A Tale of Two CSR Reports: KBR and Kohl's
A Tale of Two CSR Reports: KBR and Kohl's
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.
• 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.
• Company background: With nearly 1,100 department stores in 49 states, Kohl's is one of the largest retailers in the U.S. Whereas KBR's complex operations span sectors and continents, Kohl's has the benefit of operating within a single industry and country. Overall sustainability programs are sponsored by the executive vice president of store planning, logistics and operations, according to its 2010 filing with the Carbon Disclosure Project.
• Why it produced the report (pdf): "We are excited to launch Kohl's first corporate sustainability report as one of the ways to share our key sustainability strategies and benchmarks and showcase progress toward both long- and short-term environmental goals. Information to date has shown current programs. An annual sustainability report highlights historical data and demonstrates progress over time." -- Ken Bonning, Kohl's senior executive vice president.
• Highlights, according to the company: "Kohl’s has a history of implementing leading energy management efforts, such as solar, Energy Star and green power purchases, that have continued to grow as strong programs that make sense for both the environment and our business. To date, we have 1,097 stores - more than 600 are Energy Star-labeled and 100 of them are solar." -- Ken Bonning
• Biggest challenges: "We wanted to ensure that the report provided a balance of information that suited various information needs and interests, particularly, providing information that is robust yet clear and easy to comprehend."
• Areas for expansion or improvement: "The report and our strategies will evolve by zeroing in on three specific strategies for 2011 -- sustainable operations (which encompasses energy and climate, recycling and waste and building design), stakeholder engagement and continuing to focus on a sustainable supply chain." -- Ken Bonning
Our take: The 12-page report outlines its performance for five sustainability strategies that largely fall within the environmental arena: energy efficiency, building design, emission reduction, recycling and minimizing waste, and stakeholder engagement. The programs have been in the works for years, yielding ample data, targets and progress to share with its stakeholders, such as goals for achieving LEED certification for its stores and achieving net zero emissions by 2010 (the company met this goal, with the help of carbon offsets and renewable energy credits).
It may be helpful to create a centralized dashboard showing progress on all targets at-a-glance, as well as include discussion of the challenges the company faced working toward these goals or where the company wants to go from here.
Whereas KBR's complex operations span sectors and continents, Kohl's has the benefit of operating within a single industry and country. It's also worth noting that KBR is largely a business-to-business firm, while Kohl's is a consumer-facing company, which is reflected in their two reporting styles. Each acknowledge that their maiden effort is just the beginning of a long sustainability road ahead, one which does get easier, according to Uwe Bergmann, head of sustainability management at Henkel. He should know: The German maker of laundry, home care and cosmetics products is a sustainability reporting veteran, having recently filed its 20th.
“It’s always a struggle building up the data systems,” Bergmann told GreenBiz.com Executive Editor Joel Makower last month. “But once a process starts running more smoothly, you can focus more on content and then things start get more interesting. And you get more output for your input, so to say. So, it does get easier, but never easy.”