Corporate Responsibility Reporting Survey 2013 Exec Summary

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KPMGINTERNATIONAL

TheKPMGSurvey

ofCorporateResponsibilityReporting2013

kpmg.com/sustainability

ExecutiveSummary



TheKPMGSurveyofCorporateResponsibilityReporting2013:ExecutiveSummary

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Aboutthis

surveyWelcometotheKPMGSurveyofCorporateResponsibility

Reporting2013.

KPMG’ssurveyispublishedprimarilyforbusinessleaders,companyboardsand

corporateresponsibility(CR)andsustainabilityprofessionals.Itprovidesasnapshot

ofcurrentglobaltrendsinCRreportingwithbenchmarks,guidanceandinsightsto

helpcompaniesworldwidedeterminetheirownapproachestoCRreportingandto

assessandimprovethequalityoftheirreports.

Thesurveyisalsointendedtoprovideausefulreflectionofthecurrentstateof

CRreportingforotheraudienceswhotakeaninterestinthesubject.Theseinclude

investors,assetmanagersandratingsagencies,manyofwhomareincreasingly

factoringenvironmental,socialandgovernanceinformationintotheirassessments

ofcorporateperformance.

Corporatestakeholders,includingNGOs,customers,academicsandstudents,and

policymakersshouldalsofindusefulinformationandfoodforthoughtinthesepages.

ThisistheeightheditionoftheKPMGSurveyofCorporateResponsibilityReporting

andmarks20yearssincethefirstsurveywaspublishedin1993.Thisyearthe

researchismorebroad-rangingthanever,covering4,100companiesacross

41 countries(thelastsurveyin2011lookedat3,400companiesin34countries).

Thegrowthinthenumberofcountriesandcompaniescoveredinthissurveyisjust

oneindicationofhowCRreportinghasevolvedintoamainstreambusinesspractice

overthelasttwodecades.

Theformatofthissurveyhaschangedtoreflectthatevolution.Theresultsarenow

presentedintwoparts:

Part1:GlobaltrendsinCRreporting:aviewacross41countries(page18)

Thissectionlooksatthe100largestcompaniesbyrevenuein41countriestoexplore

howmanycompaniesareproducingCRreportsandotherissues,suchasthedrivers

forreporting,sectorvariances,andtheuseofstandardsandassuranceforCRreports.

Part2:Thequalityofreportingamongtheworld’slargestcompanies(page34)

Thissectionlooksspecificallyattheworld’slargest250companies.Itassesses

thequalityoftheirCRreports,identifiesleadersandusestheseexamplestooffer

guidanceandinsights.


©2013KPMGInternationalCooperative(“KPMGInternational”).KPMGInternationalprovidesnoclient

servicesandisaSwissentitywithwhichtheindependentmemberfirmsoftheKPMGnetworkareaffiliated.

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4 | IDH - The Sustainable Trade Initiative, Solidaridad and UTZ Certified

4 TheKPMGSurveyofCorporateResponsibilityReporting2013:ExecutiveSummary





Terminology used by N1

Methodology

Scopeofthisreport

Thesurveyisbasedonadetailed

studyofcompanyreportingonCR

performance,carriedoutbyKPMG

memberfirms’professionalsandbased

onpubliclyavailableinformationin

annualfinancialreports,stand-aloneCR

reportsandoncompanywebsites.It

includesinformationprovidedinboth

PDFandprintedreportsaswellasin

web-onlycontent.Reportspublished

betweenmid-2012andmid-2013

weresoughtinthefirstinstance.Ifa

companydidnotreportduringthis

period,informationfrom2011wasused.

Informationrelatingtoperiodspriorto

2011wasnotincludedinthissurvey.

The findingsarebasedonanalysisof

publiclyavailableinformationonly,

andnotoninformationsubmittedby

companiestoKPMGmemberfirms.

Figure1:

ReportingterminologyusedbyN100

43

25

14

6

6

22 1 1

Anoteonterminology:‘corporate

responsibility’versus‘sustainability’

Terminologyusedforreportingvaries

betweencompanies.Research

conductedforthissurveyshowsthe

mostcommonlyusedtermsgloballyare

‘corporateresponsibility’(14percent)or

‘corporatesocialresponsibility’

(25 percent)and‘sustainability’report

(43percent).Reportingundertheseand

othertermswasincludedinthissurvey.

Theuseoftheterm‘corporate

responsibility/CR’inthisdocument

shouldthereforebetakentoalsocover

theterm‘sustainability’andother

similarterms.

