While many CFOs dread the Financial Accounting Standards Board's upcoming recommendations for new business reporting--due out in September-- Dow Chemical has already released a slate of new data. In its latest "public report," the Midland, Mich., chemical maker discloses data not only on financial and environmental performance, but also on diversity, accidents, and workforce turnover. Coming soon are measures of everything from employee training to the number of people who consider Dow a "good neighbor."
With its report, Dow has opened a new chapter in corporate reporting. As CFO J. Pedro Reinhard says, "You have to look at [performance] from three perspectives": economic, environmental, and social. "The public gives us a license to operate."
Reinhard knows firsthand about the goings-on at FASB. He sat for four years, until last October, on the Financial Accounting Standards Advisory Council. But he maintains that social trends, not FASB, drove Dow to publish its report, adding that Dow's social involvement will pay off over the long term.
Reinhard cites the town of Salvador, in Bahia, Brazil (his native country), where Dow has fought illiteracy by paying for schools and training programs. The local Dow plant now has a better pool of job candidates to draw from. As in Salvador, Dow's social investment "needs to be value-creating over time," he says.
This doing-well-by-doing-good approach results from an unusual element in Dow's vision: "to achieve financial and environmental and social excellence in all corners of the world where we do business."