KMPG's latest CR Reporting Survey: What's it all about?

09 January 2014 by Rida Daher

The latest KPMG Corporate responsibility survey addressed the global trends of CR reporting of 4100 companies across 41 countries and the quality of reporting among the world’s largest 250 companies. The quality of CR reports was assessed against seven key indicators based on current reporting guidelines and KPMG professional views. The indicators handled Strategy, risk and opportunity, Materiality, Targets and indicators, Suppliers and the value chain, Stakeholder engagement, Governance of CR and finally Transparency and balance.

 

So what is it all about?

The report states that the debate on whether companies should report on CR or not is dead and buried and that CR reporting is now standard business practice over the world. The important questions are now about the quality of the report and the best means to reach relevant audiences.

The major key findings of the report are as following:

  • 71% of companies based in Asia Pacific now publish CR reports
  • 76% of companies in America now report on CR; enabling it to potentially take the lead from Europe
  • The highest growth of CR reporting since 2011 has been seen in India
  • In all sectors more than half of companies report on CR, meaning reporting can be considered standard global practice; irrespective of industry
  • Over half of reporting companies worldwide now include CR information in their annual report
  • Use of GRI guidelines is almost universal
  • Over half of the 250 largest companies worldwide now invest in external assurance. These large companies tend to set the direction that other companies follow

 

%Rate of CR reporting across selected countries:

Year

2011

2013

Country rate %

 

 

 

 

 

UAE

-

22

Nigeria

68

82

USA

83

86

South Africa

97

98

Denmark

91

99

UK

100

91

Netherlands

82

82

India

20

73

 

  • In the KPMG analysis, the average quality score achieved by the largest 250 companies for their CR reports is 59 out of a possible 100. This indicates significant room for improvement overall
  • Industries with high CR impacts produce the highest quality CR reports
  • Reputational risk is the most commonly cited type of business risk mentioned by 53% of the 250 largest reporting companies
  • There is room for improvement in terms of transparency of the reports. 41% of reporting companies do not explain the process they use in their materiality assessment
  • More companies report on CR in their annual report but integrated reports are in a minority

 

 

Things that KPMG might want to consider:

  • On the matter of mandate CR reporting, we need to understand that there is no legal liabilityto disclose quality information. Companies might put and place information or data strategically in their CSR reports; and hence we need to closely examine the rules and laws mandating CR in each country. Also keeping in mind that we cannot mandate ethics - you either have them or you don’t?!
  • We might need to investigate how the 4100 companies examined are performing against their own CR policies and commitments.
  • The number of companies reporting atpresent is insignificant to the total number of business operating in the world. The latest data figures from the World Bank suggest a number of registeredcompanies of almost half a million in the UK alone, however according to the GlobalReporting Initiative on their Sustainability disclosure database; currently only 5854organisations are reporting; that’s worldwide not just in the UK.
  • Finally reporting should be a window to an organisation and should reflect its strategy but it shouldn’t be the reason/ starting point behind a sustainability strategy. Keeping in mind that sustainability doesn’t start with CR reporting. And so if the 250 companies mentioned in the report are destined to be the leaders in the market of Sustainability; we need to make sure that they are not leading others in the wrong direction and diverting from the true purpose of a CR report.

 

 

 

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