CSR

CSR TRENDS 3 A comprehensive survey of corporate social responsibility report trends, benchmarks and best practices

A joint report by Craib Design & Communications and PricewaterhouseCoopers LLP

CSR TRENDS is a practical working tool designed to give you useful insight into corporate social responsibility report trends around the world. Our goal is to help you meet the expanding expectations of your stakeholders for more information – and proof – that your company is not only building a sustainable business, but contributes to building a more sustainable world.

CSR TRENDS 3 is chock full of benchmarks, best practices, pointers, statistics and guidelines.

We hope you find it useful.

Contents

1

Who, why and how?

What we found Special report: A general framework for CSR reports

06

Focus

08

1.1 Outstanding report:

BP PLC

1.4 Organizational profile

10 12 14 16

Credibility

18

1.2 Covers 1.3 Materiality

2

02 04

2.1 Outstanding report:

Centrica PLC 2.2 Message to stakeholders

20 22

2.3 Governance and

management systems 2.5 Assurance

24 26 28

Context

30

2.4 Stakeholder engagement

3

3.1 Outstanding report:

Vodafone Group PLC

3.5 Visuals and design

32 34 38 40 42

Performance

44

3.2 Reporting on the issues 3.3 Climate change 3.4 Testimonials and case studies

4

4.1 Outstanding report:

PotashCorp 4.3 Understanding performance

46 48 50

Accessibility

52

4.2 Objectives and targets

5

5.1 Outstanding report:

Starbucks Corporation 5.3 Other ideas

54 56 60

Who was surveyed Glossary Contact Sponsors

62 63 64 64

5.2 Websites

© Craib Design & Communications, 2009.

The contents of this book are protected by copyright and may not be reproduced without permission.

To download a PDF version of this book or to request printed copies, visit www.craib.com or www.pwc.com/ca/sustainability.

02

CSR TRENDS 3

Who, why and how?

Despite the global recession, the quantity and quality of corporate social responsibility reports issued in 2009 makes it obvious that reporting on sustainability has become a complex endeavour that matches – if not exceeds – the effort and expense that has traditionally been invested in annual reports on financial and operating performance.

The nature of these reports makes surveying and reviewing them a challenging and time-consuming task.

To ensure the perspective and advice that we bring to you is both thorough and trustworthy, Craib Design & Communications joined forces with PricewaterhouseCoopers LLP to create this resource, our third annual survey of CSR TRENDS.

who did the research Craib Design & Communications

PricewaterhouseCoopers LLP

Craib is a team of talented designers and consultants with decades of experience in corporate and investor communication.

We use a content-driven, research-based methodology across a variety of print and electronic mediums – all with proven results. Clients entrust their communications needs to us year after year, often well beyond the scope of our original assignment.

PricewaterhouseCoopers LLP (PwC) is the Canadian member firm of the PricewaterhouseCoopers global network.

As part of the world's leading professional services organization, we provide financial assurance, tax and management advisory services to clients around the globe. Members of PwC Canada's Sustainable Business Solutions practice work collaboratively with our clients to put strategic thinking at the heart of sustainability and sustainability at the heart of corporate strategy. Our experienced professionals advise on both sustainability aspirations and commercial realities, and make those two agendas work together.

This year marks the sixth year of reviewing annual reports and the third edition of our CSR TRENDS survey. Our experience in compiling these reports, as well as our wealth of experience in tailoring communications materials to our clients’ needs, puts us in an exceptionally strong position to work with you to create an effective corporate report.

We help clients in five key areas: • Corporate responsibility strategy; • Climate change advisory and assurance; • Reporting and assurance of non-financial information; • Chain of custody/supply chain risk management; and • Management systems and certification.

03

WHO, WHY AND HOW?

This survey looks at what we call corporate social responsibility or CSR reports, a term used by 23% of the companies in our survey. They're also called other things: sustainability reports (40%), corporate responsibility reports (18%) and sustainable development reports (5%) to name just a few. We've chosen the term CSR because it encompasses the broadest subject matter – social, environment and economic.

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why we do this survey

the csr trends survey process

So… why report? Why would a company open itself up to even greater scrutiny, especially if such disclosure is not required by any regulator – yet?

Early in 2009, as most companies began to issue their annual and CSR reports, we started our survey by compiling the names of companies listed in 11 Standard & Poor’s indices.

We then reviewed the CSR information on the websites of every company in the S&P/TSX Composite, Global 100, BRIC 40, Latin 40 and India 10 as well as every second company in the S&P 500, Euro 350, Australia 100, Asia 50, SE Asia 40 and Africa 40. This meant reviewing 853 websites from companies in dozens of countries. We reviewed another 262 websites of companies named in directories of CSR reporters, expanding the total number of companies in this year’s survey to 1,115.

The answer: stakeholder expectations.

Non-financial reporting is more than a component of being a responsible company.

It has become an integral part of every company’s relationship with employees, suppliers, customers, investors and communities. In fact, despite the warm and cozy sentiments that can be stirred by these reports, addressing issues that once took a back seat to financial results – if they had a seat at all – has become critical to a company’s credibility, transparency and endurance.

Our survey doesn't evaluate the accuracy of the information being reported by each company, the company's compliance with regulations, nor the company's sustainability performance. Instead, we’ve looked at how thoroughly and effectively companies have communicated their strategies and performance. It was undertaken to develop insight – ours and yours – into those approaches that most effectively tell a CSR story.

Not only did we expand the number of companies in the survey, we decided to expand our research methodology to include CSR HTML reports and CSR websites.

Every aspect of CSR reporting that we reviewed is included in our search for best practices.

However, our benchmarks are compiled from the detailed survey of 100 reports. Using an impartial methodology, our selection included: 25 reports from Canada; 25 from the U.S.; 25 from Europe, Australia and Japan; and, 25 from the rest of the world.

Each report was reviewed for close to 150 primary and dozens of secondary content and design items that we believe define a CSR report. These items fall into five categories: • Report format and structure; • Design, including the use of typography, graphs, diagrams, illustrations and photographs to enhance the communication effectiveness of the content; • Key elements of content, including corporate profile, report scope, determination of materiality, message(s) to stakeholders, case studies and testimonials, governance and management systems, stakeholder engagement and assurance reports; • CSR performance, including targets, timelines and performance indicators; and • Website treatment.

Every member of Craib Design & Communications and a team from PricewaterhouseCoopers in Toronto and Calgary were involved in the collection of the survey data, devoting an average of 217 minutes to each report. A smaller team of individuals from the three companies selected the examples of best practices.

04

CSR TRENDS 3

What we found what, why and how to report?

Good questions. And companies around the world are coming up with many different answers. A common language and infrastructure is beginning to develop, but there remains a diversity of approaches to CSR reporting that often makes it difficult to determine how well individual companies are actually performing, particularly in comparison to peers.

Because there are so many approaches, as we collected the

Results

PDF and HTML reports for our in-depth survey of CSR reports we also compiled data on the breadth and availability of CSR information on 853 corporate websites. We looked at four types of information: the existence of CSR information on the website, the presence of a CSR tab in the main navigation menu, the kind of information provided, and the existence of a formal report.

PRESENCE OF A CSR TAB IN THE MAIN NAVIGATION MENU (%)

p S&P/TSX p S&P 500 p S&P Euro 350 p S&P AUS 100

COMPANIES THAT ISSUED A 2008 CSR REPORT (%)

75% of all companies have CSR information on the website, but only 40% draw attention to the information with a tab in the main navigation menu.

Many companies do not produce a CSR report every year. Only 22% of Canadian companies have a CSR report from any year versus 74% of Euro 350 companies.

PERCENTAGE OF WEBSITES REPORTING ON SIX CSR DOMAINS

Management systems

Environment

Supply chain

Employees

Health and safety

Community support

S&P/TSX

57%

51%

5%

20%

44%

55%

S&P 500

68%

47%

24%

35%

30%

58%

S&P SE Asia 40

50%

40%

0%

35%

25%

80%

S&P Latin 40

70%

50%

3%

55%

50%

48%

S&P India 10

30%

40%

0%

30%

30%

40%

S&P Euro 350

87%

83%

42%

65%

59%

77%

S&P BRIC 40

58%

48%

8%

28%

23%

38%

S&P Australia 100

36%

76%

14%

74%

66%

68%

S&P Asia 50

52%

36%

12%

24%

32%

48%

S&P Africa 40

45%

40%

10%

25%

25%

50%

Index

Companies on the Euro 350 and Australia 100 consistently exceed Canadian and U.S. companies in the breadth and depth of information provided, sometimes by a very wide margin. Australian websites are weak only in their discussion of management systems and supply chain. Most of the companies in the Global 100 are included in the regional indices.

WHAT WE FOUND

the most striking – and disturbing – facts As you consider our benchmarks throughout this report, please keep in mind that we draw our conclusions – and our averages – from the 100 reports that we surveyed. Despite the relatively small sample size, we have identified some important facts about CSR reports.

p S&P/TSX

p S&P 500

p Europe, Japan & Australia

What matters CSR reports are very different from company to company, reflecting the uniqueness of each business and industry. Materiality guides the focus of your efforts; a scorecard provides focus for your performance. Both ensure relevance.

Focused on green The environment is not only the dominant issue in CSR reporting, it has become a mainstream political, economic and business issue. As a result, 92% of all companies in our survey had a dedicated discussion about the environment.

Intensely visual The delivery of CSR information is intensely visual, particularly in reports from Europe, with an average 79 graphs, diagrams, illustrations, schematics and photographs in each report to explain and support the text.

p Other

% OF REPORTS THAT EXPLAIN MATERIALITY

16 24

% OF REPORTS WITH SUSTAINABILITY SCORECARDS

48 48

56 56

84 40

Not only do more non-Canadian companies explain materiality, they are more likely to provide a materiality matrix.

European, Japanese and Australian reports also include more objectives in their scorecards (37 compared to 23 in Canada).

% OF REPORTS WITH DEDICATED CLIMATE CHANGE SECTIONS

% OF REPORTS THAT PUBLISH GHG EMISSION TARGETS

32 52

72 28

Whether there is a dedicated discussion of climate change or not, most companies (87%) report greenhouse gas (GHG) emissions.

AVERAGE NUMBER OF GRAPHS IN CSR REPORTS

36 52

68 32

While non-Canadian companies are evenly split between absolute versus intensity targets, most Canadian companies provide only an absolute goal.

CSR’s reach A company’s responsibility reaches beyond the floors of its factories, offices and/or stores to the actions of its suppliers and final impact of its products – generally referred to as the company’s upstream and downstream performance.

42% of companies enhance the communication value of graphs by providing captions that explain the data.

Enhancing credibility The foundation of credibility and transparency is assurance by an independent 3rd party such as an accounting firm or CSR consultant as well as stakeholders. In our Europe, Australia and Japan group, 74% of assurance reports are provided by an accounting firm compared to only 50% of Canadian firms.

% OF REPORTS THAT EXPLAIN SUPPLY CHAIN ENGAGEMENT

% OF REPORTS THAT HAVE BEEN ASSURED

74% of European, Japanese and Australian companies that seek assurance use accounting firms.

70% of all companies discuss supply chain management policies and/or initiatives, but only 46% explain how they engage with suppliers.

05

06

CSR TRENDS 3

Special report: A general framework for CSR reports by mel wilson sustainable business solutions, pricewaterhousecoopers llp

Some CSR reports are well organized.

They have a flow of information that effectively conveys the stories that the company is trying to tell. Other reports are disorganized, making them difficult to read. They jump around from topic to topic without a sense of continuity or structure.

The difference lies in the underlying report framework. In an organized report, the information is logically sequenced in the form of story arcs that take the reader from a description of the company to statements of its principles to detailed accounts of performance that demonstrate those principles.

We believe that the most effective CSR reporting contains eight key components:

1

scope of your report

2

description of your company and its operations

The first thing readers need to see is a “road map” that tells them what is in the report and what is not.

Usually readers have to infer what is not covered, but some companies explicitly identify information that is not in the report. The report scope should also contain a description of the process and criteria that were used to determine the information that has been included.

This should contain information such as who runs the company, what the company does and where it operates.

This crucial information sets the context for the remaining sections on your sustainability performance.

3

performance domain Most corporate sustainability reports take a “triple-bottom-line” approach by covering three performance domains: social, economic, and environmental.

Although conceptually these three domains are inter-connected, in a sustainability report it is important that they be distinguished in order to effectively set the direction of the story arc.

4

the specific issues of interest to stakeholders

5

your company’s policies and perspective

There are many issues within each performance domain and it is critical that your company makes an effort to determine which are of interest to your stakeholders and which are not. Once the important issues are identified, they should be clearly presented in the report along with an explanation of why the issue is important and how it relates to the company’s performance.

Once introduced, your report should articulate where your company stands vis-à-vis the issue, either by describing your policies or through a more general discussion that reflects management’s perspective.

This does not need to be a long section. In fact, conciseness makes it easier for the reader to determine whether the company’s perspective aligns with his or her own.

SPECIAL REPORT

1. Scope

2. The company and its operations 3. Performance domain

framework component

What the reader will see in the report, and why

The context

Social

Economic

Environmental

Sustainability Performance

4. Issues

5. Policies and perspectives 6. Processes and initiatives 7. Performance indicators (PI) 8. Goals and targets

The general framework for a CSR report contains eight key components logically sequenced in “story arcs”.

6

7

performance indicators Your report should present quantitative performance indicators related to each issue. For many stakeholders, this is the proof-inthe-pudding moment. Your company can talk about your programs all you want, but in the end you have to measure your performance and show progress. For this reason, it is important to show year-over-year changes in performance wherever possible. This section should also

“This report includes information on our environmental, social, and economic performance...”

“We have 20 facilities located in six countries...”

Environment

Climate change “We are concerned about climate change and we recognize we need to improve our performance” “We have initiated numerous emission reduction programs, as follows...”

Greenhouse gas emissions in tonnes CO2e “Our goal is to reduce our emissions by a further 5% by 2012 by undertaking the following...”

Applying this framework to climate change leads the reader from the report scope through to specific GHG PIs and targets.

contain management’s comments on the performance – were they satisfied or dissatisfied with it? – and factors that contributed to success or failure.

description of your company’s processes and initiatives to manage the issue Your report should talk about what you are actually doing about the issue. The goal is to demonstrate that your company not only talks the talk, it walks the walk. This section should contain numerous brief action-oriented examples of what your company did in the previous year to address the issue. This is a good opportunity to use photographs and graphics to explain your initiatives.

However, it is important not to overdo it with too many examples, especially if some of them are weak. Pick the best examples of your programs and highlight them.

1 2 3 4 5 6 7 8

example

8

The evolution of CSR reporting

future goals and targets Your report should conclude with a brief discussion of future performance goals and targets relating to the issues. The concept of including goals and targets in a sustainability report is a relatively contentious issue. In general, you should not set out detailed goals and targets unless you are confident that the performance metrics are accurately measured, and that you have a reasonably well thought-out plan to achieve the targets. Publicly stating goals and targets without having confidence in both is not only misleading to the reader, it sets the company up for serious problems in the future.

Using this framework for your next sustainability report will help you organize both your thoughts and information. It will also help you convey key messages in a way that flows logically, making your report easier to read and more engaging for your readers.

Since the late 1990s, CSR reporting in Canada has evolved from relatively simple environmental statements to comprehensive triple-bottom-line reports supported by web reporting.

To share our 10+ years of hands on experience, ongoing research and involvement in the development of professional standards, PricewaterhouseCoopers has undertaken two initiatives in the past few years in Canada: • The establishment of sustainability reporters roundtables in Toronto, Calgary, and Vancouver. Twice a year, 10 to 20 representatives from companies involved in CSR reporting meet to share ideas and perspectives; • The launch of Report Ability, PwC's occasional newsletter on CSR reporting in Canada, including company profiles and reporting statistics.

For more information about the roundtables or to download a full copy of Report Ability please go to www.pwc.com/ca/sustainability.

07

Fo·cus: (v.) To direct toward a particular point or purpose.

Focus

1 in this section 1.1 Outstanding report: BP PLC

10

1.2 Covers

12

1.3 Materiality

14

1.4 Organizational profile

16

10

SECTION 1.1

CSR TRENDS 3

Outstanding report

bp plc BP’s 24-page Sustainability Review 2008 emphasizes the company’s goal of “no accidents, no harm to people and no damage to the environment”. There are many solid features in the report and on the website: • Live links throughout the PDF to more information on BP’s website; • Comments from an independent assurance provider throughout the report as well as a detailed assurance statement that comments on the strengths and weaknesses of BP’s reporting; • Case studies documenting the company’s activities related to each area of focus as well as a searchable library of case studies; and

p Design and accessibility: BP’s reports and website have a consistent design that’s clean yet welllayered with plenty of heads, subheads, highlights, photographs, graphs and sidebars to draw the reader to key messages and make it easy to navigate within and between documents.

• Interactive maps, tools and quizzes.

quick facts Country of origin

United Kingdom

First reported

1998

Reporting method HTML website and PDF review Printed report

24 pages

Market capital

US$169.9B (Sept. 21, 09)

Revenue*

US$266.7B

* Revenue is for the trailing twelve months.

To download this report please visit: www.bp.com

p Message to stakeholders: Group Chief Executive Tony Hayward’s message sets the tone for the report by answering hard-hitting questions frequently asked by stakeholders. The answers are candid and succinct, and a live link connects the reader to speeches that provide more indepth discussions.

FOCUS: OUTSTANDING REPORT

BP gets top marks for an effective and engaging design as well as the thorough discussion of issues, strategy and performance in the message to stakeholders and throughout the feature pages.

p Reporting on the issues: A challenging question launches each discussion of five issues. First up is safety. The question Are BP’s operations becoming safer and more reliable? is answered with a discussion of BP’s initiatives and performance, a report from an independent expert and specific observations from an independent assurance provider. BP covers four other issues in similar detail: affordable energy, climate change, skills shortage and community investment.

KPI

Explanation

Oversight

p Climate change: The question Is BP really doing enough to address climate change? is answered through a fiveprong discussion covering BP’s position on climate change, the company’s climate commitment, the five areas in which BP is taking action on climate change, observations by an independent assurance provider, and BP’s four low-carbon energy businesses.

p Understanding performance: BP’s five-year performance table includes special treatment for four key performance indicators (KPIs) that includes graphs, discussion and accountability.

11

12

SECTION 1.2

CSR TRENDS 3

Covers There are hundreds of CSR reports published each year, all competing for a similar audience. It is important that the design of your cover be engaging to ensure your CSR report stands out. The best covers will also establish a strong theme or deliver a key message.

international business machines corporation IBM’s Corporate Service Corps Program dominates the front and back cover of the IBM report. According to CEO Samuel Palmisano, the Corps, which was modeled on the Peace Corps, demonstrates the company’s corporate-wide strategy “of engaging with forward-thinkers across business, science and society to make the world work better.”

• The introduction on the cover draws the reader into the report.

• Well executed on-location portraits illustrate IBM’s people strategy, global reach and commitment.

Front cover

What stakeholders need…

The cover message of your CSR report should be the beginning of a story that pulls the reader through the report from cover to cover. Such a cover message – delivered through design and text – will accomplish two communication goals: establish a foundation for understanding the core concepts of your report and entice the individual holding the report in his or her hands to look inside. The best covers are also consistent with the design of the annual report cover, emphasizing the link between CSR, operating and financial strategies and goals.

Back cover

e DOs

u DON'Ts

• DO draw readers into your report with engaging visuals and messages on your cover.

• DO reinforce your cover message with supporting evidence throughout your report.

• DO create a visual or theme that is consistent with the cover of your annual report.

• DON’T waste the readers’ time with platitudes; they deserve – and expect – more.

• DON’T leave the back cover blank. Use it to reinforce the cover or deliver other significant messages.

13

FOCUS: COVERS

westpac banking corporation Westpac combines a powerful image with near magazine-style messages on the covers of its Stakeholder Impact Report, annual review and annual report.

The news magazine approach establishes a sense of credibility – and accessibility – while immediately focusing the reader on key issues.

• Page references beside each content item make it easy for the reader to find more information on topics of particular interest.

Stakeholder impact report

Annual review and annual report

• The consistency in cover treatment on the three reports effectively integrates CSR with Westpac’s operating and financial strategy and performance.

adidas group The adidas HTML sustainability report takes full advantage of the interactive capability of the web to draw the reader into the report by boldly placing stakeholder questions and challenges on the homepage. The clever use of rollovers reveals the company’s response and provides links to more in-depth information.

• The presentation and execution places emphasis on stakeholder opinions and concerns.

• Immediate feedback sets the stage for the ongoing dialogue throughout the report.

Homepage

• The theme – Sport Matters – encompasses adidas’ values of performance, passion, integrity and diversity.

Rollover response

Benchmarks

65% had a cover theme or positioning statement

[+] More best practice reports

87% had a cover illustration or photograph

50% linked the CSR report to the annual report through theme or design

Barclays PLC

Foster's Group Limited

PotashCorp

14

SECTION 1.3

CSR TRENDS 3

Materiality The most fundamental decision to make before a single word can be written is choosing the issues and indicators to be included in your report. Establishing materiality will guide the breadth of content and depth of detail to ensure both clarity and relevance.

toshiba corporation Toshiba documents the evolution of its process for determining the issues of most importance to the company and stakeholders through a timeline that includes progress made on AccountAbility’s AA1000 Assurance Standard principles of materiality, completeness and responsiveness; the use of a stakeholder survey to determine the content of the report; and a diagram that evaluates the information in the 2008 report and on the website.

