Consolidation

CFS' First Sustainability Report
This Report covers performance in 2003, the first full year of trading for CFS, and replaces The Co-operative Bank's Partnership Report and CIS' Social Accountability Report. The ethical and sustainability accounting systems underpinning the information provided have, with substantial work on the part of a great number of staff and suppliers, been largely consolidated. CIS and bank staff, suppliers and customers are now being asked equivalent questions in the same manner at a similar point in time, and environmental impacts, such as carbon dioxide emissions and water consumption, are being measured in an analogous fashion. Consolidation has been facilitated greatly by the fact that both CIS and the bank previously utilised the AA1000 Social Accountability management framework and assurance standard i which is based on the principles of completeness, materiality and responsiveness.

For each set of indicators, a description has been provided of the accounting and reporting systems previously operated by CIS and the bank, under the heading of 'context'. Where change results in a restatement of previously declared performance, this is highlighted  and the restatement clarified on CFS' sustainability website.ii

Completeness and materiality
Unless otherwise stated, this Report is considered to be a complete commentary on CFS' material ethical and sustainability impacts in 2003. The bank has reported on its ethical and sustainability performance since 1998, and CIS has done so since 2000. CIS' reporting has been recognised as being amongst the best in the UK. In 2004, CIS' Social Accountability Report was declared to be the Best Social Report in the UK for the second time in three years. The bank's Partnership Reports have been considered to be amongst the best in the world. In 2003, the bank's Partnership Report was declared winner of the European Sustainability Reporting Awards, and in 2002 the United Nations ranked it first in their biennial Global Benchmark of Sustainability Reporting. In preparation for this report, an extensive review was undertaken of CIS' and the bank's reporting and accounting systems. Many of the accounting systems utilised in this Report are derived from those previously in place at The Co-operative Bank. Indicators have been derived from a combination of stakeholder dialogue, emerging standards (such as the Global Reporting Initiative) and business strategy. Follow this link for details of indicator derivation. However, where CFS has sought to determine the priority issues for staff, customers and suppliers, in terms of 'Delivering Value', it has relied largely on the opinions of the affected Partners.

Performance over time
In this first CFS Report, ethical and sustainability performance is attributed in most instances to either CIS or The Co-operative Bank. In 2003, the vast majority of staff, supplier and customer relationships, for example, were still distinct - with either CIS or with the bank. Year-on-year comparison of performance is therefore still valid in most instances. One exception to this is the area of staff satisfaction, as measured by the staff survey process, where the inclusion of CIS' Insurance Sales staff for the first time, and the advent of CFS central functions, renders year-on-year comparison very difficult. As a consequence of this, CFS' staff responses are compared with an amalgamation of prior year data for CIS and bank staff.

As the bank has reported on sustainability for longer than CIS, its performance is discernible for a longer period of time. Going forward, as the CFS integration process continues, the lines between each business will become increasingly indistinct, and in many instances the only relevant perspective will be that of CFS.

Responsiveness
CFS views sustainability reporting as a means to an end. Ultimately, the wealth of data collected, analysed and reported on must serve to maintain and improve ethical and sustainability performance. To this end, CFS' selection of indicators is highly influenced by stakeholder views; as are, more importantly, the targets set in relation to actual performance. Previously, the bank had established many more publicly-stated targets for itself than CIS, and those set last year can be found under the banner 'Targets 2003', which appears in each set of indicators. All parts of CFS have now established targets for 2004, which will be reported on in 2005.

i  www.accountability.org.uk/aa1000
(This link will open in a new window)
ii  www.cfs.co.uk/sustainability2003/restatements