Directions 2006 - Is Corporate Responsibility In Your Company's Blood

DIRECTIONS THE FULL REPORT 2006

TRENDS IN CR REPORTING 2005–06

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IS CORPORATE RESPONSIBILITY IN YOUR COMPANY’S BLOOD?

Directions 06 Trends in CR reporting 2005–2006 A report by salterbaxter

Contents 02 Looking for corporate responsibility behind the label by Rowland Hill, M&S

Welcome to Directions 06, a look at embedding corporate responsibility.

01 Welcome to Directions 06

06 Corporate Responsibility: more than skin deep? Lisa Walden, internal communications consultant

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Nigel Salter, salterbaxter [email protected]

Embedded Tests

The holy grail of corporate responsibility has been that this approach to doing business becomes an intrinsic part of a company’s day-to-day operations and decision-making. Much head scratching has been done over the years to work out how to do it. Has anyone had a breakthrough?

Lucie Harrild, salterbaxter [email protected] This year Directions has decided to put some of the UK’s largest companies under the microscope to see if corporate responsibility is being embedded in the organisation. Has anyone found the secret to injecting corporate responsibility into the heart of an organisation and seeing it circulate into every fibre? Do the people get it? If it had happened, would we know?

17 Embedded Tests The winners

33 The panel’s winners

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34

The panel

Euro 250 and FTSE 100 Analysis

So we have run some tests on a select group within the FTSE 100 to see if corporate responsibility is in their blood – right down to seeing if the switchboard knows what we are talking about! The tests are not diagnostic – there are many things a company should be doing in order to have embedded corporate responsibility and some of the evidence could be confidential information – but turn to page 10 to draw your own conclusions.

Rowland Hill from Marks & Spencer talks about the challenges M&S has faced in its quest to embed corporate responsibility in the business and in the brand. Lisa Walden, an internal communications specialist, gives a view on communicating corporate responsibility to employees and ensuring the people understand the strategy. After the success of last year’s judging panel we decided we needed an update on who is reporting effectively, so the panel is back. Ten experts have studied the FTSE 100 and their findings start on page 18. And last but not least we’ve researched the FTSE 100 and EURO 250 to see what they have produced this year. Happy (and healthy) reading!

This year we have two contributors who bring us the reality of embedding corporate responsibility.

35 Euro 250 and FTSE 100 Analysis overview

48 About salterbaxter

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Looking for corporate responsibility behind the label Rowland Hill Corporate Social Responsibility/ Sustainability Manager, Marks & Spencer

The challenge is that many of the people with whom you work don’t. Some of your colleagues will be CR-agnostic, a minority might even claim to be anti-CR and worst of all are those obsessives who want to use it to pursue their own CR agenda. How do you keep everyone aiming in the same direction through the good times and bad? At Marks & Spencer we clearly start with a huge debt to our heritage in that we’ve always had the ability to attract ethically minded individuals as customers, employees, suppliers and shareholders. But over the last decade the retail marketplace has undergone significant change. Expectations and personnel have all moved on and yet on the whole we’ve managed to keep CR moving forward in the right direction. It hasn’t always been easy and there have been times when we’ve had to retreat from the odd battle in order to win the war. Having tried most approaches I’ll run through the techniques that worked the best for us.

Leadership is terribly ❝ important... What you’re

As you’re reading Directions ‘06 it’s probably fair to assume that you’re someone who ‘gets’ Corporate Responsibility.

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looking for is someone who is effective within the organisation, ‘gets’ CR and is respected.

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Leadership is terribly important. In various capacities I’ve worked for M&S for nearly a quarter of a century seeing out the old family leadership up to the present day. During that time we’ve had both passive and active leadership on CR. The passive

variety is supportive and well intentioned but in truth only active leadership can ‘cut through’ to the organisation’s strategy. What I’ve learned is that if the senior team aren’t in a position to provide leadership on CR then you have to go and find it elsewhere. Look to the non-executive directors or perhaps the leader of an important business division. What you’re looking for is someone who is effective within the organisation, ‘gets’ CR and is respected. Next up is governance and processes. Compared to many organisations M&S places a greater reliance on its people rather than its processes so I won’t dwell here too long. You need to connect the leadership of the business with its CR performance and ensure stakeholder engagement with appropriate responses. It’s always easier to motivate people if you can identify positive benefits rather than the avoidance of risk. We’ve put in a system with a Board level CR Committee supported by a CR Forum of senior managers and heads of department across the business. That said, what we achieve still depends hugely on the energy and commitment of our people. The quality of our relationships with stakeholders is also hugely important. Much of this is about basic courtesy and acknowledging that sometimes the most unexpected sources can provide valuable insights into your business. At its best these relationships can help form and even deliver your future strategies. That said, many people in corporate life can feel very uneasy about face-to-face meetings with the likes of campaign groups and over the last few years the

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M&S CR team has done a lot of handholding during the initial ‘getting to know you’ phase. All successful organisations have a clear business strategy. You know the sort of thing, to be the fastest, cheapest, best, most reliable, most stylish etc. To my mind the single most important piece of information a CR practitioner can have is the answer to the question: ‘How does CR support our strategy?’ If you can answer this with clarity, knowing which parts of the CR agenda really matter to key stakeholders, along with the organisation’s strengths and weaknesses I really believe that you’re half way there. If the answer doesn’t exist within the organisation go out and start building a consensus about what it might be. Constructing simple lists of what it does and doesn’t include is a really good starting point. At one point we even had every part of the business with their own little set of pictures showing the issues that mattered. This kept focus and prevented wasted energy in responding to passing fads or distractions.

Actions speak louder ❝ than words. The behaviour and deeds of an organisation have to match up to the rhetoric.

❞

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Actions speak louder than words. The behaviour and deeds of an organisation have to match up to the rhetoric. In the long-term, organisations have to be trusted to deliver on their services as well as to act in the wider interests of society. This needs not only to be visible but increasingly to provide the option for stakeholders to feel empowered by participating in something positive. It can be a community project, recycling or choosing the ethical product.

formulated within the CR team over a number of years. The concept is that we are asking our customers to look beyond the product that they see in the store and consider all of the CR credentials that we’ve addressed on their behalf. After all, even the most sustainable product will look much the same as the most polluting and unethical. The difference lies in the way it has been produced and the level of trust in its provider. What made the campaign so effective, however, were the skills in execution provided by our colleagues in Finally there is what I’ll call the Brand marketing and communications. Almost X Factor. We live in a world of almost nine months before the first adverts limitless choice and increasing complexity. appeared the groundwork was being set We can’t possibly review all the detail so by using our customer research combined we use brands to help us make choices. with our CR Report to identify the overlaps Even within the world of CR reports of high consumer expectations and good the format, content, assurance and M&S performance. even choice of assurance providers all position our CR brand. Good brand Even the most sustainable management has to be honest. One of product will look much the the reasons that ‘Your M&S’ has been so successful for Marks & Spencer is that same as the most polluting it genuinely reflects the way employees and customers see the company. At once and unethical. The difference you have a means of brand positioning lies in the way it has been that rings true but also provides direction. produced and the level of

❝

trust in its provider.

and animal welfare groups if we were going to mention them or their campaigns. In order to ensure that our employees were informed we even launched the campaign two weeks early behind the scenes in our stores and everyone received a key ring with copies of the planned adverts on them. ‘Look behind the label’ has given us an accessible means of talking CR with employees and customers without the technical jargon getting in the way.

Our recent experiences suggest that the best outcomes are achieved by the CR holy trinity of leadership, strategy and marketing. This takes CR beyond the specialist functions and cedes ownership to some unorthodox functions such as marketing and communications.

Many of the traditional tools that CR practioners use such as governance, management and stakeholder engagement systems are clearly important. However, our recent experiences suggest that the best outcomes are achieved by the CR holy trinity of leadership, strategy and marketing. This takes CR beyond the specialist functions and cedes ownership to some unorthodox functions such as marketing and communications. In itself this is a challenge but perhaps is the ultimate test of the oft-quoted 21st century cliché about CR being in a company’s DNA.

❞

For us, part of this has also included what is effectively a CR sub-brand called ‘Look behind the label’. The genesis of ‘Look behind the label’ was a result of the clear direction provided by our Chief Executive, Stuart Rose, and ideas that had been

The drafting process required the co-ordination of many different business functions and we went out and consulted with stakeholders such as environmental

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❝

Corporate Responsibility: more than skin deep?

Fabulous newsletters may pave the way to awards, but once the excitement, not to mention the postevent hangover, has faded, this starlet of internal communications won’t get the message under the skin of employees.

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(x=y-z)

Lisa Walden Internal communications consultant, and ex-Director of Internal Communications, Prudential

❝ For internal communications to be believable, there has to be a visible connection – even for the cynics – between what’s being said and “how we do things around here”.

❞

At first, it seemed to go against the natural order of things. Getting senior managers to buy in to a CR strategy that could challenge the very source of a company’s profitability seemed unlikely, if not a fool’s errand. Pharmaceutical companies addressing product safety concerns? Tobacco producers focusing on youth smoking prevention? But the angst-ridden soul-searching battle was won (in most cases). If that was the public face of the organisation, what lies beneath? The company will have stated somewhere what is on its conscience and how prepared it is to do the right thing.

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But is this enough for employees? Employees have a view of the company’s impact on society, the big issues, the stakeholders’ perspective and even the measures used to tackle CR. Surely this must be positive. But is it enough? No. The internal communications dilemma From an internal communications perspective, the role CR plays in the business strategy is key to how deeply employees are going to absorb the message. Now we’re into tricky territory. Declaring “it’s part of our strategy”, means people will start looking for connectivity – with the brand, product development, training, customer communications, and HR policy…

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To be fair, it’s difficult. But that’s not a reason to head straight for the easy option of dropping a CR article into the company newsletter (we’ll return to this point). For internal communications to be believable, there has to be a visible connection – even for the cynics – between what’s being said and “how we do things around here”. Frankly, it’s just not worth pursuing employees as ambassadors and agents of CR without absolute clarity about three things on where CR fits in the bigger picture. Firstly, what has it got to do with the business we’re in, the products/services we provide and how does it stack up against our need to deliver profit to the shareholder? Secondly, how do CR targets or measures fit with the business’ key performance indicators – financial, customer

(as appropriate) and people (employees). Thirdly, don’t forget the brand in all this – it is essentially the corporate personality so there has to be a rationale for how people’s CR behaviours fit with it. And another thing – there must be an agreed principle that silence, if there’s a crisis, is not an option. Rubbing in the message Who and what carries the CR message? Managers and a robust communications infrastructure – the very same ones that carry the business messages. Fabulous newsletters may pave the way to awards, but once the excitement, not to mention the post-event hangover, has faded, this starlet of internal communications won’t get the message under the skin of employees. It wouldn’t be unreasonable to suggest that the bulk of an employee’s source of influence comes from the manager whether we’re talking about acceptable behaviours or believable information. So how does an important email straight from the CEO to all employees score on the believability/impact scale? Lower than the email that goes out to all

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Communicating and embedding a CR strategy internally can be a bit like using an anti-ageing cream – it takes time for the results to show and you have to keep rubbing it in.

employees after the CEO has briefed or at least communicated with all senior managers in advance. Seeping through Infrastructure – a set of processes for communicating specific types of information using specific channels (face to face briefing, email, voice message, text, print, webcast, intranet) in a standard and consistent way. It is the only way to get deep down into an organisation. Why? Because it consistently pumps through the organisation and restates, over and over again, the same strategy, the same connections… until consistency instils common beliefs and ultimately… common behaviours. That’s why managers are excluded at the organisation’s peril.

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Successful CR depends on a fully functioning communications infrastructure.

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The number of employees, sites and the overall structure of the organisation will inform how many channels or even function-specific infrastructures are used.

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So if successful CR depends on a fully functioning infrastructure, it’s worth checking to see if the following three foundations are in place: 1. Straight-talking performance updates: • Monthly and quarterly processes to communicate clear tangible progress against objectives/targets. • Details on where progress has not been made and what’s being done about it. • Briefings face to face (or voice) using a handy ‘pincer movement’ (i.e. tell all employees their manager has the information to brief them in the next 10 days). 2.Cascade processes: • Detailed (specific names in boxes) processes for how time critical/non time critical announcements are briefed in to the organisation (e.g Stock Exchange announcements, redundancies, product recall) – by

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function, business segment, site. This is essentially a logistics and e-based exercise (no surprise there aren’t any awards for this line of work). 3. Three agreements: • One with the CEO/business director (the ultimate in charge): to support the infrastructure and not give any senior managers permission to ‘opt out’ (potentially tricky issue). • One with the Finance Director and sponsor of transformation programmes: to provide the performance data and commentary on time. • One with the PR/Marketing/Marcomms Director (the ultimate owners of all external communications): to guarantee any material or comment going to the media and any customer or stakeholder communications is copied/briefed in to internal communications before it’s released.

Having alert employees ❝ is one thing. Making every employee an ambassador and agent of CR is another.

❞

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How deep are businesses prepared to go? Having alert employees is one thing. Making every employee an ambassador and agent of CR is another. It’s probably fair to say that most companies are in the former category rather than the latter. However, the CR strategy sits with the company’s core business strategy and employees have to see and understand the clear links between the two. A final thought. It takes months of constant attention and collaboration with senior managers for internal communications to effectively carry a business strategy through an organisation. Adding the complexities of CR to the mix makes it tougher, but if the CR strategy is well thought through, the infrastructure can bring it to life. Without it, the face the company projects will be no more than a mask.

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It can take months of constant attention and collaboration with senior managers for internal communications to effectively carry a business strategy through an organisation. Adding the complexities of CR to the mix makes it tougher.

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The key is it all has to connect, which is why often, it helps to have a centralised internal communications team if an organisation is implementing a strategy that requires behavioural change.

A few live scenarios to consider: BP – probably the most impressive corporate citizen, provides a dramatic illustration. The company has made a huge investment to address safety concerns and minimise environmental impact, but as the partial closure of the Prudhoe Bay field in Alaska has proved, being a responsible corporate citizen has not gone deep enough into the organisation. Richard Branson has recently announced a move into environmental businesses, known as the ‘Gaia Capitalism Project’, starting with a company called Cilion that will make environmentally friendly fuel. The question is, will he expect all employees in the Virgin empire to operate and think in a way that is aligned to this part of his business strategy – such as environmentally friendly office systems and practices? Or will environmental conscientiousness be kept within the confines of project businesses? Following its acquisition of Green & Black’s, is Cadbury Schweppes shifting its brand values to align with those of Green & Blacks and is anyone telling employees whether they are expected to behave differently as a result? To what degree will L’Oréal adopt The Body Shop’s product development principles or will this business and its beliefs be ring-fenced from the rest of the organisation? How will Body Shop people feel about that – especially if the reason they come to work is because they perceive their employer is aligned with their own ethical values?

