The KPMG Survey of Corporate Responsibility Reporting 2013 · 2020. 12. 5. · reporting 2013. KPMG’s survey is published primarily for business leaders, company boards and corporate

KPMG InternatIonal

The KPMG Survey of Corporate

Responsibility Reporting 2013

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Contents

aboutthissurvey 3

Methodology 5

Corporateresponsibilityreporting:isitreallyworthit? 9

Keyfindings 10

Part1:GlobaltrendsinCRreporting:aviewacross41countries 18Crreportingrates:asiaPacificseesstrongestgrowth 21

regulationdrivesgrowthinCrreporting 23

anarrowinggapbetweenleadingandlaggingsectors 26

MorecompaniesreportonCrintheannualreportbut‘integratedreports’areinaminority 27

GrIremainstheleadingreportingframework 30

assurancereachesatippingpointamongtheworld’slargestcompanies 32

Dataqualitystabilizesamongtheworld’slargestcompanies 33

Part2:Thequalityofreportingamongtheworld’slargestcompanies 34Introduction 36

lessonsfromtheleaders 39

1:Strategy,riskandopportunity 47

2:Materiality 53

3:targetsandindicators 57

4:Suppliersandthevaluechain 61

5:Stakeholderengagement 67

6:GovernanceofCr 71

7:transparencyandbalance 75

aboutKPMG’sClimateChange&SustainabilityServices 79

acknowledgements 80

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated. theKPMGSurveyofCorporateresponsibilityreporting2013 2

3 theKPMGSurveyofCorporateresponsibilityreporting2013©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Aboutthissurvey

WelcometotheKPMGSurveyofCorporateresponsibilityreporting2013.

KPMG’ssurveyispublishedprimarilyforbusinessleaders,companyboardsandcorporateresponsibility(Cr)andsustainabilityprofessionals.ItprovidesasnapshotofcurrentglobaltrendsinCrreportingwithbenchmarks,guidanceandinsightstohelpcompaniesworldwidedeterminetheirownapproachestoCrreportingandtoassessandimprovethequalityoftheirreports.

thesurveyisalsointendedtoprovideausefulreflectionofthecurrentstateofCrreportingforotheraudienceswhotakeaninterestinthesubject.theseincludeinvestors,assetmanagersandratingsagencies,manyofwhomareincreasinglyfactoringenvironmental,socialandgovernanceinformationintotheirassessmentsofcorporateperformance.

Corporatestakeholders,includingnGos,customers,academicsandstudents,andpolicymakersshouldalsofindusefulinformationandfoodforthoughtinthesepages.

thisistheeightheditionoftheKPMGSurveyofCorporateresponsibilityreportingandmarks20yearssincethefirstsurveywaspublishedin1993.thisyeartheresearchismorebroad-rangingthanever,covering4,100companiesacross41 countries(thelastsurveyin2011lookedat3,400companiesin34countries).

thegrowthinthenumberofcountriesandcompaniescoveredinthissurveyisjustoneindicationofhowCrreportinghasevolvedintoamainstreambusinesspracticeoverthelasttwodecades.

theformatofthissurveyhaschangedtoreflectthatevolution.theresultsarenowpresentedintwoparts:

Part1:GlobaltrendsinCRreporting:aviewacross41countries(page18)thissectionlooksatthe100largestcompaniesbyrevenuein41countriestoexplorehowmanycompaniesareproducingCrreportsandotherissues,suchasthedriversforreporting,sectorvariances,andtheuseofstandardsandassuranceforCrreports.

Part2:Thequalityofreportingamongtheworld’slargestcompanies(page34)thissectionlooksspecificallyattheworld’slargest250companies.ItassessesthequalityoftheirCrreports,identifiesleadersandusestheseexamplestoofferguidanceandinsights.


5©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclient

theKPMGSurveyofCorporateresponsibilityreporting2013 servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Methodology

ScopeofthisreportthesurveyisbasedonadetailedstudyofcompanyreportingonCrperformance,carriedoutbyKPMGmemberfirms’professionalsandbasedonpubliclyavailableinformationinannualfinancialreports,stand-aloneCrreportsandoncompanywebsites.ItincludesinformationprovidedinbothPDFandprintedreportsaswellasinweb-onlycontent.reportspublishedbetweenmid-2012andmid-2013weresoughtinthefirstinstance.Ifacompanydidnotreportduringthisperiod,informationfrom2011wasused.Informationrelatingtoperiodspriorto2011wasnotincludedinthissurvey.the findingsarebasedonanalysisofpubliclyavailableinformationonly,andnotoninformationsubmittedbycompaniestoKPMGmemberfirms.

Figure1:ReportingterminologyusedbyN100

43

25

14

6

6

2 2 1 1

Sustainability

Corporate social responsibility (CSR)

Corporate responsibility (CR)

Sustainable development

Other

Corporate citizenship

Environmental and social report

Anoteonterminology:‘corporateresponsibility’versus‘sustainability’terminologyusedforreportingvariesbetweencompanies.researchconductedforthissurveyshowsthemostcommonlyusedtermsgloballyare‘corporateresponsibility’(14percent)or‘corporatesocialresponsibility’(25 percent)and‘sustainability’report(43percent).reportingundertheseandothertermswasincludedinthissurvey.theuseoftheterm‘corporateresponsibility/Cr’inthisdocumentshouldthereforebetakentoalsocovertheterm‘sustainability’andothersimilarterms.

N100researchthefirstpartofthisreportassessesCrreportingamongthe100largestcompaniesin41countries:4,100companiesintotal.thesearereferredto asthe“n100”companies.KPMGmemberfirmsidentifiedthen100intheircountrybyrevenuebasedonarecognizednationalsourceor,wherearankingwasnotavailableorwasincomplete,bymarketcapitalizationor othersector-appropriatemeasures.

n100companiesincludebothpublicly-listed companiesandthosewithdifferentownershipstructuressuchasprivately-ownedandstate-ownedbusinesses.ninenewcountriesjoinedthesurveythisyear(seechartbelow),whiletwocountriesincludedin2011arenotpartofthe2013survey(BulgariaandUkraine).

KPMGanalystscollecteddataonthefollowingcriteriaforthen100:

• numberofcompaniespublishingCrinformationinstand-alonereportsandannualreportsbycountryandsector

• formatandintegrationofCR reporting

• useofreportingguidelinesandstandards

• rateandtypeofverificationofCrinformation,assuranceprovideranddatarestatements.

thecountriesincludedinthe2013researchwere:

Americas AsiaPacific Europe MiddleEast& Africa

Brazil australia Belgium Poland angola

Canada China(incl.HongKong) Denmark Portugal Israel

Chile India Finland romania nigeria

Colombia Indonesia France russia Southafrica

Mexico Japan Germany Slovakia Uae

US Kazakhstan Greece Spain

Malaysia Hungary Sweden

newZealand Italy Switzerland

Singapore netherlands UK

SouthKorea norway

taiwanPeople, planet, profit

Corporate responsibility & sustainability New countries added to the survey in 2013

Source: KPMG International, The KPMG Survey of Source:KPMGInternational,TheKPMGSurveyof

Corporate Responsibility Reporting 2013, December 2013 CorporateResponsibilityReporting2013,December2013


Figure2: Figure3:G250companiesbylocationof G250companiesbyindustrysector(%)headquarters(%)

13

27

6

8

128

5

3

3

3

2

2 2

2 2

211 1 11

13

25

7 117

6

6

5

4

4 3

3 2 2 2

USA Other: Finance,insurance Construction&building

Japan Malaysia &securities materials

China Austria Oil&gas Food&beverage

France Thailand Trade&retail Pharmaceuticals

Germany Finland Automotive Otherservices

UK Norway Electronics&computers Mining

Switzerland SaudiArabia Communications&media Transport

Italy Taiwan Utilities Chemicals&synthetics

Spain Singapore Metals,engineering&

Turkey manufacturing

SouthKorea

Netherlands

Canada

Australia

Denmark Companiesincludedunder‘otherservices’include

Brazil

Luxembourg entertainment,healthcare,resorts,mail,packageandfreight

delivery.ThenumberofcompaniesineachofthesesectorsIndia Sweden

representlessthan1percentoftheG250.Russia Venezuela

Mexico

Source:KPMGInternational,TheKPMGSurveyof

CorporateResponsibilityReporting2013,December2013Source: KPMG International, The KPMG Survey of

Corporate Responsibility Reporting 2013, December 2013



G250researchthesecondpartofthissurveyassessesthequalityofreportingamongtheworld’slargest250globalcompanies.

thesewereidentifiedasthetop250 companieslistedintheFortuneGlobal500rankingfor2012.Inthissurveytheyarereferredtoas“the G250”companies.theyoperatein 14 industrysectorsandarehead-quarteredin30differentcountries.

KPMGanalystssoughttoassessthequalityofCrreportingbytheG250againstsevenkeycriteria,whicharebasedoncurrentreportingguidelinesandKPMGprofessionals’viewofleadingreportingpractices.

• Strategy,riskandopportunity–reportingshouldincludeaclearassessmentoftheCrrisksandopportunitiesabusinessfacesandshouldexplaintheactionsitistakinginresponse.

•Materiality–CrreportsshoulddemonstratethatacompanyhasidentifiedtheCrissueswiththegreatestpotentialimpactsbothonthebusinessitselfanditsstakeholders.Companiesshouldmakecleartheprocesstheyhaveusedtoassessmateriality,howtheyhaveinvolvedstakeholdersinthisprocess,andhowtheyhaveusedthematerialityassessmenttoinform

theirreportingandmanagementofCrrisksandopportunities.

• Targetsandindicators–companiesshouldusemeaningful(e.g.timeboundandmeasurable)targetsandkeyperformanceindicatorstomeasureprogress,andclearlyreporttheirprogressandperformanceonsettargetsandobjectives.

• Suppliersandthevaluechain–Crreportsshouldexplainthesocialandenvironmentalimpactsofthecompany’ssupplychain,aswellasthedownstreamimpactofproductsandservices,andshowhowthecompanyismanagingthoseimpacts.

• Stakeholderengagement– companiesshouldidentifystakeholdersintheirCrreports,explaintheprocessusedtoengagewithstakeholders,andtheactionstakeninresponsetotheirfeedback.

• GovernanceofCR–reportsshouldmakeclearhowCrisgovernedwithinacompany,whohasresponsibilityforthecompany’sCrperformanceandhowthecompanylinksCrperformancetoremuneration.

