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Two Publishing Powerhouses: Science. Fiction.

By William D Alessandro on June 05, 2014 at 11:45am.

Background:
In various corporate guises over the past 125 years, Reed Elsevier has been beating up on, or trying to bed down with, junior rival Wolters Kluwer.  In recent times, Kluwer evaded a hostile takeover attempt in the 1980s.  Then in the 1990s the two broke off a merger after the European Commission ruled the marriage would dominate the global market in academic publishing.  The Commission also believed the pairing might monopolise prices and cramp contract terms for scientific and professional information in the EU.

Formerly competing strictly as Dutch companies (number one and two in the country), both now make more than half of their money overseas in North America.  (Most of Elsevier’s workforce is in the US.)   But Elsevier pulled far ahead.  The company now draws down twice as much revenue as Kluwer does — €7,130 million in 2013.  

Content:
Their sustainability reports, nonetheless, are very much alike — so much so that no points should be deducted from readers who confuse one with the other.   This is a list of the important differences:

• Kluwer declares the report to be “in accordance with” the Global Reporting Initiative’s latest guidelines (G4) for disclosing “core” aspects.  Elsevier self-declares against the GRI’s previous standard (G3) to a B level of disclosure.

• Although neither really nails the report squarely on the principle, Kluwer says they conducted a materiality analysis.  No details are given about the nature of the evaluation.   But a chart shows where the material issues fall on an x-y axis.   The visual presentation of priorities is the one G4 suggests.

• Elsevier presents tables that show performance over a period of three years.   Kluwer’s quantitative figures cover just one cycle, 2013 vs. 2012.

• Kluwer likes using the intensity metric FTE (average full time equivalent) for reporting performance criteria related to the environment, training and participation levels, and other aspects of their business operations.  

• In a general way, Elsevier addresses the controversy in government and academia, and among librarians regarding the business model for gaining access to scientific, technical, and medical primary publications.  Some of the publisher’s aims and policies in this area are aired in the report.  Elsevier concedes that the outcome could adversely affect revenues.  Kluwer takes a wild stab at the subject, saying briefly, “We strive to share relevant information with other groups outside our customer base.”

• Elsevier devotes three pages to their socially responsible supplier programme.  The information covers quantitative performance results of surveys and three years of data.   Kluwer mentions that they issued a supplier engagement policy on sustainability-related topics in 2012.

Otherwise Elsevier and Kluwer are more or less on the same page.  They are members of the London Benchmarking Group community support framework and use it to measure and report such contributions.   They are signatories of the UN Global Compact and align their codes of practice and policies with that framework for human and labour rights and the environment.   

Each makes the most of case studies featuring good works, highlighting progressive programmes, and touting the honours and awards won or bestowed by employees and divisions around the world.   Accounts of these initiatives take up the bulk of the editorial space in both reports.

Communication:
The reports look nearly identical.  They are equally nondescript.

Each uses the same two-column format and the same size, quality (just so-so), content (unimaginative), and relative number of photographs: 39 on 74 pages for Elsevier; 29 on 50 pages for Kluwer.   Elsevier uses 17 graphs, Wolters 13. 

Elsevier takes out seven pages in the annex to present the GRI Index (with a column stating whether the items are fully, partially, or not disclosed).  Kluwer uses nine pages in an annex for the index of GRI standard and specific disclosures.  Neither index is hot-linked.  Readers must scroll back and forth to find the information referred to on the lists.

The reports are similar reads.  They are wordy to the same degree and padded with vague comments.  A typical example is this one:  “Wolters Kluwer is an engaged company that enriches the communities where our employees and customers live and work.” 

Credibility:
The first words in Elsevier’s corporate responsibility report are in large white letters on a pitch black page:  “We help scientists make new discoveries, lawyers win cases, doctors save lives, corporations build commercial relationships, insurance companies assess risk, and government and financial institutions detect fraud.”

Depending on one’s perspective on environmental, social, and governance (ESG) reporting, the introduction will seem revealing or ludicrous.   Flip to page 4 (or page 3 in the Kluwer report) to read the opening statement from the respective CEOs.  Both of them tip the scale to the silly side.   Their commentaries sound like corporate advertisements. 

Readers encounter this canard in most sustainability reports.  Claims about conformity to GRI’s principles and provisions simply don’t measure up very well in the content.  The guidelines are at everyone’s fingertips, freely accessible on the GRI web page.  The evidence to support the accusation is even easier to gather and weigh when specific sector supplements are available for G3 and G4 standards — as indeed they for the media industry.   A handy 7-page synopsis for media sector reporting even exists [https://www.globalreporting.org/resourcelibrary/MSS-Summary-Guide-QRS.pdf ].  All one has to do is peruse the summary before reading either publisher’s report.  Then judge for yourself how closely if at all the guidelines are being followed. 

The sustainability rating agency Oekom Research tracks the performance of 62 media companies worldwide.  Among the key focus issues they identify are the working conditions of freelancers.  Oekom finds that media companies lack transparency on this topic.  The assertion is clearly valid for these two publishers.  Oekom also recognises that access to information by poor or otherwise disadvantaged people and institutions remains a challenge that should be addressed better.  That is true here, too, for both reports (more so for Kluwer’s).

The publishers — both are publicly traded on stock exchanges — sport huge profits.  Their journals often have astronomical subscription prices.  Scholars are constantly complaining about being ripped off — for instance, when they must pay for research articles and studies funded by federal agencies (i.e., the taxpayers) in the US. 

Both firms maintain government lobbying operations to influence state and national legislation on the commercial use of data and other restrictions in their fields of publishing, such as health laws.  None of this is reported. 

A Kluwer legal publishing division is presently under intense pressure in the US for trying to prevent students from reselling textbooks.  Elsevier has been sued recently on the grounds that automatic renewal clauses used by its subsidiary LexisNexus are fraudulent. 

Adverse current affairs and persistent, underlying ESG problems do not add up to an outright indictment.  But the unblemished version on the pages of the two ESG reports is not the whole story.

Recommendations:
1.  Ask (force?) everyone involved with the ESG reports to look at the G4 standard and its implementation manual.  By all means executives who sign off on the final report should be on the required reading list, too.

2.  Cut the number of words by half.

3. Channel that murderously competitive spirit of yours to see who can write the best sustainability report.

William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters.  He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.