The Lowe’s 2011 social responsibility report portrays a hard-working company, but one that is reluctant to take the next steps in reporting

Lowe’s, the world’s second-largest home improvement retailer (behind Home Depot), with 234,000 employees, 1,745 stores in North America and a 65-year history, appears to have a strong social responsibility programme. But its online reporting fails to reflect its sincerity.

But more important, the report lacks context. There is no compelling business case for social responsibility, and no explanation of what success could look like.

These matters should be explained by the leader. But Lowe’s chief executive, Robert Niblock, misses the opportunity. In his video message, Niblock says the company strives to “help customers secure a better tomorrow”, and that Lowe’s does this by selling energy-efficient products, ensuring a safe in-store environment, and providing exceptional customer service through an engaged and skilled workforce.

This hardly counts for a vision of a better tomorrow.

Strengths

The report’s strength lies in its presentation of the programmes and partnerships that form the company’s social responsibility agenda. Lowe’s divides its efforts into three clear categories – workplace, community and environment – allowing for easy web navigation.

The company’s programmes are well-developed and compelling. Lowe’s has a clear commitment to renewable energy that includes the installing of solar power systems on the roofs of its stores. The company’s work to promote responsibility throughout its supply chain, including in the sourcing of wood, has the hallmarks of leadership. And Lowe’s helps its customers shrink their environmental footprints by promoting and selling efficient products, and offering ways for customers to shop smarter. For example, in 2011 Lowe’s sold enough water-saving products to save the equivalent of two hours’ worth of flow over Niagara Falls, and rolled out electric-vehicle chargers at stores in nearly 20 cities.

If only Lowe’s matched the ambitions of its social responsibility programmes with a strong report. 

Leading reports go beyond descriptions of programmes and policies to include performance targets that can be used to measure progress. Lowe’s has only flirted with this step. It provides data points throughout the report, but these don’t appear to be part of a broader improvement strategy. Embracing a strong culture of data collection, improvement targets and rigorous reporting would help readers understand the company’s progress.

The supply chain section is a case in point. Lowe’s describes its supply chain clearly – 750 factories in 19 countries. It has an impressive ambition to audit “every active factory and new factory” at least once a year.That’s a commitment unmatched by leading advocates of supply chain responsibility.

But that’s where the promise ends. Nowhere does Lowe’s report on the audit results. Nowhere does it discuss what issues were uncovered or how it is helping its suppliers make the necessary corrections. Nowhere are we told if the company is going to hold itself accountable for its success or failure at improving environmental and labour standards in its supply chain.

Lowe’s could learn from its peer, Kingfisher of the UK. Kingfisher’s 166-point Steps programme is a prime example of how to measure performance against targets, over time. And how to report on progress.

In its environmental analysis, Lowe’s focuses on its efforts to help customers use its products in the most environmentally efficient way. This is good, but it would carry more weight if the company reported on its own footprint.

Operational footprint?

In this report, energy use, greenhouse gas emissions, waste and water use are inexplicably omitted. A company’s operational footprint is basic reporting. Without it, the focus on products comes across as an attempt to shift blame to consumers, which is surely not Lowe’s intention.

Lowe’s does a good job of bringing its social responsibility strategy alive. The report showcases employee accomplishments, partnerships and successful campaigns at particular stores, putting a human face on social responsibility. These stories are enjoyable, and by including letters from grateful customers, Lowe’s effectively illustrates how the company’s employee training and focus on people positively influence the consumer experience.

Lowe’s can be commended for using clear, direct and accessible language and for a website that is well structured and easy to read. But the report is practically a carbon copy of earlier reports, and reads more like a pamphlet of offerings, awards and accomplishments, rather than a report constructed to reveal progress and encourage improvement.

Lowe’s laudable efforts in social responsibility deserve better reporting.

Alex Parkinson is a senior consultant at Context America.

Snapshot
Follows GRI? No
Assured? No
Materiality analysis? No
Goals? No
Targets? Just one regarding the number of supplier audits.
Stakeholder input? No
Seeks feedback? No
Key strengths? Clearly presented, well written with accessible language.
Chief weakness? Very few meaningful metrics.
Pleasant surprise? Its ambition to audit every factory at least once a year.