MOTOR VEHICLES & PARTS SECTOR

Transcription

1 2003 F FORTUNE GLOBAL 500 AND FORTUNE 1000 MOTOR VEHICLES & PARTS SECTOR Corporate Environmental and Sustainability Reporting PACIFIC SUST USTAINABILITY INDEX SCORES J. Emil Morhardt Elgeritte Adidjaja Christopher David Frantz Ben Fleischmann Maggie Witt Erin Sedloff Morhardt, J. E., E. Adidjaja, C.D. Frantz, B. Fleischmann, M. Witt, E. Sedloff (2004) Motor Vehicles and Parts Sector: Corporate Environmental and Sustainability Reporting, Pacific Sustainability Index Scores. Claremont, CA, Roberts Environmental Center, Claremont McKenna College Price: $ Motor Vehicles and Parts Industry Report 1

2 Contents Corporate Environmental and Sustainability Reporting Motor Vehicles and Parts Company Rankings The Pacific Sustainability Index (PSI) Publications from Roberts Environmental Center The Roberts Environmental Center publishes analyses of corporate environmental and social reports together called sustainability reports on the web and in special reports. We also write books about environmental and sustainability reporting, the first of which is Clean, Green, and Read All Over: Ten Rules for Corporate Environmental and Sustainability Reporting, available from ASQ Press, and publish articles in academic technical journals. For more information please visit our web site at: To o order additional copies of this report, or to obtain multiple-copy prices, please write, , or call: Dr. J. Emil Morhardt, Director Roberts Environmental Center Claremont McKenna College 925 N. Mills Avenue Claremont, CA USA , Fax emorhardt@claremontmckenna.edu The goal of corporate report analysis conducted by the Roberts Environmental Center is to acquaint students with environmental and social issues facing the world s industries, and the ways in which industry approaches and resolves these issues. The data presented in this report were collected by student research assistants and a research fellow at the Roberts Environmetal Center. Copyright 2004 by J. Emil Morhardt. All rights reserved. The PSI Scoring System Environmental vs. Social Scores Intent, Reporting, and Performance More Environmental than Social Reporting Distribution of Possible PSI Scores Overall PSI Scores Environmental PSI Scores Socioeconomic PSI Scores Voluntary Guidelines and Third Party Verification. 8 Relationship between company size and overall PSI Scores Analysts Comments Aisin Seiki BMW Bosch Group Bridgestone Continental AG DaimlerChrysler Dana Delphi Corporation Fiat Ford Motor Company Fuji Heavy Industries, Ltd General Motors Goodyear Honda Hyundai Isuzu Johnson Controls Lear Magna Man Group Mazda Motor Corporation Michelin Mitsubishi Motors Nissan Motor Company PSA Peugeot Citroen S.A Renault Suzuki Toyota Visteon Corporation Volkswagen Volvo Director s Comments Roberts Environmental Center, Claremont McKenna College, and The Claremont Colleges Motor Vehicles and Parts Industry Report

3 2003 FORTUNE GLOBAL 500 AND FORTUNE 1000 MOTOR VEHICLES & PARTS SECTOR Corporate Environmental and Sustainability Reporting During the past decade, large manufacturing corporations have begun to report voluntarily on the environmental issues affecting their companies and on how they deal with them. The addition of social issues to these reports has resulted in some firms designating them sustainability reports. Some firms produce these reports yearly, others only occasionally, and some not at all. We obtain these reports and any additional information exclusively from corporate web sites. This report covers all of the companies in the motor vehicles and parts sector of the 2003 Fortune Global 500 and Fortune 1000 lists, whether or not they produced formal environmental or sustainability reports. It is based on all environmental and social information available on their web sites on July 2, 2004, including annual reports and, for American companies, 10-K forms. The quality of the environmental and social reporting was characterized by students at the Claremont Colleges using the Roberts Environmental Center s Pacific Sustainability Index (PSI). The overall company PSI scores rank as follows: Motor Vehicles and Parts Company PSI Rankings 1 Toyota 2 BMW 2 DaimlerChrysler 3 Volkswagen 4 Renault 5 Hyundai 6 Mitsubishi Motors 6 Fuji Heavy Industries, Ltd. 7 Nissan Motor Company 8 DENSO Corporation 9 PSA Peugeot Citroen S.A. 10 Mazda Motor Corporation 10 Fiat 11 Honda 11 Isuzu 12 Volvo 13 General Motors 14 Michelin 15 Ford Motor Company 16 Johnson Controls 16 Aisin Seiki 17 Delphi Corporation 18 Bosch Group 19 Suzuki 20 Bridgestone 20 Goodyear 21 Visteon Corporation 22 Man Group 23 Continental AG 24 Magna 25 Lear 26 Dana Motor Vehicles and Parts Industry Report 3

