world first
- 1997 Dualfuel gas-powered vehicle range launched
- 1999 Founding patrons of ACORN which helps our
suppliers meet environmental standards - 2000 Backing the responsible use of cars by
providing cars for car club operations in many UK
cities - 2000 First solar powered dealership in the UK
- 2001 First volume manufacturer to certify all
activities and sites to ISO14001 - Product Stewardship - LCA, DfE, alt. fuels,
responsible use, Motability - 2001 More than 80 of all car sales, including
all LPG vehicles meet EURO4 emissions 4 years
ahead of deadline - 2002 Vauxhall LPG OEM market share 47 -
continuing 4 years of industry leadership
6Session outline
- Engaging Stakeholders
- Who are they?
- What do they want?
- Why bother?
- Communication and engagement
- Sustainability Reporting
- History
- Where we are now
- Why report? Drivers
- Guidelines and standards
- Assurance and verification
- What is the future?
7Context
8Engaging Stakeholders
9Who are they?
- Definition (Business in the Community, 2002)
- 'Stakeholders' are those who either affect, or
are affected by, the activities of a company.
They include customers and consumers, employees,
trade unions, business partners, lenders and
insurers, investors and analysts, sector/industry
experts government, regulators, host communities,
local and international NGOs, the media, and
suppliers etc.
10What do they want?
- Information
- Want to know whats going on
- Reassurance
- Want to know that things are OK
- Influence
- Want to be involved in decisions that affect them
or those they represent
11Why bother?
- CNN World
- Nowhere to hide - instant global communications
e.g. StopEsso, McLibel - Globalisation
- Reduced control of nations increased
expectation of corporate responsibility - Managing Risk
- Many high-profile examples (Shell, Monsanto,
Nike) - Identifying Opportunities
- Harder to identify reputation, innovation, new
product development etc. (e.g. Co-op bank,
Interface, Fairtrade)
Independent analysis for the Co-op Bank plc puts
the commercial value of the bank's sustainability
positioning at around 18 of pre-tax profit.
12Monsanto We forgot to listen
- A high value agricultural products business
expanding into biotechnology GM crops - Seen as key new growth sector - rolled out new
technology crops at rapid rate - Misjudged public opinion - tried to storm the
market - Reaction took business by surprise
- EU corn imports from US down 96
- Deutsche Bank advised markets to sell GM-related
stocks - Monsanto share price fell by 35 over a year
- Agricultural products division eventually sold
for nominal value
13Monsanto
14Stakeholder communication
- Little or no communication
- One-way communication (Incl. Reporting)
- Two-way communication (Tailored)
- Two-way communication (Dialogue)
Business in the Community corporate
responsibility survey, 2002
15Stakeholder engagement pays-off
Stakeholder Superstars
43 Growth
SP 500
19 Growth
1984 1999
Source Towers Perrin, Compustat
16Communication ? engagement
The Shell perspective
High
Trust me
Involve me
Tell me
Trust
Show me
Low
Low
High
Transparency
17Sustainability Reporting
18History
19Where we are now
Social, 3
Type of reports Global Fortune 250, 2002
Environmental Social, 10
Sustainability, 14
E(HS), 73
Source KPMG
20Why report? drivers
- Regulation
- Threat of regulation (Meacher, EU CSR white
paper) - Bandwagon
- Stakeholder pressure (esp. finance industry more
recently) - Differentiator/Reputation
- One-stop shop (e.g. questionnaire fatigue)
More info wbcsd striking a balance
21Mandatory Reporting
- Netherlands, Denmark, Australia, New Zealand,
Sweden, France, US (TRI), Canada, Also Belgium,
Norway. EU IPPC rules coming into force. - Increase in past 3 years
- Potential for far more
22Reporting process (Vauxhall)
23Money - what does it take?
- Costs
- DEFRA Survey November 2001 (47 companies)
- 6,500 535,000 average 92,716
- Without strategy formulation and establishing
info systems 4500 - 259,500 average 66,903 - Web only (4 companies) 11,215 average
- Resources
- Time 3-6 months
24Guidelines, standards, awards and surveys
- Wide range, including
- Guidelines GRI, DEFRA UK env. reporting
guidelines, ABI, Forge, CIRIA, SIGMA
(incorporates GRI) - Standards EMAS, AA1000, SIGMA?
- Awards ACCA (UK, Ireland, USA, Australia, Hong
Kong, Malaysia, Pakistan, Singapore) - Surveys Unep/SustainAbility Global Reporters
Survey, BiE index (BiTC corporate responsibility
index also)
25Pros and cons of guidelines standards
- Pros
- Reduced learning curve for organisations
- Allows comparison
- Bad practices reduced
- Good practice promoted and shared
- Recognition for organisations that follow them
- Keeps focus on key elements of performance
- Help develop professional skills
- Can reduce costs
- Cons
- Promote accepted practice rather than best
practice - Reduce innovation
- Incorrectly or selectively applied
- Lowest common denominator
- Too rigid or too flexible
26Global Reporting Initiative (GRI) Report Content
- 1. Vision and Strategy
- 2. Profile
- 3. Governance Structure and Management Systems
- 4. GRI Content Index
- 5. Performance Indicators
- Economic Performance Indicators
- Environmental Performance Indicators
- Social Performance Indicators
27GRI Performance Indicators
28Why GRI?
