Awards Reporting by Susie Keane

Rewarding good behaviour IMAGE ©i S tockphoto.com / D NY59 or leading companies astray?

Reporting is an essential component of communicating with Though this co-evolution certainly presents challenges, it’s a necessary stakeholders, who are increasing their scrutiny of companies’ part of developing a well thought-out response, and, when done transparently sustainability claims. A variety of standards and awards claim to be and with sufficient lead-time, will help able to recognise which companies are doing the best job. Should companies mature in their responses to material sustainability issues. It’s the your business be chasing the accolades? very tension between aspirational goals and pragmatism that fuels innovation. With high profile environmental disasters Comparability: the white whale As with any rapid evolution, from early and corporate scandals dominating of ratings flight to social networking, much progress headlines, interest in corporate behaviour Ultimately, ratings and awards should happens when new ‘editions’ build on the has never been greater, nor has it come serve to benchmark sustainability best of the existing peer group. from a more diverse array of stakeholders. performance and reporting quality, as Employees want to be proud of their well as highlight best practice. Often this Pursuing true transparency, not a company. Investors are increasingly is more easily said than done, however. costly data dump building environmental and social While some issues – such as ethics, “Transparency!” has become a rallying considerations into their investment governance and transparency – are cry among NGOs, the public sector and sustainability professionals, as well it decisions. Corporate conduct is coming universally important, others vary widely should. It’s worth noting, however, that under deeper scrutiny, and with this in their materiality across sector lines. well-intentioned companies who go spotlight comes the daunting task of Two reports can be quite transparent, yet overboard to disclose each and every sorting the visionaries from the bluffers. emphasise very different topics, leaving data point are missing the point of To this end, a number of ratings, indices the reader hard-pressed to compare transparency and may be inadvertently and awards have sprung up, each with apples to apples. running counter to the ideals of the their own methodologies, requirements In recent years, the Global Reporting awards they pursue – not to mention and rewards. Some of the most influential Initiative (GRI) has introduced sector spending unnecessary resources. awards, and companies they have supplements, which help reporters to True transparency is not dumping recognised, are listed in the tables on narrow in on the most material issues. page 10. hundreds of pages of obscure data on While this generally improves intra-sector an unsuspecting public. This buries the Convincing stakeholders of your comparability on the number of topics truth rather than illuminating it. Being company’s commitment to sustainability discussed in a report, it also creates a transparent means openly discussing comes with its rewards – such as improved potential pitfall for reporters who follow a material challenges, risks and successes, reputation and access to investment and ‘check-box’ disclosure approach, yet miss and presenting meaningful data in meeting regulatory requirements – but not the heart of their story. context. That data should be available if without notable cost. relevant and requested, but never used to Goalposts can – and should – shift obscure the real story. Ratings or awards Reporting is an investment As the sustainability landscape evolves, that encourage quantity of disclosure at With King III in effect, all listed South companies must adapt, taking cues the cost of quality only serve to incentivise African companies will now be expected from sustainability leaders as well as lazy reporting. As they evolve, the best to address their social and environmental the public sector, and responding to rankings will provide value in the quality impact in their integrated annual report. stakeholder input. The systems that rank of their analysis rather than the volume of For many, this presents new challenges performance, therefore, are beholden data they collect. and efforts. Add to this the pile of to the same evolution. Herein lies the surveys and questionnaires required challenge. Companies demand clear What do awards say about to be considered for most awards and guidance and criteria, and like neat-and- performance? indices, and you’ll see how quickly the tidy comparability from year to year. While there is some evidence that effort will fill your employees’ time as To stay relevant and robust, however, reporting can drive better sustainability well as your budget. But how meaningful the ratings and awards must update performance, this link is by no means are these ratings, and are they worth the their expectations according to shifting a hard and fast rule. Indeed, many investment? priorities and the leading edge of practice. companies are reporting openly on

8 TRIALOGUE SUSTAINABILITY REVIEW FEBRUARY 2012 Awards The greatest shoal on earth... IMAGE ©i S tockphoto.com / D NY59 But for how long?

The survival of long beaked common dolphins, “Brydes whales, bronze whaler sharks and Cape gannets is intrinsically linked to the health of sardine stocks. Without the vast silvery shoals pulsing along our shores, the many tens of thousands of predators that occupy the top of the marine food chain could soon disappear from ’s seas. ” Thomas P. Peschak, marine conservationist and photographer, on the importance of sardines and their role in the annual Sardine Run, a unique natural phenomenon of mass migration that takes place along South Africa’s East Coast between June and July.