N100research

Thefirstpartofthisreportassesses

CRreportingamongthe100largest

companiesin41countries:4,100

companiesintotal.Thesearereferredto asthe“N100”companies.KPMG

memberfirmsidentifiedtheN100in

theircountrybyrevenuebasedona

recognizednationalsourceor,wherea

rankingwasnotavailableorwas

incomplete,bymarketcapitalization

or othersector-appropriatemeasures.

N100companiesincludebothpublicly-

listedcompaniesandthosewith

differentownershipstructuressuch

asprivately-ownedandstate-owned

businesses.Ninenewcountriesjoined

thesurveythisyear(seechartbelow),

whiletwocountriesincludedin2011are

notpartofthe2013survey(Bulgariaand

Ukraine).

KPMGanalystscollecteddataonthe

followingcriteriafortheN100:

• number of companies publishing

CRinformationinstand-alonereports

andannualreportsbycountryand

sector

• format and integration of CR reporting

• use of reporting guidelines and

standards

• rate and type of verication of

CRinformation,assuranceprovider

anddatarestatements.

Thecountriesincludedinthe2013

researchwere:

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

Taiwan

Sustainability

Corporate social responsibility (CSR)

Corporate responsibility (CR)

Sustainable development

Other

Corporate citizenship

Environmental and social report

People, planet, profit

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

Source: KPMG International, The KPMG Survey of Source: KPMG International, The KPMG Survey o f

Corporate Responsibility Reporting 2013, December 2013 Corporate Responsibility Reporting 2013, December 2013

5TheKPMGSurveyofCorporateResponsibilityReporting2013:ExecutiveSummary





Countries in the G25

Sectors in the G25

Figure2: Figure3:

G250companiesbylocationof G250companiesbyindustrysector(%)

headquarters(%)

13

27

6

8

128

5

3

3

3

2

2

2

2

2

211 1 11

13

25

711

7

6

6

5

4

4

3

32 2 2

USA Other:Finance, insurance Construction & building

Japan Malaysia & securities materials

China Austria Oil & gas Food & beverage

France Thailand Trade & retail PharmaceuticalsGermany Finland Automotive Other services

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 Companies included under ‘other services’ include

Brazil Luxembourg entertainment, healthcare, resorts, mail, package and freight

delivery. The number of companies in each of these sectorsIndia Swedenrepresent less than 1 percent of the G250.

Russia Venezuela

Mexico Source: KPMG International, The KPMG Survey of

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

Corporate Responsibility Reporting 2013, December 2013






G250research

Thesecondpartofthissurveyassesses

thequalityofreportingamongthe

world’slargest250globalcompanies.

Thesewereidentifiedasthetop

250 companieslistedintheFortune

Global500rankingfor2012.Inthis

surveytheyarereferredtoas

“the G250”companies.Theyoperate

in 14 industrysectorsandarehead

quarteredin30differentcountries.

KPMGanalystssoughttoassessthe

qualityofCRreportingbytheG250

againstsevenkeycriteria,whichare

basedoncurrentreportingguidelines

andKPMGprofessionals’viewof

leadingreportingpractices.

• Strategy,riskandopportunity

– reportingshouldincludeaclearassessmentoftheCRrisksand

opportunitiesabusinessfacesand

shouldexplaintheactionsitistaking

inresponse.

• Materiality–CRreportsshould

demonstratethatacompanyhas

identifiedtheCRissueswiththe

greatestpotentialimpactsbothon

thebusinessitselfandits

stakeholders.Companiesshould

makecleartheprocesstheyhave

usedtoassessmateriality,howthey

haveinvolvedstakeholdersinthis

process,andhowtheyhaveusedthe

materialityassessmenttoinform

theirreportingandmanagementof

CRrisksandopportunities.

• Targetsandindicators–companies

shouldusemeaningful(e.g.

timeboundandmeasurable)targets

andkeyperformanceindicatorsto

measureprogress,andclearlyreport

theirprogressandperformanceon

settargetsandobjectives.

• Suppliersandthevaluechain

–CRreportsshouldexplainthesocial

andenvironmentalimpactsofthe

company’ssupplychain,aswellas

thedownstreamimpactofproducts

andservices,andshowhowthe

companyismanagingthoseimpacts.

• Stakeholderengagement

– companiesshouldidentify

stakeholdersintheirCRreports,explaintheprocessusedtoengage

withstakeholders,andtheactions

takeninresponsetotheirfeedback.

• GovernanceofCR–reports

shouldmakeclearhowCRis

governedwithinacompany,who

hasresponsibilityforthecompany’s

CRperformanceandhowthe

companylinksCRperformanceto

remuneration.