4 The Pacific Sustainability Index (PSI) 1 The PSI Scoring System The Pacific Sustainability Index (PSI) comprises a list of 140 topics that should be addressed in corporate environmental and sustainability reports. The topics were derived from the ISO family of international environmental standards, from reporting guidelines, including those of the Global Reporting Initiative (GRI), and from a variety of other sources. The philosophy of the PSI is described in detail in our book, Clean, Green, and Read All Over, published by and available from the American Society for Quality Press 2. Each of the topics has a maximum score of either two or three points. The overall scores are presented in the graph on page five, and are used to create the ranking on page three. The overall score is calculated as a percentage of the maximum possible score. Environmental vs. Social Scores In addition to the overall score, we have subsetted the PSI into its environmental and social components and reported each of these independently in graphs on pages six through nine. The subsetted scores are also calculated as percent of maximum possible score for each subset, and have been arranged in the same rank order as the overall scores on page five. Intent, Reporting, and Performance Both environmental and social subsets of scores reflect intent, reporting, and performance. Intent scores are derived from topics in the PSI that reflect a stated willingness to perform well, to monitor that performance, and to report it. Reporting scores reflect presentation in the report of data on specific environmental and social topics, but not on how good that performance was they indicate transparency in reporting independent of success in making improvements. Performance scores reflect better performance on specific environmental and social topics since the previous reporting period, better performance than peer companies, or both. More Environmental than Social Reporting Inspection of the subsets shows that more companies report environmental information than report social information that is, more are producing purely environmental reports than are producing sustainability reports and that the scores for environmental and social performance are far lower than those for either intent or reporting. Overall Score The PSI has a total of 140 topics, 80 of them on environmental issues and 60 on social issues. The overall score is the percentage of the maximum possible score on all 140 topics. Environmental Intent Score Scores from PSI topics 1-27, 54, and 55. These topics reflect a firm s comittment to environmental reporting. Environmental Reporting Score Scores from PSI topics These topics reflect reporting of environmental performance without reflecting the quality of that performance. Environmental Performance Score Scores from PSI topics These scores reflect improved environmental performance, or performance better than the average of a firm s peers, or both. Combined Environmental Score Scores for all 80 environmental topics in the three categories above. Social Intent Score Scores from PSI questions , 124, and 125. They reflect a firm s committment to social reporting. Social Reporting Score Scores from PSI questions , reflecting amount of reporting of social performance without reflecting the quality of that performance. Social Performance Score Scores from PSI topics These scores reflect improved social performance, or performance better than the average of a firm s peers, or both. Combined Social Score Scores for all 60 social topics in the three categories above. 1 PSI scoring sheets are available on our web site Motor Vehicles and Parts Industry Report

5 Distribution of Possible PSI Scores The pie diagram to the right shows the quantitative distribution of possible points for the 140 topics in the PSI scoring system. Environmental topics make up a little more than half of the total and social topics the remainder. Environmental and social intent topics make up 41 percent, reporting topics make up 24 percent, and performance topics make up 35 percent of the total possible score. Two thirds of the possible performance score requires that firms compare their performance to that of their peers and do better than peer average. Because few companies compare themselves to their peers, the performance scores tend to be low, and drive down the overall scores. Overall PSI Scores ENVIRONMENTAL Environmental Intent Social Intent S O C I A L Environmental Reporting Social Reporting TOPICS Environmental Performance Social Performance T O P I C S Toyota 2004 BMW 2004 DaimlerChrysler 2004 Volkswagen 2003 Renault 2004 Hyundai 2003 Mitsubishi Motors 2004 Fuji Heavy Industries, Ltd Nissan Motor Company 2002 DENSO Corporation 2003 PSA Peugeot Citroen S.A Mazda Motor Corporation 2003 Fiat 2003 Isuzu 2002 Honda 2003 Volvo 2002 General Motors 2003 Michelin 2003 Ford Motor Company 2003 Johnson Controls 2003 Aisin Seiki 2003 Delphi Corporation 2003 Bosch Group 2004 Suzuki 2003 Bridgestone 2004 Goodyear 2004 Visteon Corporation 2004 Man Group 2004 Continental AG 2004 Magna 2004 Lear 2004 Dana Percent of maximum possible score The overall PSI score includes all 140 environmental and social topics. Because both environmental and social performance scores, which make up 35 percent of the total possible score, tend to be low, the overall scores are seldom above 50 percent for any company. Nevertheless, there is a very large range of scores among these companies on the Fortune lists Motor Vehicles and Parts Industry Report 5