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Embedded Tests Methodology

Is corporate responsibility in your blood?

Testing for embedded Corporate Responsibility

If it really is running through your organisation’s veins the symptoms should be recognisable! We decided to run a few tests on a selection of companies from the FTSE 100 to see how they are embedding CR. Our panel of judges picked out the most effective reporters in their sectors (see page 18) and we have used some of those as our test group. This isn’t, of course, the definitive guide to embedding CR but we hope it provides you with an interesting insight into progress. If you would like to talk to us about embedding CR please get in touch!

So the white mice are: Aerospace & Defence – BAE Systems Lucie Harrild Head of CR Communications

Banks – HSBC Beverages – Diageo Chemicals – Johnson Matthey Electricity – Scottish Power Fixed Line Telecommunications and Mobile Telecommunications – BT

Lucie Harrild, salterbaxter [email protected]

Food & Drug Retailers – Tesco Food Producers – Unilever Gas, Water & Multi-utilities – United Utilities General Financial – Man Group General Retailers – Marks & Spencer

Healthcare Equipment & Services and Health, Pharmaceuticals & Biotech – Smith & Nephew Household Goods – Reckitt Benckiser Media – ITV and BSkyB Mining – Rio Tinto and Anglo American Non-life Insurance and Life Insurance – Prudential Oil & Gas – Shell Real Estate – Land Securities Support Services – Wolseley Tobacco – British American Tobacco Travel & Leisure – British Airways

We tested the companies using the questions opposite, focusing on three areas where an organisation might try to embed CR: strategy and management, brand and product, and people. First of all we used publicly disclosed information to make assessments. Then we spoke with the relevant person responsible for CR. We wanted to see if CR was getting to the heart of the workforce, so decided to check with the switchboard to gauge whether they had heard of CR (or sustainable development). So to test the switchboard, we rang the switchboard!

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Embedded Tests

Scottish Power High

The results

Test Results: Strategy & Management: High Brand & Product: High People: Medium Overall: High

BT Key:

Medium

Test Results: Strategy & Management: High Brand & Product: Low

= High Embeddedness

= Medium Embeddedness

People: Medium

= Low Embeddedness

Overall: Medium

BAE Systems Medium

Strategy & Management: High Brand & Product: Medium People: Medium Overall: Medium

HSBC

Test Results:

Medium

Strategy & Management: High Brand & Product: Medium People: Medium Overall: Medium

Diageo High

Strategy & Management: High

People: Medium Overall: High

Medium

Strategy & Management: High

People: Low Overall: Medium

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High

HSBC’s strategy and management of CR is constantly improving and has gradually brought in more areas of the business and its functions in order to embed CR. Training is increasing with programmes for new employees, graduates and very senior management. But the switchboard didn’t understand us.

Overall: High

Overall: High

Strategy & Management: High

People: Low Overall: Medium

Medium

Unilever has committed to significant strategic leadership on CR. It is incorporated into product development and features in advertising and marketing – “we don’t play with your food”. Internal communications play their part too, but it hasn’t reached the switchboard yet.

Test Results:

Brand & Product: Medium

Man Group Johnson Matthey seem to be more successful with embedding CR in the senior parts of the company with considered CR management and senior staff trained in policy. However other employees are less aware. But there are positive changes happening in the product development area.

Strategy & Management: High

People: Medium

Medium

Tesco have some impressive employee communications activities across the organisation, which have paid off – and the switchboard knew exactly what we were talking about. Product developments and a range of external and internal communications back up the CR strategy and management.

Test Results:

Brand & Product: High

United Utilities High scores for strategy and management as well as brand and product – not surprising given the focus on responsible drinking and alcohol in society. There is broad representation of divisions, functions and geographical areas of the business on its corporate citizenship committee. Unfortunately the switchboard wasn’t up to speed.

Strategy & Management: High

People: High

High

Whilst BT run internal communications programmes for CR, the switchboard weren’t connected. But the strategy side of things is well integrated. An ad-hoc approach has been applied to products being developed with CR issues in mind. But this might change soon.

Test Results:

Brand & Product: High

Unilever

Test Results:

Brand & Product: Medium

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BAE systems have implemented the strategic and management side of things. It is probably unsurprising that CR doesn’t feature in marketing messages but it does in product development – and defence export legislation requires it. Switchboard is run by an external company and they give a seminar to employees on CR.

Test Results:

Brand & Product: High

Johnson Matthey

Tesco

Test Results:

Scottish Power’s activities in the renewables market give it a lead in the brand and product area with periodic marketing to support it. And as you might expect it has strong CR strategy and management but the employee awareness programmes aren’t sufficiently powerful.

Strong strategy and management plus activities in renewable energy are positive for United Utilities. Advertising and sales messages are given a light touch in terms of CR as is employee communications and it hasn’t reached the switchboard.

Test Results: Strategy & Management: High Brand & Product: Medium People: Medium Overall: Medium

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Man Group has put a lot of thought into the structure of managing CR and it will be interesting to see how that pays dividends in the future. It can be a bit hard to grasp but there is focus on how CR is integrated in the products. There is a wealth of information on the website and the intranet but switchboard are none the wiser.

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Embedded Tests

BSkyB High

The results

Test Results: Strategy & Management: High Brand & Product: High People: Medium Overall: High

Rio Tinto Key:

Medium

Test Results: Strategy & Management: High Brand & Product: Medium

= High Embeddedness

= Medium Embeddedness

People: Low

= Low Embeddedness

Overall: Medium

Marks & Spencer High

Strategy & Management: High Brand & Product: High People: Medium Overall: High

Smith & Nephew Medium

Strategy & Management: Medium

People: Low Overall: Medium

High

Strategy & Management: Medium

People: High Overall: High

Medium

Brand & Product: Medium People: Medium Overall: Medium

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Smith & Nephew have a bit of a sector advantage – they have to factor in CR when designing products to provide economic and practical benefit to the healthcare professionals. Plus marketing is heavily regulated. But it is missing a trick when it comes to communicating with employees.

Reckitt Benckiser may score a medium for strategy and management via this methodology but believes its hands-on approach works better in its flat structure. It is working for internal communications, the switchboard talked about the CR training they receive.

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ITV uses its intranet, the Watercooler, to give regular updates to employees on what is happening around the CR activities, and it gets plenty of attention. Viewers are surveyed on CR issues, aligning the brand with the relevant issues. It seems integration is developing, if not fully embedded.

Strategy & Management: High

People: Medium Overall: Medium

Medium

Anglo American has integrated CR through its management structures and into all the stages of its projects from feasibility to responsible closure. It doesn’t really do advertising but internal communications use various means to tunnel CR into the organisation, though it seems to have bypassed switchboard.

Test Results: Strategy & Management: High Brand & Product: Medium People: Medium Overall: Medium

Shell

Test Results:

Medium

Strategy & Management: High Brand & Product: Medium People: Medium Overall: Medium

High

Rio Tinto is creating strong management structures and the stewardship programmes mean CR is well integrated in the product area. However internal communication stays within the upper layers of the management structure so there is little embeddedness there.

Test Results:

Brand & Product: Medium

Land Securities

Test Results: Strategy & Management: High

Medium

Prudential

Test Results:

Brand & Product: High

ITV

As we’ve heard earlier in this report, M&S are working hard and creatively to embed CR and convey it via the M&S brand. It is paying off. But interestingly the switchboard weren’t well versed which unfortunately makes you wonder if shop floor can do justice to all that hard work. Maybe that’s the next area that needs focus.

Test Results:

Brand & Product: High

Reckitt Benckiser

Anglo American

Test Results:

BSkyB is using its significant customer reach to roll out CR-relevant messages such as energy efficiency and climate change. The CR strategy and management provide the company’s CR framework and a taskforce of CR champions help to embed it through the business. As with most companies we tested, switchboard drew a blank.

Effective CR strategy and management mean Prudential leads from the front and it makes every effort to communicate financial products clearly to its customers, educating them on financial planning. Some employees are given CR training but it isn’t everywhere.

Shell, as you would imagine, has all the management structures in place. And a significant amount of its product development takes sustainable development into account. Whilst there are some very positive employee training and communications programmes, they exist in isolation.

Test Results: Strategy & Management: High Brand & Product: High People: Medium Overall: High

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Land Securities has developed its CR with a focused approach to its strategy and management, positive communications programmes and green building techniques. Unfortunately the switchboard didn’t pick up those messages.

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Embedded Tests

Embedded Tests

The results

The winners

BSkyB Key:

Overall the companies we tested faired quite well. Though they use a range of approaches and CR programmes to do it, they all recognised that CR must be embedded to be effective. Interestingly of the 23 companies we tested, only three switchboards were familiar with corporate responsibility. Of the companies achieving high scores, we felt these five stood out (in alphabetical order):

Using its huge customer network to communicate CR = High Embeddedness

Wolseley High

= Medium Embeddedness

Strategy & Management: Medium

People: High Overall: High

Medium

Strategy & Management: High

People: Medium Overall: Medium

Low

Judging by the scores it’s a hands-on approach that’s having an effect. Wolseley have interesting programmes such as the Sustainable Building Centre, a showcase for renewable building materials, and promote energy saving and sustainable timber products. Switchboard weren’t sure of the terminology but once it was explained were quite knowledgeable about office-based activities.

CR and tobacco have always been controversial bedfellows and BAT is clearly thinking hard about how to embed CR in its strategy and management. But the product is the product and BAT does not see the corporate brand as a vehicle to carry CR messages. Employees are surveyed on CR but that hasn’t reached them all.

Brand & Product: Low People: Low Overall: Low

Making CR a definite brand value

Tesco

Test Results: Strategy & Management: High

Includes all geographic areas and business functions in CR thinking

Marks & Spencer

Test Results:

Brand & Product: Low

British Airways

Diageo

Test Results:

Brand & Product: High

British American Tobacco

= Low Embeddedness

There are the management structures in place to embed CR at BA but it seems they haven’t fed throughout the organisation as yet. CR is rightly represented by activities on the environment, health and safety and the community, and employees are told about these, but that won’t equip them to champion CR as a business strategy.

Extensive employee engagement activities

Unilever A good all rounder and willing to advertise

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17

Top FTSE 100 companies by sector Methodology

The panel is back Last year Directions moved on from just recording the reporting activities of major companies and a judging panel gave their opinions on how effectively the FTSE 100 report on corporate responsibility. With 49 of the FTSE 100 producing detailed reports there is now no denying that corporate responsibility reporting is here to stay. Now it is a question of how effective those reports are. The one-size-fits-all approach of one huge report looks like it might have had its day as 59 of this group use various combinations of web based and printed information to communicate values and activities. These refinements need to continue and progress for organisations to reach a point where they are really communicating effectively. So here we have a new set of willing volunteers to give their views on who is up to what this year. As before we set some loose ground rules but gave the individuals a pretty free rein to let us know what they think does and doesn’t work.

Rules

1. The assessments should be based on information on company websites or in public reports available up to and including 18 August 2006. 2. The panellists are encouraged to be forthright 3. The panellist’s decision is final (but please feel free to get in touch with us if you’d like to discuss it)

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Kirsty is an Associate Director at F&C Asset Management, one of London’s largest institutional investors with £107 billion under management. She works in the GSRI team where she covers the banking sector and leads the shareholder engagement programme on Human Rights. Prior to joining F&C in 2001, Kirsty spent six years in London and New York with Goldman Sachs

l na tio na withe r e int rks at in e wo rpor e g er o rtn RM. H hip c g ed a a P cy E lue c uttin and was s i c b n g nd tt a p n f Ma nsult er o evelo porti es, a co umb to d al re amm r of cil a n ents anci rogr mbe oun ent cli n-fin nce p me ess C lopm and no sura team usin Deve ility as ore rld B ble ntab roup a c e Wo taina ccou ing g th Sus D) A ork for BCS ing w (W port Re

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Kirsty Jenkinson Associate Director, Governance and Socially Responsible Investment (GSRI), F&C Asset Management

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4. The panel aren’t actually doctors!

Please note the panellists’ views are their own personal views and not necessarily those of their organisations or of salterbaxter FTSE 100 list taken from the Financial Times, 31 March 2006

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le nsib spo s re rate i r nt e UK. Luk corpo patie in the g d ith in Jud Pfizer’sility an tegies e-rang for onsib n stra a wid nt resp rmatio inates ageme ees a h info coord er eng overs in whic She ehold e and cture are stak grammce stru tions a pro ernan menda rd on gov recom he Boa CR e to t basis mad rterly qua

companies Jenny works with keholders’ to research their sta ations, opinions and expect iety of working across a var s tor industry sec

Jenny Dawkins

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P Hea tegy, a Str

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19

The sectors

Sectors Aerospace & Defence

Page 20

Sectors Healthcare Equipment & Services and

Banks

21

Health, Pharmaceuticals & Biotech

27

Beverages

21

Household Goods

27

Chemicals

22

Industrial Metals

28

Construction

22

Media

28

Electricity

23

Mining

29

Fixed Line Telecommunications and

Banks:

Page

Non-life Insurance and Life Insurance

29

Mobile Telecommunications

23

Oil & Gas

30

Food & Drug Retailers

24

Real Estate

30

Food Producers

24

Software & Computer Services

31

Gas, Water & Multi-utilities

25

Support Services

31

General Financial

25

Tobacco

32

General Industries

26

Travel & Leisure

32

General Retailers

26

Alliance & Leicester Barclays Bradford & Bingley HBOS HSBC Lloyds TSB Northern Rock Royal Bank of Scotland Standard Chartered

Panellist: Kirsty Jenkinson

Banks, perhaps more than any other sector, can feel that they are caught between a rock and a hard place on CSR reporting. While strict compliance requirements and client confidentiality restrict information flows, increasing public scrutiny of a sector representing 20% of the FTSE 100, and wielding undisputed influence over the global economy, means that the days of relative secrecy are well and truly over. Thankfully, banks are rising to the challenge with many now finding a balance in CSR reporting that both informs stakeholders and protects commercial activity. This involves reporting on the indirect impacts of their lending and other commercial activities as well as their direct impacts. While there is more to be done, most banks now make clear differentiations between, for example, the environmental performance of their branch networks and how they assess environmental issues when writing business. All this being said, the actual content of CSR reports still varies considerably from bank to bank, as does progress in identifying and managing sustainability related risks and opportunities. To a large extent this reflects both the different range of products and services that the banks offer, and the geographic reach of their business. For this reason, comparing companies like Bradford &

Bingley and Northern Rock to, say, Barclays or Standard Chartered, is not particularly constructive. Consequently, I think it’s helpful to consider the sector in a few sub-groups. Alliance & Leicester gets my vote among the ‘UK-focused’ institutions for an easy-to-read yet detailed report that goes beyond a review of its philanthropic activities and tackles CSR in its ‘Marketplace’. Standard Chartered and Lloyds TSB also deserve a mention for pioneering concise and punchy Corporate Responsibility ‘Reviews’ which are heavy on numbers, targets and results. However on balance, HSBC comes out as overall winner for a report that sets its approach to Sustainable Development firmly within the Group’s overall strategic goals. It grapples with the wide range of issues – from corporate governance, sustainability risk, Equator Principles implementation and treating customers fairly, to diversity, HIV/AIDS and carbon neutrality – facing a bank of its size and international reach today.