• Transparencyandbalance

– CRreportsshouldbebalancedand

includeinformationonchallengesand

setbacksaswellasachievements.

OnthebasisofKPMG’sanalysis,scores

wereattributedtoeachoftheG250

companiestoreflecthowwelltheir

CRreportssatisfiedthecriterialisted

above.Answersforthecriteriawere

weightedtoproduceanoverallscore

outof100,withgreatestweightgiven

tostrategy,riskandopportunity,

materiality,targetsandindicatorsand

stakeholderengagement,toreflectthe

relativeimportanceofthesecriteriain

achievinghigh-qualityreports.

Asaresult,aclusterof10leading

companieswasidentified(eachof

whichscored90outof100,ormore)

aswellasthehighestscoringcompany

ineachofthe14industrysectors

representedintheG250.

Seniorexecutivesfrom14ofthese

top-scoringcompanieswereinterviewedtodiscovermoreabout

howtheyapproachCRreporting.

Thelessonslearnedareoutlinedon

page39ofthissurvey.




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88



Corporateresponsibilityreporting:isitreallyworthit?

Letusbehonest,corporate

responsibility(CR)reportingisnot

withoutitscritics.

Somepeoplesaythesereportsarea

wasteoftimeandmoney,believing

themtobesodenseandsodullthat

noonecouldpossiblybothertoread

them.Othersseethemasvehiclesfor

corporategreenwash,anopportunityfor

companiestoexaggeratetheirsocial

andenvironmentalcredentialswithout

anygenuineintentiontochange.

Someinthecorporateworldseethe

productionofthesereportsastoo

complexandtoocostlyandwith

dubiousreturn-on-investment.

WhileIunderstandtheconcerns

behindaccusationslikethese,Ithink

suchviewsarefortunatelyfastbecomingoutdated.

Yes,CRreportsareoftennotaneasy

readandcompaniesshouldseekto

communicatetheinformationin

moredigestibleandengagingways.

However,thatisnotanargumentfor

notreportingatall.

Yes,greenwashcanbeariskbutastime

goeson,stakeholders-fromNGOsand

pressuregroupstocustomersand

investors-areallbecomingmoreadept

atknowingthedifferencebetweenPR

spinandCRperformance.Itisnotso

easytopulltheproverbialwoolover

people’seyesanymore.

Yes,CRreportingdoneproperlydoes

requirefinancialandhumanresources,

butsodoallformsofcorporate

reporting.

Thepointthatisbeingmissedbymany

peoplewhomakethesecriticismsis

that,inthe21stcentury,CRreportingis

–orshouldbe-anessentialbusiness

managementtool.Itisnot–orshould

notbe-somethingproducedsimplyto

mollifypotentialcriticsandpolishthe

corporatehalo.

Weareallliving,andsomeofus

arerunningbusinesses,inaworld

undergoingunprecedented

environmentalandsocialchanges.

Rampantpopulationgrowthisfuelling

ever-increasingdemandsforlimited

resources.Unpredictableextreme

weatherisaffectingsuppliesof

keycommodities.Changingsocial

conditionsandexpectationsaredriving

bothincreasedspendingpowerand

socialunrest.

CRreportingisthemeansbywhicha

businesscanunderstandbothits

exposuretotherisksofthesechanges

anditspotentialtoprofitfromthenew

commercialopportunities.CRreporting

istheprocessbywhichacompanycan

gatherandanalyzethedataitneedsto

createlongtermvalueandresilience

toenvironmentalandsocialchange.

CRreportingisessentialtoconvince

investorsthatyourbusinesshasa

futurebeyondthenextquarterorthe

nextyear.

Whatencouragesmemostaboutthe

findingsofthisyear’sKPMGSurvey

ofCorporateResponsibilityReporting

arethesignsthatmanyoftheworld’s

largestcompaniesareusingtheprocess

ofCRreportingtobringCRand

sustainabilityrighttotheheartoftheir

businessstrategy,whereitbelongs.

Almostalltheworld’slargest250

companiesreportonCR.Ofthose

thatdo,ninein10usetheirreports

toidentifyenvironmentalandsocial

changesthatimpactthebusinessand

itsstakeholders.Eightin10reportthat

theyhaveastrategytomanagetherisks

andopportunities.Sevenin10report

thatthesechangesbringopportunities

fortheinnovationofnewproductsand

services.Anenlightened,butIsuspect

growing,minorityofaroundonethird

alsoreportopportunitiestogrowtheir

marketshareandcutcosts.

Wherethesecompanieslead,others

willfollow.Thedirectionoftravelisclear.