• Transparencyandbalance– Crreportsshouldbebalancedandincludeinformationonchallengesandsetbacksaswellasachievements.

onthebasisofKPMG’sanalysis,scoreswereattributedtoeachoftheG250companiestoreflecthowwelltheirCrreportssatisfiedthecriterialistedabove.answersforthecriteriawereweightedtoproduceanoverallscoreoutof100,withgreatestweightgiventostrategy,riskandopportunity,materiality,targetsandindicatorsandstakeholderengagement,toreflecttherelativeimportanceofthesecriteriainachievinghigh-qualityreports.

asaresult,aclusterof10leadingcompanieswasidentified(eachofwhichscored90outof100,ormore)aswellasthehighestscoringcompanyineachofthe14industrysectorsrepresentedintheG250.

Seniorexecutivesfrom14ofthesetop-scoringcompanieswereinterviewedtodiscovermoreabouthowtheyapproachCrreporting.thelessonslearnedareoutlinedonpage39ofthissurvey.


theKPMGSurveyofCorporateresponsibilityreporting20139 theKPMGSurveyofCorporateresponsibilityreporting20139©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Corporateresponsibilityreporting:isitreallyworthit?

letusbehonest,corporateresponsibility(Cr)reportingisnotwithoutitscritics.

Somepeoplesaythesereportsareawasteoftimeandmoney,believingthemtobesodenseandsodullthatnoonecouldpossiblybothertoreadthem.othersseethemasvehiclesforcorporategreenwash,anopportunityforcompaniestoexaggeratetheirsocialandenvironmentalcredentialswithoutanygenuineintentiontochange.

Someinthecorporateworldseetheproductionofthesereportsastoocomplexandtoocostlyandwithdubiousreturn-on-investment.

WhileIunderstandtheconcernsbehindaccusationslikethese,Ithinksuchviewsarefortunatelyfastbecomingoutdated.

Yes,Crreportsareoftennotaneasyreadandcompaniesshouldseektocommunicatetheinformationinmoredigestibleandengagingways.However,thatisnotanargumentfornotreportingatall.

Yes,greenwashcanbeariskbutastimegoeson,stakeholders-fromnGosandpressuregroupstocustomersandinvestors-areallbecomingmoreadeptatknowingthedifferencebetweenPrspinandCrperformance.Itisnotsoeasytopulltheproverbialwooloverpeople’seyesanymore.

Yes,Crreportingdoneproperlydoesrequirefinancialandhumanresources,butsodoallformsofcorporatereporting.

thepointthatisbeingmissedbymanypeoplewhomakethesecriticismsisthat,inthe21stcentury,Crreportingis–orshouldbe-anessentialbusinessmanagementtool.Itisnot–orshouldnotbe-somethingproducedsimplytomollifypotentialcriticsandpolishthecorporatehalo.

Weareallliving,andsomeofusarerunningbusinesses,inaworldundergoingunprecedentedenvironmentalandsocialchanges.rampantpopulationgrowthisfuellingever-increasingdemandsforlimitedresources.Unpredictableextremeweatherisaffectingsuppliesofkeycommodities.Changingsocialconditionsandexpectationsaredrivingbothincreasedspendingpowerandsocialunrest.

Crreportingisthemeansbywhichabusinesscanunderstandbothitsexposuretotherisksofthesechangesanditspotentialtoprofitfromthenewcommercialopportunities.Crreportingistheprocessbywhichacompanycangatherandanalyzethedataitneedstocreatelongtermvalueandresiliencetoenvironmentalandsocialchange.Crreportingisessentialtoconvinceinvestorsthatyourbusinesshasafuturebeyondthenextquarterorthenextyear.

Whatencouragesmemostaboutthefindingsofthisyear’sKPMGSurveyofCorporateresponsibilityreportingarethesignsthatmanyoftheworld’slargestcompaniesareusingtheprocessofCrreportingtobringCrandsustainabilityrighttotheheartoftheirbusinessstrategy,whereitbelongs.

almostalltheworld’slargest250companiesreportonCr.ofthosethatdo,ninein10usetheirreportstoidentifyenvironmentalandsocialchangesthatimpactthebusinessanditsstakeholders.eightin10reportthattheyhaveastrategytomanagetherisksandopportunities.Sevenin10reportthatthesechangesbringopportunitiesfortheinnovationofnewproductsandservices.anenlightened,butIsuspectgrowing,minorityofaroundonethirdalsoreportopportunitiestogrowtheirmarketshareandcutcosts.

Wherethesecompanieslead,otherswillfollow.thedirectionoftravelisclear.

IbelievethatthedebateonwhethercompaniesshouldreportonCrornotisdeadandburied.asthissurveyfinds,Crreportingappearstobestandardbusinesspracticetheworldover-eveninthosegeographicregionsandindustrysectorsthatonlytwoyearsagolaggedbehind.

thequestionscompaniesshouldaskthemselvesnow,andwhichwehaveendeavoredtoanswerinthispublication,are“whatshouldwereporton?”and“howshouldwereportit?”.and,mostimportantly,“howcanwebestusetheprocessofreportingtogeneratemaximumvaluebothforourshareholdersandforourotherstakeholders?”.

YvodeBoerKPMG’sGlobalChairman,ClimateChange&SustainabilityServices


Keyfindings

GlobaltrendsinCr reportingCRreportingseesexceptionalgrowthinemergingeconomies• Therehasbeenadramaticincreasein

CrreportingratesinasiaPacificoverthelasttwoyears.almostthreequarters(71percent)ofcompaniesbasedinasiaPacificnowpublishCrreports–anincreaseof22percentagepointssince2011whenlessthanhalf(49percent)didso.

• TheAmericashasnow overtakeneuropeastheleadingCrreportingregion,largelyduetoanincreaseinCrreportinginlatinamerica.Seventysix percentofcompaniesintheamericasnowreportonCr,73 percentineuropeand71percent inasiaPacific.

KPMGvIeW

• ThehighestgrowthinCRreportingsince2011hasbeenseenin:India(+53percentagepoints),Chile(+46),Singapore(+37),australia(+25),taiwan(+19)andChina(+16).

• CRreportingisnow undeniablyamainstreambusinesspracticeworldwide,undertakenbyalmostthreequarters(71percent)ofthe4,100companiessurveyedin2013.thisglobalCrreportingrateisanincreaseof7percentagepointssince2011whenlessthantwothirds(64 percent)ofthecompaniessurveyedissuedCrreports.

• Amongtheworld’slargest250companies,theCrreportingrateismoreorlessstableat93percent.

Toreportornottoreport?ThedebateisoverCompaniesshouldnolongeraskwhetherornottheyshouldpublishaCrreport.Webelievethatdebateisover.thehighratesofCrreportinginallregionssuggestitisnowstandardbusinesspracticeworldwide.theleadersofn100orG250companiesthatstilldonotpublishCrreportsshouldaskthemselveswhetheritbenefitsthemtocontinueswimmingagainstthetideorwhetheritputsthematrisk.

theimportantquestionsnoware“what?”and“how?”–or,inotherwords,it isnowaboutthequalityofCrreportingandthebestmeanstoreachrelevantaudiences.thisincludesassessingwhatismaterialforthebusiness,properengagementwithstakeholders,havinganhonestcommunicationstrategyincludingopennessaboutchallengesandputtinginplacetheunderlyingprocessestogatherandcheckdata.

Anarrowinggapbetweenleadingandlaggingindustrysectors

• InallsectorsmorethanhalfofcompaniesreportonCr,meaningreportingcanbeconsideredstandardglobalpracticeirrespectiveofindustry.twoyearsagolessthanhalfofthesectorshadreportingratesabove50percent.atthesametime,thegapbetweenthehighestscoringandlowestscoringsectorhasnownarrowedto22percentagepoints.

• Somesectorshave takenbigstepsoverthepastyears.theautomotiveandtelecommunications&mediasectorsnowhavesomeofthehighestlevelsofCrreporting(77 percentand75percent,respectively),whereasfiveyearsago,in2008,theirCrreportingrateswereamongthelowest(49percentand47 percent).

CRinformationintheannualreport:nowstandardpractice• Overhalfofreportingcompanies

worldwide(51percent)nowincludeCrinformationintheirannualfinancialreports.thisisastrikingrisesince2011(whenonly20percentdidso)and2008(only9percent).thedirectionoftravelisclearandwithmorethanhalfofcompaniesresearchednowincludingCrdataintheirfinancialreports,thiscanarguablybeconsideredasstandardglobalpractice.



• However, includingCRinformationintheannualreportdoesnotimplythatcompanieshaveembracedthetrendofintegratedreporting(Ir):onlyonein10companiesthatreportonCrclaimstopublishanintegratedreport.

UseofGlobalReportingInitiative(GRI)guidelinesisalmostuniversal• Seventyeight percentofreporting

companiesworldwiderefertotheGrIreportingguidelinesintheirCrreports,ariseof9percentagepointssincethe2011survey(over90percentdosoinSouthKorea,Southafrica,Portugal,Chile,BrazilandSweden).

• Amongtheworld’s250largestcompaniestherateisevenhigherthanthen100:82percentofG250companiesthatreportonCrrefertotheGrIguidelinesasopposedto78percentin2011.

Assuranceamongthelargestcompanieshasreachedatippingpoint• Overhalf(59percent)oftheG250

companiesthatreportCrdatanowinvestinexternalassurance.thisisupfrom46percentin2011.

• Two thirdsofthosecompaniesthatinvestinassurancechoosetoengageamajoraccountancyfirm.

KPMGvIeW

Boardsshouldgetbehindintegratedreporting(IR)Basedonmemberfirms’experiencesandresearchthereseemstobeacceptanceofIrasthenextdestinationforcorporatereporting,butfewcompaniesaredoingityet.thereisalsosomenervousnessaroundwhetherIrcouldlimitratherthanenhancecommunicationaroundCrandsustainability,specificallyfornon-financialstakeholdergroups.

Ircanbethecatalystforintegratedmanagement.KPMG’sexperienceinSouthafrica,whereIrisnowmandatory,showsthatthecloseinvolvementofCeosandotherboardmembersisessentialtoreach‘oneview’ofthebusiness,consensusononesetofmaterialissuesandonecombinedbusinessstrategy.Withanintegratedapproachtovaluecreationastheendobjective,boardsupportforIrneedstoscaleup.

