Southwest has been issuing an integrated report since 2010, which probably makes it one of the earliest integrated reporters in the U.S. This longevity adds to the power of the report as the company is able to share five years of comparable data on key metrics.
The most recent report was issued last year: 2014 Southwest One Report. It’s organized around a variant of the Triple-Bottom Line structure, highlighting Performance, People and Planet. Their report includes a two-page summary table at the front of each of these three sections, with each table including multiple metrics that they have tracked over the course of five years. In between each section is a story illustrating key strategic efforts and metrics.
The company took the unusual step of trademarking the “One Report” title. According to my sources, it’s just a coincidence that this happened around the time the book One Report by Bob Eccles and Mike Krzus was published.
Here’s a basic summary of the report:
|Title||Southwest One Report 2014|
|Theme||Without a heart, it’s just a machine|
|Report Type||Covers financial, social and environmental|
|Contents||Three main sections: Performance, People, Planet
Also Governance, GRI, Mission
|Number of Pages||86|
|Value Creation||No specific graphic or metrics except for brand|
|Value Distribution||Narrative and financials|
|Stakeholders||Implied in narrative, not addressed specifically|
|Standards||Include GRI checklist|
|Assurance||Burns & McDonnell Engineering Co. Inc.
Financial auditors not referenced in this report
|Distinctive Features||Extensive use of graphics. 5 years of data.|
The report is published exclusively on line at their Southwest Citizenship and their Investor Relations webpages. In case you’re interested, the 2015 report has not been released yet. Right now, there is just a 10-K for 2015 in the investor relations area. It’s likely the new report will come out (as it did last year) in June.
Here’s a summary of their treatment of the capitals:
|Coverage of the Capitals||None||Narrative||Single
The report does not use the capitals as an organization scheme. Rather, as mentioned above, it is organized around a triple bottom line approach. But most of the capitals get detailed treatment with a time series of measures.
Performance Section includes full financials with emphasis on ROIC as key metric. The financial summary includes 10-years of data. This section also includes extensive reporting on airplane fleet and management.
People Section includes employees (human capital) and customers, community and suppliers (relationship capital). Employee data incudes headcount by division, benefits participation and training hours. Customer data includes number of customer commendations versus rudeness complaints, DOT customer satisfaction ratings, on-time arrivals, mishandled bags, animal safety on flights. Community data includes ticket and monetary donations, employee volunteer hours. Social management data includes union representations, human rights training, code of ethics acknowledgements
Planet Section includes environmental impacts including energy, fuel, water consumption, greenhouse gas inventory, regulatory compliance, conservation, waste management and recycling
There is no graphic in the report showing how these three “bottom lines” come together although it is suggested very nicely in this graphic showing the growth of Southwest’s brand strength:
Interestingly, the company’s Mission, Vision, Values aren’t listed until the very end of report. I guess they let their actions speak for their values. The report actually does that very well. I look forward to the day that every company reports multiple years of integrated data!
Southwest is featured in review of 10 U.S. integrated reports: