eNEWSLETTER > Good Growth Issue 1.1: Reporting Good Growth (Winter 2008)
FAST FACT:

The percentage of corporate executives who rank corporate responsibility as a “very high” priority has nearly doubled over the past three years. According to The Economist, “few big companies can now afford to ignore” corporate responsibility.



This global online survey was conducted by Economist Intelligence Unit on behalf of The Economist in November-December 2007. Of the 1,122 respondents, 42% were based in Europe, 23% in Asia-Pacific and 19% in North America (US and Canada). Quotation taken from The Economist article “Just Good Business” published Jan 19, 2008.

ISSUES IN DEPTH:
Why Report? BrownFlynn Unveils Analysis of All Fortune 1000s

If a company doesn’t effectively communicate its socially and environmentally responsible practices, how does that bode for its brand image and market position? While coverage of corporate responsibility issues on the website and formal corporate responsibility reporting is almost universal within the Fortune 100, the farther you move down the Fortune 1000 list, the fewer descriptions of and reports on corporate responsibility you find. We explore what this means for the business world. 

In December 2007, BrownFlynn completed a study of all corporate websites for the Fortune 1000 largest U.S. companies. From each website, we gathered the following data:

1. The presence or absence of information pertaining to corporate responsibility, defined as any information relating to the company’s community involvement, sustainable development or environmental, health and safety (EHS) practices.
2. The presence or absence of a formal report, either as a web link or a reference to a print version, on any or all of these corporate responsibility topics.

BrownFlynn concluded that there is a significant trend amongst the websites in addressing corporate responsibility practices of the Fortune 1000 companies.

• Of the Fortune 100 companies, 95% address corporate responsibility on their websites and 83% publish formal reports.
• Of the Fortune 1000, 70% address corporate responsibility on their websites and 27% publish formal reports.

Perhaps most notably, the market leaders in nearly every industry sector are integrating corporate responsibility into their operating activities, reporting on their results, and leveraging their efforts for competitive advantage. This includes sectors where the largest company, by revenue, is outside the Fortune 100.

Other research findings support BrownFlynn’s assessment on a global scale: As of 2007, 93% of the largest 100 European companies published corporate responsibility reports, and 69% of the largest 100 companies outside the U.S. and Europe published reports.[1] In addition, even as early as 2005, 64% of the 250 largest multi-national corporations in the world published reports covering both social and environmental activities.[2]

Although the benefits of integrating corporate responsibility and non-financial reporting into core operations is well established among the largest U.S. (and global) corporations, what does this mean for companies as we move down in size?

For one, the same stakeholder pressure that is influencing the larger companies has already become just as influential for the smaller ones: consumers, employees, advocacy groups and socially responsible investors all are requesting more evidence of companies’ responsible behaviors. They are using the information for purchasing, investment and employment decisions, to name a few. A growing number of companies, including major purchasers such as Wal-Mart, also require their suppliers to demonstrate compliance with certain codes of conduct that now include social and environmental measures. Finally, increasing government regulations are an impetus for corporate responsibility reporting. For example, the 2006 Companies Act requires all publicly held companies in the U.K. to report on their social and environmental impacts. Even without comparable legislation in the U.S. (for now), companies will have to meet the mandates of all other countries in which they do business.

The bottom line? The world’s largest companies and industry leaders in virtually every segment are using corporate responsibility reporting, advertising and direct governmental advocacy for increased regulation (e.g. US CAP), to solidify their position and competitive advantage. With or without immediate government regulation, when a company doesn’t effectively communicate its socially and environmentally responsible practices, the rest of the world increasingly assumes it hasn’t any. And, when government regulations do come into play, those companies that have been strategic early adopters will enjoy significant operational, cost and competitive advantages over those left scrambling to comply.