• The timeline and supporting graphics create a visual path for readers.

• The scope of the company’s report and materiality determination process are thoroughly, but succinctly, discussed.

What stakeholders need…

e DOs

u DON'Ts

Explaining materiality will tell your reader which issues are most important for your company to manage, how far your responsibility extends and where you focus your efforts. Your report should also explain the process used to determine materiality. This includes identifying your stakeholders and means of engagement. One of the best ways to convey the result of this dual process is to create a matrix that cross-references the impact of issues on corporate performance with stakeholder concern. It’s complex, but defining materiality is essential to ensuring the reader understands your issues and challenges.

• DO describe the guidelines used to prepare your report such as the Global Reporting Initiative G3 Guidelines, UN Global Compact principles, AccountAbility’s AA1000 Assurance Standard principles or other industry guidelines.

• DO include a contact for questions regarding the report.

• DON’T present all issues as equally significant, make your priorities obvious.

• DON’T begin to write your report until you’ve established materiality.

• DON’T avoid explaining your materiality process because it seems too complex; it is essential to establishing credibility.

FOCUS: MATERIALITY

15

intel corporation Intel identifies global issues related to climate change, water use, education, labour standards, and supply chain responsibility and discusses both the risks and opportunities that each issue poses to the company. The discussion is supported by a matrix that documents the impact of the issues on Intel’s business and the significance attached to each issue by stakeholders. The matrix is supported by an explanation of engagement sources and materiality criteria. Intel also provides a list of steps taken to imbed the CSR process in the company’s decision-making and external engagement.

general electric company GE boldly acknowledges the changed economic environment and explains its process for “resetting responsibilities”.

The interactive materiality matrix in the HTML report allows readers to see how issues have been “reset” in 2008 versus 2007.

External comments throughout the report provide insight into the process.

• The various corporate roles and responsibilities involved in establishing materiality are identified and discussed.

• A diagram explains the engagement and decisionmaking process.

• The colour-coded materiality matrix makes it easy to identify the individual issues within four themes.

Benchmarks

34% explained materiality

[+] More best practice reports

81% used the Global Reporting Initiative (GRI) guidelines

36% used the UN Global Compact principles

AT&T Inc.

British American Tobacco PLC

Ford Motor Company

16

SECTION 1.4

CSR TRENDS 3

Organizational profile Readers must have a firm understanding of your business activities, geographic footprint, operating performance, financial strength and corporate goals. This allows them to understand the context in which your CSR strategies have been developed and the potential impact of CSR issues on performance.

canada post corporation Canada Post’s organizational profile provides a history of the company and introduces some of the issues that could affect the company’s short- and long-term performance. The two-page spread includes key facts such as revenue and volume by line of business, number of facilities, size of fleet and addresses served.

• Written in plain language, the spread provides a thorough overview of the company’s current business and objectives.

• A sidebar listing challenges and achievements provides context, balance and transparency.

What stakeholders need…

e DOs

u DON'Ts

Never assume your readers understand what your company does or where it operates. Even companies as well known as Coca-Cola, Nike and IBM provide profiles to ensure readers understand the breadth of their businesses. Along with a description of activities, many companies provide diagrams, organization charts, maps and photographs. Your profile should also cover your financial and operating performance, the economic and competitive trends that could affect that performance, and your strategies – in all spheres of corporate activity – to ensure readers understand your economic sustainability.

• DO provide segmented as well as consolidated information.

• DO provide data on the scale of your company including number of employees and geographic footprint.

• DO use a visually diverse approach with charts, photographs, maps and illustrations.

• DON’T assume your reader knows what your company does or where it operates.

• DON’T use language someone outside your business is not likely to understand. Industry-specific terms should be explained.

17

FOCUS: ORGANIZATIONAL PROFILE

conagra foods inc.

ConAgra’s highly visual and exceptionally colourful four-page profile combines comprehensive consolidated corporate information with a description of the company’s impacts and CSR strategies at each stage of its operations from suppliers to consumers. Photography, callouts, tables and graphs create a compelling, informative and easyto-read organizational profile.

• Excellent balance of corporate information with sustainability activities and strategies.

• Effective graphics and layering make information inviting and easy to navigate.

anglo american plc Geographically diverse, Anglo-American uses a world map of its diverse activities to visually anchor the company’s organizational profile and to highlight its various sustainability initiatives in the countries in which it operates. A detailed corporate profile is provided along with a description of each of the company’s five core businesses.

• An introductory page provides key financials and business highlights such as top performing businesses, operating profit, capital expenditures, efficiency targets, employees and underlying earnings.

Benchmarks

[+] More best practice reports

82%

78%

47%

published a corporate profile

explained the report scope

published an activities map

HydroQuébec

General Electric Company

Vodafone Group PLC

Cred·i·bil·i·ty: (n.) The quality to elicit belief or confidence; trustworthiness.

Credibility

2 in this section 2.1 Outstanding report: Centrica PLC

20

2.2 Message to stakeholders

22

2.3 Governance and management systems

24

2.4 Stakeholder engagement

26

2.5 Assurance

28

20

SECTION 2.1

CSR TRENDS 3

Outstanding report

centrica plc Centrica’s report and sustainability website have straightforward structures built around key areas of impact, stakeholders and an array of tools making them easy to navigate despite the depth of content.

On the web, Centrica has created a rich user experience by providing 15 videos, live web chats and dozens of case studies.

Web tools such as the ability to save pages, make notes and compile your own report for downloading are all explained in the helpful How to use this report instruction guide.

p Governance: Chief Executive Sam Laidlaw introduces the company’s eight business principles. This discussion is followed by a more detailed description of each principle and an explanation of how it’s applied and a list of corporate policies. Mary Francis, senior independent director and chairman of the corporate responsibility committee, discusses 2008 CR-related performance in governance.

Other noteworthy features include: • Indepth reporting on the issues by areas of impact and stakeholder group; and • The business case for CR, an explanation aimed at investors.

quick facts Country of origin

United Kingdom

First reported

2003

Reporting method HTML website and simplified PDF Market capital

£13.36B (Sept. 21, 09)

Revenue*

£23.325B

* Revenue is for the trailing twelve months.

To download this report please visit: www.centrica.co.uk

p Management systems: Centrica integrates corporate responsibility, governance and risk management in a consolidated discussion that covers roles, responsibilities, director biographies and the risk “feedback loop”.

CREDIBILITY: OUTSTANDING REPORT

Centrica gets top marks for the depth of information on governance, management systems and performance, which it makes easy to access and navigate through a straightforward structure.

p Stakeholder engagement: Centrica’s Web Chat is a Q&A session with members of the CR committee.

Questions from stakeholders and Centrica’s answers are provided along with links to more information on the topic. This chat supports the website’s extensive discussion of operating context, strategy, activities, commitments, performance and future commitments for each of Centrica’s nine stakeholder groups: customers, investors, employees, suppliers, governments, communities, non-governmental organizations (NGOs), media and trade unions.

p Understanding performance/Objectives and targets: Centrica’s commitments are established and performance is reported by stakeholder group as well as key impact area. The website also offers the unique ability to toggle between 2008 and 2007.

Supporting commentary explains the performance data, which can be downloaded to Excel. Live links in the scorecard take the reader to more comprehensive discussions of issues and initiatives.

p Case studies and videos: A wealth of case studies and videos provides a solid background to corporate responsibility at Centrica along with examples of the strategy in action.

Chief Executive Sam Laidlaw and CR Committee Chairman Mary Francis appear in an excellent video that explains the company’s philosophy, performance and future plans.

21

22

SECTION 2.2

CSR TRENDS 3

Message to stakeholders The letter from the CEO remains the core expression of any company’s CSR commitment. Ideally, it should sincerely convey the sense that the company is aware of key issues and is taking action. It should also convince stakeholders that their concerns have been heard, understood and are being addressed.

anglo american plc Anglo American’s CEO Cynthia Carroll and Chairman Sir Mark Moody-Stuart provide separate discussions of the company’s commitment to CSR with in-depth coverage of progress and challenges. Ms. Carroll focuses on sustainability issues and the risks and opportunities presented to the company. The Chairman’s message highlights key global challenges such as energy security and the lack of regulatory agreement on carbon sequestration.

• Subheads emphasize key topics in the lengthy messages.

• Each message is balanced, providing both good and bad news.

• The CEO’s message invites stakeholder feedback.

What stakeholders need…

The best letters are candid, strategic and a reflection of the men and women who manage the company. An effective letter talks about the past year, primarily to establish an understanding of the company’s strategic focus. Every letter cannot follow the same format, but there are some common elements: • Discuss key events and results, placing them in perspective; • Explain what the company is doing to improve its performance; • Be specific wherever possible. The more numbers the better, the more concrete the examples the more credible the messages.

e DOs

u DON'Ts

• DO describe the trends, risks and opportunities facing your company and explain their significance to your performance.

• DO provide an outlook.

This is not a forecast, but a reasonable explanation of expectations.

• DON’T be too democratic.

It’s not necessary to touch on every division or initiative.

Focus on the most important.

• DON’T ignore disappointments.

Identify the challenges and how they’ll be addressed.

CREDIBILITY: MESSAGE TO STAKEHOLDERS

23

canada post corporation CEO Moya Greene and CSR SVP Robert Waite discuss CSR at Canada Post in their own unique voices. Ms. Greene’s conviction is palpable in almost every line of the letter, particularly when she says CSR is “crucial” and “doesn’t lose its relevance in an economic downturn… it becomes even more important.”

Both Ms. Greene and Mr. Waite touch on accomplishments and disappointments over the year with unusual directness.

• Both messages are thoughtful, succinct and balanced. They set a tone of transparency and balance that dominates the report.

bp plc Group Chief Executive Tony Hayward answers hard-hitting questions frequently raised by company stakeholders. Tough questions about BP’s capital allocation decisions, safety and operating integrity after the 2005 fire and 2006 pipeline leaks are addressed candidly, setting up comprehensive discussions of the issues that follow in the remaining pages of the report.

• Frank Q&A-style message establishes the tone for rest of report.

• The editorial approach to photography suits the Q&Astyle message.

• A link at the bottom of the page takes readers to additional speeches made by BP executives on CSR issues.

Benchmarks

59% of print reports start the CEO’s message on page 1 or 2

[+] More best practice reports

714 average number of words in the message

17% published a second message

Ford Motor Company

General Electric Company

TELUS Corporation

24

SECTION 2.3

CSR TRENDS 3

Governance and management systems Sound corporate governance and management systems are key to the success or failure of a company, let alone its CSR initiatives. Every report should explain how the tenets of good governance and CSR are expressed within the company’s codes and policies and the company’s day-to-day activities.

potashcorp PotashCorp’s governance section is robust with details on sustainability-related management processes, board oversight and risk management.