- Based on stakeholder consultation
- Saves time and resources
- Adds credibility (internally and externally)
- Helps continual improvement - identifies areas to
focus on - Provides clear template - roadmap towards
complete sustainability reporting
29Vauxhall and GRI the benefits
- Reporting process is a sustainability management
tool - raises awareness, understanding and buy-in,
public reporting of commitments and progress
focus for improvements - Corporate recognition
- leadership, raising the standard
- Encourages cross-functional working
- One-stop-shop
- communication tool providing info on what
Vauxhall is and does (useful internally and
externally) - Used detailed GRI format as a template
- GRI structure is flexible
- enabled use of other standards (e.g. UK GHG,
WBCSD Eco-Efficiency)
30Reporting as part of sustainability management
- Key management tool
- Vision and strategy
- Goals and targets
- Performance data reviewed and explained
- Additional commitments made public
- Internal communication
- Often an initiator of improved management
(baseline review) - Reporting is central to emerging standards
(AA1000, Sigma)
31SIGMA Framework
32AA1000
Reporting is an integral part of management
33Assurance and verification
- KPMG survey
- Global Fortune 250 companies 64 major
accounting firms, 9 certification bodies, 21
technical firms, 6 other - Trend towards increased verification 1999-2002
Global Fortune 250 19-29, Top 100 18-25 - SustainAbility - Trust Us verdict
- 68 in 2002, up from 50 in 2000
- Traditional Accountants lowest quality 2.0/4
- Specialist consultancies better 2.6/4
- NGOs by far the best 3.5/4
- ISEA AA1000s assurance standard
34AA1000s
- Covers the qualitative and quantitative data
relating to sustainability performance - Complements the GRI Reporting Guidelines
- The first assurance standard that covers the full
range of an organisation's disclosure and
performance - AA1000s is based on assessment of reports
against three Assurance Principles - Materiality does a report give information on
all areas of performance that stakeholders need
to judge an organisation's sustainability
performance? - Completeness is the information complete and
accurate? - Responsiveness has the organisation responded to
stakeholders' concerns and interests? - The standard is designed primarily for assurance
providers in guiding the manner in which they
provide assurance.
35Assurance - what is the purpose?
- ERM survey (what companies seek)
- Confirmation Seekers
- Focused on shareholders and analysts as main
audience - Want reported information validated
- Use the big accountants
- Active Learners
- Want to improve processes and gain credibility
with experts - Use specialist environmental and social
consultancies - Crowd Pleasers
- Consider main audience is general public and
retail customers - Use NGOs or celebrities
Source SustainAbility/Unep Trust Us 2002
Survey of Corporate Sustainability Reporting
36State of the Art
- Co-Op Bank
- Novo Nordisk
- BAA
- BT (Management quality)
- Rio Tinto
- Shell (context and commitments)
- BP
- Bristol-Myers Squibb
- South African Breweries
- BASF
- VW
- WMC
- CIS Co-operative insurance
- Baxter International
Source SustainAbility/Unep Trust Us 2002
Survey of Corporate Sustainability Reporting
37What is the future?
- More sustainability greater linkage to ARA
- SustainAbility/Unep Trust Us
- Materiality the bits that matter
- Integration Balance Sheets blended value,
Boards - governance, Brands that build true
value, Business models that are more sustainable - More web, less paper
- Real-time?
- NIKE vs Kasky
- http//www.corporatewatch.org.uk/news/nike_update
38More information
- ACCA - www.accaglobal.com/sustainability
- DEFRA - www.defra.gov.uk/environment/envrp
- GRI - www.globalreporting .org
- WBCSD Sustainable Development Reporting Portal
- www.sdportal.org - Corporate Register - www.corporateregister.com
- Tomorrow Magazine - www.tomorrow-web.com
- KPMG International Survey of Corporate
Sustainability Reporting 2002 -
www.kpmg.com/services/content.asp?l1id10l2id450
cid678 - Unep/Sustainability Trust Us Global Reporters,
2002 Survey of Corporate Sustainability Reporting
- www.sustainability.com - Deloitte Touche Tohmatsu sustainability reporting
scorecard - www.deloitte.com/vs/0,1616,sid253D108
4,00 - Institute of Social and Ethical Accountability
(ISEA) - www.accountability.org.uk - European Federation of Accountants (FEE) -
www.fee.be/publications/LatestPubs.htm - CIRIA Sustainable Construction Targets and
Indicators - www.ciria.org.uk/ - FORGE - Guidelines on Environmental Management
and Reporting for the Financial Services Sector -
www.bba.org.uk/public/corporate/35475/1712?version
1
39Sustainability Reporting Sd3 Ltd
Sustainability advisors Dan Holmes dan.holmes_at_sd3
.co.uk www.sd3.co.uk
40(No Transcript)
41ACCA UK Awards for Sustainability Reporting 2002
- Environmental Category
- Best environmental report Unilever
- Joint runners-up, best environmental report CIS
ScottishPower plc - Best first-timer report Canary Wharf Group plc
- Best SME report Best Foot Forward Ltd
- Social Category
- Best social report FRC Group
- Joint runners-up, best social report CIS
Traidcraft - Best First Timer report British American Tobacco
p.l.c. - Sustainability Category
- Best sustainability report The Co-operative Bank
- Runner-up, best sustainability report Shell
International - Commendation for sustainability reporting BT
Group plc - Commendation for SME sustainability reporting
Risk and Policy Analysts Ltd - Electronic media commendation BT Group plc
42ACCA Criteria
- Completeness to enable the reader to form a
complete picture of the reporting company and to
define the boundaries of what the report covers. - Credibility an honest and objective view of good
and poor aspects of a company's performance. - Communication written with the audience in mind,
and recognising the needs of different
stakeholders. - Comparability readers may wish to compare
reported material against other organisations in
your sector, or against previous reports. - Timeliness many organisations report on an
annual cycle, but website based reporting allows
reports to be updated more frequently.
www.accaglobal.com/sustainability