directions 05 a review of best in show of this years crop of csr reports

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Directions 05Trends in CSR reporting 2004-2005

01 Introduction

02 This year I have been driving a lotSimon Beavis

04 Taking controlDoug Johnston

06 Addressing the crisis of trust in businessMatt Haddon

08 Reducing corporate hot air emissionsMartin Cutts

10 The OFR – compliance will not be enoughNigel Salter

12 Top 100 UK companies by sector

13 The judging panel

14 The sectors

28 And the winners are

30 Global 100

36 About us

01 DIRECTIONS 05

Yes most companies report – but is theireffort worth it and are they doing much morethan ticking boxes?

Some companies seem to think size matters,some go for completeness, some go for shortbut sweet. So what actually works?

To help us decide we have assembled a panelof experts who will be giving out rosettes,plaudits, pithy criticism and insight into thestate of reporting in all the FTSE 100companies. The competition starts on page 12 but for those who always turn to theconclusion first, the prizes are awarded onpage 28.

As usual our review of the year also includesthinking from other experts on some of themain issues.

The art of the Chief Executive’s statement is illuminated by writer Simon Beavis on page 02.

Doug Johnston of Ernst & Young argues thatcompanies need to get to grips with their non-financial controls on page 04 and MattHaddon of ERM looks into the crisis of trust in business on page 06.

Building on last year’s call in Directions to ‘Cut the fluff from CSR’, Martin Cutts, founder of the Plain Language Commission, gives aguide to the challenges of writing about CSR in good plain language on page 08.

And, of course, this will be the year of theOFR which may see a substantial shake up in the way the top companies approach CSRcommunications. See what your options are on page 10.

Finally, we move away from our shores andcast our eye around the world to see what the top 100 global companies have published.

So all in all another fun-filled, fact-filledDirections report. Enjoy!

The first 4 editions of Directions studiously avoided passingjudgement on the quality of CSR reporting in the top UK companies.This is because we felt the big issue, especially in the first couple of years, was how many companies were reporting, not how wellthey were reporting.

All but a few of the major UK companies now report in some way or other so this year we’re turning our attention to the issue of effectiveness.

Welcome to Directions 05, a review of the Best in Show of this year’s crop of CSR reports.

Directions 05Trends in CSR reporting2004-2005A report by salterbaxter

Nigel Salter, [email protected]

02____03 DIRECTIONS 502____03 DIRECTIONS 05

CEOs, it appears, do a lot of ‘driving’. It’s one of their favourite pastimes; next, thatis, to ‘delivering’. And some of them do both,often in the same sentence. Reassuringly,most of them are determined to do theseactivities ‘going forward’. Think of the chaos if it were otherwise.

It’s easy to do parodies. To be fair, the world of business – like any other – has its ownlanguage, both formal and informal. Corporatereports are formal documents issued to meet a specific requirement. ‘High performance’vocabulary gets thrown in there to helppersuade, often sceptical, readers that theexecutive team is doing all the right things to guarantee success.

The trouble is too many business leaders flockto the safety of common clichés and jargon todo this. As a result, official reports becomesamey and predictable. Far from being carriedby the argument, readers find themselvesasking: ‘haven’t I read this somewhere before?’

There is a way to stop this problem.

Let’s pose a simple question. If CEOs were towrite an annual review of their leisure timewould they choose the same language? Wouldit involve so much time at the steering wheelor on the tail gate of a truck?

It’s a much more important question than it sounds.

Companies are led by individuals, most of them highly valued for their particular skills.How would it be if more of them wrote asindividuals, using the same sorts of words theywould use to describe any other importantaspect of their lives – say, family, sport, Africa or Mozart?

Communication is one of the most importantaspects of leadership. You can’t lead a highlycomplex organisation – employing tens ofthousands of people and answerable to anarmy of shareholders – effectively if you can’tmake yourself quickly and clearly understood.

If you sift through the annual reports ofleading companies you’ll notice that most CEOs and Chairmen shy away from everydaylanguage when talking about their work. You’ll be struck too by those who are braveenough to break away from the grey uniformityof business speak, and how effective it is when they do.

Let’s not get this out of perspective. Businesscommunications are undoubtedly improving.Not so many years ago the documents foistedon the public were, almost without exception,utterly dreary. Few were really written for the

By Simon BeavisFounder of The Word Works

ANY SUCCESSFUL CEO NEEDS TO GET OUT AND ABOUT. BUT,TO JUDGE BY THE THINGS BRITAIN’S LEADING EXECUTIVESSAY IN THEIR CORPORATE REPORTS, MOST SEEM TO BESPENDING JUST TOO MUCH TIME IN THEIR CARS.

THIS YEAR I HAVE BEEN DRIVING A LOT

WOULD ANY OF THEMNORMALLY SAY: “GOINGFORWARD, I AM DETERMINEDTO PLAY MORE TENNIS?”

reader; many appeared to have an altogetherdifferent target in mind, namely the waste-paper bin.

The fads of reporting were all too clear to see. One year it was fashionable to talk ofsynergies; next year, everyone was busyleveraging things left, right and centre; thefollowing year, engagement was all the rageand everyone was absolutely passionate about it.

Used sparingly, these words are perfectlyacceptable. Overused in familiar stock phrases,they quickly become devalued.

This writing business is not easy and there are legal constraints on what can and can’t be said in corporate reports. But within theseconstraints, a simple truth still holds true – the most powerful writing uses simple, plainlanguage. Everyday language – used whereverpossible – is invariably best.

Yet in some parts of the business sphere, a misguided belief still persists that usingcomplicated, over-earnest and inward-lookinglanguage loaded with fashionable buzz-phrases lends seriousness.

In fact the opposite is true. More often thannot, jargon and clichés just make the reader –whether specialist or non-specialist – tired.They also invite mockery.

So, each reporting season, journalists have afield day lampooning the mangled language ofCEOs. It’s great sport – though not yet quite on a par with the annual Bad Sex in FictionAward (just one reminder that even the finestprofessional writers are also capable ofdreadful writing).

The introduction next year of the operatingand financial review (OFR) will also swell thevolume of words coming out of top companies.The idea of the OFR is to give shareholders thechance to assess the risks facing a businessand make a more informed judgement aboutits true prospects. Companies should see thisas an opportunity not a threat. The danger isthat some will respond by lurching back intojargon and legalistic language – more words,less clarity.

That would be a real pity – greater opennessmust be a good thing. It would also beirresponsible, a step sure to inspire greaterpublic cynicism in companies at a time whenthey can least afford it.

So perhaps an appropriate pledge for CEOs this year would be: “Going forward, we willdrive changes in our communications strategyto deliver greater openness in our stakeholderrelations.”

Or, put more simply: “In future we are goingto describe what we do more clearly.”

THEN A NEW FASHION TOOK HOLD. EXECUTIVESSTARTED TO PERK UP THEIROPERATIONAL REVIEWS,BORROWING WORDS FROM THE BUSINESS SCHOOLLEXICON INCLUDING MANYIMPORTED FROM THE US.

Here are three reasons why this should change:

1. Words have real value, but they are rarely valued.Since a huge number of the words we readeveryday are produced either by companies orby big public sector organisations, we deservebetter. If these organisations are going todominate the written spaces of modern societywith reports, advertisements and brochures,it’s important that they use language well. To do otherwise is arrogant.

2. The second is rather moredifficult to explain.Executives often seem to struggle most whentalking about people. This is where the languagetends to be most opaque, embarrassed andweak. Phrases like “we have a strong andclearly articulated strategy to focus on thehuman performance aspect of our business”will almost certainly leave the reader thinkingthe strategy is neither strong, nor clearlyarticulated and that the “human performanceaspect” isn’t all it’s cracked up to be either.

3. The third is specific to the age we live in.Companies are under pressure to disclose more information than ever before. CorporateResponsibility reporting is growing rapidly and,done effectively, demands plain talking basedon facts. Warmer words, with no hard evidence,won’t do. The question “Can that statementreally be justified?” needs to be askedconstantly. It’s the first question the reader will be asking.

04____05 DIRECTIONS 05

By Doug JohnstonHead of Ernst & Young’sCorporate ResponsibilityServices in the UK

THERE IS NO POINT IN ISSUING A CSR REPORT ORAN OFR SIMPLY TO BE SEEN TO BE DOING THE RIGHT THING. COMPANIES NEED TO UNDERSTAND THE BUSINESS CASE – AND THE BUSINESS BENEFITS – THAT FLOW FROM TAKING CONTROL OF THE NON-FINANCIAL INFORMATION THAT THEY REPORT TO THE MARKET.

A year ago, this publication called forcompanies to cut the fluff from their CSR reporting. It was a timely request.Stakeholders’ tolerance thresholds arelowering dramatically all the time. Takingcontrol of the ways in which they identify,gather and report key non-financialinformation should become a priority for the management of UK companies. Thosethat get it right will benefit from betterdecision-making and better performance.

Mounting pressureVarious factors are driving companies toreassess how and why they disclose their non-financial performance. Uppermost amongstthese is encroaching regulatory pressure. TheUK’s Operating and Financial Review (OFR)

BETTER CONTROLS

=BETTER

DECISIONS

+BETTER

PERFORMANCE

now obliges UK quoted companies to reporton a broad range of relevant non-financialbusiness issues. Crucially, directors have tosign off on the OFR. At the same time,companies have become increasingly alert tothe ways in which non-financial issues impacton their core business, affecting everythingfrom employee retention to building trust and safeguarding reputation.

To date, limited investment in the controlsneeded to provide confidence in non-financialinformation means that the quality of thisinformation has varied from reasonable to poor.Understandably, in the post-Enron era, theemphasis has instead been on building robustfinancial controls. This trend has been mostacute for SEC-registered companies, forced bys404 of the Sarbanes-Oxley Act to evaluatethe effectiveness of internal controls over all the financial information they report to the markets.

S404 compliance was a major undertaking,consuming resources and managementattention and it is clear that, as a result, anumber of financial control issues have comeout of the woodwork: poor standards ofdocumentation and evidence, underdevelopedreporting routines and systems and a lack of focus on traditional financial internal controls are just three noteworthy issues. If this is the case for financial controls thatstakeholders may previously have perceivedas robust, what lessons can be learned from the experience of these companies to ensure stakeholder confidence in non-financial controls?

Evidently, the wind is blowing in just onedirection – and it is picking up speed. Directorsof UK companies need to understand that thisis not a worthless box-ticking exercise. It is stillearly days and there is, as yet, no best practicetemplate to be adopted for the disclosure ofnon-financial information. That said, there arecertain fundamental issues to bear in mind. The OFR helps to provide a framework bystressing the need for ‘relevant’ information to be included. Accordingly, before puttingthese controls in place, companies need toidentify what information is relevant to theirstakeholders – and what is not – with theinvestment in controls being directed at theinformation that is deemed most relevant. As experience has already shown, readers ofCSR reports quickly become disengaged, if not cynical, when they are expected to wadethrough fluffy non-core information.

Arriving at an assessment of the relevance of this information is not a scientific process,but certain key indicators will prove helpful.Common sense judgements are called for: forexample, a relevant issue might well be thesubject of questions at the AGM; alternatively,it might have affected the share value/revenue/reputation of a peer organisation, or alreadybe occupying significant management time.

Accurate, balanced and relevant

The OFR talks about making statementsbalanced and comparable over time.Stakeholders want more than randomsnapshots – they want to know that asustainable controls environment is in place.

Three imperatives should provide thefoundation for this process – keep it accurate,keep it balanced and keep it relevant. Once management is confident that theorganisation’s controls environment deliverson all three counts, it can have confidence inthe information it is feeding to stakeholders.

Don’t replace fluff with puff.According to Directions 2004, 145 of the UK’s 250 largest companies produced a CSRreport last year. This is obviously positive.However, if, as many of these companiesprofess, CSR matters are integral to businessperformance, why are so many of thesecompanies prepared to disclose information inwhich they can surely have little confidence?

Companies need to start focusing on theircontrols. After all, there’s little pointreplacing fluff with puff.

Confident communicationThe importance of building this confidence –and the strategic edge it delivers – should notbe underestimated. Now, with the regulatoryspotlight falling on the disclosure of non-financial information, there are real lessons to be learned from the s404 experience. TheOFR is a fact of life. Directors of UK quotedcompanies have to report on non-financialbusiness issues and – if this process is todeliver sustainable value to their businesses,instead of undermining their reputation – theyneed to develop much greater confidence inthe clarity and integrity of this information.

