Kimberly Clark Australia and New Zealand (KCANZ) is a subsidiary of the US-based company of the same name, manufacturing health care and commercial products under popular brands such as Huggies, Kleenex and Kotex. Kimberly Clark produces an annual sustainability report covering its global operations, while subsidiaries such as KCANZ produce specific, supplemental reports focusing on their region of operation. Yet, although Kimberley Clark’s worldwide report is a comprehensive and well-informed document, KCANZ’s most recent sustainability report, ‘Walking the Talk,’ shows that there is still much work to be done at the subsidiary level.
The 31-page report provides a high-level overview of KCANZ’s business and the sustainability issues it deems ‘essential’ – managing resources, sustainable practices, stakeholder relationships and governance. The report opens with a statement from KCANZ’s MD, claiming that the company makes "a simple promise: to actually do what we say we will." After reading this document, however, one has a far better idea what the company is saying than what they are actually doing (or why). This report misses what many professionals would consider the primary goal of sustainability reporting – to identify key material issues, disclose the company’s performance on these issues and demonstrate how the company manages sustainability risks and opportunities.
The report has several glaring omissions that most readers would expect to see in a sustainability report from a leading company such as Kimberly Clark. The document does not appear to be structured around a materiality process, and no stakeholder engagement or responses to stakeholder concerns are discussed. Equally concerning, the document fails to define the boundary, scope, purpose, or intended readership for the report. Although it is a regional document, the report doesn’t drill into Australia and New Zealand-specific sustainability issues in the kind of detail one might expect, or that would complement the high-level information found in the worldwide report. Dividing the report content by operations (i.e. sales, distribution, and manufacturing, etc.) would also help focus and structure the report, since each operational division faces very different sustainability issues.
Overall, the report comes up thin on the real meat of the content – what KCANZ is doing to address sustainability issues and how they are performing. In the environment section, aspirational objectives for KCANZ and progress against these objectives are presented, but are not supported by sufficient context. The reader is left wondering how exactly past improvements in performance were achieved, and how the company is trending against its objectives. Few targets are revealed in the chapter dealing with people/employees beyond safety targets. In fact, this section is scarce on any actual data about employees, omitting figures on employee numbers, diversity, and equality, although these are mentioned as important issues for the company both on the website and throughout the sustainability policy.
One would also expect the report to explore how KCANZ intends to meet the sustainability challenges ahead. For a company that consumes large amounts of timber, fiber and water, these likely include water scarcity, sustainable and ethical timber and fiber sourcing, and managing waste and effluents. Although very basic data is provided on these topics, there is no discussion of trends, how performance improvements have been achieved, risk management processes, or plans to manage these issues in the long-term.
In fact, the report misses the boat so significantly on these topics that the reader can’t help but wonder why exactly it was written and who the intended audience might be.
Perhaps the biggest critique of the report is that an unknowing reader might easily mistake it for a marketing document, such is the extent to which it praises Kimberly Clark’s achievements throughout the year, without offering appropriate context or covering controversial issues. The report applauds KCANZ for their membership in WWF’s Global Trade and Forest Network, their agreement with Greenpeace on sustainable forest practices, signing the Australian Packaging Covenant and New Zealand Packaging Accord, and their support of CMRI and CleanUp Australia. Though these efforts are commendable, without tying them to material issues or a sustainability strategy, they read like a laundry list of achievements, rather than a focused insight into how the company is setting out to achieve their sustainability goals.
The online PDF is also difficult to read at times due to the colors used for the text. But the biggest shortcoming in communication is the lack of in-depth information on KCANZ’s performance and future commitments. More information on important topics (such as governance) can be found on the company website, but this content isn’t referenced in the report. The website also contains good information on senior responsibility for sustainability issues, a comprehensive sustainability policy, details on community involvement, and topical discussions on fiber use and nappies in landfills. Yet, very little of this information is incorporated in the sustainability report or even referenced within the document.
This report could increase its credibility through application of the principle of balance. ‘Walking the Talk’ expounds on the company’s positive contributions to society, but stops short of including challenges the company faces or any negative impacts of its operations. The report even includes a page of customer feedback quotes that are entirely positive – which can only make the reader wonder what might have been omitted during the editing process. One finds it difficult to believe a company the size of Kimberly Clark has not received any negative comments in all of 2010! Credibility could also be increased by seeking independent assurance of the statements made in the report.
1. KCANZ should give more consideration to their objectives for producing a sustainability report. A combination of stakeholder mapping and materiality assessment could be used to help identify their stakeholders and key concerns, and this in turn should inform the structure and content of the report
2. KCANZ should give greater attention to sustainability risks, challenges, or controversial issues which affect their business. This will help enhance credibility and provide a more even-handed insight into their sustainability performance
3. KCANZ should integrate content from their parent company’s report, as well as their website and company sustainability policies. This will help provide much-needed context to the issues covered in the regional report, and will help readers find more in-depth information on particular topics
4. Greater context needs to be given around the performance objectives, so that readers understand KCANZ’s performance and trends over time, how they compare with Kimberley Clark worldwide, and how they are meeting (or falling short of) their targets. A sustainability dashboard or scorecard could concisely summarize performance in key areas, leaving ample space in the report for discussion of performance and management
Samantha Eyre is Project Consultant at Net Balance, a sustainability advisory services firm with offices in Melbourne, Sydney, Brisbane and London.www.netbalance.com