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OneSteel: Bucking the trend

By Kate Niblock-Siddle on November 26, 2010 at 2:11pm.
Content:

OneSteel’s 2010 Sustainability Report bucks the trend. Moving away from the current push to combine sustainability information into annual reports, the Australian steel company, which previously published sustainability information in its Annual Report, has decided to publish a standalone sustainability report for the first time in 2010.

OneSteel, which is involved in all stages of the steel life cycle from mining raw materials, producing iron and steel, manufacturing and distributing steel finished products and collecting scrap steel for recycling, provides an explanation for this in its report. It says it has elected to do so to “provide stakeholders with a greater level of communication on the company’s approach to sustainability.” To do this, it has engaged its stakeholders to determine the material issues to include in the report.

This is a decision that has not been taken lightly. The report sets out a five-step process that the company undertook to develop the report. This included adapting the Global Reporting Initiative guidelines to the OneSteel reporting framework, engaging stakeholders on material issues, assessing the proposed content against the material issues, endorsement of the content by an internal panel and finally, producing the report.

This process has helped the company to produce a report which clearly articulates its key sustainability issues: Safety and People, Customer and Market, Environment, Community and Economics. The report is structured according to these issues and benefits from a Sustainability Scorecard at the front of the report which sets out the principles, outcomes for the year and planned initiatives in these areas for the coming year. This helps provide readers with a snapshot of how the company is performing against each of its material issues, which they can then find more detail on throughout the report.


Communication:

OneSteel’s report is quite difficult to find on the corporate website. It is not in the Sustainable Development section (although other reports are) but in the Publications section. However, once found it is easy to navigate – and is available as an interactive report online and also as a downloadable pdf. It has a clear structure with a contents page and GRI table and is easy to read with a good balance of text, photos and diagrams. Each of the sections on the key sustainability issues has a diagram on each page which lets you know exactly where you are in the section.


Credibility:

While the Sustainability Scorecard lists the outcomes from the current year and planned initiatives for the coming year, there are few quantitative targets set. This makes it harder for readers to understand OneSteel’s strategy and objectives going forward.

Due perhaps to the separate publication of an annual report, the section on economic issues has less information than other sections. However, the information that is covered in this section demonstrates some of the links between sustainability issues and the company’s current and potential economic performance. For example, there is a section on the impacts of an Emissions Trading Scheme on its business, which is crucial given the emissions-intensive and trade-exposed nature of its operations. This section also includes a discussion on the drought in Australia and impacts on industrial water allocations. This section could be expanded from environmental issues to also include social issues, such as the impact on the business of safety challenges and operating in local communities.

OneSteel’s stakeholder engagement process brings credibility that the report is covering the key issues for the company and its stakeholders. However, the report is not externally assured and the company has self-declared a GRI Application Level C. Obtaining external assurance would help improve credibility.

OneSteel has a large impact – with more than 10,000 employees, 30,000 customers and AUS$6 billion in revenue. As a result, in the coming year, one would expect the company to increase the number of GRI indicators it is reporting against (particularly in the labour and human rights categories) while continuing to focus on its material issues.


Recommendations:

1)    Communicate how the sustainability issues are linked with OneSteel’s overall business strategy
2)    Include more information on sustainability issues as they affect the economic performance of the company
3)    Include quantitative short-term and long-term targets
4)    Continue to seek feedback from stakeholders, specifically on report formats
5)    Obtain external assurance

Kate Niblock-Siddle is a Senior Associate at Net Balance, a sustainability advisory services firm with offices in Melbourne, Sydney, Brisbane and London. www.netbalance.com