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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
0www.kpmg.com/crreporting |
Theroad
ahead
The KPMG Survey of Corporate
Responsibility Reporting 2017
kpmg.com/crreporting
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
1www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International
have any such authority to obligate or bind any member firm. All rights reserved.
Contents
About this survey 2
Research samples: the N100 and G250 3
Executive Summary 4
What do these findings mean for business? 6
Quantitative global trends in corporate responsibility reporting
N100 companies continue to catch up with the G250 9
Reporting in Latin America grows, Eastern Europe yet to catch up 11
Regulation, stock exchanges and investor pressure drive national
reporting rates
15
Lagging sectors gain ground 20
More companies include CR data in annual financial reports 21
Integrated Reporting takes off in certain countries 24
Assurance of CR data continues steady growth 26
GRI remains the most popular framework for CR reporting 28
Acknowledging the financial risks of climate change
Three quarters of companies worldwide yet to acknowledge climate
change as a financial risk
30
Very few companies quantify climate risks or model their financial
impacts
31
What is driving acknowledgement of climate risk in the leading
countries?
32
Mixed picture for TCFD priority sectors among the N100 33
Climate risk reporting: the world’s largest companies (G250) 34
Linking CR activity to the Sustainable Development Goals
SDGs emerge as a clear trend in CR reporting 39
SDG reporting among the world’s largest companies 42
Acknowledging human rights as a business issue
Human rights is firmly on the agenda as a global business issue 44
Companies in India, the UK and Japan are the most likely to discuss
human rights
46
Mining companies are the most likely to acknowledge human rights 47
Linking carbon targets to the global climate goal
More companies set carbon targets 49
Most carbon targets are not linked to greater climate goals 50
How we can help 51
Methodology 52
Acknowledgments 56
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
2www.kpmg.com/crreporting |
Aboutthissurvey
Welcome to the KPMG Survey of Corporate
Responsibility Reporting 2017.
This is the 10th survey since the first edition was published in 1993. This
year, KPMG member firm professionals reviewed corporate
responsibility (CR) and sustainability reporting from 4,900 companies in
49 countries and regions, making this the most extensive survey ever.
The survey provides a detailed look at global trends in CR reporting and
insights for business leaders, company boards, and CR and
sustainability professionals. It is designed to offer guidance on good
practice to corporate professionals who assess and prepare their own
organization's CR reporting. It also serves as a guide to investors, asset
managers and ratings agencies who now factor environmental, social
and governance (ESG) information into their assessments of corporate
performance and risk.
The survey is based on several months of research, with KPMG
member firm professionals analyzing thousands of company financial
reports, corporate responsibility reports, and websites. The number of
companies and markets involved in the survey means that it is one of
the most comprehensive and authoritative pieces of research on CR
reporting available worldwide.
This year the survey spotlights four major
emerging trends within CR reporting:
— Reporting on climate-related financial risk
— Reporting on the UN Sustainable Development Goals
(SDGs)
— Reporting on human rights
— Reporting on carbon reduction targets
Lead authors
José Luis Blasco
Global Head, KPMG
Sustainability Services
As well as leading KPMG’s global Sustainability Services network, José Luis also heads the
Sustainability Services practice at KPMG in Spain and has served as Head of Governance, Risk and
Compliance at KPMG in Spain. He joined KPMG in 2003 after working in the third sector, and was
appointed a Partner in 2008.
José Luis advises major companies on incorporating the risks and opportunities of environmental
and social megatrends into their corporate strategies. He plays an active role in many well-known
sustainability initiatives and organizations including the GRI, International Integrated Reporting
Council (IIRC), World Business Council for Sustainable Development (WBCSD) and the United
Nations Environment Programme (UNEP).
Adrian King
KPMG Global Sustainability
Reporting & Assurance Leader
Adrian is the Partner in Charge of the Sustainability Services practice at KPMG in Australia. He has
more than 25 years’ experience working with global public and private companies to provide
financial and non-financial advisory, reporting and assurance services. Adrian works with clients to
help them respond to all financial and non-financial challenges, with a particular focus on health &
safety, environmental and community issues in order to manage risk, create value and achieve a
competitive advantage. Adrian was the Global Head of KPMG’s Sustainability Services network
from 2014 to 2017.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
3www.kpmg.com/crreporting | 3www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Researchsamples:theN100andG250
Throughout this document, the reader will see statistics quoted for two
different research samples: the “N100” and the “G250”.
N100
The N100 refers to a worldwide sample of 4,900
companies comprising the top 100 companies by
revenue in each of the 49 countries researched in
this study. These N100 statistics provide a broadbased
snapshot of CR reporting among both large
and mid-cap firms around the world.
G250
The G250 refers to the world’s 250 largest
companies by revenue based on the Fortune 500
ranking of 2016. Large global companies are
typically leaders in CR reporting and their behavior
often predicts trends that are subsequently
adopted more widely.
For more details on these research samples, a full list of the 49 countries and
regions covered and the research methodology see page 52.
For more information about the survey and to explore the data in more detail using an interactive online
tool, visit kpmg.com/crreporting.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
4www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
4www.kpmg.com/crreporting |
ExecutiveSummary
Quantitative trends in corporate responsibility reporting
CR reporting is standard
practice for large and
mid-cap companies
around the world.
