In its 2012 sustainability report, Volkswagen asks readers to “take a careful look behind the scenes”, but doesn’t make it easy

Volkswagen is an ambitious company. At first glance, its reporting would appear to be ambitious as well. VW has published its 2012 sustainability report in an HTML microsite, accompanied by a less comprehensive (albeit 170 pages long) PDF version, a smaller brochure that details its good works, an entire magazine devoted to diversity, and links to 165 supplemental documents.

The report is less than a fascinating read, however. Stilted and at times circular language, a dearth of definitions, and greyscale graphics make readers work hard to understand what VW really means when it says it wants to be the world’s most profitable, fascinating, and sustainable carmaker.

In its report, VW includes extensive discussion of its materiality process and outcomes. Stakeholder engagement appears considered and comprehensive, and VW conducts a materiality analysis each year. With all the resources dedicated to engagement and determination of material issues, one could be forgiven for thinking that the materiality process and results inform the company’s corporate strategy. The report makes no mention of materiality as a driver of corporate strategy, however, and with the exception of “employment” and “economic stability”, none of the issues VW defines as material made their way into the annual report’s discussion of risk factors.

Greater clarity on the role that materiality analysis plays in corporate strategy – as opposed to “sustainability strategy” – would go a long way towards ensuring that stakeholder concerns are being addressed as business issues and that the materiality analysis delivers a return on the investment.

Firm v fuzzy

The VW report is packed with data that, on the environmental front in particular, tell a story of steady progress. Environmental metrics – energy, greenhouse gas emissions, water, and waste data – are presented in absolute and normalised terms, per vehicle produced. In addition, many, though not all, environmental goals are measurable and have an end date.

Social data and goals, on the other hand, lack the rigour that the environmental information enjoys. As an example, diversity, which ranks high on VW’s list of material issues, is addressed at length in the report. When it comes to goals and metrics, however, data is presented in percentages without absolute numbers, and goals are too loosely defined to be of much use to either company or stakeholder.

One goal is to increase the ranks of women in the firm as a whole “from 15.2%”; to what and by when it does not say. And the target to increase the ranks of women in management to 30% “in the long term”, while laudable at first blush, lacks milestones or definitions – how does VW define “management”? This makes progress difficult, if not impossible, to measure.

Format let down

The online report has a “Background” landing page that features a single sentence: “Anyone seeking to accurately appraise a company’s commitment does well not to just skim the surface. It takes a careful look behind the scenes to see how things are really connected.” Unfortunately, the report’s structure and format do little to aid the reader in taking that careful look.

The GRI index, so often used by companies as a live index and essential for readers looking for particular information, is hyperlinked neither in the online report nor the PDF. In addition, the GRI index points to numbered references in the online report that do not seem to exist, making navigation using the GRI index a difficult task.

What’s more, the PDF has none of the navigational tools available in the online report, such as the numbered icons or the list of links. A hyperlinked PDF and GRI index alone would have gone a long way towards helping readers understand VW’s performance.

VW’s annual financial report has a pop-up glossary tool that defined terms on the spot. Such a tool would have been useful in the sustainability report, especially for those definitions of sustainability, corporate responsibility, corporate social responsibility, and citizenship. All of these terms can be found in the report, and each seems to mean something slightly different. It’s not entirely clear what, exactly, we’re all talking about.

Kathee Rebernak is the founder and chief executive of consulting firm Framework LLC.

Snapshot

Follows GRI?                Yes, at an “A+” application level.

Assurance?                   Some data assured, as indicated by a tick in the indicator section.

Materiality analysis?    Yes, process described and results depicted.

Goals?                           Yes, scattered throughout.

Targets?                         Some, but inconsistently contextual or time-bound.

Stakeholder input?      Yes, both positive and negative.

Seeks feedback?         No, but an “info” email address is provided.

Key strength:                 Contextualized environmental metrics.

Chief weakness:          Lack of quantitative, time-bound social goals.

Pleasant surprise:       Pop-up glossary in annual report (but, alas, not in sustainability report).

Level of integration:     1.5 (on a scale of 1–5).

CR Reporting  Kathee Rebernak  sustainability report  Volkswagen CR report