Ibelievethatthedebateonwhether

companiesshouldreportonCRornot

isdeadandburied.Asthissurveyfinds,

CRreportingappearstobestandardbusinesspracticetheworldover-

eveninthosegeographicregionsand

industrysectorsthatonlytwoyears

agolaggedbehind.

Thequestionscompaniesshouldask

themselvesnow,andwhichwehave

endeavoredtoanswerinthis

publication,are“whatshouldwereport

on?”and“howshouldwereportit?”.

And,mostimportantly,“howcanwe

bestusetheprocessofreportingto

generatemaximumvaluebothforour

shareholdersandforourother

stakeholders?”.

YvodeBoer

KPMG’sGlobal

Chairman,

ClimateChange&

SustainabilityServices

TheKPMGSurveyofCorporateResponsibilityReporting2013:ExecutiveSummary 9





Keyfindings

GlobaltrendsinCR reporting

CRreportingseesexceptional

growthinemergingeconomies

• There has been a dramatic increase in

CRreportingratesinAsiaPacificover

thelasttwoyears.Almostthree

quarters(71percent)ofcompanies

basedinAsiaPacificnowpublish

CRreports–anincreaseof22

percentagepointssince2011when

lessthanhalf(49percent)didso.

• The Americas has now overtaken

EuropeastheleadingCRreporting

region,largelyduetoanincreasein

CRreportinginLatinAmerica.

Seventysix percentofcompanies

intheAmericasnowreporton

CR,73 percentinEuropeand71percent inAsiaPacific.

KPMGVIEW

• The highest growth in CR reporting

since2011hasbeenseenin:India

(+53percentagepoints),Chile(+46),

Singapore(+37),Australia(+25),

Taiwan(+19)andChina(+16).

• CR reporting is now undeniably a

mainstreambusinesspractice

worldwide,undertakenbyalmost

threequarters(71percent)ofthe

4,100companiessurveyedin2013.

ThisglobalCRreportingrateisan

increaseof7percentagepoints

since2011whenlessthantwo

thirds(64 percent)ofthecompanies

surveyedissuedCRreports.

• Among the world’s largest 250companies,theCRreportingrateis

moreorlessstableat93percent.

Toreportornottoreport?

Thedebateisover

Companiesshouldnolongeraskwhetherornottheyshouldpublisha

CRreport.Webelievethatdebateisover.ThehighratesofCRreportinginall

regionssuggestitisnowstandardbusinesspracticeworldwide.Theleaders

ofN100orG250companiesthatstilldonotpublishCRreportsshouldask

themselveswhetheritbenefitsthemtocontinueswimmingagainstthetide

orwhetheritputsthematrisk.

Theimportantquestionsnoware“what?”and“how?”–or,inotherwords,

it isnowaboutthequalityofCRreportingandthebestmeanstoreach

relevantaudiences.Thisincludesassessingwhatismaterialforthebusiness,

properengagementwithstakeholders,havinganhonestcommunication

strategyincludingopennessaboutchallengesandputtinginplacethe

underlyingprocessestogatherandcheckdata.

Anarrowinggapbetweenleading

andlaggingindustrysectors

• In all sectors more than half of

companiesreportonCR,meaning

reportingcanbeconsideredstandard

globalpracticeirrespectiveof

industry.Twoyearsagolessthanhalf

ofthesectorshadreportingrates

above50percent.Atthesametime,

thegapbetweenthehighestscoring

andlowestscoringsectorhasnow

narrowedto22percentagepoints.

• Some sectors have taken big steps

overthepastyears.Theautomotive

andtelecommunications&media

sectorsnowhavesomeofthehighestlevelsofCRreporting

(77 percentand75percent,

respectively),whereasfiveyearsago,

in2008,theirCRreportingrateswere

amongthelowest(49percentand

47 percent).

CRinformationintheannualreport:

nowstandardpractice

• Over half of reporting companies

worldwide(51percent)nowinclude

CRinformationintheirannual

financialreports.Thisisastrikingrise

since2011(whenonly20percent

didso)and2008(only9percent).

Thedirectionoftravelisclearand

withmorethanhalfofcompanies

researchednowincludingCRdata

intheirfinancialreports,thiscan

arguablybeconsideredasstandard

globalpractice.






• However, including CR information in

theannualreportdoesnotimplythat

companieshaveembracedthetrend

ofintegratedreporting(IR):onlyone

in10companiesthatreportonCR

claimstopublishanintegratedreport.

UseofGlobalReportingInitiative

(GRI)guidelinesisalmostuniversal

• Seventy eight percent of reporting

companiesworldwiderefertothe

GRIreportingguidelinesintheirCR

reports,ariseof9percentagepoints

sincethe2011survey(over90

percentdosoinSouthKorea,South

Africa,Portugal,Chile,Braziland

Sweden).