KPMGvIeW

AssuranceisnolongerjustanoptionJustasCrreportingitselfisnowastandardbusinesspractice;itisalsobecomingstandardpracticetohaveCrandsustainabilitydataexternallyassured.thetippingpointhasbeencrossed,withoverhalftheworld’slargestcompanies(G250)nowinvestinginassurance.ascanbeseenwithothertrendsinCrreporting,thelargestcompaniestendtosetthedirectionthatothercorporationsfollow.

Manycompaniesnowfacesignificantpressuretogivestakeholdersconfidenceinwhattheysayandassurancecanhelpprovidethiscredibility.thequestionforleadersisthereforenolonger“shouldweassureourCrdata?”rather“whywouldwenot?”and“howdowechoosetheappropriateassuranceoptionthatmeetsstakeholders’needsandputsusaheadofourpeers?”.


thequalityofreportingamongtheworld’slargestcompanies

Attentionmustbepaidtoreporting Table1:10G250companiesscoremorethan90outof100forCRreportingquality:onthevaluechain

• InKPMG’sanalysis,theaveragequalityscoreachievedbyG250companiesfortheirCrreportsis59outofapossible100.thisindicates

Company

a.P.MøllerMærsk

Country

Denmark

Sector

transport

significantroomforimprovement BMW Germany automotiveoverall.

CiscoSystems US telecommunications&media

• Reportingontargetsandindicatorsis FordMotorCompany US automotivemostwell-developedtodate,withanaveragescoreof68outof100.

Hewlett-Packard US electronics&computers

large companiesalsoappeartobe InG netherlands Finance,insurance&securities

reportingonmaterialityandstrategy, nestlé Switzerland Food&beverageatanaveragescoreof66and62.

repsol Spain oil&gas

• Akey areafor improvementisreportingonsuppliersandthevaluechain,whereaverageG250reportingqualitywasassessedat46outof100,followedcloselybystakeholderengagementandgovernance,bothat anaveragescoreof53outof100.

Europeancompaniesserveasanexampleforotherregions• AroundonequarteroftheG250

(63 companies)scorehigherthan80 outof100acrossthequalitycriteria,and10companiesscorehigherthan90.thesecompaniesarelocatedineuropeandtheUS.

• EuropeanG250companiesachievethehighestaveragequalityscorefortheirCrreportsat71outof100.this compareswithaveragescoresof54forcompaniesintheamericasand50inasiaPacific.

• WithinEurope,companiesinItaly(85),Spain(79)andtheUK(76)scoremosthighly.

Siemens Germany electronics&computers

total France oil&gas

Source:KPMGInternational,TheKPMGSurveyofCorporateResponsibilityReporting2013,December2013

IndustrieswithhighCRimpactsshowtrailingscores• Largecompaniesintheelectronics

& computers,miningandpharmaceuticalssectorsproducethehighestqualityCrreports.theiraveragescoresare75,70and70 respectively.

• However somesectorsthatfacesignificantCrrisksandopportunities,andhavesignificantpotentialsocialandenvironmentalimpacts,arepublishingreportswithscoresbelowtheglobalaverage.theoil&gas,trade&retail,metals,engineering&manufacturingandconstruction&buildingmaterialssectorshaveaveragescoresof55,55,48and46outof100,respectively.

Opportunitiesovertakerisks• MostG250CRreports(87percent)

identifyatleastsomesocialandenvironmentalchanges(or‘megaforces’)thataffectthebusiness.Climatechange,materialresourcescarcityandenergyandfuelarethemostcommonlymentioned.

• Morecompaniesseeopportunitiesthanrisks:81percentofreportingcompaniesidentifybusinessrisksfromsocialandenvironmentalfactors,whereasslightlymore(87 percent)identifycommercialopportunities.

• Themostcommonlycitedopportunityofsocialandenviron-mentalchangeisinnovationofnew



productsandservices,mentionedby72percentofreportingG250companies.theopportunitytostrengthenbrandsandcorporatereputationisthenextmostcommonlycited(mentionedby51percentofreportingcompanies),followedbyimprovingmarketposition/growingmarketshare(36percent)andcuttingcosts(30percent).

• Onlyonein10 reportingcompanies(12percent)identifiesimprovedaccesstocapitalorimprovedshareholdervalueasanopportunityofsocialandenvironmentalchange.

• Reputationalriskisthemostcommonlycitedtypeofbusinessrisk,mentionedby53percentofreportingG250companies.

• OnlyasmallnumberofG250Crreports(5percent)includeinformationonthefinancialvalueatstakethroughenvironmentalandsocialrisk.

• Asignificantnumberofreportingcompaniesalsomentionothertypesofriskthataffectcompanyoperationsandnotjustcorporatereputations:

KPMGvIeW

RiskandopportunityneedstobelinkedtovalueManycompaniesnolongerseecorporateresponsibilityasamoralissue,butascorebusinessrisksandopportunities.Moreandmoreinvestorsacceptthatenvironmentalandsocialfactorsputcompanyvalueatstake.thisleadstothequestionofwhatthepotentialfinancialimpactsofthoserisksandopportunitiescouldbeandwhatthecompanyisdoingtomitigateormaximizethem.

veryfewcompaniesareyetdeclaringanyquantifiedriskstothebottomlineintheirCrreporting.Companiesneedtobepreparedforthistochangeandshouldstarttointegratethetopandbottom-lineimplicationsintheirbusinessscenarioplanningandriskmanagement.

regulatoryrisk(48percent), • Mostreportingcompaniesinthecompetitiverisk(45percent),physical G250(83percent)stateintheirrisk(38percent),socialrisks(36 reportsthattheyhaveaCrstrategy.percent)andlegalrisks(21percent).1 Companiesintheamericasaremost

likelynottorefertostrategy:threein• TheAmericasistheonlyregion 10donot.

wherecompetitiveandregulatoryrisksarementionedmoreofteninG250Crreportsthanreputationalrisks.

1Seepage48foradefinitionofdifferenttypesofrisks


thequalityofreportingamongtheworld’slargestcompanies

Figure4:AveragequalityofG250reportsbysector(Scoreoutofapossible100)

• Largecompaniesintheelectronics&computers,miningandpharmaceuticalssectorsproducethehighestqualityCr reports.

Electronics & computers Mining

Pharmaceuticals Utilities

Communications & media Transport

Automotive Food & beverage

Finance, insurance & securities Chemicals & synthetics

Oil & gas Trade & retail

Metals, engineering & manufacturing Construction & building materials

75 70 70 65 65 64 64 59 58 58 55 55 48 46

Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013



Figure5:AveragequalityofG250reportsbycountry2

(Scoreoutofapossible100)

•LargecompaniesinItaly,SpainandtheUKleadtheworldforthequalityofCr reports.•EuropeanG250companiesachievethehighestaverage

qualityscorefortheirCrreportsat68outof100.thiscompareswithaveragescoresof51forcompaniesintheamericasand48inasiaPacific.

85 79 76 70 70 69 68 63 60 55 54 39

Italy Spain

UK France

Australia Netherlands

Germany Switzerland

South Korea Japan

USA China/Hong Kong


Figure6:AveragequalityofG250reportsbycriterion(Scoreoutofapossible100)

•G250companiesasawholescoremosthighlyfor targetsandindicators.thegreatestimprovementneedstobemadeinreportingonsuppliersandthevaluechain.


CorporateResponsibilityReporting2013,December2013

Targets and indicators Materiality

Strategy, risk and opportunity Transparency and balance

Governance Stakeholder engagement

Suppliers and the value chain

68 66 62 58 53 53 46

2averagescorespercountryareonlygivenforthosecountriesthathavefiveormorecompaniesreportingonCrintheG250.


Moretransparencyneededonmaterialityprocess• Overthreequarters(79percent)of

G250companiesthatissueCrreports,discusstheidentificationofCrissuesthatarematerialtotheirbusinessandstakeholders.

• Thereisroomfor improvementintermsoftransparencyontheprocessusedforidentifyingmaterialissues.41percentofthereportingcompaniesdonotexplaintheprocesstheyuseandonlyasmallminority(5percent)assessmaterialissuesonanongoingbasis.

Targetsandindicatorsarenotyetfullydefined• OneineightreportingG250

companies(13percent)reportsnoCrtargetsatallandaquarter(26percent)donotrelatetheirCrtargetstomaterialissues.

Reportingonsuppliersandthevaluechainislackinginsectorsatrisk• Companiesinthechemicals&

syntheticssectoraretheleastlikelytoreportonsupplychainissues.Sixty percentofG250companiesinthissectorthatreportonCrdonotreportonthesupplychain.Companiesintheelectronics&computerssectorarethemostlikelytodoso.

• G250companiesinEuropearethemostlikelytodiscussindetailtheenvironmentalandsocialimpactsoftheirproductsandservices.almostthreequarters(73percent)ofreportingcompaniesineuropedosowithafurther23percentprovidinglimitedinformation.Intheamericas,lessthanhalf(49percent)providedetailedinformationondownstreamimpactsandthefiguredropstolessthanonethird(32percent)inasiaPacific.

CompaniesintheAmericasandAsiaPacificstruggletoexplainstakeholderengagementprocess• G250companiesinAsiaPacificand

theamericaslagbehindthoseineuropeforexplainingtheprocessusedtoengagestakeholders.Fourin10companiesintheseregionsoffernoexplanationatall.

• Theminingandmetals,engineering&manufacturingsectorsscorehighestforidentifyingkeystakeholdersintheirreports.

• OnlyonethirdofG250companies(31 percent)includestakeholdercommentsintheirCrreports.



KPMGvIeW

Supplychainreportingneedsmorefocusthissurveyshowsthatsomesectorswithcomplexsupplychains,carryingpotentiallycatastrophicenvironmentalandsocialrisks,havelowlevelsofreportingonsupplychainissues.

recentincidentsincludingoilspillsandfactorydisastersshouldremindbusinessleadershowimportantitistomanagetheenvironmentalandsocialimpactsofthesupplychain.

Putsimply,ifcompaniesdon’tstartmanagingtheseissuestheywon’thavealicensetooperateintheglobalized21stcenturyworld.Companiesurgentlyneedtobuildconfidenceamongcustomers,communities,investorsandotherstakeholdersthattheirsupplychainsarebeingproperlymanaged.transparentcorporateresponsibilityreportingisaneffectivewaytobuildsuchconfidence.