It also provides an overview of current sustainability initiatives and activities at the board level, complete with targets and results for 2008 and targets for 2009.

• Each section of the report discusses management’s responsibilities and systems.

• The discussion is comprehensive yet easy to navigate with subheads, bullet points and expandable links.

What stakeholders need…

Your report should explain the key elements of your governance and CSR management framework, highlighting recent changes and pending improvements. This framework includes: • Codes of conduct and ethics; • External charters, principles and guidelines to which the company subscribes; • A dedicated sustainability committee supported by community/stakeholder committees; and • Processes for identifying and mitigating risks.

e DOs

u DON'Ts

• DO identify the individuals who are responsible and accountable for CSR issues within the company and where they fit into the governance structure.

• DO explain how changes in policy or structure are better adapted to the changing needs of the company.

• DON’T ignore shortcomings in your governance or CSR management framework.

Acknowledge the need for improvement and disclose your plans for bringing your framework closer to current best practice.

FOCUS: GOVERNANCE AND MANAGEMENT SYSTEMS

25

bayer ag Bayer explains its CSR strategy, mission, governance structure, sustainable management practices and corporate policies in a section called Strategy and Management.

A timeline tracks the development of sustainability at the company under three categories: strategic steps, projects and measures, and external evaluations.

• Bayer clearly defines the Board’s sustainability roles and responsibilities.

• Flow charts and diagrams help the reader comprehend the complex systems and processes.

• There is an unusually comprehensive timeline.

• Sustainability objectives extend to 2010.

bhp billiton plc BHP Billiton’s governance discussion provides details of the company’s sustainable management structure and committee responsibilities supported by a diagram that illustrates the relationships.

Governance and systems performance in 2008 is disclosed under sub-sections including site closures, risk management, management systems review and ethical business conduct results.

• A graph shows the company’s progress against 15 health, safety, environment and community management standards.

• Links and intuitive navigation make the comprehensive section easy to use.

Benchmarks

79% provided a dedicated discussion of governance

[+] More best practice reports

72% provided a dedicated discussion of CSR management systems

66% reported on risk management

BMO Financial Group

British American Tobacco PLC

Centrica PLC

26

SECTION 2.4

CSR TRENDS 3

Stakeholder engagement CSR reporting is a dialogue between a company and its stakeholders. To be an effective dialogue, your report should explain how often, with whom and through what activities you engage with those stakeholders.

general electric company GE integrates stakeholder engagement into its materiality assessment process. A stakeholder panel offers comments, questions and suggestions on drafts of the report and provides strategic advice on GE’s priorities. A synopsis of the assessment is provided in the report along with GE’s response to the previous year’s panel recommendations.

• GE’s explanation of stakeholder engagement is supported with a diagram.

• Unedited stakeholder commentary – External Perspectives – are provided throughout the report, each providing a link to the website for the complete transcript and/or audio.

What stakeholders need…

Your CSR report should identify your stakeholders and explain how you approach and manage engagement with them. Equally important, your report should convey the results of those encounters. These stakeholders want to know that they’ve been heard and understood, which makes it important to reveal their key areas of interest and concern and explain how their feedback is being incorporated into CSR policies and initiatives.

Reporting on stakeholder feedback offers particularly valuable insight into your CSR performance for stakeholders who are not engaged in the process.

e DOs

u DON'Ts

• DO list your major stakeholder groups and report on your approaches to engagement such as surveys, focus groups and community panels.

• DO provide information on how stakeholders can contact your company.

• DON’T avoid revealing unflattering feedback or tough questions. Publish an honest account of the results of your engagement and provide sincere answers.

CREDIBILITY: STAKEHOLDER ENGAGEMENT

27

starbucks corporation Starbucks uses a host of formal long-term partnerships to improve its performance in a variety of sustainability areas including ethical sourcing, environmental stewardship and community involvement. Starbucks’ corporate responsibility website, appropriately named Starbucks™ Shared Planet™, features blogs as an engagement mechanism and to support its partnership efforts.

• It engages with individual stakeholders through My Starbucks Idea blog, which encourages discussion about Starbucks’ products, experience and community relations.

air france-klm Air France-KLM combines expert commentary with stakeholder engagement tables specific to each of the company’s five key issues. The expert commentary provides some background to each issue, comments on Air France’s initiatives and progress as well as suggestions for improvement.

• Accompanying each commentary is a table that identifies the stakeholders affected by each issue, engagement topics, engagement “pathways” and achievements in 2008-09.

• Consistent format of combining external commentary to support stakeholder engagement disclosure is used for each material issue.

Benchmarks

71% identified major stakeholder groups

[+] More best practice reports

76% described specific stakeholder engagement methods

33% provided results of stakeholder engagement

HydroQuébec

Royal Dutch Shell PLC

McDonald's Corporation

28

SECTION 2.5

CSR TRENDS 3

Assurance Assurance is fundamental to credibility because it builds trust through oversight.

Companies that have their CSR reports verified by sustainability consultants or accounting firms – sometimes by stakeholder panels as well – demonstrate both openness and sincerity.

vodafone group plc An independent assurance provider’s indepth assurance statement of Vodafone’s report clearly defines the scope of the assurance and provides an easyto-follow table that identifies information in the report that has been assured and the level of assurance. The statement also reports on its findings and conclusions and provides key observations and areas for improvement.

• Links in the PDF report take the reader directly to additional information on the website.

• Plain language subheads in the form of questions make it easier for the reader to navigate the detailed information.

What stakeholders need…

e DOs

u DON'Ts

Assurance reinforces confidence in your CSR report by providing the opinion of external experts on the credibility of the information that’s provided. Of course, stakeholders will want to know who reviewed your report, which pieces of information were included in the review, the assurance methodology and any assurance guidelines that were followed such as AccountAbility’s AA1000 Assurance Standard or the ISAE 3000. Stakeholder review panels are often used to review your report from a less rigorous, but potentially more intimate perspective.

• DO identify the information that has been assured.

• DO consider using an auditor who will use accepted guidelines such as AA1000 or ISAE 3000.

• DO provide the auditor’s comments on your report’s strengths and weaknesses.

• DON’T avoid assurance out of fear that you’ll be criticized.

Assurance builds trust through oversight.

• DON’T depend solely on stakeholder testimonials.

These are effective but should be accompanied by professional assurance.

29

CREDIBILITY: ASSURANCE

bt group plc BT Group takes a two-prong approach to assurance by combining a stakeholder panel review with an auditor’s assurance statement. The stakeholder panel is involved throughout the year to provide guidance on establishing priorities and the reporting boundaries. Complementing the stakeholder panel review is an auditor’s statement based on AA1000 as well as the GRI. • Both the stakeholder review and auditor’s statement provide links to the website for a full review/statement.

• Names and photos of the individuals on the stakeholder panel strengthens credibility.

bg group plc BG Group uses an external auditor to provide assurance in accordance with both the AA1000 and ISAE 3000 Standards. The assurance statement lists the steps taken in the assurance process, provides observations on the report and offers suggestions for improvement.

• In a section called Learning from our independent assurance process BG Group explains the company’s response to the commentary.

• A table is used to present areas of improvement identified by the auditors in 2007 and BG’s progress in 2008.

• Auditors’ comments are integrated throughout the report to provide additional depth and credibility.

Benchmarks

44% provided an assurance report

[+] More best practice reports

58% of assurance reports were written by accounting firms

47% of assurance reports commented on the report’s weaknesses

Barclays PLC

British American Tobacco PLC

Nexen Inc.

Con·text: (n.) That which surrounds, and gives meaning to, something else.

Context

3 in this section 3.1 Outstanding report: Vodafone Group PLC

32

3.2 Reporting on the issues

34

3.3 Climate change

38

3.4 Testimonials and case studies

40

3.5 Visuals and design

42

32

SECTION 3.1

CSR TRENDS 3

Outstanding report

vodafone group plc Vodafone’s corporate responsibility report and website pages are designed as companion documents. The report provides detailed information on Vodafone’s performance on the most material issues while the website provides more general information about the company’s approach to each issue, policies and management processes.

The 56-page PDF report is loaded with links to ease navigation of the document itself or provide instant access to additional content on the website. Ease of reading is further enhanced by a design that distinguishes types of information, such as key facts.

p Accessibility: Information about corporate responsibility at Vodafone is made available through Vodafone’s CR website and a CR report that is available in PDF and online. Vodafone also publishes CR reports from 11 of its operating companies with details on national and local initiatives and issues.

quick facts Country of origin

United Kingdom

First reported

2001

Materiality Matrix

Reporting method HTML website and PDF report PDF report

56 pages

Market capital

£73.24B (Sept. 21, 09)

Revenue*

£41.932B

* Revenue is for the trailing twelve months.

To download this report please visit: www.vodafone.com

p Materiality: Vodafone has created nine materiality matrixes, one for the company and eight for broad issue categories, to determine where it should focus its efforts. Each matrix maps specific issues by potential impact on the company and significance to stakeholders.

CONTEXT: OUTSTANDING REPORT

Vodafone gets top marks for the accessibility of information in its CSR reporting as well as the thorough discussion of materiality, objectives, issues and stakeholder engagement.

Feedback from opinion formers on our CR strategy and reporting Opinion formers taking part in our focus group on CR strategy and reporting in July 2008 agreed that our management is committed to integrating sustainability into the business. They believed the ‘One strategy’ theme of last year’s CR Review was relevant and justified.

Participants felt that Vodafone’s material issues are generally covered by our CR reporting, but that our emphasis on opportunities in emerging markets may warrant further discussion of the accompanying risks.

We have responded to this feedback in this 2008/09 CR Report, which includes a discussion of the opportunities and challenges presented by our new operating company in India.

p Objectives and targets: A summary table documents the company’s quantified commitments, actions, progress, revised commitments and deadlines. Discussion is succinct, but meaningful; links embedded in the table take the reader to more information on related topics.

Further discussion and data is provided in a separate progress report on each issue.

p Stakeholder engagement: Vodafone

p Reporting on the issues: Vodafone reports on 10 issues, reporting on each in the same format: a brief introduction to the issue and the company’s approach, previous targets, progress, and ongoing commitment. The data-rich progress reports are supported with comments from experts and more on the web links.

engages with opinion makers and leaders, experts, NGOs, governments, regulators, employees, local communities and consumers through focus groups, surveys, one-on-one meetings and roadshows. It also conducts in-depth explorations of emerging issues from different perspectives through CR Dialogues to bring together a wide range of informed views and experiences and encourage others to respond.

