International Reporting Standards

As a company that is serious about corporate responsibility, sustainability and stakeholder engagement, we strongly believe in the power of transparency. At Seventh Generation, our annual reporting is one of the ways we periodically confront the distance we still must travel to reach our goals. The process of comparing annual trend data, acknowledging our proudest moments as well as our disappointments, and communicating where we are as a company in a way that our employees, partners and consumers can appreciate is time-consuming but worthwhile. As comparability among companies is another benefit of transparent reporting, we have followed the Global Reporting Initiative (GRI) guidelines since 2004.

We have been successful in delivering sustainability information to interested companies, NGOs, academics and those seeking work at our company but we have done less well getting this information to our consumers. With our 2008 report, we tried to boost the numbers of people who interacted with our report through a collaboration with Justmeans, a social networking community that creates opportunities for engagement on corporate social responsibility. We were excited about the idea and the opportunity to incorporate others’ thoughts on corporate sustainability into a crowd-sourcing book. But our efforts failed to generate excitement in our report.

This is the first year that our annual Corporate Consciousness report has been designed specifically for our website with searchable content that will invite consumers to read small sections at a time and to comment or ask questions. We hope this new platform will increase readership among a variety of audiences. In a further effort to make the reporting process relevant, timely and interactive, we are exploring options for open sourcing data directly on our website which will allow us to provide operational information more frequently than once a year.

Ceres and Stakeholder Consultation

Our annual reporting process benefited greatly from a stakeholder review convened by Ceres on June 15, 2010. Ceres is a national network of diverse groups dedicated to integrating sustainability into capital markets and we are indebted to them for facilitating stakeholder dialogues to support sustainability reporting. In addition to panel members from Ceres, Seventh Generation, and the consulting community, there were eleven participants including one of our retail partners as well as a manufacturing partner – the first time we have had both of these stakeholders represented in our report development process. Three non-governmental organizations, five businesses and an internet marketing expert also participated on the review panel. As a further level of review, an internal cross-disciplinary team provided comments. The feedback we received was instrumental in challenging us to be as transparent as possible.

Reviewer Comments:

Overall: Reviewers appreciated the story-based reporting, the candor of the report, the inclusion of employee and consumer voices, and the details on the company’s public policy actions. They challenged Seventh Generation to discuss how it will balance rapid growth with its aggressive sustainability strategy. They appreciated the tone and message of Jeffrey Hollender’s letter.

CEO Letter: Noting the importance of hearing from the current leadership, stakeholders wanted to see a forward-looking letter from CEO Chuck Maniscalco. This has been added.

Baby Wipes Downsizing: The panel thought this was an excellent case study and appreciated the level of transparency in this story. They recommended more information on how this issue has been resolved and suggested that Seventh Generation consider developing a social networking forum that would allow consumers to participate in identifying possible solutions when the company faces challenges. Baby Wipes story has been rewritten.

New Sustainability Goals: The review team was pleased to see these goals but wanted: more short-term targets that would pave the way to some of the longer-term goals; clarification of which old goals are still in place; plans to link attaining goals and executive compensation; and more information on how employee energy use is tracked. Reviewers also questioned how Senior Management would be accountable to these goals.The goals section was clarified and reorganized. However, short-term targets are still lacking for some of the goals as these are being developed in 2010.We are still discussing how to tie executive compensation, job descriptions and other measures to these goals.

Product Sustainability Scorecard: Reviewers wanted more detail on the scorecard’s categories, criteria and weighting. Additional details have been added.

Supplier Engagement: Resource constraints limited this program and, while the report noted this, there was insufficient discussion of how the company’s sustainability strategy was integrated throughout the supply chain. Fair point. Limited additional explanation was added - probably still falling short of reviewers’ wishes due to the reduced emphasis in this area this past year.

Appendix A: International Reporting Standards

The Global Reporting Initiative (GRI) develops globally applicable Sustainability Reporting Guidelines for voluntary use by organizations worldwide. As a member of GRI, we support this effort to foster corporate accountability, comparability, and transparence.

In 2006, GRI revised their standards to develop a “C” applicability level that is appropriate for smaller companies which we followed this year. The following information indicates how we have met the required Profile Disclosure elements and topic-related performance indicators for this C level.

