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September 2007 • Ethical Corporation
Report review
Skanska’s 2006 annual report
Strong foundations but flimsy structure
Skanska’s report disappoints in light of its strong sustainability reputation,
says Aleksandra Dobkowski-Joy
ome reports leave you with the impression that,
despite a beautifully crafted presentation, replete
with tables, charts, and even a stakeholder quote or
two, the issuing company lacks a fundamental understanding of, and strategic approach to, sustainability.
Skanska’s report suffers from the opposite
problem. Readers may walk away with the impression that Skanska really “gets it”, but will probably
be frustrated by the company’s incomplete efforts
to communicate its sustainability performance.
At first pass, Skanska’s combined annual and
sustainability reporting approach provides an excellent opportunity for readers to review in-depth
financial and business segment data while considering the company’s sustainability objectives.
The “Strategy for Profitability” section explicitly
defines industry leadership in sustainability as one
of Skanska’s top priorities. Skanska also integrates
employee information into the financial narratives
and includes paragraphs on safety, environmentally
friendly design, and energy-efficient solutions into
descriptions of the company’s construction, residential development and commercial development
activities.
S
Strong targets, weak indicators
There is room for improvement here. Skanska could
more concretely tie sustainability performance to
business success by explicitly discussing bottom-line
implications of various sustainability initiatives.
While Skanska’s website presents data showing the
increasing value of projects with “higher environmental standards”, the report does not elaborate on
these statistics.
Skanska should also comment on whether
potential clients are demanding proof and application of environmental expertise, and if the
company’s favourable reputation as a responsible
operator gives it an advantage during the bidding
process.
The report does better when discussing efforts to
recruit and retain skilled employees. With a workforce age profile heavily weighted towards older
workers (73% of employees are over 41), Skanska
clearly recognises and communicates the strategic
risks of not pursuing a broad and diverse base of
potential hires.
The dedicated sustainability section of the report
is hobbled, however, by serious deficiencies.
Although Skanska does a good job of outlining
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global trends and challenges in the construction
industry, the company illustrates performance
mostly via case studies. This approach makes it very
difficult for readers to discover buried statistics and
draw conclusions on corporate-level achievements.
Featured indicators seem to be selected at random
and often lack descriptive context.
Skanska avoids quantitative goals and targets
entirely, instead leaning heavily on “the four zeros”
– general targets of zero loss making projects, zero
environmental incidents, zero work-site accidents
and zero ethical breaches.
If the lack of specific goals is a result of datacollection difficulties around distributed operations,
Skanska should make this clear. The report repeatedly states that all construction projects are
inherently local. As such, Skanska could create a
standard set of performance indicators for each
project, which could then be rolled up to provide an
integrated perspective. Skanska could use such a
system to begin defining explicit, quantitative
targets that would correspond to its “four zeros”
aspirations.
Skanska seems to be somewhat confused over
what types of activities genuinely fit under the
sustainability umbrella. For example, the company
claims that its involvement in financing and
building new schools and hospitals demonstrates its
“commitment to society”, rather than simply a good
business decision.
Skanska could address at least some of these
issues by applying the Global Reporting Initiative
G3 Guidelines. Skanska would clearly benefit from
the rigour and comprehensiveness of the GRI
approach, and one hopes that the company’s reluctance to apply the GRI is not related to Skanska’s
considerable involvement in developing the
ISO26000 Social Responsibility standard.
An easy starting point would be for Skanska to
compile a GRI-based content index, as many
required disclosures are already scattered
throughout the financial narratives, the sustainability section, the directors’ report and the
company’s website.
Ultimately, Skanska requires a significant
reporting upgrade. Although the company has
poured the foundation for sustainable action
through its strategic positioning and “zero” goals,
too little of the resulting structure is yet visible in its
communications. ■
Snapshot
Follows GRI? No.
Assured? No.
Goals? “Zero” goals only.
Stakeholder input? Unclear.
Targets? No interim targets
specified.
Seeks feedback? No.
Main strengths:
Incorporation of
sustainability information
into financial narratives.
Key weaknesses: Lack of
comprehensive, consolidated
data. No quantitative
targets.
Pleasant surprise:
Environmental case studies
on website.
Skanska seems
to be somewhat
confused over
what types
of activities
genuinely fit
under the
sustainability
umbrella
Aleksandra Dobkowski-Joy is a
principal at Framework:CR.
[email protected]
www.frameworkCR.com
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