Around three quarters of the
4,900
companies studied in this
survey issue CR reports.
See page 9.
history of this survey, every sector has a
reporting rate of
All industry sectors show a healthy rate
of CR reporting:
or more.
See page 20.
60%
for the first time in the
Latin America has seen
a surge in CR reporting
in the last two years,
driven by regulation, foreign investor
demand and the need to build and protect
public trust. See page 13.
“Integrated Reporting” has
taken off in Japan, Brazil,
Mexico and Spain. See page 24.
Most of the world’s
biggest companies now
integrate financial and
non-financial data in their
annual financial reports
(78 percent), suggesting they believe CR
information is relevant for investors. See page 21.
Assurance of CR data has more than doubled
among the G250 in the last
12years
(now 67 percent of reports),
indicating that the largest companies
see value in promoting the reliability
of this information. Assurance is also
increasing at a steady rate among
N100 companies. See page 26.
GRI remains the most popular
framework for CR reporting.
Around two thirds of reports
analyzed in this survey apply the
GRI G4 Guidelines or Standards.
See page 28.
Acknowledging the financial risks
of climate change
This survey confirms
that a majority of
companies do not
acknowledge climate
change as a financial risk
in their annual reports
72%
of the
N100 do not
52% of the
G250 do not
Of the minority that do acknowledge climate risk,
very few attempt to quantify or model the business
value at stake. The statistics support the need for
initiatives such as the Financial Stability Board’s
Task Force on Climate-related Financial Disclosures
(TCFD). See page 30.
Linking corporate responsibility activity
to the UN Sustainable Development
Goals (SDGs)
The SDGs have
resonated strongly with
businesses worldwide in
less than two years
since their launch. Many
already connect their CR
activities to the SDGs
43%
of G250
reporters
39%of N100
reporters
This is a clear trend that has emerged in a short
space of time and strongly suggests that the SDGs
will have a growing profile in CR reporting over the
next two to three years. See page 39.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
5www.kpmg.com/crreporting | 5www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms
are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind
KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.
Acknowledging human rights as a business issue
Human rights is firmly on the
agenda as a global business
issue. A clear majority of CR
reports now acknowledge the
issue of human rights: around
three quarters of the N100
(73 percent) and nine out of ten
(90 percent) in the G250.
However, the lack of a public human rights policy at many
companies suggests there is still work to do, and only a
minority of businesses are yet prepared to align themselves
publicly with the UN Guiding Principles on Business & Human
Rights. See page 44.
Linking carbon targets to the global climate goal
A solid majority of reports from the world's largest
companies (G250) now disclose targets to cut their
carbon emissions: the percentage in 2017 stands at
67%Yet, most of these firms do not relate their own targets
to the climate goals being set by national governments,
regional authorities or the UN, such as The Paris
Agreement which commits countries to limit global
warming to well below 2°C. See page 49.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
6www.kpmg.com/crreporting |
Whatdothese
findingsmean
forbusiness?
This survey is arguably the most
comprehensive overview of
corporate responsibility reporting
trends worldwide. It is packed full
of data, but what does all this
data actually mean? If business
leaders have no time to continue
reading beyond this point, what
are the key points I want them to
take away from this report?
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties,
nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
6 | www.kpmg.com/crreporting
José Luis Blasco
Global Head, KPMG
Sustainability Services
jblasco@kpmg.es
@JLBlasco_KPMG
linkedin.com/in/joseluisblasco/
It is a tough question because there is so much of
interest in these pages. Yet when I reviewed the data and
asked myself this same question, I came up with three
important messages that I want to get across. Firstly, get
ready for more reporting regulation because it is on the
way. Secondly, be clear that reporting integration is the
new normal and “non-financial” is the new financial.
Finally, remember that from here on in, it’s all about
reporting your impact not just statistics.
Get ready for more reporting regulation
In the many interviews we conducted for this survey,
regulation emerged as a clear and recurrent theme. We
heard how governments and stock exchanges the world
over - from Latin America to Japan, the US and the EU, to
India and Taiwan - are bringing in new layers of regulation
for environmental, social and governance (ESG)
disclosure. We heard how voluntary guidelines are rapidly
transitioning into mandatory reporting requirements in
many parts of the world.
My message to business here, is to expect more of the
same. Countries that do not yet have reporting regulation
are likely to introduce it. Those that have it are likely to
strengthen it and to bring in new requirements for
reporting on critical issues such as climate change and
human rights. Voluntary frameworks are likely to continue
to become compulsory. Levels of disclosure will likely
continue to ratchet up.
While initiatives to standardize reporting approaches will
carry on and should be encouraged, it is likely that the
international reporting landscape will continue to be
fragmented and dynamic for the foreseeable future.
Business leaders need to ensure their organizations are in
touch with global reporting trends and in a good position
to anticipate and respond to change. As demands for
disclosure continue to grow, firms need to ensure that
they have up-to-date and efficient systems in place to
collect, analyze and disclose the necessary ESG
information and that they are able to convince regulators,
investors and others of the reliability of that information.
