Tomorrow's Company review

Tomorrow’s Company is a research and agenda setting organisation committed to creating a future for business which makes equal sense to staff, shareholders and society. This year, Alliance Boots requested that Tomorrow’s Company undertake independent analysis of the Alliance Boots Corporate Social Responsibility Report 2010/11. Commentary relating to this analysis is detailed below.

Tomorrow’s Company — an independent review of the Alliance Boots CSR Report 2010/11

This is the first time that Alliance Boots has introduced an external commentary into its CSR report. We view this as a constructive step. The result has been a dialogue, prompted by the initial comments of a “critical friend”, during which the group both explains but also re-examines its approach to reporting on its CSR activities.

Alliance Boots has listened seriously to every challenge. Sometimes there has been immediate change, more often the fruits of the dialogue will be seen in future years. And of course, as a group under private ownership, albeit with revenue of over £20 billion, and operations in more than 25 countries including associates and joint ventures, it is, as yet, under no obligation to be so open. The ambition level is high – “to build a world leading sustainable group” according to Stefano Pessina, Executive Chairman, and “on track to building a strong corporate social responsibility culture that others will strive to emulate” according to Ornella Barra, Chairman of the social responsibilities committee. It is against this ambition that the report should therefore be judged.

A good sustainability report reflects progress over a number of years against targets. Here, for good reason, there are few group targets. The Alliance Boots CSR model involves a central framework with local discretion and accountability. This is wise in what is a complex and diverse group. Such delegation makes it harder to communicate overall progress. Many of the businesses are relatively new to the group and its framework. We recognise that it takes time to establish a baseline and begin to show a meaningful set of trends.

Tomorrow’s Company has made some suggestions for a clearer approach to the framework of group policies and priorities which sit above but also interact with the objectives and targets of each business. It is encouraging to see these being worked through at group level – meanwhile within the group there is evidence of bold target-setting – for example the move by Boots UK to include traceability data for all the natural materials and ingredients used in Boots product brands within the next two years.

Sometimes the group is perhaps reluctant, stemming from a sense of modesty, to speak of its level of activity and achievement with the detail and colour that we would like to see and the section on stakeholder dialogue is an example of this. We now know from our own experience that the group relishes stakeholder feedback. We would like to see this better illustrated in the report, although we appreciate that some of the most effective dialogue takes place in private. We would also like to hear more from Alliance Boots about the leadership opportunities and challenges that it sees for itself in the future.

The partnership which Alliance Boots is building to help the European Organisation for Research and Treatment of Cancer (EORTC) Charitable Trust is a good example of the Group’s leadership. So is the Boots UK partnership with Macmillan Cancer Support. Another admirable example of vision is the work of Boots UK, in partnership with others, in helping to regenerate towns and cities in the UK. This is the work of real leaders – laying important foundations for the future in work that is unlikely to grab headlines.

The report brings to life other examples of leadership around the group – for example the Zaragoza warehouse of Alliance Healthcare España and its recognition for environmental excellence, the BCM achievement in Vitre, France, in saving energy through a loop with a local incinerator and swimming pool, and the initiative shown in developing the first lower carbon Boots store in Eastbourne in the UK.

So how well is Alliance Boots doing against its high ambitions? At a business level, we sense a welcome tendency to under-promise and over deliver. At the group level there is a determination to be rigorous. Sometimes, as a result, it is not easy to see the big picture of progress towards building a strong CSR culture. The admirable rigour over numbers can be further enhanced by a clearer explanation of the link between group strategy and local achievement and consistent use of longer-term targets and milestones. In this way future reports will give a more powerful account of the many achievements of Alliance Boots.

Mark Goyder, Founder Director, Tomorrow’s Company.

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