This is the fifth in a series of surveys conducted by KPMG exploring reporting trends around the globe. The first was conducted in 1993 and it is not surprising that much has changed over this time.
Most notably has been the number and breadth of reporters. Based on information available in the public domain almost 80% of the largest 250 companies globally have issued reports, up from 50% in 2005.
Reporting levels are at their highest in the UK and Japan but are also on the rise in France, Norway, Switzerland, Brazil and South Africa. In addition, eastern European nations are starting to embrace greater disclosure, though not yet always in a formal report. Keen to show they can meet western expectations of environmental and social performance this is a region to watch.
Perhaps showing an increased sophistication in the implementation of CSR, three quarters of the reports issued include an overview of their sustainability strategy and associated objectives. This is also reinforced in the most recent guidelines from the Global Reporting Initiative (GRI), known as G3. These emphasise reporting the overall approach undertaken by the organisation in addition to specific performance indicators.
The GRI remains the dominant framework, used as the basis for around 75% of reports.
Also evidence of a growing sophistication is a shift away from risk management approaches towards approaches centred around learning and innovation.
Three main topics emerged as the most commonly reported, regardless of geography or industry - governance, climate change and supply chain.
Whilst many make reference to governance issues, only 68% do this within an explicit corporate governance section. Some 92% of companies disclose their code of conduct but only 59% report on non-compliance with the code.
The report highlights the location and responsibilities of the CSR or sustainability team as an indicator of the function’s importance or priority within the business. Increasingly this is occurring in specialised units rather than within a communications or public relations department.
With the rise of programmes like the Carbon Disclosure Project and the heightened attention to climate change it is not surprising to find it included in the majority of reports. What is perhaps more surprising is that 41% do not disclose their carbon footprint. Conversely, only 8% report on emissions within their value chain.
Whilst mining companies and those in the utilities, metals and engineering, oil and gas and chemicals industries address climate change risks in their reports, many from the construction, forestry and transport industries do not.
Similarly to the Code of Conduct example many organisations discuss similar codes in place for suppliers. However, to date only half of those disclose the details of how it is implemented and monitored, and even fewer the results of these activities.
The role of assurance
Forty per cent of reports are formally assured, up from 30%. In addition, a further 27% contain other types of third party commentary including comments from key influential stakeholders or from their stakeholder panels.
Reports are most commonly assured in France, Spain, South Korea and Italy. Interestingly, in the top two reporting nations, the UK and Japan, only 25% and 50% of reports are assured respectively.
In addition, despite growing concerns about the impacts of these industries less than 10% of reports from the retail, forestry and construction sectors are assured.
A small number of reports, less than 10%, have begun to integrate financial and non-financial reporting. A larger proportion refer to their CSR reports in their annual financial reports.
More and more companies are reporting online and companies are generally getting better at engaging stakeholders when deciding what to report, however, this remains an area where further improvement can be made with only 38% of reporters publishing stakeholder feedback.
CSR reporting is growing in size and sophistication as companies seek to better articulate the value of their CSR strategies and approaches.
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