The New Annual Report

What are you doing to ensure a sustainable planet? The public is demanding to know, and an increasing number of companies worldwide are complying by issuing annual corporate responsibility reports.

At a time when SEC-mandated financial annual reports run the gamut from minimalist “10-K wraps” to traditional books with photographs, charts and thematic messages, a new category of annual reports is emerging. Companies give them various names-Corporate Responsibility Review, Global Citizenship Report, Sustainable Development Report-but their intent and purpose are basically the same: to address pertinent environmental, social, community and sustainability issues, define specific objectives, and benchmark progress.

Although companies are not required by law to produce such reports, an increasing number do. In Europe, about 90% of the top companies publish corporate responsibility reports, averaging 72 pages, according to Nearly two-thirds of companies in non-transatlantic nations, including Japan, Brazil and Australia, do too, with an average page count of 64. Recently U.S. businesses have adopted this practice, with the majority of the top 100 American companies now publishing reports averaging 44 pages.

Also noteworthy is that companies that are not publicly held issue corporate responsibility reports too. Universities, medical facilities, agricultural concerns, transportation lines and other businesses are responding to stakeholder demand for greater transparency and accountability. Today even shareholders who want to protect the value of their investment recognize that sustainable performance depends on a healthy “triple bottom line”-environmental, social and financial.

Since no disclosure rules dictate what must go into a corporate responsibility report, information varies broadly, but typically focuses on specific issues relevant to that business. Protection of human rights in overseas operations. Employee health and workplace safety. Use of toxic substances. Renewable energy and conservation. Waste management. Size of carbon footprint. Animal testing of drugs and cosmetics. Environmental chain-of-custody oversight. Water and air quality. Recyclability. Environmental partnerships. These are some concerns that global watchdog groups closely monitor, ready to catch and expose scofflaws on Internet blogs and postings.

To bear up under this scrutiny, the majority of corporate responsibility reports surveyed avoid speaking in generalities and in a marketing tone of voice. Instead they focus more on what they are actually doing, reinforcing their message with tables and graphs and evocative color photography. Here are some ways that companies and institutions are communicating their sustainability efforts effectively.

Gap Inc.
90 pages self cover, 11″x17″

For Gap, commitment to social responsibility extends not only to its 150,000 employees but to those working in the garment factories of its global supply chain. Tables and charts in its report track conditions and remedial progress. Energy conservation and environmental performance programs cited run the gamut from the use of organic cotton to replacing some 7,500 light fixtures in two locations with low-energy T8 fluorescent bulbs-good for the environment and a $947,000 annual savings for the company.

163 pages online only, 8.5″x 11″

No photographs or illustrations are included in Nike’s
163-page Corporate Responsibility Report, just charts and graphs. The online report (designed to a downloadable size) delves deeply into initiatives related to sustainability, human rights, workplace safety and community support. In the interest of full disclosure, it even includes a directory of names and addresses of all of its contract factories worldwide.

The Coca-Cola Company
40 pages plus cover, 9″x10.5″

The Coca-Cola Company, which calls itself “a local business on a global scale,” operates in more than 200 countries. As such, reporting on the ways it supports communities encompasses the entire world. Its performance reviews by geographic area include specific initiatives, ranging from bringing electricity to a health care center in Uganda to supporting HIV/AIDS awareness in China. Water stewardship and sustainable packaging are critical commitments wherever it operates.

Stanford University
12 pages plus cover, 7.5″x 11.75″

Environmental leadership, innovation and conservation
are the three pillars of Stanford University’s sustainability program. Its report lists achievements that range from retrofits in student housing to save 50 million gallons of water annually to reducing the number of single-occupancy commuter vehicles on campus from 72% in 2002 to 52% today. Other programs include new buildings that introduce green innovations and an Energy Crossroads conference that brings together sustainability leaders from the government, nonprofit, business and academic sectors.

16 pages self cover, 8.5″x 11″

Target’s corporate responsibility message focuses on community and environmental activities in North America, where it operates approximately 1,500 discount retail stores in 47 states. The discount retail giant features initiatives that reinforce its consumer-friendly image by calling out projects, such as offering free apartments to families of long-term patients at St. Jude Children’s Research Hospital to funding classroom field trips for school kids. On the environmental front, Target highlights its two LEED-certified sustainable stores and gift cards made from biodegradable material.