➜ And the winner is: HSBC

A V

BAE Systems is the only company in this sector that publishes a full CR Report. Smiths Group and Rolls-Royce focus primarily on environment, health & safety and therefore fail to address many of the key issues for this sector such as business ethics, human rights and lobbying.

Aerospace & Defence: BAE Systems ARolls-Royce Smiths Group V

Panellist: Emily Osband

A

As in previous years, BAE has continued to make stakeholder feedback central to its report. There are detailed comments from external experts in four key areas – ethics, employees, lobbying and education – followed by the company’s response. This format obviously works best when the external reviewer provides challenging and insightful commentary. The section on lobbying makes for a good read with Robert Barrington, Director of Governance and Socially Responsible Investment F&C Asset Management, highlighting strengths and weaknesses of the company’s approach. The Q&As get top marks for honesty – drawing attention to a government inquiry into allegations of false accounting and

corruption within BAE and media reports relating to bribery. However, this makes for slightly uncomfortable reading when they raise more questions than they answer. All three companies report comprehensively on environment, health and safety – showing clear performance trends. The quantitative targets published by Smiths Group and Rolls-Royce demonstrate a mature approach to reporting in this area.

➜ And the winner is: BAE Systems

Beverages: Diageo SAB Miller Scottish & Newcastle

Panellist: Matt Haddon

All three companies prepare a CR report and all commission an external assurance programme. Whilst some CR issues are common to all three companies in the sector, others such as water shortages and HIV/AIDS tend to be more specific. This is generally reflected in the CR reports. SABMiller addresses a number of CR issues, giving equal space and emphasis to each one, whilst Diageo and Scottish & Newcastle focus on responsible drinking as their key issue. Responsible drinking, as in 2005, is the dominant issue for the sector in 2006. All three companies recognise the issue and the importance of their role in promoting responsible behaviour. They also detail management processes and initiatives they have put in place, examples of memberships, research, policy commitments and best practices. Diageo though, goes a notable step further than the others, and is awarded first prize.

Firstly their report provides outcome and performance evidence, such as the number of complaints made to the Advertising Standards Authority and the proportion of advertising spend focused on responsibility messages. This effectively moves the report on – from one based on commitments and initiatives, to one which more clearly demonstrates the business benefit of good CR performance. Secondly the Diageo report is broader, covering a wider range of issues such as the company’s economic impact, employees and governance practices. It is a more complete non-financial performance report.

➜ And the winner is: Diageo

V

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21

Chemicals: BOC ICI Johnson Matthey

Panellist: Mike Kelly

All of these companies see CSR, and particularly the environmental component of CSR, as an opportunity rather than a cost and talk about future income streams from that source. Additionally occupational health and safety features very strongly both in terms of the targets set and also in the narratives from the CEOs and Chairmen. This is quite right given the hazardous products and processes with which they are all involved and the ambitions set, such as a target of zero reportable accidents introduced by Johnson Matthey or BOC’s simple zero incidents and injuries is admirable. The length of the BOC report is great and proves you don’t have to destroy a couple of forests every 12 months to produce an effective document. Although it covers all the main areas, the report is in danger of underselling what they are doing, even though it gives a nod to GRI, the ABI, the UK’s Combined Code and the provisions of the US Sarbanes Oxley as well as the UN Global Compact. It would be good to see future reports building on the use of diagrams to communicate targets and data, enabling the reader to easily gauge performance improvements.

Construction: Hanson

Panellist: Jenny Dawkins

Hanson reports online, and is strongest in the area of health and safety, where it gives trends on performance data showing sustained improvements. It would be strengthened by disclosing the targets set for future years. The rest of the information is largely policy statements, although it does make the link between its training initiatives and the business strategy, references to senior management involvement and gives a few interesting case studies. There are a few role models for more comprehensive reporting among the construction companies outside the FTSE 100. Companies like Lafarge, Barratt and Wates produce standalone sustainability reports, and tackle their core business impacts in areas such as waste minimisation, using local suppliers and local employees to contribute to local economic development, and responsible purchasing e.g. sustainable timber sourcing. The coverage of the overarching aim of sustainable construction

A V

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ICI is straightforward, provides clear performance data and again is of an easy to read length and a somewhat easier to digest format.

Electricity: British Energy Group Drax Group International Power Scottish and Southern Energy Scottish Power

Johnson Matthey also has clear data, easily understood, and even confirms support to ILO conventions and the Universal Declaration of Human Rights. But the winner is Johnson Matthey, because they also talk about difficult issues such as animal testing.

Panellist: Judith Luker

Now what do they all think about REACH? (the EU regulatory framework for the Registration, Evaluation and Authorisation of Chemicals)

A V

➜ And the winner is:

(looking to improve the ecological footprint of buildings and the living standards they enable) and contributing to sustainable communities is particularly impressive. Wates also deserves special mention for its initiative to employ people aged 35 plus who are long-term unemployed, ex-offenders and parents returning to work. The inclusion of strategic priorities, performance targets, stakeholder dialogue and accreditation schemes such as Investors in People and ISO 14001 are also common strengths in these reports which Hanson could emulate.

Fixed Line Telecommunications and Mobile Telecommunications: BT Vodafone

Panellist: Nick Robins

Hanson

Scottish Power’s Issue Briefings are in direct response to stakeholder feedback; these and the individual performance summaries make it easy to navigate through key issues. The concise Summary Report provides a good punchy overview, while those wanting more detail can turn to the full Community and Environment reports, which slightly confusingly also contain summary sections.

A V

somehow to make a connection with the reader. The stakeholder engagement information is chiefly focused on government and the investment community. International Power contains a lot of repetition from the previous report. It highlights a few philanthropic endeavours but there is no hook into the core business. The stakeholder engagement programme seems this time to be limited to employee consultation. Drax Group’s report is the weakest in this category, with a narrow focus on environment and H&S and limited accountability. It is, however, nice and short!

Scottish and Southern Energy’s report is diligent, if somewhat dense. It raises some important issues, including appropriate sales and marketing techniques and the sector’s role in reducing total energy demand. Extra marks also for linking corporate responsibility objectives to directors’ remuneration. British Energy Group responds to feedback from the previous report, and the document is neat and concise. However, I felt it failed

Johnson Matthey

➜ And the winner is:

Overall, reporting in this sector could be more imaginative when it comes to the design and layout of reports. Future targets are not always reported and apart from Scottish Power, reporting on stakeholder engagement is limited.

Perhaps more than any other major sector in the FTSE, telecoms continue to be buffeted by the strong winds of technological change and regulatory intervention. 02 is now part of the Spanish Telefonica group – although, for now, it has maintained a high standard of separate CR reporting. In addition, Cable and Wireless has fallen out of this year’s review; let’s hope that the corporate turnaround currently underway will also extend to its CR programme. That leaves the two telecoms behemoths, BT and Vodafone, whose disclosure this year highlights two of the wider themes impinging on the responsibility agenda: first, how to manage the dance between the standalone report and an in-depth website, and second, how to connect transparency on CR with disclosure through the annual report. BT has made a refreshing contribution this year with its Changing World: Sustaining Values report, which effectively conveys the company’s strategic CR priorities and performance in a mere 18 pages – providing a snapshot of how it is anticipating future trends. This is backed by a comprehensive website that enables analysts to drill down to the detail. What is equally impressive is how issues of reputation, employee motivation and social responsibility are dealt with in the main body of the shareholder-directed annual report.

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➜ And the winner is: Scottish Power

Vodafone has also continued the steady evolution of its CR strategy and reporting, with particularly good sections on the positive contribution that mobile can make for emerging markets, and on how the group is managing the growth of potentially anti-social content (such as adult content and gambling) on its networks. Its “We said… we have… we will” mantra also provides a strong spine around which to present performance on its priority indicators. One area where CR disclosure could improve is in the area of business ethics and marketplace conduct. Telecoms is an extremely concentrated market, bringing intense regulatory oversight, with the potential for new interventions (such as from the EU over roaming charges) as well as investigations into anti-competitive behaviour. BT does have a short section on “competing fairly” which is welcomed, and it would be great to see greater attention to this from Vodafone next year. All in all, a good crop.

➜ And the winner is: BT

23

Food & Drug Retailers: Morrison Supermarkets J Sainsbury Tesco

Panellist: Jenny Dawkins

A V

Including some of the major supermarkets, this sector is nothing if not high profile. Health and wellbeing has been a firm focus in recent years, responding to popular preoccupation with the ‘o’ word (obesity). The sector also has some other meaty issues to address including its supply chain, food miles, consumer information and its impact on local communities. Sainsbury’s and Tesco are the clear leaders in this sector. While Morrisons has developed its reporting since last year and included some useful measures in some areas, it is still way behind the impressive and comprehensive reporting of its rivals. There is little to choose between Sainsbury’s and Tesco – both reports are well focused on the key impacts of the core business, and both include independent comments, impressive measurement and targets (especially on environmental issues), with some great case studies thrown in. Sainsbury’s gives good explanation of the reasons behind the trends in many places and the summaries of its performance against quantified targets are particularly impressive.

Tesco edges ahead on its coverage of stakeholder engagement, outlining the processes used and actually summarising the key opinions of each group – how rare! It is also a bit more readable, and more open about the challenges it faces, including these in the introduction alongside its highlights. The sector as a whole could include more discussion of challenges – all are guilty to some extent of skirting over the difficult issues rather than giving open explanations of why performance is below par and what they are doing to address the situation.

Gas, Water & Multi-utilities: Centrica National Grid Severn Trent United Utilities

Panellist: Mike Kelly

All the companies in this section are old hands at reporting and can display a string of awards for differing aspects of reporting over the years. They have been through the range of reporting styles from the 10 page review which is all story-based, to the site specific dataheavy tomes in accordance with a complete range of reporting standards and guidelines. So taking a step back from the detail of the reports to consider how these corporates are changing led me to think of the following common points:

Overall they are all mature in their reporting and United Utilities appeals to me most as a very clear read and an account of highlights and lowlights.

• The majority are using the internet in a smarter fashion – not just the odd pdf but a range of reporting mechanisms to really appeal to ‘an audience of one’, NGT are very good at this • There is a forward looking focus – how will we make the business more durable in the future – Severn Trent’s discussion on Adaptation is good

➜ And the winner is:

• Two issues, human rights and climate change, feature in all reports and are addressed in a way that makes you think the companies are serious at embedding this into the business

➜ And the winner is: United Utilities

Tesco

Alliance Unichem and Boots Group merged during our research period. Alliance Unichem has not been judged here but Boots Group appears in the General Retailers sector

Food Producers: Associated British Foods Cadbury Schweppes V Unilever

A

Panellist: Judith Luker

Unilever’s is the only report to use the internet effectively – the website provides updated and more detailed information, with quick links for different stakeholders. The balance of offline/online content is good and makes the report far easier to navigate. There are numerous examples of programmes where corporate responsibility is really being practised on the ground, making this the best example of a report where the organisation is characterised by corporate responsibility. It’s a refreshing change from the usual self-referencing narrative about governance procedures and filing-cabinet policies. Cadbury Schweppes reports biennially, which is sensible and reduces the risk of reporting cycles becoming the focus rather than the byproduct of corporate responsibility activity. However, its content is undermined by an excessive use of illustration which somewhat trivialises the issues under discussion, and by its length. Its “two-speed approach”, through data-rich inserts, is an innovative approach to

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addressing the different information needs of stakeholders but it doesn’t achieve its objective of avoiding information overload and doesn’t work as well as online/offline cross-referencing. The Associated British Foods report is by far the weakest in this category, with an over-reliance on governance and policies and little evidence of real-life outcomes – which gives it a feeling of remoteness.

➜ And the winner is: Unilever

General Financial: 3i Amvescap Man Group Schroders

Panellist: Lucie Harrild

The General Financial sector is a bit thin on the ground for CR. AMVESCAP is immediately knocked out of this race as it doesn’t produce a report – there is some explanation of its policies on the website. So, to continue in reverse order: Schroders. A very brief document which unfortunately reads like a policy document and is a half hearted attempt. 3i, the private equity and venture capital house is a slightly less boring read as it seems to have thought a bit about what CR means to 3i and recognises the fact that its biggest impact is its investments. There is a rather vague assertion that some investments are turned down for environmental and social reasons, but it sounds like they know that more by chance than judgement. And that just leaves us with Man Group which is much more encouraging. Though a first report, it clearly sets out the who, what, why, when and how of Man Group’s approach and leaves the reader in no doubt that it is being led from the top, with commitment and understanding. By having contributions from the CR

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committee it is transparent and accountable, each executive’s role and understanding is demonstrated in each person’s own voice. There is also a level of self-awareness with the admission that they operate in a “controversial niche of the financial services sector”. And as the report moves on to early disclosures of data and objectives it proves that there is action behind the words. It will be interesting to see updates on the commitment to include employees’ families in the carbon neutral plan.

➜ And the winner is: Man Group

25

General Industries: REXAM

Panellist: Jenny Dawkins

The scope of REXAM’s reporting is good – it covers most of the key issues you would want from a manufacturer of consumer packaging such as promoting eco-efficiency in the design process, minimising waste, promoting health and safety, employee training and supply chain management. One issue that is not really covered is the implication of the company’s presence in developing countries, in terms of working conditions, human rights, security and local community development. The annual report includes snapshots of performance measurement, trends and benchmarking against the industry standard in key areas. The problem is that the more detailed reporting on the website is out of date and the standalone (and ironically named)

‘Environmental and social update’ is from 2004. You have to ask, if the company is making the progress that the annual report claims (the 2005 review “resulting in a more extensive CR programme”) why doesn’t the website reflect this, or at least say when new information will be available?