6 ENVIR NVIRONMENT ONMENTAL SCORES Toyota 2004 BMW 2004 DaimlerChrysler 2004 Volkswagen 2003 Renault 2004 Hyundai 2003 Mitsubishi Motors 2004 Fuji Heavy Industries, Ltd Nissan Motor Company 2002 DENSO Corporation 2003 PSA Peugeot Citroen S.A Mazda Motor Corporation 2003 Fiat 2003 Isuzu 2002 Honda 2003 Volvo 2002 General Motors 2003 Michelin 2003 Ford Motor Company 2003 Johnson Controls 2003 Aisin Seiki 2003 Delphi Corporation 2003 Bosch Group 2004 Suzuki 2003 Bridgestone 2004 Goodyear 2004 Visteon Corporation 2004 Man Group 2004 Continental AG 2004 Magna 2004 Lear 2004 Dana 2004 Categories* Environmental Intent Environmental Reporting Environmental Performance Percent of maximum possible score * Maximum possible score for each category is 100% Environmental intent scores include topics about the firm s products, environmental organization, vision and committment, stakeholders, environmental policy and certifications, environmental aspects and impacts, choice of environmental performance indicators and those used by the industry, environmental initiatives and mitigations, and environmental goals and targets. Environmental reporting scores are based on the degree to which the company discusses its emissions, energy sources and consumption, environmental incidents and violations, materials use, mitigations and remediation, waste produced, and water used. They also include use of life cycle analysis, environmental performance and stewardship of products, and environmental performance of suppliers and contractors. Environmental performance scores are based on whether or not the firm has improved its performance on each of the topics discussed under the heading of environmental reporting, and on whether the quality of the performance is better than that of the firm s peers. Scoring for each topic is one point if performance is better than in previous reports, two points if better than industry peers, three points if both Motor Vehicles and Parts Industry Report

7 SOCIOECONOMIC SCORES Toyota 2004 BMW 2004 DaimlerChrysler 2004 Volkswagen 2003 Renault 2004 Hyundai 2003 Mitsubishi Motors 2004 Fuji Heavy Industries, Ltd Nissan Motor Company 2002 DENSO Corporation 2003 PSA Peugeot Citroen S.A Mazda Motor Corporation 2003 Fiat 2003 Isuzu 2002 Honda 2003 Volvo 2002 General Motors 2003 Michelin 2003 Ford Motor Company 2003 Johnson Controls 2003 Aisin Seiki 2003 Delphi Corporation 2003 Bosch Group 2004 Suzuki 2003 Bridgestone 2004 Goodyear 2004 Visteon Corporation 2004 Man Group 2004 Continental AG 2004 Magna 2004 Lear 2004 Dana 2004 Categories* Socioeconomic Intent Socioeconomic Reporting Socioeconomic Performance Percent of maximum possible score * Maximum possible score for each category is 100% Social (socioeconomic) intent scores include topics about the firm s financials, employees, health and safety reporting, social management organization, social vision and committment, stakeholders, social policy and certifications, social aspects and impacts, choice of social peformance indicators and those used by the industry, social initiatives and mitigations, and social goals and targets. Social reporting scores are based on the degree to which the company discusses various aspects of its dealings with its employees and contractors. They also include social costs and investments. Social Performance scores are based on whether or not the firm has improved its performance on each of the topics discussed under the heading of social reporting, and on whether the quality of the performance is better than that of the firm s peers. Scoring for each topic is one point if performance is better than in previous reports, two points if better than industry peers, three points if both Motor Vehicles and Parts Industry Report 7

