Directions                                         No
                                                        04
Trends in...
What’s inside



                                                                            04
                          ...
Introduction                 Sharpen those shears!
                             It’s time to cut the fluff in
            ...
By Mark Weintraub
           Editor of the slimmed-down Shell Report
           (32 pages including cover)




CORPORATE S...
Like
         you the be
                         s
       but leave o t Italia
             t          u         n
      ...
By Francis Sullivan
           Adviser on the Environment
           HSBC Holdings plc




DOES THE FOCUS ON HOT ISSUES SU...
“To make HSBC one of the world’s leading             To help us apply these principles to high-risk
brands for customer ex...
By Simon Propper and
                   Peter Knight Context




COMPANIES ARE CONSTANTLY                      Hutch days ...
up systems that track, audit and report on the       that others think appropriate. In doing this they   Novo Nordisk and ...
Operating and Financial Review
Worth the wait?
SO IT’S ALMOST HERE. AFTER A PROLONGED GAME OF ‘NOW
YOU SEE IT, NOW YOU DON...
In the Government’s                                So in essence, the OFR is intended to get             2. Companies coul...
By Nigel Salter salterbaxter
                                  and Simon Propper and
                                  Pet...
As a responsible business, [company
                                                                                name] ...
We have made every effort to ensure that the data in Directions are
Methodology                                           ...
Analysis
overview



                        24 of the top 250 UK
                        companies reported for the first...
Analysis overview




                                    123 of the top 250 UK companies
                                ...
83 of the top 100 UK companies report,
       compared with 44 of the European
       top 50 and 27 of the US top 50




3...
US top 50




                                                                                                            ...
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Directions 4 98% Fluff Free

  1. 1. Directions No 04 Trends in CSR reporting 2003-2004 A joint report by salterbaxter and Context social environmenta contex
  2. 2. What’s inside 04 Is your head in the sand? by Francis Sullivan 01 Introduction 02 Pass the celery by Mark Weintraub 06 The glass is definitely half full by Context 32 About us 31 Beyond Reporting 08 Operating and Financial Review – Worth the wait? by salterbaxter 20 10 UK Top 250 sector analysis The fluffometer by Context and salterbaxter 12 Methodology 16 US top 50 analysis 18 Euro top 50 analysis 13 Analysis overview
  3. 3. Introduction Sharpen those shears! It’s time to cut the fluff in CSR reporting. Welcome to the new sobriety in reporting non-financial Peter Knight, Context performance. The corporate lexicon of homilies, generalities peterk@econtext.co.uk and soft assurances that characterises much CSR reporting – fluff – is on its way out. This trend is being driven by sceptical audiences and tightening regulation Simon Propper, Context simonp@econtext.co.uk such as Sarbanes-Oxley and the UK’s Operating and Financial Review (OFR). A less fluffy future is good news because the emphasis is Nigel Salter, salterbaxter nsalter@salterbaxter.com strongly on reporting, not spin. This is what the purists have always wanted – quasi-statutory documents that talk about a company’s non-financials in a thoroughly grown-up way. The unloved Global Reporting Initiative (GRI) has always called for sobriety (at excruciating length and detail). Does this mean boom time for the beleaguered GRI? Unlikely. And that’s simply because of market demand for short, pertinent reports that allow you to take a company’s pulse quickly. There is little call for the GRI bible approach. We predict more factual, shorter reports (Mark Weintraub of Shell shows how on page 02), although we know it will take time for the obese to slim down. But as reporting sharpens up, companies are beginning to see a greater need to communicate their non-financial performance in other ways, to different audiences. To go beyond reporting. Fluff-free doesn’t mean fun-free. Good news, progress, innovation and achievement will still have their place in corporate communication. Leave your shears here and head for page 31 to find out how to go Beyond Reporting. 01
