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Sonneveld Group Sustainability Report 2015: A half-baked report not quite rising to the occasion

By Alex Nichols on June 23, 2016 at 10:01am.
Context:
Founded in 1956 in the Netherlands, Sonneveld Group is an international ‘bakery solutions’ company. It started out producing ‘bread-fats and emulsions’ as well as bread improvement agents and liquid bread improvers (who knew?). They are whizz kids at baking processes, bread products and pastry quality. Their “innovative bread and pastry concepts … enhance the bakery sector”. They opened the European Bakery Innovation Centre (EBIC) to help promote “a healthy future for the European bakery sector”.  Sonneveld exports to countries in Europe, the Middle East, South America and South East Asia. 

Since 2010, Sonneveld has been an independent part of Orkla Food Ingredients (OFI), which in turn is part of Orkla Group.  OFI is a Norwegian company which has its own sustainability programme; Orkla moved its sustainability reporting from being ‘standalone’ to being within its Annual Report.

Business is strong, they’re expanding overseas. The steady commodities market is helping them. I guess this can be volatile. But, on that point, when commodities prices are low, purchasing and processing companies can exert more pressure on supply chains to improve sustainability performance. How does this affect how Sonneveld (or Orkla) works with its supply chains? Their report doesn’t entertain such discussion.

Sonneveld seems to have a variety of ingredients in its Sustainability recipe. It has “Socially Responsible Enterprising (SRE)” principles, a social programme called Bake for Life, a Clean Label produce stamp, some ‘People Planet Profit’ pillars (which appeared to be dissolved in 2011 but which are still on their website).  And then Sustainability Reporting (called CSR report inside).

So, the question that comes to mind is: What is the strategy for this company, and how is reporting helping them? 
The answer appears to be that Sonneveld (and Orkla) realise that customers, investors and others are increasingly interested in sustainability, so they have put together a quick report to meet the immediate need. One assumes that the customers themselves only need to see that something is being done by Sonneveld, and that the report is the vehicle to summarise it, to tick a box. 

Content:
A no-nonsense start presents the contents page which clearly lays out the issues covered inside.  

It opens with a section called CSR Report. Not sure if that was intentional, it says Sustainability Report on the front.

The first narrative is about ‘values’. It’s OK, but why start with this stuff? This feels like the puff rather than the loaf. My guess is that, because they work very closely with customers, they might use this 20-page Report as a sales/engagement tool – “we will work with you to find a solution…”. No bad thing. These opening paragraphs start making claims (sort of) such as how Sonneveld “invests in the growth … of its employees by giving them freedom and responsibility…”.  And they tell us that they ensure an “appropriate price/quality ratio”, whatever that is.

Next up we get the CEO/MD’s message (can one be both CEO and MD?). It is rather underwhelming. Where’s the vision, the long term mega trends, the ‘what we stand for’ message, the stuff about risk exposure to sustainability impacts that affect the ability of Sonneveld to deliver its commercial strategy…? 

Accepting that the Report is only 20 pages long, I expected to be directed to an online supplement – a report improvement agent if you will – for some detail. But when you look, you’re met with fluff, e.g., “Sonneveld thinks and works in a sustainable and socially responsible manner. We are always looking for the best possible solutions, with respect for people, the environment and society”.  And then the Sustainability Report web page mentions Orkla’s reporting, as if that’s supposed to meet this readers’ need. But then I read elsewhere that Sonneveld is independent of Orkla, allowed to autonomously run its own affairs, unimpeded by the parent. 

Now, Orkla has its own materiality process. So, the onus is on me to research Orkla and find some of the detail behind how it – and thus its subsidiary – responds to the sustainability agenda. 

Onto the first performance chapter, where we’re told how Sonneveld “strive to create a stimulating work environment”.  And then, after a table on ‘personnel information’ that made me say, “So what” to it, we’re told about the self-managing of employees after Sonneveld opted not to replace a Head of Production who left. 

An Expert Review ought to point out that Sustainability Reports should deliver a message about why an issue is an issue, what the reporter is doing about it, and an evaluation on its approach (“DMA” in the trade). 

So what’s the issue? Changes in the management team… as a result of what? Is that an issue?
Then we’re told about a Polish merger and Trainees recruited, and then how they managed safety after a risk audit. It’s all a bit fragmented and tricky to see what they see as the people related risks (in their People Planet Profit pillars, one assumes?). 

Environment & Safety chapter next – and lease cars is the lead heading. Big deal. Flour dust exposure next. They’re reducing it, which must be great. But is it an issue that warrants coverage in this Report? (Maybe it is! In this document. Because I think I am coming to the conclusion that this document is about sending a message to customers who might not be very demanding about the quality and depth of reporting on these topics.) 

There’s a bit on resource usage and CO2 emission but it’s all meaningless without any context. Perhaps they could compare to other sister companies, to paint a picture on how well they’re doing. The waste flows chart on p13 is not very clear: there must be some that goes to landfill across all the countries where it operates?

Then a chapter on Food safety. But there was no occupational accident/incident performance reporting in the Environment & Safety chapter. Hmmm. (And I note that one of the researchers (p2) sits in the QESH department.) 
Despite the expertise of the Dutch in the English language, the Food safety chapter loses its way a little – “Food safety and sustainability are ideally a chain issue.” This happens elsewhere too.