• Among the world’s 250 largest

companiestherateisevenhigher

thantheN100:82percentofG250

companiesthatreportonCRrefer

totheGRIguidelinesasopposedto

78percentin2011.

Assuranceamongthelargest

companieshasreachedatipping

point

• Over half (59 percent) of the G250

companiesthatreportCRdatanow

investinexternalassurance.Thisisup

from46percentin2011.

• Two thirds of those companies that

investinassurancechoosetoengage

amajoraccountancyfirm.

KPMGVIEW

Boardsshouldgetbehind

integratedreporting(IR)Basedonmemberfirms’experiencesandresearchthereseemstobe

acceptanceofIRasthenextdestinationforcorporatereporting,butfew

companiesaredoingityet.Thereisalsosomenervousnessaroundwhether

IRcouldlimitratherthanenhancecommunicationaroundCRand

sustainability,specificallyfornon-financialstakeholdergroups.

IRcanbethecatalystforintegratedmanagement.KPMG’sexperiencein

SouthAfrica,whereIRisnowmandatory,showsthatthecloseinvolvement

ofCEOsandotherboardmembersisessentialtoreach‘oneview’ofthe

business,consensusononesetofmaterialissuesandonecombined

businessstrategy.Withanintegratedapproachtovaluecreationastheendobjective,boardsupportforIRneedstoscaleup.

KPMGVIEW

Assuranceisnolongerjustanoption

JustasCRreportingitselfisnowastandardbusinesspractice;itisalso

becomingstandardpracticetohaveCRandsustainabilitydataexternally

assured.Thetippingpointhasbeencrossed,withoverhalftheworld’slargest

companies(G250)nowinvestinginassurance.Ascanbeseenwithother

trendsinCRreporting,thelargestcompaniestendtosetthedirectionthat

othercorporationsfollow.

Manycompaniesnowfacesignificantpressuretogivestakeholdersconfidence

inwhattheysayandassurancecanhelpprovidethiscredibility.Thequestionfor

leadersisthereforenolonger“shouldweassureourCRdata?”rather“why

wouldwenot?”and“howdowechoosetheappropriateassuranceoptionthat

meetsstakeholders’needsandputsusaheadofourpeers?”.




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Figure 4:

Rate of corporate responsibility reportingacross 41 countries - 2011 and 2013 (% of companies reporting on CR)

Canada 79 83

Mexico 66 56

USA 83 86

Brazil 88 78Chile 27 73

Colombia – 77

Angola – 50

Israel 18 19AmericasNigeria 68 82

South Africa 97 98

UAE – 22

2011 2013 Middle East& Africa

Reporting rates in percentages

Spotlight on reporting requirementsThe following countries have high CR reporting rates or significant recent growth in CR reporting, related to reporting requirements:

Denmark France India Indonesia Japan Malaysia NigeriaFinancial Statements Grenelle II Act requires The top 100 listed Law No. 40/2007 Mandatory and Malaysia Stock Central Bank of Nigeria

Act requires large large companies to companies in India are requires Limited voluntary guidelines Exchange listing requires financial

companies to report report annually on CR required by the Liability Companies to for certain types of requirement that services companies to

on CR activities, or, if activities and advises Securities Exchange report on CR in the companies to report companies describe report on CR and the

they do not, to explain reports are subject to Board to report on annual report. Publicly- on environmental CR activities and law Securities and Exchangein their annual reports independent CR in their annual listed companies are impacts, including that all publicly listed Commission of Nigeria

why not. verification. reporting from financial also required to report GHG emissions. companies publish Corporate Governance

year 2012/13. on CR in the annual CR information in the Code recommends

report. annual report. companies disclose

CR practices.

22 TTheKPMGSurheKPMGSurvveeyofCorporateRyofCorporateResponsibilitesponsibilityRyReporting20eporting20113:Ex3:ExecutivecutiveSummareSummaryy





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 81Hungary 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. Hong Kong) 59 75

India 20 73

Indonesia– 95

Japan 99 98

Kazakhstan – 25

Malaysia – 98

New Zealand 43 47

Singapore 43 80

South Korea 48 49

Taiwan 37 56

Asia Pacific

Base: 4,100 N100 companies

Source: KPMG International, The KPMG Survey of


Norway Singapore South Africa UK USAorwegian Accounting Singapore Stock Exchange King Code of Companies listed on the Disclosure requirements

ct (and amendment (SGX) Sustainability Governance Principles London Stock Exchange of the U.S. Securities &

