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McBride: An Elephant Among the Zebras?

By Alison Mclernon (Beyond Business) on December 18, 2013 at 2:52pm.

Company
McBride is Europe's leading provider of private label household and personal care products, currently supplying over 95% of Europe's top 20 retailers. Headquartered in London, McBride has over 5,400 employees in 5 offices and 17 manufacturing sites based in Europe, China, Malaysia and Vietnam. Revenue for the FY ending June 2013 was 761.4 million.

Content
McBride's overall reporting record is consistent and the company has delivered a comprehensive sustainability report again this year. McBride has published an annual sustainability report since 2004. While not GRI-based, the report is "aligned to GRI reporting principles".

The 2013 report, however, reads a little like a safari trip where everyone is admiring the beautiful zebras and flamingos while failing to notice the elephants in their midst. We can give these elephants names: quality of wastewater, human rights, employee diversity, employee satisfaction and product quality and customer satisfaction.

Before taking a closer look at the elephants, we can admire some of McBride's zebras and flamingos. These are a range of innovative steps to improve the company's sustainability impacts, such as product redesign, package redesign, partnering with other suppliers on distribution routes and use of 100% green energy at McBride's Belgian sites. Another innovative move which deserves mention is the use of icing sugar, a by-product of a local food company, to help maintain a constant temperature in the water treatment plant in McBride's Spanish factory, reducing the amount of diesel required for heating in this process by 80%. Additionally McBride's waste management has improved, with 84% of waste being reused, recovered or recycled and waste as a percentage of production dropping to 1.3%.

McBride places great emphasis on employee health and safety, and maintains a number of programs at different facilities to encourage employees to follow a healthier lifestyle. Despite this, accident levels slightly increased in 2012 and this is transparently reported and explained by McBride.

Now let's return to the elephants. The elephants show up, generally towards the end of the report and never in much detail. For example, wastewater: McBride reports wastewater quantities, and does not hide the fact that wastewater increased by 7% in 2012. However, there is no reference in the report to the quality of wastewater in McBride's European or Asian sites. McBride references the related topics of spills and soil contamination by mentioning a minor spill and remediation efforts for contaminated soil at a Belgian facility. This gives an insight into McBride's Western European operations, but leaves wastewater performance in the rest of the world unreported. 

Additional elephants omitted from McBride's report include employee diversity and employee satisfaction. As an employer of over 5,400 people, this is an important field of impact for McBride and one has to wonder why information on employee diversity and employee satisfaction surveys included in last year's report have been omitted this year.

The same goes for the subject of human rights. Some of McBride's operations are located in Eastern Europe and Asia, notable high-risk areas for human rights violations, but human rights gets only a passing mention. McBride admits that that work is required in this area yet, despite having made a similar comment last year, McBride has not provided any details as to how the subject will be approached.

Finally, product quality and customer satisfaction, while repeatedly referred to throughout the report, are not dealt with in any detail. The way in which private label products perform and compete in a market which is driven by brands is surely a material issue for a company such as McBride. The degree to which McBride contributes to its customers' success in increasing sales and profitability through private label is probably the most significant contribution this company can make. While McBride briefly discusses the role of private label in the economic environment, this is focused on shoppers and helping families to manage their budgets. McBride makes no mention of an equally interesting aspect of this, which would provide a more rounded view of McBride's impacts - the way McBride works with retailers, and helps them to build an attractive portfolio of products which consumers will buy in preference to branded products. Responsiveness to customer requirements and consumer satisfaction surveys for McBride products are not mentioned in the McBride report.

Communication
The report comes in PDF format with similar information available on the McBride website. The report is split into two main sections: the first half contains fascinating information about the numerous innovative efforts McBride has made to enhance sustainability, while the second part is a more detailed dive into McBride's performance in the different sustainability areas. Once the reader is familiar with the report structure, the inclusion of performance information in a compact way at the end of the report is quite convenient - information and data are clearly presented by topic, making for easy navigation. Extensive use of graphs makes the report nicely visual.

Credibility
Making a call about the credibility of this report is difficult as it contains much information about very important steps towards sustainability taken by McBride and this appears credible.  Another credibility-builder is that McBride does not shy away from disclosing data and information even when performance is down. However, in these days of G4, when materiality is the word on everyone's lips, it would appear that McBride has some work to do. Carbon emissions and employee health and safety are important, but a fuller review of material issues and a considered selection of those which are most material would be of value. While McBride performed a stakeholder review in 2012/13, no disclosure is made about the outcome of this review or how it was used, if at all, in developing sustainability strategy or selecting the issues most material to McBride's business. This report overlooks some important "elephants", preferring to entertain us with zebras and flamingos, and that reduces credibility.

Recommendations
1. Materiality: McBride should perform a materiality analysis and adapt the focus of reporting to the most material issues.
2. GRI: Consider applying the GRI G4 Framework for future reports to ensure material focus and reporting on performance which is relevant to McBride's material issues.
3. Transparency: Deal more transparently with issues of waste water quality, product quality and performance, certain labor practices issues and human rights issues.

Alison Mclernon is a Sustainability Analyst with a strong background in financial analysis of corporations and environmental research.  Beyond Business Ltd www.b-yond.biz