With more than $10 billion in assets, BECU is the largest credit union in the state of Washington and the fourth-largest credit union nationally. It began as the credit union for the Boeing Company but now has a community charter that covers most of the Puget Sound area. It has more than 800,000 members.
For the past several years the credit union has issued a short annual report that for the most part summarizes its financial picture; interested people can access a detailed report from the credit union’s accounting firm. But BECU also releases a second publication that identifies its contributions to the community and environment. Through this “sustainability report” BECU communicates to stakeholders its performance on social responsibilities. Here, Tom Berquist, senior vice president of member strategies at BECU, talks about the credit union’s approach to annual reports.
Tom Berquist, senior vice president
of member strategies, BECU
Why does BECU publish two reports?
Tom Berquist: Ten years ago all we did was a counter statement, our version of a financial annual report. It was pretty short and we never made a big deal about it. Members could take copies out of a rack; that sort of thing. Then we began to publish a community brochure, mainly for elected officials and community leaders, that addressed what we were doing in the community. It was around 15 pages long, reported on our outreach efforts, volunteering, contributions, and so forth. It had no financial information in it.
We published the brochure separately because we often needed it available before the annual report was ready. We attended a regular legislative dinner in January and visited our Washington, DC, delegation in February, and we wanted officials and representatives to learn what we were doing. We had the feeling some of the impression they were receiving about us was coming from bank lobbyists. We wanted to make sure they were getting a clear picture of our community activities and how social responsibility is a part of the credit union operating principles.
We believe it is important to communicate community-oriented efforts to the public and stakeholders.
The community brochure blossomed?
TB: Yes. About three years ago we expanded it. We now publish what we call our “sustainability report.” It uses standards and methods developed by the Global Reporting Initiative (GRI) G3 Sustainability Reporting Framework. To quote from the report, “it is the world’s most used sustainability reporting framework and provides a standardized approach to ensure we are meeting the highest degree of technical quality, credibility, and relevance to our report.” Basically we answer a lot of questions about what we do, and an independent company — Sustainable Business Consulting — assures the report’s content. We do not print the sustainability report, but it is easily accessible online.
For the first time this year we did include in the sustainability report a short snapshot of our financial condition. People BECU publishes a short financial annual report as well as an extensive sustainability report that describes what the credit union does for staff, the community, and the environment looking at the sustainability report that have not looked at the annual report can see an eight-line financial summary as well as a comparison of 2011 figures to 2010 figures. Conversely, our financials annual report includes four pages summarizing our sustainability and community-related activities.
What are some of the activites the sustainability report reveals?
TB: The sustainability report this year has the following sections: Background on BECU, Affordable Housing/Asset Building; Education and Financial Literacy; Employee Engagement; Employee Benefit Programs; Credit Union System; Listening to Our Members; and Environmental Sustainability.
Explain some of these.
TB: For example, this year we added a section that focuses on employee engagement. This covers our code of ethics, performance competencies, and our employee survey, which is an anonymous survey conducted by an outside company addressing the likes of employee satisfaction, teamwork, and service given to employees by departments not their own. This section also includes information on benefits, work practices, remote workforce, employee turnover, and employee volunteerism and fundraising. Another example would be the section on our support of the credit union system. This section addresses the credit union organizations we belong to, our assistance to two nearby credit unions concentrating on serving low-income and middle-income people, and the seven cooperative principles.
How do you measure the sustainability report's effectiveness?
TB: For one, we have a box on one of the opening pages with a headline “Your Input is Valuable.” We ask for readers’ ideas on how to improve our sustainability efforts and the report itself. We give a place to email comments.
We are not convinced we are doing this the right way yet. We might change how we do sustainability reporting. VanCity across the border from us in Vancouver does a more integrated annual report, a combination of what we would call the annual report and the sustainability report. The Co-operative Bank in Great Britain publishes a similar report. Both have a robust process for reporting back to stakeholder groups.
When we put out the old community brochure we would get a lot of upbeat comment on it, that it was good information to go to the community. The league especially liked it. We have not received a great deal of feedback concerning the sustainability report, but this year we are planning to sit down with stakeholder groups and ask them how the sustainability report makes sense to them, how useful it is, if these are the directions they welcome BECU going, and so forth. We hope to hold and expand these kinds of stakeholder meetings each year.
How do you get your reports in front of the right people?
TB: Historically, we printed the old community brochure for the people we would see at a Hike the Hill effort, handing them to an aide or legislator, or have them for passing out at legislative dinners and the like. So these people know we make an effort to record and present our sustainability, community, and environmental work. We now let them know they can access full evaluations online.
Do you work on the reports in-house?
TB: Basically, yes. In the first year of our sustainability report we had an outside party help determine how we calculate carbon footprint and the like. Now we do it on our own; we do the content and the design in-house.
How much time do you put into them?
TB: The first sustainability report took a good deal of time; a lot of effort had to go into finding and assembling the data , things like how far people traveled to get to work, how much telecommuting there was, and so forth. Now we do one much more rapidly. The annual report — the financial report — is done on a pretty tight schedule.
What department does the work?
TB: Marketing people drive the stories we put into the annual report. The financial information, of course, comes from accounting. The sustainability report was initially under the management of a single individual concentrating in strategy and planning. Now the sustainability report is generally handled by the marketing group.
Are there other benefits to reporting your sustainability efforts?
TB: Yes, there is a transparency function that the sustainability report plays. The report requires stating goals and the metrics on progress toward them. It shows us where we fall short of certain goals and makes us more accountable. So there is a healthy transparency element.
Do you have advice for other credit unions putting together annual reports?
TB: We believe it is important to communicate community-oriented efforts to the public and stakeholders. We educate people to the fact that helping the community is a part of our credit union fabric and that our people-helping-people philosophy extends beyond strict membership.
This article appeared originally in the December 2012 issue of The Callahan Report. Click here to read the main article: "Make The Most Of Your Annual Report."