Health, Pharmaceuticals & Biotech and Healthcare Equipment & Services: AstraZeneca GlaxoSmithKline Shire Pharmaceuticals Smith & Nephew

➜ And the winner is: REXAM

A V

Panellist: My-Linh Ngo

Pharma has continued to dominate the headlines, with coverage continuing about product safety (GSK’s asthma drug had its safety warning tightened whilst Astra had to abandon two promising drugs), sales & marketing practices (Abbot’s membership of the UK trade association was suspended for unethical marketing practices), as well as about clinical trials (the disastrous Northwick Park trials which left all the volunteers in hospital) to name but a few. The medical equipment industry has also started to gain some press on similar issues (Smith & Nephew has received an anti-trust subpoena from the US Dept of Justice). What’s improving? • All the companies continue to make steady progress with regards to the level of public reporting, as well as the breadth • Shire deserves recognition for expanding its issues reporting • Congratulations to GSK and Astra for starting to report on marketplace compliance performance What’s still work in progress? • Disappointingly Smith & Nephew does not report on product safety and marketing practices to the detail the others do • A small, but possibly important point relates to the lack of reference to legal proceedings on matters related to CR (you have to go to the Annual Reports to find these). Is it me, or does this not seem strange? Clearly this

is an issue for other sectors as well, but surely it is critical for such a regulated health industry? Future wish list? • Better performance reporting please: not just policy and process KPIs, but actual performance ones which enable the reader to judge the effectiveness of a company’s CR practices • Thankfully, the access to medicines debate is broadening, with companies’ approaches to middle income countries such as India, and within industrialised countries (e.g. cancer drug Herceptin in the UK) starting to gain attention. More transparent about the global strategy please • Proactive genuine dialogue with stakeholders about the numerous ethical challenges/ dilemmas in their business e.g. getting the balance between risk vs benefits of taking drugs, addressing the contentious disease focuses (e.g. ADHD, anti-depression drugs), emerging technologies etc. Smith and Nephew is the winner overall for its solid track record in reporting.

➜ And the winner is: Smith & Nephew

A V

General Retailers: Boots Group DSG International GUS Kingfisher Marks & Spencer Next

Panellist: Mike Peirce

Last year saw Boots produce its first CSR report – a publication relatively short on data but accompanied by plenty of targets. How this summer’s union with Alliance UniChem will affect the chemist’s reporting is yet to be seen, though the new company insists that its commitment to responsible business remains firm. From merger to demerger. As GUS plans its split into Argos and Experian, the retail and business services group has produced what may be its last ever corporate responsibility report. Few are likely to mourn the demise of this review – though there are many worse CSR documents in print – which is supplemented by separate reports on specific policies such as conflict diamonds and socially acceptable products. DSG’s website is prettier and packed with examples of action, but it’s hard to find many targets except in the arena of environmental performance. Whilst we learn about a range of employee engagement initiatives, there is little discussion of how staff, including senior leaders, are being developed to address the challenges identified by the company. Next’s second-ever CSR report, covering the period to January 2005, recounts some basic information on the company’s governance structure. A simple stakeholder approach is

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adopted for the report and, reasonably enough, the greatest attention is paid to supply chain issues. The two stand-out reports in this sector come from Kingfisher and Marks & Spencer. Kingfisher’s strength is its emphasis on process, particularly the elaboration of its management tool – Steps to Responsible Growth. The evidence highlights the leadership role of B&Q in the group, though more could be said about how the company is building the team that will spread these achievements across the group. Marks & Spencer tells us more about progress than systems. Its CSR report highlights almost twenty key issues within the categories of people, products and places. For each issue, we learn about the key events of the last year, what the company has achieved and what it intends to achieve next year. M&S does give a glimpse of the internal initiatives which it is using to develop its people and company culture, though more might be said on its training for senior executives.

Household Goods: Persimmon Reckitt Benckiser

Panellist: Lucie Harrild

The Household Goods sector consists of Reckitt Benckiser, the cleaning and hygiene products manufacturer and Persimmon, a housebuilder – very different companies with very different corporate responsibility concerns which initially makes you doubt the ability to compare them and make a judgement. However Persimmon’s report is rather perfunctory. Whilst the company lays out an admirable no-nonsense approach to CR and continues that view through the use of straightforward language, the result is dry and it is quite an effort to keep your attention from wandering. This is a shame as there are some good examples of going beyond the CR ‘housekeeping’ of H&S and recycling into innovative building projects using modern materials to maximise environmental savings. Now that Persimmon have acquired Westbury, making it the nation’s largest housebuilder, it should really look to go beyond just getting the information out there and think about how best to communicate with different stakeholders and audiences.

So Reckitt Benckiser takes the number one slot, if slightly by default. It is a report that ticks the boxes in terms of relevant headings: Primary Purpose, Tackling Climate Change, Sustainability, Responsibility, Further Information. But somehow it feels that it has been written with a CR ‘dictionary’ beside the author and rather than thinking about CR and what it means to Reckitt Benckiser, some worthwhile projects have had the CR lexicon hurled at them so that they qualify for the Sustainability Report. It’s a start but a good example of a company on its CR journey, so hopefully the future will hold something a bit more insightful.

➜ And the winner is: Reckitt Benckiser

➜ And the winner is: Marks & Spencer

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27

Industrial Metals: Corus Group

Panellist: Jenny Dawkins

The Corus report has broad coverage, quantified trend data which is well explained, targets, benchmarks, and some interesting case studies. It is well-written with useful performance summaries and shows evidence of sector leadership and collaboration in some areas, such as reducing CO2 emissions. Corus goes further than many global metals companies in discussing the core impacts of its business, and illustrates the ‘sustainable solutions’ in the form of product innovations that it is pursuing in each of its main business areas. Among the major metals companies around the world, Alcan was the only one I came across who did this better – theming its innovations as responses to industry shifts thereby linking it more closely with the business strategy and wider sustainability issues. Corus recognises that it needs to extend its performance data and targets to the areas of community and employee impacts, and there are some places where other targets could

be quantified or perhaps be more challenging. Evidence of external stakeholder engagement would strengthen the report, and some areas could perhaps be covered more comprehensively, such as workforce diversity, the company’s response to skills shortages and its management of its supply chain.

Mining: Anglo American Antofagasta BHP Billiton Kazakhyms Lonmin Rio Tinto Vedanta Resources Xstrata

A V

Panellist: Matt Haddon

➜ And the winner is: Corus Group

Strong commodity prices and the associated rise in market values and new listings have led to a rise from five miners in the FTSE 100 last year, to eight in 2006. The result is a much bigger gap between the CSR leaders and those following behind.

a sector-wide response to the challenges of sustainability – the International Council on Mining and Metals’ Sustainable Development Framework providing a well researched and widely consulted standard to which many miners have signed up.

Nevertheless, compared to other sectors the general standard remains high. With the exception of recently listed Kazakhyms, all companies in the group prepare a CR/ sustainability report, and almost all obtain third party assurance. Kazakhyms stands out as far behind the crowd.

More specifically, the Anglo report is well structured and flows naturally through the key issues presented, making it one of the easiest reports to read. The BHP report is detailed and comprehensive, though its length contrasts with the focused nature of the Rio report which stands out for its ability to get to the point. The very high standard of reporting in this sector makes selecting one winner difficult – Rio Tinto and Anglo American share first prize.

Anglo American, Rio Tinto, Xstrata and BHP Billiton continue to set the standard, not only within the sector, but more broadly. They each produced comprehensive reports highlighting the key CR issues, their business performance implications, their boundaries of reporting and how these relate to financial reporting and their broader economic impacts. There is also an increased emphasis on performance, as well as the usual commitments and process. The sector continues to stand out, and its progress in reporting in recent years is impressive. This may in part be explained by

➜ And the winner is: Anglo American and Rio Tinto

A V

Media: BSkyB ITV Pearson Reed Elsevier Reuters WPP Yell

Panellist: My-Linh Ngo

We are seeing real improvements in CR activities and reporting within the media industry, and our UK companies are still leading the pack. What’s improving? • Refreshingly, competition has opened up on CR reporting – with the gap narrowing in terms of what is reported, the quality, and creative approaches taken to make it accessible, interesting yet still address the key issues • A positive by-product of the work of the UK Media CSR Forum has been the development of a common framework for managing and reporting CR by media companies, so facilitating benchmarking • Both Reuters and ITV have revamped their websites to better report on their CR activities • Interesting to see that BSkyB has introduced the approach of giving donations to charities in return for comments on its reporting, as a means of encouraging feedback – will be interesting if this works What’s still work in progress? • It is good to see Reed Elsevier start to address the issue of its association with the defence sector (via involvement in organising trade exhibitions in this industry), although more debate is needed on this in future • WPP also shows it’s not afraid to confront issues about standards, marketing ethics and obesity, but doesn’t address the issue of clients in sensitive business activities, or its role in drugs promotion

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• Reporting on community activities still doesn’t quite hit the mark for me – still too much based in philanthropy, and not enough on how such activities add value to the core business itself Future wish list? • For media companies, managing people is critical, and companies agree, regularly stating that “employees are our greatest asset”. But reporting has yet to really demonstrate the added value gained by the business from investment in staff • More upfront, genuine dialogue with stakeholders about the ethical challenges and dilemmas in their business e.g. role of the media in shaping/reflecting societal values, corporate governance, advertising/marketing ethics, off-shoring of jobs, and so on. They may do well to learn from the recent efforts of AOL in exploring internet ethics with its customers Winner: two if I may – the broadcasters – ITV and BSkyB, both of which have come a long way in reporting terms.

Non-life Insurance and Life Insurance: Aviva Friends Provident Legal & General Old Mutual Prudential Royal & Sun Alliance

Panellist: Mike Peirce

As a whole, the CSR reports and websites from life and non-life insurance companies stand up well to a comparison with their peers. The communications provide a business case for environmental efficiency and community action, strategies and targets are outlined, and a wide mix of internal and external assurance approaches and standards are adopted. But the reports produced by these companies also typify the limitations of so many CSR publications. Readers learn about corporate objectives but gather little about the people that will deliver them. Precious few words, for example, are devoted to how the companies are identifying the critical skills, experience and attitudes that will enable them to achieve their objectives, let alone the learning processes that will embed these competencies in the organisation. Reports touch on workplace issues, but the connection is rarely made with how employees can contribute to the achievement of the organisation’s CSR objectives. Aviva, for example, identifies three key CSR issues: climate change, customer focus and managing structural change. The report provides detailed information on training, which includes a leadership academy, but the relationship of this training to these CSR issues is not explained.

Friends Provident bows to the trend for identifying and outlining its material issues. Like its peers, it describes a mix of advanced and graduate leadership programmes; but yet again, the link to corporate responsibility is not explored. Old Mutual’s approach to people management is framed by the company’s objectives for black economic empowerment. The latest available report (published in early 2005) helpfully acknowledges its poor performance in a Best Company to Work For survey, as well as the unearthing of major staff dissatisfaction through a series of internal reviews. Facing this challenge, the latest available report for the company outlines a human capital model for developing the full potential of its people. Readers await the successor to this report to identify progress. Prudential, at last, provides a link between workplace issues and CSR strategy. Detail is limited, but we do learn of the piloting of an e-learning tutorial; not only this, the company plans to launch the tool with a senior management population. It may just be a few words, but hopefully this provides a glimpse of a more positive aspect of CSR reporting in the future.

➜ And the winner is: ITV and BSkyB

Royal and Sun Alliance also identifies its interest in developing “the talent we need for today and for the future,” and confirms that “providing opportunities and experiences for everyone to develop is a key priority”. Yet how these opportunities will contribute to its CSR goals remains a mystery to the outsider.

DIRECTIONS 06

➜ And the winner is: Prudential

29

Oil & Gas: BG Group BP Cairn Energy Shell

Panellist: Jenny Dawkins

This sector’s sustainability reporting is, of course, long-established and considered by many to lead the field, so this is really the battle of the heavyweight reports! And they’re impressive – lots of tracking data against targets, discussion of the outcomes of stakeholder engagement, and examples of where the companies have made a real difference. But what makes them (mostly) readable is the focus on the key business issues – climate change is the biggie, of course, and Shell does particularly well in positioning this centre stage. I was also impressed by BP’s section on access to energy and Cairn Energy’s coverage of the issue of water use, a pressing human rights issue in one of their Asian sites. Shell and Cairn Energy do best in giving an overview of the particular issues facing their major sites. A All of the companies are open about the challenges they face, and Shell and BP include straight-talking acknowledgments of their shortcomings. They are also good at explaining the reasons for movements in the trends, although more about their future plans for addressing problem areas would be useful.

Real Estate: BAA British Land Hammerson Land Securities Liberty International

Panellist: Emily Osband

The amount of information published by each company in this sector is impressive. All the reports are packed full of performance data and detailed action plans/targets which give the impression that CR is being taken seriously. The key issue for real estate companies is sustainable and green building design. The extent to which the reports address this issue varies. British Land appears to be leading the way with its Sustainability Brief for new developments, which sets out a process for integrating sustainability into the design and construction of new buildings. The other companies tend to report just one off examples of green innovation – rather than an overall strategy. The Land Securities report is the most engaging. A six page case study brings to life the company’s efforts to minimise the environmental impacts of a new high profile office development at New Street Square in London. It helps to demonstrate that sustainability is not just for niche projects and gives a glimpse of exciting possibilities.

30

DIRECTIONS 06

Both Cairn and BG Group give clever summaries of their progress for each section. BP deserve special mention for their clear targets to increase the amount of renewable energy generated in the next few years, and for their efforts to communicate sustainability issues to a wider audience than just the report readers (for communications in the widest sense they would get the gong!). But the prize goes to Shell for sheer readability of reporting, and for the inclusion of extensive external commentary – there is a great Q&A with the CEO, asking all those difficult questions that you would like to raise.