Materiality: Because transparency is so important to our company, we made a conscious decision to report on all areas that touch our business and that affect our diverse stakeholders: our consumers, our retail partners, our manufacturing partners, the earth itself, and the members of our own company. Thus we consider our product design and packaging work, as well as our sourcing and supplier engagement efforts to be material to our company. Consistent with our commitment to environmental stewardship, our varied initiatives to reduce our environmental footprint (within our office, through our approach to logistics, our carbon accounting work) are material as well. As we are committed to collaborating with others to create positive change, our efforts to engage our customers and consumers and our policy work are also material. Finally, as a privately-held business that believes strongly in corporate accountability, a discussion of our economic performance, donations, and workforce are also necessary components of this report.

This report is only available on the internet in an effort to save paper and to facilitate access to the many links that will help readers pursue particular topics further.

GRI Table

Profile Disclosures

Standard Disclosures

1.1 CEO Letter:

A Letter from CEO Chuck Maniscalco:

“I came to Seventh Generation a year ago because I saw a huge opportunity to show the world that there is a better, more sustainable, more socially-responsible way to build a business. Jeffrey and team had built a sound foundation, and my 28 years on the front lines at successful consumer businesses gave me the right set of skills to complement the strong team already in place.

Upon arriving in June 2009, I found a company with a strong sense of mission but with a less developed sense of how to build a profitable business. And without being profitable, we risk being marginalized as a lonely voice in the crowd. To be successful, we need to compete with the big consumer packaged goods companies, but in a different way. We are working hard to build a new business model – what Jeffrey Hollender calls ’CR 2.0’. Here’s how we are setting and delivering the standard for this new brand of business:

  • Systems Approach. We recognize the interconnectedness of everything around us and must consider the external costs of our actions. Our commitment to use sustainable palm oil acknowledges the very real costs of habitat loss and environmental degradation associated with palm oil use. This focus extends to our concern about the way our products are used once they have reached consumers’ homes as our line-drying initiative attests. This earth-to-earth view shapes the way we do business and the products we produce, and we hope that other companies will follow our lead.
  • Radical Transparency. In a world where so many companies have earned consumers’ scorn, we strive to build trust with our partners and consumers. Our transparency about everything we do differentiates us from other businesses and builds motivation within our community and loyalty from our consumers.
  • Influence Beyond Our Size. We are a small company with big ideas. To have any kind of impact, we must strive to create impact beyond our size. One of the things I find refreshingly different about Seventh Generation is that when our competitors copy us, instead of mourning the loss of a competitive advantage, we applaud them for doing the right thing. Influence beyond our size also means we strive to build coalitions among like-minded companies, NGOs, and others, to magnify our impact.

There are more than a few challenges to overcome in the near-term but two of my own goals are to develop our diagnostic and analytic capabilities and to bring more focus to our efforts. With a desire to have the broadest possible reach, we have spread ourselves too thin and some of our initiatives have not realized their potential. We need to define what we mean by being a positive force for change more concretely. For example, the WAGES initiative to support green cleaning cooperatives for Latina women in the San Francisco Bay area is perhaps the best embodiment of our social responsibility efforts as it touches our products, our commitment to social justice, and provides a new model for business. This is exactly the type of initiative we want to expand dramatically.

There are inevitable tensions between profitability and sustainability. In the past year and a half, Seventh Generation has made pricing moves across our entire portfolio to make us more competitive. This is not only a business imperative but it gives us access to a wide range of new consumers. There are some sustainability advances that may prove to be too expensive for most consumers and we will have to resolve those conflicts. That is why I am particularly proud of the ten new sustainability goals we developed in 2009 to guide our way forward. Pursuing these goals will force us to resolve these conflicting needs through innovation and creativity. We are integrating these sustainability targets into our functional planning and bringing more discipline to the way we measure our progress against these goals.

I am both deeply humbled and proud to have joined the exceptional community that is Seventh Generation and to be bringing tangible sustainability targets to our daily business decisions. We truly have a different business model here. The work is fulfilling and the dream noble – and, with the partners I’ve found here, it is achievable.