33

34

SECTION 3.2

CSR TRENDS 3

Reporting on the issues At the heart of every CSR report is a candid, but thorough, discussion of the issues that have had – or could have – the most impact on your operations, stakeholders and the communities in which you operate.

tesco plc Tesco clearly identifies its issues within five baskets – environment, communities, suppliers and ethical trading, customer choice and health, and our people – in the table of contents on the inside front cover, immediately identifying achievements and challenges within each basket in a gatefold.

More detailed discussion of specific issues within each basket includes plenty of graphs, outside comment in Others Say, case studies that illustrate strategies in action, measurable targets, and links to more information on the web.

What stakeholders need…

A CSR report should not only identify and report on the issues that are most important to the company and its stakeholders, it should explain performance in a meaningful way. This discussion should cover risks as well as opportunities, past performance along with expectations for the future. Back up your discussions with hard numbers that have been collected with a consistent methodology over time. Finally, make it interesting by using a variety of communication devices and tactics to keep the reader informed and engaged.

e DOs

u DON'Ts

• DO identify and explain trends, initiatives and your performance.

• DO include a thorough discussion of risks and opportunities.

• DON’T confuse the reader by discussing too many issues.

Focus your discussion on those issues that could have the most impact on your business and/or are of most significance to stakeholders.

CONTEXT: REPORTING ON THE ISSUES

35

centrica plc Centrica’s HTML report delivers a consistent discussion on context, impact, strategy and key performance indicators for each of the company’s key issues.

It also uses the power of the web to provide supporting videos on each issue.

• The reader can view 2008 versus 2007 performance on each key issue.

• A comprehensive discussion and quantitative data are presented consistently over four main categories: previous commitments, initiatives, performance data and future commitments.

british american tobacco plc Three different icons are used to identify those issues that are covered in the report, on the web or not reported on at all. Full-bleed photography and no-nonsense subheads such as What is the issue and why is it important?, What are we doing about it? and What’s next? focus the discussion.

• The company makes excellent use of layering along with a variety of visual devices including photography, captioned graphs, diagrams and sidebars.

• Comments from an independent assurance provider throughout add credibility and provide background on the issues.

• 2009 objectives accompany each section.

Benchmarks

65% reported on their performance on reducing water use

[+] More best practice reports

70% provided information about supply chain management, policies and initiatives

64% discussed human rights

BP PLC

Xstrata PLC

Standard Chartered

36

SECTION 3.2

CSR TRENDS 3

Reporting on the issues

bayer ag TABLE OF CONTENTS

Bayer brings the company’s most material issues to the forefront in a 20-page section entitled Focus Issues. The key issues – climate change, access to medicines and water use – are each introduced by background information on the global challenges and trends that affect Bayer. The Performance Report that follows explains the company’s strategies, objectives and performance on a wider range of sustainability topics.

• Bayer makes particularly effective use of testimonials, case studies, sidebars and tables.

• Web links provide direction to more information on the company’s robust CSR website.

westpac banking corporation Westpac’s magazine-style report begins with an overview of The issues that matter providing thought-provoking questions to introduce each issue with page references for more in-depth discussion. The report provides an engaging read with each section following a consistent editorial style: Our approach, Issue (explained by an external commentator), Advocacy and Actions.

• The comprehensive discussion of key issues with external and internal perspectives provides context and balance.

• A wide range of performance indicators are published at the back of the report.

30

TABLE OF CONTENTS

FOCUS ISSUE

CLIMATE

31

Bayer Sustainable Development Report 2008

Innovations for climate protection Bayer is taking an active and

TABLE OF CONTENTS

28

TABLE OF CONTENTS

integrated approach to the chal-

FOCUS ISSUES

29

Bayer Sustainable Development Report 2008

lenges posed by climate change by making substantial investments in climate protection and

Our challenges

speciğcally developed products and processes. In addition to

fulğlling the company’s global With population ğgures oncommitment, the rise, the world is facing a number of major the Bayer Climate challenges. Climate protection, world health and new safeguarding food supplies Program also unlocks ecoare becoming ever more pressing issues. True to the spirit of its mission statenomic potential. ment “Bayer: Science For A Better Life,” the Group is making an important TABLE OF CONTENTS contribution to identifying effective solutions for dealing with these challanges.

TABLE OF CONTENTS

42

FOCUS ISSUE

WATER

These also form the basis of our sustainability reporting – this year, climate protection, health care, water and food are focus issues of our current Sustainable Development Report.

The United Nations estimates that the world’s population will exceed nine billion by the middle of the 21st century – that’s around 2.3 billion more than the current ğgure.

With population growth particularly rapid in developing and emerging nations, local infrastructures and the ecological equilibrium are being put under increasing pressure. At the same time, the population in most industrial nations is aging, generating an imbalance in the social structures. In addition, changes in consumption patterns and the massive demand for energy caused by the global spread of urbanization are putting more pressure on natural resources. According to the International Energy Outlook (ieo), energy consumption in Asia alone will increase almost fourfold in the period from 1990 to 2030.

Integrated approach to tackling complex challenges Global solutions, like global problems, are closely interlinked. Climate change can only be tackled with the most advanced energy-saving technology and sustainable energy generation.

Effective climate protection is also a

causes of disease and inadequate health care in many parts of the world. In addition, poverty often triggers wastage of local natural resources. With the consequences including deforestation, soil degradation and increasingly arid conditions, this situation further exacerbates the problems posed by climate change and shortages of food and water.

As an inventor company, we are staying true to the spirit of our mission statement “Bayer: Science For A Better Life” and focusing our know-how and innovative strength on ğnding answers to the most pressing issues of our time.

Bayer Development Report 2008 Bayer is Sustainable a company with a very broad spectrum of activities and interests and, as such, we have the advantage of being able to observe the interconnections and reciprocal inĠuences that exist between each of these global challenges, and ensuring these are incorporated into our solutions systematically.

9.1 7.7 6.1 5.3

1990

43 2000

dirty water are some of the primary

Global energy consumption by region (in quadrillion btu) 100.7

148.9

70.0

92.0

67.3

Western Europe North America

36.8 11.2

69.1

Eastern Europe / CIS 285.7

Middle East 38.3 14.5 Central / South America

9.5

23.9

Africa

Global energy consumption has grown dramatically in the last few decades and will continue to increase signiğcantly in the future.

Demand in up-and-coming Asia is set to almost quadruple by 2030 compared to 1990.

74,2

Asia / Paciğc

1990 2030

Source: ieo, International Energy Outlook 2008; btu = British Terminal Unit

2050

Responding to megatrends It is also in our own interests to tailor our portfolio to the challenges the the rights and health of women worldfuture will bring. After all, as a com- wide. As the rising global population pany, we are part of this society and also needs to be fed, we are making our our business activities are inĠuenced contribution toward increasing agriculby the trends, needs and goals created tural yields and promoting sustainable by it. That’s why we believe a sustain- methods of cultivation by developing able and successful approach to busi- innovative crop protection products ness means bringing our innovative and integrated crop protection solustrength to bear in the areas where our tions and bringing about advances in Water isput essential for sustaincore skills can be to the best possibiotechnology. Due to its many years of ble use, particularly the ğelds of health, experience in corporate environmental inghigh-quality life. However, food and materials. this valuable protection, Bayer has the cutting-edge technologies needed to protect drinkresource distributed ing water and other similarly valuable Our portfolio alreadyis contains a number unevenly of promising solutions. New processes resources effectively. One other factor throughout worldto and alsorelevance, particularly in is ofis special and materials from Bayerthe are helping boost the energy efğciency of produc- the current difğcult economic climate: often used wastefully tion processes, buildings and vehicles, and Duepolto its high earning power, the and are unlocking new market potential company is generating growth, jobs luted. energies.

This isWith resulting for renewable the num- in andsevere income in many parts of the world, ber of people in the world on the up thus contributing to social stability and ecological damage, disease, and a trend toward aging populations security.food in some regions, our drug research and shortages and violent icts. commitment to ensuring the global pro- conĠ Creating transparency vision of medical care is taking on an In addition to addressing these megaBy developing andmore, promoting ever more important role. What’s trends on a strategic level, we also want by making family planning more acces- to provide clear, transparent reporting. to support efğThat cient and open discussion of the sible,solutions we are also working to improve includes

Responsible and efğcient use of water

encing desertiğcation, while heavy rain-

2020

Over 6.7 billion people live on Earth today. Ensuring food supplies in the light of continued dynamic population growth is a major challenge. The Food and Agriculture Organization of the United Nations (fao) calculates that global agricultural production would have to double in the next 50 years to feed what would by then be a global population of over nine billion people.

Source: un, World Population Prospects: The 2008 Revision, March 2009

falls are destroying crops and Ġooding

key issueEberhard when itJochem comesfrom to safeguardProfessor the Fraunhofer villages in other areas. Unless we see Institute Systemsfood and Innovation ing thefor world’s supplies,Research as cli- (isi) an increase in agricultural productivity in Karlsruhe is the winner of the the ğlikelihood rst Bayer Climate mate change increases and ensure water is used efğciently, it Award worth €50,000. The Bayer Science & Education of extreme weather conditions such as will be impossible to provide sufğcient Foundation bestowed the award on Professor Jochem as heatwaves, heavy downpours and tropifood and water for the world’s growing an acknowledgement of his pioneering interdisciplinary cal storms. some such as the population. research into In energy efğregions ciency. The photomontage shows in climate-friendly modeessential with his fold-up Sahel,him large expanses of land scooter, whichthe he frequently uses to go to meetings. for feeding population are experiIn turn, poverty, poor nutrition and

Growing world population

responsible consumption of water, Bayer is committed to conserving one of the most crucial of all raw materials.

Bayer CropScience employee Greg Skinner at the Bremer River, a feeder river of the dried up Lake Alexandrina in South Australia. Both belong to the Murray-Darling Basin, once the biggest river system in Australia. After many years of drought the river and thereby its tributaries have dried up. Farmers who used to till land in this area had to give up because of water shortages.

challenges we face and the provision of detailed information on our goals, strategies and performance. To that end, our Sustainable Development Report each year contains not only a performance report, but also features several focus issues currently deemed to be of particular signiğcance in the eyes of the general public and from the company’s own perspective. This year, those issues are “Innovations for climate protection”, “Global access to medicines” and “Responsible and efğcient use of water”.

More information on these topics is available on the following pages:

Climate Medicine Water

30 36 42

CONTEXT: REPORTING ON THE ISSUES

37

vodafone group plc Each of Vodafone’s material issues are covered in three clearly identified discussions: We said, We have, We will. Within these discussions, Vodafone outlines the objectives established in 2008, the year’s initiatives and performance, and establishes future targets.

Challenging comments from sustainability leaders, quantitative data, case studies and stakeholder engagement results create an unusually transparent report. Links throughout provide readers with the ability to navigate easily within the report and jump to additional information in the CR section of the company’s website.

enbridge inc.

Enbridge employs a balanced approach, dividing its issues into economic, environmental and social performance. Each section provides comprehensive discussion with highlights, a scorecard, discussion of policy and performance indicators.