Software & Computer Services: Sage

Panellist: Lucie Harrild

There hasn’t been much improvement in Sage’s reporting over the past year. There are a couple of pages in the annual report and the website lists policies with a few top line achievements under headings of Employment, Our Marketplace, Environment and Community. But it isn’t insightful. Sage UK does produce a 15 page report which includes forward looking targets and objectives, and covers ethical business practices, suppliers, customers and people. Unfortunately it is all brief and perfunctory and there is no contextual or illustrative detail so the reader gets no feel for what is (or isn’t) going on. As this sector is a group of one I’ve looked at the EURO 250 for comparison but it is all very disappointing. Two German companies become the competition, SAP and T-Online. T-Online

produces nothing. SAP has a few web pages of policy and a couple of achievements, but there is even less real-life activity with policy as the main (but brief) feature. Sage would have to be the winner out of these three but I’d rather withhold the prize!

➜ And the winner is: Sage

V

➜ And the winner is: Shell

As an airport operator, the issues faced by BAA are obviously different. The report clearly identifies climate change as the top issue and sets out the company’s response to this challenge – lobbying for aviation to be included in the EU Emissions Trading Scheme and setting up a charge and discount scheme to reward airlines which use cleaner fleets. All the companies (except Hammerson) have stuck to the traditional printed format. I thought that BAA struck a good balance between print and web – with a 20 page printed summary and more detail on the website. With reports running at over 30 pages, Land Securities and British Land could perhaps shift some of the detail to the web. But for overall effectiveness Land Securities is the winner.

➜ And the winner is:

Support Services: Brambles Industries Capita Wolseley

Panellist: Jenny Dawkins

This diverse sector includes companies specialising in areas such as outsourced customer contact, distribution and waste management. But too often the couple of pages in the annual report devoted to corporate responsibility give bland statements about community, environment, health and safety which could frankly be made about any company. More information is available online. Capita has defined what responsibility means to the company and gives example environmental activities, performance data and targets. Brambles Industries also gives environmental performance data. In both cases, better coverage could be given to social impacts – more data and targets would be beneficial in these areas. Brambles could also do with some more recent case studies! The sector as a whole could include more on their challenges, and in an industry rife with acquisitions, consideration could be given to the challenge of aligning different business cultures.

Wolseley’s corporate social responsibility report is a step ahead. It covers its major impacts (the timber sourcing and fleet management sections are particularly good), gives a rationale for why they are important areas for the business and demonstrates some impressive progress (although figures are sometimes patchy and could be presented more meaningfully – how about some charts?). Wolseley links responsibility issues to the business strategy, for example in the area of recruitment and retention, and highlights examples where it has shown leadership in sector initiatives.

➜ And the winner is: Wolseley

Land Securities

DIRECTIONS 06

31

Tobacco: British American Tobacco Gallaher Imperial Tobacco

Panellist: Emily Osband

British American Tobacco (BAT) appears to be the most transparent – with a Group report of over 130 pages plus local reports in around 30 countries. Now in its fifth year of reporting, the Chief Executive reflects on some key achievements since its first report. Examples include the introduction of international marketing standards, setting up the BAT Biodiversity Partnership and the part played by the company in supporting the Eliminating Child Labour in Tobacco Foundation. It’s a mature report, with clear action plans and targets. However with so much detail, I would have really liked a printed summary of key points (like last year). Imperial Tobacco also publishes a pretty comprehensive report with clear objectives and targets – running to 86 pages. A four page executive summary on the website provides an overview of performance.

smoking and are clearly opposed to banning smoking in public places. Imperial Tobacco states that ‘the statistical population studies (epidemiology) which have led to claims that other people’s smoke is a risk to health are subject to methodological flaws.’ With an increasing number of governments worldwide introducing bans on public smoking, such denial will obviously continue to fuel allegations of irresponsibility. The sector continues its search for the holy grail of a harmless tobacco product – but there’s been little progress. BAT says the company is working hard in R&D, but a less hazardous smokeless tobacco that is placed behind the upper lip (which is banned across most EU countries) seems unlikely to be its saviour.

➜ Aerospace & Defence BAE Systems ➜ Banks HSBC

Gallaher’s report is the easiest to read – it’s the shortest (50 pages) and has the most sophisticated design. However it lacks some of the substance of its competitors, with quite broad and unchallenging targets. Although all of the companies clearly acknowledge that their products cause harm, they go on the serious defensive about passive

The winners

➜ Beverages Diageo ➜ And the winner is: British American Tobacco

➜ Chemicals Johnson Matthey ➜ Construction Hanson

A V

Travel & Leisure: British Airways Carnival Compass Group Enterprise Inns Intercontinental Hotels Ladbrokes Partygaming Whitbread

Panellist: Lucie Harrild

The Travel & Leisure sector is a real mixed bag with planes, cruise ships, pubs, hotels, food, drink and gambling (with and without premises) all making an appearance. Carnival (cruise ships) focuses on the environmental side of things and its current structure for governing the environmental performance was developed in 2002 as part of a settlement with the United States government. And it shows – it is heavily based on maritime law and is a very internal facing document. Shockingly there is no health and safety information. Major gaps in disclosure continue to be a theme – Compass has only two pages in its annual review and some policies on the website. There is some information in the OFR of 2005’s annual report but it is very poor for the size and impacts of the organisation. The pubs and hotels are also hit and miss. Whitbread’s last accident figures are from 2002/2003. It does produce a brochure called ‘Taking our responsibilities seriously’ but that doesn’t give much factual information. Enterprise Inns only manages four pages in the annual report, which are replicated on the site. And Intercontinental Hotels is a work in progress as it says it will be communicating more in 2006. Currently though it is quite confusing, as some information is in the

32

DIRECTIONS 06

Investor Relations section and some is in the Corporate Information section of the website. So that brings us to the gamblers and BA. PartyGaming doesn’t report and cites on the website its membership of GamCare, the charity which promotes responsible gambling. Ladbrokes does report although the latest report includes Hilton Hotels which was sold in February. However the Ladbrokes part covers responsible gaming, employee development (Ladbrokes Academy) and environmental issues and so the future looks encouraging. BA, perhaps unsurprisingly, comes out as the winner. But its reports for 2006 are surprising – it has changed its reporting structure this year and is putting more information into the annual report. No bad thing in itself but the transition looks messy with the CR report relegated to a series of pdfs which aren’t accessible or engaging and some data will not be complete for this year. It would have been better to concentrate on getting the web pages looking right in order to lead readers through the change. Hopefully next year will be clearer.

➜ And the winner is:

➜ Healthcare Equipment & Services and Health, Pharmaceuticals & Biotech Smith & Nephew ➜ Household Goods Reckitt Benckiser ➜ Industrial Metals Corus Group ➜ Media BSkyB ITV

➜ Electricity Scottish Power

➜ Mining Anglo American Rio Tinto

➜ Fixed Line Telecommunications and Mobile Telecommunications BT

➜ Non-life Insurance and Life Insurance Prudential

➜ Food & Drug Retailers Tesco ➜ Food Producers Unilever ➜ Gas, Water & Multi-utilities United Utilities ➜ General Financial Man Group ➜ General Industries REXAM ➜ General Retailers Marks & Spencer

➜ Oil & Gas Shell ➜ Real Estate Land Securities ➜ Software & Computer Services Sage ➜ Support Services Wolseley ➜ Tobacco British American Tobacco ➜ Travel & Leisure British Airways

British Airways

DIRECTIONS 06

33

Analysis of Euro 250 and FTSE 100 Methodology

We have made every effort to ensure that the data in Directions are accurate.

Euro 250 and FTSE 100

The research is based on company websites and printed reports. Every attempt was made to verify the data with each company on the phone or via email. If we have missed data, please get in touch and we will update our records.

Analysis overview

43

%

of companies have independent verification statements

The categories we have chosen are not judgemental but the following rules and definitions were applied to ensure a consistent approach.

Research conducted by Jo Sampson and salterbaxter

1. The cut-off date Our assessments are based on information in the public domain by 1 July 2006. 2. The list of Euro 250 and FTSE 100 Companies Taken from the Financial Times website and dated 31 March 2006.

5. Independent verification statement Report includes a formal verification/ assurance statement by third parties. We have not counted informal comments by external commentators. 6. FTSE4Good Index Company included in any of the FTSE4Good Index Series (Global, US, Europe, UK).

3. CR Report – years Shows the number of years the company has published either a CR Report, Sustainable Development or EHS Report. Reports not archived in the company's website may not be counted. Mergers and acquisitions may affect these data by reducing the number of years recorded. 4. CR Report – format Shows the format of the report ie printed summary, printed in full, web report. We indicate if the report is limited in scope or integrated within the annual report. We do not count the following as reports: web pages on CR which cover policies and programmes (without time-specific performance information) and single issue reports e.g. on community, HIV, supplier diversity.

7. Dow Jones Sustainability Index (DJSI) Company included in any of the DJSI series (World, STOXX, EURO STOXX). 8. United Nations Global Compact (UNGC) Signatory to the United Nations Global Compact. 9. Business in the Community Ranking Position in Business in the Community’s (BITC) CR index. It is also noted when a company declares it is a member but is not in the index. 10. Climate Leadership Index Shows inclusion in the Climate Leadership Index. The index is based on company responses to the Carbon Disclosure Project and comprises the 60 “best in class”.

11. OFR Shows if the company has produced an Operating and Financial Review and titled it as such. 12. Performance against environmental targets The report covers a range of environmental impacts and the company's performance data is reported against specific targets for continuous improvement.

59

48

%

of companies are in the Dow Jones Sustainability Index

report on the web

13. Performance against social targets The report covers a range of social impacts and the company’s performance data is reported against specific targets for continuous improvement. 14. The Euro 250 and FTSE 100 The Euro 250 and FTSE 100 combined are a group of 297 companies. This means that 47 companies are in the FTSE 100 but fall outside the EURO 250. The following charts and the analysis overview lists information for the group as a whole but separated by sectors for ease of reference.

%

%

47

%

produce printed reports

57

of companies are in the FTSE4Good Index

47

%

are signatories to the United Nations Global Compact

UK vs EURO:

KEY

34

COMPANY NAME

—

Yes

a

See comments

Fr

1

• • • • •

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

––

––

––

AR = Annual Report

•

––

––

––

Pe r en form vir an Pe onme ce ag r so form ntal ainst t cia an l ta ce arge rge aga ts No ts ins tes t

BIT Cr an kin g Cli ma te Ind ex OF R

71

UN GC

Sector name

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort on Pr we int ed bs ite su mm We ary br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

We also had a quick look for trends in the use of printed reports and web reports in the UK and in Europe.

––

EHS = Environment, Health & Safety

––

Printed reports in UK 49%

Printed reports in Europe 37%

Web reports in UK 59%

Web reports in Europe 47%

a) Comment b) More comment

m = Member of Business in the Community

DIRECTIONS 06

35

Euro 250 and FTSE 100

EADS

Fr

1

26

BAE SYSTEMS

UK

5

178

42

ROLLS-ROYCE GROUP

UK

8a

• • • –– • ––

–– –– ––

• • •

•

––

––

•

m

––

––

b

––

• •

–– ––

17=

––

• • • • –– • –– ––

––

a) Environment report only for 7 years and a H&S report for 1 year. Information in AR b) Verification of environmental data only

62

—

BANCA INTESA

It

1

––

––

––

––

––

•

––

––

––

––

––

—

KBC GROUPE

B

2

• • •

––

64

––

•

––

• •

––

––

––

––

––

––

––

74

—

NORDEA BANK

Swe

––

––

––

––

a

––

––

––

––

•

––

––

––

––

––

77

19

STANDARD

UK

5

• •

––

•

––

––

•

––

•

––

––

––

• •

84

—

Ru

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

88

—

DEXIA

B

5

––

––

•

––

––

––

—

SAN PAOLO IMI

It

4

––

––

––

––

––

• •

96

—

COMMERZBANK

G

1

––

––

––

––

––

––

––

––

––

––

105

—

DANSKE BANK

Den

––

––

––

––

• • •

• • • • • • –– •

––

90

• • • • • •

––

––

––

––

––

––

––

––

––

––

––

114

—

ERSTE BANK

Aus

a

––

––

––

––

––

––

––

––

––

––

––

––

––

––

a) Have begun reporting in AR with objectives to increase it

115

—

CAPITALIA

It

a

––

––

––

•

b

––

––

––

––

•

––

––

––

––

––

a) 1st report due in Sept 2006 b) Web report in Italian

116

—

AIB

Ire

a

a

a

––

––

––

––

––

––

––

m

––

––

––

––

a) Information in AR for 3 years

132

—

SVENSKA

Swe

––

––

––

––

•

––

––

•

––

––

––

––

––

––

––

Ire

a

a

a

––

––

––

––

m

––

––

––

––

1

––

––

––

• •

3

––

––

––

• •

––

Sp

• • • •

––

• • • • ––

––

Nor

• •

––

––

––

––

––

Swe

––

––

––

––

•

––

––

––

––

•

––

––

––

––

––

It

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

a

––

––

•

––

––

•

––

––

––

––

––

––

––

––

Banks (continued)

CHARTERED 228

Fr

SAFRAN

—

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

Company created by merger in ’05, reporting cycle not yet reached

UK

SMITHS GROUP

54

4

––

• •

––

• •

––

––

––

m

––

• • •

Automobiles & Parts 43 67

DAIMLER CHRYSLER

—

BMW GROUP

—

G

3

G

6a

• • • •

––

––

––

•

––

a

• • • •

—

VOLKSWAGEN

G

156

—

CONTINENTAL

G

157

—

FIAT

It

2

170

—

PEUGEOT

Fr

3a

––

––

––

a

94

––

––

• •

Fr

––

––

1 a

RENAULT

––

––

––

—

• • • • •

a

5a

80

a

––

–– ––

––

• • • • •

––

––

• •

–– ––

––

––

––

––

• •

––

––

––

––

––

––

––

• •

–– m

––

––

• • • • –– • •

––

––

––

• • • •

a) 2 year reporting cycle, prior to that produced single issue reports a) 5 years, integrated with AR and web report

