June 11, 2014
Dunstan Allison-Hope, Managing Director, Advisory Services, BSR
In the 20-page law-enforcement disclosure section of Vodafone’s new sustainability report, the company describes how it responds to demands from law-enforcement agencies in its 29 markets, provides a country-by country overview of the relevant legal context, and is frank about the challenges the company faces—including the stark fact that some governments have “direct access to an operator’s network, bypassing any form of operational control” and as a result “already have permanent access to customer communications via their own direct link.”
It is the most impressive new approach to sustainability reporting I’ve seen in some time. When was the last time a sustainability report contained revelations so significant that it landed on the homepage of the New York Times and BBC News?
Vodafone’s reporting on law enforcement illustrates six important things about the future of sustainability reporting:
1. Law-enforcement relationships matter. The Vodafone report gets to the heart of one of the state’s most important functions—the enforcement of its laws and policies for the public interest—and the role of companies in supporting that function. As a result, the reader has a much greater understanding of how the system works from a telecoms-industry perspective. It is remarkable that this basic public function of law enforcement has been largely absent in 20 years of sustainability reporting, and society would benefit if banks, tourism companies, healthcare companies, and others issued similar reports.
2. Details matter. In the reporting world, we talk a lot about using materiality to produce more succinct reports that prioritize what matters most. I agree that we should do this. But this only works if it is done in the service of more detail for the experts who need it: As the IIRC advises, a report should “provide an entry point to more detailed information.” Vodafone’s report provides extensive disclosures and commentary that allow the reader to make informed judgments about how telecom companies should integrate respect for human rights into their relationships with law-enforcement agencies. Indeed, if it wasn’t for the detail, the report wouldn’t have been front-page news.
3. Narrative matters. There are more than 40,000 words in Vodafone’s law-enforcement report and just 15 numbers. And here, that’s the right mix, as Vodafone’s extensive analysis and narrative points out the shortcomings of these numbers: “In our view, inconsistent publication of statistical information by individual operators amounts to an inadequate and unsustainable foundation for true transparency and public insight…it is not possible to draw any meaningful conclusions from a comparison of one country’s statistical information with that disclosed for another.”
4. Systems matter. Much of the Vodafone report is dedicated to describing the larger system that can be addressed only in collaboration with others. Indeed, Vodafone expresses a strong opinion that much of its report shouldn’t be there at all—the company is just reporting what governments should be reporting but are not: “We believe governments should be encouraged and supported in seeking to adopt this approach consistently…we are already engaged in discussions with authorities in a number of countries to enhance the level of transparency through government disclosure in the future.”
5. Innovation matters. The Vodafone report doesn’t follow any guidelines because there aren’t any. But that didn’t stop the company from trying to figure it out: “There is no established model to follow: Few international communications operators have published a country-by-country report of this kind…Additionally, there are no standardized methods for categorizing the type and volume of authority and agency demands.” We hear a lot about the GRI, SASB, and IIRC guidelines, but the future of reporting also will be shaped by companies experimenting like this.
6. Standards matter. At the same time, the long-term sustainability and comparability of these reports depend on standard approaches. And Vodafone supports this, too: “Where possible, we will…work with other local operators to develop a consistent, cross-industry recording and reporting methodology and will engage with governments to make the case for a central, independent, and verified source of statistical information spanning all operators.”
Companies deserve praise when they push the boundaries of transparency in ways designed to fulfill their responsibility to respect human rights—and doubly so when they also encourage governments to fulfill their duty to do the same. By doing this through the vehicle of its sustainability report, Vodafone has illustrated both the value of reporting and its future direction.
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