Stimulating Q&As with a variety of experts and stakeholders provide views on sustainability and some of the issues that Enbridge faces.

• Enbridge features three case studies to illustrate the management of key issues.

• Scorecards and GRI performance indicators in each section provide quantitative performance information along with the discussion.

Benchmarks Most companies in our survey (92%) reported performance on absolute GHG emissions, but there was significant variance from region to region on reporting GHG emission intensity.

GHG EMISSIONS INTENSITY PI (%)

p S&P/TSX p S&P 500 p Europe, Japan & Australia p Other

38

SECTION 3.3

CSR TRENDS 3

Climate change The political, economic and business focus on climate change continues to drive three trends: more meaningful emissions data, more thorough discussions of concrete mitigation strategies and more consistent carbon accounting along with independent verification.

duke energy corporation Duke Energy, one of the largest emitters of CO2 in the U.S., addresses the risks and opportunities related to climate change, provides quantitative performance and documents the company’s progress against climate change related objectives in a corporate scorecard.

• A Q&A with the senior vice president of strategy and planning provides an update on the company’s ambitious goal to reduce its CO2 emissions by 50% by 2030.

• The report makes effective use of layering, sidebars and testimonials.

• Easily identifiable links are embedded in the text for access to additional information online.

What stakeholders need…

Your CSR report should explain the significance of climate change to your company’s performance, your strategies for mitigating risks and capturing opportunities, as well as your quantified GHG indicators. For example, the GRI G3 Guidelines recommend three climate change related metrics: • Total direct and indirect GHG emissions by weight; • Other relevant indirect GHG emissions by weight; and • Initiatives to reduce GHG emissions and reductions achieved.

Consider providing emissions data by region and by operation.

e DOs

u DON'Ts

• DO follow a recognized reporting protocol such as the WBCSD/WRI GHG Protocol to report emissions.

• DO discuss all mitigation strategies, including energy efficiency, renewable energy initiatives, emissions trading and carbon offsets.

• DON’T provide only half the information readers need and expect. Where possible, report both absolute and relative GHG emissions data.

39

CONTEXT: CLIMATE CHANGE

ford motor company Climate change is the first issue identified under Ford’s Material Issues section within its HTML sustainability report. This comprehensive section describes initiatives and progress made to reduce its operational footprint and the company’s strategy to capitalize on climate-friendly products. It also provides a detailed report on reducing emissions within Ford’s areas of influence: vehicles, fuel, driver behaviour and a detailed discussion of partnerships and participation in policy development.

allianz se Allianz’s 28-page summary report devotes six pages to the environment, four to climate change in which it discusses the role the financial industry plays in mitigating climate change and encouraging the transition to a clean-energy, low-carbon world through lending, investment and insurance practices.

It describes Allianz’s climate change strategy and provides objectives, performance highlights, a table identifying product and service development and risk management.

• Allianz’s CSR microsite includes many pages on climate change with videos, interactive graphics and galleries.

Benchmarks

46% had a separate section on climate change

[+] More best practice reports

74% provided quantitative as well as qualitative data on GHG emissions

72% reported on mitigation measures

Bayer AG print report and www.climate.bayer.com

Dell Inc.

Tesco PLC

40

SECTION 3.4

CSR TRENDS 3

Testimonials and case studies Case studies and testimonials can be a very effective way to demonstrate your strategies in action and foster an honest dialogue with stakeholders. To be credible, your stories and outside commentary should be balanced, reporting on disappointments as well as achievements.

aviva plc Aviva showcases a series of case studies and initiatives that provide specific examples of the company’s management of key sustainability issues in each of its operating regions. The report has striking full-bleed photography of the skylines of major cities in each region as effective backdrops.

Key statistics and quotes from Aviva executives accompany each of the five spreads.

• The visual treatment distinguishes the case studies from the rest of the report.

• The HTML version provides additional insight from regional CR executives along with personal contact information.

What stakeholders need…

To eliminate the notion that CSR reports are self-indulgent marketing rather than sincere disclosure, many companies use testimonials, expert commentary and case studies to enhance the credibility of their policies, promises and initiatives. They can also reassure stakeholders that their voices are being heard.

It’s very important that you not publish only praise for your company; this can cause readers to question the truthfulness of the comments. Comments and case studies should be honest about weaknesses or setbacks as well as accomplishments.

e DOs

u DON'Ts

• DO consider developing a visual treatment for case studies and testimonials that will distinguish this information from the company’s information.

• DON’T be tempted to rewrite or edit testimonials to make them sound more articulate.

The speaker’s own words will have greater credibility and impact.

41

CONTEXT: TESTIMONIALS AND CASE STUDIES

bhp billiton plc A host of detailed case studies are found throughout BHP Billiton’s HTML report effectively demonstrating how the company’s sustainable development policy is being implemented in each focus area: community, environmental protection, health and safety as well as employee and socioeconomic development. Subheads such as The Challenge, The Program, The Results and The Future are used to organize each case study.

• The case studies are found in a separate sub-section in each area of focus as well as in a consolidated three-year library that’s searchable by year and area of focus.

international business machines corporation In keeping with the collaborative theme of IBM’s corporate responsibility report, the company publishes seven external commentaries covering a variety of issues and initiatives interspersed throughout the report. These commentaries provide credible insight into IBM’s impact on society and the overall value of the company’s services.

• Commentaries are treated as sidebars to draw the reader’s attention to each testimonial.

Benchmarks

57% provided testimonials and/or commentary from stakeholders

[+] More best practice reports

67% of testimonials were from employees

18% were from customers

Coca-Cola Company

Export Development Canada

Xstrata PLC

42

SECTION 3.5

CSR TRENDS 3

Visuals and design A picture is worth a thousand words. You’ve probably heard that a thousand times, but it’s particularly true for CSR reports. Good graphic elements – photographs, illustrations, diagrams, graphs and maps – can convey complex stories and be more influential than substantial amounts of text.

massmart holdings limited Massmart is Africa’s third largest distributor of consumer goods.

In its CSR report, it effectively expands upon the theme – Working to Change Facts – by combining high-impact photography with hard-hitting facts related to each of the company’s six focus areas.

Thought-provoking, sometimes shocking, full-page imagery introduces each fact while its flip side image portrays the company’s corresponding initiative. Clever pagination allows the reader to fully absorb the fact before turning the page to find Massmart’s contribution to changing the situation.

What stakeholders need…

e DOs

u DON'Ts

To be as meaningful as a thousand words, your “pictures” should be used to support your CSR discussion, not simply fill space. If they aren’t meaningful, they’re just wallpaper.

Of course, there are many kinds of information that can be more effectively delivered visually than through words – corporate structures, technological processes, the profile of a mine, geographic footprint, timelines, even stakeholder impact. Such devices – along with meaningful headlines and pull quotes – can also entice a reader into a discussion that might otherwise be overlooked.

• DO remember that report readers are usually scanners – flipping through the pages, reading the headlines and glancing only at photographs, illustrations and graphs.

• DO use diagrams and illustrations to clarify complex operations or to describe your business structure.

• DON’T use photographs as wallpaper. Every image should convey a meaningful message, otherwise it is merely a distraction.

• DON’T forget to use captions to explain photos, illustrations and graphs.

CONTEXT: VISUALS AND DESIGN

43

regions financial corporation Regions’ social responsibility report comprises seven case studies providing evidence of the company’s ability to change lives. Thoughtful and creatively executed, these full-page collages visually tell the story and support each case study. This personal approach is further expanded to show the company’s What a Difference a Day Makes initiative, which offers every Regions associate a chance to spend one paid workday volunteering.

Polaroid portraits of employees fill a double-page spread, each with a handwritten note about what the employee did on his or her day to make a difference.

edf group EDF is established in all areas of the electricity value chain from the purchase of materials to generation and distribution. The report effectively uses illustration to help the reader understand the scope of its business and impact. The four-page gatefold presents a visual representation of the company’s value chain along with a description of the activities at each step and a detailed list of its environmental, social and economic impacts.

This comprehensive presentation is made easy to navigate and understand with the use of numbers, bullets and subheads.

Benchmarks

42% provided captions on graphs

[+] More best practice reports

19 average number of graphs in a report

49 average number of photographs

Deutsche Bank AG

PotashCorp

Caterpillar Inc.

Per·for·mance: (n.) The execution or accomplishments of work, acts, feats, etc.

Performance

4

in this section 4.1 Outstanding report: PotashCorp

46

4.2 Objectives and targets

48

4.3 Understanding performance

50

46

SECTION 4.1

CSR TRENDS 3

Outstanding report

potashcorp From cover to cover of its summary report, PotashCorp tells its sustainability story with arresting full-page photographs of stakeholders supported by succinct discussions and a multitude of graphs, tables and callouts.

p Cover: Absolute clarity – a simple image and tagline clearly identify the company’s goal to produce more. Using the same design and theme on the sustainability and annual reports provides a strong link between corporate responsibility and corporate strategy.

The HTML report expands upon the PDF/print document with more indepth discussions of the company’s economic impact as well as its approach and activities related to governance, labour, human rights, community and product responsibility. A unique feature is PotashCorp’s Story Library, a compilation of stories about employees and management.

quick facts Country of origin Canada First reported

2003

Reporting method HTML website and PDF summary report Printed report

32 pages

Market capital

US$27.353B (Sept. 21, 09)

Revenue*

US$6.714B

* Revenue is for the trailing twelve months.

To download this report please visit: www.potashcorp.com

p Visuals/Testimonials: Full-bleed photographs of employees, suppliers and customers on location around the world provide examples of PotashCorp’s policies in action and place the detailed statistical discussion of performance on various issues in a personal context.

PERFORMANCE: OUTSTANDING REPORT

PotashCorp gets top marks for the use of visuals to convey key messages and testimonials. The performance discussion is supported by a scorecard and library of case studies.

p Case studies: Every section contains p Understanding performance/Objectives and targets: PotashCorp uses pop-up windows that contain data or more detailed information to support the main discussions of corporate responsibility. The GRI table often goes beyond documenting to explaining performance on each indicator. Scorecards in each section provide 2008 targets; a progress report with symbols that clearly identify targets achieved, partially achieved or not achieved; and 2009 targets. Site specific reports supplement the discussions of corporate-wide performance.

p Website: The site is particularly rich in information, but the many web tools make it easy to use by allowing users to create shortcuts, change the text size, highlight columns and rows in tables, search by keyword or user-entered word, print or email individual pages and pop-up windows, and use a host of links throughout the report to move quickly to related information.

stories that illustrate the company’s strategies in action. These stories are compiled in a Story Library where they are organized by issue.

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48

SECTION 4.2

CSR TRENDS 3

Objectives and targets “Unless commitment is made, there are only promises and hopes; but no plans.”

