M&S is the UK’s largest clothing retailer with a market share of 11.2% (by volume) and 3.9% of the UK food market, employing 78,000 people. An iconic UK brand now 125 years old, M&S has a reputation for uncompromising quality standards and demanding relationships with suppliers on quality, service and price. Their unique business model is based almost entirely on own-brand. Business outside the UK is now close to 10%.
No doubt that Plan A (and there is no one who cannot complete the phrase – "because there is no Plan B") , branded M&S's CR program unequivocally. The absolute clarity of the CR brand at M&S, its presence in every M&S communication in- store, on delivery trucks, on products and of course externally is a world class example of CR branding. Sir Stuart Rose confirms in his Chairman's introduction that Plan A has become cost positive within 2 years and that it makes absolute business sense. This is very heartening for any CEO who remains unsure about the contribution of CR.
Plan A started out in 2007 with 100 targets. Of these, 29 relate to climate change, 18 to waste, 20 to raw materials and sourcing, 21 to supply chain standards, and 12 to healthy living. M&S show impressive progress two years into the plan, with a clear chart detailing status against each target. The sheer scope of work against so many targets, many of which are significant wide-reaching projects, is highly impressive, and the meticulous detail with which M&S reports on progress against each is evidence of a systematic, operational and integrated approach to CR.
I find the employee section to be a disappointingly weak 2 pages in a 49 page report. Not surprising as this is not covered by the 100 commitments. There is little detail regarding employment practices, processes and policies. One line suffices to note that "We closed 26 underperforming stores and employees were redeployed wherever possible." The UK press in early 2009 reported 1000 redundancies confirmed by M&S (incidentally, against the highly publicized backdrop of the dismissal of an employee who leaked plans of redundancies to unions, and a severe union response). So what does redeployed wherever possible mean? How many were redeployed? Head offices were also restructured and redundancies effected. How many? Changes to employee pension plans appear to have reduced the benefit quite significantly. How did this go down at M&S? There is a short paragraph about employee training, but nothing about actual employee development in M&S. How many employees are promoted from within? Data on safety includes numbers of incidents reported per million sq feet. But how many incidents is that, actually? And here is a strange sentence: "Our employment policies meet the requirements of the United Nations Universal Declaration of Human Rights." Since when was the UDHR a Human Resources Manual? Has anyone in M&S actually read the Declaration? And what about a wide range of labor standards that are not included in the UDHR. Actually, diversity and inclusion is not a basic right proclaimed in the UDHR (it's part of the ILO Declaration on Fundamental Principles and Rights at Work) but I decided to have a look anyway. Data reported: 76% of employees and 66% of managers (from first line supervisory level) are female. Data not reported: 3 women on a 19 strong Board and Executive Committee combined = 16% (from M&S website). Data reported: 14% of employees (9% of supervisors upwards) are from ethnic minority backgrounds. Data not reported: Number of minority employees reaching higher management levels. Also not reported: any form of proactive management or organizational process to encourage diversity and equality of opportunity at M&S. Where is M&S on this? We don’t know what employees are saying because there is no data relating to any form of employee survey or feedback. And as for ethics, well here is another one of those fuzzy statements: "A greater number of senior management are now required to formally confirm their acceptance of our Code of Ethics every year." Greater than 1? Greater than 10%? Data not reported: number of ethics complaints, or employment related claims against M&S (though the fact that M&S paid their first-ever fine relating to safety is disclosed). All in all, this report does not do justice to a core 78,000 strong employee stakeholder group.
This report is clearly structured in 4 sections – a brief overview, summary narratives for core pillars of Plan A, detailed performance against targets, and a closing summary section with a GRI Index. The summary narratives provide a brief contextual overview of each section, and a response to three questions: (1) What have we committed to do? (2) What have we achieved so far? and (3) What more can we do?
However, M&S's communication on stakeholder engagement and materiality is poor. M&S's materiality matrix is an exercise which prioritized only Plan A 100 targets, and does not include other issues raised by stakeholders. It does not disclose which issues fall into which quadrants of the matrix. The stakeholder feedback section, which M&S admits is "very brief" looks rather fabricated with some flimsy statements which do not give the impression of being entirely representative.
This is M&S's 6th report and they remain at GRI C level. They report on 36 of 42 framework clauses, and 19 (fully) and 6 (partially) out of a total 79 GRI performance indicators. 5 of these are simply referenced to the Annual Financial Report. Almost the entire section indicators on labor, human rights, social impacts and product responsibility are not disclosed. This is low-level transparency. I won't even mention disclosure of supply chain sources as other leading reporters are now doing. But then, this is a report about 100 targets, all but 12 of which are related to environment and sourcing. Is that the sum of Plan A?
M&S say there were "no significant structural changes to our business in 2008/2009." But in early 2008 there was a major Board and Executive Committee shake up, and significant restructuring during the latter part of 2008. John Porritt's statement is effusive and uses only superlatives. He says that M&S's plan covers the "whole gamut of sustainabilty issues, and is outcomes based." I didn’t see too many outcomes… yet. But I did see big gaps in the reporting scope. The Assurance Statement is limited to a third of the 100 commitments, and does little to enhance the report credibility, couched as it is in legalese.
Plan A looks to be externally focused – with a strong bias for environmental issues, at the expense of other core sustainability issues. I am afraid, when all is said and done, that M&S will have to put together a Plan B after all.
1. Make the effort … broaden the scope to include a wider range of performance indicators
2. Report more outcomes, not just actions
3. Avoid fuzzy generic statements which are not be substantiated
4. Report on actions to encourage women and minorities in senior positions
5. Read the Universal Declaration on Human Rights
Elaine Cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz, a leading CSR reporting and consulting firm in Israel, specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses. Elaine Cohen is an independent reviewer and has no relationship with the reporting company.