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

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
the really tough sustainability issues hitting the
agendas of businesses and the media. Salterbaxter
identified a trend in CR communications with
companies operating in a state of CR 1.0,
something that we categorised as a housekeeping
approach to corporate responsibility. Businesses
are working hard to identify, monitor and manage
key environmental and social impacts – but then
coming to a halt, or not tackling the ‘elephant
in the room’.
research on external communications, a mark
of whether businesses are confident enough
to talk about their views and prioritise their
big issues as an organisation.
The questions we asked…
Is the business showing signs of embedding
corporate responsibility and sustainability
into its strategy and articulating where it
sees the business value?

In the current climate, where businesses are
expected to be more accountable for their
impacts in the economic crisis, issues such as
energy security and globalisation sit firmly under
the heading of corporate sustainability – and here
a housekeeping approach is just not good enough.
Stakeholders demand for their issues to be
addressed and businesses need to communicate
their stance on complex challenges. This is the
next step we have identified in sustainability:
the shift from CR 1.0 to 2.0.
Here we’ve looked at ten of the most responsible
UK companies, those that are platinum ranked by
Business in the Community*. These leaders have
thorough, robust programmes in place already.
But what are their communications reflecting?
Does the reader go away with a sense of what
issues are a priority and why? We based our
Is the business engaging effectively with
stakeholders?
Does the business work through a materiality
process to define and prioritise issues?
What this review is not doing… This is not a
critique on business conduct. Our aim is to
find clarity in approach and look at how this
is articulated.
Dan Holmes
Head of CR
salterbaxter
dholmes@salterbaxter.com
*The BITC CR Index is a benchmarking tool that assesses
and compares responsible business behaviour, more
details can be found at www.bitc.org.uk