Nor is it just the OFR’s arrival that addsurgency to this issue. There is a much widerappreciation that non-financial issuesunderpin sustainable business performanceand, therefore, an increased desire to haveappropriate performance management andreporting frameworks which allow progress in non-financial performance to be tracked.Other developments clearly signpost the need for companies to overhaul their internalcontrols – and their disclosure mindsets. Therecently-published Flint Review stressed theneed for companies’ Turnbull statements tocontain assurances that annual reviews ofcontrols environments have been performed,benchmarked against the key risks facing eachorganisation. The intention is to encouragecross-fertilisation between the OFR and theidentification, control and monitoring ofbusiness risks, as well as clear, confidentmarket communication.

PUT BLUNTLY, THE QUESTIONHAS TO BE: “WHY DISCLOSESOMETHING IF YOU’RE NOTSURE YOU CAN BELIEVE IN ITYOURSELF?”

ONCE THE KEY NON-FINANCIAL ISSUES HAVE BEEN IDENTIFIED, COMPANIESSHOULD START TO PUT INPLACE CONTROLS ENABLINGINFORMATION AROUND THESEISSUES TO BE IDENTIFIED,MONITORED AND CONTROLLEDON A REGULAR BASIS.


ADDRESSING THE CRISISOF TRUST IN BUSINESSTHE CRISIS OF TRUST IN BUSINESS IS IMPOSSIBLE TO IGNORE. ACROSS 20 COUNTRIES SURVEYED BYGLOBESCAN AT THE END OF 2003, NON-GOVERNMENTALORGANISATIONS (NGOS) WERE ONCE AGAIN THE MOSTTRUSTED AND GLOBAL COMPANIES THE LEAST. THE NAMES OF SOME BUSINESS PEOPLE ARE NOW INDELIBLYLINKED WITH CORPORATE WRONGDOING.

By Matt HaddonPartner in the internationalconsultancy ERM. He was a coremember of the World BusinessCouncil for SustainableDevelopment (WBCSD) teamwhich developed ‘Beyondreporting: Creating businessvalue and accountability’, ofwhich this article is an extract.

The full report can be found atwww.wbcsd.ch

Yet how can this be, comes the cry? Surely the sustainability/corporateresponsibility/environment/‘jolly good egg’reports that corporations have been dutifullyproducing were enough to convince scepticsthat their hearts were in the right places?

Clearly, the answer is no…

The World Business Council for SustainableDevelopment (WBCSD) recently reached a staging-point in a two-year project tounderstand how businesses can better frame, discharge – and report on – their‘accountabilities’. The title of its conclusionsprovides part of the answer: ‘BeyondReporting’.

Yet only recently have leading reportingorganisations moved from once a year ‘reportproduction’ to embedded non-financial‘reporting’.

The difference is subtle, yet crucial. While the‘report producer’ often had to skirt aroundsensitive topics (such as how does diversityreally affect a professional services firm?), the ‘reporter’ engages with different businessunits and functions to help them to identifymaterial issues for themselves. While the‘report producer’ used annual emails to gatherdata to tick the boxes of a checklist, the‘reporter’ taps into underlying businessinformation that their colleagues use tomanage material issues day-to-day. And while the ‘report producer’ found a verifier

to check the numbers before going to print,the ‘reporter’ develops a sophisticated view ofwhat’s in place to implement non-financialpolicies and uses external assurance exercisesthat provide confidence to the Board that theorganisation is walking its talk.

After working with more than 60 companiesand a series of professional commentatorsfrom AccountAbility to the OECD, the WBCSDproject found that businesses and the peoplewithin them are entirely comfortable with beingheld to account. What was equally clear wasthat the traditional view of what businessesshould be accountable for, and to whom, isfailing to equip corporations with the toolsthey need to survive and prosper in a highlyconnected stakeholder age.

These concerns are now reaching themainstream and new corporate governancerequirements explicitly ask for a forward-looking approach. For example, the UKgovernment’s proposals for Operating andFinancial Reviews call on companies to reporton how management of non-financial issuesmay impact the business going forward.

And here lies an additional challenge. To havesufficient confidence to provide this forward-looking view of what will really affect thesuccess of the business, companies need broad,robust reporting and assurance processes. A compliance-driven response is limited in itsability to identify issues that may destroy orcreate value.

Sadly, and despite the millions of dollarsspent, the answer is likely to be no.

The WBCSD project highlighted a number ofcases where companies are beginning tocreate value in their business.

Take Denmark-based Novozymes, whichbelieves that a broader view of accountabilityoffers the potential to learn fromstakeholders, not just communicate to them. To retain its licence to operate in thecontroversial world of industrial enzymes,Novozymes recognises the importance of

IN HINDSIGHT IT SEEMS CRAZY THAT SO MANYCOMPANIES APPEARED HAPPYTO SEE PRODUCTION OF ASTANDALONE CORPORATERESPONSIBILITY REPORTAS ‘ENOUGH’.

IN SHORT, NON-FINANCIALREPORTS WERE IN DANGER OFBEING PERCEIVED AS LARGELYPERIPHERAL AND MOSTBUSINESS PEOPLE (AND IFTHEY WERE HONEST, MANY SUSTAINABLE DEVELOPMENT(SD) AND CR PROFESSIONALS)KNEW THEY DID LITTLE TOHOLD THEM TO ACCOUNT.

WOULD SARBANES-OXLEYREALLY HELP A FOODMANUFACTURER UNDERSTANDTHAT THE FUTURE OF ITSBUSINESS WOULD BE DEFINEDBY OBESITY?

being open about technology and productdevelopment with society, politicians,authorities, NGOs, customers and investors.Increasingly it is focusing on engagementthrough stakeholder round-tables and has beenable to learn from the public policy debate on bio-ethics.

Or Australian bank Westpac, which has been rebuilding its reputation since suffering financial problems in the early1990s against a backdrop of unprecedentedconsumer pressure over branch closures, lack of transparency and bank charges. A new chairman provided the leadership todifferentiate the bank by emphasising theemployee/customer interface. And its corporateresponsibility team engaged the business todevise a straightforward approach throughdisarmingly simple and well communicatedinternal programmes such as (the customershould only have to) ‘Ask Once’ and ‘Do theRight Thing’.

SD or CR champions have a vital role to playin co-ordinating or catalysing change. Butthey need to approach each business functionwith a very open mind. Individual functions(e.g. ethics, diversity, community relations) areoften wrestling with problems that they donot see as ‘sustainability’, but these areprobably the sustainability issues that reallydo matter for the business.

So how can reporting organisations get morebusiness value from reporting, and at the sametime move more firmly to rebuild trust? Ofcourse, there is no silver bullet, no singleanswer that will light up the eyes of either theCEO or the NGOs. But there is a lot to aim at.

The WBCSD project identified five fundamentals for creating value fromaccountability and non-financial reporting:

• Understand what drives value in yourbusiness;

• Recognise that different people areaccountable for different things;

• Connect the functions that drive the value drivers;

• Leverage the effort that is going intostraightforward compliance; and

• Tell people what you think accountability means for you.

It boils down to one simple idea: let go of theCR and reporting agenda – and help others inyour organisation find their own solutions.

of the failure to explain insider jargon to readers, and an example of the fluff that Directions has been bemoaning in recent issues.

One says:

‘Demonstrating the many beneficial waysmobile telephony is being used in widersociety is a positive way we can demonstratethe social use of this technology.’

Prick this gassy bubble and perhaps it just means:

‘Mobile is being used in many sociallybeneficial ways, and we need to keepdemonstrating this.’


PRACTICAL STEPS TOWARDS PLAINER LANGUAGEIN CORPORATE REPORTS

REDUCING CORPORATE HOT AIR EMISSIONS

It’s my childhood’s fault. As a boy there usedto be milk churns awaiting collection next torural railway lines. So I’m already thinkinglactation, mastitis, woolliness and fluff whenI delve into the XYZ annual report:

• ‘One of the lowest rates of churn in theworld demonstrates the customer loyaltygenerated by our high-quality products.’

• ‘Maintaining churn at a low rate is a keycomponent of maximising the return we make on our investment in customeracquisition.’

And then in huge letters, So It Must Be A Good Thing:

• ‘9.7% Our rate of churn.’

Maybe I’m the only person reading companyreports who doesn’t know what a non-milkchurn is or who has to look up ‘dosimetry’ and ‘epidemiology’, but to me it’s typical

SOME CSR REPORTS AND OFRSARE EXEMPLARY BUT OTHERSARE SO FLATULENT THEYCOULD POWER A WIND FARM.

Worse still are the backslappings that pepperso many chairman’s messages: ‘Our corporateresponsibility programme has been overseenby our Corporate Responsibility Advisory TaskForce, under Simon Wallaby’s inspiring andpulsating leadership.’

By Martin Cutts Founder of Plain Language Commission

Neither the readers nor – probably – Mr Wallaby need such exaggerated praise. When he wins the office sweepstake, there’ll be no superlatives left.

She awarded a prize for cant to the Bank of America’s CEO, Kenneth D Lewis, forpronouncing, ‘The reason Bank of Americais in business is to help make communitiesstronger and to help people achieve theirdreams.’ Kellaway says this ‘offends againstsincerity, it is not truthful, and it is hideously fashionable’.

People think plain language is about usingshort words and short sentences, and indeedthese are part of the story. But even moreimportant is saying the right things andkeeping to the essentials. Readers haven’ttime for fluff. This means excising what JohnCleese called ‘statements of the bleedin’obvious’ like these:

• ‘Pre-pay customers pay in advance for their usage...’.

Now who’d ever have thought that? You mean pre-pay means paying in advance?Come on.

• ‘Business planning is an important processwithin the Group and is a key ingredient indelivering the long term objectives of thebusiness. It is central to the delivery of thecorporate objectives...’.

Now this really is extraordinary: a multi-billionpound group actually planning before it does things. This whole idea could catch on.The public must be informed immediately.

Even when readers have been told whatEBITDA and GAAP are, it’s a good idea notto befuddle them with stuff like this:

‘As EBITDA is not a measure of financialperformance under UK GAAP, it may not becomparable to similarly titled measures ofother companies because EBITDA is notuniformly defined.’

Which manages the rare feat of being adouble-because and a triple-negative sentence, a combination guaranteed to defeat most people. The paragraph goes on:

‘EBITDA should not be considered byinvestors as an alternative to group operating profit or loss or profit or loss onordinary activities before taxation as anindication of operating performance, or asan alternative to cash flow from operatingactivities as an indication of cash flows.’

statements’. And instead of ‘As a consequenceof declining revenues over the past three years,actions have been taken at both Cox and theDibble Group to reduce the operating costbase’, we can say ‘Declining revenues in thelast three years have led Cox and the DibbleGroup to reduce operating costs’. That’s morethan a third shorter.

Often it’s better to replace abstract nounswith verbs. For example ‘a flexible approach tothe resolution of risks’ means ‘a flexibleapproach to resolving risks’, while ‘in additionto the collection and redistribution of reports’means ‘as well as collecting and redistributingreports’. Chestnuts like ‘we are in receipt of’and ‘on a regular basis’ can be written simplyas ‘we receive’ and ‘regularly’ respectively.

Plain-language authors and editors use arather fluid set of guidelines because eachdocument is different. The guidelines include:

AS LUCY KELLAWAY HASPOINTED OUT IN THE FT,COMPANIES SPATTERBUZZWORDS LIKE ‘PASSION’EVERYWHERE – SHE COUNTED 379 PASSIONS ON GENERALELECTRIC’S WEBSITE.

We all welcome headings as resting placeswhere we can stop, regroup and skim. But theheadings in many reports leave you ignorantof what’s to come, like these:

• ‘Debtor recoverability’This sounds like they go hunting for missingdebtors and returning them to their gratefulfamilies like lost dogs. The text that followsis scarcely more enlightening: ‘... we maintainprovisions for doubtful debts for estimatedlosses that result from the inability of aportion of our customers to make required payments.’ Why can’t we start this withsome normal English like, ‘Some of ourcustomers don’t pay up, so...’.

• ‘Customer performance’Is this about how customers are performing?No, you silly boy, that’s what the words saybut not what they mean – it’s about how the company is performing towards itscustomers. It’s just a new wrapper for thatold 20th-century idea, ‘customer service’.

• ‘Revenue recognition’Maybe this means being able to recognise acheque among the junk mail, but somehow I doubt it.

• ‘Mast site restoration provisions’Probably this means ‘Restoring mast sites totheir original condition’. To make headingsmeaningful, they often need unpacking and lengthening.

Reports also need more active-voice verbs.So instead of ‘This commentary should be read in conjunction with those financialstatements’, we can say ‘Please read this commentary alongside the financial

HELP ME. IF THIS IS ENGLISH, I NEED A DOCTOR TO EXPLAINWHY I’M SUDDENLY ILLITERATE.

• Keep sentences short and simple.• Prefer verbs to abstract nouns,

because they are easier and livelierto read.

• Where possible, prefer active to passive verbs.

• Avoid pomposity, verbosity, archaisms and official jargon.

• Organise the contents in a logical framework.

• Make the type highly legible and the layout attractive.