There’s no scene-setting. We’re straight into a list of groups or projects they participate in; it’s not clear at all really (what is Nebafa…?). Food and health then appears to be the next chapter. Some (what I would consider) material issues arise here. Salt reduction in food products for example. Sonneveld seem to be doing well on this (unassured data p17). 
After the picture of a chick eating something (breadcrumbs?), we arrive at a Sustainable purchasing chapter – perhaps this is a significant material issue? Palm oil is (eventually) covered here. Using RSPO certified product is a good thing. There’s more written on this subject compared to the amount of depth in other chapters in the Report. It is a little tricky to read, e.g., it ignores basic convention, such as defining abbreviations (e.g. WNF, p19). 

Buried in the text is a commitment – “from 2015 all products which are derived from or contain a fraction of palm oil will be from sustainable cultivation.” All good. But, later they say “At the end of 2015 Sonneveld completed the final step in the process of sustainable palm oil certification … we now purchase 90% of all palm oils and products containing palm oil, such as emulsifiers, as ‘RSPO segregated” [the highest standard of certification where ‘palm oil from certified mills is kept apart from conventional palm oil. Up until final refinery, all movements of certified oil are reported to UTZ Certified. Oil can be traced back to certified plantations. After refinery, third-party certification ensures the integrity of the chain. End users may label segregated oil 'RSPO-certified sustainable palm oil’]. They don’t actually state “100% certified palm oil achieved”. 

And it is here that we find narrative on why palm oil is an issue with narrative on how they manage it, as a purchaser. But this narrative should be a little more separated out, for clarity. 

The text is also a little simplistic, and perhaps over-claiming (to suit the undemanding target audience?), e.g. “RSPO ensures that the growing demand for palm oil is monitored and managed in a responsible way”. I don’t think RSPO themselves would claim to ensure that? They certainly aim to, attempt to, or try to, though. Or, “Among other things, RSPO sees to it that those who work on palm oil plantations enjoy better living and working conditions.” Well, it doesn’t see to that, does it? (And better than what?) What RSPO does is provide is a certification that offers “an assurance to buyers of palm oil products that the standard of production is sustainable”. 

The programmes found on Sonneveld’s website such as Clean Label and Bake for Life do not make the cut. Nothing of substance about them is found in this Report.

Communications:
Sonneveld has a clever corporate logo: a heart (passion), a tick (“that’s quality done guys”), and a curvy hill shape (landscape, homeliness?). 

The front cover images screams, “let’s get down to business” and knead this dough!
It gives the wrong impression, however. The Report is unsophisticated in its design, basic in its structure and unappealing to read. The imagery is slightly bizarre, as if no thought has gone in to it. Photos are not captioned, and mostly irrelevant. Page 17 shows a bun with a picture of the world on it. On p6 the CEO is standing in front of a boat. Not sure why. And the great little toast-house sculpture p7 has to be seen, but I am not sure what it adds.
I wonder what the creative brief looked like for the report. Who is the target audience? If it’s customers after all, why not say that?

In presentational terms, I would be happy with merely a Word document, if the report had a description of their strategy (or management approach) on sustainability. Even if this were spoon-fed from the Orkla report, or merely signposted to it. All Sonneveld say is “Read the Sustainability Report 2014 of Orkla (EN)>>“ on p2. That’s it. Or, I would be happier if they simply described how the Orkla policies and management systems guide their every move, but they don’t.
The spell-check function (available in any word processing software) should be used. E.g. “Inspring” on p3. 

Credibility:
Sonneveld are not obliged to follow any reporting framework, but I would advise at least consulting the Global Reporting Initiative’s. The GRI meets just down the road from Sonneveld, in Amsterdam, so it would not be too much of a struggle to go see what it’s all about and ask others about it.

Using a framework would add to the credibility of the report greatly. The content principles would be so useful.
Following some core Quality of Information principles (such as timeliness, clarity, accuracy etc.) would be a good next step. 

Data and claims in the report would benefit from (a) being clearer, or even (b) from some form of third party assurance. 
Stakeholder engagement would be a useful addition to the assessment of what issues matter to Sonneveld and its stakeholders, and how best to communicate their performance.
Finally, there is nothing on sustainability risk governance arrangements. 

Recommendations:
Allow the report to be one thing: “a Sustainability Report”, not a customer flyer (that can come later). 
Use the GRI framework, or something similar
Use a materiality process, informed by stakeholders
Strip out unwanted clutter 
Use clear and structured narrative
Use targets and show performance against them, e.g. in a table
Signpost to detail, even if at the parent company level, e.g. material issues assessment, governance 
Show how the company compares to similar sister companies
More clarity in data presentation
Use a proof reader. And a spelt checker (sorry, couldn’t resist).

Alex Nichols runs international consulting projects for business on sustainability reporting, strategy, materiality assessment, stakeholder engagement, assurance and training. Alex is also Associate Director at Paia Consulting, Singapore, Senior Associate Consultant with IMS plc, Bristol, and a Senior Associate Consultant with Gorham & Partners mining strategy and research firm. www.alexnicholsconsulting.com   |  www.paiaconsulting.com.sg