FewlargecompaniesyetlinkCR Transparencyandbalanceislimitedperformancetoremuneration formostcompanies• Aroundonequarterofcompanies • Onlyoneinfive G250companies

(24 percent)reportthatthecompany (23 percent)publishesawell-Boardhasultimateresponsibility balancedreportthatdiscussesforCr. Crchallengesandsetbacksaswell

assuccesses.Companiesinthefood• Inmost G250 companies (61 percent) &beverage,pharmaceuticals,and

Crismanagedonaday-to-daybasisby electronics&computerssectorsareadedicatedCrorsustainabilityunit. mostlikelytodoso.

• Onlyonein10 G250companies(10percent)reportsaclearlinkbetweenCrperformanceandexecutiveoremployeeremuneration.


Global trends in CR reporting: a viewacross 41 countries

© 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client the KPMG Survey of Corporate responsibility reporting 2013 services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 19

Part 1 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client

services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. the KPMG Survey of Corporate responsibility reporting 2013 20

SincethelastKPMGSurveyofCorporateresponsibilityreportingin2011,therehavebeentwoyearsofdebateinthebusinessworldontheform,scopeandcontentofCr reporting.

Muchofthisdiscussionhasbeeninfluencedbythreeimportantdevelopmentsinthefield.Firstly,the publicationinMay2013oftheGrIG4 Guidelines3forreporting.Secondly,thespreadofmandatoryCrreportingrequirementsincountriesfromIndiatotheUK.4andthirdly,momentumtowardsintegratingnon-financialandfinancialinformationinreportingandtheworkoftheInternationalIntegratedreportingCouncil(IIrC).researchforthissurveyexploredtheimpactofthesechangessince2011,assessingreportingamongthen100–the100largestcompaniesin41countries.

theresearchpresentsapictureofCrreportingasatrulymainstreamglobalbusinesspractice,theimportanceofwhichisrecognizedbycompaniesandregulatorsalike.reportingratesare

nowhighacrossallregionsandindustrysectors.Countriesthatpreviouslylaggedbehindarecatchinguporevenovertakingtheearlypioneersintermsofthequantityofcompaniesreporting.

thistrendisreplicatedattheregionallevel,wheretheamericashasover-takeneuropeastheregionwiththehighestreportingrate.

regulationisanincreasinglyimportantdriverofgrowthinCrreporting,butframeworkssuchastheGrIandvoluntaryguidancefromregulatorsandstockexchangesarealsodrivingupreportingrates.alongsidetheoverallgrowthinreporting,integrationoffinancialandnon-financialinformationisincreasing.

• TheN100 globalaveragereportingratehasincreasedfrom64percentin2011to71percentin2013.

• TheAmericasovertookEuropeastheleadingreportingregion.AsiaPacificsawthemostsignificantincreaseduetoajumpinCrreportingratesincountriessuchasIndia,Singaporeandaustralia,andnewcountrieswithhighreportingratesjoiningthesurvey.

• RatesremainedstaticinEuropeanddroppedintheMiddleEast&Africa,largelyduetoanumberofcountrieswithlowreportingratesjoiningthesurveyforthefirsttime.

Keyfindings:

3 theGlobalreportingInitiative’sG4GuidelineswerepublishedinMay2013,availableat:globalreporting.org/reporting/g4/4 KPMG,UnitednationsenvironmentProgramme,GlobalreportingInitiativeandUnitforCorporateGovernanceinafrica,CarrotsandSticks,

Sustainabilityreportingpoliciesworldwide,2013.



Crreportingrates:asiaPacificseesstrongestgrowth

Crreportingisnowundeniablyamainstreamglobalbusinesspractice–withalmostthreequarters(71percent)ofthen100companiessurveyedpublishingareport,comparedwith64 percentofcompaniesresearchedin2011.thereportingratefortheG250remainedrelativelystablein2013comparedwith2011,withaminimaldecreasefrom95percentto93percentduetothechangingcompositionofthe250eligiblecompanies.

then100growthtrendismostevidentintwooftheregionsstudied,withtheamericasovertakingeuropeastheleadingreportingregionandasiaPacificalmostcatchingupwitheurope.

asiaPacificsawthebiggestoverallincreasefrom49percentin2011to71 percentin2013.thisispartlyduetonewcountriesbeingincludedinthesurvey,suchasIndonesiaandMalaysia,whichbothdemonstratehighreportingrates.However,themajorityoftheincreaseisduetoexceptionallyhighgrowthratesinseveralcountries.

Figure7:Growthinreportingsince1993PercentageofcompanieswithCrreports

%

For example,inIndiatheCrreportingrateincreasedto73percentin2013from20percentin2011,inSingaporetherateincreasedto80percentfrom43 percent,andinaustraliatherateincreasedto82percentfrom57 percent.InthecaseofIndiaandSingaporeitislikelythatmuchofthisgrowthisduetotheintroductionofnewmandatoryandvoluntaryreportingrequirements(seepage23).InaustraliatheincreaseisduetoanumberofcompaniesreportingonCrforthefirsttimein2013,primarilyinthecompanyannualreport.

Intheamericas,theCrreportingrateincreasedfrom69percentin2011to76 percentin2013,largelyduetothechangesinthenumberofcompaniesreportingonCrinlatinamerica.DespitetherateofCrreportingremainingrelativelystableintheUSandCanadaandthenumberofreportingcompaniesinBrazilandMexicodropping,theoverallrateintheregionincreased.

Figure8:

“therehasbeenasurgeinCrreportinginMalaysiawhichIseeasatippingpointinmakingCrstandardbusinesspracticehere,encouragedbytheMalaysianStockexchange’srequirementthatlistedcompaniesreportonCractivities.atthesametime,IthinkmanyMalaysiancompaniesarelessexperiencedinCrthancompaniesineuropeandtheamericas.Forthisreason,manyCrreportsarestilllimitedinscopewithafocusonphilanthropicandcommunityinvestments.However, justasthequantityofreportsisincreasingrapidly,soIexpecttoseerapidprogressinthequalityandsophisticationofreportingprocessesandcontent.”

DatukHewLeeLamSang,Partner,KPMGinMalaysia

CRreportingbyregionPercentageofcompanieswithCrreports

% 100 100

1993 1996 1999 2002 2005 2008 2011 2013

93

71

95

64

83

53

64

4145

2835

2418

12

8080

6060

4040

2020

00Americas Asia Pacific Europe Middle East

& Africa

7671 7173

6154

69

49

Base: 4,100 N100 companies Base N100/G250 companies 2011 N100 Source: KPMG International, The KPMG Survey of Source: KPMG International, The KPMG Survey of 2013 Corporate Responsibility Reporting 2013, December 2013 G250 Corporate Responsibility Reporting 2013, December 2013

From1993to2002thesurveyincludedonlystandaloneCRreports.

From2005onwardsthesurveyincludesCRinformationinannualreportsaswell

asseparateCRreportshardcopyorweb-based,duetothetrendofmore theKPMGSurveyofCorporateresponsibilityreporting2013companiesreportingonCRincompanyannualreports.

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclient

servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

22

80

100%

Figure 9: Reporting rates by country

Keyfindings:

•Regulatoryrequirementshave drivenreportingtoitshighestlevelsinFrance,DenmarkandSouthafrica.

•Thehighestgrowthratessince2011 wereseeninIndia,Chile,Singapore,australia,taiwan,romania,China(incl.HongKong)andnigeria.

•ReportingratesalsofellnoticeablyinMexico,Brazil,Spain,Slovakia,FinlandandtheUK.

60

40

20

0

Fran

ce

Den

mar

k

Sou

th A

fric

a

Mal

aysi

a

Japa

n

Indo

nesi

a

UK

USA

Can

ada

Nig

eria

Net

herla

nds

Aus

tral

ia

Spa

in

Finl

and

Sin

gapo

re

Swed

en

Hun

gary

Bra

zil

Ital

y

Col

ombi

a

Chi

na (i

ncl.

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ng)

Nor

way

Indi

a

Chi

le

Port

ugal

Rom

ania

Bel

gium

Switz

erla

nd

Ger

man

y

Slo

vaki

a

Rus

sia

Taiw

an

Pola

nd

Mex

ico

Ang

ola

Sou

th K

orea

New

Zea

land

*

Gre

ece

Kaz

akhs

tan

UA

E

Isra

el

2011

2013 * 2011 reporting rate restated for New Zealand.

reportinginChileincreasedsubstantiallyfrom27percentin2011to73percentin2013,duepartlytomanycompaniesreportingonCrforthefirsttimeandanumberofnewcompaniescomingintotheChileann100list.theadditionofColombiatothesurvey,withareportingrateof77percent,addedtotheoverallincreaseintheamericas.

thereportingrateineuropeincreasedonlyslightly,partlyduetolowerthanaveragereportingratesinsomeofthecountriesthatwereincludedinthesurveyforthefirsttimethisyear(e.g.Poland).theMiddleeast&africa(Mea)wastheonlyregiontoseeadropinCrreportingrates:from61percentin2011to54percentin2013.thiswasdespiteahighrateofreportinginSouthafrica(98 percent)whichisconsistentwith2011,andanincreaseinthereportingrateinnigeriato82percentfrom68percent,largelyduetonewregulations(seeoppositepage).theoveralldeclineintheMeareportingrateisduetoanumberofcountrieswithlowerthanaveragereportingrates,suchasUaeandangola,joiningthesurveyforthefirsttimethisyear.

“reportinginChinahascontinuedtogrowwiththreequartersofcompaniesresearchedthisyearproducingCrreports,comparedwith59percentin2011.reportingrequirementsfromtheShanghaiStockexchangeandCrguidelinesforstate-ownedenterpriseshavebeeninplacesince2008.It’slikelyrecentgrowthreflectsthegreaterexpectationsinthemarketplaceregardingCr.reportingisapracticalwaytoshowresponsiveness,andcompaniesalsowanttoavoidbeingleftbehindthosewhohavealreadyissuedreports.”

SeanGilbert,Director,KPMGinChina

Base: 4,100 N100 companies Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013

“CrisgaininggreaterprominenceamonglargecompaniesinChileastheyincreasinglyunderstandthebenefitsofincorporatingCrintothebusinessandreportingonthis.High-profileprojectsintheminingandenergysectorshavebeendelayedinrecentyearsduetosocialpressureandconcernsabouttheimpactoncommunitiesandtheenvironment,demonstratingthatcompaniesmustaddressCrissuestocontinuetooperate.ChileancompaniesarealsoimplementingCrpoliciesandreportingontheiractivitiestoensuretheyremaincompetitivewithforeignmultinationalsandareinagoodpositiontomeetgovernmentregulations.”