8 Use of Voluntary Guidelines and Third Party Verification Toyota 2004 BMW 2004 DaimlerChrysler 2004 Volkswagen 2003 Renault 2004 Hyundai 2003 Mitsubishi Motors 2004 Fuji Heavy Industries, Ltd Nissan Motor Company 2002 DENSO Corporation 2003 PSA Peugeot Citroen S.A Mazda Motor Corporation 2003 Fiat 2003 Isuzu 2002 Honda 2003 Volvo 2002 General Motors 2003 Michelin 2003 Ford Motor Company 2003 Johnson Controls 2003 Aisin Seiki 2003 Delphi Corporation 2003 Bosch Group 2004 Suzuki 2003 Bridgestone 2004 Goodyear 2004 Visteon Corporation 2004 Man Group 2004 Continental AG 2004 Magna 2004 Lear 2004 Dana 2004 OECD Guidelines for Multi-National Enterprises Third Party Validation AA 1000 ISO or EMAS 1 SA 8000 Certified UN Global Compact, Universal Declaration of Human Rights ILO Core Labor Standards UN Basic Principles on the Use of Force GRI Guidelines 2 1 Open circle if at least 50% of operations certified, solid circle if 100% 2 Open circle if the report is "in adherance" with the 2002 or later GRI guidelines, solid circle if the report is "in accordance" with the 2002 or later GRI guidelines. Only a few companies have chosen to have their reports verified by third parties, and none has asserted that this verification is done in accordance with the AA 1000 verification standard. Most companies are in the process of, or have completed, adoption of an International Organization for Standardization (ISO) environmental management system. None of the companies has signed on to the SA 8000 social accountability standard, the basis for much of the socioeconomic scoring in the PSI. Three companies formally subscribe to the United Nations Global Compact Universal Declaration of Human Rights; three subscribe to the Organization for Economic Cooperation and Development Guidelines for Multi-National Enterprises; three subscribe to the International Labor Organization Core Labor Standards; and none to the United Nations Basic Principles on the Use of Force all guidelines with components similar to those of the SA 8000 standard. The Global Reporting Initiative (GRI) Sustainability Reporting Guidelines are an important part of the basis for the PSI, but only two of these companies have written their reports in accordance with them. Eight others partially subscribe to them Motor Vehicles and Parts Industry Report

9 Overall PSI Scores Relationship Between Revenue and Overall PSI Score BMW Renault Fuji Heavy Industries Hyundai Mitsubishi Nissan Denso Mazda PSA Peugeot Fiat Honda Isuzu Volvo Michelin Aisin Seiki Johnson Controls Goodyear Man Group Continental Delphi Bosch Suzuki Bridgestone Visteon Magna Lear Toyota Volkswagen DaimlerChrysler General Motors Ford Motor Company Motor vehicles companies Parts companies Both Dana Revenue ($M, from 2003 Fortune lists) T here is a weak but statistically significant positive relationship between company size (depicted here as the revenue reported in the Fortune 2003 lists) and PSI score, but it accounts for only about 21 percent of the variability among PSI scores. The regression line itself can be interpreted as the size-specific mean score: those companies whose scores are above the line are doing better than average for companies of similar size. When regressions are calculated separately for the motor vehicles portion and parts portion of the sector, neither is significant. Thus the overall regression shown above results entirely from the highly significant difference in report scores between the two portions of the sector. Unlike the smaller companies in our previous sector reports, most of the parts sector companies reviewed here did provide a significant amount of environmental information, although they were less comprehensive in the socioeconomic areas. That their scores were lower than for companies producing automobiles is probably attributable to a combination of their highly significantly smaller size and the business-to-business nature of their operations. Only one of the motor vehicle manufacturers, Suzuki, has an overall PSI score lower than those of the American industry giants Ford and General Motors. Suzuki s low overall score, however, is entirely attributable to its almost complete lack of reporting on social issues, something it will probably fix in the next round Motor Vehicles and Parts Industry Report 9