––

• • • •

––

––

a) Information in AR and on website

––

––

––

––

• • • •

––

a) 1 year standalone, prior to that produced information in AR and on web pages

Banks 4

1

HSBC

UK

6

• •

––

12

—

UBS

Sw

8a

––

a

––

14

6

ROYAL BANK OF

UK

4

• •

––

• • •

–– –– ––

• • • • • • • • • • • •

m m m

• • ––

• • –– • –– • • • ––

17

SANTANDER CENTRAL

—

Sp

4

• •

––

––

• • • •

––

––

––

• •

• • • •

• –– –– • • • • –– • • –– • –– •

––

m

––

––

––

––

• • • •

––

––

• • • –– • • • ––

––

––

137

—

BANK OF IRELAND

139

—

DNB NOR

141

—

BANCO POPULAR

—

BNP PARIBAS

Fr

4

24

8

BARCLAYS

UK

7

25

—

UNICREDITO ITALIANO

It

6

28

—

BBVA

Sp

4

31

—

CREDIT SUISSE

Sw

12

a

b

––

34

—

SOCIETE GENERALE

Fr

2

––

35

9

HBOS

UK

3a

––

• •

39

—

DEUTSCHE BANK

G

9

42

—

CREDIT AGRICOLE

Fr

3

45

—

ABN AMRO

48

12

LLOYDS TSB

• • • • •

• –– • –– • • –– • –– –– • • • –– • • • –– • • • –– –– –– •

55

KEY

36

FORTIS

—

Yes

a

See comments

N

3

UK

9

B/N

2

–– ––

• •

––

–– ––

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

• • • • •

• • • • •

• a

3

––

––

• • •

––

––

––

––

––

––

m

––

––

• • • • • • • ––

144

—

SEB

146

—

MEDIOBANCA

151

—

TURKIYE IS BANK

Tur

159

—

NATIONAL BANK

Gre 10a

• • • • •

• • –– • • • • –– • •

AR = Annual Report

––

m

––

––

10=

•

––

• • • •

m

––

––

• •

––

––

––

––

––

•

––

10=

––

––

•

––

––

OF GREECE

a) Barclays Bank of Ghana only

a) Section in AR b) Various online reports: Energy and Material Report, Milestones and Indicators, CSG and Society Report

165

—

AKBANK

166

—

FORENINGSSPARBANKEN

185

—

BANCA MONTE

Tur

––

––

––

––

––

––

––

––

––

––

––

––

––

––

Swe

a

––

––

––

––

––

––

• • •

––

––

––

––

––

It

5

• •

––

•

––

• • • •

––

––

––

––

––

187

—

NATEXIS BANQUE

Fr

a

––

––

––

––

––

––

––

––

––

––

––

––

––

––

Gre

3

• •

––

––

––

––

•

––

––

––

––

––

•

––

Aus

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

G

1

• •

––

•

––

––

•

––

•

––

––

––

––

––

Only information available refers to the group (Postbank is part of Deutsche Post) a) Information in AR

—

EFG EUROBANK

200

—

RAIFFEISEN INTERNATIONAL

—

DEUTSCHE POSTBANK

• • • • ––

209

—

ANGLO IRISH BANK

Ire

a

––

––

––

•

––

––

––

––

––

m

––

––

––

––

217

—

BCP

Por

1

• •

––

––

––

––

––

––

––

––

––

––

––

––

EHS = Environment, Health & Safety

––

m = BITC member

a) 13 pages in AR ‘05

ERGASIAS

206

––

a) Produced reports in ’01 and ’02, now integrate into AR – 4 pages

POPULAIRE

––

––

a) 10 years of Social Activities report (printed & distributed to shareholders)

DEI PASCHI

195

a) Pre-merger Bank of Scotland and Halifax produced reports

a) Information in AR for 3 years

ESPANOL

HISPANO 21

a) Developing web report

HANDELSBANKEN

a) Produce environment reports only

SCOTLAND

––

SBERBANK OF RUSSIA

255

Pe r en form vir an o Pe nme ce ag r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

––

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica tio we n bs ite FT SE 4G oo d DJ SI

–– ––

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

––

––

Pe r en form vir an Pe onme ce ag r so form ntal ainst t cia an l ta ce arge rge aga ts No ts ins tes t

––

BIT Cr an kin g Cli ma te Ind ex OF R

—

106

UN GC

71

BIT Cr an kin g Cli ma te Ind ex OF R

Aerospace & Defence

UN GC

Co un try

Euro 250 listing on the left FTSE 100 listing on the right

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Analysis

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

37

Euro 250 and FTSE 100

––

• •

––

•

––

––

––

––

––

323

73

ICI

UK

15a

––

• •

––

• • • • •

––

––

• • •

404

98

JOHNSON MATTHEY

UK

4

––

•

––

––

––

––

•

––

m

––

• • •

•

––

––

• • •

––

––

•

• • • • • –– • •

ma

––

––

• •

a) Lafarge UK is a member of BITC

––

––

––

––

––

a) Report in AR for 5 years b) 41 pages in AR c) AR on website and pdf of sustainable development pages on website

––

Pe r en form vir an Pe onm ce ag e r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

•

Chemicals (continued)

BIT Cr an kin g Cli ma te Ind ex OF R

––

Euro 250 listing on the left FTSE 100 listing on the right

UN GC

• •

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

4

Pe r en form vir an Pe onm ce a g e r so form ntal ainst cia an t l ta ce arge ts rge ag No t s ains tes t

It

Co un try

BANCA NAZIONALE

—

BIT Cr an kin g Cli ma te Ind ex OF R

224

UN GC

Banks (continued)

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif ica on tio we n bs ite FT SE 4G oo d DJ SI

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

Analysis

DE LAVORO 225

—

ALPHA BANK

Gre

a

––

––

––

•

––

––

•

––

––

––

––

––

•

––

227

—

PKO BANK

Pol

––

––

––

––

––

––

––

––

––

––

––

––

––

––

240

—

BANCO DE SABADELL

Sp

3

• •

––

•

––

––

––

––

• •

––

––

––

––

––

242

—

BANCO ANTONVENETA

It

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

245

—

BANCA POPOLARE

It

3

• •

––

––

––

•

––

––

––

––

––

––

• •

––

––

––

––

––

UK

4

• •

––

––

a) Have produced a Social Report for 5 years which is a pdf of short excerpts from the AR

Construction & Metals

DI VERONA 247 256

Pol

PEKAO

—

ALLIANCE &

55

––

––

––

––

––

––

––

––

––

––

––

––

––

––

• • • –– • •

––

––

––

•

––

––

m

• • • • ––

––

• • • –– • •

––

––

––

––

––

––

52=

––

LEICESTER 279

63

NORTHERN ROCK

UK

4

390

93

BRADFORD &

UK

3

––

––

103

—

SAINT GOBAIN

Fr

a

b

b

––

124

—

LAFARGE

Fr

5

• •

––

•

––

127

—

VINCI

Fr

a

b

c

––

––

––

130

—

CRH

Ire

3

––

––

––

––

––

––

HOLCIM

Sw

6a

––

•

––

• • • –– • • •

––

—

• • •

––

135

––

––

––

• •

a) 3 reports have been produced in 2 year reporting cycles b) Verification only covers CO2 emissions

142

—

BOUYGUES

Fr

a

a

a

––

•

––

––

––

––

•

––

––

––

––

––

a) 56 pages of sustainable development report integrated into AR

186

—

ACS

Sp

a

b

b

––

•

––

––

––

––

•

––

––

––

•

––

a) Detailed report in AR for 2 years b) 54 pages integrated in AR with its own pdf

189

—

HEIDELBERGCEMENT

G

1

• •

––

––

––

––

GRUPO FERROVIAL

Sp

a

b

b

––

• –– • • • • •

––

—

• •

––

218

c

––

––

• • • ––

243

—

ACCIONA

Sp

1

• •

––

•

––

––

•

––

––

––

––

––

57

HANSON

UK

5

––

––

––

• •

––

260

––

––

––

––

––

––

––

––

––

––

• •

•

––

––

––

•

29=

––

––

• • b

b

a) ’00 and ’02 information in AR b) ‘04 most recent report and data available a) Sustainability reports for past 4 years

b

––

––

BINGLEY

Beverages 58

16

DIAGEO

UK

7

83

21

SABMILLER

UK

9

89

—

INBEV

B

1

133

—

HEINEKEN

N

5

140

—

PERNOD RICARD

Fr

a

295

67

SCOTTISH & NEWCASTLE

UK

5

• • –– • –– • • • a

––

a

•

––

––

• •

––

––

––

––

––

––

––

––

––

b

––

––

a

––

• • • • • • • • –– –– –– • • • • • –– • –– • • •

––

•

48

––

• • •

m

––

––

––

––

m

––

––

––

––

––

––

––

• •

––

––

––

––

56=

––

•

––

––

––

a) Report is on a microsite

a) CR report integrated in AR (3 years) b) Some time specific information but out of date

a) Website pages are the content of the report

BASF

—

G

17

85

—

BAYER

G

5a

109

—

AIR LIQUIDE

Fr

5

164

168 184

232 250

KEY

38

AKZO NOBEL

—

SYNGENTA

—

BOC GROUP

43

LINDE

—

SOLVAY

—

Yes

––

a) Detailed report in AR since ‘02 b) 34 pages in AR

a) Report in AR for 5 years b) 30 pages in AR c) Amey is UK subsidiary and 75=

Electricity

Chemicals 61

a) Produced a ’90-’95 review and then continued to report annually

a

See comments

N

2a

• • • •

––

a

––

a

––

a

––

•

UK

b

14a

––

––

• •

a

B

•

––

3

1

––

• •

Sw

G

––

• • •

––

–– ––

––

–– • • –– • • • • • a

b

b

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

• • • • • • • • • –– –– ––

––

• • • •

––

•

––

m

––

––

•

24=

c

–– ––

–– ––

•

––

––

•

–– ––

AR = Annual Report

––

––

• •

––

––

––

•

––

––

––

––

––

––

–– –– ––

––

• • • • • •

a) Sustainable development report integrated into AR a) CR information in AR since 2000, standalone report for 2 years

•

a) Website pages are the content of the report.

––

––

––

––

—

EDF

Fr

5a

––

b

b

––

49

—

ENEL

It

9a

––

—

ENDESA

Sp

5

86

—

UNIFIED ENERGY

Ru

1

• • • • • •

––

72

a

––

a) Began environmental reporting in ‘93

• • ––

15

a) CR information integrated in AR since ‘98 b) Available to download: 10 pages in AR and submissions to BITC, Carbon Disclosure Project and UNGC c) Included in KLD’s Global Climate 100 Index a) Website pages are the content of the report

a

––

b

––

• • • • • • –– • • –– • • –– –– ––

––

––

––

––

• •

––

––

––

––

––

b

––

––

––

• •

• •

––

•

––

•

––

•

––

––

––

• • • ––

––

––

––

––

––

––

––

a) 6 yrs of Society report, now integrated in AR

a

––

––

––

––

––

––

––

––

––

––

a) ’03 is last available report and web information, 4 pages in AR ‘05

SYSTEM 87

—

IBERDROLA

Sp

3

• •

––

112

—

FORTUM

Fin

7a

––

––

––

119

—

CEZ

Cz

a

––

––

––

129

31

SCOTTISH POWER

UK

10

––

20=

•

––

34

SCOTTISH AND

UK

7a

• • • • • • • • • –– • • •

––

148

––

7=

––

––

• • • •

Por

9a

• •

•

––

––

––

• •

––

––

SOUTHERN ENERGY

––

––

• •

EHS = Environment, Health & Safety

a) Environmental reporting only until ‘00. Have produced 2 sustainability reports since ‘01. Began reporting in ’96 but not on an annual basis (4 reports over 10 years) b) Summary produced in German, Italian, Portuguese and Spanish. Quantitative data produced in English and French

m = BITC member

173

—

ENERGIAS DE

––

•

––

• • • • –– • ––

––

––

––

•

––

––

––

––

––

•

––

––

44=

––

––

• •

––

•

––

a) Only in Russian b) Summary in English

a) 2 CR/Sustainability, prior to these reports have been single issue or in AR a) 3 CR, prior to these reports have been in AR

PORTUGAL 212

—

UNION FENOSA

Sp

4

––

319

72

INTERNATIONAL

UK

4

––

––

––

POWER

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

39

Euro 250 and FTSE 100

––

––

––

––

–– ––

–– ––

–– ––

–– ––

––

––

b

–– ––

––

•

• ––

–– ––

210

46

ASSOCIATED BRITISH

UK

3

Pe r en form vir an Pe onme ce ag r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

––

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

•

Co un try

––

Food Producers (continued)

BIT Cr an kin g Cli ma te Ind ex OF R

a

• •

Pe r en form vir an o Pe nme ce ag r so form ntal ainst cia an t l ta ce arge ts rge ag No t s ains tes t

3

UK

DRAX GROUP

94

UK

Euro 250 listing on the left FTSE 100 listing on the right

UN GC

394

BRITISH ENERGY

85

BIT Cr an kin g Cli ma te Ind ex OF R

360

UN GC

Electricity (continued)

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

Analysis

––

•

a

b

a

c

––

––

––

––

––

––

––

––

a) Summary in AR b) Case studies but no time specific information c) Available on request

––

––

––

•

––

––

––

––

•

––

––

––

•

––

a) 10 years of environment reports only b) Web pages include social reports

• • • •

––

––

––

––

––

––

•

––

• • • • • •

––

––

––

•

––

• • • •

• –– –– –– –– • • –– • –– –– • • –– • –– • • • • • –– –– • • • • • • •

m

––

––

––

––

––

––

––

––

––

14=

––

––

––

––

––

4=

––

• • • • • • •

•

FOODS

a) 4 pages in AR with data b) Drax Power is a member of BITC 234

—

ORKLA

Nor 10a

b

Electronic & Electrical Equipment 19

—

SIEMENS

97

—

ABB

101

SCHNEIDER ELECTRIC

—

G

6a

Sw

6a

Fr

3

• –– –– –– • • • • • • • • • • •

––

––

• •

––

––

•

––

––

––

a) Prior to ’00 produced single issue reports

b

m

––

––

•

––

a) Prior to ’00 produced single issue reports b) Foreign language summaries printed

––

•

––

•

––

• •

––

––

––

• •

26 41

Sp

TELEFONICA

—

DEUTSCHE TELEKOM

—

FRANCE TELECOM

—

46

—

TELECOM ITALIA

79

20

BT GROUP

G Fr

4 7 3a

It

6

UK

14a

N

3

Sw

6

102

—

KPN

125

—

SWISSCOM

176

—

PORTUGAL TELECOM

Por

2

208

—

TELEKOM AUSTRIA

Aus

4

213

—

BELGACOM

B

223

—

OTE

• • –– • • • • • –– • –– –– • • • • • • –– • • –– • –– • • –– • • • • • • –– • –– –– –– • –– –– –– • –– • • –– –– –– • • • • –– –– • • • ––

a

a

• • • • –– • • • • •

–– –– –– –– 4=

––

• ––

–– –– ––

––

• ––

–– –– ––

–– • –– • • • •

––

Merged with T-Online June ‘06 a) Previous reports are for Orange and not available a) Report is integrated with AR a) Single issue reports prior to ‘00