LuisFelipeEncina,Partner,KPMGinChile



regulationdrivesgrowthinCrreporting

Crreportinghastraditionallybeenvoluntary,however,governmentsandstockexchangesaroundtheworldareincreasinglyimposingmandatoryreportingrequirements.Crreportingregulationsareseeninseveralcountriesthathavealmost100percentreportingrates,includingFrance,DenmarkandSouthafrica.regulationisalsobehindasignificantincreaseinreportingratesintaiwan.

alongsidegovernmentregulation,newguidelinesandstandardsfromstockexchangesandotherorganizationsarealsohavinganimpact.Forexample,inSingapore,theintroductionoftheSingaporeStockexchange(SGX)SustainabilityreportingGuideforlistedcompaniesandarevisedCodeofCorporateGovernance(whichmakesconsiderationofsustainabilityissuespartoftheboard’sremit)hasinfluencedthe37percentagepointriseinreportingrates.

SimilarfactorsareinfluencingCrreportinginnigeria,whichhasoneofthehighestCrreportingrates(82percent)notonlyinafrica,butalsoglobally.the CentralBankofnigeria

issuedguidelinesin2012mandatingthatfinancialservicescompaniesestablishsustainabilityprocessesandreportonthem.Inaddition,theSecuritiesandexchangeCommissionof nigeriaupdatedtheCorporateGovernanceCodein2011torecommenddisclosureofsustainabilitypractices.

InIndia,wheremuchCrreportingisfocusedoncommunityinvestmentanddevelopment,thereportingrateisincreasingduetorecentregulatoryrequirements.thetop100listedcompaniesinIndiaarerequiredbytheSecuritiesexchangeBoardtoreportontheiradoptionofIndia’s‘nationalvoluntaryGuidelinesforSocial,environmentalandeconomicresponsibilitiesofBusiness’intheirannualreportingfromfinancialyear2012/13.thenewCompaniesact,whichwillimpactreportsfromfinancialyear2014/15,requiresallregisteredcompaniestoestablishaBoardCommitteeonCorporateSocialresponsibility,investatleast2percentofnetprofitsonsociallyresponsibleprojects,andexplaintheiractivitiesintheirannualreport.

Trendsinmandatoryandvoluntaryreportingpoliciesresearchreleasedin2013bytheGrIincollaborationwithKPMG,theUnitednationsenvironmentProgramme(UneP)andtheCentreforCorporateGovernanceinafrica,examinesmandatoryandvoluntaryreportingpoliciesin45countries.theresearchfoundthat:

• thereare134 separatemandatorypoliciescoveringdifferentaspectsofCrreportingandafurther53voluntarypolicies

•manypoliciesarebasedona‘reportorexplain’approach

•sustainabilityreportinghasbecomealistingrequirementonseveralstockexchangesinnon-oeCDcountries,includingBrazil,China(incl.HongKong),MalaysiaandSouthafrica.5

CRreportingdropsinsomecountriesCrreportingratesdroppedinsomecountriescomparedwith2011,despitetheoverallupwardtrend.thebiggestdropswereseeninMexicoandBrazil(10fewercompaniesreportinginboth)andtheUK(9fewercompaniesreporting).thesedecreasescanbeexplained,atleastinpart,bythechangingcompositionofthen100inthesecountriesfollowingtheglobalfinancialcrisis.InSpain,forexample,mergersandacquisitionsamongbigfirmsinthebankingsectorhaveresultedinsomesmallercompanies,whicharelesslikelytoissueCrreports,beingincludedintheSpanishn100.

“InDenmarkthebiggestcompaniesare requiredeithertoreportontheirCractivities,or,iftheydonot,toexplainintheirannualreportswhytheydonotdoso.From2014this‘reportorexplain’approachwillbeextendedwithrequirementsforcompaniestoreportonhumanrights,climatechangeandemployeediversity.WhilethereportingrateinDenmarkisveryhigh,manycompaniesstrugglewithreportingonCrastheyremainfocusedondisconnectedenvironmental,health,humanresourcesorphilanthropicinitiatives.thelegislationhasencouragedcompaniestodevelopamorestructuredapproachtoCrasitisincreasinglydifficulttoreportwithoutanunderlyingCrstrategyandclearmanagementapproach.”

ChristianHonoré,Partner,KPMGinDenmark

5 KPMG,UnitednationsenvironmentProgramme,GlobalreportingInitiativeandUnitforCorporateGovernanceinafrica,CarrotsandSticks,Sustainabilityreportingpoliciesworldwide,2013.

theKPMGSurveyofCorporateresponsibilityreporting2013 24©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Figure 10:

Rateofcorporateresponsibilityreporting

across41countries-2011and2013 (%ofcompaniesreportingonCR)

Canada 79 83

Mexico 66 56

USA 83 86

Brazil 88 78

Chile 27 73

Colombia – 77 Angola – 50

Americas Israel 18 19 Nigeria 68 82 SouthAfrica 97 98 UAE – 22

2011 2013 MiddleEast

&AfricaReporting rates in percentages

Spotlightonreportingrequirements

ThefollowingcountrieshavehighCRreportingratesorsignificantrecentgrowthinCRreporting,relatedtoreportingrequirements:

Denmark France India Indonesia Japan Malaysia Nigeria FinancialStatements GrenelleIIActrequires Thetop100listed LawNo.40/2007 Mandatoryand MalaysiaStock CentralBankofNigeria

Actrequireslarge largecompaniesto companiesinIndiaare requiresLimited voluntaryguidelines Exchangelisting requiresfinancial

companiestoreport reportannuallyonCR requiredbythe LiabilityCompaniesto forcertaintypesof requirementthat servicescompaniesto

onCRactivities,or,if activitiesandadvises SecuritiesExchange reportonCRinthe companiestoreport companiesdescribe reportonCRandthe

theydonot,toexplain reportsaresubjectto Boardtoreporton annualreport.Publicly- onenvironmental CRactivitiesandlaw SecuritiesandExchange

intheirannualreports independent CRintheirannual listedcompaniesare impacts,including thatallpubliclylisted CommissionofNigeria

whynot. verification. reportingfromfinancial alsorequiredtoreport GHGemissions. companiespublish CorporateGovernance

year2012/13. onCRintheannual CRinformationinthe Coderecommends

report. annualreport. companiesdisclose

CRpractices.

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclienttheKPMGSurveyofCorporateresponsibilityreporting2013 servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.25

Belgium – 68 Poland – 56 Denmark 91 99 Portugal 69 71 Finland 85 81 Romania 54 69 France 94 99 Russia 58 57 Germany 62 67 Slovakia 63 57 Greece 33 43 Spain 88 81 Hungary 70 78 Sweden 72 79 Italy 74 77 Switzerland 64 67 Netherlands 82 82 UK 100 91 Norway – 73

Europe

Australia 57 82 China(incl.HongKong) 59 75 India 20 73 Indonesia – 95 Japan 99 98 Kazakhstan – 25 Malaysia – 98 NewZealand 43 47 Singapore 43 80 SouthKorea 48 49 Taiwan 37 56

AsiaPacific


Norway Singapore South Africa UK USA NorwegianAccounting SingaporeStockExchange KingCodeof Companieslistedonthe Disclosurerequirements

Act(andamendment (SGX)Sustainability GovernancePrinciples LondonStockExchange oftheU.S.Securities&

in2013)requireslarge ReportingGuideforlisted andKingReporton mustreportonGHG ExchangeCommission

companiestoreport companiesandCodeof Governance(KingIII), emissionsfrom2013. (SEC),Dodd-FrankAct

onsocial,environ- CorporateGovernance andJohannesburg CompaniesActrequires requiresdisclosureon

mentalananti- encourageCRreporting,

StockExchange(JSE) largeandmediumsized conflictmineralsand

corruptionactivities. andEnergyConservation

Act2012requireslarge

companiestoreporton

requirecompaniesto

publishanintegrated

reportincludingCR

companiestodisclose

CRinformationrelevant

tocompanyperformance

PresidentialExecutive

Order13514requires

federalagenciestoreport

Source: KPMG, United Nations Environment Programme, Global Reporting Initiative and Unit for Corporate Governance in Africa, Carrots and Sticks, Sustainability reporting

energyuse. performance. intheannualreport. onCRperformance. policies worldwide, 2013.


Trade

& re

tail

Chem

icals

&

synt

hetic

s

Cons

tructi

on &

build

ing m

ateria

ls

Trans

port

Pharm

aceu

ticals

Met

als, e

ngine

ering

&

man

ufac

turin

g

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ce, in

suran

ce

& se

curit

ies

Food

& be

verag

e

Oil &

gas

Com

mun

icatio

ns

& m

edia

Electr

onics

&

com

pute

rs

Fore

stry,

pulp

& pa

per

Auto

mot

ive

Utilit

ies

Mini

ng

anarrowinggapbetweenleadingandlaggingsectors

Keyfindings:

•ThegapbetweenthesectorswiththehighestandlowestCrreportingrateshasnarrowedtojust22 percentagepoints,from32in2011and42in2008.

•Reportingrateshave changedonlyincrementallyinmostsectorssince2011,reflectingthematurityofreporting.

•Ninesectorsmoved fromhavingaminorityofcompaniesreportingin2008toamajorityin2013.

•Theautomotiveandtelecommunications&mediasectorsnowhavesomeofthehighestlevelsofCrreporting(77percentand75 percent).Fiveyearsago,theirCrreportingrateswereamongthelowest(49percentand47 percent).

Companiesoperatingin15differentsectorsareincludedinthissurvey.

reportingisnowthenormacrossallthesesectors,withatleast62percentofcompaniesineverysectorproducingareport.thereislittlechangesince2011inthetypesofindustriesthataremostorleastlikelytoreport.Heavyindustryandresource-basedsectorsstillleadthewaywiththehighestreportingrates,andservicesandtrade&retailstilllagbehind.However,thegapbetweenreportingratesamongtheleadersandlaggardsisnarrowing.

lookingbacktothe2008survey,ninesectorshavemovedfromhavingaminorityofcompaniesreportingfiveyearsagotoamajorityin2013:automotive,communications&media,construction&buildingmaterials,finance&insurance,food&beverage,metals,engineering&manufacturing,pharmaceuticals,trade&retailandtransport.ofthese,themostsignificantincreaseswereintheconstruction,pharmaceuticalsandtrade&retailsectors.