Reporting integration is the new normal and “nonfinancial”
is the new financial
There was a time when corporate responsibility
information was considered strictly “non-financial” and
not relevant to include in annual financial reports. The
corporate responsibility report as we know it today was
born from those beliefs. But times are changing.
As our survey shows, more than three quarters of the
world’s largest 250 companies now include at least some
“non-financial” information in their annual financial
reports. And where the largest firms lead, others
inevitably follow. We can also see that some countries
appear to be enthusiastically adopting the concept of
integrated financial and “non-financial” reporting, in many
cases nudged along by regulation or stock exchange
guidelines.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
7www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International
have any such authority to obligate or bind any member firm. All rights reserved.
7www.kpmg.com/crreporting |
So my final message, is to go
beyond the statistics and explore
how to assess and communicate
impact. I believe there will be
significant benefits for those who
choose to lead in this field.
I hope you enjoy reading this
survey and I would be delighted
to hear your thoughts on it.
Please do feel free to contact me
by email,Twitter or LinkedIn.
Finally, may I extend my warmest
thanks to the many KPMG
professionals who contributed so
much hard work to the
production of this survey and to
the experts at other organizations
who so generously gave us their
time to provide insight on the
findings. I am very grateful.
Furthermore, the conventional lines between “financial”
and “non-financial” are not only beginning to blur, but in
some examples are breaking down completely. It’s
important to note that the recommendations of the
Financial Stability Board’s Task Force on Climate-related
Financial Disclosures (TCFD) apply to the disclosure of
climate risk in annual financial reports not in corporate
responsibility reports.
I believe this is the start of a shift that will gather pace in
the next few years. Environmental and social issues such
as climate change, water scarcity and human rights will
increasingly be seen as financial rather than non-financial
issues. Companies will be expected to be transparent not
only about their own performance on these topics, but
also about the financial risks and opportunities they face
from them and the likely effects on the business’s value
creation in both the short and long term.
My message here is directed at Chief Financial Officers:
the merging of financial and “non-financial” reporting will
accelerate quickly in the next few years and it is the
finance teams that will be expected to deliver the
disclosures. The first step to effective disclosure is for
finance teams to gain a sound understanding of the
material environmental and social issues that have
potential to affect the company’s financial performance.
Most companies have resident experts who can help,
namely their sustainability teams.
So increased dialogue and collaboration between the
finance and sustainability functions – which are too often
separate and siloed – will be critical.
It is all about impact not just statistics
Traditional corporate responsibility reporting has focused
on reporting statistics such as how many cubic meters of
water a company has saved, how many tons of carbon it
has reduced or how many employees it has sent on
training programs. Such statistics increasingly lack real
meaning without information on context and impact. The
future of corporate responsibility reporting is all about
communicating impact, not statistics.
Financial stakeholders - including investors, lenders and
insurers – need to know what impacts your business is
having on society and the environment, and how this
could impact your business performance in the future.
They want to see that you understand these impacts and
to understand what your business response is. For
example, is your company taking action that reduces
risks, unlocks opportunities or builds capacity for future
value creation?
In the responsible investment space, impact investing is a
growth area that will increase pressure on companies to
disclose their impacts on society in a measurable and
comparable way.
The UN’s Sustainable Development Goals (SDGs) are
fueling demands for impact data. As this survey
highlights, simply linking corporate responsibility activity
thematically to the SDGs is not enough. People want to
know how companies are contributing to achieving the
goals and what the actual impact of those positive
contributions is. Similarly, they want to know how
company activities are exacerbating the challenges the
SDGs seek to solve, and what that negative impact is in
real terms. It is not just civil society and NGOs that want
this information, we are seeing a number of large
institutional investors exploring how they can align their
investment approaches with the SDGs. Such investment
strategies will inevitably require impact disclosure from
business.
Base:
Source:
4,900 N100 companies
The KPMG Survey of Corporate responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
8www.kpmg.com/crreporting |
Quantitativeglobal
trendsincorporate
responsibility
reporting
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
9www.kpmg.com/crreporting |
N100companiescontinuetocatchupwiththeG250
The underlying reporting rate for
N100 companies has risen by 2
percentage points since 2015: up
from 73 to 75 percent.1
This means that N100 companies continue to
catch up steadily with the G250. The G250
reporting rate has been stable at between 90
and 95 percent in the last four surveys.
There have been significant increases since
2015 in certain countries such as Mexico
(+32 percentage points), New Zealand (+17
percentage points) and Taiwan (+11
percentage points) where new regulation has
driven reporting rates higher (see page 15).
Growth in global CR reporting rates since 1993
12%
18%
24%
18%
41%
53%
64%
71%
73% 72%
35%
45%
64%
83%
95%
93% 92% 93%
0
10
20
30
40
50
60
70
80
90
100
1993 1996 1999 2002 2005 2008 2011 2013 2015 2017
N100 G250
75%
Underlying
trend1
93%
1 The underlying trend of 75 percent applies when looking at the same
sample of countries in 2015 and 2017. The overall N100 rate in 2017 is
72 percent due to the inclusion of 5 new countries with relatively low
reporting rates in the 2017 research.
