Seiko, the legendary watchmaker renowned for quality has produced its second CSR report, of sorts. Seiko employs around 7,500 people and turns over 174 billion yen (around $2bn). Founded in 1881, Seiko introduced the first wrist watch in Japan in 1913 and the first quartz watch in the world in 1969. Seiko companies develop and market watches, electronic devices, semiconductors, eyewear, clocks and other products. "Seiko Holdings Corporation strives to disclose corporate information in a timely and appropriate manner" says Koichi Morano, Seiko Holdings President (actually, the President's statement is largely copy-paste from 2007 report perhaps this indicates stability and consistency in Seiko's business?!) I found the timely claim a little ironic, however, as Seiko's report covers activities for the year up to March 2008 and was published only in February 2009. Timely? Not so obvious. Unlike the purpose of this CSR report which is highly obvious. Sell more watches. Promote our business. Entice more customers. Improve our reputation. It is only on page 19 of this 34 page report that the Company starts to talk about CSR. The first 18 pages are marketing an 18 page advertisement for Seiko timepieces, Seiko stores and Seiko quality, innovation and brand promotion under the guise of a CSR report.
The CSR Section opens with: "Seiko Holdings Corporation and our operating companies strive to fulfil our corporate social responsibilities by compliance with statutes and by respect for corporate ethics that reflect the different corporate structures of the companies and the industries in which they operate". This is indicative of a CSR approach which has long been overtaken by more advanced thinking CSR , of course, is much more than compliance and doing the right thing. This opening statement reflects the level of thinking of Seiko in relation to CSR and limits what we can expect to see in terms of significant CSR impacts in this report. Don't expect stakeholder dialogue or a materiality matrix here. Seiko is as far away from this as the grandfather clock was to Swatch. What is material to Seiko? Time. How people use time the world commodity that no one ever has enough of. How do Seiko products help people use their time more effectively? What contribution to managing time can Seiko make through its unique positioning as a manufacturer of tools to measure time? Instead, their "With you, every moment" by-line simply reinforces a traditional single-bottom-line driven Seiko model. The fact that they report they were able to assist a customer who brought in a 100 year old antique clock for repair says little about their CSR approach and more about their expertise and customer service, both of which are not in question. Notwithstanding, organic lenses, watches for the blind and visually impaired, clocks with voice functions and Braille options indicate a certain prowess in generating positive social impact with socially beneficial products for a diverse range of customers.
Seiko ascribes to what has now become an obligatory CSR report commitment to equality: "Seiko Holdings Corporation and our operating companies are committed to gender equal employment", followed by a list of benefits which includes encouraging employees to take annual vacation! Women in management positions? 5%. Very equal. Community involvement is restricted to cultural and sports brand-building sponsorships, and planting mangrove trees in Thailand.
Environmental impacts gain more coverage with evidence of deeper thinking. Seiko discloses environmental activities expenditure of around $3million which it's nice to know was amply offset by resource and consumption-related savings. Seiko has reduced absolute carbon emissions by 7% since 2005, but it is not clear how these numbers are calculated and what they include. Seiko consider themselves to be "at the forefront of an international environmental trend", having switched to use of mercury-free batteries. How many? Measurable benefit? Who knows! Seiko's energy-saving clock seems to be a nice technical environmental innovation, and the company has earned the Japanese Eco-Mark for low-energy-consumption technology. There is no reference to internal environmental training or employee behaviour in the business.
Despite quoting a reference to GRI guidelines, this report bears no resemblance to a GRI report. No index, no materiality, no disclosures against most of the core indicators, no performance targets and certainly no challenges. The CSR section covers, briefly, governance, social activities and environmental activities. Governance and ethics have a brief paragraph each, providing no real insight into how good governance and ethical practice are embedded at Seiko. The report has a brief contents page but no index. There is minimal supplementary information on the company's website. Finally, the aspirational language of the management approach declarations is not supported with substantive content. They hang in mid-air. The 2007 report did a little better, and I wonder why Seiko did not build on this momentum.
This is a marketing publication. It bears little credibility as a CSR report. In fact, reports like this fuel scepticism of CSR reporting. For sure, there are some good things going on at Seiko Holdings, for example a good traditional approach to ethics, good environmental consciousness and a general desire to be up there with the CSR leaders and do the right thing. I am sure that the Seiko leadership feel that they are doing well and possibly have a desire to do better. However, this report falls far short of what we have come to expect for companies of quality with regard to transparency, accountability, dialogue, measurement of progress and any sense of visionary progress in this area. This report is an invitation for positive feedback. In this way, it is rather like a young child who seeks approval from mom after tidying up her room, not quite realizing shoving all the litter under the rug is not the ultimate solution. Seiko has tidied up its operation, become compliant, adopted some good practice and seeks applause. But this is an undeveloped approach to CSR and a lazy approach to reporting. Much of the content, in addition to the President's remarks, is copy-pasted from 2007 report. Seiko needs to realign itself with its core objectives and look for the opportunity in CSR. Its time for Seiko to mature.
1. Remove the marketing section and concentrate on reporting CSR.
2. Review thinking on CSR and consider a more advanced approach to developing a truly strategic, comprehensive approach and report much more transparently.
3. Include indicators of progress targets and measures.
4. Use the GRI framework as a guide and work more closely to develop data against the core indicators.
5. Do not rehash last year's report content make each report uniquely relevant. If you must repeat content, indicate where this is done.
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.