Figure11:

Sectorreportingtrends

% 100

66

84 8484

67

62

58 65

47 47

59 62

79

71

78

69

7778 77 7574 7269 7267 70

61 61

69 69

64

69

57

66 6568

62

5249 49

41

25

39

32

26

80

60

50

40

20

0

2008

2011

2013

27 theKPMGSurveyofCorporateresponsibilityreporting2013


©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

MorecompaniesreportonCrintheannualreport,but‘integratedreports’areinaminorityIrhasgainedsignificantmomentumsincethelastsurveyin2011,drivenbytheworkoftheIIrCtodefineaframework,bytheKingCodeofGovernancePrinciplesandtheKingreportonGovernance(KingIII)inSouthafrica,andworldwidebycompanies’owneffortstopresentinvestor-relevantnon-financialinformationinreports.

ManycompaniesaretakingtentativestepstowardsIrbypresentingCrdataalongwithfinancialdataintheirannualcompanyreports.Companiescontinuetotakedifferentapproachestointegration,andnotallcompaniestaketheIIrCconceptanddefinitionasthestartingpoint.researchforthissurveyshowsthatmorecompaniesarecombiningtheirnon-financialwithfinancialdata,butthatfewcompaniesfeelconfidentinstatingthattheyproduceanintegratedreport.

“SincetheKingCodeofGovernancePrinciplesandtheKingreportonGovernance(KingIII)cameintoeffecton1March2010,agrowingnumberofSouthafricanorganizationshavebeenproducinganintegratedreport.Itisespeciallyencouragingthatthisgrowthisnotonlydrivenbycompliance,butratherbytherealizationthatintegratedreportingisabetterwayofprovidinginsightsintotheorganization’sstrategyanditsabilitytocreatevalueintheshort,mediumandlongterm.”

NeilMorris,Partner,KPMGinSouthAfrica

Forthefirsttimeinthissurvey,themajorityofcompanies(51percent)includeinformationonCrintheirannualfinancialreport.thisfigurehasrisendramaticallysince2008,whenitwasjust9percent,andsince2011whenitwas20percent,showingagrowingacceptancethatCrissuesarematerialforbusiness.

ofthosecompaniesthatincludeCrinformationintheirannualreports,themajority(58percent)dosoinaseparatechapter,ratherthanintegratingCrdataintothewidernarrativeonbusinessperformanceandvalue.anincreasingnumberbutstillaminority(42percent),arestartingtomakethelinkbetweenCrandbusinessstrategybyincludingCrinformationintheDirectors’report.

ofcompaniesthatincludeCrintheDirectors’report,mostalsocontinuetopresentCrinformationinaseparatechapteroutsidetheDirectors’report.thissuggeststhatmanycompaniescontinuetoseeavalueinprovidingaseparatenarrativearoundCrperformance,andenablinginterestedreaderstolookintothisaspectofcompanyperformanceingreaterdetail.ItcouldalsomeanthatcompaniesarenotyetsurehowtofullyintegratetheirCrinformationwiththewidernarrativeonbusinessperformance.

theresearchalsoshowsthatonlyaminorityofcompaniesclaimthattheypublishanintegratedreport.Justonein10companiesthatreportonCr(10 percent)dosoandevenfewer(3 percent)referencetheworkoftheIIrC.ItremainstobeseenhowthiswillchangewiththelaunchofthefinalIIrCframework,andasmorecompaniesusetheframeworkandshareexperienceswiththeirpeers.

HowwillIRchangecompanyreporting?Inthebroadestsense,Irisaboutaligningbusinessreportingwithbusinessstrategy,explaininghowenvironmental,social,governanceandothernon-financialfactorsimpactonabusiness’sabilitytooperate,createandsustainvalueovertheshort,mediumandlongterm.

Formanybusinesses,Crinfor-mationhasanimportantroletoplayinthisbroadervisionofreporting,butitisimportanttorecognizethattheCrinformationrequiredinanintegratedannualreportmaybedifferenttothattraditionallyprovidedinCrreports.thisisbecauseanannualreportfocusesonlyonthemattersthataremostrelevanttothebusinessstrategy,andwillnormallyprovideinformationthatisspecificallyaimedatmeetinginvestorneeds.ManycompaniesmaychoosetoreportinmoredetailonCrinaseparatereportinordertomeettheneedsofotherstakeholdersinterestedinCrpoliciesandperformance.

themajorityofcompaniesthatstatetheyproduceanintegratedreportarebasedinSouthafrica,drivenbyKingIII.ninetythreepercentofn100companiesthatreportonCrinSouthafricastatethattheirreportisintegrated.


Figure 12: Figure13:

Corporate responsibility in annual reporting FormatofCRinformationinannualreports

In a specific section/chapter on CR only

In a specific section/chapter on CR and in the Directors’ report

In the Directors’ report only

24

18

58

•Morethanhalf(51percent)ofn100companiesnowreportonCrintheirannualfinancialreport.thisproportionhasincreaseddramaticallyinthelastfiveyearsfromjust4percentin2008and20 percentin2011.

•Ofthecompaniesthatincludeinformationintheirannualreport,42 percentnowincludeinformationonCrintheirDirectors’report,comparedwithjustoveraquarterin2011.

Keyfindings:

5149

7

3

1

89

• 10 percentofcompaniesclaimtohaveintegratedtheirannualreporting,andofthese,mostdonotyetrefertotheIIrCconceptordefinition.

• ThenumberofreportsthatstatetheyareintegratedarebyfarthehighestinSouthafricaat93percentduetotherequirementsofKingIIIandtheJohannesburgStockexchange.

Keyfindings:

CRinformationinannualreport

NoCRinformationinannualreport

Base: 4,100 N100 companies Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013 Base: 2,080 N100 companies that include CR information

in annual reports Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013

Figure14:

Doesthereportstateitisanintegratedreport?

No

Yes, the report states it is integrated, but does not refer to the IIRC

Yes, the report states it is integrated and it refers to the IIRC

The report does not state it is integrated, but there is reference to the IR trend/IIRC

Base: 2,897 N100 companies that report on CR Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013



“Companiesneedtofindanapproachtointegratedreportingthatenablesthemtoreportonvaluecreationinitsbroadestsense–financial,social,environmentalandeconomic.WhiletheworkoftheIIrCisinvaluableinaddressingtheneedsofthelongterminvestor,businessesmustalsothinkabouthowCrinformationispresentedinawaythatmeetstheneedsoftheirotherstakeholders.Wearelikelytoseemanydifferentapproachesascompaniesembracetheconceptofintegration.CompaniesmaychoosetocontinuetogivereadersmoredetailonCrinitiativesinastand-alonereport,inaseparatechapteroftheannualreportorthroughtheirwebsite.Iwouldrecommendthatcompaniesdevelopacommunicationsstrategybasedontheneedsofdifferentstakeholders.”

WimBartels,KPMG’sGlobalHeadofSustainabilityReporting&Assurance

“thereleaseofthefirstInternationalFrameworkcreatesthecatalystforashiftfromthoseinnovatorsincorporatereportingmovingtowardsintegratedreporting,toasignificantnumberofearlyadopters.Itisremarkablehowmuchawarenesshasbeencreated,withthisreporthighlightingthemomentumtowardsincorporatingcorporateresponsibilityintoannualreports.themomentumisnotedandIthankKPMGfortheinsights,itonlyencouragestheIIrCtohelpmakethisbreakthroughnowthatthereisaFrameworkforcompaniestouse.IcanonlyreiteratethewordsofWimBartelswhenhestatesthat‘Wewouldrecommendthatcompaniesdevelopacommunicationstrategybasedontheneedsofdifferentstakeholders’.”

PaulDruckman,ChiefExecutive,InternationalIntegratedReportingCouncil


GrIremainstheleadingreportingframework

Intheabsenceofregulatoryrequirements,voluntaryreportingguidelinessuchastheGrIplayanimportantroleinimprovingconsistencyinCrreportingandthequalityofdisclosure.

researchconductedforthissurveyshowsthattheGrIremainsthemostwidelyusedvoluntaryreportingframework,farexceedingtheuseofnationalstandardsandotherguidelines.overthreequarters(78percent)ofglobaln100companiesnowrefertotheGrIintheirCrreport,anincreaseof9percentagepointssince2011.amongtheworld’slargest250companiestherateincreasedto82 percentin2013from78percentin2011.thosewhodonotrefertotheGrIframeworkeitherstatethattheyusetheirownframeworksdevelopedin-house,nationalreportingguidelinesornoneatall.

Inseveralcountrieswheremorethan75 percentofreportingcompaniesrefertoGrI,itislikelythisislinkedtolocalregulatoryreportingrequirements.Forexample,inBrazil,Finland,Southafrica,Spain,andSwedenreportingrequirementsreferencetheGrIorexplicitlyrequireorrecommendthatcompaniesreportusingtheGrIguidelines.

“thereisastrongbeliefamonglargecompaniesinSouthKoreathattheapplicationofglobalstandardsandguidelinessignificantlyenhancesthecredibilityoftheirreporting.atthesametime,Koreancompanieshaveahistoryoffocusingresourcesonimprovingdisclosure.theGrIguidelinesareperceivedtobemorecrediblethanacompany’sownstandardsorthosefromlocalorganizations.”

SungwooKim,Partner,KPMGinSouthKorea

“Inthiseraofprofessionalreporting,companiesneedtobeabletoexplaintostakeholdersthebasisonwhichtheirreporthasbeenprepared.UseofanexternalframeworksuchastheGrIwillincreasinglybeseentobeessentialtodemonstratecredibility.thereiscurrentlyalackofconsistencyinhowtheGrIisusedandthisisreflectedinreportingquality.alignmentbetweencompaniesonhowtheyapplytheGrIframework,andhowtheyfocusreportingonmaterialissuesinlinewiththelatestG4Guidelines,isthenextstep.”

WimBartels,KPMG’sGlobalHeadofSustainabilityReporting&Assurance

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclient

“theGlobalreportingInitiativeundertakesanarrayofoutreachactivities,engagingwitheveryonefrommultinationalcorporations,labororganizationsandcivilsociety,togovernment,academiaandmarketregulators.thesustainabilitychallengeisaglobalone,andGrIisinauniquepositiontoinformdebatesthroughitsglobalnetworkofthousandsofexpertsandsustainabilityleaders,GrI‘FocalPoints’,whichareregionalofficesinBeijing,Delhi,Johannesburg,newYork,Melbourne,Mumbai,SaoPauloandsoon,Bogota–andover70certifiedtrainingpartnersineveryregionintheworld.SinceKPMG’s2011surveywaspublished,thetrendtoregulatesustainabilityreportinghasincreasedmarkedly,anditisnosurprisethatthefiguresinKPMG’ssurveyarehighestinthosecountriesthathaveintroducedregulationinoneformoranother.”

