announcements commentary

Is reporting child's play?

The ACCA has recently published a report on the reporting of child rights issues, in which I was involved.

The abuse of child rights is one of the most serious issues that a company can face. More than any other it has the potential to bring down any organisation associated with it. That is because the issue is so serious and the children concerned so vulnerable.

The reporting of child rights issues is perhaps one step removed, but nevertheless a crucial piece of the corporate accountability puzzle. ACCA’s paper starts from the relatively poor state of child rights reporting, acknowledging that few companies report much more than on the policy they have adopted on the issue.

The next step was to look at the role that reporting standards play in supporting child rights reporting. Overall the findings were that, with the exception of the GRI, the support that the main reporting standards provide is quite limited. While all the main standards (IIRC, Shift, GRI) are obviously consistent with transparent reporting on the issue, there is little explicit support. However the GRI is different since it has published more detailed guidelines in association with UNICEF.

ACCA also convened a roundtable to discuss what the reporting of child rights should look like. The main body of the report constitutes a set of guidelines, based on the structure of the UN Guiding Principles. It also provides examples of good practice from those companies that do demonstrate good practice in this area. This includes Lego’s guidelines on marketing and also H&M’s work with UNICEF and in piloting the Children’s Rights and Business Principles.

The ACCA report deserves credit for highlighting the issue – as there is a real need for companies to disclose more than their policies on the matter. But child rights reporting does present even more of a challenge than human rights reporting. Most human rights reporting (as indeed most corporate non-financial reporting in general) is directed at opinion formers. Yet the real people to whom accountability is owed are those whose rights are at stake. When it comes to child rights reporting, this implies a need is to communicate directly to children. That is not easy, although it can be done. This is a challenge that the ACCA paper identifies, but for which it does not offer significant guidance.

Which companies should take note? It is not only those that rely on extensive supply chains in which children may be exploited. It is also those that through the credit card products they deliver, can supply the finance for child abuse to take place. And of course it is also those that sell products designed to appeal to children. The test will be whether the coming months see more reporting of child rights issues.


Those that sell to children should report to them

Sustainability and CSR reports are rarely read – with the exception of those who write them and those who audit them. That doesn’t make them useless. At their best, they provide an anchor point and focus for those within companies trying to manage business impacts.

Still, that is a lot of time and money spent on little return. So what can be done?

One approach would be to address reports about business impacts to the stakeholders affected by the business. Of course that would make for some extra work since the interests of staff, say, are different from those of environmental NGOs. But the reward would not only be reports that are read, but very likely also a far richer and more integrated engagement process with stakeholders.

A good group to start with would be children. Children are an under-served stakeholder, yet one with which many large consumer-facing companies are deeply involved – think of all that advertising. And it is quite possible to write reports that are child-accessible.

So – those that sell to children should report to them.


Taking integration seriously

Will the new IIRC framework make a difference to accountability?

The main good point about the new IIRC framework is probably that it will encourage those who currently do not report at all on sustainability matters to think about them. It is perhaps the best-articulated statement of the enlightened shareholder perspective to date. But it is still a shareholder perspective: the framework makes explicit that an IIRC report does not have to satisfy other stakeholder information needs.

Of course the real interest will be in what companies do with it. Will we see a Shell producing an IIRC report that properly discusses its stranded assets? Will we see an HSBC discussing its structure in terms of international tax issues?

More modest success criteria would include seeing the framework used to construct the narrative sections of Annual Reports and the Disclosures on Management Approach of GRI reports.


GRI G4: an end to PR perfection?

Will G4 provoke a backlash? The new draft of the GRI Guidelines, G4, represents a step change in reporting. G4 is more demanding in terms of materiality, boundaries, the value chain and in other areas. This could provoke the somewhat childish response from companies that ‘it is just all too much’. And together with the potential removal of the application levels, which function as a reward system, the GRI may be at a turning point.

A hostile response to G4 would be a childish response because, if they are read with some attention, the GRI does not demand perfection. The guidelines provide for those that cannot meet every requirement or report on every indicator. It simply asks why not and what the company plans to do about it.

Such a thoughtful response would, unfortunately, be counter-cultural for the great majority of organisations. For most, a report that does not look ‘finished’ (and glossy) is seen as letting down the brand. The demands of PR outweigh the need to think strategically about sustainability and reporting – and perhaps sometimes the need to think at all.

The world does not need more polished sustainability reports. But it does need a more thoughtful process of reporting and a more serious exploration of what a company’s place in a sustainable world might be. The draft G4 GRI Guidelines are an important step in that direction.


Predictions for 2011

What does 2011 hold for sustainability? Footprints and transparency – see my article in the Guardian Online here.


The Unbearable Lightness of Thought

Apparently it is a good idea to have a recession if that means you can focus on making money at the expense of everything else. Stefan Stern thinks that “now the recession’s here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money”. This seems to me precisely the attitude of the bankers that got us into this mess in the first place.

He may be right to point out that doing good doesn’t necessarily have to be good for business, at least in the short run. Yet isn’t it such short run thinking that is responsible for the long term problems we now face?

And he may be right that much CSR is ‘babies, dolphins and forests’. A lot of CSR reporting does indeed suffer from smiling baby syndrome. But then, that is just poor CSR.

So if the consequences of corporate activity really don’t matter beyond making money, perhaps he should explain whether he thinks it necessary to have a planet around to make money on.


Partial to Confusion

The BBC will not support a Disaster Emergency Committee appeal for Gaza.

Their thinking behind this is that it might compromise the BBC’s impartiality. Quite apart from the controversy over this decision actually being good publicity for the appeal, the thinking behind this view seems very muddled.

Of course the war which caused the humanitarian distress in Gaza is extremely controversial. No-one is expecting the BBC to take sides on that. But why should the need to help people who are suffering be controversial? What on earth could the ‘balancing view’ as to the need to relieve suffering look like?

I look forward to the treatment of this issue in their forthcoming corporate responsibility report…


Constructing the Compact

The Global Compact is facing a real challenge in its handling of the complaint against PetroChina by NGOs.

If it fudges the issue, its credibility will be undermined.  If it de-lists PetroChina, it will appear to be going backwards. So if PetroChina will not respond constructively, then perhaps the Global Compact should.

One root of the problem is the structure of the Global Compact.  It combines setting the standard with judging those who try to apply it.  This gives it the potential for conflicts of interest.  Dealing with such issues is a well-trodden path.  Maybe it is time the Global Compact set out on that journey.