Sustainability reporting is critical to establishing a reputation for leadership on social, environmental and economic issues. A strong sustainability report is a useful tool for a company’s stakeholders, including its supporters and critics alike.

The five independent members of Kimberly-Clark’s Sustainability Advisory Board were asked to provide an assessment of our web-based 2008 Sustainability Report: Shaping a Healthier World.

Here is the SAB’s assessment of our 2008 report:

Overall Assessment

Kimberly-Clark’s transition to a fully web-based sustainability report shows significant progress from the 2007 report in many areas. The web-based format allows the reader easy access to the report’s content.

The website’s size has the potential to be overwhelming to some, and the shorter 2008 Sustainability Report Summary is an important complement to the web-based report. Overall, however, the report demonstrates that K-C is doing a great deal in the broad field of sustainability – throughout the world.

Tom Falk clearly states the business case for sustainability in his message, and we are particularly impressed with his resolve that difficult economic times will not weaken K-C’s commitment to sustainability.

Examples of the particular challenges K-C faces and related achievements are plentiful and impactful. Issues relating to natural resource consumption, such as energy use, fiber procurement, waste management and recycling are well covered. However, the report would benefit from an in-depth and analytical discussion of the key policy issues discussed below coupled with a more aggressive approach to setting sustainability goals.

In our opinion, areas of increased focus should include:

Climate change and water use

Climate change is an exceptionally important issue. The detailed energy and emissions data in the report is appreciated, but the absence of context could convey a lack of urgency on this key issue. Additionally, a discussion of the business-related risks of climate change would be important. Specifically, what risks does climate change present for Kimberly-Clark? Similarly, we recommend that K-C discuss the risks water shortages present to the business and the relationship of climate change to water availability.

The economic implications and drivers of K-C’s sustainability efforts

Sustainability is the integration of environmental stewardship and social responsibility with economic development, but the report contains little discussion of the economic pillar of sustainability. We recommend, for example, that K-C include more information about its economic performance and be more transparent about taxes paid in the various countries and communities where it operates. We also encourage Kimberly-Clark to discuss governance issues in more detail, including achievements and challenges.

The sourcing and use of sustainable wood fiber

The issues surrounding the use of virgin and recycled fiber are adequately explained with appropriate examples and supporting data. However, while the benefits of K-C products for our quality of life cannot be denied, the report would be strengthened by a discussion of whether single use products are an appropriate and sustainable long-term use of virgin wood fiber. Also, an acknowledgement that fiber procurement from the Canadian Boreal Forest is the subject of some public controversy would lend additional credibility to K-C’s discussion of its fiber use.

Human rights, labor practices and diversity

There is little information provided on Kimberly-Clark’s human rights and diversity performance. We would like to see more information on standards of human rights and labor practices, particularly in the supply chain.

Additional Comments

Generally, the web-based report includes an appropriate level of information. However, in some areas, the report appears to suffer from a comprehensive bottom-up information gathering process, which results in too many facts being presented without the benefit of a discussion of either K-C’s perspective on key policy issues or of significant challenges the company faces.

More information on how K-C applies the life-cycle approach would be welcomed. K-C should describe exactly which stages of a product’s manufacture, distribution, use and disposal are considered. The area of logistics is not always fully addressed, although it is largely under K-C’s control. There is a significant amount of relevant information throughout the website, and it would be good to see this collected in one place to enable a better view of the whole life-cycle picture.

Additionally, some subject areas that may be less material to K-C’s overall sustainability efforts are given greater attention than other subjects that could be regarded as more critical. For example, the Awards and Recognition section contains more information than the sections on water use or fiber procurement. Also, there is no discussion about K-C’s approach to chemical use or of K-C’s policy on third party certification of environmental management systems.

Overall, we would like to see more explanation of significant sustainability trends and challenges and a more in-depth focus on major sustainability issues that affect Kimberly-Clark.

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