10 Analysts Comments Aisin Seiki 2003 Environmental Report Harmony with society and nature is the theme of the 2003 corporate environmental report. From the beginning the report clearly envisions the company as a greener and more environmentally responsible company. Nonetheless, there is not much discussion of vision regarding the social aspect of the company. The Aisin Seiki 2003 Environmental Report talks very little about social activities which results in the low PSI scores on the socioeconomic section. Aisin Seiki could improve the report by including more information on company health and safety vision and implementation and more quantifiable performance data, both in the environmental and socioeconomic sections of the report. - Adidjaja BMW Sustainable Value Report Innovation, efficiency, and responsibility are the central themes of BMW s 2003/2004 Sustainable Value Report. The report is the second highest ranked sustainability report scored in 2004, providing a broad account of issues in both the environmental and socioeconomic categories. Like many of the other reports, its score would be improved if comparisons to industry averages were applied more broadly. The organization of the report also makes it difficult to find specific information. Titles of several of the different sections seem vague, and the sections themselves include details that apply to several sustainability categories. - Frantz Bosch Global Responsibility Environmental Report 2003/2004 This report is fairly well written but lacks quantitative comparisons at an industry wide level, information on environmental and socioeconomic indicators, and stakeholders, as well as explicit targets and improvements in both environmental and social aspect of the company. - Adidjaja Bridgestone 2004 web pages Bridgestone did not produce a sustainability report, however it did provide several web pages regarding environmental issues as well as a brief discussion of socioeconomic issues. The biggest shortcoming is the complete lack of data addressing the company s environmental and socioeconomic performance. The web pages also do not provide any information regarding socioeconomic policies, especially in relation to the treatment of employees. - Frantz Continental AG 2004 web pages and Life Cycle Assessment Continental AG did not produce a sustainability report, but it did conduct an extensive life cycle assessment as well as produce several environmental web pages. These included extensive environmental data for the current year, but none from previous years or of industry averages. There was also no discussion of stakeholders. The only socioeconomic information existed in scattered web pages that were not particularly helpful because the pages were tailored to job seekers. - Frantz Daimler Chrysler 2004 Environmental Report, Social Responsibility Report, and 2004 web pages Daimler Chrysler s 2004 Environmental report comprehensively describes its sustainability activities and policies in a social report, an environmental report, and in web pages. The reports are extremely long and cumbersome to read through owing to an abundance of anecdotes, but they are also extremely thorough. The reports themselves contain little numerical performance data but they reference these data on the company website which meets our scoring requirements. As with most companies, it would be helpful if the data provided were compared to industry averages. - Frantz Dana 2003 Annual Report and 2004 web pages Dana did not provide any environmental information and only a little socioeconomic information in pages about future careers and innovations. - Frantz Motor Vehicles and Parts Industry Report

11 Delphi Motors 2004 Corporate Citizen web pages The information provided in the Delphi web pages covers a wide range of business practices and procedures, but fails to reach past the surface of those commitments towards quantifiable, specific goals. While the reasons for sound practices are explained, and the theory for implementation is well developed, Delphi fails to explain details of the strategy for implementation. Specific global environmental efforts are mentioned; however, there is no mention of how Delphi, as a corporation is making the same effort. Delphi does not mention its own weaknesses and makes no mention of continued progress or revision in the future. The company website portrays a solid vision based on Delphi s Principles and Absolutes of Excellence; however, it does not sufficiently explain the actions to effect their larger vision. - Sedloff DENSO Corporation 2003 Environmental Report This is an exceptional report that reflects the company s determination to improve its environmental and social performance. The report is remarkable in paying close attention to the internal and external environmental audit process and following up with measures to enhance the company s environmental performance. The report is very educational, easy to read, and well-organized. More points could be earned by devising socioeconomic indicators and engaging in socioeconomic auditing to supplement the excellent environmental processes. - Adidjaja Fiat 2003 Environmental Report, Code of Conduct, and Guidelines for Internal Control System Fiat has an extremely comprehensive environmental report with most of the necessary information, although it does not compare environmental performance to industry averages. There is little socioeconomic information, however. There is a Code of Conduct and a Guide for the Internal Control Systems that is intended to provide some information on company policy and procedure, but no data on the health of the employees is included. Nor does Fiat clarify its practices regarding wages, child labor, free association, and other important socioeconomic topics, resulting in a low socioeconomic PSI score. - Frantz Ford Motor Company Corporate Citizenship Report This report is lengthy and detailed and provides a broad look into the company. It does a good job reporting on environmental data as well as describing many of Ford s environmental policies and initiatives. However, the data is presented very generally and it is often hard to compare progress to previous years. There is little socioeconomic data which would greatly improve the PSI score. A more specific breakdown of the environmental data and a further discussion of the general environmental aspects and impacts of the company would also improve the score. - Fleischmann Fuji Heavy Industries Ltd Environmental Report and 2004 web pages This report comprehensively describes the company s environmental activities. Most of the critical information is present, but none of the environmental data is compared with industry averages. There is far less socioeconomic information given; however, the proper certifications were present, demonstrating that many of the company s socioeconomic policies were sufficient. - Frantz General Motors, Corporate Responsibility Report and Sustainability Report 2003, and 2004 web pages This report is quite comprehensive and provides a good picture of the company s policies, practices, and intentions. It also has a large amount of performance data; however, the report does not present this information very clearly and makes improvement hard to determine. The report does not include information on the company s Motor Vehicles and Parts Industry Report 11