UPM-KYMMENE

Fin

4a

—

STORA ENSO

Fin

4a

23

—

E.ON

G

2

51

—

SUEZ

Fr

7

52

—

RWE

G

9

69

—

GAZ DE FRANCE

Fr

5

• • • •

93

24

NATIONAL GRID

UK

10

––

Fr

6

• •

• • • •

7=a

––

––

44=

––

––

––

• • • •

––

––

––

––

––

––

•

––

––

––

––

•

––

––

•

––

––

––

––

––

143

32

CENTRICA

UK

6

––

––

––

––

––

a

––

a) ’04 is last printed report, ’05 report is web only

191

—

GAS NATURAL SDG

Sp

4

a) Reports from a subsidiary, Proximus

229

50

UNITED UTILITIES

UK

4

343

82

SEVERN TRENT

UK

12

• • –– • • • • • • • –– –– –– • • • • • • –– • –– • • • –– –– –– • • • –– • • •

B

––

––

––

––

––

G

a

a

a

––

––

––

––

Swe

––

––

––

––

a

––

––

––

––

110

a

a

––

a

––

––

––

––

––

––

––

––

––

––

––

––

Gre

2

• •

––

––

––

––

––

––

––

––

––

––

––

––

UK

5

• • • • • • –– •

––

•

––

––

––

a

––

• • • • • •

16

––

a

––

––

––

––

––

––

•

––

––

a

––

––

––

––

—

CARREFOUR

Fr

5

197

—

AHOLD

N

8

246

52

SAINSBURY (J)

UK

10a

275

61

MORRISON (WM)

UK

1

—

a) Pdfs of pages in AR

VEOLIA

ALLIANCE UNICHEM

––

—

NESTLE

29

22

UNILEVER

UK

1a

Sw

4

N/UK 10a

78

—

DANONE

Fr

8

118

28

CADBURY SCHWEPPES

UK

7

KEY

40

Yes

a

See comments

––

a) Prior to ’02 published environment reports only

• •

a) Veolia Water UK only

17=

––

20=

––

• • • –– • –– •

––

––

––

––

––

––

––

• •

––

––

––

––

––

a) 3 pages in AR

––

––

––

––

––

––

––

––

a) Policy statement only

––

• • •

––

––

––

––

––

a

––

a) Available in large print, Braille, audio and digital

––

––

• • • • –– –– • •

a) Information on web pages but data is out of date

163

—

DEUTSCHE BOERSE

––

––

––

––

a) Information on web pages but not time specific

182

—

INVESTOR

• •

––

29=

––

––

• •

a) 3 years of CR reports, previously single issue

190

44

MAN GROUP

UK

1

• •

––

––

––

––

––

––

––

a) Pdf of 3 page excerpt from AR

238

—

JULIUS BAER

Sw

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

270

60

3I GROUP

UK

a

––

a

––

––

––

––

––

•

––

81=

––

––

•

––

a) Pages from AR are downloadable as separate pdf

305

69

AMVESCAP

UK

––

––

––

––

a

––

––

•

––

––

––

––

––

––

––

a) Policy statements and some details on community involvement

375

89

SCHRODERS

UK

3

––

––

––

•

––

––

• •

––

––

––

•

––

––

G

1a

a

––

––

•

––

––

––

––

b

––

––

––

––

––

a) Thyssenkrupp Steel has reported on sustainability for 1 year, in print and on the website (German only) b) Thyssenkrupp Ascenseurs, France is only participant

UK

3

a

a

––

•

––

––

––

––

––

––

––

• •

––

a) Last available report is ’04 as moving to web based reporting which will launch end ‘06

––

––

––

––

162

—

GBL

––

•

––

––

––

––

•

––

––

––

––

• • •

a) Merged with Boots July ’06. All this data is for Alliance Unichem

Food Producers 11

a) Prior to ’02 published environment reports only

ENVIRONNEMENT

SUPERMARKETS 92

• –– • –– • –– • • –– •

––

a

66

389

––

General Financial

TESCO

15

—

201

TRANSCO

Food & Drug Retailers 57

194

Gas, Water & Multi-utilities

Fixed Line Telecommunications 22

Forestry & Paper

––

––

•

––

b

• •

––

•

––

• • • •

––

• •

––

a

––

––

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

• •

m

––

––

––

• • • •

31=

•

––

• •

• –– • • • • • •

36=

––

AR = Annual Report

ma

––

• • • • • •

––

––

EHS = Environment, Health & Safety

a) Only Latin America produces written report b) Only environmental indicators verified a) Combined Environment and Social report in ’05, previously produced separately

––

––

––

––

General Industrial 169

—

THYSSENKRUPP

401

97

REXAM

a) Danone UK & Ireland is a member

m = BITC member

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

41

Euro 250 and FTSE 100

Sp

4

METRO

G

5

• • • •

—

149

—

153

35

MARKS & SPENCER

UK

5

154

36

GUS

UK

6

172

—

PPR

Fr

4a

248

KINGFISHER

53

UK

5

329

77

NEXT

UK

3a

372

88

BOOTS GROUP

UK

7

380

DSG INTERNATIONAL

91

UK

4

b

a

b

c

• • • • • • –– • –– –– –– • • –– • • • • –– –– • • ––

a

a

––

––

––

•

––

––

• •

––

––

––

––

––

––

––

––

––

20=

––

––

50=

––

––

––

––

––

––

31=

––

––

m

––

––

10=

––

––

m

––

• • • • •

• • –– • • • • • •

––

a) Metro Cash and Carry (subsidiary) only

—

SYNTHES

215

—

FRESENIUS

MMC NORILSK NICKEL

Ru

2a

• •

––

––

––

•

––

––

––

––

––

––

––

•

a) Titled Social Report but briefly covers sustainability and environment

199

—

NOVOLIPETSK

Ru

4a

a

a

––

•

––

––

––

––

––

––

––

––

•

––

a) Integrated with AR

UK

3

• •

––

•

––

•

––

––

––

––

––

––

• •

Den

––

––

––

––

a

––

––

––

––

––

––

––

––

––

––

a) Policies with brief information on environmental achievements and community involvement

––

•

––

• •

––

•

––

––

––

•

––

a) ’06 is first sustainability report, previous 3 years were single issue reports

a

––

––

FERROUS 340

a) Biannual reporting. Next full report due ‘07 b) Detailed pages in AR which are downloadable as separate pdf c) In French a) Summary and KPI update on website

Sw

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

G

a

a

––

––

b

––

––

––

c

––

––

––

•

––

––

MEDICAL CARE

SMITH & NEPHEW

66

•

UK

12

––

UK

6

G

6

• • • • –– •

––

––

a

––

• •

––

Boots Group became Alliance Boots in July 06. This data refers to Boots Group pre-merger

65

—

A P MOLLER-MAERSK

81

—

DEUTSCHE POST

G

4a

• •

158

—

TNT

N

2

161

39

BAA

N

17

2

––

• • • • •

175

—

AUTO ROUTES DU

Fr

3

• • –– –– –– • –– • • • • –– • • –– • –– • • –– • –– • • –– •

––

––

––

––

It

9

• •

––

•

––

•

––

––

•

––

––

––

• •

Sp

3

• •

––

•

––

•

––

• •

––

––

––

––

N

4a

• •

––

––

––

• • •

c

––

––

• •

a) CR reports since ’02, single issue since ‘98 b) Pakistan business is a signatory c) Philips Electronics UK is a member

N

6

––

––

• •

a) ING Bulgaria is a signatory

UK

• • –– • –– • • • –– • • • • • • • •

––

8a

––

b

b

––

––

––

––

––

––

––

•

––

––

––

––

––

a

a) 6 pages in AR

a) Information in AR b) Environmental and animal testing policies only c) Included in ‘06 index after this research period

m

––

•

17=

––

a) Excerpt sent to shareholders

––

––

a) Began environmental reporting in ’90 b) Integrated with AR, 13 pages (since ’02)

––

•

CORUS GROUP

Industrial Transportation

a

a) TNT UK is a member a) Individual airports produce printed reports

––

SUD DE LA FRANCE 177

—

AUTOSTRADE

179

—

ABERTIS

a

a) Integrated with AR but also available as standalone report

––

Leisure Goods 59

290

80

a) 2 reports in 3 years

Healthcare Equipment & Services 193

—

Industrial Metals (continued)

––

––

––

121

Euro 250 listing on the left FTSE 100 listing on the right

Pe r en form vir an o Pe nme ce ag r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

Pe r en form vir an o Pe nme ce ag r so form ntal ainst cia an t l ta ce arge ts rge ag No t s ains tes t

• • • • • •

BIT Cr an kin g Cli ma te Ind ex OF R

INDITEX

104

• –– • –– –– • • • • –– • –– • –– –– –– • –– –– –– –– –– • • –– • –– • • • –– • • –– • • • • –– –– –– –– • –– ––

UN GC

––

HENNES & MAURITZ

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

4

—

Co un try

Swe

95

BIT Cr an kin g Cli ma te Ind ex OF R

General Retailers

UN GC

Co un try

Euro 250 listing on the left FTSE 100 listing on the right

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Analysis

—

PHILIPS ELECTRONICS

b

a) Guide to report produced for employees

Household Goods 98

25

RECKITT BENCKISER

152

—

HENKEL

341

PERSIMMON

81

UK

4

––

––

––

––

––

––

––

––

––

• • • –– • • –– • •

––

•

––

––

––

• •

––

––

––

a

––

• –– • • • –– • • –– • • •

Life Insurance 18

—

ING

a

75

18

AVIVA

82

—

AEGON

N

3

91

23

PRUDENTIAL

UK

5

128

30

OLD MUTUAL

UK

5

• • • • • •

155

37

LEGAL & GENERAL

UK

6a

• •

––

––

––

181

—

CNP ASSURANCES

Fr

a

a

a

––

––

239

—

ALLEANZA

It

a

––

––

––

––

304

68

FRIENDS PROVIDENT

UK

5

––

•

––

•

m

––

Industrial Engineering 126

145

VOLVO

—

ATLAS COPCO

—

Swe 16a Swe

––

• • a

a

––

•

––

––

––

• •

––

––

––

–– ––

––

•

a) Integrated with AR but also available as standalone report

1

––

––

––

•

––

––

•

––

––

––

––

––

––

Fr

1

• •

––

––

––

––

––

––

––

––

––

––

––

•

Fr

3a

a

––

––

––

––

––

––

––

––

––

––

––

•

––

a) 3 years of environment reports only

G

3a

• •

––

––

––

––

––

•

––

––

––

––

––

––

a) Sustainability reports since ’03, prior to that environment reports only

—

SANDVIK

Swe

216

—

ALSTOM

235

—

VALLOUREC

249

—

MAN

180

5

b

• • • –– •

––

––

––

––

––

m

––

––

• •

c

––

––

––

––

––

• •

––

m

––

• • •

a) 2 years of environment reports prior to 4 years of CSR reports

––

––

––

––

•

––

––

––

––

––

a) 4 years of reporting integrated with AR

––

––

––

––

––

––

––

––

––

––

a) Alleanza is part of Generali Group. Some of its CR activities are included in Generali’s first report

––

––

• •

––

36=

––

––

• •

b

––

––

Industrial Metals 68

—

NORSK HYDRO

99

—

ARCELOR

KEY

42

Yes

a

See comments

Nor

7a

b

Fr

4

a

b

b

––

•

––

• • • •

––

•

––

• •

a) CSR reports since ’99, environment reports since ‘89 b) Integrated with AR

––

•

––

––

• • •

––

––

––

• •

a) Integrated with AR b) Sustainable Development section of AR available as standalone pdf

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

AR = Annual Report

EHS = Environment, Health & Safety

m = BITC member

a) 7 years of CSR reports and one environment report in ‘99 b) Business Unit level targets included in web report

a) Black economic empowerment information only b) Nedbank (South African subsidiary) only c) Old Mutual Kenya is only signatory

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

43

Euro 250 and FTSE 100

VIVENDI UNIVERSAL

45

REED ELSEVIER

147

33

BRITISH SKY

UK

5

• • • • •

––

––

––

––

•

––

––

•

––

a

––

––

––

a

• • • • • ––

––

––

a) ’99 was an environment report only

32

—

ALLIANZ

G

5

33

—

AXA

Fr

3

85

––

• • • • • •

a) Only environmental data is verified a) Only environmental data is verified

53

—

GENERALI

It

1

73

—

ZURICH FINANCIAL

Sw

a

G

6

a

a

––

•

––

F

5a

• •

––

––

––

Sw

8

––

•

––

It

2

––

––

––

––

––

––

––

––

––

• • • • –– • –– • • ––

BROADCASTING 167

—

WPP GROUP

183

—

MEDIASET

UK

3

• •

––

•

––

––

• •

––

m

––

• • •

It

––

––

––

––

––

––

––

––

––

––

––

––

• • • –– • –– • • –– • • • –– –– • • ––

24=

––

––

––

m

––

• • •

221

48

PEARSON

UK

3

––

•

––

•

––

222

—

LAGARDERE GROUPE

Fr

1

a

a

––

––

––

263

58

REUTERS

UK

5

––

––

––

•

a

282 348

UK

ITV

64

UK

YELL GROUP

83

3 3

• • • •

––

––

––

•

–– ––

––

a

––

––

––

––

76

• •

a) Only environmental data is verified

––

––

a) Integrated with AR, focused on social issues

42=

––

––

m

––

––

• • •

a) Summary in AR

––

—

•

––

• •

m

––

––

––

––

––

––

––

––

––

––

––

––

––

• •

––

m

––

––

––

––

a) 4 pages in AR

––

––

—

AGF

111

—

SWISS RE

138

—

RAS

204

—

SAMPO

Fin

4

327

75

ROYAL &

UK

6

• • • • –– • –– •

• • –– • • • •

––

•

––

––

––

a) SRI report and environment report

––

––

––

––

––

a) 2 years of standalone reports, before then it was integrated in AR

––

––

•

––

•

––

a) Only verified CO2 emissions

––

––

––

––

––

––

––

a

––

––

––

––

––

––

––

––

96=

––

––

––

––

•

––

a

a

SUN ALLIANCE

• • • • • • • • –– • • –– • • –– • • –– • • • • • • • –– • –– • –– • ––

24=

• • •

––

––

• • –– • • •

––

––

––

––

––

––

––

––

––

––

––

––

––

––

• • •

––

78=

––

40

10

ANGLO AMERICAN

UK

6

47

11

RIO TINTO

UK

10

56

14

BHP BILLITON

UK

11

120

29

XSTRATA

UK

4

277

62

KAZAKHYMS

UK

a

––

––

––

––

––

––

––

––

316

71

ANTOFAGASTA

UK

a

a

b

––

––

––

––

––

328

76

VEDANTA RESOURCES

UK

a

a

b

––

––

––

•

––

349

84

LONMIN

UK

5

• •

––

•

––

––

––

––

a

31= 39=

–– ––

• • • •

Oil & Gas Producers 1

1

BP

UK

12

• •

––

•

––

• • • •

m

a) Included in ‘06 after this research period.