 

Chuck Maniscalco, CEO
Seventh Generation

Organizational Profile
GRI Guideline Description Link

2.1
2.4
3.4

Organizational Name, Location, Contact Point:
Seventh Generation
60 Lake Street
Burlington, Vermont 05401
tel: 802-658-3773 www.seventhgeneration.com or email responsibility@seventhgeneration.com
See Our Company
Our Company

2.2

Brands, products, services
See Our Company, Our Products
Our Company
Our Products

2.3

Operational structure
See Our Company
Our Company

2.5

Countries where company operates
See Our Company, Sales
Our Company
Our Sales

2.6

Ownership and legal form:
privately-held
See Our Company
Our Company

2.7

Markets served:
global; primarily USA and Canada
See Our Company, Sales
Our Company
Our Sales

2.8

Scale of reporting organization:
106 employees
Net sales: We are a privately held organization and choose not to reveal this information.
See Our Company
Our Company

2.9

Significant changes
See Logistics for a discussion of our new manufacturing partners and new distribution centers. See Executive Summary for information about our new CEO.
Logistics
Executive Summary

2.10

Awards received
See Executive Summary, Awards
Our Awards
Report Parameters
GRI Guideline Description Link

3.1

Reporting Period
Calendar year 2009 with occasional mention of relevant achievements in early 2010.
 

3.2

Date of previous report
Our Crossroads: Reinventing the Purpose and Possibility of Business Report was published in 2009 and covers the year 2008.
Our 2008 Report  

3.3

Reporting cycle
Annual. This report covers 2009.
 

3.5
3.6
3.7

Process for defining report content;
Report boundary;
Report boundary limitations

In determining report content, we were guided by our own corporate priorities, achievements, goals, and shortcomings; by considerations of stakeholder interest; and by GRI guidelines. We hope the report will be read by our employees; our manufacturing and retail partners and other businesses; our consumers and members of the Seventh Generation Nation (our on-line community); and anyone else interested in issues pertaining to corporate responsibility.

This is not just a report about our Burlington office operations. We have also been conscious of the sustainability practices back in our supply chain as well as the impact and use of our products. Where we have not addressed particular GRI guidelines, it has generally been because they were not relevant to our business, they dealt with proprietary information (such as some of the financial parameters), or they involved a larger data-gathering effort than we are capable of at this time.

 

3.8

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities.
We lease our Burlington office and we use third party logistics providers and contract manufacturing partners. Also see Logistics, Manufacturing and Measuring Our Environmental Footprint.

Logistics
Manufacturing
Measuring Our Environmental Footprint

3.10

Explanation of restatements of earlier information
As this report is online, we have links to information from previous years to facilitate stakeholder understanding of our business.

 

 

3.11

Significant changes from previous reporting periods
See Products for a discussion of our newest product line.

Our Products

3.12

GRI content index  

3.13

Report assurance
Many of our environmental indicator performance metrics take advantage of the company’s MIPs database, which provides us with accurate information on the materials used in our products. We have chosen not to independently assure our report, and have relied instead on our corporate consciousness team and our controller to review and substantiate the report’s accuracy and authenticity. We have also benefited from our outside reviewers’ comments. Our sustainability consultants Pure Strategies provided an independent review of our assumptions and conducted our materials and environmental footprint-related calculations.

 
Governance, Commitments, Engagement
GRI Guideline Description Link

4.1
4.3
4.4

Governance structure, Independent members, employee input to board
See Governance.

Governance

4.2

Governance chair
Peter Graham is the Chairman of the Board and Jeffrey Hollender is Executive Chairman.

 

4.14
4.15

Stakeholders
See International Reporting Standards.

 

International Reporting Standards
Economic Performance Indicators
GRI Guideline Description Link

EC1

Direct economic value
Data on direct economic value, revenue, operating costs, retained earnings, and payments to capital providers and governments are proprietary information.

Our Company

EC3

Coverage of the organization’s defined benefit plan obligations
Seventh Generation firmly believes in creating wealth and financial prosperity throughout all levels of the organization. All full-time employees receive a variety of benefits including 100% paid medical premiums, an employee stock incentive plan, and participation in other value-building benefits, such as a 401(k). Seventh Generation contributes an automatic 4% of an employee’s wages into their 401(k) plans whether or not the employee also contributes to the plan. Eligibility is 1st day of the month after their hire date. 91.5% of employees contribute voluntarily to this plan.