2013) requires large Reporting Guide for listed and King Report on must report on GHG Exchange Commission

ompanies to report companies and Code of Governance (King III), emissions from 2013. (SEC), Dodd-Frank Act

n social, environ- Corporate Governance and Johannesburg Companies Act requires requires disclosure onmental an anti- encourage CR reporting, Stock Exchange (JSE) large and medium sized conflict minerals and

orruption activities. and Energy Conservation

Act 2012 requires large

companies to report on

require companies to

publish an integrated

report including CR

companies to disclose

CR information relevant

to company performance

Presidential Executive

Order 13514 requires

federal agencies to report

Source: KPMG, United Nations Environment

Programme, Global Reporting Initiative and

Unit for Corporate Governance in Africa,

Carrots and Sticks, Sustainability reporting

energy use. performance. in the annual report. on CR performance. policies worldwide, 2013.

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Thequalityofreportingamongtheworld’slargestcompanies

Attentionmustbepaidtoreporting Table1:

10G250companiesscoremorethan90outof100forCRreportingquality:onthevaluechain

• In KPMG’s analysis, the average

qualityscoreachievedbyG250

companiesfortheirCRreportsis59

outofapossible100.Thisindicates

Company

A.P.MøllerMærsk

Country

Denmark

Sector

Transport

significantroomforimprovement BMW Germany Automotive

overall.CiscoSystems US Telecommunications&media

• Reporting on targets and indicators is FordMotorCompany US Automotive

mostwell-developedtodate,withan

averagescoreof68outof100.Hewlett-Packard US Electronics&computers

Large companiesalsoappeartobe ING Netherlands Finance,insurance&securities

reportingonmaterialityandstrategy, Nestlé Switzerland Food&beverage

atanaveragescoreof66and62.Repsol Spain Oil&gas

• A key area for improvement is

reportingonsuppliersandthevalue

chain,whereaverageG250reporting

qualitywasassessedat46outof100,

followedcloselybystakeholder

engagementandgovernance,bothat anaveragescoreof53outof100.

Europeancompaniesserveasan

exampleforotherregions

• Around one quarter of the G250

(63 companies)scorehigherthan

80 outof100acrossthequality

criteria,and10companiesscore

higherthan90.Thesecompaniesare

locatedinEuropeandtheUS.

• European G250 companies achieve

thehighestaveragequalityscorefor

theirCRreportsat71outof100.

This compareswithaveragescoresof

54forcompaniesintheAmericasand

50inAsiaPacific.

• Within Europe, companies in Italy

(85),Spain(79)andtheUK(76)score

mosthighly.

Siemens Germany Electronics&computers

Total France Oil&gas

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

IndustrieswithhighCRimpacts

showtrailingscores

• Large companies in the electronics

& computers,miningand

pharmaceuticalssectorsproducethe

highestqualityCRreports.Their

averagescoresare75,70and

70 respectively.

• However some sectors that face

significantCRrisksandopportunities,

andhavesignificantpotentialsocial

andenvironmentalimpacts,are

publishingreportswithscoresbelow

theglobalaverage.Theoil&gas,

trade&retail,metals,engineering&

manufacturingandconstruction&

buildingmaterialssectorshave

averagescoresof55,55,48and46

outof100,respectively.

Opportunitiesovertakerisks

• Most G250 CR reports (87 percent)

identifyatleastsomesocialand

environmentalchanges(or

‘megaforces’)thataffectthe

business.Climatechange,material

resourcescarcityandenergyandfuel

arethemostcommonlymentioned.

• More companies see opportunities

thanrisks:81percentofreporting

companiesidentifybusinessrisks

fromsocialandenvironmental

factors,whereasslightlymore

(87 percent)identifycommercial

opportunities.

• The most commonly cited

opportunityofsocialandenviron

mentalchangeisinnovationofnew






productsandservices,mentioned

by72percentofreportingG250

companies.Theopportunityto

strengthenbrandsandcorporate

reputationisthenextmostcommonly

cited(mentionedby51percentof

reportingcompanies),followedby

improvingmarketposition/growing

marketshare(36percent)andcutting

costs(30percent).

• Only one in 10 reporting companies

(12percent)identifiesimproved

accesstocapitalorimproved

shareholdervalueasanopportunity

ofsocialandenvironmentalchange.

• Reputational risk is the most

commonlycitedtypeofbusinessrisk,

mentionedby53percentofreporting

G250companies.

• Only a small number of G250

CRreports(5percent)include

informationonthefinancialvalueat

stakethroughenvironmentaland

socialrisk.

