This document provides a summary of trends in corporate responsibility communications among leading UK companies. It examines how 10 top-ranked companies by Business in the Community address complex sustainability issues and stakeholder engagement in their reporting. The analysis finds that only 4 of the 10 companies can be considered "CR 2.0 leaders" that successfully prioritize and communicate their stances on important issues. The other 6 are still practicing a "housekeeping" CR 1.0 approach and need to better integrate stakeholder feedback and tackle challenging topics to make the shift to CR 2.0 communications. Examples of online engagement tools used by international leaders are also highlighted.

1. DIRECTIONS
SUPPLEMENT
JUNE /JULY 09
TRENDS AND ISSUES IN THE WORLD
OF CORPORATE COMMUNICATIONS
The shift from CR 1.0 to 2.0 – the UK horizon

2. Directions Supplement
June/July 09
Welcome to the June/July 2009 edition of Directions Supplement.
Following on from our Directions 2008 report, which identified the European
companies making the shift from CR 1.0 to 2.0, we now reveal a snapshot of
UK CR leaders*. CR 2.0 is the move from CR housekeeping to communicating
the issues that matter most. In the current business climate many are questioning
how corporate responses to key ethical and environmental issues will fare.
Will the recession shift focus away from corporate responsibility or will CR be a
driving force for recovery? One thing is for sure, those companies that successfully
articulate how they have embraced their more complex issues are leading the
field in CR communications.
‘Leaders’ should be leading the way. So are these companies
putting into focus the issues that matter most to their
stakeholders? And is there clarity in their approach?
Our 2008 Directions report examined some of research on external communications, a mark
the really tough sustainability issues hitting the of whether businesses are confident enough
agendas of businesses and the media. Salterbaxter to talk about their views and prioritise their
identified a trend in CR communications with big issues as an organisation.
companies operating in a state of CR 1.0,
something that we categorised as a housekeeping The questions we asked…
approach to corporate responsibility. Businesses
are working hard to identify, monitor and manage Is the business showing signs of embedding
key environmental and social impacts – but then corporate responsibility and sustainability
coming to a halt, or not tackling the ‘elephant into its strategy and articulating where it
in the room’. sees the business value?
In the current climate, where businesses are Is the business engaging effectively with
expected to be more accountable for their stakeholders?
impacts in the economic crisis, issues such as
energy security and globalisation sit firmly under Does the business work through a materiality
the heading of corporate sustainability – and here process to define and prioritise issues?
a housekeeping approach is just not good enough.
Stakeholders demand for their issues to be What this review is not doing… This is not a
addressed and businesses need to communicate critique on business conduct. Our aim is to
their stance on complex challenges. This is the find clarity in approach and look at how this
next step we have identified in sustainability: is articulated.
the shift from CR 1.0 to 2.0.
Dan Holmes
Here we’ve looked at ten of the most responsible Head of CR
UK companies, those that are platinum ranked by salterbaxter
Business in the Community*. These leaders have dholmes@salterbaxter.com
thorough, robust programmes in place already.
But what are their communications reflecting? *The BITC CR Index is a benchmarking tool that assesses
Does the reader go away with a sense of what and compares responsible business behaviour, more
issues are a priority and why? We based our details can be found at www.bitc.org.uk
CUSTOMISED
REPORTING

3. BAA
1.0
The aviation sector is facing significant engagement, opening up ongoing two-way
challenges. Can this inherently difficult industry dialogue channels with stakeholders around
keep afloat, manage its impacts and transform these sensitive issues. As a company constantly
its operations? Long used to tackling problematic in the public eye – due both to the scale of its
issues, such as noise pollution, BAA does impacts and the intractable issue of airport
not appear to have adapted its corporate expansion – managing public perception and
responsibility reporting to fully reflect the enlarged engaging with the right groups is vital to the
scale of its impacts. Whilst the 2008 corporate long-term sustainability of its operations.
responsibility report does explore Heathrow’s At present its efforts do not adequately
contribution to the UK economy and airport measure up to the size of the challenge.
expansion, it does not put forward a truly
convincing case for its continued growth. Highly scrutinised and highly regulated,
An engaging online campaign using social it needs to upgrade communications to engage
media that confronts the questions in an with stakeholders in a more meaningful way,
open and honest fashion would better inform so BAA is stationary at CR 1.0 for now.
Barclays
2.0
Barclays has broadened its focus from corporate too selective. More examples regarding how
responsibility to sustainability. The desired the company responds to feedback (particularly
intention being to identify and manage the negative) would be useful. This would have been
impacts of most significance to stakeholders particularly apt for demonstrating responses to
across the entire group and ensure that impact criticism of the financial sector on the topic of the
management is embedded into business economic crisis.
practices. The 2008 Sustainability Report is
based on thorough stakeholder identification Nonetheless Barclays is a CR 2.0 leader –
and materiality assessments. Equally, the depth stakeholders are at the heart of its sustainability
of commitment to issues tackled is impressive. strategy. The number of case studies for each
However, while the approach is thorough – issue is notable. However, better use of online
both in terms of identifying issues of importance tools should be a priority as currently the format
to stakeholders as well as through provision of does not do the content justice.
examples of work undertaken – it is at times
Co-operative Financial Services
2.0
For the second year running, Co-operative different stakeholder group experiences. Outside
Financial Services has integrated its CR reporting of its report, its campaigns such as ‘Plan Bee’
into a group-wide Sustainability Report. This is aimed at helping to save the honey bee, are
a combined approach to reporting done well – well supported with online videos and engaging
all too rare at corporate group level. It is split material – demonstrating how its values run
into three main areas – social, ecological and through the company.
delivering value. For example, in the social
section ethical finance initiatives sit logically Co-operative has made the shift to CR 2.0,
alongside ethical supply chain measures and due to a formula and group-level approach that
community involvement. The only caveat demonstrates how each aspect of its business
being that the document is not supported is led by the same values. Whilst its membership
by a compelling online presence – a missed site is well populated with ethical campaigns,
opportunity considering the detail and leadership its corporate site could improve the accessibility
demonstrated. The ‘warts and all’ approach of information contained in the report or direct
is at times too dense – if only for the amount stakeholders to the relevant information.
of ground covered, which could detract from
ECONOMIC