The South African Maritime Safety Authority encourages all South Africans to play an active role in protecting our marine ecosystems for future generations.

For more information call 012 366 2600 or visit our website http://samsa.org.za

SR6_Advertorial.indd 4 21/07/2011 10:50 Awards increasing emissions or declining JSE SRI Best Performers Nkonki-Financial Mail Integrated efficiencies. What is certain is that while (alphabetically, by impact) 2011 Reporting Awards: Top 10 in 2011 the Johannesburg Stock Exchange Socially Responsible Investment (JSE SRI) High Impact Pretoria Portland Cement Limited and Dow Jones Sustainability Indexes Nedbank Group Limited (DJSI) indices are making efforts to track AngloGold Ashanti Barloworld Limited performance, there is still a long way to ArcelorMittal South Africa Goldfields Limited go before ratings are able to rank how Exxaro Resources Group Five Limited well a company manages its sustainability Aspen Pharmacare Holdings limited risks and opportunities. Gold Fields Limited Impala Platinum Holdings Foschini Group Limited For one thing, using publicly available Kumba Iron Ore Discovery Limited information and company-submitted Lonmin Plc Woolworths Limited survey responses can skew perception. Where ratings or indices aim to measure Merafe Resources BHP Billiton Group performance, not just reporting style, Mondi cutting through the fluff to determine the Pretoria Portland Cement Company Ernst & Young 2011 Excellence in Limited most sustainable companies is surprisingly Sustainability Reporting Awards: difficult. Inevitably, with every round Sappi Limited Top 10 of rankings, erstwhile darlings of the Woolworths Holdings The Bidvest Group sustainability world are cast into the Medium Impact sinners group, while analysts scratch their Eskom heads wondering how they didn’t see it Barloworld Limited Massmart Holdings AngloGold Ashanti coming. Limited Anglo American Platinum Steinhoff International Holdings While communicating performance is Exxaro Resources an important piece of the sustainability Low Impact Gold Fields picture, reporting shouldn’t be seen as Absa Group Impala Platinum Holdings an end in itself. Awards that undervalue The Bidvest Group Limited Sasol thoughtful self-analysis can end up Old Mutual Northam Platinum lauding companies with glossy reports Lonmin Plc but without a good grasp of their own Santam sustainability risks. Standard Bank Group Vodacom Group Limited Sustainability Services: Top 20 So, where’s the value? GRI-based Reporters 2011 The sustainability ratings universe DJSI Supersector Leaders 2011 Sasol continues to evolve, and signs point to Gold Fields it eventually consolidating as the most BMW Lonmin robust and renowned endure. Until Westpac Banking Corp SustainabilityServices that happens, companies need to be Xstrata Plc conscious of duplicated efforts, or risk Koninklijke DSM N.V. Impahla Clothing investing more of their budget chasing Hyundai Engineering & Construction Sappi awards than lowering their business’s Itausa-Investimentos Itau Anglo American Plc impact. Pay attention to ratings that give PepsiCo Inc Anglo Gold Ashanti valuable benchmarking and guidance, not Roche Holding AG Anglo Platinum necessarily those whose surveys make Post NL N.V. Foschini you look the best. As the pack of raters Swiss Re Ltd Massmart thins out over time, the strongest will be Pearson Plc Xstrata Alloys those who offer value to their constituents Repsol YPF SA African Rainbow Minerals beyond a plaque to hang on a wall. Koninkijke Philips Electronics N.V. Harmony Gold At the end of the day, inclusion in an Stockland MTN index, or being shortlisted for an award, Lotte Shopping Co. Ltd Northam Platinum should be seen as a pat on the back for Samsung Electronics Co. Ltd Liberty Group a job well done. Under no circumstances KT Corp Standard Bank should it be a sole driver of strategy. When pursuing ratings or awards, remain Air France KLM Evraz Highveld Steel & Vanadium true to your motivations, as well as to Enagas SA JD Group the interests of your company’s key stakeholders. A focus on these ‘material ACCA SA Sustainability Reporting Awards: 2011 issues’ will hold the best promise of De Beers (winner, overall and resources sector) sustainable business returns, and will be Vodacom (winner, non-resources) the best defence against being led astray Santam (winner, sector) by the fleeting glamour of awards.

10 TRIALOGUE SUSTAINABILITY REVIEW FEBRUARY 2012