ErnstLigteringen,ChiefExecutive,GlobalReportingInitiative

Figure15:

UseoftheGRIGuidelines

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31 theKPMGSurveyofCorporateresponsibilityreporting2013 servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Figure 16: Where are the GRI Guidelines used most?

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Keyfindings

• Morecompaniesthanever nowrefertotheGrIguidelinesintheirCrreporting.

• In37ofthe41countriessurveyed,morethanhalfofn100companiesrefertotheGrIguidelinesintheirCrreporting.

• Morethan90percentdosoinSouthKorea,Southafrica,Portugal,Chile,BrazilandSweden.

• Lessthan50percentdosoinKazakhstan,romania,Denmarkandnigeria.

Base: N100 companies with standalone report or GRI-based section in the annual report Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013

32theKPMGSurveyofCorporateresponsibilityreporting2013©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

assurancereachesatippingpointamongtheworld’slargestcompaniesexternalassuranceofCrreportsisstillvoluntaryinmostcountries,withjustFranceandSouthafricapioneeringamandatoryapproachamongthe41 countriessurveyed.Despitethis,manycompaniesdoseekoutassurance,motivatedbyaneedtodemonstratecredibilitywithexternalstakeholders,tomeettherequirementsofsustainabilityindicesandbythevalueassurancecancreateinternallythroughmorereliabledataandaclearerunderstandingofCrissues.

theoverallrateofCrreportassuranceamongn100companiesin2013,includingthenewcountriesaddedtothesurveythisyear,isequalto2011at38percent.amongcountriescoveredinboththe2011and2013surveys,therateofassuranceamongcompaniesthatreportonCrincreasedto41percentin2013.thelowestratesofassuranceareseenincountrieswhereCrreportingisstillinitsinfancy,includingIndonesia,Israel,Kazakhstan,Malaysia,nigeria,SingaporeandtheUae.

Figure17:

RatesofassuranceforCRreporting

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ofthen100companiesthatchoosetoassuretheirCrreports,72percentoptforalimitedratherthanreasonablelevelofassurance,10percentforareasonablelevelofassuranceandafurther8percentoptforacombinationofthetwolevels.overhalf(52percent)choosetoverifytheirwholereportratherthanselectedindicatorsorchaptersandthemajority(67percent)continuetooptforamajoraccountancyfirmtoprovideassuranceservices.

Incontrasttothen100,assuranceratesamongtheworld’s250largestcompanieshavereachedatippingpointwithoverhalf(59percent)ofcompaniesthatreportonCrnowoptingforassurance,upfrom46percentin2011.

astheG250grouphasledreportingtrendsoverthelast20years,itislikelythistrendwillbereflectedamongthen100infutureyears.

2002 2005 2008 2011 2013

2927 3033

4039

46

3838

59

Base: N100/G250 companies that report on CR Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013

theKPMGSurveyofCorporateresponsibilityreporting2013

“WithmorecompaniesmovingtowardsdeeperintegrationofCrintotheirbusinessstrategyandmanagementprocesses,webelievethatexternalstakeholderswillseekinformationfromauditorsprovidingindependentassuranceofCrinformationanddemonstratingthatthecompanyisasseriousaboutCrdataasitisaboutitsfinancialinformation.atKPMGwebelievememberfirmshavearoletoplaytoassistorganizationsandstakeholdersinthatjourney.”

LarryBradley,KPMG’sGlobalHeadofAudit

67

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Figure 18: Assurance providers

Keyfindings

• ThenumberofcompaniesthatchoosetohavetheirCrreportsassuredbymajoraccountancyfirmsincreasedslightlyto67 percentin2013,comparedwith 64percentin2011.

Major accountancy organizations

Other providers

Base: 1,099 N100 companies that report on CR and use external assurance Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013

33

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientservicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

Dataqualitystabilizesamongtheworld’slargestcompanies

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Keyfindings

• OnequarterofN100 reportingcompaniesrestatedCrdatafrompreviousyears.ofthosethatrestateddata,33percentstatethereasonforrestatementswasupdatedorimprovedmethodologies.

• ThenumberofG250companiesrestatingdatadroppedfromathirdin2011toonequarterin2013.ofthosethatrestateddata,49percentcitedupdatedorimprovedmethodologies.

ascompaniesseektointegratereportingandpresentrelevantCrdatatoinvestorsalongsideestablishedmetricsforfinancialdisclosure,itismoreimportantthaneverthatCrdataisrobust.Highlevelsofrestateddatayearuponyearriskserodingconfidenceincompanydata,reportingsystemsandprocesses.

thenumberofn100companiesthatmadeanyCrdatarestatementsincreasedslightlyto25percentin2013from21percentin2011.thenumberofcompaniesthatrestatedanyCrdatadroppedamongtheG250fromonethirdtojustoveronequarter(26percent)suggestingthatthequalityofdataisimprovingamongthebiggestcompaniesasCrreportingsystemsandprocessesmature.

themostcommontypeofrestatementfoundinbothn100andG250Crreportsrelatetoanupdatedorimprovedmethodologybeingappliedbycompanies,suggestingthatcompaniesarestrengtheningtheirinternalreportingsystemsandprocessesandimprovingthequalityofdatafordecisionmaking.

thepercentageofrestatementsduetoerrororomissionamongthen100decreasedto21percentin2013,comparedwith29percentin2011.amongtheG250,thenumberofrestatementsduetodataerrorsoromissionsalsodecreasedto22percentin2013from35percentin2011.

Figure19:

ReasonsforrestatementsofCRdata

Restatements due to updated (improved) estimation/calculation methodology

Update of definitions applied

Restatements due to error or omission

Update of scope (not relating to change in acquisition/divestments)

Base: 587 N100 companies that report on CR and restated CR data Source: KPMG International, The KPMG Survey of Corporate Responsibility Reporting 2013, December 2013


the KPMG Survey of Corporate responsibility reporting 2013 35

The quality of reporting among the world’s largest companies

© 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

the KPMG Survey of Corporate responsibility reporting 2013 36

Part 2 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Introduction

asoutlinedintheprevioussection,Crreportingisabusinessnormtoday,butweneedtolookbehindthequantitativedatatounderstandwhethertheincreaseinthevolumeofreportsismatchedbyanimprovementinthequalityofreporting.

thisyear,forthefirsttime,theKPMG tosupplementtheresearch,seniorSurveyofCorporateresponsibility representativeshavebeeninterviewedreportingincludesanin-depth fromseveralofthecompaniesthatassessmentoftheCrreportspublished scoredmosthighlyintheKPMGbytheG250companies(theworld’s250 assessment.theysharedinsightslargestcompaniesbasedontheFortune intohowtheyhaveachievedbestranking).thequalityofG250reportshas practicesinreporting,theirmotivationbeenassessedusingsevencriteria: fordoingsoandthebusinessbenefits• strategy,riskandopportunity theyhavegainedasaresult.• materiality• targetsettingandindicators• suppliersandthevaluechain• stakeholderengagement• governanceofCR• transparencyandbalance.

Figure 20: KPMG’s CR reporting quality assessment, 7 key criteria

STAKEHOLDER ENGAGEMENT Report explains how stakeholders are engaged and how their views inform CR strategy, materiality process, targets, etc.

RISK, OPPORTUNITY & STRATEGY Report identifies social and environmental risks /opportunities and explains the company’s strategic response.

MATERIALITY Report demonstrates clear, on-going process to identify most significant issues.

TARGETS & INDICATORS Report declares timebound and measurable targets.

TRANSPARENCY & BALANCE Report is open about challenges as well as achievements. Communicates effectively.

SUPPLIERS & VALUE CHAIN Report shows how CR strategy and targets address material impacts of suppliers, products and services.

GOVERNANCE OF CR Report shows how CR is governed within the company, who has responsibility, and how CR performance is linked to remuneration.




AlmostallG250companiesissueCRreportsbutthequalityofreportingisinconsistenteachG250company’sreportwasassessedagainstthequalitycriteriaandawardedanoverallscore.thisproducedanaveragequalityscoreof59outof100amongthe93percentofG250companiesthatpublishaCrreport.

thehighestaveragescoreswereseenforreportingontargetsandindicators(68)andmateriality(66).Companiesscoredlowestforthequalityoftheirreportingonsuppliersandthevaluechain(46),governance(53)andstakeholderengagement(53).theresultssuggestthereisroomforimprovementinthequalityofcompanyreportingonCr.

thehistoricaltrendhasbeentoreportondataandnumbersratherthanthedetailsaroundprocesses.also,issuessuchassupplychainmanagementandgovernancehaveonlybecomesubjecttopublicscrutinyfairlyrecentlyandsocompanyprocessesforthesemaynotyetbeasrobustastheycouldbeinmanycompanies.thequalityofreportingmattersbecauseitistakenasindicativeofthequalityofmanagement/whatisactuallyhappeninginsidethecompany.

Poorqualityreportstendtobeassociatedwithpoorperformanceinthemindofthereader.Fewcompaniespractice‘totalgreenwash’thesedaysbutreaderscertainlygivemorecredencetoahigherqualityreport.

Aclusterof10companiesofthosesurveyedsetthepaceonequarterofG250companies(63)achievedanoverallqualityscoreof80orabove.thesecompaniesdemonstratedasuperiorunderstandingoftheimpactofsocialandenvironmentalissuesontheirbusinessandreportedontheirstrategy,performanceandinteractionwithstakeholdersmorethanothers.

tencompaniesscored90ormore.theyare:• A.P.MøllerMærsk

Transport-Denmark

• BMW

Automotive–Germany

• CiscoSystems

Telecommunications&media–US

• FordMotorCompany

Automotive–US

• HewlettPackard

Electronics&computers–US

• ING

Finance,insurance&securities–

TheNetherlands

• NestléFood&beverage–Switzerland

• RepsolOil&gas–Spain

• SiemensElectronics&computers–Germany

• TotalOil&gas–France

“thequalityofCrreportinginChinavariesquitedramaticallyfromthoughtfuldocumentstoonesthatonlyspeakofbroadambitionsandvalueswithlittledetailaboutactualactionsoroutcomes.reportingshouldoutlineastrategicfocus,targetsandfollow-upactions,ratherthananexhaustivelistofunconnectedsocialorenvironmentalactivities.WhenthedepartmentthatdrivesCrreportingdoesnothaveamandatetosetstrategyforthecompanyorinfluenceotherdepartments’goals,programsandpriorities,itisoftenreflectedinthequalityofthereporting.thatsaid,itisaprocessandChinamustberecognizedforgoingfromverylimiteddisclosuretothemuchhighernumbersofcompaniesreportingtodayinjustafewshortyears.”