12 environmental aspects or impacts, nor does it clearly identify and discuss the environmental or socioeconomic stakeholders. A discussion of this as well as the inclusion of a complete and clear section on performance data would improve the score. - Fleischmann Goodyear 2004 web pages Goodyear s environmental web pages provide a good background to the company s sustainability actions and policies, but they do not provide many details. The pages do not include any data or any comparisons to the rest of the industry. This is true for both environmental and sustainability metrics. - Frantz Honda 2003 Environmental Annual Report, Ecology Report, and 2004 web pages Honda provides extensive environmental information in its Environmental Annual Report and its Ecology Report. It is particularly impressive that Honda publishes an environmental report annually. There is very little socioeconomic information available, however. The Conduct Guidelines include several company policies and there are some descriptions of community activities, but that is all Honda offers. Honda should particularly focus on providing some information on the health and treatment of employees. - Frantz Hyundai 2002 Environmental Report and 2002/2003 Sustainability Report These reports provide most of the appropriate information and do so in a user-friendly manner. Charts and tables as well as an informative index make information easy to find. However, the reports rarely compare data to industry averages, and the sustainability report left out policy information regarding child labor, free association, forced labor, and corporal punishment. - Frantz Isuzu 2003 Environmental Report and 2004 web pages This report thoroughly describes the company s sustainability actions regarding the environment, although several categories of performance data are missing. The scattered web pages in the environmental section of the website do not comprehensively describe the socioeconomic actions of the company. There is some description of employee health and training as well as a few community actions, but there is no mention of any company policies. - Frantz Johnson Controls 2003 Sustainability Report This report is much better and more comprehensive than Johnson Controls previous reports. There is considerably more information on both environmental and socioeconomic topics. It is still deficient, however, in discussing stakeholders, environmental aspects and impacts, approaches to performance measurement, and explicit goals for improvement. Nor does it provide much information that allows comparison with previous performance or with peer companies. - Adidjaja Lear 2004 web pages Lear did not write a formal report, but does provide several pertinent web pages. These describe Lear s customers as well as facility locations. Several policy statements (environmental, quality, equal opportunity, and supplier quality) are also included. The web pages do an especially good job of describing the company s commitment to diversity.the biggest gap in these pages is the lack of information about the company s effects on the environment, and the complete lack of data concerning environmental and socioeconomic performance. - Frantz Magna 2004 web pages Magna did not provide a sustainability report. In the web pages, there is some socioeconomic information, but almost no environmental information. Most of the socioeconomic information was geared towards recruiting employees. - Frantz Motor Vehicles and Parts Industry Report