  4. 4. By Mark Weintraub Editor of the slimmed-down Shell Report (32 pages including cover) CORPORATE SUSTAINABILITY REPORTS ARE BECOMING EVER FATTER. PERHAPS IT’S TIME FOR A DIET. the Pass celery Like many people, I’m concerned about the actually having?) the information that really and systems. There’s always too little about problem of obesity. But in my professional life, matters for judging our performance, we our actual performance and what the people the expanding girth I’m worried about is in simply throw everything we’ve got in the fridge impacted by our activities really think of us. cellulose, not cellulite. Corporate sustainability into the pot. reports are growing fatter at alarming rates. A diet is needed. Not the craziness of Atkins Shelves (and trees) are falling. Costs are We are also unclear about who we are but something pleasantly old-fashioned, rising. Looming above it all is the question: writing these reports for. Non-governmental based on the principle that less is more. A bit who actually reads these 100+ page epics? organisations (NGOs) and single-issue of self-restraint and selectivity in sustainability campaigners? The socially responsible investor reporting goes a long way, not only in I blame no one but ourselves – we who produce community? Mainstream investors? Staff? The increasing readability (raising the chance that and benchmark and provide guidelines for general public? Judging from most reports I see, more people might actually read them) but corporate sustainability reports. The emphasis the answer seems to be everyone. And in trying also improving the quality of reporting. is remorselessly on breadth over depth, to please everyone, we satisfy no one. There inclusiveness over relevance, and comprehen- is inevitably too much specialist detail and Every diet needs its instruction manual. Here siveness over material importance. Not sure arcane debate for the general reader about the are my suggested five steps to slimmer and about (or not willing to take a view on? Or not mechanics of reporting or internal processes more successful sustainability reporting. GOs or ’t see N staff. We don ce they want rs and xperien at n leade In our e is form is opinio ain readers. issues than th nything new For u s, that m r a Use othe r channels as the eir par ticula I don’t learn tionship xperts discussio – above a issue e re detail on th rked: “I hope my rela re ns, particular to allow those who ll the web o a If I do, o and face-t much m one NGO re m report. now much m the issue to d want more o-face ability k t hard work rill down detail on allows. As pany’s sustain uble. I should inly no ur key putting th deep. This a ’s certa means a from a com pany is in tro sions.” And it looking for yo st and keep ing it curr e specialis t informa lot of at com discus ey are t analy informati ent. Short ti er printed on on the web with th om ongoing hole th ne investmen on and tr y fr n the w o please.” informati ansparen reports m alread community. O rankings. As e data on to the cy in tota l – just ean more l Just th The printe med d report is ium that best serv tailoring the financia r comparative n’t do words. rs o do people w the tip of es the au numbe ointedly: “We ith a part icular inte the iceberg that le ience. d me p rest to yo a told ur website ds . 02
  5. 5. Like you the be s but leave o t Italia t u n and o help t. (Not cookin bad read e: T tran , tha ers his g, the a s i mak paren t reall who fo s NOT rt lies t y t in w wid e that s proces matte cus on o hide hat e s r t t sele risk an electio that i .) You n hose a hings, ct t d is n. W s ex eed reas fina h e t ncia e issue sues m use o ernally a clear , good lly a s a u f a nd t and lo nagem r existi ocused nd o ex cati ent ng c to tern on sy o al s s that stems mpany take m t - hold atter o ers. mos t Try to write it for a 12-year-old. Not for the cognoscenti. You’ll inevitably land somewhere in the middle. But in doing so you’ll strip away the corporate jargon and have a better chance of being actually understood by intelligent people not deeply familiar with sustainable development. The subject is important enough for everyone to be able to understand how well you are (or aren’t) doing. Constant vigilance and considerable tact are required in helping colleagues overcome their love of corporate speak. If you want to keep your friends, the phrase “great, now lets see if we can say that in English” is best kept as a last resort. Like any commun feedbac ication, k. We ru y our sust n the sa ou need to get sy ainabilit me read stematic program y report er surve mes, usin s as y prog We use g an exte with our other c rammes for that hard rn ommunic individu data, mo al market resea ation al mana re than rch grou gers, to the part shape o ur report icular ta p. stes of . Diets are never easy. It means difficult discussions internally, for example with specialists who spend all their waking hours on a particular topic. Telling them they have a whopping 250 simple words to get the crux of their story across doesn’t always make for a jolly conversation. People who really live and breathe their issue can rarely order breakfast in less than that word count. Giving them a serious chance to address the specialists in language they are more comfortable with on the web helps. But it remains a battle. It is a battle I believe worth fighting in the name of clarity, transparency and effective reporting. PASS THE CELERY, PLEASE. 03
