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The Corporate Social Responsibility Report. Companies use it to catalog their sustainability successes, discuss challenges and provide transparency on the environmental and social impacts its stakeholders care about. If done well, it can also serve as a management tool to help companies make better business decisions and improve their performance.
CSR reports, like everything, are changing. There are new issues, new tools and new expectations by the public, stakeholders and companies themselves. So, to take stock, we took note of two first-time reports from KBR and Kohl's that were coincidentally both published on the same day this week.
These companies come from disparate sectors with two completely different customer bases, and each took their own approach during their first corporate reporting endeavors. We touched base with both to hear their thoughts.
KBR
• Company background: Spun off from Halliburton in 2007, KBR is an engineering, procurement and construction company playing in a wide range of sectors: infrastructure and minerals, oil and gas, defense, government, transportation, and so on. The company's sustainability program is driven by a cross-functional international committee established in 2006; there is also an executive steering committee that offers guidance and reports to a CSR subcommittee of the board of directors.
• Why it produced the report (pdf): Pressure from stakeholders, including employees, shareholders and customers. "It was time to take all the things we've been doing and get it out there for everyone to see. The timing was right. We have a really good story to tell." -- Chuck Lyons, global vice president of KBR Quality Health, Safety and Environment
• Biggest challenges: "We had so much information that we had to start condensing it to get it into a publishable amount. Our first draft was 72 pages, with only text." -- Chuck Lyons
• Highlights, according to the company: Its Afghani First and Iraqi First programs hired and trained locals in various trades, such as auto mechanics, construction or welding, "giving them a usable trade so when KBR leaves, they can go work for someone else, another contractor, or set up shop themselves." -- Chuck Lyons
• Areas for improvement: Employees want more of their activities to be included and the company wants to do a better job of tracking volunteer activities. -- Suzanne Mayne, director of KBR Environment and Sustainable Development
Our take: It's pretty common for first-timers to exclude quantitative data and goals, and KBR is no exception. The 19-page report spotlights a range of company efforts related to sustainability, encompassing safety, philanthropy, education, environment and community involvement, among other areas. Most of the information is anecdotal, and KBR is admittedly grappling with identifying which indicators or metrics it would be meaningful to report on. From a reader's perspective, the lack of data in the report makes it hard to understand the scope of the company's environmental impacts.
Lyons said that while the company is debating internally how often to issue sustainability reports, it is entertaining three-year intervals because this lines up with the typical timeline of its projects and would better show progress than annual reporting; annual disclosure of some sort, however, may arguably be better for keeping its stakeholders informed, which, according to the company, is one of the main drivers behind the production of the report.
Building on globalcitizen's
Building on globalcitizen's comment above, I think it is a good idea to start with a materiality analysis to identify the key issues that are important to your companies stakeholders. There is certainly an opportunity for Kohl's to expand in this regard. I also noticed that neither report utilized the GRI reporting framework, which is also a missed opportunity. The GRI framework allows for materiality as well as comparability across reports.
At Workday, we also just released our first sustainability report, and it is by no means perfect but is a good starting point and establishes a baseline for improvement. We utilized the GRI guidelines and are looking to build upon this framework for future reports.
http://www.workday.com/sustainabilityreport
While Kohl's may have retail
While Kohl's may have retail stores in only one country, the manufacturing of its products reaches across the globe to the poorest of communities. Environmental goals and policies are a key part of a company's CSR policy, but the term Corporate Social Responsibility extends beyond the environment. Kohl's should expand their CSR report to include effects of their manufacturing processes; the environmental and labor side.
Good start to a look at the
Good start to a look at the reports. I have not read KBR's but have looked through Kohl's. I liked the 12 page length, and the information in the report is clearly intended to be understandable and not overwhelming for consumers with a less-than-advanced understanding of sustainability.
I would love to have seen their numbers for their carbon data, particularly with a discussion of what was included in scope 3. I would have liked to see greater discussion of how they intend to meet their net-zero goal in the future. RECs and CCs are great interim tools, but ultimately there is still point-source carbon emissions from the purchaser. These are things I grappled with for our 1st report, and am still working on having sorted for the 2011 report.
Having published our own first report this year (for 2010), it's great to see others doing the same. Let's keep going and learn from each-other as we go!