Companies trying to draft a corporate responsibility report for the first time often find the journey to be a bumpy one.
What exactly goes into one? How do you win senior leadership’s support? When is the best time to publish it? The list of questions can be endless. The list of guidance and best practices can be woefully short.
Kircher
In 2009, however, $12 billion food giant ConAgra decided to give it a shot. The company published its first CSR report last September, and it is preparing to publish its second later this year. Chris Kircher, vice president of corporate affairs at ConAgra Foods, explained how his company got started during a recent Webcast hosted by consulting firm Corporate Citizenship.
A primary driver, he said, was ConAgra’s larger push to adopt a more centralized operating structure in the late 2000s. Starting in 2007 and 2008, the company began to simplify its organization and focus on core businesses. It sold off ancillary operations such as its commodities trading group, which at one point included about 100 independent operating companies.
While moving to that more centralized structure, Kircher said, the company discovered many small efforts that fell under the umbrella of corporate responsibility, but weren’t connected in an integrated platform. CSR reporting “became a way of getting our arms around all that information,” he said.
A bit of shareholder activism at that same time also underscored the issue. As ConAgra was deciding to publish a CSR report, Kircher said, an investment group inquired about its corporate responsibility practices—specifically, whether ConAgra had policies about genetically modified crops, animal rights, ingredients in food products, and the like. Because the investors couldn’t find the information they wanted, they were going to submit a shareholder proposal that would have ended up in ConAgra’s proxy statement.
ConAgra instead decided to bring the investor activists into its CSR planning. “We agreed to involve them in the actual process for putting together the report, keeping them engaged in where we stood, and actually letting them take a look at the report before we posted it,” Kircher said.
Kircher also admitted that including the activists at that early stage carried a risk that they might not be pleased with what ConAgra had done (or not done) so far, possibly creating situations where “we’d agree to disagree.” The company took the gamble anyway, he said, and “what we found is that they were very appreciative not only of the opportunity, but of what we had included” in the report. All of their suggested changes proved valuable, he said. The investor group still works with ConAgra today, he added.
Getting Started
“I think it’s important to get the folks who are sharing the data to realize this is an ongoing effort it’s not a one-time type of thing.”
—Chris Kircher,
VP of Corp. Affairs,
ConAgra Foods
ConAgra’s first practical step was to identify important stakeholders at the start, to see which priorities matter most to each group. The company tapped Corporate Citizenship for help, which concluded that ConAgra’s customer base would probably play a critical role in determining what went into the CSR report. Since ConAgra’s customers are largely restaurants or retail supermarkets—some of which have aggressive CSR efforts themselves—“that moved the idea of a corporate responsibility report from a nice-to-have to a must-have,” Kircher said.
The importance of customers’ attitudes, in turn, helped win support from senior ConAgra executives. “It was helpful to remind senior management that this is more than just the right thing to do, but that our customers expect it, and we really need to keep that in mind as we look at what we’re reporting on,” Kircher added.
ConAgra next developed a corporate responsibility council, which included internal “gatekeepers” of the data needed for the CSR report. “I walked them through the design and strategy of rolling out the report, gave them a timeline of what that would look like and what their role would be in the editorial process,” Kircher said. And because senior management supported the CSR effort by then, gatekeepers of CSR data were “much more willing and able” to get that information.
Challenges
OUR ENVIRONMENT
Below are two graphs from ConAgra’s CSR report providing two examples of its sustainability program:
Source: ConAgra Foods.
ConAgra’s biggest obstacle, Kircher said, was simple reluctance to disclose data that had not been shared before. To get around that point, ConAgra turned to the Global Reporting Initiative—a globally respected framework for CSR data that companies should disclose. “It gave us a framework that we could follow to figure out what kinds of things might go into a report, and what degree of comfort we had in terms of transparency and sharing information,” he said.
“There may be some data that you have that you may never feel comfortable ever sharing, and there’s nothing wrong with that,” Kircher stressed, but neither should a CSR report be “a puff piece.”
Majumdar
A report’s release date should also be carefully considered, said Mitun Majumdar, senior consultant of Corporate Citizenship. Sometimes a company might want to leverage release of the report alongside other important news; other times, a company might want to delay the release so it won’t be overshadowed by another announcement.
Final Steps
Following the completion of its report, ConAgra began a publicity campaign to get the word out. It issued a press release, made an internal announcement, and sent the report to customers, suppliers, shareholders, and other important audiences.
Kircher said ConAgra chose to produce an electronic version rather than a traditional printed report. The only question was whether stakeholders would approve, but the response has been positive, he said. Some companies choose to produce a short summary report, but supplement it with more information online to delve into a greater level of detail, Majumdar said.
By putting the report online, companies can also then link to other Websites or repositories of related information, Kircher noted. Participants in the Carbon Disclosure Project, for example, “can provide a direct link to what you’re doing and how you stack up.”
Another benefit: “Should we ever need to update it with more dynamic information on a more frequent basis, it gave us the ability to do that a little more easily,” Kircher said.
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