At Plain Language Commission we specialise in converting the sow’s ear ofcorporate prose into the silk purse of plainlanguage through editing and training.Many of the documents we edit display theClear English Standard to show they’vepassed our checks of clarity, structure and layout. More than 10,500 documentscarry the logo, and it’s good that more and more company reports are seeking it.


COMPLIANCE WILL NOT BE ENOUGHWHY LISTED COMPANIES THAT JUST TICK THE BOXES WHEN RESPONDINGTO THE NEW OFR REGULATIONS WILL NOT GET THE BENEFITS THAT THENEW APPROACH HAS TO OFFER.

Many companies are already groaning aboutthe amount of work required to comply withthe new OFR guidelines.

But, unfortunately for those companies,simply aiming for compliance is to miss thepoint of the OFR. To get any real benefit fromthe changes they are going to need to gobeyond mere compliance.

The government has adopted a flexibleframework (in consultation with the businesssector) in order to avoid companies simplyticking the boxes and producing boilerplatecopy. The objective is to provide betterinformation, not more information. So thetrade off for the flexibility that has been builtinto the regulations is that the onus is verymuch on businesses to view the OFR as an opportunity for better disclosure rather than an excuse for publishing moreturgid guff.

And there should also be an element ofenlightened self-interest in all of this. To make the new format work for their

businesses and their investors, companiesare going to have to rethink their approach toreporting in lots of ways.

Here are some of the options to consider:

A) Where does the OFR go?This is probably the most important questionas the answer probably then informs all yourother options. To over-simplify a bit, if youdecide that the OFR is a part of the FinanceDirector’s report or should sit alongside theRemuneration report in the ‘back’ (ie purelystatutory) section of the annual report thenyou’re probably just going to be ticking theboxes. This is what happened to the USequivalent ‘Management Discussion andAnalysis’ and rather than being enlightening it became a bit like reading the small print in a sales contract.

If, on the other hand, you see the OFR assitting in the ‘front’ section of the report andbeing owned by the Chief Executive then youhave more of a challenge and more choice.You could simply stick a box ticking OFR at

the end of the standard review section andnot change much else – obviously not whatwe’d advise. You could roll the Chief Executive’sreview, the Financial review and the CSRcontent all together under a new banner of anOFR. Or you could completely rethink thereport and start from first principles aboutwhat the OFR is aiming to achieve. This mightlead to a new structure altogether and mightactually make reporting a bit easier in future –and this is what the forward thinkingcompanies will be doing.

B) Illuminate or obfuscate?The type of information being asked for in theOFR is, at first sight, quite technical and couldeasily, if left to just the accountants andlawyers, become unreadable.

By Nigel SalterDirector, salterbaxter

BUT THE CHALLENGE IS NOT JUST WHAT STRUCTUREYOU CHOOSE. IT’S HOW YOUGO ABOUT PUTTING THEINFORMATION ACROSS…

This is where we think the companies that arewilling to go the extra mile will gain the most.Good writing will make all the difference.

Take the following example of where we cansee problems (and therefore opportunities).

Describing the company strategy: This istougher than many might imagine and is anintegral part of the new OFR. Having a companystrategy is one thing but having one that makessense to the outside world and that you’recomfortable publishing in the annual report isquite another. Contrast these two examples…

A few years ago, a utility company describedits strategy like this (unnamed for obviousreasons)… ‘Through its unique combination ofskill and experience, Xco provides a range ofinfrastructure support services to the utility,transport and public sector markets. Xcoapplies its expertise to infrastructures rangingfrom managing PFIs to building new hospitals,managing public housing stock to pipelinenetworks.’

… hello?!

Reuters (admittedly a salterbaxter client)describes its strategy in its latest annualreport like this:

‘Our strategy is straightforward

Fix itWe are two-thirds of the way through the Fast Forward programme which is aimed attransforming our core business.

Strengthen itWe have to keep ahead of the competition byconstantly improving our customer offering.We are developing our newer businesses andpositioning to exploit rapid growth inelectronic trading.

Grow itOur relentless focus on the fundamentalsmeans that we can now also begin to lookahead: where will our future growth comefrom? We are identifying and investing inopportunities in new areas and building on our single biggest asset – our strong brand.’

Hallelujah!

The challenge will be the same for sectionssuch as the nature of the business and its objectives, business risks and futureprospects – all likely areas for obfuscationand corporate fog.

C) ‘Does the OFR mean that we can stop publishing a separate CSR report?’The answer should be no for all thosecompanies wanting to take disclosure seriously.

It may mean that the CSR report can beshortened or that more information can move onto the web, reducing the need for the lengthy printed report but the CSRinformation required in the OFR will almostcertainly be different in substance and tonefrom that published in the CSR report.

Some companies will undoubtedly use theOFR as a get-out. But not those that see theircommunications as more than just aregulatory burden.

Of course, all of these points are put forwardin the hope that listed companies will see the potential of the OFR and will approach itpositively. There is, however, a real risk thatthe box ticking approach will prevail becauseeven this could involve a lot of hard work. But companies will surely want to make thehard work worthwhile.

Compliance will be enough from a legalperspective. But is that really enough foryour company’s shareholders andstakeholders?

THERE ARE ALREADY SOMEEXAMPLES OF ENTIRELY COMPLIANT BUT ENTIRELYDULL OFRS.

WE WOULD RECOMMEND YOU HAVE THE OFR WRITTENBY AN EXPERT IN WRITINGRATHER THAN AN EXPERT IN YOUR BUSINESS.


So this year Directions is baring its teeth.

A key to our approach in the first 4 editions of Directions was to tryto simply record what the largest companies were publishing interms of CSR communications – no judgement and no commentary.

Things have moved quickly. In 2000 just under 50% of the top 250UK companies could be classified as ‘reporters’. Last year therewere only 44 companies without any substantial CSR disclosureand only 17 of the FTSE 100 could be described as non-reporters.

So it seemed to us that the issue is no longer how many companiesreport. We think the focus should now be on how good and howworthwhile the reporting of the top companies is.

So we’ve decided to assess the effectiveness of CSR reporting inthe UK. And in order to do this we’ve put together a crack panel ofexperts who are willing to offer praise when praise is deserved butalso happy to tell it straight when it appears that a company reallyis either wasting its time or publishing fluff.

We set a couple of ground rules but otherwise we felt it wasimportant that each individual should be able to express his or herown views in the way that they saw fit. So we are not pretendingthat this is a scientific, quantitative benchmarking exercise. It is asector by sector review by experts with insight and the ability tospot what’s good and what’s not.

The rules

Top 100 UK companies by sector

1. The assessements should be based on information on companywebsites or in public reports available up to and including 19 August 2005.

2. The reviewers are encouraged to make full use of irony and humour.

3. The reviewer’s decision is final (but you’re more than welcometo contact us if you feel your company has been treated harshly).

4. Size isn’t everything.

5. Don’t take it too seriously.

So please read on to see which companies win the woodenspoons, which receive special judges’ commendations and which are best in show…

Matt Haddon Partner, ERM Matt is a Partner in international consultancyERM. He works with a number of blue chipcorporate clients to develop cutting edgenon-financial reporting and assuranceprogrammes, and was a core team member of the World Business Council for SustainableDevelopment (WBCSD) Accountability andReporting working group.

Please note the panellists’ views are their own personal views andnot necessarily those of their organisations. The SRI analysts’views are not recommendations or investment advice. We’d alsolike to apologise to any of our clients who don’t win! We hope this proves that the judges are entirely independent.

Emily Osband Director, CR FuturesEmily is a corporate responsibilitycommunications consultant. She has tenyears experience in this field and recently set up CR Futures – a new forward thinkingCR consultancy. She specialises in writing CR reports and other CR communications such as intranet sites, brochures and annualreports. Emily also advises companies on CR policy and strategy.

Peter Mason Editor and co-founder ofEthical PerformanceA journalist for more than 20 years, Peterhas written on various subjects for a number of national newspapers and magazines, and has been a staff member on the foreign desk of The Guardian. He is also the author of five books.

Richard Aldwinckle CR ConsultantRichard is a London-based corporateresponsibility consultant specialising incommunications, stakeholder dialogue, socialinvestment, and development issues. He hasworked with many leading European, US andJapanese companies on CR strategies andprogrammes. He also writes speeches andarticles on CR.

Nigel Salter Director, salterbaxterNigel is a communications consultant andmanaging director of salterbaxter. He hasbeen working in the corporate reporting field for 12 years, advising major UK andEuropean companies on financial and CSRreporting and branding.

The judging panel

Douglas Johnston Director, Ernst & Young LLPDoug leads Ernst & Young’s CorporateResponsibility Services team in the UK. He has represented Ernst & Young in leadingseveral discussion groups on the future ofnon-financial reporting. Doug directs non-financial reporting and assurance projects for Ernst & Young – working with some of the world’s leading non-financial reporters.

Simon Abrams Senior Analyst, Jupiter SRI and Governance teamSimon is responsible for the strategic analysis of companies’ corporateresponsibility performance. Prior to joiningJupiter, Simon was responsible for managingthe Business in the Environment Index ofCorporate Environmental Engagement. Simon is a judge on the ACCA awards forSustainability Reporting.

Melissa Gamble SRI Research Analyst, Morley Fund ManagementMelissa is a Senior Analyst on the SociallyResponsible Investment (SRI) Team at Morley,the fund management arm of the Aviva Group.Her role is to cut through the ‘greenwash’ and find stocks which are set to outperformby identifying social, environmental andgovernance issues that have an impact on a company’s profitability but are generallyunder-analysed or mispriced by the market.

Roger Cowe Director, ContextRoger is a director of the corporateresponsibility consultancy Context, which he joined after a career in journalism whichincluded 12 years on the business staff of The Guardian. From the late 1990s Rogerspecialised in corporate responsibility,contributing to publications including theFinancial Times and The Observer. He alsowrote reports for organisations ranging from the Association of British Insurers toForum for the Future.


AEROSPACE & DEFENCE:

BAE SystemsRolls-RoyceSmiths Group

PANELLIST:Emily Osband

In this sector BAE Systems stands out sinceit’s the only company that has a full CR report.Smiths Group and Rolls-Royce touch on CRissues in their annual reports/websites, buttheir formal reports only cover environment,health and safety issues. Rolls-Royce also hasa community report. I was surprised to seethat Rolls-Royce came 10th in the Business inthe Community CR Index despite its lack ofpublic disclosure on CR issues.

CR is obviously a tricky subject for defencecompanies. A comment at the beginning ofBAE’s report acknowledges the controversialnature of their products: ‘No matter hownecessary, the manufacture and sale ofequipment that is designed to kill inevitablyevokes strong feelings’. This, combined withthe inclusion of some quotes that are criticalof BAE, gives the impression that the companyis open and listens to its stakeholders. Thereport also devotes two pages to an interestingdebate between BAE and the British AmericanSecurity Information Council on whether thedefence industry really benefits the economy.

One of the most important issues for thesector is business ethics, in particular briberyand corruption. Rolls-Royce says nothingabout this. Smiths publish their Code ofBusiness Ethics but give no further details.

In contrast, BAE Systems has two pages onits ethics programme and includes data oncalls to the ethics hotline. There is a frankadmission that the number of calls theyreceived is low for a company their size andthat they need to address this.

BAE Systems’ CR report is clear and concise – a good length at 30 pages. It seems to coverthe key issues and includes data. My maincriticism is that it lacks challenging targets.

All three companies report comprehensivelyon environment, health and safety. I wasimpressed to see that all the companies haveISO 14001 certification at nearly all their majormanufacturing sites. Smiths Group and Rolls-Royce have quantitative targets – somethingabsent from the BAE Systems report.However, I was disappointed to see very littleabout the efficiency and design of aircraftengines – a pressing issue for the sector giventhe increase in air travel and its impact onclimate change.

The sectors Aerospace & defence page 14

Banks page 15

Beverages page 16

Chemicals page 17

Construction & building materials page 17

Electricity page 18

Food & drug retailers page 18

Food producers & processors page 19

General retailers page 19

Health, pharmaceuticals & biotechnologypage 20

Leisure & hotels page 20

Life assurance & insurance page 21

Overall winner

Worthy of note

KEY:

Media & entertainment page 21

Mining page 22

Oil & gas page 23

Personal care & household products page 23

Real estate page 24

Software & computer services page 24

Speciality & other finance page 25

Support services page 25

Telecommunication services page 26

Tobacco page 26

Transport page 27

Utilities page 27

FTSE 100 list taken from the Financial Times, Friday 1 July 2005

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and the winner is...BAE SYSTEMS

BANKS:

Alliance & LeicesterBarclaysHBOSHSBCLloyds TSBNorthern RockRoyal Bank of ScotlandStandard Chartered

PANELLIST:Richard Aldwinckle

The banking sector covers a very broadspectrum of institutions from the regionalNorthern Rock to the global HSBC and therange and quality of their CR reporting isequally diverse, from Northern Rock’sextremely basic on-line, design-free offering,to the 66 pages from RBS. As ever, size is noguarantee of quality. It seems the larger thereport, the more densely packed it is, notnecessarily with more data but more verbiage,especially of the “we need to build long termrelationships based on mutual knowledge and trust” variety.