  6. 6. By Francis Sullivan Adviser on the Environment HSBC Holdings plc DOES THE FOCUS ON HOT ISSUES SUCH AS ETHICS, DIVERSITY, HUMAN RIGHTS AND GOVERNANCE MEAN COMPANIES ARE IGNORING THE THREAT OF A DECLINING ENVIRONMENT? Is your head in the sand? In the last year, it has become fashionable reputation that doesn’t get shredded or now reaching a point in some businesses where to dismiss companies’ CSR activities as spin. cause sniggers when your company name reducing their impact on the environment is In fact in some quarters the mistrust of is mentioned over dinner. not seen as a valid concern of management? companies has grown so strong that you might think their sole purpose is to rip off To be truly sustainable, a company needs Sometimes the absence of visible their customers, exploit their staff, destroy to focus on the economic, social and environmental disasters on the scale of the the environment, subvert legitimate environmental aspects of the business. Exxon Valdes or the burning rainforests of Brazil government and bully their suppliers. In a This has led to some far-sighted companies and Indonesia, means people assume these very small number of cases companies producing triple bottom line accounts. problems have been ‘solved’. But we must not continue to behave in a way that reinforces forget that forests continue to disappear, there this view. But it is incorrect to assume that all are dozens of ‘minor’ oil spills a year and the companies are the same – all equally wicked. ARE WE NOW REACHING threats to people and nature from global A POINT IN SOME warming grow daily as the carbon dioxide Having worked in both the charity and the concentration in the atmosphere builds up. corporate sectors, I have found that many BUSINESSES WHERE NGOs talk about ‘business’ as a uniform REDUCING THEIR IMPACT ON The UN Millennium Development goals provide monoculture focusing purely on the bottom a good framework to address all three aspects line. Interestingly, too, many private sector THE ENVIRONMENT IS NOT of sustainability and should be used by more workers, largely through ignorance, group ‘the SEEN AS A VALID CONCERN businesses. These goals were adopted in 2000 NGOs’ into one mass of critical back-stabbers OF MANAGEMENT? by 191 governments with a series of targets out to ruin legitimate business. covering social and environmental issues – such as addressing global poverty, ensuring With such polarised views about business Undoubtedly it is a challenge to keep all three environmental sustainability and achieving performance, CSR has taken a battering. But elements in focus. Worryingly, over the last universal primary education for all children. despite this CSR is starting to flow around the few years there have been signs that the veins of the most hardened business people. environment is slipping off the corporate Many existing CSR activities can be hung from At its simplest, it’s about a licence to operate, agenda. Concerns have risen about the social this framework. For instance, in HSBC’s new to find and keep good staff and to have a impacts of business, and rightly so. But are we Strategic Plan, the first imperative is: 0 44
  7. 7. “To make HSBC one of the world’s leading To help us apply these principles to high-risk brands for customer experience and corporate sectors, specific guidelines are being social responsibility”. This calls for consistency prepared. The first, the Forest Land and between corporate strategy, business Forest Products sector guideline, was behaviour and our wider responsibilities to launched at our AGM in May. This will communities and the environment. also be applied to our own paper and furniture purchasing. Consistency As an example, HSBC has signed up to the is key. Over the coming months, Equator Principles. These voluntary other sector guidelines will be guidelines provide a framework to address prepared, covering freshwater In the future, it may be the environmental and social issues that infrastructure, metals and better to talk about Corporate arise in financing