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April 1, 2009

How Sun Manages its Year-Round CSR Reporting Cycle

Sun Microsystems has published three CSR reports, including its 2008 report, and is just beginning the process for the next one. Here are some key takeaways  from Marcy Scott Lynn, Sun’s director of Corporate Social Responsibility, on running a successful CSR reporting program

# 1 – Get buy-in at all levels – from the board room to the mail room.

Jonathan Schwartz, chief executive officer of Sun, gets involved early in the process of developing a CSR report, drafting a letter for the report, Lynn said.

To help keep the company on one page regarding CSR, Lynn maintains a public blog called “Innovation + Responsibility.” Not only does it provide a way for her to communicate a vision to Sun employees, but it also provides transparency to customers, shareholders, and anyone else interested.

One of Lynn’s posts, “Employee Engagement, I’m Starting to Sound Like a Broken Record,” discusses the difficulty in getting the general workforce excited about CSR.

#2 – Tap your stakeholders.

About 45 people are on Sun’s internal stakeholder team, and another 10-14 organizations make up the external stakeholders.

“Not everyone on the internal team participates at every meeting, but they’re all invited,” she said, adding that about 40 members of the internal team provide content and data for the report.

External stakeholders come from a range of organizations that focus on employee rights in the supply chain to social investors, “as well as a couple customers that we feel we can learn something from,” Lynn said.

Schwartz participates in at least one of the external stakeholder meetings and provides feedback all along the way.

“We look for candid feedback from the previous report, and that guides the next one,” Lynn said. “It’s not rocket science but it’s kind of complex.”

Lynn begins reaching out to external stakeholders in late February or early March, she said, and by May an external outline has been developed. Stakeholder meetings typically happen in June.

#3 – Hammer the information into a usable form.

Final data begins making its way to Lynn’s desk on June 30, when Sun’s fiscal year ends.

Useful information for a CSR report comes not only from hard numbers on resource use, emissions, goals reached, etc., but also from practical examples that make a company’s products more sustainable or recyclable (you can expect Sun’s new data center in Broomfield, Colo., to figure into the next report.)

Another example from Lynn: “We used to have a system that had 300 mini-screws. So when the product’s lifespan was over, someone had to sit around with a mini-screwdriver and take out 300 screws. Now the product has been redesigned so everything snaps. It makes the building of the product faster and it’s also easier to take apart.”

For more tips on putting together CSR reports, refer to Lynn’s excellent blog post, “CSR Reporting in 10 (Not so Easy) Steps.”

#4 – Get feedback from internal and external stakeholders.

Sun doesn’t get a huge amount of direct questions from stockholders, which may be surprising or disappointing to some people, Lynn said.

“But we do hear from social investing funds. We get detailed questionnaires about policies, emissions, charitable giving,” she said. “They’re asking about our performance as they make their investment decisions. It’s clear that more investors are cognizant about the environment.”

Overall, Lynn said she has been surprised by the lack of feedback from the general public. She discusses this in her blog post, “Rethinking Reporting.”

#5 – Present a final draft, but be ready to make changes.

“Around September, we meet again with internal and external stakeholders with as close to final a draft as possible,” she said. But there are often more changes to be made.

She might still be waiting on final nuggets of data. Sometimes company leadership suggests changes that require retooling of the document.

The final report comes out in October.

#6 – CSR reporting is an ongoing process.

Last December Sun posted a mid-year update to the report, and Lynn expects another one this winter.

“It’s really helpful to do a mid-year update,” she said. “From a process standpoint, it gets people accustomed to tracking and reporting this data. As we do a mid-year report, the processes are in place and we don’t have an end of fiscal year scramble.”

Additionally, the mid-year report lets internal stakeholders know how divisions are performing against expectations, and whether they need to tweak their processes.

#7 – Outside consultants will cost.

Developing and maintaining a CSR program has tangible and intangible costs. If a company chooses to use outside consultants and preparers, the costs can rise, Lynn said.

“We don’t use consultants, so we don’t have a huge dollar layout, but we do invest a lot of time and resources,” Lynn wouldn’t discuss the money in detail, saying, “The budget is what we need to get it done and get it done right,”

But Lynn’s also a realist. “I am mindful that we’re in tough economic times, so just because we’ve done something a particular way in the past doesn’t mean that’s the way we’ll keep doing it,” she said. “We are looking at fundamentally changing how reporting happens in our company. What that looks like, I don’t know yet.”

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