The banking sector has got more issues thanyou can shake a stick at – off-shoring, financialexclusion, consumer debt, ethical investment,pensions mis-selling, responsible lending,money-laundering, bribery and corruption, to name just a few.

HSBC does a good job of setting out what are the key issues for each of its divisions up front. Some reports tackle them bystakeholder; others mention them almost inpassing if at all. Most explain what the bankshave put in place to address issues, ratherthan how well they are tackling them, orwhere there have been breaches. As well aslack of detail, there is often lack of context.For example, Barclays baldly states it is stayingin Zimbabwe for the sake of its employeesand customers, but doesn’t attempt to putthis into the context of its experience inSouth Africa, who it consulted on this or how it came to make this decision.

On human rights, HSBC merely states itoperates in countries accused of breachinghuman rights, that it has worked with

Transparency International to develop groupwide policy on this and that it expects thehighest standards of itself and its suppliers.Again, a bit more context wouldn’t have goneamiss. With HSBC and RBS both investing inChinese banks, it will be interesting to see howhuman rights, transparency, bribery andcorruption will be tackled in next year’s reports.Several reports read more like corporatebrochures; lists of highlights refer to awardswon, league tables entered and even, in thecase of Alliance and Leicester, the number of product “best buy” mentions in the press. No modesty, false or otherwise, in this sector!Most reports seem aimed at the committedCR ‘wonk’, except for Lloyds TSB, which hasproduced a colourful report that is clearlyaimed at a more general audience. A series of simply written stories and paragraphsmake for easy reading but a rather busydesign distracts rather than leads the eye.

HSBC’s and RBS’s reports are both terriblytext heavy, although with a crisp writing style,warm tone of voice and generous spacingbetween sentences, HSBC just about holdsyour attention. RBS’s report, on the otherhand, has such dense text and such a smalltypeface that you have to be pretty committedto stick with it to the end.

My pick of the crop is Standard Chartered.After the now obligatory letters from theChairman and CEO, it gets straight into adescription of the business and then a pieceon stakeholder dialogue. In the brisk andefficient style that it uses throughout thereport, it says how stakeholders are engaged,what they said, what their response is andhow stakeholder engagement will be improvedin future. This written clarity is matched by asimple, predominantly two-colour design thathelps break up the copy into manageablechunks without being too fussy. Each sectioncontains well-signposted topics, withsummaries of highlights and future actions inboxes alongside. Simple graphics make it easyfor the reader who wants to take in a subjectat a glance; sensible amounts of text providethe detail for the more serious reader. Anexcellent way of dealing with the differingneeds of different audiences and varyinglevels of interest.

and the winner is...STANDARD CHARTERED

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BEVERAGES:

Allied DomecqDiageoSAB MillerScottish & Newcastle

PANELLIST:Matt Haddon

All four of the beverages companies in thisreview recognise that ‘responsible drinking’ is the most important issue facing the sector.All acknowledge they have an active role to play in managing it – and to a greater orlesser extent their reporting reflects this.

Allied Domecq leads the pack in producing areport that reflects the reality of the business,not just the aspirations of the CR department.It demonstrates that accountability for keynon-financial issues is embedded across thebusiness and acknowledges that the companydoesn’t yet have all the answers.

SAB Miller is not far behind and showcaseswhat CR really means for one of itsoperations. Diageo shows courage inrecognising the boundaries of its influenceand focusing on the material issues thebusiness can affect, measuring progressthrough innovations such as marketers’performance assessments. S&N acknowledgesthe need for CR to be owned by everyone,although we don’t get to see much evidence.

Allied Domecq and SAB Miller also do a goodjob of identifying that CR issues are crucial tothe management of business risk. For example,SAB highlights the link between waterconsumption and business costs and its effortsto reduce risk by working with local suppliers. And both SAB Miller and Diageo shine in theiruse of benchmarking to give context for theirown achievements, helping give the reader asense of whether their performance is goodin the bigger scheme of things.

The main challenge that all these companiesstruggle with lies in explaining why theyreport in the first place and, with theexception of Diageo, who they are reportingto. What business value do they get from thisannual rigmarole?

Or is it all about increasing transparency andbuilding trust? If this is the case then thecommunity sections of most reports could domore to really explain how they are tacklingalcohol related challenges there.

Another gap across the board is demonstratinghow the reported issues link to those identifiedby the company’s own risk managementprocesses, to give us confidence that thereare effective processes in place to managethe next issue coming round the corner.

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and the winner is...ALLIED DOMECQ

See also special award on page 29.

CONSTRUCTION &BUILDING MATERIALS:

BPBHansonWolseley

PANELLIST:Peter Mason

CHEMICALS:

BOCICIJohnson Matthey

PANELLIST:Melissa Gamble

The chemicals sector provides a range ofsolutions and challenges for sustainabilitywith some products providing environmentalbenefits, and others creating problems. The growth of the hydrogen market is beingdriven by environmental legislation to reducesulphur emissions from oil refineries andpetrol. Johnson Matthey is a key beneficiaryof automotive emissions regulations andmany of their products have positive socialand environmental benefits. They make strongcommitments in their reporting to continueto invest in R&D to develop new productssuch as fuel cells.

Generally speaking, chemicals companies areheavily regulated by safety legislation andhave been good at reporting their impactsaccordingly. In Europe, the introduction of theREACH proposal, aimed at investigating thealleged link between chemicals and health,represents a substantial overhaul of EUChemicals regulation. Its basis is to shiftresponsibility of higher safety testing anddata provisioning standards onto the industry.It would therefore be good to see CR reportingof hazardous substances data broken down to specific product areas to give a clearer ideaof each company’s exposure to safety risksand other liabilities that may be associatedwith the introduction of REACH. At presentcompanies only provide aggregated hazardouswaste information, except for ICI who providethe most detailed disclosure in this area.

This year, in particular, chemicals companieswere affected by high input costs as the oilprice rose to all time highs and on top ofthat, emissions trading and the rising cost ofcarbon affected energy prices. This had thebiggest impact on high energy users such asBOC, and provided greater incentives tocompanies across the sector to improve theirenergy efficiency. BOC still provides little in theway of quantitative data and historical recordson their energy performance. Improved datain this area would assist in tracking efficiencyimprovements. Johnson Matthey’s energyand water use seems to be increasing.

It’s great to see Johnson Matthey and BOC including CSR information as part oftheir annual report and accounts. Thisdemonstrates joined up thinking on reportingto investors on CSR and financial matters,thereby bringing these issues into themainstream. Little reference is made toproduct safety litigation by BOC in their report,despite being subject to injury claims based onallegations that manganese in welding fumescauses Parkinson’s disease. If this claim isproven it would have a significant financialand reputational impact on the company andmore could be done to reassure stakeholdersabout this issue.

In general, FTSE 100 companies in theconstruction sector have had some catchingup to do when it comes to sustainabilityreporting – and though they at least now givecorporate responsibility due prominence ontheir websites, you’d be hard pressed to saythey’ve done anything more than move up tothe back of the chasing pack.

Unsurprisingly, given the nature of theirbusiness, health, safety and environmenttopics are still the main focus of reportingefforts. But even in those areas – which lend themselves quite easily to statisticalquantification – there is a disappointing lackof hard data.

In the more tricky areas of community andsocial impact there is even less to get the teethinto. This is compounded by a general lack ofspecific, measurable targets for improvement.Those targets that are set tend to be put inunhelpfully vague terms, such as BPB’sobjective to ‘realise the potential of our people’.Rarely is any time span connected with suchpledges, making them even looser and, frankly,hardly worth the paper they are written on.

There is also a worrying reliance on blandmotherhood-and-apple pie statementsdelivered with no back up. Hanson says, forinstance, that it has ‘a fair and competitiveremuneration and benefits policy everywherewe operate’, yet provides no tangible evidence– such as its rates of pay and how theycompare to the rest of the sector – to back up the assertion.

Sustainable procurement, which could be oneof the sector’s most significant future inputson corporate responsibility, merits hardly aword anywhere.

On the plus side, all three companies makesure their reporting on corporate responsibilityis nothing more than a couple of clicks awayfrom their home page – and what they dopresent is well written, brief and accessible.Not cutting edge by any stretch of theimagination, but there is at least a sense offorward movement, with Hanson making thebest fist of things.

and the winner is...ICI

Most comprehensive coverage of CSR issues in the chemicals sector – excellent quantitative data and targets for improvement in place.

and the winner is...HANSON

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FOOD & DRUG RETAILERS:

Morrison SupermarketsSainsbury’sTesco


Morrisons may now be established as one ofthe biggest players in the supermarket sector,but it’s clearly still the new kid on the blockwhen it comes to corporate responsibilityreporting.

By comparison with the fulsome efforts ofTesco and Sainsbury’s, Morrisons’ latest three-page web offering is thin in the extreme,although it does lay out how the group aimsto tackle CSR in its new era as owner of

Safeway. Like its rivals, its reporting gives dueattention to the company’s role in fightingobesity, but most of the action in other spheresis promised for the future rather thanchronicled in the present. Morrisons haspledged to produce more detail on the web in the near future, but for now its reportinghas failed to take any significant shape.

Sainsbury’s, on the other hand, could almostbe accused of going too far. Its 129 pagereport is definitely on the long side, butcontains impressive amounts of performancedata and has all the bases covered. Tesco’sreporting is, if anything, even morecomprehensive in terms of data, and comeswith a self-contained section on KPIs that isespecially useful for CSR anoraks. It also makesgood use of case studies, which are always anengaging way to get the message across.

If Morrisons delivers on its promise to scale-upits efforts, then the sector should soon havea good story to tell on the reporting front –though none of the three appear to havetheir data verified at present, which is anincreasingly untenable position these days.

ELECTRICITY:

International PowerScottish and Southern EnergyScottish Power

PANELLIST:Doug Johnston

All of these companies provide informationon their non-financial activities – ScottishPower and Scottish and Southern producestand-alone reports and International Powerprovide information on the web and as partof the annual report and accounts. This is asector that has a long history of reportingand there are some really good sections inthese reports:

• Scottish Power’s CEO statement which cutsout a lot of the ‘fluff’ often seen in theseintroductions providing an honest overviewof both successes and challenges.

• Scottish and Southern’s coverage of the ‘energy challenge’ and particularly thechallenges of operating coal-fired powerstations.

• Scottish Power and Scottish andSouthern’s clear presentation of how theyhave progressed against targets – includingwhere these have not been met.

Scottish Power and International Power’sreports are broad in coverage – addressingissues such as how they treat their peopleand how they deal with their suppliers.Scottish and Southern’s primarily deals with

environmental sustainability aspects ofbusiness performance, though provides someuseful insights on customer issues such asfuel poverty and energy efficiency.

My favourite of these reports is the ScottishPower report – it basically told me exactlywhat I wanted to hear. Each section told mewhat is important to them and why, theirapproach to managing the issues and howthey had progressed against what they hadplanned to do. This is set within the context ofsome usefully constructed general overviewsections. I was particularly pleased to see asection on the reporting process whichoutlines how they have gone about improvingthe quality of the information they disclose –this illustrates to me that they believe thatit’s not just about getting the information outthere but making sure what gets out there isdirected at the right stakeholders and is ofsufficient quality for them to form appropriateconclusions about performance.

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and the winner is...SCOTTISH POWER

and the winner is...TESCO

GENERAL RETAILERS:

Boots GroupDixonsGUSKingfisherMarks & SpencerNext

PANELLIST:Roger Cowe

GUS is a puzzle. The group which owns Argos,Homebase and the credit information companyExperian initially appears to be antagonisticto CR. Chief executive John Pearce describes itas “a piece of jargon that is not always veryhelpful”.

Curiously, the body of the report is much betterthan most in this sector. It includes some dataon subjects such as energy and emissions,supplier audits, health and safety.

On the other hand, Boots and Kingfisherdisappoint. Both seem to have gonebackwards in the last couple of years. Bootsclaims that the Dow Jones SustainabilityIndex demonstrates that it is ‘clearlypositioned among the best in our industry’.But it offers no evidence to back that up.

Kingfisher, the owner of B&Q and similar chainsaround the world, used to have an innovativeapproach, embodied in the 2002 report:“How Green is my Kitchen?”. Sadly, the group appears to be stuck there. There was a 2003 update but now there is just a policydocument.

Next may not have given up reporting, but its latest version is for 2003 – and that was a muted attempt. The data shows a 23%increase in carbon dioxide emissions butthere is no explanation.