Base: 4,900 N100 companies and 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
10www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
10www.kpmg.com/crreporting |
Ian Mackintosh
Chair, Corporate
Reporting Dialogue
Greater alignment of
reporting frameworks
will help continue
growth
The corporate responsibility
reporting rates demonstrated in
KPMG’s 2017 survey are very high and
are testament to the huge progress
that has been made over the years.
Over the next five years, we expect to
see greater alignment and consistency
The one quarter of N100 companies in this year’s survey that
are not reporting ignore sustainability at their peril. If they want
to remain in business in the long term, they need to start
thinking about it immediately. The first step is to start reporting
internally. By considering the issues we’re facing globally and
understanding how they could affect business models – both
positively and negatively – these companies can adapt
accordingly. If they don’t act, it’s unlikely they will remain in
business.
among the various reporting standards and frameworks.
This should make reporting easier for companies and give
governments and regulators greater clarity when formulating
new, or reviewing existing, legislation. This should contribute
to continued growth in reporting rates in that same period.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
11www.kpmg.com/crreporting |
Reportingin
LatinAmerica
grows,Eastern
Europeyetto
catchup
CR reporting in the Americas
region has risen by an impressive
6 percentage points in the last
two years.
As a result, it has overtaken the Asia Pacific
region to become the leading region for CR
reporting globally. This growth has come
predominantly from Mexico where reporting
rates have jumped from 58 percent in 2015
to 90 percent in 2017, driven by regulatory
change. This has been complemented by
growth of 5 percentage points in Colombia
and the US and by already-high rates in
Brazil.
CR reporting rates in Asia Pacific have
stabilized following a surge of 8 percentage
points between 2013 and 2015. Several
countries with the highest CR reporting
rates in the world, such as Japan, India,
Malaysia and Taiwan are in the Asia
Pacific region.
Mixed picture in Europe, Middle East & Africa continues
In Europe, the picture is also mixed. The underlying trend is one of growth (up 3 percentage points) but the divergence
between Western and Eastern Europe observed in 2015 remains.
The rate of reporting in Eastern Europe is still relatively low at 65 percent, despite an increase of 4 percentage points since
2015. Eastern European countries may be closing the gap on the rest of the region but are doing so slowly. Clearly, the
impact of the European Directive on Non-Financial Reporting has yet to be fully felt.
There has been a slight decline of 1 percentage point in the Middle East & Africa where reporting rates are traditionally
low. Low rates of reporting in Angola, Oman and Israel are offsetting high rates in South Africa and Nigeria.
Corporate responsibility reporting rates by region
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent
firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to
obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to
obligate or bind any member firm. All rights reserved.
Middle East
& Africa
EuropeAsia PacificAmericas
20172
83% 78% 77% 52%
11www.kpmg.com/crreporting |
69%
76% 77%
49%
71%
79%
71% 73% 74%
61%
54% 53%
0
20
40
60
80
100
2011 2013 2015
Americas Asia Pacific Europe Middle East & Africa
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
2 The underlying trends of 78 percent for Asia Pacific and 77 percent for Europe apply when looking at the same sample of countries in both 2015 and 2017. The overall Asia Pacific regional rate
in 2017 is 77 percent and the overall European regional rate in 2017 is 73 percent due to the inclusion of new countries with relatively low reporting rates in the 2017 research.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
12www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client
services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All
rights reserved.
12www.kpmg.com/crreporting |
Olivier
Boutellis-Taft
Chief Executive,
Accountancy
Europe
Full effect of EU Directive will be seen
in 2019 or 2020
The EU Non-Financial Reporting Directive (which requires large companies in the EU to
disclose social, environmental and diversity information) is the most significant EU-wide legislative
initiative to promote corporate responsibility reporting. It has likely already had some effect on CR
reporting rates in the EU, but it is difficult to say what the impact has been so far because the
process of transposing the Directive into the national laws of EU countries has been a bumpy one.
Nearly half the EU Member States missed the December 2016 deadline for transposition.
While the Directive provides high level guidance, Member States have considerable flexibility in
terms of how to apply it in their national laws. This means that states that already had existing CR
reporting legislation – such as the UK, Germany and Sweden – have been able to shape the
requirements of the Directive according to those existing regulations, thus ensuring some
continuity for businesses. However, businesses in the many states that lacked existing regulation
have had to play a waiting game to see how the Directive would be applied in national law.
We believe that the real impact of the Directive will start to become evident during 2019 or even 2020, following these
delays in transposition and a transitional period as companies become familiar with the legislation and introduce new
internal reporting systems or adapt their existing ones.
Despite the delays and teething troubles, the Directive is a key step to increasing the importance of CR reporting,
particularly in those EU Member States where no such requirements previously existed. However, the true benefits of
non-financial reporting will be felt only when it is properly integrated with financial reporting and not treated as a separate
exercise by a different silo within the organization. Reporting is only an instrument; the benefits will come once CR
objectives and practices are fully embedded in the business, which reporting can demonstrate but cannot achieve on its
own.