2

2

ROYAL DUTCH SHELL

UK

9

• •

––

•

––

• • • •

m

• • • •

––

a) Company formed ‘05 so reporting cycle not yet reached

3

—

GAZPROM

Ru

a

––

––

––

––

––

––

––

––

––

––

––

––

a) One environment report in ’02, ’05 has 3 pages in AR

––

––

a) 3 years of reporting in AR b) Excerpt from AR is downloadable as pdf

5

—

TOTAL

Fr

5a

• •

––

•

––

b

• • •

m

––

––

• •

––

––

––

a) 2 years of reporting in AR b) Excerpt from AR is downloadable as pdf

a) Total and Elf merged in ’00 and have produced reports since. Both companies produced environmental reports before ‘00 b) Only certain indicators verified

––

• •

13

—

ENI

It

5

––

––

––

a) 18 pages in AR, separately downloadable

—

LUKOIL

Ru

1a

––

––

––

36

—

STATOIL

Nor

5

• • –– • • –– –– • –– –– • • • • –– –– • • • • • • • • • •

––

27

––

––

––

37

—

SURGUTNEFTEGAS

Ru

a

a

––

––

––

––

––

––

––

––

––

60

17

BG

UK

9

––

Sp

10a

• • • • • • •

––

REPSOL-YPF

• •

––

—

• • • •

––

70

––

––

––

123

—

OMV

Aus

4

––

––

––

• •

—

PETROLEOS (CEPSA)

Sp

3

• • • •

––

174

––

––

––

––

196

—

TATNEFT

Ru

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

214

—

NOVATEK

Ru

1

––

––

––

•

––

––

––

––

––

––

––

––

220

—

MOL MAGYA

Hun

4

379

90

CAIRN ENERGY

UK

6

• • • • • •

• • • •

Mobile Telecommunications ––

•

––

1

• • –– •

––

––

––

Nor

5

––

––

––

•

MOBILE TELESYSTEMS

Ru

––

––

––

––

TURKCELL

Tur

––

––

––

––

UK

6

TELIASONERA

Swe

—

TELENOR GROUP

188

—

207

—

10

5

VODAFONE

92

—

134

44

MUNICH RE

107

Mining

KEY

a

• • • • –– •

––

––

SERVICES

––

––

• • • • • • –– • –– • • –– –– –– –– –– • ––

––

Pe r en form vir an Pe onm ce ag e r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

––

––

Non-life Insurance

BIT Cr an kin g Cli ma te Ind ex OF R

––

Euro 250 listing on the left FTSE 100 listing on the right

UN GC

–– ––

Pe r en form vir an o Pe nme ce ag r so form ntal ainst t cia an l ta ce arge ts rge ag No ts ains tes t

–– 42=

BIT Cr an kin g Cli ma te Ind ex OF R

Fr

N/UK 5

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

—

108

Co un try

63

7a

UN GC

Media

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

Analysis

Yes

a

See comments

––

• • • –– –– • –– –– –– • • •

––

––

––

––

––

a

––

––

––

––

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

DIRECTIONS 06

AR = Annual Report

• • •

m

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

EHS = Environment, Health & Safety

a) Some information on community and education activities

m = BITC member

––

––

a

––

––

––

––

––

b

• • • –– •

––

––

––

––

––

• •

–– ––

• • •

a) Reporting cycle is biannual

––

––

a) 12 pages in AR

• • • • •

––

•

––

––

––

––

•

––

––

––

––

––

––

• •

––

––

81=

––

––

a) Some site and country specific reports give targets

a) ’96 to ’01 were environment reports only b) Included in ‘06 after this research period

––

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

45

Euro 250 and FTSE 100

SAIPEM

—

• •

––

––

––

•

––

––

––

––

• •

Personal Goods 44

—

L’OREAL

Fr

4

54

—

LVMH

Fr

5a

100

––

Fr

a

LUXOTTICA

It

BEIERSDORF

G

—

CHRISTIAN DIOR

192

—

202

—

136

Sw

RICHEMONT

—

233

—

SCA

236

—

SWATCH GROUP

241

—

ADIDAS-SALOMON

• •

––

––

––

b

––

•

––

––

b

––

––

•

––

• • • • • • a

c

––

––

––

––

• • •

––

––

––

d

––

––

––

––

––

• • • ––

––

––

a

a

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

3

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

––

a

––

––

––

––

––

––

––

––

––

––

––

Swe

8

• • •

• •

––

––

––

––

•

––

Sw

––

––

––

––

––

––

––

––

––

––

––

––

––

G

6

––

• • • •

––

• •

––

––

––

––

• •

a) Integrated with AR

7

GLAXOSMITHKLINE

UK

Sw

NOVARTIS

—

6

• • •

8

a

—

ROCHE

Sw

14

9

—

SANOFI-AVENTIS

Fr

2

20

7

ASTRAZENECA

UK

6

G

SCHERING

—

131

—

NOVO NORDISK

307

77

SHIRE

4

G

11

UK

3

b

––

––

•

• ––

a

•

• • ––

b

m

• •

• –– • • • –– • • • –– • • –– • –– –– • • • • • • –– –– –– –– –– • • • –– –– –– • –– • • • • • • –– –– –– –– • –– –– a

a

a

––

• • • • ––

––

• •

––

––

––

––

• •

––

––

––

––

––

39=

––

a

a

219

47

BRITISH LAND

UK

4

334

79

LIBERTY

UK

4

• • • • • • • • • • –– • –– • • • • • –– • –– • • ––

370

87

UK

3a

––

LAND SECURITIES

38

UK

a) Verification applies to EHS sections only b) GSK in Bulgaria, Pakistan, Romania and Ukraine are signatories a) Report is integrated with AR b) Separate GRI report is downloadable

—

SAP

211

—

T-ONLINE

369

86

SAGE GROUP

KEY

46

Yes

a

See comments

––

• • •

––

• •

––

230

—

ADECCO

Sw

2

• •

––

400

96

BRAMBLES

UK

3a

a

b

UK

4a

b

9a

––

––

• –– –– • –– • • • ––

––

•

––

––

––

––

Pe r en form vir an Pe onm ce a g e r so form ntal ainst cia an t l ta ce arge ts rge ag No ts ains tes t

BIT Cr an kin g Cli ma te Ind ex OF R

––

––

•

––

––

m

––

––

––

––

––

––

––

––

––

a) Report in AR for 3 years b) 6 pages in AR, separately downloadable as a pdf

––

––

––

––

––

––

a) Report in AR for 6 years and web report for 4 years b) 8 pages in AR

• • • • • •

––

––

––

––

––

a) 4 years of CR reports and 5 of environment

––

––

––

•

––

a) 5 years of sustainability reports and 8 of environment

––

––

––

––

––

––

• • • •

––

––

––

––

––

31=

––

––

• •

INDUSTRIES 419

100

CAPITA

––

• •

5

––

––

•

––

––

• •

Technology Hardware & Equipment 16

—

NOKIA

Fin

38

—

ERICSSON

Swe 13a

113

—

ALCATEL

Fr

4

150

—

STMICROELECTRONICS

Fr

5

244

—

ASML HOLDING

N

7

• • • • • • • • • • • –– –– –– • • • • –– • –– –– –– –– • • ––

UK

5

a

UK

5

• •

––

• • •

––

•

––

64=

––

• • •

a

a

––

––

––

––

––

––

––

––

––

––

117

––

––

13

BRITISH AMERICAN

•

b

•

––

• • •

a

a

––

––

––

G

––

––

––

––

––

UK

1a

a

a

––

•

203

—

ALTADIS

Sp

258

56

GALLAHER

UK

5

• •

––

•

––

––

––

––

––

78=

––

• • •

Gre

1

•

––

––

––

––

––

––

––

––

––

––

a

––

––

––

––

––

• • • • • • ––

––

•

• •

m

56=

––

a) 10 pages in AR downloadable as separate pdf

Travel & Leisure a) Applied best practice principles of OFR

198

—

OPAP

––

––

––

––

•

––

a) Reporting in AR for 4 years

•

––

––

a) Reported as Hilton plc, recently sold hotel division and is now Ladbrokes plc a) 1 year of environmental reporting

––

205

—

ACCOR

Fr

•

––

49

LADBROKES

UK

4a

––

––

––

• • • •

226

231

51

CARNIVAL

UK

a

––

a

––

––

––

––

•

––

––

––

––

––

––

––

264

59

PARTYGAMING

UK

––

––

––

––

––

––

––

––

––

––

––

––

––

283

65

COMPASS GROUP

UK

––

––

––

––

a

––

––

m

––

––

––

a) Policy and community information only

•

––

• • • • –– ––

––

––

• • •

––

––

––

a) Policy and community information only

• • •

––

78=

––

––

• •

a) Changing reporting structure to integrate with AR b) ’06 report is an interim report in downloadable pdfs

–– 75=

––

m

––

m

––

––

68=

––

• • • • • • • • •

––

m

––

––

––

––

––

––

––

––

––

––

––

––

––

•

––

––

a

––

––

DIRECTIONS 06

––

––

––

––

AR = Annual Report

––

––

––

• • •

CR/CSR = Corporate Responsibility/Corporate Social Responsibility

IMPERIAL TOBACCO

a) Available on request for those without web access b) 2 page summary sent to shareholders, directing them to website

a

––

––

27

a

a) Integrated with AR

326

––

––

––

––

––

INTERCONTINENTAL

UK

––

––

––

––

a

––

––

––

•

b

––

––

––

––

––

––

––

––

––

––

––

––

a) 4 pages in AR

––

•

––

b

•

––

––

70=

––

––

•

––

a) Combination of environment reports, AR content and web based information b) Environment report only

332

78

BRITISH AIRWAYS

UK

16a

396

95

ENTERPRISE INNS

UK

a

a

––

UK

5a

b

b

a) Last available report is ’04, next report will be a web report

––

a) 2 pages in AR

––

––

Merged with Deutsche Telekom in June ‘06

––

––

a) 2 pages in AR b) Sage UK is a member

EHS = Environment, Health & Safety

74

––

HOTELS

408

G

a) Report in AR for 3 years

a) Report is integrated with AR

––

Software & Computer Services 30

•

a

Tobacco

INTERNATIONAL HAMMERSON

––

a

a) Verification only applies to environment data

Real Estate 160

––

a

TOBACCO

8

122

––

UK

50

4

––

WOLSELEY

Pharmaceuticals & Biotechnology 6

––

––

41

a) Included in ‘06 after this research period a) 5 years of environment reports b) Sustainable development report integrated with AR c) Verification only applies to environment report d) LVMH Watch and Jewellery UK is a member

––

––

• • •

171

UN GC

––

Support Services

CR rep ort –y Pr ea int rs ed rep ort Fu ll r ep ort on Pr we int ed bs ite su mm We a r br yr ep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

––

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

10

Pe r en form vir an Pe onm ce ag e r so form ntal ainst cia an t l ta ce arge r ge aga ts No ts ins tes t

It

BIT Cr an kin g Cli ma te Ind ex OF R

237

UN GC

Oil Equipment & Services

CR rep ort –y Pr ea int rs ed rep o rt Fu ll r ep ort o Pr nw int eb ed sit su e mm We a ry br rep ep ort ort Su mm ary rep Ve ort rif on ica we tio n bs ite FT SE 4G oo d DJ SI

Euro 250 listing on the left FTSE 100 listing on the right

Co un try

Analysis

m = BITC member

99

WHITBREAD

KEY Aus = Austria B = Belgium Cz = Czech Republic Den = Denmark Fin= Finland Fr = France G = Germany Gre = Greece Hun = Hungary It = Italy Ire = Ireland N = Netherlands Nor = Norway Pol = Poland Por = Portugal Ru = Russia Sp = Spain Swe = Sweden Sw = Switzerland Tur = Turkey UK = United Kingdom

DIRECTIONS 06

47

About us

Salterbaxter is a corporate communications and corporate branding design consultancy.

A key area of our expertise is corporate reporting and we advise leading UK and European organisations on the development and design of their financial and CR reporting programmes.

Our offer to clients is a balance of a genuine understanding of the corporate governance and reporting agenda with a commitment to producing outstanding creative work. This has been recognised with our work receiving numerous awards including the ACCA award for innovation in sustainability reporting for our work with O2, and the DBA/Management Today Design Effectiveness Award for our work with EMI.

We are a signatory to the United Nations Global Compact. As part of the Directions series we produce monthly articles on a broad range of corporate communications issues. Please contact us if you would like to receive them or contribute to one.

Reporting/CR clients include: BBC

Land Securities

British Library

Misys

BSkyB

02

Business in the Community

Provident Financial

Daily Mail & General Trust

Reuters

Ernst & Young

Tetra Pak

GlaxoSmithKline

Unilever

Kelda Group

Vodafone

To talk more about reporting and embedding CR: Contact Nigel Salter or Lucie Harrild: [email protected] [email protected] Tel: +44 (0)20 7229 5720

48

DIRECTIONS 06

DIRECTIONS THE FULL REPORT 2006

TRENDS IN CR REPORTING 2005–06

We researched the use of sustainable plastics for the dust jacket of this report but did not find anything suitable. We believe alternatives must be made available. So, using advice from the British Plastics Federation, we are making a donation to an organisation developing such materials in order to support their commercialisation in the future. We’d like to hear about alternatives you might have come across, so please get in touch with any recommendations. This supplement is printed on Think4 Bright and is supplied by Howard Smith. It is an FSC (Forest Stewardship Council) certified material and is 100% recyclable. www.hspg.com

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IS CORPORATE RESPONSIBILITY IN YOUR COMPANY’S BLOOD?