Santa Enterprises, Corporate Social Responsiblity (CSR) Report Review

Santa Enterprises, CSR Report Review

Have you ever had that horrible moment when you've hit the "send" button on an e-mail, and you realize that you've just sent something to the wrong person? Not only to the wrong person, but something that really should never see the light of day. Last week we received such an e-mail, completely by mistake. Of course, the bottom of the e-mail had the usual "if you are not the intended recipient" stuff, but in light of the attachment, we thought we would share it with you anyway.

It appears to be a pre-first draft of the "Santa Enterprises Corporate Social Responsibility assurance report". We won't mention the name of the advisers/auditors, but suffice to say this came to us from a reputable firm. They know who they are, so we'll leave it at that.

I’ve gone through and removed the names of the actual individuals and replace the actual names with “(name removed)” for confidentiality. Also, the reviewers text was highlighted, so I've left their highlighting.

So here, reproduced in full for your seasonal enjoyment, is the pre-first draft of the CRS assurance report for Santa Enterprises:

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Report Introduction

-- Note to (name removed) --

Insert the usual "stuff" here. I think we have some other reports that we can steal from. Usual stuff - importance of CSR reporting, sustainability, etc. No one will notice that it looks like every other report.

-- Note to (other name removed) specifically --

(Name removed), this time at least remember to change the name of the client. The "Baby Seal-Skin Cigar Case Company" might also be located in the far north, but I'd rather we didn't have that kind of mistake again. I really do not want to be called on the carpet (or snow) again.

Organization overview

Santa Enterprises is a multi-national, family run business, with one of the greatest brands and customer bases in the world. Santa Enterprises is proud of its long tradition of same-day delivery to all customers around the world, although this requirement for same-day deliver, one day of the year, does impose a certain level of stress leading up to that day. On the other hand, the company is (internally anyway) famous for its "after Christmas" party.

Santa Enterprises has one of the world’s most extensive supply chains, with suppliers around the world delivering the widest possible range of products for distribution. In the past this has opened the company to criticism of suppliers' business practices, but an assertive PR program has, in the vast majority of cased, shielded the company from any direct negative PR. Allocation of blame on suppliers has been a key method of ensuring the purity of the brand (**Partner's comment: You might want to reword that.**)

The centralization of distribution and management of final quality assurance and preparation by the Elf workforce is also a hallmark of the company. In fact, the intergenerational support of the Elf workforce is a significant contributor to the ongoing value of the brand. This workforce loyalty also enables Santa Enterprises to keep its labor costs low, while at the same time continuing to provide a great work environment for that specific workforce.

Equally, the seasonal nature of the business has ensured that the company has been able to use the "non-Busy Season" in the early part of the year to review processes, introduce new products, and to experiment with alternative go to market strategies. We note that in the antipodes (Australia and New Zealand in particular) the "Christmas in June" program has met with some limited success.

Work performed

(Provider name removed) has been engaged by Santa Enterprises to review and provide an independent report on the company's CSR report. Our report covers the years (removed) to (removed), and focuses specifically on Santa Enterprises.

As in previous years we evaluated Santa Enterprises’ progress against targets based on the following:

• Documented evidence relating to the period stated above, verifying the extent to which actions undertaken by Santa Enterprises led to the achievement of targets. This evidence included internal and external communications, management reports and analysis of data from key performance indicators
• A series of one-to-one meetings and telephone conversations with individuals responsible for creation of Santa Enterprises’ corporate responsibility report.
• We have also considered the structure and content of your GRI G3 Index.

Certain areas were, as in the past, specifically excluded from our review and assurance. These include:

• External suppliers. Santa Enterprises makes extensive use of external partners in the supply chain for the creation and deliver of specific products and services. As these are not under the control of Santa Enterprises management, they are again excluded from this report.
• Estimated Carbon Footprint. While Santa Enterprises is fundamentally a distribution company, the carbon footprint has been excluded. Santa Enterprises expects to include this in reporting as soon as there is a mandatory reporting of carbon emissions. Santa Enterprises does not participate in the Carbon Disclosure Project. (**Partner comment: You might want to delete this text. Check with client. **)

Standards applied

As in previous reviews, we applied both the AA1000AS (revised) standard, and the ISEA3000 standard for the review of non-financial information, and all work was perform in accordance with the spcific Agreed Upon Procedures document agreed by both parties. We note that Santa Enterprises has elected to retain the report for internal use only.