Although we welcome the flexibility that the Directive allows governments in driving the adoption of CR reporting, we
believe we should be moving towards an international framework that would both streamline the process for new
reporters and also increase consistency between reports. In the meantime, it is crucial for businesses to focus their
reporting on the CR issues of prime importance to them and their stakeholders, and ensure these issues are considered at
the top level of management. This includes the identification of the key risks and strategies to minimize these risks, and to
maximize opportunities. This, in turn, will lead to better returns for investors.
We are already seeing a strong correlation of increased returns for investors from companies that truly embrace CR issues
and the EU Directive should result in an increase in reporting that further demonstrates this link. Once investors are
convinced of the benefits of embedding reporting into the organization at all levels then we will see a further surge in CR
reporting.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
13www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
13www.kpmg.com/crreporting |
Ricardo Zibas
Director,
Sustainability
Services, KPMG in
Brazil
The view from Latin America
A number of factors are driving CR reporting in Latin
America. Firstly, the region is rich in natural resources and
companies need a social license-to-operate in order to access these
resources. Many such companies build infrastructure like hospitals
and schools in order to enhance their relationships with local
communities and this in turn has led to a culture of CR reporting as
companies seek to demonstrate their contributions to society.
Secondly, Latin American companies can face high non-tariff trade
barriers on exports such as demands from foreign governments
and consumers for environmental or human rights certification and,
increasingly, fair trade certification. Reporting helps to overcome
such barriers.
Thirdly, CR reporting in Latin America has increased as companies
attempt to retain or regain public trust in the wake of high profile
corporate scandals, such as the Samarco dam collapse in 2015 –
the worst environmental disaster in Brazilian history.
These trends are combining with new developments in government regulation, stock
exchange requirements and stakeholder pressure to drive high levels of reporting. In order to
achieve even higher levels across the region in the next few years, more mandatory and
properly-enforced government or industry regulation will be needed. Given recent trends,
I expect this to take place.
CR reporting rates: North America
vs Latin America
84%
74%
88%
81%
65
70
75
80
85
90
North America Latin America
2015 2017
Base: 700 N100 companies in the Americas
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
14www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
14www.kpmg.com/crreporting |
Gheorghita
Diaconu
Director,
Sustainability
Services,
KPMG in Romania
The view from Eastern
Europe
Many businesses in Eastern Europe
are still focused on the financial bottom line
rather than the triple bottom line - it’s fair to
say that a culture of sustainability is yet to
properly take hold across the region. In
Romania specifically, much of the 6
percentage point reporting growth observed
since 2015 has come as a result of a
commitment to transparency by
multinationals that operate in the country.
The EU Directive on Non-Financial Reporting
was transposed into Romanian law last year.
Despite this, many companies in Romania
and across Eastern Europe are still just
beginning to understand the topic and build
their capacity to respond.
However, I expect to see steady growth in CR reporting in Eastern Europe
over the next few years and improving quality as regulatory requirements,
market pressure and increasing awareness take effect.
CR reporting rates: Western Europe
vs Eastern Europe
79%
61%
82%
65%
0
10
20
30
40
50
60
70
80
90
Western
Europe
Eastern
Europe
2015 2017
3
Base: 2,400 N100 companies in Europe
Source: KPMG Survey of Corporate Responsibility Reporting 2017
3 The underlying trend of 82 percent applies when looking at the same sample of
countries in 2015 and 2017. The overall Western Europe rate in 2017 is 75 percent
due to the inclusion of 3 new countries with relatively low reporting rates in the
2017 research.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
15www.kpmg.com/crreporting |
Regulation,stockexchangesandinvestorpressuredrive
nationalreportingrates
Greatest growth seen in Mexico, New Zealand andTaiwan
Governments, regulators and stock exchanges continue to play a key role in driving up CR reporting rates around the world. In the three countries which have experienced the greatest
increases in reporting since 2015 - Mexico (+32 percentage points), New Zealand (+17 percentage points) and Taiwan (+11 percentage points) - a mix of new regulation, stock exchange
requirements and investor pressure have been instrumental in increasing reporting.
There has also been strong growth in CR reporting across a number of EU countries. Finland, Ireland, Greece and the Czech Republic have all recorded increases of 8 percentage points
between 2015 and 2017. While the full effect of the EU Non-Financial Reporting Directive is not expected to be felt for another two years or so, it is possible that awareness of the
Directive has helped to boost reporting rates in some EU countries. Under the Directive, companies that do not disclose their social, environmental and Board diversity policies can be
named publicly. This risk of reputational damage may already have convinced some non-reporters to start reporting with more expected to follow suit.
CR reporting has also increased by 8 percentage points in the United Arab Emirates (UAE) since 2015.
