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Tulip: A first report as frustrating as it is promising

By elaine cohen (BeyondBusiness) on April 30, 2012 at 4:46pm.

Company:

Tulip Ltd is the UK division of Danish Crown, the world's second largest pig slaughter business. Tulip employs over 8,000 employees in 20 operating sites, supplying a range of pork, bacon, sausage, cooked meats and poultry, sandwiches and sandwich fillers to the retail and foodservice sectors. Tulip manufactures own label and branded products. Tulip’s agricultural business BQP is a wholly owned subsidiary and works in partnership with around 250 British pig farmers.

Content: 

Billed as "The First Ever Annual Corporate Responsibility Report 2012", this report may be a breakthrough, as are all first reports, but it could hardly be much briefer or lighter on performance data. The report is a short 18 pages of narrative, some of which are barely one paragraph. There is no environmental performance data – no environmental emissions, water consumption, waste levels, recycling performance. Aside from some numbers relating to employee training, there is no data about the employee workforce, freedom of association, diversity, turnover, health and safety or other relevant indicators. Despite the CEO of Tulip being a "firm believer in ‘what gets measured, gets done’", this report discloses very little in terms of data about the company's sustainability performance, leaving us to blindly believe that, somewhere in this Company, sustainability performance is getting measured.


This report is as frustrating as it is promising.


The report is promising insofar as it refers to some key areas of agribusiness sustainability including the sustainability roadmap for the English pig industry, published in 2011 by the British Pig Executive (BPEX), which sets targets to reduce the pig industry’s carbon footprint. The study showed that 72% of the industry's carbon impact is in the area of pig farming, 20% was attributable to storage in the home and consumption and 8% in transport, processing, distribution, retail, consumer transport and waste management.  The major impact for Tulip, therefore, is the standards it requires from the 250 pig farms that supply meat to Tulip, and its own processing and transportation operations. These are all referred to in general terms in Tulip's report.  The frustrating thing is that there is no actual description of environmental standards required and no carbon management performance data in the Tulip supply chain. Tulip refers to its Eco-Pig project, which started in March 2010, aimed at reducing the pig-farming carbon footprint by 6% by end 2012, but frustratingly, with over half the time gone by the time the Tulip report was published, no interim data is included which shows whether Tulip is on track to meet this target or not.


The report is promising in that it sets out some clear targets for future sustainability performance improvement: reduce energy consumption by 15% by 2015, increase recycling rates and eliminate waste to landfill by 2015, reduce overall water consumption by 20% by 2020. It's great to see Tulip making these commitments. The frustrating thing is that the targets do not specify a baseline year from which performance will be measured, and there is no data about current performance. There is also almost no information about what Tulip intends to do in order to achieve these results.


Another promising aspect of this report is the attention paid to safety. Tulip states: "We are proud of our achievements over the past three years which have resulted in a 35% reduction in lost time accidents and a reduction of our average accident rates to below that of the comparable industry rate."  It appears this company is measuring Lost Time Accidents and benchmarking itself against industry peers. They seem to have been making progress. That's promising. But frustration sets in when you start wondering about the point of including a sentence such as this in a CSR Report without providing the data. What has been Tulip's LTA rate? What is the benchmark they are using to pat themselves on the back? And what does "average" accident rates mean? Rolling three years? What about the reporting year specifically? Was there an improvement?


Similarly, it is promising that Tulip has "rolled out a Group wide monitoring and targeting system at all our sites, data from our operations is uploaded to a centralised software system ‘Carbon Desktop’, from here we are able to monitor and measure with great detail our environmental performance against our set KPIs." This is fabulous, and certainly promising in terms of Tulip's ability to manage its future performance. What's frustrating is that, with such a sophisticated push-button at-a-glance performance system, why does Tulip choose not to disclose a single data-point relating to environmental performance, aside from a couple of short positively positioned case studies?


I could go on.  There are more examples. Additionally, there are aspects of pig-farming and sustainable agriculture that Tulip has omitted from this report – animal well-being, for example and the standards required from the 250 pig-farms that supply Tulip. How does Tulip ensure animal health and safety standards? What about food safety in the Tulip supply chain? Does Tulip audit its suppliers?  What is Tulip's policy with regard to antibiotics, or organic farming, or how Tulip enforces compliance with EU regulations relating to pig-friendly farming?  Similarly, nothing is mentioned about Tulip's retail operations and sustainability issues arising from waste in the retail food chain and foodservice sector.

Communication:

The presentation of this report is in PDF format, downloadable from the Tulip website, where there is a small amount of additional content. The report does not cover anything about stakeholders, stakeholder engagement or material issues. It has three sections: people, environment and community, most of which refer to high-level policy approaches with a few case studies. The section containing the most case studies (four) is the community section.

Credibility:

Kirsty Wilkins, HR Director, captures the essence of this report in her closing remarks: "I hope that we have given you a brief insight into the range of activities that have taken place across the Tulip Group during 2011 and I look forward to being able to report back to you at the end of 2012 with details of further progress made by Tulip."  Brief insight is correct. It's very brief. Report back at end 2012. Yes, it will be important to provide data in the next report, demonstrating how Tulip has delivered against its targets.


The report is credible at face value – we can believe that Tulip has good intentions and has committed to some interesting sustainability targets. The report does not inspire much confidence that the company will meet these targets, as so little is disclosed about current performance or actionable strategies. While there is a named contact for providing feedback, which attests to a certain openness to engage in discussion, the only meaningful feedback about this report can be around expectations of more transparent disclosure in the future. Otherwise, Tulip's reporting will remain at the level of a marketing-style declarative document, providing very limited information of real value to stakeholders.


However, Tulip must be complimented on two counts: First, the publication of a first sustainability report is always a positive step and it is far better to publish a "light" report than not to publish anything. This way, at least, Tulip has made some important promises and we stakeholders now bear the responsibility of observing how Tulip stands by these in the coming year. Second, in publishing an independent report, Tulip has taken a positive step, despite its parent company not reporting fully on Sustainability. Danish Crown, a limited cooperative based in Denmark, publishes three pages of narrative on CSR in its annual report, and no a separate or comprehensive coverage of sustainability performance. Perhaps Tulip's initiative will inspire the parent company to go the extra mile?
 
Recommendations:

1. Disclose sustainability performance data.
2. Consider the full range of material issues and give these focus in the report. Describe action strategies and progress, not just general policy approach.
3. Ensure targets are clear and that multi-year targets include a measurement baseline.

elaine cohen is the CEO of Beyond Business Ltd, www.b-yond.biz/en , a leading CSR consulting and sustainability Reporting firm.