4. Directions Supplement
June/July 09
J Sainsbury plc
1.0
Sainsbury’s identifies its values in its about should really be a given – a housekeeping issue.
us section to include a “strong regard for the The process of defining material issues does not
social, ethical and environmental effects” of its appear to be as robust as we would expect and a
operations. Its five CR principles reflect the key clear engagement process is not communicated.
issues faced and these are prioritised following
an assessment of significance to the business To make the shift to CR 2.0 we would like to see
and their defined stakeholders. Although an understanding and clearer articulation of the
Sainsbury’s “aim to approach complex issues complexity of some of the issues that this sector
of responsibility and sustainability in the most faces. There is also a need for communication
responsible way possible whilst also helping to on the process behind issue prioritisation.
effect positive change”, the issues tackled do On a positive note the Sainsbury’s interactive
not appear to be different from the ‘housekeeping store displays great use of innovative online
issues’ we would expect to see. For example tools to bring to life the CR issues within the
“operating within strict environmental limits” store environment.
John Lewis Partnership
1.0
The John Lewis Partnership is one of a kind, John Lewis Partnership’s long-standing
with a “visionary and successful way of doing commitment to non-financial reporting sets it
business, boldly putting the happiness of apart from its competitive field. However, despite
Partners at the centre of everything it does”. the content being excellent, it fails to articulate
Due to the structure of the business (employee- how the wider issues are central to the business
owned) we would expect it to engage with its and is therefore still practising CR 1.0. This is
stakeholders and respond to their concerns – unfortunately exacerbated by a site and PDF
and we are not disappointed. Some of the more report that is too dense – hampering access
interesting issues that are identified are supplier to information.
relationships and sustainable products. So the
complexities involved in tackling these issues
are explained and ambitions are also stated.
What we’d like to see now is an understanding
of the impact John Lewis can have as a business
and the rationale for why an issue is important.
SUSTAINABLE

5. Kelda
2.0
As a utility company, Kelda is explicit about who Kelda is at CR 2.0 – with strong evidence
its stakeholders are and their importance to the of continuous stakeholder engagement, a user
success of the firm. For this reason the company’s friendly standalone site with clear signposting
impact on communities is central to its CR strategy. of issue areas and the stakeholder engagement
Allied to this, Kelda has a diverse set of stakeholder tools relative to each issue. Definitely a leader.
engagement tools. This allows the company to
speak from a position of strength about its
leadership role in the region it operates in.
Performance data is detailed and an appreciation
of the wider sustainability context is evident.
Lloyds TSB
1.0
Lloyds TSB has integrated CR into its business Developed with stakeholders, it identifies
strategy and has clearly identified its stakeholders objectives and activities to enable Lloyds TSB to
and the importance of each group. It has a move forward. Issues such as ‘better distribution
detailed set of metrics and indicators across all of the report’ and ‘improve effectiveness of data
key areas. Customers are central to the business, collection’ sit together providing readers with a
as are communities. snapshot of its ambitions for further achievements
with its corporate responsibility programme.
While the commitment to climate change is
perhaps a peer-driven response to other The full Report and shorter review are easily
banks taking a lead on climate change (HSBC, digestible documents well populated with
Co-operative), Lloyds TSB does grapple with varied case studies. Online engagement tools
other wider issues, such as financial inclusion, are, however, poor. The website is low on detail,
and demonstrates a proactive enthusiasm for merely providing a small number of links to latest
providing training for its employees and support reports and policy documents. Better use of
for suppliers. A great section of the report is the the website to communicate progress is required
responsibility scorecard. to take it to CR 2.0.
Pearson
2.0
Pearson has fully integrated its approach into new markets with education and literacy.
to responsibility into its business strategy. Initiatives are illustrated through good use
This customised approach distinguishes the of case studies, enabling the reader to drill
company from its competitors, furthered by down to what is happening at ground level
great engagement with wider issues. with individual companies.
The company has aligned its combined CR and The strategy and vision are a great fit with the
business message to its role as an education company, and the report is supported by good
provider and information service. This allows the use of online tools. Another CR 2.0 leader.
group to evolve its corporate strategy and expand
FINANCIAL
INCLUSION