National rates of CR reporting, 2015 and 2017
Countries with CR reporting rate higher than 90%
98% 99%
2015 2017
UK
97% 99%
2015 2017
Japan
100% 99%
2015 2017
India
99% 97%
2015 2017
Malaysia
97% 94%
2015 2017
France
94% 94%
2015 2017
Denmark
95% 92%
2015 2017
South Africa
87% 92%
2015 2017
US
58% 90%
2015 2017
Mexico
Presence of CR reporting
regulation in the country
Government Mandatory Voluntary Stock Exchange Mandatory Voluntary
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Note: 2015 CR reporting rate restated for South Africa
Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
16www.kpmg.com/crreporting |
National rates of CR reporting, 2015 and 2017
Countries with CR reporting rate higher than the global average (72%-89%)
Brazil
85% 85%
2015 2017
Norway
90% 89%
2015 2017
Taiwan
77% 88%
2015 2017
Sweden
87% 88%
2015 2017
Nigeria
85% 88%
2015 2017
Spain
84% 87%
2015 2017
Singapore
84% 84%
2015 2017
Canada
81% 84%
2015 2017
Chile
80% 83%
2015 2017
Colombia
78% 83%
2015 2017
The
Netherlands
80% 82%
2015 2017
Switzerland
75% 82%
2015 2017
Finland
74% 82%
2015 2017
Portugal
81% 80%
2015 2017
Italy
79% 80%
2015 2017
Ireland
70% 78%
2015 2017
Hungary
84% 77%
2015 2017
Australia
81% 77%
2015 2017
Romania
68% 74%
2015 2017
South
Korea
74% 73%
2015 2017
Russia
66% 73%
2015 2017
Germany
69% 73%
2015 2017
Countries with CR reporting rate lower than the global average (less than 72%)
New
Zealand
52% 69%
2015 2017
Thailand
67%
2017
Peru
69% 66%
2015 2017
Belgium
59% 62%
2015 2017
Austria
62%
2017
Poland
54% 59%
2015 2017
Luxembourg
59%
2017
Slovakia
48% 55%
2015 2017
Greece
46% 54%
2015 2017
Czech
Republic
43% 51%
2015 2017
Turkey
50%
2017
UAE
36% 44%
2015 2017
Angola
34% 32%
2015 2017
Oman
37% 30%
2015 2017
Israel
28% 26%
2015 2017
Kazakhstan
23% 25%
2015 2017
Cyprus
13%
2017
Presence of CR reporting
regulation in the country
Government Mandatory Voluntary Stock Exchange Mandatory Voluntary
Information on CR reporting regulations sourced from www.carrotsandsticks.net Accessed 27 September 2017
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
17www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
17www.kpmg.com/crreporting |
Jesús González
Partner,
Sustainability
Services, KPMG in
Mexico
Foreign investment helps to
increase CR reporting
in Mexico
In Mexico, a perfect storm of regulation,
stock exchange innovation and investor pressure
has driven a leap in reporting rates. In 2013, the
government passed the General Law on Climate
Change which requires companies to report on
their carbon emissions. This was rolled out
between 2015 and 2017. Mexico’s stock exchange
(Bolsa Mexicana de Valores) has also introduced
sustainability indices, which many companies are
keen to join to gain new investors and access new
capital. In order to join, companies must produce
sustainability reports.
Another important element is the level of foreign investment in the
Mexican economy. The high levels of growth seen in Mexico since the
liberalization of the economy in the late 1980s and early 1990s means
that its companies have long been targets for foreign investment. Foreign
investors increasingly ask for sustainability reporting. Taken together,
these three factors have created a new environment where sustainability
reporting has flourished.
It’s encouraging that so many large companies in Mexico are adopting
sustainability as a long-term business strategy. However, the real
challenge lies with convincing Mexico’s small and medium firms, 99
percent of all companies in the country, that sustainability is a must for
long-term profit generation and risk management.
Erica Miles
Director,
Sustainability
Services, KPMG in
New Zealand
New Zealand Stock Exchange
Code set to increase both
quantity and quality of CR
reporting
The growth of CR reporting in New Zealand
over the last two years can be attributed to
increased consumer awareness and investor
pressure, as well as a broader appreciation among
businesses that non-financial risk management is
key to long-term value protection and creation.
For the moment, the quality of CR reporting by
New Zealand businesses is often lacking in balance,
objectivity and transparency. Over the next two
years, the Corporate Governance Code recently introduced by the New
Zealand Exchange (NZX) will likely act as a catalyst for better business
reporting by raising the bar on what is expected. The onset of this more
holistic approach will hopefully see box-ticking compliance consigned to
the side lines and frameworks such as Integrated Reporting and GRI being
used as critical business tools to understand, define and enhance corporate
value.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
18www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
18www.kpmg.com/crreporting |
Niven Huang
General Manager,
Sustainability
Services, KPMG in
Taiwan
Stock exchange pushes up CR
reporting inTaiwan
CR reporting in Taiwan has increased over
the last two years due to new mandatory reporting
regulation and investor principles from the Taiwan
Stock Exchange. In 2014, the exchange required
mandatory CR reporting by companies in the
chemical, food, finance and insurance sectors, as
well as all businesses with paid-in capital of T$10
billion. At the end of 2015, this was extended to
include companies with paid-in capital of
T$5 billion.
Last year, the exchange also published new
stewardship principles for institutional investors,
which advise investors on how to fulfill their
ownership responsibilities and encourage them to
disclose how they have applied the principles.
HanifeYmer
Director in charge,
Sustainability
Services, KPMG in
the Lower Gulf
CR reporting gains momentum
in the UAE
Although the UAE is one of the few
countries in the survey where less than half the top
100 companies currently report on CR, increasing
interest in sustainability is driving up
reporting rates.
