The question on everyone’s (masked) lips.😷 Although we are currently publishing a 2019 Sustainability Report, should we include our response to COVID-19, even though it occurred in 2020?
In my view, the answer is unequivocally yes. Reporting is never in a vacuum, and when reality has changed so starkly between the time of preparation and the date of publication of a sustainability report, I believe it’s fairly obtuse not to include a reference or update. In fact, many are referring to a company’s COVID-19 response as a sort of litmus test of its seriousness about sustainability. If core values of positive social impact and responsible employment are not demonstrated in times of crisis, when they are most needed, then they are apparently not truly embedded. Check out the COVID-19 Stress Test by Vigeo Eiris, which concludes with the words: «CSR presents a pathway to protect consumer trust, investor confidence and workforce loyalty. If there is a simple lesson that we can relearn, it is that CSR practices can act as powerful tools when responding to a crisis.»
I reviewed 30 Sustainability Reports that were published in the last few weeks (those that have crossed my radar through announcements and alerts) and produced the following analysis:
- The majority of companies include references to COVID-19 in their 2019 Sustainability Reports, though a third of them are only doing so via a brief mention in the leadership (Chair, CEO or other senior leaders) letters.
- The number of companies providing extensive updates about their actions to support their stakeholders during the COVID-19 challenges are few — just 8 companies out of 30 specifically reference more than a single stakeholder group (e.g. employees, customers, suppliers, communities or new business activities).
- Most of the companies that have included COVID-19 references in their Sustainability Reports also have a COVID-19 update on their website homepage.
- Three companies that do not provide COVID-19 updates in the 2019 Sustainability Report include a reference on the company homepage.
- Five companies — radio silence.
These results surprised me a little. There has been no greater global social or economic crisis in recent years than the coronavirus pandemic, affecting billions of lives, forcing businesses around the world to a standstill, a slowdown, or for many, bankruptcy. There has never been a period in our lifetime when the ability to work and deliver economic output has been so drastically affected. There have never been so many layoffs in such a short period, nor so many employees affected by the virus or by sickness or deaths of loved ones, neighbors or colleagues. Never has «materiality» been subordinated to a single overriding issue that affects everything corporations are doing.
In this unprecedented scale of crisis, all corporations face both risk and opportunity — the familiar duality of CSR or sustainability. The annual Sustainability Report is a core communication tool to disclose the impacts of companies on people and the environment, as well as the sustainability risks and opportunities companies face, and how they are dealing with them. By the time the next report is published, in 2021, although companies may still be navigating the «new normal», whatever that looks like, their actions now are what counts and what stakeholders seek to understand. A page on a website may get lost in time, a Sustainability Report is a permanent attestation to a company’s commitment. Business is not currently «as usual». Sustainability Reports published in 2020 should also not be «as usual».
Yet, in more than a quarter of the recent reports I reviewed, companies say nothing at all — not even: «Hey folks, stay safe.» For many others, the mention is cursory. On the positive side, there are examples of comprehensive disclosure such as Infosys, Samsung and Moody’s (see below).
Here are a few examples from the 30 reports I reviewed (alpha order):
B2Gold’s President and CEO references COVID-19 in his opening letter — not the first thing he addresses, but it is there on the first page of the letter and a commitment to work with governments, health authorities and other players to support navigating the pandemic. Separately, B2Gold includes a half page update of key COVID-19 initiatives and commitments addressing employees, health and safety and community — referencing more details on the company’s website.
Notably, all forecasts and data shared for 2020 is footnoted in B2Gold’s report with the words: «based on current assumptions, subject to variation due to impacts of COVID-19 pandemic.»
This is a first report from this company, and nothing like a baptism of fire, facing both the challenges of first time reporting AND the COVID-19 pandemic all at the same time. GasLog’s Chairman’s first words in his opening letter addresses this. In fact, the first paragraph of the Chair’s letter includes the word «challenges» three times — a symptom of today’s market and reporting environment. In addition to this, GasLog briefly references the measures taken to protect employees and maintain operations.
Infosys provides detailed coverage of its COVID-19 response, starting with a reference in the COO letter to the contribution made by the Infosys Foundation to support local communities. Later, a dedicated section in the report focuses on Infosys’ risk management approach and support for the health and safety of employees and vendors, and business continuity plans for customers.