BEST PRACTICES:
Five Corporate Responsibility and Sustainability Reports BrownFlynn Loves, and Why
The recent explosion in non-financial corporate reporting has been accompanied, not surprisingly, by a multitude of vehicles for evaluating and ranking corporate responsibility and sustainability reports. But knowing in general terms which company’s report is considered “the best of the best” won’t necessarily help you in creating one for your own business. The meticulous details of reporting make the difference between a good report and a great one, so our “Top Five” list aims to illuminate specific and adaptable techniques that can help your report stand out from the crowd. Check out some great examples of reports we’ve come across in our own research.

1. Best Transparency: Sasol, Integrated Oil and Gas Company

Why: In its 2006 Sustainable Development Report, Sasol fully discloses its successes and failures, even on the most difficult issues: the report calls out the names, places of work and causes of death of those who suffered fatal accidents while on the job.

2. Best Customization: Hewlett-Packard (HP), Technology Solutions Provider

Why: Instead of a print version of its Global Citizenship Report, HP offers fully integrated web reporting accessible through two user-friendly web options. The first is a comprehensive web report that can be customized and printed by individual stakeholders with only their desired sections and data. The second is a shorter PDF file called “The Hidden Component,” which targets consumers that want to know how HP’s global citizenship creates value for them.

3. Best First-Time Reporting: Fairmount Minerals, Industrial Sand Producer

Why: In its first Corporate Responsibility Report in 2006, Fairmount Minerals not only successfully implements the Global Reporting Initiative (GRI) G3 reporting guidelines; it also has Application Level certification from GRI for using those standards. The GRI is seen as the world leader in corporate responsibility reporting standards, and Fairmount’s inaugural report hits the ground running.

4. Best Regional Reporting: McDonald’s, Fast Food Restaurant Chain

Why: McDonald’s regional management structure is reflected in its 2006 Worldwide Corporate Responsibility Report, which discusses different efforts, goals and progress in its various geographic arenas. The company delivers on its promise to “Think Globally, Act Locally” by providing detailed, region-specific reports that highlight the different approaches and results occurring across the globe.

5. Best Layout: Baxter, Medical Products and Services Company

Why: Each year, Baxter produces three versions of its Sustainability Report: a comprehensive web version with expanded content, a formal printed report, and a highlights brochure that is available in several different languages. The range of available detail can meet the needs of any audience.

Whether your report is for corporate responsibility, sustainability, employee volunteering or community giving, there are hundreds of practical details and options that will affect its ultimate effectiveness. BrownFlynn can help you sort through the choices, find the best alternatives, and implement them seamlessly for maximum impact.

(Please note: The “Best” distinctions noted above reflect BrownFlynn opinions and are based on our Firm’s extensive experience as well as research in reporting; they are not based on formal metrics.) 

BROWNFLYNN HAPPENINGS:
RICK KIRK, DIRECTOR OF OPERATIONS, of HYLAND SOFTWARE, INC. is the winner of our January monthly drawing for a Hooded Cleanline Jacket from our sustainable product partner Nau.



This moisture-resistant, soft shell jacket breathes comfortably in damp and chilly weather. Fabric supplier Teijin weaves stretch fabric from post-consumer and post-industrial material for a stylish, sustainable way to keep moving in changing weather. Get one at www.nau.com.

Rick, enjoy your prize!

SNEAK PEEK:A Look at Some of Our Upcoming Prizes

For Earth-Lovers Only. In honor of Valentine’s Day, our February giveaway features a box each of assorted hand-made truffles and caramels from Katherine Anne Confections, recognized for excellence by the Chicago Sun Times and Timeout Chicago. Katherine Anne Duncan uses locally sourced ingredients and packages her confections in beautiful hand-made and tree-free packaging from Distant Village. What a delicious way to show your love for socially and environmentally responsible business practices!



Orange You Ready to Do Good, Do Well, Win™? Daylight Savings Time is upon us in March, and BrownFlynn wants you to spring forward into sustainability—with style! This orange fruit-inspired wall clock is created from 100% recycled plastic detergent bottles, and is given to our winner compliments of the eco-fashion Pivot Boutique.

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