While reporting heavyweight BT is still top dog, young upstart Virgin Media has some tricks of its own

In the contest for best corporate responsibility performance and reporting, BT and Virgin Media are far from evenly matched. BT has seven years worth of Better World reports under its belt. It has operations in 170 countries and more than 110,000 employees. Virgin Media, in its current incarnation, came into being less than two years ago and its 15,500 staff are all based in the UK. Start … Managing Our Responsibilities in 2008 is its debut report.

But what counts in corporate responsibility is not necessarily size or tenure. Discerning stakeholders ask instead whether the veteran reporter is still pushing performance; whether the upstart is achieving game-changing innovation.

BT deserves the mantle of corporate responsibility leader. It established climate metrics before most companies had acknowledged that global warming was real. It has instituted progressive practices to ensure equal access to communications technology. BT’s reporting is smooth: comprehensive yet focused, and buttressed by years of internal management attention and external counsel and critique.

Virgin Media, through its affiliation with the Virgin Group, draws on a different heritage: scrappy, cheeky, innovative and unexpected. Its first report is true to these roots. While concrete examples of innovation – like onsite “napping pods” for employees to rest and recharge – are relatively limited, Virgin Media’s angle is more about the road ahead than its past accomplishments. In delivering this message, it bucks traditional reporting language, referring to challenges, for example, as “headaches” and “things that keep us up at night”. If word choice is any indication, Virgin Media could deliver any number of innovations to the field of corporate responsibility and close the gap on BT.

Leading with strengths

One of BT’s key strengths is its demonstrated ability to keep its eye on the sustainability ball over long periods. The company has amassed vast quantities of data that track and measure performance along the four pillars of its sustainability strategy: climate change, a more inclusive society, sustainable economic growth and responsible business. The company tightly focuses its Sustainability Review, a 24-page summary of its full sustainability report, on these themes, using selected examples and core performance measures to help readers gain a clear perspective on BT’s performance. BT checks and verifies the relevance of its strategy through internal materiality analysis, and input from its leadership panel, composed of sustainability experts from thinktanks, business and academia.

BT’s Sustainability Review is therefore quite successful, underpinned as it is by a rich yet easily searchable Society & Environment website that catalogues background and policy information, details on individual programmes and initiatives and exhaustive charts and tables of performance metrics spanning years. Indeed, to help readers navigate its full sustainability report, BT provides not one, but four indexes (alphabetical by topic, Global Reporting Initiative-based, by business principle, and according to the ten principles of the United Nations Global Compact), and provides a key word search function to boot.

Coming up quickly

Virgin Media is itself wasting no time in establishing a vigorous sustainability practice. The company’s first report communicates the promise of great things to come, on employee and customer relations in particular.

Virgin Media appears to be making corporate responsibility a cornerstone of the company culture, a laudable effort for a new enterprise. To this end, the company participates in forums with more than 200 Virgin Group companies to share best practice on topics such as responsible business. Access to the Virgin Group as well as other industry groups will help Virgin Media gain ground on the likes of BT and other reporting leaders.

That said, readers deserve fair warning: Start … Managing Our Responsibilities in 2008 is more a prelude than a fully-fledged report. There is a glaring absence of quantitative goals and targets, which will impede comparability between this and future Virgin Media reports. The reporting process also passes on a thorough materiality analysis to define key issues and inform its broader strategy. Instead, Virgin Media leveraged the expertise of organisations such as Business in the Community, the Media CSR Forum, and, to a lesser extent, the Global Reporting Initiative to inform this effort.

Virgin Media is upfront about the limitations of its first effort, without minimising its ambitions. That said, the company must be prepared to deliver on the considerable expectations it raises here.

Climate innovation

BT can rightly claim the title of climate leader: the company has set audacious goals of reducing by 80% its UK-based carbon dioxide emissions from a 1996 baseline by 2016, and reducing by 80% its global CO2 emissions by 2020 from a 1996 baseline (per contribution to GDP).

BT reflects its commitment to these goals in several ways. BT asks employees to participate on a personal level, for example, to join company carbon clubs to educate themselves about climate change and help generate ideas on how BT can reduce its carbon footprint. BT chief executive Ben Verwaayen chaired the Confederation of British Industry Climate Change Task Force in 2007. BT has also launched a sustainability consulting practice to help large corporate and public sector customers derive the greatest possible reductions in greenhouse gas emissions from the use of efficient information technology.