‘Sustainable environment and infrastructure’ is one
of the key pillars of the UAE Vision 2021, the
government’s long-term strategy for socioeconomic
development. What’s more, 2017 is the
'Year of Giving' in the UAE, a government initiative
focusing on three key pillars – Corporate Social
Responsibility, Volunteering, and Serving the
Nation. Given the increased interest in
sustainability within the region, I would expect CR
reporting to become the norm for larger companies
within 5 years.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
19www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
19www.kpmg.com/crreporting |
Cornis van
der Lugt
Senior Research
Fellow, Centre for
Corporate
Governance in Africa,
Stellenbosch
University Business
School
Future reporting regulation to
be shaped by crises and
emerging issues
Historically, new regulation has come out of
crises or emerging issues. The future of CR
reporting regulation will evolve to fit new issues
and boost the quality of implementation on existing
issues. Increasingly specific requirements will be
necessary to facilitate implementation of economic
instruments such as trading schemes or carbon
taxes, compelling companies to disclose more
reliable and accurate information. We might also
see requirements for more sophisticated
disclosure related to tax evasion, for example
country-by-country breakdown of tax payments.
In emerging markets there is particular interest in
socio-economic impact, which will drive further
disclosure regulation around impact assessment
and valuation. Investors understand the business
logic that underlines the concept of treating
environmental, social and governance (ESG) issues as material. But many
companies fail to report business logic, true value creation and materiality
effectively. Some leading stock exchanges, notably from emerging
markets, are starting to mandate disclosure that requires not only
reporting numbers but also better description of the business logic and
sustainability behind the numbers.
Anthony Miller
Corporate Social
Responsibility
Coordinator,
Sustainable Stock
Exchanges Initiative,
United Nations
Conference on Trade
and Development
Stock exchanges transitioning
from voluntary guidelines to
mandatory reporting
requirements
There are many factors driving corporate
responsibility reporting requirements in stock
exchanges around the world. In developing
countries, for example, CR reporting is seen as a
proxy for good governance, which is critical for
attracting foreign investment. Elsewhere,
investors and governments are increasingly
concerned with how companies are building and
protecting long-term value. While these and other
drivers increase reporting rates, the reporting
debate among stock exchanges is now
largely over.
Among the 65 stock exchanges that have
partnered with the Sustainable Stock Exchanges initiative, there is now
widespread acceptance of the benefits of voluntary corporate responsibility
reporting guidance. We are also seeing some exchanges and regulators
starting to transition to mandatory reporting requirements, which is a trend
we expect to continue over the long term. As a result, companies that are
not already producing sustainability reports should consider doing so, as
this is fast becoming a mainstream expectation in most markets around
the world.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
20www.kpmg.com/crreporting |
Laggingsectors
gainground
For the first time in the history of this survey, more than 60
percent of companies across all industry sectors are reporting
on CR.
The four lagging sectors identified in KPMG’s 2015 survey – Healthcare; Transport &
Leisure; Industrials, Manufacturing & Metals; and Retail – have all shown increases
in CR reporting in 2017. The most significant growth has come from the Healthcare
and Chemicals sectors which have seen increases of 8 and 6 percentage points,
respectively.
While there has been an increase in CR reporting from businesses in the Retail
sector since 2015, the sector still has some way to go to catch up with others.
As in previous years, sectors with high
environmental and social impacts - such
as Oil & Gas and Mining - typically
have high CR reporting rates
2
3
__ More than two thirds of companies in
all sectors except Retail now report on
their CR performance
CR reporting rates by sector
58%
67%
72%
68%
76%
75%
76%
81%
68%
73%
79%
77%
83%
75%
76%
63%
68%
69%
70%
70%
71%
73%
74%
76%
77%
79%
79%
80%
81%
81%
2017 2015
Oil & Gas
Chemicals
Mining
Technology, Media & Telecommunications
Automotive
Forestry & Paper
Healthcare
Utilities
Food & Beverages
Financial Services
Transport & Leisure
Personal & Household Goods
Construction & Materials
Industrials, Manufacturing & Metals
Retail
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
21www.kpmg.com/crreporting |
MorecompaniesincludeCRdatainannual
financialreports
Companies that include CR information
in annual financial reports
2015
56%
N100
2017
60%
65%
G250
78%
Base: 4,900 N100 companies and 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
4 The underlying trend of 60 percent applies when looking at the same sample of countries in 2015 and
2017. The overall N100 rate in 2017 is 57 percent due to the inclusion of 5 new countries with relatively
low reporting rates in the 2017 research.
4
The trend for large companies to
include CR information in their
annual financial reports
continues to grow.
The vast majority (78 percent) of the world’s
top companies (G250) now do this, indicating
that they believe CR data is relevant for their
investors. The practice has shown
remarkable growth in recent years: in
KPMG’s 2011 survey only a minority 44
percent of G250 companies included CR
data in their annual reports.
Among the N100, the underlying trend is
also one of growth, with the rate of
companies including CR data in their annual
reports up to 60 percent in 2017.