• A signicant number of reporting

companiesalsomentionothertypes

ofriskthataffectcompanyoperations

andnotjustcorporatereputations:

KPMGVIEW

Riskandopportunityneedstobe

linkedtovalue

Manycompaniesnolongerseecorporateresponsibilityasamoralissue,but

ascorebusinessrisksandopportunities.Moreandmoreinvestorsaccept

thatenvironmentalandsocialfactorsputcompanyvalueatstake.Thisleads

tothequestionofwhatthepotentialfinancialimpactsofthoserisksand

opportunitiescouldbeandwhatthecompanyisdoingtomitigateor

maximizethem.

Veryfewcompaniesareyetdeclaringanyquantifiedriskstothebottomline

intheirCRreporting.Companiesneedtobepreparedforthistochangeand

shouldstarttointegratethetopandbottom-lineimplicationsintheirbusiness

scenarioplanningandriskmanagement.

regulatoryrisk(48percent), • Most reporting companies in thecompetitiverisk(45percent),physical G250(83percent)stateintheir

risk(38percent),socialrisks(36 reportsthattheyhaveaCRstrategy.

percent)andlegalrisks(21percent).1 CompaniesintheAmericasaremost

likelynottorefertostrategy:threein

• The Americas is the only region 10donot.

wherecompetitiveandregulatory

risksarementionedmoreoftenin

G250CRreportsthanreputational

risks.

1Seepage48foradefinitionofdifferenttypesofrisks

TheKPMGSurveyofCorporateResponsibilityReporting2013:ExecutiveSummary 15





Thequalityofreportingamongtheworld’slargestcompanies

Figure5:

AveragequalityofG250reportsbysector

(Scoreoutofapossible100)

• Large companies in the electronics & computers, mining and

pharmaceuticalssectorsproducethehighestquality

CR 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








Figure6:AveragequalityofG250reportsbycountry2


• Large companies in Italy, Spain and the UK lead the world

forthequalityofCR reports.

• European G250 companies achieve the highest average

qualityscorefortheirCRreportsat68outof100.This

compareswithaveragescoresof51forcompaniesinthe

Americasand48inAsiaPacific.

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

Source: KPMG International, The KPMG Survey ofCorporate Responsibility Reporting 2013, December 2013

Figure7:

AveragequalityofG250reportsbycriterion


• G250 companies as a whole score most highly for targets

andindicators.Thegreatestimprovementneedstobemade

inreportingonsuppliersandthevaluechain.



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.




17



Moretransparencyneededon

materialityprocess

• Over three quarters (79 percent) of

G250companiesthatissueCR

reports,discusstheidentificationof

CRissuesthatarematerialtotheir

businessandstakeholders.

• There is room for improvement in

termsoftransparencyontheprocess

usedforidentifyingmaterialissues.

41percentofthereporting

companiesdonotexplaintheprocess

theyuseandonlyasmallminority(5

percent)assessmaterialissuesonan

ongoingbasis.

Targetsandindicatorsarenotyet

fullydefined

• One in eight reporting G250

companies(13percent)reportsno

CRtargetsatallandaquarter(26percent)donotrelatetheirCRtargets

tomaterialissues.

KPMGVIEW

Reportingonsuppliersandthevalue

chainislackinginsectorsatrisk

• Companies in the chemicals &

syntheticssectoraretheleastlikely

toreportonsupplychainissues.

Sixty percentofG250companies

inthissectorthatreportonCRdo

notreportonthesupplychain.

Companiesintheelectronics&

computerssectorarethemostlikely

todoso.

• G250 companies in Europe are the

mostlikelytodiscussindetailthe

environmentalandsocialimpactsof

theirproductsandservices.Almost

threequarters(73percent)of

reportingcompaniesinEuropedoso

withafurther23percentproviding

limitedinformation.IntheAmericas,

lessthanhalf(49percent)provide

detailedinformationondownstreamimpactsandthefiguredropstoless

thanonethird(32percent)inAsia

Pacific.

Supplychainreportingneeds

morefocus

Thissurveyshowsthatsomesectorswithcomplexsupplychains,carrying

potentiallycatastrophicenvironmentalandsocialrisks,havelowlevelsof

reportingonsupplychainissues.

Recentincidentsincludingoilspillsandfactorydisastersshouldremind

businessleadershowimportantitistomanagetheenvironmentalandsocial

impactsofthesupplychain.

Putsimply,ifcompaniesdon’tstartmanagingtheseissuestheywon’thavea

licensetooperateintheglobalized21stcenturyworld.Companiesurgently

needtobuildconfidenceamongcustomers,communities,investorsand

otherstakeholdersthattheirsupplychainsarebeingproperlymanaged.