Management guru Peter Drucker’s advice applies to managing CSR as surely as any other aspect of a company. A CSR report should not only publish goals, it should track progress toward their achievement.

telus corporation The TELUS report begins with an outline of the company’s priorities for 2008, describes performance over the year, and sets new priorities for 2009 under the five pillars of the company’s CSR strategy. This discussion is followed by a scorecard with 2008 targets, 2008 results and 2009 targets against the economic, environmental and social measures TELUS deems most important to the company.

• Symbols are used to identify how well TELUS is performing against its targets.

• A GRI indicator is included in the key performance indicator (KPI) table.

What stakeholders need…

e DOs

u DON'Ts

A thorough CSR report will identify the company’s goals against which performance can be measured. Unfortunately, too many CSR goals are expressed in terms that defy measurement; to be the employer of choice is one popular goal. To be meaningful, goals should be specific, measurable, achievable and placed within a specific time horizon. The most thorough reports explain the processes for monitoring performance, the progress made toward achieving a target and the reasons for disappointments. With the publication of each report, new goals should be established or established goals confirmed.

• DO emphasize objectives that provide insight into management’s own measures of performance.

• DO report your progress against objectives.

• DO benchmark your performance against your peers.

• DON’T be afraid to set targets beyond one year. This demonstrates long-term commitment to sustainability.

49

PERFORMANCE: OBJECTIVES AND TARGETS

loblaw companies limited Loblaw dedicates six of the 24 pages in its report to the company’s CSR targets and achievements.

Measurable targets are organized and colour coded to represent the five pillars of its CSR strategy.

The table identifies the 2008 target, describes 2008 progress against targets and sets future goals.

• Designed to be read in PDF, the table includes interactive page references to conveniently direct the reader to other areas of the report for more information.

• The degree of progress achieved is quickly identified by a symbol.

basf se BASF takes a triple-bottom-line approach by reporting on the company’s financial, operating and CSR performance and strategies in one integrated document. The company reports its progress on objectives under three categories: economic; environment, safety and product stewardship; and employees and society.

• Bold metrics run along the bottom of the spread to highlight improvements.

• A status bar visually shows the company’s progress in achieving its 2020 targets.

• Page references guide the reader to more detailed information.

Benchmarks

59% published a summary of objectives on a dedicated page or spread

[+] More best practice reports

46% reported on progress against established goals

52% set targets for 2009 and/or beyond

Duke Energy Corporation

PotashCorp

Vodafone Group PLC

50

SECTION 4.3

CSR TRENDS 3

Understanding performance Establishing an understanding of performance among stakeholders is significantly more challenging than simply reporting performance metrics.

Your report should explain the factors driving performance, such as trends within your industry, as well as the outcomes.

aviva plc Aviva reports on how others see us in a list of assessments from various leading indexes. It provides a three-year comparative KPI table that includes a percentage change column, a visual progress symbol and 2009 targets. The discussion of the most important indicators becomes more granular in a table that provides Aviva’s global performance benchmark; a six-year performance graph; direct company impacts; a discussion of performance strategy and targets; and indirect impacts.

What stakeholders need…

Your company’s performance must be understood within the context of your industry – for example, a retail company might focus on same store sales growth – and within your unique priorities and strategies. Your report should explain the importance of the measures that you emphasize and how performance is being measured. KPI metrics should be consistent, verifiable, comparative and accurate. Using internationally recognized protocols to evaluate and track performance entrenches both consistency and comparability. The challenge is always to provide insight, not bury the reader in minutiae.

e DOs

u DON'Ts

• DO provide enough data for readers to understand performance trends.

• DO distinguish between performance indicators that are useful to understanding performance and those that are considered KPIs.

• DON’T report key indicators solely in tabular format at the back of your report. Integrate the performance metrics into the narrative sections of the report as well.

• DON’T be afraid to report that you have not achieved a goal.

PERFORMANCE: UNDERSTANDING PERFORMANCE

51

caterpillar inc.

Caterpillar combines quantitative performance, qualitative commentary and examples of initiatives to build the reader’s understanding of the company’s performance against its 2020 objectives. The 2008 performance data is presented in graph form with supportive commentary that identifies trends and/or explains the performance. Caterpillar layers the presentation with visual examples of initiatives to illustrate its progress.

• KPIs are summarized and expressed in performance at-a-glance graphs.

adidas group The adidas report provides a particularly transparent presentation of progress against goals. The performance and targets are presented by focus area and grouped into summary presentations. The use of large bold percentages that indicate progress makes it easy to understand the company’s performance. Each of its 30 targets for 2008 are discussed under a common structure: 1) Approach: Why was this target chosen? What was the approach taken?

2) Progress: Score, Barriers encountered along the way, Conclusion.

3) Next steps: Lessons learnt in 2008.

New target for 2009.

Benchmarks

46% provided summary performance tables or graphs

[+] More best practice reports

36 average number of items in performance tables and/or groups of graphs

63% provided a GRI index table

Centrica PLC

Deutsche Telekom AG

Kingfisher PLC

Ac·ces·si·bil·i·ty: (n.) Easy to approach, enter, speak with, or use.

5

Accessibility

in this section 5.1 Outstanding report: Starbucks Corporation 54 5.2 Websites

56

5.3 Other ideas

60

54

SECTION 5.1

CSR TRENDS 3

Outstanding report

starbucks corporation Starbucks has created an entirely new dimension in corporate interaction through constant tweeting on Twitter, 3.8 million fans on Facebook and 66 videos on YouTube. On the company’s Shared Planet™ website it’s hard not to be engaged by the interactive maps, mug pledge, personal carbon calculator and ability to purchase carbon offsets.

This extraordinary engagement does not diminish the depth of information about ethical sourcing, environmental stewardship and community involvement.

p Interactivity: Starbucks’ use of web-exclusive technology is exceptionally rich and effective. For example, Explore a Green Starbucks Store examines the environmentally smart elements incorporated into a green store’s design.

At the heart of Starbucks’ global responsibility report is a scorecard supported with discussions of what they've been doing, hurdles, case studies and future commitments.

quick facts Country of origin

United States

First reported

2001

Reporting method HTML website and build-your-own report Market capital

US$15.23B (Sept. 21, 09)

Revenue

US$9.867B

*

* Revenue is for the trailing twelve months.

To visit this report please visit: www.starbucks.com

p Climate change/Interactivity: Starbucks carbon calculator encourages individuals to help reduce global CO2 emissions by purchasing sufficient credits to offset their personal carbon footprint.

ACCESSIBILITY: OUTSTANDING REPORT

Starbucks gets top marks for the depth and breadth of interaction with stakeholders, whether it’s describing the ethical sourcing of its coffee beans or reporting on other issues.

p Case studies: The interactive coffee map provides information about farmer support centres and projects funded by Starbucks as well as the ability to visit coffee farms around the world through videos.

p Reporting on the issues: Starbucks

p Blog: My Starbucks Idea allows readers to share, vote, discuss and see ideas to improve the company’s products, experience and community involvement. Ideas are rated as under review, reviewed, coming soon or launched. Users are not timid in their criticisms, but Starbucks allows users to express their thoughts freely.

focuses on ethical sourcing, environmental stewardship and community involvement.

Each of these sections includes an explanation of the company’s strategies, policies, objectives, activities and performance supported by scorecards, case studies, testimonials, news and videos.

Every section identifies commitments, goals, supporting goals and hurdles.

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56

SECTION 5.2

CSR TRENDS 3

Websites The role of your website in CSR reporting is to expand, explain and excite. Web tools allow you to make your CSR information as interactive as the endeavour itself and many companies take full advantage of the medium’s capabilities to engage readers with interactive maps, videos, blogs and games.

bp plc BP’s Environment and Society section of the corporate website holds the group level 24-page sustainability report as well as nine country and seven site reports. This provides readers with the option of drilling down for very granular data or remaining at a wider bird’s-eye view. Beyond the reports, BP makes a wealth of CSR-related information easy to access and engaging to explore.

A section called Maps & Tools contains interactive sustainability and environmental maps.

BP Energy Lab provides a host of interactive games, tools, energy facts and quizzes.

What stakeholders need…

Corporate social responsibility is inherently an interactive endeavour and almost every company that produces a CSR print report also has dedicated CSR web pages. These sites usually offer substantially more information than the printed report, often presented through web-exclusive features. Because this information can span many pages, you can make it easier for stakeholders to find the specific information they need by weaving web references into your HTML, PDF and printed reports. The interactive nature of CSR can be further enhanced with easy-to-use feedback tools.

e DOs

u DON'Ts

• DO post your CSR report in both HTML and PDF formats.

• DO place your CSR pages one click from the corporate home page.

• DON’T simply repeat your printed CSR report on your website. Provide links to more detail and excite the user with animation and other web tools that can help make sense of complicated CSR issues.

ACCESSIBILITY: WEBSITES

57

mcdonald's corporation McDonald’s HTML CSR report contains candid and very well executed videos to provide outside commentary, stakeholder views and insight into initiatives. Beyond the report, the CSR webpages contain a host of videos on topics such as animal welfare auditing, supply chain, deforestation of the Amazon and building green stores. Andrea Moffat of CERES provides an overview of CERES’ engagement with McDonald’s.

McDonald’s also provides a blog where issues are openly discussed and each comment is responded to by the company, creating a sense of full circle engagement and transparency.

bt group plc BT provides a full HTML report and a printed 20-page summary report. The company uses its strength and experience in the communications industry to provide extensive CSR webpages loaded with content that engages, educates and informs. There are numerous CSR microsites such as Biggerthinking.com, which includes initiatives such as BT’s Crazy Green Invention contest, and btbetterworld.com, which is aimed at young people. There are climate change games, pod casts an interactive map, the ability to toggle between graph and table data and an interactive GRI table.

Better Business Choices Game

www.btplc.com/climatechange

Benchmarks

23% of U.S. companies use social media such as Facebook or Twitter

[+] More best practice reports

18% of U.S. companies have blogs

26% had microsites dedicated to CSR

Aviva PLC

Bayer AG

J Sainsbury PLC

58

SECTION 5.2

CSR TRENDS 3

Websites

telus corporation TELUS has a full HTML and PDF CSR report supplemented with a 20-page printed summary. The reports contain messages from the CEO and CFO in video and text format. There’s a library of CSR stories, including a video about the TELUS Day of Service, one of the company’s volunteer initiatives.

A stakeholder feedback survey contains both specific questions and the option to write comments or questions. The HTML report employs a clean straightforward design with a search function and breadcrumb trail that makes it easy to navigate. The PDF versions have generous, easy to identify links throughout.

enbridge inc.

Enbridge’s CSR report is available in HTML and PDF. The HTML report uses a straightforward design to ensure readers can easily navigate the wealth of information. Interactive GRI tables in each section provide easy-to-access additional information. A well-designed online survey asks pointed questions to help Enbridge focus reporting in the future. Beyond the report, Enbridge’s Building Sustainable Communities microsite looks at four key CSR areas with descriptions of the company’s investment and support of various initiatives and programs visually supported with extensive professional photography.