CUSTOMISED
REPORTING
 BAA
1.0
The aviation sector is facing significant
challenges. Can this inherently difficult industry
keep afloat, manage its impacts and transform
its operations? Long used to tackling problematic
issues, such as noise pollution, BAA does
not appear to have adapted its corporate
responsibility reporting to fully reflect the enlarged
scale of its impacts. Whilst the 2008 corporate
responsibility report does explore Heathrow’s
contribution to the UK economy and airport
expansion, it does not put forward a truly
convincing case for its continued growth.
An engaging online campaign using social
media that confronts the questions in an
open and honest fashion would better inform
Barclays
2.0
Barclays has broadened its focus from corporate
responsibility to sustainability. The desired
intention being to identify and manage the
impacts of most significance to stakeholders
across the entire group and ensure that impact
management is embedded into business
practices. The 2008 Sustainability Report is
based on thorough stakeholder identification
and materiality assessments. Equally, the depth
of commitment to issues tackled is impressive.
However, while the approach is thorough –
both in terms of identifying issues of importance
to stakeholders as well as through provision of
examples of work undertaken – it is at times
Co-operative Financial Services
2.0
For the second year running, Co-operative
Financial Services has integrated its CR reporting
into a group-wide Sustainability Report. This is
a combined approach to reporting done well –
all too rare at corporate group level. It is split
into three main areas – social, ecological and
delivering value. For example, in the social
section ethical finance initiatives sit logically
alongside ethical supply chain measures and
community involvement. The only caveat
being that the document is not supported
by a compelling online presence – a missed
opportunity considering the detail and leadership
demonstrated. The ‘warts and all’ approach
is at times too dense – if only for the amount
of ground covered, which could detract from
ECONOMIC
engagement, opening up ongoing two-way
dialogue channels with stakeholders around
these sensitive issues. As a company constantly
in the public eye – due both to the scale of its
impacts and the intractable issue of airport
expansion – managing public perception and
engaging with the right groups is vital to the
long-term sustainability of its operations.
At present its efforts do not adequately
measure up to the size of the challenge.
Highly scrutinised and highly regulated,
it needs to upgrade communications to engage
with stakeholders in a more meaningful way,
so BAA is stationary at CR 1.0 for now.
too selective. More examples regarding how
the company responds to feedback (particularly
negative) would be useful. This would have been
particularly apt for demonstrating responses to
criticism of the financial sector on the topic of the
economic crisis.
Nonetheless Barclays is a CR 2.0 leader –
stakeholders are at the heart of its sustainability
strategy. The number of case studies for each
issue is notable. However, better use of online
tools should be a priority as currently the format
does not do the content justice.
different stakeholder group experiences. Outside
of its report, its campaigns such as ‘Plan Bee’
aimed at helping to save the honey bee, are
well supported with online videos and engaging
material – demonstrating how its values run
through the company.
Co-operative has made the shift to CR 2.0,
due to a formula and group-level approach that
demonstrates how each aspect of its business
is led by the same values. Whilst its membership
site is well populated with ethical campaigns,
its corporate site could improve the accessibility
of information contained in the report or direct
stakeholders to the relevant information.
Directions Supplement
June/July 09
J Sainsbury plc
1.0
Sainsbury’s identifies its values in its about
us section to include a “strong regard for the
social, ethical and environmental effects” of its
operations. Its five CR principles reflect the key
issues faced and these are prioritised following
an assessment of significance to the business
and their defined stakeholders. Although
Sainsbury’s “aim to approach complex issues
of responsibility and sustainability in the most
responsible way possible whilst also helping to
effect positive change”, the issues tackled do
not appear to be different from the ‘housekeeping
issues’ we would expect to see. For example
“operating within strict environmental limits”
John Lewis Partnership
1.0
The John Lewis Partnership is one of a kind,
with a “visionary and successful way of doing
business, boldly putting the happiness of
Partners at the centre of everything it does”.
Due to the structure of the business (employee-
owned) we would expect it to engage with its
stakeholders and respond to their concerns –
and we are not disappointed. Some of the more
interesting issues that are identified are supplier
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
should really be a given – a housekeeping issue.
The process of defining material issues does not
appear to be as robust as we would expect and a
clear engagement process is not communicated.
To make the shift to CR 2.0 we would like to see
an understanding and clearer articulation of the
complexity of some of the issues that this sector
faces. There is also a need for communication
on the process behind issue prioritisation.
On a positive note the Sainsbury’s interactive
store displays great use of innovative online
tools to bring to life the CR issues within the
store environment.
John Lewis Partnership’s long-standing
commitment to non-financial reporting sets it
apart from its competitive field. However, despite
the content being excellent, it fails to articulate
how the wider issues are central to the business
and is therefore still practising CR 1.0. This is
unfortunately exacerbated by a site and PDF
report that is too dense – hampering access
to information.
 Kelda
2.0
As a utility company, Kelda is explicit about who
its stakeholders are and their importance to the
success of the firm. For this reason the company’s
impact on communities is central to its CR strategy.
Allied to this, Kelda has a diverse set of stakeholder
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
strategy and has clearly identified its stakeholders
and the importance of each group. It has a
detailed set of metrics and indicators across all
key areas. Customers are central to the business,
as are communities.
While the commitment to climate change is
perhaps a peer-driven response to other
banks taking a lead on climate change (HSBC,
Co-operative), Lloyds TSB does grapple with
other wider issues, such as financial inclusion,
and demonstrates a proactive enthusiasm for
providing training for its employees and support
for suppliers. A great section of the report is the
responsibility scorecard.
Pearson
2.0
Pearson has fully integrated its approach
to responsibility into its business strategy.
This customised approach distinguishes the
company from its competitors, furthered by
great engagement with wider issues.
The company has aligned its combined CR and
business message to its role as an education
provider and information service. This allows the
group to evolve its corporate strategy and expand
FINANCIAL
INCLUSION
Kelda is at CR 2.0 – with strong evidence
of continuous stakeholder engagement, a user
friendly standalone site with clear signposting
of issue areas and the stakeholder engagement
tools relative to each issue. Definitely a leader.
Developed with stakeholders, it identifies
objectives and activities to enable Lloyds TSB to
move forward. Issues such as ‘better distribution
of the report’ and ‘improve effectiveness of data
collection’ sit together providing readers with a
snapshot of its ambitions for further achievements
with its corporate responsibility programme.
The full Report and shorter review are easily
digestible documents well populated with
varied case studies. Online engagement tools
are, however, poor. The website is low on detail,
merely providing a small number of links to latest
reports and policy documents. Better use of
the website to communicate progress is required
to take it to CR 2.0.
into new markets with education and literacy.
Initiatives are illustrated through good use
of case studies, enabling the reader to drill
down to what is happening at ground level
with individual companies.
The strategy and vision are a great fit with the
company, and the report is supported by good
use of online tools. Another CR 2.0 leader.
Directions Supplement
June/July 09
Reckitt Benckiser
1.0
Although CR is not given any mention within the
business principles or ‘About us’ section, Reckitt
Benckiser sees sustainability as “the benefits
our products and financial performance provide
to society; and delivering those benefits in a
way that continually reduces our impact on the
environment, whilst managing our business in
a socially and ethically responsible manner”.
Conveying the point that CR is part of
how the company does 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
adopting a “leadership approach” ensures
responsibility for managing CR sits within the
appropriate business areas, making CR part of
day-to-day business operations.
In a sector beset by controversy with the
conflicting objectives of energy supply, price
and the environment, Scottish Power states that
its stakeholders agreed a need to manage and
report “with greater depth and focus on the areas
where…business was having greatest impact on
LIFECYCLE
APPROACH
manufacturing and post sale – suggesting
an integrated approach. But disappointingly,
the company let’s itself down by its lack of
stakeholder engagement and there is no
evidence of any assessment of material issues
– keeping Reckitt Benckiser at CR 1.0.
On a separate note a really good overview of the
reporting process and how data has been put
together is provided – reassuring the reader of
how well CR is managed through the business.
society and the environment”. However what
we found in the 2008 CR report was in fact the
opposite – 12 focus issues and no presentation
of how they are prioritised. Scottish Power does
provide an overview of its impacts and issue
areas, explains its approach to managing the
impact and maps performance over the past
year. If only it prioritised its issues and showed
evidence of integrating stakeholder feedback
into the decision making process – it would
then be well on its way to CR 2.0.
 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
propelled themselves further into the world
of CR 2.0 with what we see as leading edge
initiatives. Here are a few highlights.
Engagement on wider issues emerged as a
key trend. Vodafone continues its exploration
of the wider issues relating to ICTs and emerging
economies, with studies looking at using its
influence and reach to improve health and
education. The Foundation’s latest report
explores the rapidly expanding area of MHealth
– the use of mobile phones to help track,
measure and assist the delivery of healthcare
solutions in the developing world.
By using a range of online tools and
communications strategies, 2.0 leaders are
engaging with wider audiences and becoming
more closely aligned with leading thinking on
sector issues. To launch the latest version of
its Creating Shared Value Report, Nestlé held
a wide-ranging forum exploring global policy
debates around food and nutrition. Broadcast live
over the internet, the forum’s hard-hitting content
dealt honestly with the challenges that lie ahead
for governments, private businesses and civil
society in confronting critical humanitarian issues.
Other examples of good online engagement
include Telefonica’s education social network
site www.aula365.com. It provides
supplementary learning content for Latin
American schoolchildren – backing up its
commitment towards closing the digital divide.
Royal Dutch Shell’s dialogues are another
example of using live online broadcast to
engage. The energy company, through live
question and answer sessions with its experts,
demonstrates leadership and transparency
around tough subjects. Elsewhere BASF
enhanced the usability of its latest report,
providing readers with the ability to manipulate
performance data in real-time. These interactive,
customisable charts enhance reader experience
allowing for a tailored, engaging read.
Another area attracting growing attention is
that of reporting on lobbying and public policy
activity. British American Tobacco’s latest
report has a detailed section covering lobbying
and political contributions. And GlaxoSmithKline
moves further by listing all lobbying activity
and declaring that it has made a commitment
to stop contributing to any political parties.

