Consultants


Consultants

A growing number of consultancies are emerging to provide advice on issues ranging from CSR strategy development to environmental health or safety monitoring of suppliers. Some advise on data retention policies or supporting software, and others will help a company to collect disparate information from various corporate departments and suppliers. Many consultancies and standards groups will also advise a company on how to compile and write a sustainability report. These advisors fall into a variety of groups: the traditional large accountancy firms, smaller specialized CSR or software consultants, independent auditions, or CSR-campaign- related organizations.

As might be expected, the large, traditional accounting firms such as PriceWaterhouseCoopers and KPMG have been active in this area for some time. In fact, according to a recent survey, 65 percent of company sustainability reports reviewed were audited by the major accounting firms. [3 ] KPMG has its well-established Sustainability Advisory Services as well as their Supply Chain Integrity service that has been operating since the late 1990s. PricewaterhouseCoopers has a similar Assurance/Business Advisory practice with more than 400 consultants in 32 countries worldwide. In April 2002, PricewaterhouseCoopers also announced that it had become a charter sponsor of the Global Reporting Initiative (with which it has been actively working since 1998 in an advisory capacity). Globally, PwC provides clients with a variety of services, from traditional compliance reviews and factory audits , to strategy development, metrics definition, data collection, product lifecycle analysis, environmental policy assessments, or responsible supply chain impact studies.

We help companies understand all the things that they are doing around being responsible or not, says Martin Ogilvie Brown, from PwC s, Sustainable Business Solutions group . This includes helping multinational corporations to sort through the often disparate and difficult-to-collect information concerning their social and environmental performance from various departments and functions around the world.

We look at the whole sea of information that is relevant and important-to stakeholders, he says, and then help them to collect and assess information that addresses their specific reporting requirements. Then we help them sort through what they are doing well, or not so well, and point out where they may need to develop a new policy, metric, or initiative. [4 ]

On the international supplier audit side, a good example of a more specialized service is Bureau Veritas, which provides independent monitoring and auditing services of suppliers for companies worldwide. Bureau Veritas covers many industries, including apparel, foods , and other consumer goods, and will provide audits against a company s own code of conduct, or against recognized standards such as the Fair Labour Association (FLA) or the World Responsible Apparel Production (WRAP). They also provide site certification for SA 8000.

Finally, there have emerged in recent years a number of smaller CSR and sustainability specialist consultancies that help companies devise their social and environmental strategies, or develop their nonfinancial reporting process. They can advise on most of the key features of an ethical supply chain ” creating a strategy, program management, change management, developing performance indicators, supplier monitoring, coaching and auditing ” that we have been examining. Stratos, for example, a sustainability consultancy and research group based in Ottawa, Canada, provides clients with strategic planning, benchmarking, and standards implementation, audit, and reporting advice. We have a specialization in sustainability and CSR type issues, says Stephanie Meyer, a Principal with Stratos, so we are all very conversant in all of the different disciplines ” and that really is our core focus.

When I look at various assurance statements and look at what I think really does add value, she says, it is when you do see the assurance providers recommendations in there ” where [assurance auditors ] are providing some recommendations on how the company can improve, included within the assurance scope. Typically an audit assignment does not include recommendations, but you can come to some agreement to use those. We re not scared to go down that path , and that can be part of what can differentiate us from some of the big Four. [5 ]

Similarly, London-based Impactt Limited provides companies with services such as vision and strategy development, troubleshooting assistance, and factory assessments. They also help companies construct tools and methodologies. We work by opening people s eyes to the impacts and the risks of how the company works now, says Louise Jamison, Director at Impactt, and opening their minds to the possibility of change. We create a safe environment for people to question what they do and how they do it and then work with them to develop creative, pragmatic solutions and strategies and robust tools and systems which deliver measurable and demonstrable results.

Impactt has developed its own in-house approach to evaluating labor conditions in production sites known as the Impactt Diagnosis, which combines rigorous data-gathering with common sense and an open and cooperative approach to working with factory managers.

This enables us regularly to uncover issues which other auditors miss , she concludes, and to reinforce the business case for improvement with production site managers. [6 ]

Case Study: Impactt

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The following text is taken as a direct quote from the Impactt Web site. See source note below.

The Pentland group owns a number of international sports & leisure brands, including Ellesse, Speedo, Kickers, Berghaus and Red or Dead. In addition, Pentland supplies own label footwear and clothing to high street retailers, mainly in the UK. Pentland commissioned Impactt to work intensively with management, union and workers at one of its supplier factories in Vietnam to:

  • Understand the factors driving excessive overtime.

  • Build a shared understanding of the need for change.

  • Develop verifiable management systems for recording overtime.

  • Ensure that information is available to workers, union, management, and Pentland on hours worked.

Impactt worked with MRSC, a Vietnamese NGO specialising in working with migrant workers, to ensure that workers views were properly represented in the negotiation. This approach has brought about real change in the factory through:

  • Enabling workers to choose whether they work overtime or not

  • Enabling workers to choose how much overtime they work

  • Developing verifiable record keeping systems for overtime

  • Ensuring that workers have information about hours and pay

The lessons learnt at the factory will be rolled out to Pentland s other suppliers around the world.

Source: Impactt Web site at www.impacttlimited.com.

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Statistically among these various consultancies and auditors, the larger accounting firms are favored by most large corporations, but in a recent reporting analysis performed by SustainAbility, companies that used the smaller audit groups or CSR-specialist consultancies, ( especially if those CSR organizations were teamed with an audit firm or specialist consultancy) tended to produce better CSR reports, actually scoring significantly higher in terms of accuracy, verification, and customer satisfaction. The formal accountancy approach, of course, focuses more on validation of facts and figures, whereas CSR groups often feel free to comment more broadly on performance, even providing recommendations that are useful both to the reader of the report and to the company itself. [7 ]

As with financial auditors, if your company does decide to hire a third-party to verify compliance, the Global Reporting Initiative has some useful advice about selecting auditors. This includes:

  • Make certain of the auditor s degree of independence and freedom from bias, influence, and conflicts of interest.

  • Understand their ability to balance consideration of the interests of different stakeholders.

  • Be certain that the auditor was not involved in the design, development, or implementation of the organization s sustainability monitoring and reporting systems and did not assist in compiling the sustainability report.

  • Allocate enough time to enable the process to be carried out effectively.

  • Be certain that the auditing company, and the individual auditors assigned, are competent and experienced enough to meet the objectives. [8 ]

[3 ] Beyond Numbers, KPMG Assurance and Advisory Services Booklet, p. 17.

[4 ] Interview, November 6, 2003.

[5 ] Interview, September 2, 2003.

[6 ] See www.impacttlimited.com.

[7 ] Allison Maitland, How to Prove Good Intent, The Financial Times, November 18, 2002.

[8 ] Sustainability Reporting Guidelines, The Global Reporting Initiative , p. 78.