Our Opinion

-- Note to (name removed) --

Insert the usual "stuff" here. I think we have some other reports that we can steal from. Usual stuff - "fair and accurate", negative assurance (to cover our backs - we didn't get paid enough to do a really detailed review, besides, He won't let us near the Elves, so negative is the only assurance we can give, not to mention the dreadful state of their records...).  And let’s face it, we can’t very well say “listen, your main brand is an obese guy in red pajamas, who is to cookies what the Marlboro Man is to smoking.”

Key findings and Observations

Carbon intensive

Santa Enterprises, through its centralization of all product distribution from the North Pole, and the requirement to gather all product at that one location, is running an excessively carbon intensive business, in respect of transportation related carbon.

Centralized distribution

The current process of central distribution, as noted in previous reports, does add overhead in the need first to gather all products in one location, then to perform a single massive distribution event. Distributed distribution centers might reduce costs, reduce waste, and certainly reduce carbon emissions.

"The List"

This is another fine perennial item in our reports. We continue to stress that “Naught and Nice” list could cause some serious problems. We remain concerned because:

• Naughty and Nice would appear to have too many alternative interpretations
• This sounds just a little too similar to a Ricahrd Nixon “Enemies List”.

We also remain skeptical as the effectiveness of the risk assessment processed used to determine placement on either Naughty or the Nice list. Documentation of the criteria for inclusion on either list may be helpful.

Recycling

One consistent complaint from stakeholder interviewees is that the amount of packaging seems excessive, and that there appears to be no recycling program in place. We heard from a number of stakeholders that they would welcome being able to provide the packaging for pickup the following day. All those boxes and wrapping paper. One helpful stakeholder even suggested a name – “Boxing Day”. We’re not sure how well this would work, but we recommend Santa Enterprises explore a recycling and waste reduction program.

Sustainable sourcing

Sustainable sourcing or resources used remains an area of potential improvement. Certainly progress has been made, and we would suggest that Santa Enterprises might be able to further improve the brand through publicity of such sourcing.

Employee relations

The centralization of some production at the North Pole does create something of a captive workforce, and undermines the ability, should they so desire, for Elf collective bargaining. While not suggesting a relocation, it may be appropriate to leverage the existing supply chain, providing secondment of Elves to the factories in China (and other countries) and secondment of workers and management in such factories to the North Pole. Such secondment should also have the side benefit of improved sharing of management practices and efficiencies in operational practice.

Danger of "Elf Labor" accusations

Unfortunately we were unable to speak with any of the Elves, or to actually see and review the ER (Elf Resources) records. When we combine this is the general height of Elves, there is the risk that Santa Enterprises could be leaving itself open to accusations of "Child-Elf Labor" practices. We recommend that subsequent reviewers be provided with access to ER records for verification.

Stakeholder engagement

All reviewers were in agreement as to the very extensive and impressive stakeholder engagement processes in place. The "Letters to Santa" program and the "Mall Santas" are both highly effective at engaging the very wide stakeholder communities.

• "Letters to Santa": This clearly is one of the greatest and longest running examples of stakeholder engagement, in terms of both feedback on prior year performance, and on clear expectation setting on the part of the stakeholder community. We would caution, however, that the actual range of stakeholders participating in the program is somewhat narrow. Perhaps the program could be widened to include others in the wider Santa Enterprises stakeholder community such as parents, suppliers, Elves, local regulators and community leaders - the Archbishop of Canterbury comes to mind).
• "Mall Santas": Again, one of the great stakeholder engagement programs. We note also that this program has been growing internationally, with Mall Santas being seen in Canada, the United Kingdom, parts of Europe, and moving into Asia.  The feedback provided by this program is invaluable to Santa Enterprises, as demonstrated by the year on year continued popularity of the program. Greater care might be taken in some cases in selection of actual event moderators.

Recommendations

Finally, our recommendations to the management of Santa Enterprises remains the same as in previous years - there are a number of individual actions that could be taken, but generally we would say: "Don't Change a Thing. Your Stakeholders Love you, and the service is great".

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So with that let me end this post, and wish everyone a wonderful holiday season. Certainly there will be more articles between now and the year end, covering the usual range of topics, so keep coming back.

Cheers,
Dan