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Vaisala: A fair weather report

By Elaine Cohen (beyond Business) on March 29, 2010 at 2:56pm.

Content:

This is Vaisala Oyj's second report, since they began "advancing corporate responsibility issues systematically" in 2008, when they issued their first report. This is an interesting Company, specializing in electronic measuring instruments, many of which are used in meteorology and climate change measurement. In fact, if you have never heard of a ‘reference radiosonde’, under development by Vaisala on a not-for-profit basis for the benefit of the world, this report will enlighten you to the fact that it is one of the instruments used to determine the pace at which our planet is heading for disaster, an essential tool for climate change scientists.  Far from being a global giant, this Company turns over around 230 million Euros, employs a mere 1,400 people and enjoys a global business reach given the specialist nature of its products and services. 97% of sales are outside of its home country, Finland.  The tone and content of the CEO statement provides a degree of confidence that this report is worth delving into - he scopes the Vaisala approach to Corporate Responsibility well, and the achievements and the aspirations of the company in an unpresuming way. The 2009 highlights section provides an excellent overview of what I call the ‘delta’ - the key things that have progressed since the last report - including a major reorganization, a significant acquisition, product development, customer service progress and more.

Beyond the technology, what is interesting about this company is its high dependency on its people. 32% of revenues go to pay salaries and benefits, a high ratio. This is reflected in the workplace section of the report which covers the headlines well.  There are positive results of Vaisala's employee survey (87% response rate) as well as safety, wellbeing, compensation and benefits, employee development and green commuting, with the establishment of an internet-based ride-sharing platform for employees. Despite a commitment to being an Equal Opportunity Employer, only 28% of employees are women and minorities do not get a mention. However, Vaisala's Giant Leap paid internship programme appears to offer strong benefits for students and for the Company.

Community ‘outreach’ programs are either less well developed or less well reported at Vaisala. The company donated 0.07% of revenues to community programs, and employee engagement in the community is hardly mentioned. This is perhaps an opportunity for the company in coming years.

Finally, environmental reporting, as one might expect for a company which specializes in environmental measuring instruments, is more detailed and data is provided since 2005.  However, almost all key environmental indicators for waste, energy consumption, packaging materials etc increased in 2009 over 2008, and whilst these are partially explained through once-off construction projects, this does not seem to tally with the high level of environmentally positive actions reported. Vaisala takes part in the WWF Green Office program and conducts Life Cycle Analyses on products and Designs according to DFE (Design for Environment).  We should expect to see a significant reduction in environmental impact in  2010.


Communication:

Vaisala's report is as clear and considered as its organizational mission: "We believe in a world where environmental observations improve daily life". A simple, focused and rather inspirational mission, absolutely relevant to the core business of this interesting company. The report itself is aligned with this mission in terms of its clarity of communication, its balance between implementation and aspiration, and the plain language about business impacts. This having been said, there are pages and large sections of this report which repeat last year's content. Whilst it is understandable that values and certain aspects of the business do not change year on year, I believe that large-scale reproduction of previously reported information is inadequate. If Vaisala finds it necessary to reprint 5 whole pages of fairly generic high-level statements of values, code of conduct and stakeholder groups, then the focus should be on what is new that Vaisala has done to uphold such values and dialogue with stakeholders in 2009. Otherwise, headlines and a reference to a past report would suffice.

Credibility:

This is a nice report, albeit at C level (low) transparency as a GRI application level. The significance of this is that much of it is declarative and drill-down to meaningful data is lacking in most areas of significant impact. The report stays firmly within the boundaries of direct impact reporting and does not address indirect impacts or outcomes of its different business activities in different sectors. A little more in the way of illustrative case studies and follow through on the declarations of intent would be desirable to make this report more relevant. Elements of more advanced reporting such as strategic focus, CR management structure, materiality analysis, stakeholder dialogue and external verification are not present. What is most striking in terms of the credibility of this report is the absence of any form of commitment regarding future directions and targets, with the exception of one target to reduce 9% energy consumption between 2008 and 2016. Despite what seems to be a clear focus, there is nothing that this company sets up as benchmarks against which both the company and its stakeholders can measure its progress in coming years.  As Vaisala matures in its management of Corporate Responsibility, we should seek some corresponding increase in the maturity of their reporting.

Recommendations:

1. Assurance - for Vaisala's third report, a degree of external verification would be welcome
2. Case studies - greater illustration of how this Company impacts through case studies would be an advantage
3. Objectives, Goals and Targets - a credible CR programme must be based on a plan and this should be disclosed.

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.