COVID-19 references also appear in different sections of the report, describing, for example, research initiatives on the effects of the pandemic, and a hackathon hosted with IBM to address issues such as crisis communications and remote working. Another example is converting the company’s internship program to operate virtually so that interns can stay on course in their careers. There is also a specific case study on smart building automation as a key factor in managing uninterrupted operations in buildings, including critical infrastructure like data centers.
Further, Infosys reports pushing out its climate ambition from its commitment to achieve carbon neutrality in 2020 to 2021 due to COVID related uncertainties. Interesting. With all the travel restrictions, lockdown and virtual working, you might have thought that the carbon neutral commitment would be even easier to achieve in 2020. But apparently it take more than zoom meetings and cancelled flights to deliver a long-term step change in carbon performance. It’s notable the the company is acting with a measure of caution and publishing an updated commitment to stakeholders.
Several references are made in different sections of the report, covering employees, safety, communities in addition to a brief mention by the CEO in his opening letter.
And this is a final comment from the General Counsel:
So, not overly detailed, but clearly representing different dimensions of the Mondelez COVID-19 response. Mondelez also maintains a website page, accessible from the homepage, with a detailed list of actions currently being taken across different aspects of the business.
Moody’s covers its response to COVID-19 through its CSR Report across different dimensions of its activities, with a focus on helping customers and markets navigate this pandemic and managing risk.
Interestingly, as an employer of 11,000 people worldwide, Moody’s makes no reference to what it’s doing to support its employees through the challenges of COVID-19, choosing to focus on market and customer-facing actions. Moody’s coverage of its COVID-19 response is prominent on the company’s homepage and covered in a coronavirus blog. You can also download a Moody’s COVID-19 status report, an early example of what I suspect will be a flurry of standalone COVID-19 Response Reports that many companies will publish starting in late 2020 and through 2021, supplementing regular annual and sustainability reporting. Sooner or later, someone might even develop a standard for COVID-19 CSR Reports (GRI? Anyone? 😂)
Recency Centers publishes a strong report that is GRI, SASB and TCFD compliant, well-structured and nicely laid out. This applies also to their COVID-19 response, grouped on one page, covering support for employees, communities and ethical conduct. There’s something to be said about grouping COVID-19 updates on one page (or two) — providing a sense of scale and coverage to a company’s response, This way, the reader can appreciate the company has a considered response, rather than a fragmented (uncoordinated) one.
Samsung Electronics has one of the most extensive (and impressive) examples of coverage on COVID-19, and, in this 13th Sustainability Report, introduces a dedicated chapter covering the COVID response and other mentions throughout the report. Specifically, the CEO opens up with understanding the challenges everyone faces and wishing everyone well. Nice. Then a dedicated chapter covering Samsung’s COVID response for employees, suppliers, customers and some stories.
In particular, thanks to COVID, we meet Kim. Kim, I assume, is a fictitious employee and Samsung shares the changes to her day as a result of COVID-19 measures in the work environment. I note she didn’t take time for ice-cream, but maybe this wasn’t a typical day!
Beyond this, Samsung shares in the dedicated COVID-19 chapter, (and in a case study later in the report) how the company helped boost mask production in Korea by 51% through deploying support personnel to optimize the production process for local mask-makers, and engaged more than 100,000 employees in brainstorming and debating ideas to address COVID-related challenges. Samsung also references COVID-19 in its risk management section and the establishment of a separate COVID-19 risk monitoring and response organization. All in all, a comprehensive and creative disclosure on COVID from Samsung, demonstrating a holistic approach to protecting different stakeholders.
STMicroelectronics:2020 Sustainability Report Briefest of mentions in the report. Cursory mention by the CEO and a short reference to triggering risk management protocols to support employees and maintain supply chain continuity. One nice touch: Thank you to report contributors who worked to complete the report in lockdown.
There is no mention of COVID-19 on this company’s website.
Reporting is never easy and reporting in CoronaWorld is even less easy. Well done to all these companies and others who are maintaining reporting, with or without references to their COVID response in this period. I have no doubt that the pressures at this time on all businesses could easily turn into an excuse to delay/shelve disclosure. Having said that, the way companies are behaving through this pandemic is a direct reflection of their values. Does no COVID disclosure = no values? Well, that might be going a little far, but no disclosure certainly risks eroding stakeholder trust.
What’s the best way to disclose? Report? Web? Social media? Answer: All of the above. But failing to include any form of COVID response in sustainability reports publishing this year is a missed opportunity and one that stakeholders are not likely to forget. Even ice cream may not help.