Still, that’s more than Dixons, which doesn’tactually have a report. There is someinformation in the CR section of its website.But it manages not to mention that it wasdeleted from the DJSI Stoxx European index last year. And it says nothing in aTrading Standards section about brushes with regulators.

Reassuringly, Marks & Spencer is the clearleader in this sector, despite its commercialtroubles over the past few years. It provides a wide-ranging CR website and a report as apdf or hard copy. The report adopts quite adifferent approach to the website, which isunhelpful. But each section consists of a clearpresentation of last year’s targets, this year’sprogress and new targets. The presentation isa bit boring, but maybe that’s fitting for whatmany would regard as the nation’s mostpredictable clothing retailer.

FOOD PRODUCERS &PROCESSORS:

Associated British FoodsCadbury SchweppesTate & LyleUnilever


All of these companies have some form ofdisclosure on their non-financial performance– Cadbury Schweppes and Unilever producestand-alone reports and Associated BritishFood (“ABF”) and Tate & Lyle have separatesections on their websites and within theirannual report and accounts. From myperspective it’s not how the report looks orthe format it’s in that counts, but how it helpsme to answer some fundamental questionsabout the business:

• What are the issues which are most criticalto your success and how have youdetermined these?

• What plans did you have in managing thoseissues and how did you get on in progressingthese plans?

• What challenges and opportunities will yoube responding to in the future?

With these questions in mind, some of thehighlights from these reports are;

• The ‘how we make decisions’ section of the Cadbury Schweppes report whichclearly sets out the governance frameworkacross non-financial matters.

• The focus of Unilever’s sustainabilityinitiatives on 3 key themes – agriculture, fish and water.

• Tate & Lyle’s description of environmentaltargets and progress against these in theenvironment section of their report.

• ABF’s description of what differentstakeholder groups can expect from ABFand how they can expect to be engaged.

Some of the lowlights are:

• An almost complete absence in the reportson how the topics covered have been selectedor indeed why certain issues are hardlycovered at all.

• There is a lot of talk about corporate socialresponsibility being embedded, but verylittle coverage of how.

• On the whole the sector is big on reportingprogress and successes, but there are only ahandful of examples where poor progress orfailure is discussed.

and the winner is...MARKS & SPENCER

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and the winner is...UNILEVER

The report is easy to navigate, it clearly outlines the sustainabilityinitiatives which are important tothe business and the report hasbeen independently assured – theonly one in this sector.

DIRECTIONS 05

LEISURE & HOTELS:

CarnivalEnterprise InnsHiltonIntercontinental HotelsWhitbreadWilliam Hill

PANELLIST:Nigel Salter

This is an interesting sector with a diverserange of issues to address – and some of themare quite tricky. Cruise ships, responsibledrinking, seasonal and temporary labour,environmental issues for hotels and the bighot topic of responsible gambling.

Considering the seriousness of their issuesCarnival Cruises say nothing. A small page inthe annual report given over to an environmentpolicy. Otherwise silence. At least they can’tbe accused of overdoing the PR.

Likewise William Hill – no real discussion of the issues around gambling – this isdisappointing given the serious coverage ofthis tricky subject over at Hilton whendiscussing its Ladbrokes’ business.

I tried to get to Enterprise Inns’ CR websection but it only ever said ‘page not found’.

I was impressed by Hilton’s report. It’s detailed,well structured and has some interestingangles and stories such as the ‘Big Bird Race’which involves tracking the migration ofAlbatrosses. They identify the big issuesclearly and appear to be taking it seriously.Negatives are that there’s just too muchinformation and the commitments/targets

are a bit weak. A summary or a quick readversion would be a real benefit.

In contrast, Intercontinental Hotels Grouphave neither quality or quantity. They seemto say that they are ‘the world’s most globalhotel company with the largest number ofrooms, with over 3,500 hotels and 530,000guest rooms across nearly 100 countries andterritories’ on every page of their web sectionbut then explain very little about what thismeans in terms of CSR.

Top of the class is Whitbread, although if it were based on completeness it would beHilton. But this is about effectiveness andWhitbread appear to have thought moreabout their readers. Their reporting isthorough, but it’s the tone and fact that theyhave produced a shorter document called‘Taking our responsibilities seriously’ thatgives them the edge. It just makes for a more interesting read. Also a good section in the annual report.

HEALTH, PHARMACEUTICALS& BIOTECHNOLOGY:

Alliance UniChemAstraZenecaGlaxoSmithKlineShire PharmaceuticalsSmith & Nephew


The pharmaceutical industry has been facingchallenging times. Once the darling of theinvestment industry, growth has slowed dueto patent expirations, generic competition,product safety concerns, and healthcarespending reaching unsustainable highs.Corporate responsibility reporting has beenimproving, however many of these reportsstill focus on policies, management systemsand data collection rather than providingstrategic responses to some of the moreimmediate risks mentioned above.

For example, safety issues moved centre stagelast year when Merck’s painkiller, Vioxx, waswithdrawn from the market after it was foundthat the drug increased the risk of heartattacks and strokes in patients. This set off aspate of allegations about the safety of otherprescription drugs – AstraZeneca’s Crestorand GSK’s Serevent among them. Yetdisappointingly none of the pharmaceuticalcompanies discuss specific product safetyconcerns in their CR reporting. For example,Shire’s drug for Attention Deficit HyperactivityDisorder (Adderall XR), withdrawn in Canadalast year over concerns about psychiatricevents associated with the drug, is notmentioned in their CR reporting, even thoughit is one of their most profitable products.This does little to counteract the erosion ofpublic trust in the sector. Whether or not thecompanies believe that the data is accurate,being silent does not help their reputation.

Alliance Unichem still publishes relativelylittle information, although they have

improved their disclosure in the past fewyears – but performance data and targets are yet to be developed. In contrast, Smith &Nephew is now on its 5th year of sustainabilityreporting with an impressive track record onproviding detailed quantitative information...numbers are always something that weinvestors like to see!

But there have also been improvements...Pharmaceutical companies have beencriticised in the past for profiting from anunethical contract that protects intellectualproperty but withholds life saving treatmentsfrom patients who cannot afford to pay. In recent years, the industry has progressedwell in responding to this crisis by takingsteps to improve access to medicines,especially in the world’s poorest countries.GSK’s reporting on this area is the mostimpressive, as is their R&D budget allocatedtowards developing world diseases. They havebeen involved in R&D for all three priorityWorld Health Organisation diseases (malaria,tuberculosis and HIV/AIDS). AstraZeneca hasalso made similar commitments to R&D in its reporting, and appointed an Access toMedicines Director in January 2004.

20____21

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and the winner is...GLAXOSMITHKLINE

Best for overall coverage of keyissues, good quantitative datadisclosed and reporting on theAccess to Medicines issue.

and the winner is...WHITBREAD

MEDIA & ENTERTAINMENT:

BSkyBDMGTEMAPITVPearsonReed ElsevierReutersWPPYell Group

PANELLIST:Simon Abrams

In briefWhile media companies have relatively lowdirect impacts there are a number of issuesthat can be covered under the broad CRbanner. These include:

• Responsible advertising: as advertisinginfluences our lifestyles and aspirations andthose of our children e.g. food advertising oralcohol, do responsible advertising policiesguide best practice behaviour?

• Transparent and responsible editorial policy:the public wants reassurance that news isfactual and unbiased and that scientificreports are robust and credible, docompanies have clear editorial policies toguide behaviour and is this monitored?

• Diversity: what we see or read can reinforceprejudices and stereotypes, is there a clearcommitment to diversity both in theworkplace and in the output?

• Technology: how are companies addressingthe rapid change in the technologicallandscape, which has thrown up new challengessuch as the increased availability of adultcontent, online gambling and download piracy?

So how have the companies performed?

Gold starsAll the companies recognise the importanceof establishing clear and transparent editorialpolicies and ensuring it guides their behaviour.Reuters with its Trust Principles has the most developed and integrated editorialpolicy. As you would expect from creativecompanies there is a strong focus on peoplemanagement and most report on issues such

as diversity, flexible working and retention.BSkyB was the first company to providetechnological safeguards for online gambling.All the media companies report impressivecommunity programmes; getting close to thegeneral public can increase customer loyaltyand satisfaction. Yell was one of only twoFTSE 100 companies to feature in the latestSunday Times Great Places to Work list.

Black marksFrom an investment perspective, mediacompanies have struggled to articulate thestrategic benefit of their CR activities in theirreporting. CR is treated as an important butnon-strategic issue in most reports. If theseactivities are important, companies shouldprovide a clear rationale to demonstrate thelong term value to investors.

Where next?Two of the biggest challenges will be toensure that companies maintain their CRcommitments in the face of increasedcompetition, deregulation and technology,and to maintain a balance between creativeindependence, freedom of expression and values.

LIFE ASSURANCE &INSURANCE:

AvivaFriends ProvidentLegal & GeneralOld MutualPrudentialRoyal & Sun Alliance


We’ve put Royal & Sun Alliance in with LifeAssurance as it was all alone as a FTSE 100 in Insurance.

The financial services and pensions industrieshave been a powerful voice in the CSR debate. Add to this the high profile role of the Association of British Insurers and it isunsurprising that this sector is pretty good on reporting.

The difference between the life assurers andRoyal & Sun Alliance is more marked thanexpected. RS&A disappoint with a report thatreads more like an internal managementdocument than a piece of external corporatecommunication. It also makes a big play of‘products with CR benefits’ which just seemsoverdone when some of the tough issues arebarely touched.

The life assurers are all pretty good. Aviva is best for completeness and thoroughness;Friends Provident is the liveliest and best toread with an interesting focus on FinancialExclusion and some excellent case studies.Also all round good use of unstuffy language;Legal & General wins hands down for its cleartargets and objectives; Old Mutual has a

unique angle on things due to the issue ofHIV/AIDS in South Africa and the company’smajor focus – Black Economic Empowerment; Prudential is a good balance and has a genuinely informative Chief Executive’sstatement which sets the context forreporting without all the usual guff.

If there were awards for completeness thenAviva would be at the top but the absolutethoroughness makes the report incrediblydour and boring to read. All the boxes areticked but this approach meant that gettingto the end was a struggle.

Best in sector has to be Prudential as itstrikes the best balance between interest andsubstance. Thorough but not deadpan, a goodreport on progress and achievement, someinteresting case studies, particularly on itsFoundation in Poland and the data is clearlypresented. Friends Provident would be a closesecond as it’s so refreshing.

and the winner is...YELL

If pushed, I would say that Yell’s CR report best articulatedthe strategic benefit of its CR programmes; in particular, its commitment to peoplemanagement was impressive.

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and the winner is...PRUDENTIAL


MINING:

Anglo AmericanAntofagastaBHP BillitonRio TintoXstrata


Mining companies have been grappling withtheir significant environmental and social profilefor many years, and the high quality of thereports reviewed here reflects the importancethey attach to non-financial issues. Rio Tinto,Anglo American, BHP Billiton and Xstrata doa good job in communicating effectively onmaterial issues and all stress the importanceof integrating corporate responsibility withintheir core business strategies.

Each company deserves a gold star for a thorough and developed approach to reporting.

Rio Tinto stands out in particular for providingclear summaries of the context for each issueit identifies, helping the reader understandwhy each one is important. It outlines companypolicies and programmes in place along withresults and ‘snapshot’ case studies. The casestudies include examples of how data collectedand published in the report are used in keydecision making processes.

Indeed, the importance of integrating social,environmental and economic performanceinto the company’s management approach isemphasised throughout. There is also evidencethat corporate governance and accountabilityfor non-financial issues is embedded acrossthe company.

Similarly, Anglo American’s and BHP Billiton’sreports recognise that sustainable developmentis central to the future of their businesses.Key risks, challenges and opportunities aredetailed and material issues faced by thebusinesses are comprehensively identified.BHP in particular does a great job ofexplaining what it calls ‘sustainability valueadd’. A neat graphic really helps to demonstratehow managing key issues effectively (such as human rights, greenhouse gases, businessethics) will help the group to deliver long-term shareholder returns, enhancedstakeholder trust and myriad other benefits.As ever, of course, the real challenge lies inproviding evidence of achievement and this is one to watch with interest.

Xstrata emphasises the integral role ofcorporate responsibility to a lesser extent,although it does effectively highlightenvironmental and community risks andchallenges faced by the business.

Each report has minor areas forimprovement: for example, an introduction to the business and its operations wasnoticeably absent in some cases. Likewise, it is not always clear who the reports areaimed at and why they have been published.However, there is not a great deal lacking and certainly little need to increase the highaverage number of pages.