SeanGilbert,Director,KPMGinChina


Table2: Table3: Table4:AveragequalityofG250reportsbysector AveragequalityofG250reportsbycountry AveragequalityofG250reportsbycriterion

Sector Averagescore Country Averagescore Qualitycriteria Averagescore(outofapossible100) (outofapossible100) (outofapossible100)

electronics&computers 75 Italy 85 targets&indicators 68

Mining 70 Spain 79 Materiality 66

Pharmaceuticals 70 UK 76 Strategy,risk&opportunity 62

Utilities 65 France 70 transparency&balance 58

telecommunications&media 65 australia 70 Governance 53

transport 64 netherlands 69 Stakeholderengagement 53

automotive 64 Germany 68 Suppliers&thevaluechain 46

Food&beverage 59 Switzerland 63 Source:KPMGInternational,TheKPMGSurveyof

Finance,insurance&securities 58 SouthKorea 60CorporateResponsibilityReporting2013,December2013

Chemicals&synthetics 58 Japan 55

oil&gas 55 US 54

trade&retail 55 China(incl.HongKong) 39

Metals,engineering&manufacturing 48

Construction&buildingmaterials 46



Electronics&computercompaniesleadthepackCompaniesintheelectronics&computerssectorleadtheG250intermsofthequalityofCrreporting,withanaveragescoreof75,followedbymining(70)andpharmaceuticals(70).thelowestscoringsectorsareoil&gas,trade&retail,metals,engineering&manufacturing,andconstruction&buildingmaterials.

Note:Tableincludesonlythosecountrieswithfiveormore

companiesintheG250thatreportonCR.



Europeinfrontonreportingqualityeuropeancompanieshaveasignificantleadoverotherregionsinreportingqualitywithanaveragescoreof71,comparedwithaveragescoresof54intheamericasand50inasiaPacific.

therearealsopronouncedregionaldifferencesinscoresforcertaincriteria.Forexample,companiesintheasiaPacificregionscore45onaveragefortransparencyandbalance,comparedwith53intheamericasandanaverage

europeanscoreof73.Forreportingonsuppliersandthevaluechain,averagequalityscoresare31inasiaPacific,comparedwith48intheamericasand58ineurope.

Italy,SpainandtheUKhavethehighestaveragescores,reflectingtherelativematurityofreportinginthesemarketscomparedwithcountriessuchasChina(incl.HongKong)wherewidespreadreportingisanewerphenomenon.



LessonsfromtheleadersKPMG’sanalysishasidentifiedaclusterof10exemplarG250companieswhoseCrreportingscoredparticularlyhighlyagainstourqualitycriteria,andafurthereightwhosereportsscoredmosthighlywithintheirspecificsector.

anumberofthesecompaniesagreedtosharetheirexperienceswithreadersofthissurvey.organizationswiththeirownexperienceinCrreportingmayrecognizemuchofwhatthesecompaniessay,whilethosethatarelesspracticedmayfindsomeusefullessons.

Table5:Companiesthatparticipatedininterviews:

Weaskedtheexemplarcompaniesthefollowingquestions.

•WhatarethefundamentalsforpublishinghighqualityCrreports?

•WhatbenefitshaveyougainedfromCrreporting?

•HowdoyouthinkCrreportingislikelytoevolve?

•Whatchallengesdoyoufaceinfurtherimprovingthequalityofyourreports?

Company Country Sector

a.P.MøllerMærsk Denmark transport

Bayer Germany Pharmaceuticals

BMW Germany automotive

CiscoSystems US telecommunications&media

enel Italy Utilities

FordMotorCompany US automotive

Hewlett-Packard US electronics&computers

InG netherlands Finance&insurance

nestlé Switzerland Food&beverage

repsol Spain oil&gas

Siemens Germany electronics&computers

tesco UK trade&retail

total France oil&gas

vale Brazil Mining

Source:KPMGInternational,TheKPMGSurveyofCorporateResponsibilityReporting2013,December2013


Gettingthefundamentalsright

EstablishrobustprocessesallthecompanieswespoketoagreedthatthefoundationsofqualityCrreportingarerobustsystemsandprocessesforcollectingdataandidentifyingmaterialissues.

“Gettingthebasicsright,suchasagoodmaterialityprocess,enablesustocreateareportthatbothsatisfiestheneedsofexternalstakeholdersandisrelevanttoourbusiness,”saidannetteStube,DirectorofGroupSustainabilityata.P.MøllerMærskGroup.“themoresolidourprocessesthebetterthereport.”

“themoresolidourprocessesthebetterthereport.”

AnnetteStube,DirectorofGroupSustainability,A.P.MøllerMærskGroup

thereis,however,no“onesize-fits-all”solutionforcollectingdata.Manyofthesecompanieshavedevelopedtheirownsystemsratherthanbuyingoff-the-shelfproducts.Inevitablyittakestime,andsometrial-and-error,togetthesesystemsrightbutthemoreintegratedtheyareintothebusiness,themoreeffectivetheyare.

attesco,forexample,Crisacorepartofthebalancedscorecardusedacrosstheentirecompanytomonitorperformanceagainstthebusinessstrategy.

LeadfromthefrontGettingtherightprocessesinplaceisimportant,butgoodprocessesarenouseiftheyarenotimplemented.

thatimplementationneedstobedrivenfromtheverytopoftheorganization,accordingtothecompanieswespoketo.

“leadershipsupportisamusttosecurethebuy-inandengagementofthefunctionswhicharecrucialtodevelopmentofthereport,”saidUrsulaMathar,HeadofGroupSustainabilityandenvironmentalProtectionatBMW.

asKersten-KarlBarth,DirectorofCorporateSustainabilityatSiemenssaid,“theSiemensSustainabilityBoard,whichischairedbytheChiefSustainabilityofficer,isthecentralsteeringcommitteeforsustainabilityatSiemens.Initsregularmeetingsitdirectsoursustainabilityprogramaspartofoursustainablestrategy,adoptsappropriatemeasuresandinitiativesandmonitorsprogress.”

ItisperhapsnosurprisethatthesecompaniesallhaveleaderswhoarepersonallyengagedwithandcommittedtoCr.

©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclientttheKPMGSurheKPMGSurvveeyofCorporateryofCorporateresponsibilitesponsibilityryreporting20eporting201133 servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.4141

atvale,forexample,seniorleadersplayhands-onrolesinCrreporting,helpingtoestablishprioritiesandidentifyissuesanddilemmastobecovered.

notonlydoesthishelptosecurethenecessarytimeandresourcesforqualityreporting,butitalsogivesCrteamsthelicensetobetransparentandbalancedintheirdisclosure,reportingchallengesandsetbacksaswellassuccesses.

asJohnviera,GlobalDirectorofSustainabilityofFordMotorCompanysaid,“Wehavesupportfromthetopdownandthathasenabledustoreportinamorecredibleway.”

However,evenincompanieswherereportingiswell-established,seniormanagersdocomeandgoandprioritiescanchange.Crteamsmustcontinuallydemonstratethebusinessvalueofreportingtoensurecontinuedsupport.

“Crreportingcostsmoneyandtime,soitisimportantthatinternalstakeholdersunderstandtheaddedvaluewegetfromthereport,”saidUteMenke,HeadofSustainabilityandexternalreportingatBayer.

“Byreachingoutbeyondourownfourwalls,wecancreateabetterreport.”

JohnViera,GlobalDirectorofSustainability,FordMotorCompany

Stakeholderengagement:gettherightbalancethecompaniesagreedontheimportanceofgoodstakeholderengagementindeliveringqualityCrreporting.

“Byreachingoutbeyondourownfourwalls,wecancreateabetterreportthatmeetstheneedsofourstakeholders.Italsogivesconfidencetoourseniorleadersthatwearefocusedontherightissues,”saidJohnvieraofFord.

However,thesecompaniesrecognizeitisunrealistictosatisfyalltheinformationexpectationsofallstakeholders.

eduardoGarcíaMoreno,DirectorofCorporateresponsibilityandInstitutionalServicesatrepsolnoted,“Weneedtorespondtomanystakeholders;somedemandmoreconciseinformationwhileothersrequiremoredetaileddata.”

abalancingactisrequiredandthisiswherearobustmaterialityprocessisessential.

“Wegetahugevolumeofenquiriesfromstakeholders.Wecanneverrespondtoeverything,soweusematerialitytoidentifyourprioritiesanddrivethoseforward,”saidKathyMulvany,SeniorDirectorofCorporateaffairsatCiscoSystems.

CompaniesthatpublishstakeholderviewsandcommentsintheirCrreportssaytheybenefitsignificantlyfromtheaddedcredibilitytheseindependentvoicesbring.However,someareconcernedthatthemovetowardsintegratedreportingcouldleadtoconstraintsonformatandcontentandmakeitmoredifficulttoincludestakeholdervoicesinthefuture.

“Weusematerialitytoidentifyourprioritiesanddrivethoseforward.”

KathyMulvany,SeniorDirectorofCorporateAffairs,CiscoSystems

BetransparentontargetstheexemplarcompaniesbelievetheirCrperformanceishelpedbypubliclydeclaringtheirCrtargets,andbeingopenabouttheirperformanceagainstthosetargets.

asJoshHardie,CorporateresponsibilityDirectorattescoPlCsaid,“Publishingareportdoesincentivizeustopushourselvesfurther.Ifyoumissatargetyouhavetobeopenaboutit,andyoudon’twanttomissitagain.”

atBayer,UteMenkebelievesthattargetshavebenefitsaboveandbeyondshowingexternalstakeholderstheprogresstheco

The KPMG Survey of Corporate Responsibility Reporting 2013 · 2020. 12. 5. · reporting 2013. KPMG’s survey is published primarily for business leaders, company boards and corporate

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