The good, the bad and the ugly of European CSR reports

A group of CSR consultants has just published its analysis of all the sustainability reports published by the FTSE EuroTop 100 index companies.

The consultants, Radley Yeldar, wanted to provide an overview about the quality of sustainability reporting across Europe, and used the above index to make it easier to provide like for like comparisons. They analysed a total of 82 reports, covering 11 sectors.

Interestingly, its 'Top 10' of CSR reports worth looking at includes some rather controversial choices such as British American Tobacco and Rio Tinto. The former is lauded for the structure of its report and the latter for its stakeholder engagement.

Of course, this analysis is of the quality of CSR reporting, rather than what the organisations are doing as day-to-day practice.

As an overview, the CSR consultants pointed out that the top performers demonstrated how their CSR strategy supported their business strategy, and was governed by KPIs. They also praised companies which demonstrated external stakeholder input into the company strategy.

Some reports had also been innovative in their use of online media, providing several different ways for stakeholders to comment.

The report's author was critical of companies that produced lengthy, text-heavy reports with no indication of which elements were most important.

Common mistakes included: discussion of CSR activity being undertaken, but without any reasons why this was the case, no indication of the work the company does, and little or no description of what the company means by sustainability.

Conversely, successful reports gave a clear company overview, and had a clear discussion of the risk and opportunities presented by CSR and the marketplace issues faced by the company.

The analysis by sector makes the useful observation about 'basic materials' (mining, chemicals, industrial materials etc) that the high quality of the reports is likely due to the level of regulation and scrutiny to which they are subject. The sector has practice in describing complexity and bad news. This doesn't mean these companies are corporate saints - more than they're used to rebutting accusations of being sinners.

Consumer goods firms (including food producers, beverages and tobacco) were also high performers in reporting. The analysis notes that German reports were particularly good on transparency, bringing up the overall score.

The Industrials sector, covering manufacturing, construction and aerospace industries came in for criticism, with the slightly barbed comment that 'many reports seemed as if they had not moved forward since the late 80s'. Ouch.

Although Oil and Gas companies were praised for accountability and management, they fell down on stakeholder engagement, with the report's authors expressing surprise given that the industry 'almost invented' today's stakeholder engagement models. Perhaps they just don't want to share their secrets…

The Utilities sector apparently fell into the trap of being 'compliance-heavy' and lacking a 'human voice'. Not ideal if you actually want people to read your report.

Overall, this analysis was an interesting exercise, and one which anyone involved in writing their firm's CSR report should read.

Photo credit: Generationbass.com