Transparentcorporateresponsibilityreportingisaneffectivewaytobuildsuch

confidence.

CompaniesintheAmericasand

AsiaPacificstruggletoexplain

stakeholderengagementprocess

• G250 companies in Asia Pacic and

theAmericaslagbehindthosein

Europeforexplainingtheprocess

usedtoengagestakeholders.Fourin

10companiesintheseregionsoffer

noexplanationatall.

• The mining and metals, engineering &

manufacturingsectorsscorehighest

foridentifyingkeystakeholdersin

theirreports.

• Only one third of G250 companies

(31 percent)includestakeholder

commentsintheirCRreports.

FewlargecompaniesyetlinkCR

performancetoremuneration

• Around one quarter of companies(24 percent)reportthatthecompany

Boardhasultimateresponsibility

forCR.

• In most G250 companies (61 percent)

CRismanagedonaday-to-daybasisby

adedicatedCRorsustainabilityunit.

• Only one in 10 G250 companies (10

percent)reportsaclearlinkbetween

CRperformanceandexecutiveor

employeeremuneration.

Transparencyandbalanceislimited

formostcompanies

• Only one in ve G250 companies

(23 percent)publishesawell-

balancedreportthatdiscusses

CRchallengesandsetbacksaswell

assuccesses.Companiesinthefood

&beverage,pharmaceuticals,and

electronics&computerssectorsare

mostlikelytodoso.






AboutKPMG’sClimateChange&SustainabilityServices

AboutKPMG’ssustainabilityservices

KPMGisoneofthepioneersof

sustainabilityconsulting–someKPMG

memberfirmsfirstofferedsustainability

servicesover20yearsago–whichgives

KPMG’snetworkalevelofexperience

fewcanmatch.Todayournetwork

employsseveralhundredsustainability

professionalslocatedinaround

60countries.

Localknowledge,globalexperience

OurglobalnetworkmeansKPMG

professionalshavein-depth

understandingoftheeconomic,

political,environmentalandsocial

landscapeswhereveryourorganization

mayoperate.Atthesametime,our

memberfirmsarecloselyconnected

throughourglobalCenterofExcellence.

Thismeansthat,whateverchallenge

youface,wecanputtogetherateam

withinternationalexperiencetohelp

you.

SustainabilityPlus

Wedon’tworkinasustainability

vacuum.Weworkside-by-sidewith

KPMGprofessionalsfromtax,auditand

advisoryincludingsectorspecialists,

managementconsultants,tax

accountantsandexpertsinIT,supply

chain,infrastructure,international

developmentandmore.Youwon’t

receivegenericadviceandone-size-fits

allsolutions,insteadyoucanbenefit

fromahand-pickedmulti-disciplinary

team.

Results-driven

KPMGfirmshelpclientstodevelop

future-fitbusinessstrategiesbasedon

solidunderstandingoftheissues.We

strivetothinkbigandchallenge

convention,butwithimplementationin

mind,workingwithyoutofindpractical

solutionsthatcancreatesuccessand

growththroughchange.

Foresightneedsinsight

OurglobalCenterofExcellencefocuses

onthought-provokingresearch,

analyzingdriversofglobalchangeand

developingpracticalbusinessresponses

thatyoucanapplywithinyourown

organization.

SpecialistsinCRreportingand

assurance

Reportingonenvironmentalandsocial

performanceisnowleadingpracticein

businesswhereverintheworldyou

mayoperate.

Stakeholdersfrominvestorsto

NGOswanttoknowthatacompany

hasidentifieditsmostsignificant

environmentalandsocialrisksand

impacts,andisaddressingthem

effectively.Theyalsoneedtoknowthat

theinformationprovidedbyacompany

isaccurate,credibleand

canbetrusted.

Momentumisalsobuildingtowards

integratedreportingwhichprovidesa

holisticoverviewofanorganization’s

financialandnon-financial

performance.

KPMGmemberfirmscanhelpyour

organizationto:

• Understand what environmental and

socialinformationyou

shouldreport

• Choose the right reporting approach

andframeworksforyourbusiness

• Integrate nancial and non-nancial

informationinyourreporting

• Report information for specic

purposessuchastheCarbon

DisclosureProjectandsustainability

indices

• Benchmark the quality of your

reportingagainstindustrypeers

• Provide independent assurance for

yourinternalandexternalreporting

systems

• Provide independent assurance of

yoursustainabilityperformance

reporting

• Verify the sustainability performance

ofyoursuppliers.




19



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Documents

Corporate Responsibility Reporting Survey 2013 Exec Summary