projects. As a result, we will mining, and energy. Responsibility rather than CSR. not provide loans directly to projects where the borrower will not, or is not able to, comply We know these issues matter – with the Equator Principles or our own our customers DO write to us. We need to remind ourselves that it’s not just internal environmental, reputational and Our objective is to ensure, social issues that matter. But above all it’s not social policies – whichever carries the through the implementation of words that make a difference here, it’s deeds, higher standard. clear lending criteria, that over and it is CSR performance that counts, not time we phase out support of only commitment and policy. activities that do not contribute THE FIRST IMPERATIVE IS to sustainable development, and TO MAKE HSBC ONE OF THE increasingly seek out those that do. WORLD’S LEADING BRANDS FOR CUSTOMER EXPERIENCE AND CORPORATE SOCIAL RESPONSIBILITY 05 5
  8. 8. By Simon Propper and Peter Knight Context COMPANIES ARE CONSTANTLY Hutch days of the 1970s when it was (quite to view the world through a half-empty glass. rightly) being exhorted to do more for the Even when you factor out the self-serving CAJOLED TO BE MORE environment. The refrain has now been taken nature of these sentiments (we consultants RESPONSIBLE. HOW BORING. up by the CR community – same mantra, all have something to sell), it’s rather depressing LET’S LOOK INSTEAD AT WHAT different issues. to think that not much has changed in the way THEY HAVE ACHIEVED. non-business people view business. Sure, we can always do more. But it is utterly Business is not doing enough to promote boring to be told off all the time. If the Self-appointed CSR gurus who exhort corporate responsibility. Companies have to psychology does not work on teenagers, why corporations to boost their social performance do a lot more to qualify as responsible should it have the desired effect on the generally have a poor understanding of citizens. The 2004 Global Compact summit business community? business. Many find commercial life distasteful – was met by this do-more mantra in a slew of harsh and uncouth. Hence their demands for reports from organisations, some purporting Although the 70s fashion for furniture and business to act in ways that totally defy logic. to be business-friendly. Business has been clothes are back, times have changed in Take the constant call for widespread under this pressure since the Starsky and business. It is sad that so many people continue stakeholder dialogue and for business to set 06
  9. 9. up systems that track, audit and report on the that others think appropriate. In doing this they Novo Nordisk and the Co-operative Financial process. While it’s certainly good for business to will quickly discover – as any half-intelligent Services, for staying the course. And a high-five talk to others and gain a better understanding parent has – that praise drives action. And to Amnesty International for being one of the of the world (clever operators have been doing action encourages more action. first NGOs to report. this for centuries), why install yet another layer of management just to please pressure groups? Let us look at the world through a half-full But there are more. Here’s a detailed list of glass for a change. Let us praise good, sensible, positive, responsible actions taken by The CSR community must reconnect with business-led initiatives. We congratulate companies (who are our clients). business. It needs to understand the role of Cadbury’s, Gap, Nike and Starbucks (yes) for business in society and the difficulties business what they have done to clean up their supply- faces trying to balance calls to behave in ways chains. We admire the jumbo reporters, Anglo American Anglo American, the mining and natural resources company, has pioneered a ground-breaking HIV/AIDS policy in Africa, moving much faster than governments and other companies. By the end of 2003, 1,048 employees were receiving free antiretroviral therapy. More at www.angloamerican.co.uk GlaxoSmithKline GSK, one of the world’s top pharmaceutical companies, has a social investment programme for the developing world that includes donations of medicines. For example, since 1998, the company has participated in a global partnership with the World Health Organization to eliminate lymphatic filariasis (elephantiasis) by 2020. GSK has donated 240 million treatments of preventive medicine (albenzadole) to more than 80 million people since 1998. More at www.gsk.com HP HP, the information technology provider, has 25 projects under way in 20 countries on five continents, looking at ways to make information and communication technology available