Building Sustainable Communities microsite: http://community.enbridge.com

ACCESSIBILITY: WEBSITES

59

general electric company GE’s citizenship report, Resetting Responsibilities, is posted as a PDF and in HTML. One of the unique content features is unedited stakeholder perspectives – some as audiovisuals that have also been posted on YouTube – throughout the report and by stakeholder group. GE uses the web’s ability to transform table data into graphs, giving the reader the ability to see performance trends with the roll of the mouse. An interactive materiality matrix shows the resetting of priorities and explores the issues. Beyond the report are GE’s microsites ecomagination and healthymagination.

ecomagination microsite

healthymagination microsite

Benchmarks Video was used most extensively

by U.S. firms. 100% of the companies in Canada, the U.S., Europe, Japan and Australia that had videos in their CSR pages used them to deliver case studies or testimonials.

VIDEO INTEGRATION IN CSR WEBPAGES (%)

p S&P/TSX p S&P 500 p Europe, Japan & Australia p Other

60

SECTION 5.3

CSR TRENDS 3

Other ideas Summary reports Different stakeholders require different amounts of information. In response, some companies publish a summary of the full report that provides the reader with a snapshot of the company’s CSR strategy, performance and objectives.

hydro-québec Hydro-Québec offers a succinct six-panel foldout summary of its 40-page printed report.

The summary report contains highlights of performance in key areas supported by graphs and images and a summary of future objectives.

[+] More best practice reports Summary reports:

Ford Motor Company

Standard Chartered

Interactive PDFs:

TELUS Corporation

Royal Bank of Canada

Caterpillar Inc.

Loblaw Companies Limited

Symantec Corporation

Vodafone Group PLC

ACCESSIBILITY: OTHER IDEAS

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Interactive reports Interactive PDFs are not just a carbon copy of a printed document. These reports are designed to be read onscreen and contain features such a live links, visual navigation and pop-ups that create a document that is interactive, easy to distribute, make comments upon and print.

intel corporation Intel’s report provides a consistent navigation on the left side of the page that functions like a website.

Live links throughout the report allow for additional information to be quickly accessed and are underlined for easy recognition.

Fact sheets Fact sheets are commonplace in investor relations, often providing a one- or two-page summary of the company’s quarterly performance. It’s certainly not common, but a few companies are adopting the format for CSR performance.

royal dutch shell plc Shell’s multi-purpose insert provides a quick snapshot of highlights and performance.

KPIs are illustrated as graphs with supporting commentary.

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WHO WAS SURVEYED

CSR TRENDS 3

Who was surveyed We compiled the names of all the companies listed in 11 Standard & Poor’s indices: the S&P/TSX Composite, S&P 500, Global 100, BRIC 40, Latin 40, India 10, Euro 350, Australia 100, Asia 50, SE Asia 40 and Africa 40. Expanding our survey reach to include HTML reports, we selected 100 reports for our formal survey and benchmarking: 25 from Canada; 25 from the U.S.; 25 from Europe, Australia and Japan; and, 25 from the rest of the world. Below are the 100 companies that were surveyed or identified for a best practice (indicated by •).

Abbott Laboratories Abertis Infraestructuras SA • adidas Group • Air France-KLM Air Products & Chemicals Inc. Alcatel-Lucent ALFA, S.A.B. de C.V. • Allianz SE • Anglo American PLC AngloGold Ashanti Limited ANZ Banking Group Applied Materials Inc. Assa Abloy AB • AT&T Inc. • Aviva PLC Avon Products Banco Bradesco SA Banco Comercial Português SA Bank of China Limited • Barclays PLC Barrick Gold Corporation • BASF SE • Bayer AG • BG Group PLC • BHP Billiton PLC • BMO Financial Group Bombardier Inc. • BP PLC • British American Tobacco PLC • BT Group PLC Bunge Limited • Canada Post Corporation Canadian Imperial Bank of Commerce Canadian National Railway Company Canon Inc. Catalyst Paper Corporation

• Caterpillar Inc. CEMEX, S.A.B. de C. V. • Centrica PLC Chevron Corporation China Mobile Limited CLP Holdings Limited • Coca-Cola Company • ConAgra Foods Inc. CVS Caremark Corporation Daimler AG • Dell Inc. • Deutsche Bank AG • Deutsche Telekom AG DR.Reddys Laboratories Limited DTE Energy Company • Duke Energy Corporation Ecolab Inc. • EDF Group • Enbridge Inc. • Export Development Canada Fomento Economico Mexicano S.A.B. de C.V. • Ford Motor Company • Foster's Group Limited Friends Provident PLC Gammon Gold Inc. • General Electric Company Halliburton Company Hongkong Electric Company Limited • Hydro-Québec Hyundai Motor Company Limited IAMGOLD Corporation Impala Platinum Infosys Technologies Limited • Intel Corporation

• International Business Machines Corporation • J Sainsbury PLC Johnson Matthey PLC Jubilant Organosys Limited KB Home • Kingfisher PLC Larsen & Toubro Limited Laurentian Bank of Canada Legg Mason Inc. Linde AG • Loblaw Companies Limited Manulife Financial Corporation • Massmart Holdings Limited • McDonald's Corporation Metso Corporation Motorola Inc. National Bank of Canada • Nexen Inc. Occidental Petroleum Origin Energy Limited PepsiCo, Inc. PetroChina Company Limited • PotashCorp PTT Exploration and Production Public Company Limited Reed Elsevier • Regions Financial Corporation • Royal Bank of Canada • Royal Dutch Shell PLC Safeway Inc. Saipem SPA Samsung Electronics Co., Ltd. Sasol Limited Scotiabank SK Telecom Co., Ltd. SKF AB

Souza Cruz SA Standard Bank Group Limited • Standard Chartered • Starbucks Corporation Sun Life Financial Inc. Sun Microsystems Inc. Symantec Corporation Talisman Energy Inc. Telecom Italia SPA • TELUS Corporation • Tesco PLC The Bank of New York Mellon Corporation The Boeing Company The Co-operators The Procter & Gamble Company TD Bank Financial Group • Toshiba Corporation Toyota Motor Corporation Transat A.T. Inc. Unilever NV Verizon Communications Inc. • Vodafone Group PLC Wal-Mart Canada Corporation Walmart de Mexico, S.A.B. de C.V. West Fraser Timber Co. Ltd. • Westpac Banking Corporation Wipro Limited Woolworths Limited Xerox Corporation • Xstrata PLC YTL Corporation Berhad

GLOSSARY

Glossary accountability assurance standard (aa1000as)

gri

ngo

A set of guidelines issued by AccountAbility for providing assurance on publicly available information, particularly CSR reports.

More information can be found at www.accountability21.net.

Global Reporting Initiative. An international network of business, civil society, labour and professional institutions whose vision is to create a common framework for CSR reporting.

More information can be found at www.globalreporting.org.

Non-governmental organization.

A non-profit group or association unaffiliated with government, often associated with promoting causes such as humanitarian issues and development.

assurance

gri g3 guidelines

The process of confirming that reported performance information has been prepared in accordance with specified criteria and is free from material errors, omissions, and misrepresentations.

The most recent set of standards and guidelines for CSR reporting published by the GRI.

climate change

An standard published by the International Federation of Accounts for providing assurance on non-financial information. More information can be found at www.ifac.org.

stakeholder

Changes in global climate patterns caused by human-produced greenhouse gas emissions. Also known as global warming.

corporate social responsibility (csr) A company’s commitment to operating in a socially, economically and environmentally sustainable manner, while recognizing the interests of its stakeholders.

csr report Corporate social responsibility report is the term used by 23% of the companies in our survey to refer to reports that detail the environmental, social and economic impacts of a company’s operations. Other terms include sustainability report, corporate responsibility report and corporate citizenship report.

ghg Greenhouse gas. A number of anthropologically produced and naturally occurring gases whose presence in the atmosphere traps energy radiated by the Earth. Primary GHGs, aside from water vapour, include the following six gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

international standard for assurance engagements (isae 3000)

kpi Key performance indicator. Quantifiable, comparable metrics used to measure performance on specific issues.

materiality Defined by the GRI as “the threshold at which an issue or indicator becomes sufficiently important that it should be reported. Beyond this threshold, not all material topics will be of equal importance and the emphasis within a report should reflect the relative priority of these material topics and indicators.” The GRI also specifies that “materiality for sustainability reporting is not limited only to those sustainability topics that have a significant financial impact on the organization. Determining materiality for a sustainability report also includes considering economic, environmental, and social impacts that cross a threshold in affecting the ability to meet the needs of the present without compromising the needs of future generations.”

A person or group that is affected, either positively or negatively, by a company’s operations, even if they have no financial connection to the company. A company’s stakeholders can include its employees, customers, suppliers, governments, shareholders, NGOs and members of the communities in which it operates.

sustainable development Generally defined by the UN and others as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

un global compact principles A set of 10 business principles, published by the United Nations, to which companies can voluntarily ascribe. The principles, drawn from various UN documents, address human rights, labour standards, anti-corruption and the environment.

More information can be found at www.unglobalcompact.org.

wbcsd/wri greenhouse gas protocol The WBCSD/WRI GHG Protocol is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol Initiative, a decade-long partnership between the World Resources Institute and the World Business Council for Sustainable Development, is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.

More information can be found at www.ghgprotocol.org.

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CONTACT/SPONSORS

CSR TRENDS 3

For further information please contact:

craib design & communications

pricewaterhousecoopers llp

42 Wellington Street East, 2nd Floor Toronto, Ontario M5E 1C7

Royal Trust Tower, TD Centre 77 King Street West Toronto, Ontario M5K 1G8

(416) 363-5206 www.craib.com Kevin Ward Creative Director, Craib Design & Communications kward@craib.com Elaine Wyatt President, Craib Strategic Directions elaine_wyatt@craib.com Courtney Craib Partner, Web Development Manager, Craib Design & Communications courtney@craib.com

(416) 941-8262 www.pwc.com/ca/sustainability Mike Harris Lead Partner, Sustainable Business Solutions mike.harris@ca.pwc.com Mel Wilson Associate Partner, Sustainability Reporting and Assurance Practice mel.j.wilson@ca.pwc.com Christine Walters Senior Manager, Advisory Marketing christine.walters@ca.pwc.com “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

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AR UPDATE 2009 is a complementary resource to CSR TRENDS 3.

It is Craib’s sixth annual review of trends, benchmarks and best practices in annual reports.

AR UPDATE 2009 To receive a copy, please visit www.craib.com

www.craib.com www.pwc.com/ca/sustainability

30%

Cert no. SW-COC-000952