6. Directions Supplement
June/July 09
Reckitt Benckiser
1.0
Although CR is not given any mention within the manufacturing and post sale – suggesting
business principles or ‘About us’ section, Reckitt an integrated approach. But disappointingly,
Benckiser sees sustainability as “the benefits the company let’s itself down by its lack of
our products and financial performance provide stakeholder engagement and there is no
to society; and delivering those benefits in a evidence of any assessment of material issues
way that continually reduces our impact on the – keeping Reckitt Benckiser at CR 1.0.
environment, whilst managing our business in
a socially and ethically responsible manner”. On a separate note a really good overview of the
Conveying the point that CR is part of reporting process and how data has been put
how the company does business. together is provided – reassuring the reader of
how well CR is managed through the business.
It tackles a total of eight key priority issues taking
a lifecycle approach by looking at the impacts
associated with products from raw materials to
Scottish Power
1.0
Encouragingly Scottish Power recognises that society and the environment”. However what
adopting a “leadership approach” ensures we found in the 2008 CR report was in fact the
responsibility for managing CR sits within the opposite – 12 focus issues and no presentation
appropriate business areas, making CR part of of how they are prioritised. Scottish Power does
day-to-day business operations. provide an overview of its impacts and issue
areas, explains its approach to managing the
In a sector beset by controversy with the impact and maps performance over the past
conflicting objectives of energy supply, price year. If only it prioritised its issues and showed
and the environment, Scottish Power states that evidence of integrating stakeholder feedback
its stakeholders agreed a need to manage and into the decision making process – it would
report “with greater depth and focus on the areas then be well on its way to CR 2.0.
where…business was having greatest impact on
LIFECYCLE
APPROACH

7. A two-speed approach to CR…
The two-speed approach to CR, as identified in Directions 2008, is also very much
in evidence in the leading UK companies. Only four of the ten ‘leaders’ are leading
the way by bringing into focus the issues that matter most to their stakeholders
and their business, reflecting a clear approach and having the confidence to
communicate their stance on the complex issues. These businesses are identified
as ‘platinum’ leaders in CR as they have stringent responsible business practices.
We therefore expected to find more in their communications and will look out for
further developments in the months to come.
Looking back on some of Europe’s 2008 CR 2.0 leaders…
Some CR 2.0 leaders from 2008 have now Other examples of good online engagement
propelled themselves further into the world include Telefonica’s education social network
of CR 2.0 with what we see as leading edge site www.aula365.com. It provides
initiatives. Here are a few highlights. supplementary learning content for Latin
American schoolchildren – backing up its
Engagement on wider issues emerged as a commitment towards closing the digital divide.
key trend. Vodafone continues its exploration Royal Dutch Shell’s dialogues are another
of the wider issues relating to ICTs and emerging example of using live online broadcast to
economies, with studies looking at using its engage. The energy company, through live
influence and reach to improve health and question and answer sessions with its experts,
education. The Foundation’s latest report demonstrates leadership and transparency
explores the rapidly expanding area of MHealth around tough subjects. Elsewhere BASF
– the use of mobile phones to help track, enhanced the usability of its latest report,
measure and assist the delivery of healthcare providing readers with the ability to manipulate
solutions in the developing world. performance data in real-time. These interactive,
customisable charts enhance reader experience
By using a range of online tools and allowing for a tailored, engaging read.
communications strategies, 2.0 leaders are
engaging with wider audiences and becoming Another area attracting growing attention is
more closely aligned with leading thinking on that of reporting on lobbying and public policy
sector issues. To launch the latest version of activity. British American Tobacco’s latest
its Creating Shared Value Report, Nestlé held report has a detailed section covering lobbying
a wide-ranging forum exploring global policy and political contributions. And GlaxoSmithKline
debates around food and nutrition. Broadcast live moves further by listing all lobbying activity
over the internet, the forum’s hard-hitting content and declaring that it has made a commitment
dealt honestly with the challenges that lie ahead to stop contributing to any political parties.
for governments, private businesses and civil
society in confronting critical humanitarian issues.
CLARITY
PRIORITIES

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