In spite of its short-cut approach to determining materiality, Virgin Media, like BT, connects on key issues such as climate change. The company is exploring innovative ways to reduce emissions, promote energy efficiency and invest in “carbon outreach”. The latter programme supports two initiatives, one that combats deforestation through the Tropical Forest Trust’s climate tree initiative and another that helps Southampton University’s sustainable energy research group to monitor the energy use patterns of the UK’s eco-homes. The combination is fresh and effective, fighting climate change on multiple fronts and striking a nice balance between the global and the local elements of this planet-wide crisis.

Leading from the top

For all the areas in which Virgin Media falls short in comparison with BT, executive commitment and involvement is not one of them. Chief executive Neil Berkett himself sets a remarkable tone: for starters, he chairs the company’s corporate responsibility committee, which otherwise consists of managing directors from various functions of the business. In what many similarly placed managers would consider a dream scenario, Virgin Media’s director of corporate responsibility reports directly to this high-level, cross-functional team. Additionally, Berkett accepts “personal responsibility to show leadership” on addressing key corporate responsibility issues in his letter to stakeholders, a refreshing approach.

BT can also boast of tremendous top-level support for its sustainability strategy and programmes. An executive-level sponsor oversees performance for each strategic theme, driving accountability and attention to BT’s sustainability programmes. BT uses its Sustainability Review to drive this point home, incorporating Q&A sections with each executive that not only reiterate BT’s continued focus, but also outline specific challenges to be overcome.

One possible concern for BT is the recent change-over in the positions of both chairman and chief executive. Indeed, the chairman’s letter in this year’s report falls a bit flat, simply restating key accomplishments from the past year, without setting forth any sort of updated, broader vision for BT’s next steps.

Bottom line

BT continues to push the business case for sustainability, quantifying benefits wherever possible. For example, BT calculates savings from energy, waste, and travel programmes at £365m over a five-year period from 2004-08. BT also puts the value of excellence in corporate responsibility (in winning competitive bids) at a potential £2.2bn in 2008 – certainly nothing to sneeze at.

But where BT truly pulls ahead of the pack is in its effort to directly link financial measures to aspects of sustainability performance. BT’s table of key performance indicators and targets has been expanded to contain a financial indicators column with hard numbers as well as descriptions of indirect impacts. BT intends to develop additional financial indicators in future years, such as a metric for the costs to business of lost time injuries and a measure quantifying the financial ramifications of a diverse workforce.

BT’s success in the further rollout of such metrics should attract analyst attention, and hopefully inspire Virgin Media – and the entire reporting field – to a much-needed convergence of financial and sustainability communications.

In terms of both performance and communication, BT will be hard to catch, by Virgin Media, or any other company, because of its incredible momentum and continued focus on innovating sustainability. BT’s approach of staying humble and continually looking to the future may prove an insurmountable obstacle to any would-be challenger.

Snapshot BT 2008 Changing World: Sustained Values Report Virgin Media: Start … Managing our Responsibilities in 2008
Follows GRI? Application Level A+ No
Assured? Yes No
Materiality analysis? Yes No
Goals? Yes Yes
Targets? Yes Some
Stakeholder input? Yes Some Seeks feedback? Yes Yes Key strength Years of sustained follow-through. Linkage of corporate responsibility performance with financial indicators. Prospect of innovation; high level of executive oversight and participation. Chief weakness Chairman’s letter lacks vision and excitement. Not enough substance to call this a true report. Pleasant surprise Clean organisation in the face of massive amounts of data. Making an early start on infusing corporate responsibility into company culture.

Aleksandra Dobkowski-Joy is a principal at Framework:CR
Kyle Whitaker is an analyst at Framework:CR

Useful links:
BT Group plc 2008 Sustainability Report
Virgin Media 2008 Corporate Responsibility Report

If you want to hear more about best practices in sustainability reporting, you might be interested in a conference we're doing on 11th-12th June 2009, in Brussels. It's called "The Global Corporate Responsibility Reporting Summit".

It's about how to produce an effective CR report and engage all your stakeholders in the process. If that's of interest, you can call us on +44 (0) 207 375 7165 or have a look on www.ethicalcorp.com/globalreporting/

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