to more than four billion people who can’t afford computers. More at www.hp.com Shell Shell produced one of the shortest reports of 2004 in a bold attempt to improve communication. It was the first energy company to commit not to explore or drill for oil in World Heritage Sites. More at www.shell.com Unilever Unilever’s CR activities are now widely quoted, especially its efforts to innovate in new markets among the rural poor, and meet basic needs in nutrition and hygiene. It has, for example, developed biscuits in Ghana fortified with vitamin A and zinc to boost children’s immune systems. These and other products are often produced in small packages to make them more affordable. Unilever has been working in partnership with a wide range of organisations to develop guidelines on sustainable agriculture and to promote sustainable fishing practices. It has been managing, measuring and reporting on its environmental impact for nearly a decade. This year it launched ice-cream freezer cabinets using hydrocarbon refrigerants that do not contribute to climate change or ozone depletion. More at www.unilever.com Vodafone Vodafone, the world’s biggest mobile telephone company, has set up a team to develop products that meet specific social needs, such as helping the disabled and elderly, or enhancing communications in education. It has begun to explore how mobile telecommunications can support the provision of micro-finance among the rural poor. The company collected 1.5 million used handsets in 2003 – recycling 82% and reconditioning 18%. More at www.vodafone.com/responsibility We’d say the glass is definitely half full. 07
  10. 10. Operating and Financial Review Worth the wait? SO IT’S ALMOST HERE. AFTER A PROLONGED GAME OF ‘NOW YOU SEE IT, NOW YOU DON’T’, THE UK GOVERNMENT FINALLY PUBLISHED ITS GUIDANCE PAPERS FOR THE NEW OPERATING AND FINANCIAL REVIEW (OFR) IN MAY 2004. THE REGULATIONS THAT WILL MAKE THE OFR COMPULSORY FOR ALL QUOTED COMPANIES ARE STILL IN DRAFT FORM BUT ARE EXPECTED TO COME INTO FORCE IN 2005. THE OFR HAS BEEN TRUMPETED AS A RADICAL RE-THINK OF CORPORATE REPORTING, BUT WHAT DIFFERENCE WILL IT REALLY MAKE? By Nigel Salter salterbaxter What were the intentions? The goal is to address the weaknesses identified by the Company Law Review that reported the following: “Company accounting and reporting remains essentially backward looking and based on financial indicators. There are few statutory requirements to report on the main qualitative factors which underline past and future performance (or for future performance, even financial factors) – in particular on strategy, prospects, opportunities and risks; on tangible, and so-called ‘soft’ assets (which may contribute significantly to success but are not well captured in traditional financial statements); and on key business and wider relationships. As a result, the information provided is defective and directors do not have the discipline of accounting for stewardship on some key responsibilities.” 08
  11. 11. In the Government’s So in essence, the OFR is intended to get 2. Companies could, ironically, use this as own words, this is what the companies thinking about and explaining likely an excuse for less disclosure OFR is intended to do: future performance and reporting on a range of Many companies have been dragged, reluctantly, relevant non-financial indicators including social, to reporting on CSR. The requirements of environmental, ethical and human resource issues. the OFR may actually mean a backwards step. Companies may cut their investment in CSR The intentions are hard to argue with. reporting and simply tick the boxes that the “Shareholders The test is whether or not the thing works. statutory report requires. It’s easy to see can exercise ef how some companies may hide behind the OFR control only if fective they have clea Will it work? formula and go no further – and that would meaningful info r and rmation about That all listed companies will be required be a shame. main drivers of the to incorporate CSR issues and performance a company’s pa future perform st and into their annual reporting process is no 3. Forward looking statements, lawyers and ance. The OFR designed to ar is doubt a good thing. And the best aspect auditors simply aren’t compatible m shareholders is the emphasis on performance reporting – The regulations want companies to look that informatio with n. It will enable ie numbers and proof – not just a few forwards and discuss potential performance to make a prop them er assessment paragraphs of fluff. and developments. But without safe harbour only of past pe not protection (as exists in the US) it is unlikely rformance but the directors’ also of But we see