13 Man Group Sustainability Report and 2004 web pages This report adequately addresses some of the company s general commitments to the environment, its employees, and society. However, it lacked any concrete and numerical information pertaining to these issues. To improve the report s score, the Man Group should consider including numerical data, both present and historical, to show improvements in performance. Also, to excel above and beyond its competitors, the company could compare its environmental and socioeconomic performance with other companies in the industry. - Witt Mazda 2003 Environmental Report and 2004 web pages Mazda provides extensive environmental information in its environmental report and web pages but very little socioeconomic information. The environmental section could be improved with further discussion of stakeholders and comparisons between the company s data and industry averages. The socioeconomic discussion is limited to small sections regarding worker safety and community activities. This section needs to be expanded to discuss socioeconomic policies and management in order to improve the sustainability score. - Frantz Michelin: Performance & Responsibility Report and 2003 Updates As reflected in the report title, Performance and Responsibility, Michelin s corporate sustainability report discusses its environmental performance and management to design programs to take care of its customers, people, shareholders, as well as the environment. There is a clear and well thought-out policy, strategy, and management system to support this commitment. The score could be improved significantly by including quantitative environmental and socioeconomic performance data. These should include both improvement since the last report and performance better than peer averages. - Adidjaja Mitsubishi Motors 2004 Environmental Sustainability Report Compared to the 2003 report, the Mitsubishi Motors 2004 Sustainable Report has much more environmental and socioeconomic information and is generally much improved. In particular, the company describes its environmental measures at each of its different facilities. In order to get higher score, the report should also include historical performance data. - Adidjaja Nissan: Enriching People s Lives 2002 Nissan s Environmental and Social Report is extremely comprehensive concerning environmental issues, but leaves out important socioeconomic information. The major items lacking in the environmental section are comparisons with the industry averages and data concerning hazardous waste. The socioeconomic section gives a solid overview by providing company policies and describing the different management strategies and community activities. It fails to comment on policies concerning labor laws, the promotion of diversity, and employee compensation. Overall Nissan provides a very solid report, but leaves room for improvement in the socioeconomic portion. - Frantz PSA Peugeot Citroen 2003 Business Review and 2004 web pages The environmental and sustainability information from this firm, unlike any other such information reviewed here, is completely embedded in the annual financial report. This is a good idea in our opinion, plainly indicating the importance of environmental and sustainability performance to the financial health of the company. There are comprehensive sections on socioeconomic and environmental issues but these sections could be improved by providing data tables regarding the company s performance instead of distributing the information in the text. This data should also be compared to industry averages. -Frantz Motor Vehicles and Parts Industry Report 13

14 Renault 2003 Annual Report and 2004 web pages Renault provides extensive sustainability information in its website and annual report, although it has not released a formal report since The environmental performance score was low due to a lack of comparison with industry averages. There was also limited discussion regarding environmental stakeholders. Although the socioeconomic portion was very comprehensive, it could have been improved by specific reference to labor issues such as wages, hours, child labor, corporal punishment, etc.- Frantz Suzuki 2003 Environmental Report There is no socioeconomic data in Suzuki 2003 Environmental Report. If the report had covered socioeconomic aspects as thoroughly as it covers the environmental ones, the PSI score would have been among the highest in the Motor Vehicle and Parts Industry. We strongly recommend that Suzuki include social reporting. - Adidjaja Toyota 2004 Environmental and Social Report Toyota s core business is more than making cars. The company knows that the success of the business depends on its environmental management. As the report puts it, without environmental responses, the automobile industry has no future... and only automakers that succeed in this area will be acceptable to society. This report reflects meticulous environmental management in all stages of the vehicle life cycle, including production, logistics, use, disposal, and recycling. As a result, the report recieved the highest score in Motor Vehicle and Parts Industry in This report presents absolutely superb summary of the company s environmental and social activities. -Adidjaja Visteon 2003 Performance Track Report and 2004 web pages Although Visteon does not have a formal corporate sustainability report, the company s website does provides some sustainability information. Most of the environmental and socioeconomic comprehensiveness score resulted from information in the news releases posted chronologically on the web site. In addition to the news releases, the web site provides annual environmental performance reports, which contribute to the increase in the environmental performance score. The company could improve its overall score by covering more topics in its performance track report that should also include the socioeconomic topics. - Adidjaja Volkswagen 2003/2004 Environmental Report Volkswagen proves in their environmental report that the environment is a high priority for the company. The report is extremely user friendly. However, it is missing a few key details. While it may make aesthetic sense to place charts and graphs within the text, it does not provide easy access to a reader interested in quantifiable statistics. The self-reporting of materials used in packaging of cars is fantastic. Volkswagen appears to have a deep commitment to environmental conservation and has many innovative and progressive ideas for the future. - Sedloff Volvo 2002 Environmental Data and 2004 Web Pages Volvo provided extensive sustainability information through web pages and scattered reports, including the 2002 Environmental Report and the Code of Conduct. The company s policies were made clear and a large portion of environmental data was presented, although this data was not compared to industry averages. There was very little information regarding stakeholders and the company s effort to connect with their concerns. All the provided information would be much more accessible if it were consolidated into one sustainability report as it had been in the past. - Frantz Motor Vehicles and Parts Industry Report