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and the winner is...RIO TINTO

OIL & GAS:

BG GroupBPShell

PANELLIST:Simon Abrams

PERSONAL CARE &HOUSEHOLD PRODUCTS:

Reckitt Benckiser


As Reckitt Benckiser is the only FTSE 100company in the sector I decided to look furtherafield for some points of comparison. Colgate-Palmolive and Gillette gave me what I needed.

I had originally written this piece all abouthow Reckitt’s information is too old andlightweight and while the company promisesthat a full sustainability report will bepublished shortly it hadn’t yet materialised.And then, as if by magic, it appeared. And it’sa huge improvement. The main problem withReckitt’s old approach was fragmentation(separate reports, separate web pages etc) –the information was very disjointed and thissuggested a disjointed management approach.The web section was just a whole series ofpdfs to download which was quite frustratingand these turned out to be mainly policystatements. But what a difference a day makes.The new sustainability report is thorough,sets the context clearly, has meaningful dataand also gets to the difficult issues.

I still feel that the information on supplychain, transport and packaging is a bit lightbut it is a big step forward.

Colgate-Palmolive and Gillette might lacksubstance in a few areas but they do producesound, integrated reports. Colgate’s approach is sustainability based and Gillette’s is CSRwith some interesting case studies on subjectssuch as water usage and diversity. It’s alsoGRI compliant which gives it some rigour.

My initial assessment, based on the oldinformation, was that Reckitt’s reporting wasbehind the others. The new report placesthem ahead. It is serious but interesting andpoints the way forward. It is also verified.

and the winner is...BG GROUP

and the winner is...RECKITT BENCKISER

In briefCompanies in this sector have to manage and report on a number of important issuesin such a way that makes sense to a range ofaudiences. Recent events have highlightedthe problem of embedding top level CR policiesthrough every level of management. It wouldappear that failure to sufficiently embed orenforce these policies has allowed corners tobe cut leading to expensive incidents and PRdisasters. From an investment perspectiveaddressing safety concerns, minimisingenvironmental impacts and social impactsand active dialogue with key stakeholders arecritical to understanding managementcompetence and commitment to CR issues.

So how have they done?

HighlightsWell let’s state one thing up front – thesecompanies have systems and procedures forpretty much everything. The problem is the gapbetween procedures and performance i.e. theproblem of embedding.

All three companies have good reporting. BG,which is the smallest of the three FTSE 100listed oil & gas companies, continues toimpress with clear, readable CR reporting andequally good CR performance.

Things to noteShell & BP have excellent reporting but havealso had high profile campaigns wagedagainst them.

Shell has comprehensive CR systems but isstruggling to demonstrate consistently highstandards across its operations. For the last three years, Friends of the Earth hassuccessfully worked with community groupsliving next to Shell installations to highlightdeficiencies in Shell’s operational performanceand community dialogue. Shell has belatedlyreflected this in its latest CR report but untilthese issues are resolved, its good work inother areas will not receive due credit.

While the issues surrounding BP’sinvolvement in the controversial Baku-Tiblisi-Ceyhan pipeline attracted much mediacommentary, the company’s performance andreporting on the CR aspects of this projectwas impressive and clear. Less impressive werethe findings from the Texas refinery explosion,which appeared to show a significant gapbetween safety systems and safety behaviour.Details of the incident will be reported in thenext CR report, but reporting is no substitutefor performance. The company has set asideapproximately $700 million to covercompensation and lost production.

Reporting from these companies has certainlyimproved. However these ongoing issueshighlight that further progress is needed todemonstrate to the wider investmentcommunity that CR issues are embedded into the business.


REAL ESTATE:

The British Land Co.HammersonLand SecuritiesLiberty International


Environmental and social considerations havebecome an increasingly important aspect ofplanning requirements in the UK, driven bychanges to planning policy and governmentcommitments to sustainable development(both as regulator and customer). With alreadysignificant restrictions on space especially onout of town and Greenfield development, anda need to address a shortage in affordablehousing across the UK, this regulatory climateprovides a number of risks and opportunitiesfor the real estate sector which is exposed tothese changes. In turn, companies’ social andenvironmental credentials are coming undergreater scrutiny when making planningapplications and securing governmentcontracts and will continue to be an importantdifferentiator of commercial success.

In response to this shift, corporateresponsibility reporting in this sector hasbeen steadily improving with companiesgetting better at gathering data on both theirdirect and indirect social and environmentalimpacts and setting targets for improvement.

Most marked improvement over the past few years comes from British Land and LandSecurities. They provide good quantitative

performance data and targets. LibertyInternational and Hammerson have yet toestablish a track record of continuousimprovement, but both have progressedconsiderably in data collection this year,allowing better understanding of how theirimpacts are being managed and mitigated.

The next step is for these companies to focustheir new developments and investmentsaround innovative, energy efficient andsustainable design and construction processesthat will differentiate them from the pack andprovide a unique selling point for future clients.

The UK needs to address climate changecommitments, and buildings in this countryare generally not that innovative when itcomes to environmental design. As energyprices continue to rise, and building regulationscome into force, the energy efficiency ofbuildings is likely to become an increasinglyimportant aspect of client requirements. Land Securities appears most advanced inthis area, reporting good information on theiremissions profile. They are also one of thefew real estate companies to be participatingin the slightly shambolic EU Emissionstrading scheme, which although at presentonly provides a tiny revenue (of £13,500 pa),shows that the company is open toinvestigating new opportunities.

SOFTWARE &COMPUTER SERVICES:

Sage


There isn’t much to say about Sage since itonly produces two pages on CR in its annualreport/website. The content is weak – justexamples of policies and initiatives. It doessay that they collect data on a quarterly basise.g. on diversity and waste recycling, butdisappointingly these data are not published.It also says that the Board will considersetting specific CR targets. If they do so, thiswould be a good step forward.

The UK division of Sage – which accounts for27% of the Group’s revenue – goes muchfurther than its parent company andproduces a 26 page CR report. This coversthe key issues and includes some targets.The Group’s annual report also says that the other businesses are committed todeveloping similar reports.

As Sage is the only software company in theFTSE 100, I took a look at the FTSE 250 andcompanies outside the UK for some points of comparison. There are four softwarecompanies in the FTSE 250 – Computacenter,Isoft, Logica and Misys. Like Sage, thesecompanies only publish short CR sections

in their annual reports. It’s a pretty poor show.

Outside of the UK, the software giantsMicrosoft and IBM do much better. Microsoftproduces a printed Citizenship Report which is 75 pages and IBM has a detailed web report. In the Microsoft report, there is a comprehensive section on digital inclusion – a key issue for the sector. It sets out someinteresting programmes in this area and hasthe ambitious goal of providing technologyaccess and skills training resources to 250million people worldwide by 2008. However,the other two software companies in the FTGlobal 100 – Oracle and SAP – don’t publishCR Reports.

In contrast to the software sector, most of theIT hardware companies in the FT Global 100publish detailed CR Reports including Dell,HP, Intel and Samsung.

and the winner is...MICROSOFT

Although not in the FTSE 100!

and the winner is...BRITISH LAND

More data and improvement fromprevious years which shows strongcommitment and reporting of arange of social and environmentalissues affecting their business.

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SUPPORT SERVICES:

CapitaCompassHaysRentokilREXAM


The companies in this sector may have littlein common, but one thing they do share islacklustre reporting regimes.

All five give the impression that CSR reporting– and by extension CSR itself – is little morethan an after-thought. Although Rentokil isway out in front in terms of depth ofcoverage, even its reporting is thin on data,KPIs and targets, and, like the others, givesno sense that the company is enthused aboutcorporate responsibility.

Overall, there’s a decidedly cursory feel towhat’s on offer, and Hays’ reporting inparticular has an especially token air.

Though Rentokil has clearly put in a fairamount of effort, the others appear merely tohave cobbled together a few vague statementsand existing policy guidelines in the hope thatthey will convey a favourable impression.

As a result there’s a candy floss feel to muchof the content; what you initially see looksquite attractive and substantial, but it soondissolves into sugar when you bite in. Capitaare especially guilty in that regard, offering,

for instance, a promising-looking section onhealth and safety that delivers only one keystatistic and no commentary on what it means.

There are some interesting touches –packaging company REXAM includesinformation on the standards of dormitoriesused by supplier staff in China and has auseful ‘next steps’ section outlining futurepriorities, while Compass has a handy areacontaining pdfs of speeches on CSR made bysenior staff. But there is little anywhere thatcould be described as wide-ranging andcomprehensive, let alone mould-breaking.

It could be that all of the companies in thissector are actually doing something substantialto improve their social and environmentalperformance, but if that’s the case then theirreporting hardly reflects that reality. At thevery least that means they are each doingthemselves a severe dis-service.

SPECIALITY & OTHER FINANCE:

3iAMVESCAPMan GroupSchroders

PANELLIST:Roger Cowe

These companies look after about £350 bn of other people’s money – buying and sellingbusinesses, operating hedge funds and otherinvestments. That’s quite a responsibility, but you wouldn’t know it from the effort they put into reporting how they live up to thatresponsibility. There is barely a serious CRreport between them.

Schroders comes closest, with a 24 page pdfreport, which is interestingly located in theInvestor Relations section of the website. It includes hard figures, and even a target, in the environment section, but the firmrecognises that its main impacts are throughits investment decisions, and reports itsspecific Socially Responsible Investing (SRI)activities, engagement and voting records.Nothing on dealing with customers, though,whether they are individuals or pension fundtrustees, and little but bland policy statementson tricky issues such as human rights.

The venture capital outfit 3i produces a 6-page report in pdf form, complete with apretty picture of a child’s toy on the cover(but no explanation of why this is in any wayrelevant). The remaining five pages presentpolicies which cover the main areas, but theonly specific reporting of performance is for charity donations. Otherwise 3i quotes the Dow Jones Sustainability Index saying: “3i is clearly positioned among the best in the financial services industry”. The indexproviders obviously had more than just this report to go on.

The other two firms in the sector have not yetgot this far. AMVESCAP settles for resoundingpolicy statements (e.g. “our most importantcontribution to social responsibility is theachievement of our core purpose of helpingpeople worldwide build their financialsecurity”). No mention of the $450m in finesthe firm paid in the US last year to settlecharges of improper trading.

Man Group settles for a single pdf page, with a few employee statistics and (for thefirst time) a couple of paragraphs on ethics. It offers hope for the future. The hedge fund company reviewed its approach last yearand concluded that it needs “increasedformalisation and more transparent reporting”.I’ll look forward to seeing what they have tosay about the responsibilities of hedge fundsin modern financial markets.

and the winner is...SCHRODERS

and the winner is...RENTOKIL


TOBACCO:

British American TobaccoGallaherImperial Tobacco


The sheer amount of information published by companies in the sector is impressive – 130 pages from BAT, 60 pages from ImperialTobacco and over 100 pages from Gallaher(counting both their CR and EHS Reports). All three companies are certainly trying. But it is hard not to be cynical and regardthese efforts as a PR exercise designed toavoid tighter regulation.

BAT stands out as investing the most timeand effort in its reporting. While Gallaher andImperial Tobacco both publish printed reports,BAT takes a more sophisticated approach andproduces a range of materials for differentaudiences. These include a 16 page summaryprinted report, a more detailed web report, ashort video introduction from the ChiefExecutive and local reports in an impressive34 countries.

BAT’s report is focused around six key issues– marketing and youth smoking prevention,information on health risks, harm reduction,smoking in public places, supply chain andillicit trade. They can’t be accused of avoidingthe controversial issues. In contrast, ImperialTobacco’s four priorities – ensure robustprocesses, strengthen product stewardship,improve OHSE and social performance –sound somewhat bland.

BAT’s report is interesting because it’s one ofthe few I’ve seen that is structured around

stakeholder dialogue – with each sectionpresenting the views of stakeholders followedby the company’s response. The company hasconsulted widely, talking to 136 stakeholders.But I found that the stakeholder-led approachmade it hard to decipher the key messages.Also, the stakeholder feedback seemedselective at times. For example, only the viewsof smokers are given in the section on smokingin public places.

There are a couple of key messages thatstood out. All three companies provide healthwarnings on cigarette packs even where it’snot required by law. They also say they do notmarket to children. I was also interested tohear BAT’s CEO talking about their commitmentto develop less harmful products such as anew chewing tobacco which has been launchedin Sweden and South Africa.

Despite some good initiatives, they all stressthe rights of smokers and are firmly opposedto outright bans on smoking in public placesfor obvious reasons. There are clearly limitsto how far a socially responsible tobaccocompany can go.

TELECOMMUNICATIONSERVICES:

BTCable & WirelessO2

Vodafone

PANELLIST:Richard Aldwinckle

The corporate personalities of the main playersin the telecoms sector are reflected in theirapproaches to CR reporting, from the verythorough, rather earnest BT report, which at128 pages for the full 2005 report wins thesector ‘thud factor’ award, to the creativelycool and rather flash O2 approach (literallyso, with a one minute flash ‘movie’ on theirwebsite advertising their report). A rathertraditional design in the case of BT contrastswith a very modern feel for O2’s report, whodeserve praise for trying to make what canbe a rather dry subject more accessible to awider audience.