a variety of problems and risks. that the lawyers and the auditors will allow view on the co future prospect mpany’s These are the top three: much to be said that is meaningful or helpful. s and its approa to managing al ch Expect lots of legal caveats and generic l those factors 1. The compliance approach can be statements unless the lawyers and auditors can environmental – perf issues, relations ormance, employee blindingly dull work together to develop a methodology that with suppliers, As CSR journalist Roger Cowe points out: makes this exercise genuinely worthwhile. customers and ”CSR reporting will no longer be the primary local commun which are cruc ities ial to the compa – responsibility of corporate affairs (ie PR) future success ny’s specialists – which is good news if you have and reputation. ” faith in company secretaries, but bad news So… if you buy the argument that they are risk- averse bureaucrats.“ The importance of CSR will be recognised in regulation but there’s a risk this will be an If companies simply read the recommendations, excuse for companies to lose sight of the take them on board and respond at face value innovation, business improvement and energy then not only will annual reports become that CSR has delivered in many organisations. even more boring, but imaginative and relevant CSR reporting could be killed off before it Yes, it’s a good thing that CSR issues and really gets going. I like annual reports (and performance measures will be addressed by companies) that try to express personality, all listed companies. But only if companies where a management style is made visible, approach the new requirements in a positive and where there is a clear attempt to be and imaginative way. interesting, engaging and open. More guidance risks more boredom. Was it worth the wait? Companies now have the choice between going the extra mile or simply complying with regulations. Time will tell if this results in improved reporting. 09
  12. 12. By Nigel Salter salterbaxter and Simon Propper and Peter Knight Context CSR reports can become lists WE PREFER CLARITY TO WOOLLINESS. of data and good case studies, WE THINK ALL REPORTS SHOULD HAVE A LOW-FLUFF COUNT. but to be of value they should reflect the real issues facing the business. These are not always ‘easy’ issues or the ones that make the best pictures. We are a people business and our people don’t leave their values at home. We want to create a workplace where nobody needs to compromise their ethics and where difficult issues are openly discussed. Animal research is essential to understand disease. It enables us to evaluate the effectiveness and safety of new medicines before they are given to people. Regulations require the use of animals to establish that new medicines are safe and to test some types of vaccines after each batch is produced. The fact that we don’t always get everything right is one reason why we are committed to transparency, dialogue and a multi-stakeholder approach. We continue to make progress, but recognise that we still need to work hard to improve performance at projects and operations where we have not yet got it right. [We] ended a joint venture and 49 contracts due in part to concerns about their willingness to operate in line with our Business Principles. Reported cases of bribery in 2003: 8. 10
  13. 13. As a responsible business, [company name] has an important role to play in balancing social, economic and environmental factors in accordance with society’s transition to more HERE ARE SOME EXAMPLES. sustainable forms of development. WHERE DOES YOUR REPORT REGISTER ON OUR FLUFFOMETER? We similarly approach a comprehensive understanding of the full life cycle and safe use of our products to ensure all their benefits are delivered. In our company, we pursue a corporate culture that combines the determination to achieve economic success with cosmopolitanism, trust, transparency and responsibility for our environment. This attitude is reflected in all areas of the company and is absolutely essential if we are to put the Group’s current product and marketing offensive successfully into practice and thus safeguard the future of the Group on a sustainable basis. We have always said that corporate responsibility is a journey, that whatever Whilst integrating corporate responsibility into the fabric we have achieved there is always more to be of the organisation is an objective in itself, ensuring that done. As this web site shows, we have come it effectively sits at the heart of business strategy and corporate values, it is not one that should be showcased a considerable way over the past year. and then forgotten. We know very clearly that companies which