15 Director s Comments Is automated sustainability reporting in the offing? I just returned from the 18 th International Conference on Informatics for Environmental Protection (EnviroInfoGeneva October 21-23, 2004)* which had, for the first time, a series of sessions on corporate sustainability communication and reporting. Most of the speakers in these sessions are championing the storage of corporate environmental data in XML format in a database, from which it can be retrieved for multiple purposes including overall management, performance tracking, and reporting. The advantages of storing the data in a database (instead of, say, spreadsheets) are the familiar ones that anyone who needs the data can find out where it is kept and thus can easily determine if it exists i.e. if the person who was supposed to post it did so and can retrieve the latest copy, ideally through the internet or an intranet. The advantages of using XML, a more highly evolved version of the HTML that provides us web pages, are that the same data can be automatically filtered and assembled into any of several previously defined report formats. It can then be output as data tables, well-designed printed reports (usually in PDF format), web pages, or any other format. Thus, at any point in the process, a user can automatically generate whatever report is of interest to her, and check on both the status of the data and how the report is coming along. Once all the data are entered, the report is finished! A visionary group at the University of Kaiserslautern in Germany has gone so far as to prepare an XML schema** that includes the 395 semantic components required for meeting the full basic Global Reporting Initiative (GRI) base guidelines. Once these components are provided with the appropriate text, a complete GRI report or any subset of it can be produced at will. Not only that, but it can be produced as a printable PDF and simultaneously as a set of HTML web pages. This all seems like a good idea, but you can also read our paper from the symposium*** which finds that the most thorough reports are invariably in high quality print format. Hence, we would guess that automated reporting is not going to be adopted widely unless it can produce reports that look as though they have been designed by professional print designers. We would appreciate being informed of any good examples of corporate environmental or sustainability reports produced in this way. J. Emil Morhardt Claremont, California November 3, 2004 *on the web at where, as is appropriate for a conference featuring technological data sharing, listen the talks and look at the overheads. The papers may be available by the time you read this as well. **Browsowski, Jan, Ralf Isenmann, Monika Beisel, and Jorge Marx-Gomez XML Schema for sustainability reports meeting the needs of the GRI guidelines. p in the conference proceedings ***Morhardt, J. Emil and Elgeritte Adidjaja Electronic presentation styles of corporate sustainability information and how they reflect the quality of reporting. P in the conference proceedings, and available on our website under the sidebar category Our Technical Papers Motor Vehicles and Parts Industry Report 15

16 The Roberts Environmental Center Claremont McKenna College The Claremont Colleges Roberts Environmental Center The Roberts Environmental Center, an environmental research institute at Claremont McKenna College (CMC), is housed in the W. M. Keck Science Center in the heart of the Claremont Colleges campus. Its mission is to provide students of all the colleges with a comprehensive and realistic understanding of today s environmental issues and the ways in which they are being and can be resolved, and to identify, publicize, and encourage policies and practices that achieve economic and social goals in the most environmentally benign and protective manner. The Center is funded by an endowment from George R. Roberts (Founding Partner of Kohlberg Kravis Roberts & Co. and CMC alumnus), other endowments, grants, and gifts, and is staffed by faculty and students from the Claremont Colleges. Center staff are happy to consult with companies wishing to improve the quality of their environmental and sustainability reporting. Center students are often looking for corporate summer internships and post-graduation positions, and the center director can aid firms in finding the right student. Claremont McKenna College Claremont McKenna College, a member of the Claremont Colleges, is a highly selective, independent, coeducational, residential, undergraduate liberal arts college with a curricular emphasis on economics, government, and public affairs. The Claremont Colleges The Claremont Colleges form a consortium of five undergraduate liberal arts colleges and two graduate institutions based on the Oxford/Cambridge model. The consortium offers students diverse opportunities and resources typically found only at much larger universities. The consortium members include Claremont McKenna College, Harvey Mudd College, Pitzer College, Pomona College, Scripps College, Keck Graduate Institute of Applied Life Sciences, and the Claremont Graduate University which includes the Peter F. Drucker and Masatoshi Ito Graduate School of Management Motor Vehicles and Parts Industry Report