With C&W, who only publish a few pages ontheir website and a two-yearly communityinvestment report – the last covering 2002-03 – the focus is still very much on charitablegiving and philanthropic activities. Maybe withthe acquisition of Energis the company willstart to report on a broader set of corporateresponsibility issues and take a leaf or two outof its larger and more impressive sector peers.

For completeness, tone, structure andreadability, Vodafone’s report is the clearsector winner. Its report sets out up frontwhat the material issues are affecting itsbusiness and makes a good job of translatingits stakeholder engagement activities into acoherent and convincing commentary. It isnot afraid to publish critical comments fromopinion leaders and consumers alike –including a stakeholder’s quote on its back

cover saying “I don’t believe the informationcontained in CR Reports”! The way it talksabout stakeholder comments, previously settargets, achievements and new targets underthe headings of ‘You said’, ‘We said’, ‘We did’and ‘We will’ is typical of the report’s overallballsy, no-nonsense style. Vodafone also setsout, up front, its global footprint, making itmuch easier to tell whether it is, or isn’t,addressing some of the more global issues,such as ethical supply chain purchasing, socio-economic development and poverty reduction,that leading international companies are nowstarting to report on.

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and the winner is...VODAFONE

and the winner is...BRITISH AMERICAN TOBACCO

Most of the companies in this sector have beenreporting for years and as such these reportstend to be logical and cover the right sorts ofissues. The only company to break the mouldis National Grid Transco (“NGT”) which appearsto have abandoned the hard copy stand-alonereport format for the “pick and mix” web basedreport – not everybody’s cup of tea, but it’spretty easy to get what you want. Some of thegood things that run across all the reports are:

• the clear descriptions of CSR governancestructures.

• the summaries of key stakeholders and whatthey’re interested in.

• the descriptions of progress made againsttargets and plans for the future.

In all honesty there’s not much between them,though a number have ‘special features’ whichparticularly appealed to me:

• United Utilities’ radar diagram showing the relative priority attached to various CSR issues.

• Centrica’s description of key responsibilities atthe beginning of each section which helps toset each chapter in context.

• Severn Trent’s section on the code ofconduct which provides useful insightsinto the feedback they have received on itand key improvement areas.

• NGT’s performance at a glance sectionincluding both the highlights and lowlights.

The big down-side of these reports is thatthey really are trying to cover everything. I would have liked to have gained more of aninsight into how they have prioritised theirCSR programmes to focus on what’s reallyimportant and how they have sought to embedthe management of these issues in businessprocesses. In my view none of the reportsreally quite address this… Roll on the OFR…

UTILITIES:

CentricaNational Grid TranscoSevern TrentUnited Utilities


TRANSPORT:

BAABritish AirwaysExel


and the winner is...UNITED UTILITIES

All of these reports are good, it istherefore really tough choosing awinner. However, I am required tochoose and therefore it is going tobe United Utilities – it really is atext book report and also includessome nice features including:

• A clear map linking business principles, stakeholder needs and the issues reported.

• Presentation of targets and progress against these in each section.

• The radar diagram commented on above.

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Ranging from BAA whose commercial future is inherently dependent on corporateresponsibility, to lower profile British Airwaysand supply chain logistics specialist Exel wherethese issues are not so visceral, this is adiverse sector group.

Perhaps predictably (and thankfully for itsshareholders) BAA does the best job ofreporting. It squares up to the material issues itfaces from the outset, with its CEO tackling thereal environmental and community challengesof expansions at Heathrow and Stansted. Therest of the report (wrapped around an OFRstructure) backs up the case with informationabout how these issues are being tackled.

But that is not to say that British Airwaysand Exel do not have their strengths. BA hasstructured its report around ‘The BA Way’, its framework for managing the businessoverall, and this goes some way to showinghow CR relates to the bigger picture. It has an admirably concise set of key performanceindicators, although these could better makethe connections between financial, peopleand environmental performance.

And even though Exel is clearly a relativenewcomer to reporting, its environmentalreport does demonstrate that it has

recognised that there are commercialopportunities in making customers’ supplychains more environmentally efficient as wellas logistically. Future reports can be expectedto demonstrate more coherently how this isdriving performance, particularly around CO2and climate change.

All the companies in this sector are strugglingwith a common challenge: how to demonstratethat the data they have been compelled toreport on actually get used in day-to-day life– from the boardroom to the front line. Giventhe importance of CR to their commercialfutures they could do a better job ofdemonstrating how it all ties together.

Finally, more players in this sector need to startunderstanding what ‘community investment’really means for them. The extractivecompanies (and to be fair BAA) have learnedthat it is not about how much you donate tocharity, but how you engage with the localeconomy through employment, procurementand indeed environmental activities.

and the winner is...BAA


And the winners are:

General retailers:MARKS & SPENCER

Health, pharmaceuticals & biotechnology:GLAXOSMITHKLINE

Leisure & hotels:WHITBREAD

Life assurance & insurance:PRUDENTIAL

Construction & building materials: HANSON

Electricity: SCOTTISH POWER

Food & drug retailers: TESCO

Food producers & processors:UNILEVER

Aerospace & defence:BAE SYSTEMS

Banks:STANDARD CHARTERED

Beverages:ALLIED DOMECQ

Chemicals:ICI

Media & entertainment:YELL

Mining:RIO TINTO

Oil & gas:BG GROUP

Personal care & household products:RECKITT BENCKISER

Real estate:BRITISH LAND

Software & computer services:MICROSOFT

Speciality & other finance:SCHRODERS

Support services:RENTOKIL

Telecommunicationservices:VODAFONE

Tobacco:BRITISH AMERICAN TOBACCO

Transport: BAA

Utilities:UNITED UTILITIES

AND THE SPECIAL AWARD FOR THE CHIEF EXECUTIVE’SSTATEMENT CONTAINING THE LEAST FLUFF GOES TO:

ALLIED DOMECQ’S Philip Bowman


1. The cut-off date: our assessments are based on information in the public domain by 1 July 2005.

2. The list of Global 100 companies: from the FT Global 100 which ranks companies by market capitalisation (calculated on 31 March 2005).

3. CR Report – years: shows the number of years the company has published either a CR Report or EHS Report. Reports notarchived on the company’s website may not be counted. Mergers and acquisitions mayaffect these data by reducing the number of years recorded.

4. CR Report – format: shows the format ofthe report ie printed summary, printed in full, web report (including both html & pdfreports). We indicate if the report is limited in scope eg an EHS Report only. We do notcount the following as reports: web pages on CR which cover policies and programmes(without time-specific performanceinformation) and single issue reports e.g. on community, HIV, supplier diversity.

5. CR section in annual report: one full pageor more. We indicate if the section is verydetailed. Only in exceptional circumstances is a company that only publishes information inits annual report classified as a reporter.

6. Independent verification statement: reportincludes a formal verification/assurancestatement by third parties. We have notcounted informal comments by externalcommentators.

7. GRI table: report includes a table showingwhich of the Global Reporting Initiative (GRI)indicators are reported. This does NOT indicateif a company is compliant with the GRI.

8. FTSE4Good Index: company included in anyof the FTSE4Good Index Series (Global, US,Europe, UK).

9. Dow Jones Sustainability Index (DJSI):company included in either the DJSI WorldIndex or DJSI STOXX Index.

10. Global 100 Most Sustainable Corporations:company included in the Global 100 list (anannual ranking produced by Innovest StrategicValue Advisers and Corporate Knights).

11. UN Global Compact: signatory to the UnitedNations Global Compact. We have not countedsubsidiaries that have signed up.

This year we have decided to look further afield and see what the levels of reporting are like in the Global 100.

We have made every effort to ensure that the data in Directionsare accurate. Our research is based on information on companywebsites and in printed reports. We have added a note if any of theinformation reported was unclear. If we have missed data, pleaseget in touch and we will update our records.

Although our categories are simple and non-judgemental, we stillhad to apply some rules and definitions to ensure a consistentapproach between companies. These are:

Global 100Methodology

(Research conducted by Emily Osband, CR Futures)

KEY Yes a See comments CR/CSR = Corporate Responsibility/Corporate Social Responsibility AR = Annual Report EHS = Environment, Health & Safety GRI = Global Reporting Initiative

001 GENERAL ELECTRIC US 3 –– • 90 • a –– • –– • –– –– a) Community & site remediation only

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OUR CATEGORIES AND THE KEY:

31

Companies are non-reporters

Global 100Analysis overview 31

Companies report for the firsttime this year

07

Companies have independentverification statements

25Companies are in the FTSE4Good Index

64

Are signatories to the UnitedNations Global Compact

Combination of Environment, Social and Community x26

Citizenship x15

Sustainability x15

Other x14

Corporate Responsibility x13

CSR x12

Responsibility x1

Samsung Electronics – ‘Green ManagementReport’

30Provide a GRI reference table

30

14 pages66 pagesAverage length of a printed summaryAverage length of a printed full report

Companies are in the Dow JonesSustainability Index

48

Companies are in the Global 100Most Sustainable Corporations

16

BEST ALTERNATIVE TITLE:And this one brought a smile to our faces…

MOST POPULAR TITLES:We also had a quick look for trends in the titles being adopted. The following words were the most used – obviously with the word ‘report’ or ‘review’ after them.


Global 100Analysis

001 GENERAL ELECTRIC US 3 –– –– • 90 • a –– • –– • –– –– a) Community & site remediation only

002 EXXON MOBIL US 5 –– –– • 58 • • –– –– –– –– –– ––

003 MICROSOFT US 2 –– –– • 76 • a b • • –– –– –– a) Brief reference in CEO introductionb) Refers to PricewaterhouseCoopers assessment, but no formal verification statement

004 CITIGROUP US 5 –– –– • 52 • • –– • • • –– ––

005 BP UK 11 • 36 • 64 • • • • • • • •006 WAL-MART US –– –– –– –– –– a b –– –– –– –– –– –– a) Web sections on community, supplier standards &

ethics and fact sheets/position statements on several issuesb) Community only

007 SHELL N/ 8 –– –– • 33 • • • • • • • •UK

008 JOHNSON & JOHNSON US 9 –– –– • 40 • a –– • • • –– –– a) Case studies only

009 PFIZER US 4 •a 10 –– –– • •b –– –– • • –– • a) Corporate Citizenship Brochure published Nov 2004b) Covers access to medicines & other CR issues (but not in a single CR section)

010 BANK OF AMERICA US 4a –– –– •b 16 •b c –– –– • –– • –– a) Last Community Report & Environment Update published in 2003 b) Community & environment onlyc) Community only

011 HSBC UK 5 • 10 • 32 • • • • • • –– •012 VODAFONE UK 5 –– –– • 35 • • • • • • –– ––

013 IBM US 15 –– –– –– –– • a –– • –– –– –– –– a) Refers to the web report

014 TOTAL Fr 3 • 16 • 83 • • a • • • –– • a) Reference to external audit of some environment data, but no formalverification statement

015 INTEL CORPORATION US 11 –– –– •a 38 • b –– • • • • –– a) Separate EHS and Global Citizenship Reportsb) Brief reference and section oncompliance with EHS regulations

016 AMERICAN INT. GROUP US –– –– –– –– –– –– –– –– –– –– –– –– ––

017 ALTRIA US 1 –– –– –– –– •a • –– –– –– –– –– –– a) Limited group data – refers to operating company CR reports

018 TOYOTA MOTOR J 6 –– –– • 90 • • • –– • • • ––

019 GLAXOSMITHKLINE UK 5 • 4 –– –– • • • a • • • • –– a) Verification of EHS section only

020 BERKSHIRE HATHAWAY US –– –– –– –– –– –– –– –– –– –– –– –– ––

021 PROCTER & GAMBLE US 12 • 8 –– –– • a –– • • • –– –– a) Refers to the Sustainability Report

022 SAUDI BASIC SA –– –– –– –– –– a • –– –– –– –– –– –– a) HSE policyINDUSTRIES

023 NOVARTIS Sw 9 –– –– –– 84 • •a • •b –– • –– • a) 30 pages with datab) 84 page ‘GRI Report’ on the website

024 CHEVRON TEXACO US 2 •a 20 –– –– • • b –– –– –– –– –– a) CR Update 2003 (20 page update to 2002 full report). Next full report due later in 2005b) Assurance of greenhouse gas data only

025 JP MORGAN CHASE US –– –– –– –– –– a b –– –– –– –– –– –– a) Policies & examples of initiatives on community, environment & diversityb) Community only