adopt and embrace corporate responsibility are more likely to create wealth and shareholder value than those that don’t and, in so doing, link this to their core business principles. Because of the large number of diesel storage facilities identified we were unable to develop spill response plans. Instead, the pollution control training course will be modified to incorporate the training about how spill response plans should be developed. Regional employment equity officers have played a significant role in highlighting regions where employment equity is not practised as vigorously as executive management would prefer. In so doing, these officers enable corrective action to be taken and ensure that the entire [company name] staff is aware of the imperative represented by employment equity. Note 1 Sources available on request. Note 2 We are heartened by the difficulty in finding truly fluffy examples. We hope that in a few years fluff will be on the endangered list. 11
  14. 14. We have made every effort to ensure that the data in Directions are Methodology accurate. Our research is based on information on company websites and in printed reports. The research findings were verified with each company on the telephone – our thanks to Christina-Maria Weiss who carried out the research this year. In just a few cases companies declined to participate, but most were extremely helpful and keen to have their entry checked. If we have missed data, please get in touch and we will update our records. Although our categories are simple and non-judgemental, we still had to apply some rules and definitions to ensure a consistent approach between companies. These are: 1. The cut-off date: for data inclusion was 7. Section in annual report: typically refers to 11. Covers supply-chain: is a new category July 31 2004 and our assessments are based on content of one full page or more. We indicate added this year. We identify when supply-chain information in the public domain on that date. if data are included where possible. Only in issues are covered only briefly and specific exceptional circumstances is a company that information is reported. 2. The top 250 UK companies: were taken from only publishes information in its annual report the Financial Times website on June 7 2004. classified as a reporter. 12. FTSE4Good: a dot in this box means a company is included in either the World or 3. The top 50 US companies: were taken from 8. Independent verification statement: refers UK index. the Standard & Poor’s 500 index on July 31 2004. to formal auditing of the report by third parties and excludes informal comments by external 13. Dow Jones Sustainability Index: a dot 4. The top 50 Euro companies: were taken from commentators. in this box means a company is included in the Financial Times website on July 31 2004. either the World or European STOXX index. They are the top 50 excluding UK companies. 9. Includes environmental performance: covers a range of issues e.g. emissions and 14. BitC CR Index: only records the companies 5. Number of years reporting: refers to either discharges, resource use and waste. A dot in that appeared in the top 100, not the full list environment or CSR reports. Mergers and this box means that some but not necessarily of participants. acquisitions may affect these data by reducing all the company’s impacts are reported, ideally the number of years recorded. with data. 15. Investment Trusts: are excluded because they are not regarded as trading companies. 6. Web reports: it is important to note that 10. Includes social and ethical performance: Their places have been taken by the next what some companies call a report is actually covers a range of subjects e.g. business ethics, largest companies outside the top 250. only a couple of pages. We attempt to identify community, employment, health and safety, the level of information covered and make a and human rights. A dot in this box means that judgement about what can reasonably be some but not necessarily all relevant issues classified as a ‘report’. are reported, ideally with data. Companies reporting community/health and safety data only did not receive a full dot. ce an ce t en orm an em ex orm erf tat Ind s ing lp erf ns ue ity ort ica lp ort iss tio bil 00 eth rep nta rep ica na ain p1 ex me rif tai nd al ch ars To nd nu ve us la on ly- ort DI ye ex an sS cia nt vir pp nd rep ort OO ts of de in ne en su so RI en ep er en 4G on Jo (FTSE ranking on the left) ed rs rs rs mm CC mb br ep SE cti int ve ve ve w Ind Sector name We Nu Bit Do Co Co Co Co FT Se Pr 051 A COMPANY –– a b –– –– –– –– –– 1 a Comment b More comments KEY Yes a See comments AR Annual Report BitC CR Index Business in the Community Corporate Responsibility index DR Directors’ Report H&S Health and Safety SHE/EHS Safety, Health & Environment 12
