Corporate social responsibility (CSR) reporting, sometimes referred to as the triple bottom line (for "people, planet and profit"), has seen significant growth in the past five years, nearly tripling from 2,000 in 2007 to almost 6,000 in 2011, according to Corporate Register. Manufacturers in particular have taken to releasing these reports, if for no other reason than to keep their customers happy or at least informed about the nature of their sustainability initiatives.
An entire cottage industry of auditors and consultants has emerged to advise manufacturers on the numerous regulatory efforts in place or on the horizon, and virtually every industry sector has its own "green" initiatives and causes (e.g., free range, conflict-free minerals, Fairtrade, LEED, etc.). Companies are expected to be able to track the carbon footprint not only of their own manufacturing activities, but also their transportation, distribution and procurement activities, while monitoring the related activities of their extended supply chains as well. They're also expected to adhere to diversity and inclusion in their hiring practices.
That's not to say, of course, that all CSR reports are created equal, especially when it comes to nailing down exactly how a manufacturer reports its CSR activities. Companies that excel in the third P of the triple bottom line -- profit -- tend to be rewarded by Wall Street even if they come up a bit short on the people and planet side. However, such is the momentum toward full disclosure that even the biggest and most successful companies are being held accountable by stakeholders for incomplete reporting.
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| "If theres a production process that can be made safer, we seek out the foremost authorities in the world, then cut in a new standard and apply it to the entire supply chain." Tim Cook, CEO of Apple Inc. |
The poster child for how not to reveal CSR activities is high-tech giant Apple Inc. Despite a well-deserved reputation for supply chain excellence, Apple (IW 500/14) has come up short in recent months due to its reluctance to fully disclose how it measures its carbon emissions and how it monitors the activities of its global suppliers. Apple, for instance, declined to participate in the Carbon Disclosure Project (CDP), an independent global system for companies to measure, disclose, manage and share climate change and water information. While more than 3,700 companies worldwide participate in the CDP, Apple does not (making it the largest IT company in the world to not participate). Having cultivated a cachet with the counterculture for decades, Apple's nondisclosure was viewed as a thumb in the eye to many of its adherents, especially after The New York Times criticized the company for effectively turning a blind eye toward the substandard labor practices of Foxconn, a Taiwan-based electronics manufacturer that assembles many of Apple's most popular products (iPads, iPhones, iPods, etc.).
Compounding matters, when Apple produced a 2012 progress report on its supplier responsibility, the company revealed that almost two-thirds (62%) of its suppliers do not comply with its limit of 60 hours per week in the factory. Also, more than a third (35%) of Apple's suppliers do not meet its standards for workplace safety, while nearly a third (32%) do not comply with Apple's hazmat management practices. To stem the rising tide of criticism, Apple CEO Tim Cook announced earlier this year that it had joined the Fair Labor Association (FLA) as an associate member, the first high-tech company to do so, and that the FLA will independently report on Apple's supply chain activities.
Speaking at a recent technology conference, Cook said, "We don't let anyone cut corners on safety. If there's a production process that can be made safer, we seek out the foremost authorities in the world, then cut in a new standard and apply it to the entire supply chain."