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026 SANOFI-AVENTIS Fr 1a –– –– • 64 • •b •c –– • –– –– –– a) Company formed in 2004. Aventis previously reported for four years and Sanofi Synthelabo for two yearsb) 16 pages with some datac) Verification of certain HSE and social indicators

027 CISCO SYSTEMS US 1 –– –– –– –– •a b –– • • –– –– • a) Limited data & date unclear. New report due later in 2005b) Brief reference

028 NESTLE SW 2a –– –– –– –– •a •b –– –– –– • –– • a) Last Sustainability Review published in May 2002; some updated information & data on the website & in the ARb) 6 pages including some data

029 ENI IT 4 –– –– •a 78 •a •b •c –– –– –– –– • a) EHS Report 2004; CR Report 2003 b) 10 pages including some datac) Verification of EHS Report

030 WELLS FARGO US –– –– –– –– –– a b –– –– • –– –– –– a) Brief web sections on community, environment & diversityb) Community only

031 COCA-COLA US 4 –– –– •a 40 •a b •c –– • –– –– –– a) Separate reports on Citizenship, Environment, HIV, Workplaceb) Community only & environment / equal opportunities policy c) Verification of environment data only

032 ROYAL BANK OF UK 3 –– –– •a 48 • • –– –– • • –– • a) 2003 Report. New report due soonSCOTLAND

033 VERIZON US 1 –– –– –– –– • a –– –– • –– –– –– a) Community onlyCOMMUNICATIONS

034 ROCHE Sw 13 –– –– • 108 • •a • • • • –– –– a) Sustainability Report is sent out with the AR in a single folder

035 UBS Sw 7 –– –– –– –– • • •a –– • • –– • a) Verification of environment information

036 DELL US 6 • 7 • 70 • • –– a –– • –– –– a) Gives GRI reference for indicators reported

037 PEPSICO US 2 –– –– –– –– a •b –– • –– –– –– –– a) Citizenship web section mainly covers policiesb) 18 pages with some data (but primarily covers the United States)

038 TELEFONICA Sp 3 –– –– • 208 • • • • • • –– •039 HOME DEPOT US 1 –– –– –– –– •a b –– –– • • –– –– a) CR Report has limited data

b) Mainly covers community

040 DEUTSCHE TELEKOM G 10 –– –– • 80 • • –– • • • • •041 BHP BILLITON Au/ 9 • 16 –– –– •a • • • • • –– • a) Includes a 164 page pdf

UK

042 NTT DOCOMO J 4 –– –– –– –– • • –– –– • –– • ––

043 WACHOVIA US –– –– –– –– –– a b –– –– • –– –– –– a) 18 page Community Report and 3 pages on environment(but limited data) b) Community only

044 TIME WARNER US –– –– –– –– –– a b –– –– –– • –– –– a) Citizenship section covers community, diversity & public policy(limited data)b) Community & employment only

045 SBC COMMUNICATIONS US –– –– –– –– –– a –– –– –– • –– –– –– a) Citizenship section covers community & diversity (limited data). Also publish a 6 page Citizenship brochure

046 BANCO SANTANDER Sp 3 –– –– • 99 • • • • • • –– •CENTRAL HISPANO

047 CONOCO PHILLIPS US 1 –– –– • 40 • • –– –– –– –– –– ––

KEY Au = Australia Fi = Finalnd Fr = France G = Germany HK = Hong Kong It = Italy J = Japan N = Netherlands Ru = RussiaSA = Saudi Arabia SK = South Korea Sp = Spain Sw = Switzerland UK = United Kingdom US = United States

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DIRECTIONS 0534____35

Global 100Analysis continued

048 COMCAST US –– –– –– –– –– a –– –– –– • –– –– –– a) Web sections on community & diversity

049 FRANCE TELECOM Fr 5 –– –– • 52 • • –– –– • –– –– •050 NIPPON TELEGRAPH J 6 –– –– •a 26 •a • –– –– • –– –– –– a) Environment Report only

AND TELEPHONE

051 AMGEN US –– –– –– –– –– a b –– –– –– –– –– –– a) Web sections on community & business ethicsb) Brief reference to community

052 SAMSUNG SK 4 –– –– •a 40 •a • –– –– –– • –– –– a) Green Management Report which covers EHS & communityELECTRONICS

053 ABBOTT LABORATORIES US 6 –– –– • 48 • a –– –– –– –– –– –– a) Access to medicines only

054 NOKIA Fi 8 –– –– –– –– •a • –– • • • • • a) Separate reports on Environment and CSR

055 MERCK US 2a –– –– –– –– •a • –– –– • –– –– –– a) Limited data & date unclear

056 SIEMENS G 7 –– –– a –– • –– –– –– –– • • • a) Printed report in 2003; web update for 2004

057 TYCO INT. US –– –– –– –– –– a b –– –– –– –– –– –– a) Commitment section mainly covers policies (limited data) b) Brief reference in CEO letter

058 GAZPROM Ru 1a –– –– –– –– •a • –– –– –– –– –– –– a) Environmental Report only covering 2002

059 UNILEVER UK/ 9 –– –– •a 42 • • • –– • • • • a) Separate Environment and Social ReportsN

060 ING N 5 –– –– • 36 • • • • • • • ––

061 3M US 3 –– –– –– –– • • –– • • • –– ––

062 BARCLAYS UK 6 –– –– • 36 • • • –– • • –– ––

063 NEWS CORPORATION US –– –– –– –– –– –– –– –– –– –– –– –– ––

064 CHINA MOBILE HK –– –– –– –– –– –– a –– –– –– –– –– –– a) Community & employment onlyHONG KONG

065 ASTRAZENECA UK 5 • 23 –– –– • • • –– • • –– –– a) 23 page summary report

066 ORACLE CORPORATION US –– –– –– –– –– a –– –– –– • –– –– –– a) Web section on community (which includes brief pages on environment & diversity)

067 AMERICAN EXPRESS US –– –– –– –– –– a –– –– –– • –– –– –– a) Web section on community

068 HEWLETT-PACKARD US 4 • 23 –– –– • a –– • • • • • a) Environment only

069 BNP PARIBAS Fr 5 –– –– • 119 • •a –– –– • • –– • a) Includes 40 pages on sustainable development

070 MORGAN STANLEY US –– –– –– –– –– a b –– –– –– –– –– –– a) Charity Report and web section on diversityb) Briefly mentions community

071 MEDTRONIC US –– –– –– –– –– a b –– –– • –– –– –– a) Web sections on community & diversity b) Brief reference to community

072 UNITED HEALTH US –– –– –– –– –– a b –– –– • • –– –– a) Section on communityGROUP b) Affordability of healthcare only

073 HBOS UK 5 –– –– • 32 • • • a • • • –– a) Gives GRI reference for indicators reported

074 TELECOM ITALIA It 5 –– –– –– –– • •a • b • • –– • a) 72 page Sustainability Report is incorporated into the annual reportb) Gives GRI reference for indicators reported

075 QUALCOMM US –– –– –– –– –– a b –– –– • –– –– –– a) Brief sections on community, environment & diversityb) Brief reference to community

076 E.ON G 1 –– –– • 95 • • –– –– –– –– –– •


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077 GENENTECH US –– –– –– –– –– a b –– –– –– –– –– –– a) Web sections on community & diversityb) Reference to community in CEO letter

078 ELI LILLY US 8 –– –– –– –– • • –– • –– –– –– ––

079 WALT DISNEY US 4 –– –– •a 24 •b •c –– –– • –– –– –– a) Environment Report onlyb) Environment Report and broader CR web section (but mainly policies & case studies) c) Environment & community only

080 ENEL It 8 –– –– •a 122 • • • b • • –– • a) Separate Environment & Sustainability Reportsb) Gives GRI reference for indicators reported

081 TELECOM ITALIA It 3 –– –– –– –– •a •b –– –– –– –– –– –– a) Focuses on policies & initiatives. Data is in the ARMOBILE b) 70 page Sustainability section with data

082 MITSUBISHI TOKYO J –– –– –– –– –– a •b –– –– –– –– –– –– a) Code of Ethics onlyFINANCIAL b) Mainly covers community & environment

083 VIACOM US –– –– –– –– –– a –– –– –– • –– –– –– a) Citizenship section covers community & ethics only

084 MIZUHO FINANCIAL J –– –– –– –– –– a •b –– –– –– –– –– –– a) Short sections on community & environment b) Mainly covers community & environment

085 WYETH US 3 –– –– •a 36 •a –– –– • –– –– –– –– a) Reports on EHS & Philanthropy

086 BBVA Sp 3 –– –– • 175 • • • • • • –– •087 SAUDI TELECOM SA –– –– –– –– –– a –– –– –– –– –– –– –– a) Brief section on community

088 L’OREAL Fr 2 –– –– –– –– • • • –– • • –– •089 MERRILL LYNCH US –– –– –– –– –– a b –– –– • • –– –– a) Sections on community & diversity

b) Community only

090 US BANCORP US –– –– –– –– –– a b –– –– • –– –– –– a) Community Report & web section on ethicsb) Brief reference

091 GOLDMAN SACHS US –– –– –– –– –– a a –– –– –– –– –– –– a) Sections on community

092 FANNIE MAE US –– –– –– –– –– a b –– –– • • –– –– a) Web sections on affordable housing & communityb) Affordable housing only

093 UNITED TECHNOLOGIES US 1 –– –– • 34 • a –– –– –– • • –– a) Brief reference to CR Report in Chairman’s letter plus some examples of CR initiatives

094 CREDIT SUISSE Sw 11 • 6 –– –– • •a –– –– • • –– • a) Within the Business Review 2004

095 DUPONT US 4 –– –– –– –– • • a • • • –– • a) 3rd party evaluation of EHS Audit Program

096 AXA Fr 3 –– –– • 80 • •a –– • • –– –– • a) 22 pages in the AR

097 SAP G –– –– –– –– –– a b –– –– • • • • a) Citizenship section covers community onlyb) Community only

098 LLOYDS TSB UK 8 •a 2 • 22 • • •b –– • • –– –– a) 2 page summary leaflet for customersb) Verification of environment section only

099 TELSTRA Au 5 –– –– –– –– •a • –– –– • –– –– –– a) Separate reports on CSR & Environment

100 EBAY US –– –– –– –– –– a –– –– –– • –– –– –– a) Web section on community

KEY Au = Australia Fi = Finalnd Fr = France G = Germany HK = Hong Kong It = Italy J = Japan N = Netherlands Ru = RussiaSA = Saudi Arabia SK = South Korea Sp = Spain Sw = Switzerland UK = United Kingdom US = United States

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36 DIRECTIONS 05

About us Salterbaxter is a corporate branding and corporatecommunications design consultancy.

A key area of our expertise is corporate reporting and we adviseleading UK and European organisations on the development anddesign of their financial and CSR reporting programmes.

Our offer to clients is a balance of a genuine understanding of thecorporate governance and reporting agenda with a commitmentto producing outstanding creative work.

This has been recognised with our work receiving numerousawards including the ACCA award for innovation in sustainabilityreporting for our work with O2.

British Library

BSkyB

Business in the Community

Daily Mail & General Trust

Ernst & Young

GlaxoSmithKline

Kelda Group

Land Securities

Provident Financial

Reuters

Tetra Pak

Unilever

Vodafone

Yell

Current reporting/CSR clients include:

To find out more:

Contact Nigel Salter:[email protected]: +44 (0)20 7229 5720

01 Introduction

02 This year I have been driving a lotSimon Beavis

04 Taking controlDoug Johnston

06 Addressing the crisis of trust in businessMatt Haddon

08 Reducing corporate hot air emissionsMartin Cutts

10 The OFR – compliance will not be enoughNigel Salter

12 Top 100 UK companies by sector

13 The judging panel

14 The sectors

28 And the winners are

30 Global 100

36 About us

Printed by CTD using production facilities certified by ISO 14001. CTD achieved ISO 14001 in 2002 andruns a full Continuous Environmental Improvementprogramme. This programme aims to deliverreductions in solvent and energy use, waste, emissionsand resources in all areas of the production process.

CTD is an FSC accredited company. FSC is astakeholder owned system for promoting responsiblemanagement of the world’s forests. Its trademarkprovides international recognition to organisations whosupport the growth of responsible forest management.

Printed on Revive Uncoated, exclusively availablefrom the Robert Horne Group and made from 80%post-consumer waste.

Our thanks to our contributors, panel members, George Brooks for photography and Don atsalterbaxter for standing in an allotment in welliesand a flat cap.

salterbaxter202 Kensington Church Street London W8 4DP

Tel +44 (0)20 7229 5720Fax +44 (0)20 7229 5721www.salterbaxter.com

Directions 05Trends in CSR reporting 2004-2005

directions 05 a review of best in show of this years crop of csr reports

Documents

global companies

directions report

major uk companies

crisis of trustsome

quality of csr reporting

editions of directions

state of reporting

year of the12