  15. 15. Analysis overview 24 of the top 250 UK companies reported for the first time this year (29 a year ago) Number of 0 e5 0 100 50 25 rop companies that: UK UK US Eu REPORT 145 (132) 83 (84) 27 (22) 44 (40) REPORT ENVIRONMENTAL 123 (98) 75 21 42 AND SOCIAL PERFORMANCE REPORT ENVIRONMENTAL 140 (132) 81 26 44 PERFORMANCE REPORT SOCIAL AND 127 (100) 79 22 42 ETHICAL PERFORMANCE COVER SUPPLY-CHAIN ISSUES 54 37 6 18 ARE DEFINED AS 105 (118) 17 23 6 NON-REPORTERS HAVE INDEPENDENT VERIFICATION 60 (45) 44 2 21 ARE REPORTING FOR THE FIRST 24 (29) 7 8 6 TIME THIS YEAR PRODUCE NO REPORTING OF 44 (56) 6 (16) 24 1 SUBSTANCE (NO CSR REPORT AND NO SIGNIFICANT SECTION IN ANNUAL REPORT) 145 of the top 250 UK REPORT ON THE WEB ONLY 43 26 5 13 companies now report REPORT IN PRINT ONLY 3 1 0 0 (132 a year ago) Last year’s figures shown in brackets where available. UK sector with: 0 100 r 25 cto UK UK Se LEAST COMPANIES REPORTING Software and computer services 0/5 0/1 Insurance 1/5 1/1 Leisure and hotels 2/17 4/6 Speciality and other finance 3/14 2/2 100% COMPANIES REPORTING Beverages 4/4 4/4 Tobacco 3/3 3/3 Utilities 8/8 4/4 MOST FIRST-TIME REPORTERS Support services 4/18 1/6 Media & entertainment 4/19 4/9 13
  16. 16. Analysis overview 123 of the top 250 UK companies report environmental and social performance (98 a year ago) 44 of the top 250 UK companies produce no CSR information of substance, in any report (56 a year ago) 60 of the top 250 UK companies have independently verified reports (45 a year ago) 14
  17. 17. 83 of the top 100 UK companies report, compared with 44 of the European top 50 and 27 of the US top 50 37 of the UK top 100 companies report on supply-chain issues, compared with 18 of the European top 50 and 6 of the US top 50 15
  18. 18. US top 50 ce an ce t en orm an em ex orm erf tat Ind s ing lp erf ns ue ity ort ica lp ort iss tio bil eth rep nta rep ica na ain me rif ex tai nd al ch ars nu ve nd us la on ly- ort ye an dI sS cia nt vir pp rep ort of ts oo de in ne en su so en ep er en 4G on Jo ed rs rs rs mm mb br ep SE cti int ve ve ve w Ind We Nu Do Co Co Co Co FT Se Pr (S&P 500 ranking on the left) 001 GENERAL ELECTRIC 2 –– a –– –– a H&S and Community only 002 MICROSOFT 1 –– –– a a –– –– a Limited data 003 EXXON MOBIL 4 a –– –– –– –– a With data 004 PFIZER 3a –– a –– a Last report published in 2001 b H&S and Community only 005 CITIGROUP 4 –– –– 006 WALMART STORES –– –– a –– –– –– –– –– a Fact sheets on community, people and energy; Good Works community web section; Statement of ethics 007 AMERICAN INTERNATIONAL –– –– a –– –– –– –– –– –– –– a Code of conduct only GROUP 008 BANK OF AMERICA 4 –– a –– b –– –– a 2003 update to 2002 environmental report and community webpage b Community data only 009 JOHNSON & JOHNSON 8 –– 010 INTEL 10 a b –– –– a Separate EHS and Global Citizenship report b Brief reference to social reports 011 IBM 14 a –– –– b –– –– a Report pdf and additional web information b Describe supplier evaluations, but little data 012 CISCO SYSTEMS 1 –– a –– b b –– –– a Brief reference b Limited data 013 PROCTER & GAMBLE 11 a b c –– d a Summary report b Report pdf c Reference to Sustainability report d Policies 014 JP MORGAN CHASE –– –– a b –– –– –– –– –– –– a Communityweb section mainly covers policies; Community data only b Covers community 015 COCA-COLA CO. 3 a b c –– a Brief reference b Limited data c Brief mention, Supplier Guiding Principles 016 VERIZON COMMUNICATIONS –– –– a b –– –– –– –– –– a Community and environment web sections, limited data b Covers community only 017 CHEVRON TEXACO 1 a –– –– –– –– a Summary report 018 MERCK & CO 2 –– a –– –– –– a Covers access to medicines 019 ALTRIA GROUP –– –– a –– –– –– –– –– –– a Responsibility web section mainly covers policies; community data only 020 WELLS FARGO –– –– a b –– –– –– –– –– a Sections on community and diversity b Covers community only 021 DELL INC. 5 a b –– –– a Report pdf and additional web information b Brief reference 022 PEPSICO 1 –– a b –– c c –– –– –– a Citizenship web section mainly covers policies b 15 pages c Limited data 023 SBC COMMUNICATIONS –– –– a –– –– –– –– –– –– a Corporate citizenship web section covers mainly community and diversity, limited data 024 UNITED PARCEL SERVICE 1 a –– –– a Reference to Sustainability report 025 TIME WARNER 1a b –– –– –– –– a Last report published in 2002 b Pdf 16 KEY Yes a See comments AR Annual Report BitC CR Index Business in the Community Corporate Responsibility index DR Directors’ Report H&S Health and Safety SHE/EHS Safety, Health & Environment

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