 

EC4

Significant financial assistance received from government
None was received.

 

EC5

Ratio of standard entry level wage compared to local minimum wage
The purpose of our company’s compensation plan is to share our financial success and celebrate our employee owners for their contributions to the growth and success of the company.

In addition to the benefits noted in EC3, the company currently pays a minimum starting base rate of $16.06/hour which is 99% higher than the current Vermont minimum wage of $8.06/hour and is 122% higher than the federal minimum wage rate of $7.25/hour. All full-time employees are also eligible to participate in the company's cash and equity incentive plans.

 
Environmental Performance Indicators
GRI Guideline Description Link

EN1

Materials used by weight or volume
See Materials.
Packaging

EN2

Percentage of input materials that are recycled
See Materials.
Packaging

EN16

Total direct and indirect GHG emissions by weight
See Greenhouse Gas Accounting.
Greenhouse Gas Accounting

EN18

(from the Additional Standards category) Initiatives to reduce GHG emissions and reductions achieved
See Products.
See Measuring Our Environmental Footprint

Our Products
Measuring Our Environmental Footprint

EN26

Initiatives to mitigate environmental impacts
See Products.
See Measuring Our Environmental Footprint

Our Products
Measuring Our Environmental Footprint

EN27

Percentage of products sold and their packaging materials that are reclaimed by Category
See Products.
See Measuring Our Environmental Footprint

Our Products
Measuring Our Environmental Footprint

EN28

Fines and Noncompliance
None.

 
Labor Practices and Decent Work Performance Indicators
GRI Guideline Description Link

LA1

Total workforce
See Our Company.
Our Company

LA2

Total number and rate of employee turnover by age group, gender, and region:

  • Overall turnover was 9% or 9 people producing an overall increase of 10% or 10 people
  • Voluntary was 7% or 7 persons
  • Involuntary was 2% or 2 persons
  • Total of 5 females: 4 females <40, 1 females >40
  • Total of 4 males: 1 male <40, 3 males >40
 

LA3

Benefits provided to full-time employees that are not provided to part-time temporary or part-time employees, by major operations:

All employees receive the same benefits; part-time employee time-off benefits are pro-rated based on their scheduled days worked.

 

LA4

Percentage of employees covered by collective bargaining agreements:
None.
 

LA10

Average hours of training per year per employee per employee category: Each employee engaged in an average of 40 hours of training in 2009 broken down as follows: two days of development training, one day on-site retreat, and an average of 16 hours of company specific training related to our products and business delivered in brown bag lunch meetings. In addition, each employee is eligible to spend an additional $1,000 on a development opportunity of their own choice. $11,400 was spent on the 25 employees who pursued this individual training benefit in 2009 - averaging 15 hours of training each.

 

The 60 percent decrease in average training hours per employee between 2008 and 2009 can be attributed predominately to our decision to re-evaluate our focus on how to engage community members in their own development and the programs we offer our community. Much of that evaluation took place throughout 2009 bringing renewed focus to a few key areas for 2010: leadership; identifying employee strengths; building highly effective teams; and systems thinking.

 

LA14

Ratio of basic salary of men to women by employee category

 

Review of gender pay equity within the organization
Salary Range Comparison Male # Female # Gender pay equity
30,000 – 50,000 $42,575.16 4 $42,673.62 20 100%
51,000 – 70,000 $61,958.40 6 $59,258.77 18 105%
71,000 – 90,000 $81,200.08 6 $78,459.81 7 103%
91,000 – 110,000 $97,628.72 6 $101,030.70 3 97%
111,000+ $175,274.00 24 $138,318.30 13 127%
Total   46   61  
 
Society Performance Indicators
GRI Guideline Description Link

SO5

Public policy positions and lobbying
See The Larger Stage
The Larger Stage

SO8

Fines and sanctions for noncompliance with laws and regulations
None.
 
Product Responsibility Performance Indicators and Marketing
GRI Guideline Description

PR9

Fines concerning the provision and use of products and services
None.

GRI Application Level

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