Reviewing different corporations’ sustainability, corporate responsibility, or environmental, social, and governance (ESG) reports can be useful for investors and other stakeholders. Sometimes these reports can come off as ungenuine or as blatant greenwashing. Analyzing how these reports present metrics, align with existing standards and frameworks, and deliver effective information is important to determining if the sustainability reports are effective and impactful. The sustainability reports for Target, Citi, and John Deere were reviewed with these criteria in mind to determine their effectiveness.

Target

Target’s 2021 corporate responsibility report covers their fiscal year from February 02, 2020 to January 30, 2021 (Target 2021, 4). Labeling their report as a 2021 report, even though the dates are effectively for 2020, make this report harder to line-up with other organizations and limit the comparative usefulness of reporting. The report is broken into triple-bottom line categories of people, planet, and business which make it easy to navigate. However, while there are some informative graphs, in general this 105-page report is primarily text heavy and relies heavily on large data tables with small print making it difficult to read. A more ideal method of presentation would be to provide more data as graphics and highlighted key metric values while placing granular data tables in appendices. The focus on storytelling, as opposed to graphically presented metrics, gives the sense that they are trying to obfuscate their actual progress towards goals. This report comes off as fairly dry and less interesting than most others at first glance, even though it does provide a large volume of useful data.

Target’s report has a section outlining their materiality and stakeholder engagement which shows that they have analyzed how their business impacts a variety of stakeholders which is important. The focus of their goals and metrics are around moving towards zero greenhouse gas (GHG) emissions, zero waste to landfills, and ensuring their supply chain adheres to their equitable and sustainability policies as well (Target 2021, 13-14). While their structure is not the most interesting, their reporting does follow Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosures (TCFD), and United Nations Guiding Principles Reporting Framework (UNGPRF) frameworks as well as highlighting how they work contributes to the United Nation’s Sustainable Development Goals (SDGs) (Target 2021, 18). It would have been better to see the SDGs applied to their different metrics and goals instead of just provide in a list early in the report. A majority of their data was listed as independently verified, although it was difficult to determine what organization was used to verify the different datasets. Target’s sustainability report does check a lot of boxes regarding alignment with standards and useful data but falls flat when it comes to presenting interesting and useful metrics around the actions and sustainability impacts of their company.

John Deere

Conversely, John Deere’s report has a large variety of graphics and visually presented metrics. The bolding and highlighting of their key metrics makes it easy to see what their focus is for different categories, and the data table provided at the end provides multiple previous years to be able to easily see their actual progress on the different metrics (John Deere 2021, 79). The clear focus on not only their GHG emissions, but the elements that drive those emissions, provide metrics that can turn into actionable efforts. The economic opportunity analysis of their waste reductions also was impressive since it highlights the fact that a lot of actions that can be taken reduce risk and costs as well (Hart 2010, 88).

They break out their reporting in environmental, social, and governance categories but one thing that they do not showcase in this report is a clear description of their materiality evaluation. While they discuss it briefly, and how their report aligns with GRI, SASB, an SDGs, the lack of details around materiality of their corporate actions could be improved (John Deere 2021, 11). Also, while the SDGs were briefly mentioned, there were no actual ties to SDG categories presented in the report which could indicate more of a greenwashing approach then an integrated sustainability approach. The only data that appears third-party verified is their GHG emissions that was verified by Apex Companies, LLC (John Deere 2021, 79). Their report is only 80-pages and is much easier to read and identify important elements and progress versus historical actions. However, while the metrics presented are useful and clear, their reasoning for their choices is less clear. John Deere’s report is a much slicker looking report but fails to provide information indicating that sustainability is an integrated and impactful part of their business strategy.

Citi

When it comes to materiality of ESG topics, Citi’s 2020 report greatly excels at this. Like John Deere, they break up their topics by ESG categories but provide much deeper information by identifying how different key stakeholders are impacted by each sub-element in those categories. Their materiality chart is a very powerful example of a company identifying the most material sustainability items for their business and stakeholders (Target 2021, 15). They provide both highlighted and graphically represented key metrics, as well as detailed and informative tables throughout the report as well. While much longer than the other two reports at 176 pages, the specifications around how goals align with other global standards and frameworks like the GRI, SASB, United Nations Global Compact (UNGC), UNGPRF, Principles for Responsible Banking (PRB) and TCFD standards in addition to SDGs make this report much more useful for a larger variety of stakeholders (Citi 2021, 132). They also have their data third-party verified by SGS with granular details of the different assurances (Citi 2021, 168). Overall, the Citi report is the strongest of the three as it blends very detailed information that follows many standards and frameworks with third-party verified data while still providing easily digestible graphics and metrics. Their report highlights how to report impactful sustainability data for a large variety of stakeholders.

Additional Insights

These three reports provide good examples of companies on different spectrums of sustainability. Focuses on continuous improvement and small incremental changes that perpetuate current industry structures typically fail to change the issues at the core of unsustainable practices (Hart 2010, 113). The John Deere sustainability report appears to showcase a company that is focused on managing business as it is today while aiming to reduce costs and risks. However, Citi’s reporting gives the impression that they are truly engaged with external stakeholders and want to reposition themselves to improve their reputation and grow in the changing global markets (Hart 2010, 82). This focus will be important for them to continue to generate shareholder value over time since the performance in all four quadrants that results from the combination of an internal and external view with a focus on today and the future will be critical to deriving competitive advantage from creating disruptive innovation and creative destruction on their path in sustainability (Hart 2010, 82-117).

Author: Logan Callen

References

Citi. 2021. “Environmental, Social, and Governance Report 2020.” Citi. Accessed October 5, 2021. https://www.citigroup.com/citi/about/esg/downloads.html.

Hart, Stuart L. 2010. Capitalism at the Crossroads. 3rd ed. Upper Saddle River, New Jersey: Prentice Hall.

John Deere. 2021. “2020 Sustainability Report.” John Deer. Accessed October 5, 2021. https://www.deere.com/en/our-company/sustainability/sustainability-report/.

Target. 2021. “2021 Target Corporate Responsibility Report.” Target. Accessed October 5, 2021. https://corporate.target.com/corporate-responsibility/reporting-progress/corporate-responsibility-reports.