CLARITY

PRIORITIES

Contact:
Louise Dudley-Williams
ldudley-williams@salterbaxter.com
Tel: +44 (0)20 7229 5720
Emily Measor
emeasor@salterbaxter.com
Tel: +44 (0)20 7229 5720
The Directions Supplements
support our main Directions
report. The main report is
published each year and is
now regarded as the UK’s
most comprehensive analysis
of the trends and issues in
CR communications. If you
want a copy, call us on the
number below or email
directions@salterbaxter.com
202 Kensington Church Street
London W8 4DP
Tel +44 (0)20 7229 5720
Fax +44 (0)20 7229 5721
www.salterbaxter.com
About us
Salterbaxter advise companies
on strategy, branding, corporate
communications and design.
We have a strongly held belief that most things could
be made better – they just need better insight, brighter
ideas, more creative thought. And so our offer to clients
is all about creative re-thinking for the corporate
communications landscape. Re-thinking an entire
business proposition; re-thinking branding, vision
and values; re-thinking the approach to corporate
responsibility; re-thinking employee engagement;
re-thinking what the web can do for business; re-thinking
the annual report and shareholder communications.
This approach helps new ideas flourish and breaks
boundaries. It sheds new light on old problems and
turns some new problems inside out.
Most importantly it helps clients do things better.
The main areas we focus on are:
– Brand and reputation
– CR/Sustainability
– Corporate reporting
– Employee engagement
– Digital communications
Our clients are extremely varied and include FTSE 100
companies; major multinationals; some of the world’s
most exclusive brands; law firms; private equity firms;
world leading educational establishments and
independent, entrepreneurial businesses.