There has been a particularly significant
increase in the number of US N100
companies integrating CR information into
their financial reporting – 81 of the top 100
US companies now do this compared with
only 30 just two years ago in 2015. (For
more on this trend see page 23).
G250 companies that include CR
information in annual financial
reports, 2011-2015
2011
44%
2013
55%
2015
65%
2017
78%
Base: 250 G250 companies
Source: KPMG Survey of Corporate Responsibility
Reporting 2017
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
22www.kpmg.com/crreporting |
Ten countries with the highest rates of CR information in annual financial reports
98%
1
5
3
4
2
6
7
8
9
10
93%
88%
91%
81%
86%
83%
92%
80%81%
India
South
Africa
Taiwan
Malaysia
Denmark
France
UK
Norway
Sweden
US
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
23www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
23www.kpmg.com/crreporting |
Katherine Blue
Partner, Sustainability
Services, KPMG in
the US
Three key factors encouraging data integration in US reporting
In the US, three main factors have driven growth in CR reporting and the attendant increase in
companies including CR information in their annual reports. The most significant has been investor
and shareholder interest in sustainability, which is forcing companies who have not previously
reported to start practicing this kind of disclosure.
Secondly, companies are also required to carry out climate change-related disclosure in Securities and
Exchange Commission (SEC) filings. More companies are complying with this, particularly as the risk
from climate change becomes ever clearer.
Lastly, the influential Sustainability Accounting Standards Board (SASB) publishes industry-specific
Sustainability Accounting Standards that advise what CR disclosures organizations should include in
their mandatory financial SEC filings. Taken together, these factors have driven higher reporting rates
and, in particular, have significantly increased rates of companies including CR information in their
annual reports.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
24www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
24www.kpmg.com/crreporting |
IntegratedReportingtakesoffincertaincountries
Big rises in Japan, Brazil, Mexico and Spain
The number of companies that specifically label their reports
as “Integrated” is growing slowly but steadily.
In 2017,
14%of reporting companies in both the G250 and N100 groups
do this. In 2015, the rates were:
11%of N100 reporting
companies
15%of G250 reporting
companies
Around two thirds of these also reference the International
Integrated Reporting Council (IIRC) framework for integrated
reporting.
Despite the modest global growth, there have been
significant increases in Integrated Reporting in four countries
in particular: Japan (+21 percentage points), Brazil and
Mexico (both +16 percentage points) and Spain (+9
percentage points).
Actual number of Integrated Reports: top ten countries
South Africa
+288 90
Japan
+21
42
21
Spain
+9
27
36
The Netherlands
-1
27 26
Brazil
+16
6
22
Mexico
+16
5
21
South Korea
+7
10
17
UK
+6
9
15
Sweden
+2
13 15
Poland
+5
10
15
2015
2017
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Note: 2015 Integrated reporting rate restated for South Africa
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
25www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
25www.kpmg.com/crreporting |
Richard Howitt
Chief Executive
Officer,
International
Integrated
Reporting Council
Integrated Reporting seen
as a proxy for good
governance
Both Brazil and Mexico are keen to
attract foreign investment, and Integrated
Reporting is seen as a proxy for the good
corporate governance that is crucial for
attracting these investors.
Integrated Reporting has always attracted keen
interest in Brazil – many Brazilian companies
joined the first IIRC Pilot Programme along with
representatives from the Brazilian Development
Bank. This, combined with the fact that Brazilian
companies have traditionally been at the
forefront of CR reporting trends accounts for the
increasing popularity of Integrated Reporting in
the country. Whilst Integrated
Reporting is a mainstream approach to reporting, we are seeing in many
countries that CR reporting is often a precursor on the journey to real
integration of information.
In Mexico, the rise in Integrated Reporting is being driven partly by the
overall increase in CR reporting, with integrated reports seen as best
practice for making sustainability information strategic, relevant and part
of the broad story of value creation. Investors are putting more pressure
on companies to explain how CR efforts benefit the business, which
helps to increase demand for Integrated Reporting. It helps reporting to
become a tool for understanding and quantifying long-term value rather
than a box-ticking exercise to satisfy governments and regulators.
Yoshitake
Funakoshi
Partner,
Sustainability
Services, KPMG in
Japan
Governance reforms drive
Integrated Reporting in Japan
Several recent initiatives from the
government, the financial regulator and the
stock exchange in Japan have all helped to
increase rates of Integrated Reporting in the
country. In 2014, the Japanese Ministry of
Economy, Trade and Industry (METI) produced a
report on competitiveness and incentives for
sustainable growth (known as the Ito Review).
This report, among other recommendations,
promoted two-way dialogue between
companies and investors on the topic of
sustainable growth. Integrated Reporting is
seen as a useful tool for such dialogue.
Also in 2014, the Japanese Financial Services Agency (FSA), the
authority responsible for ensuring the stability of the Japanese financial
system, published a Stewardship Code for institutional investors that
reminds investors of their fiduciary duty and promotes sustainable
growth within the Japanese economy. The code stipulates that
investors should encourage their investee companies to practice
Integrated Reporting. The following year in 2015, the Tokyo Stock
Exchange published its Corporate Governance Code, which also
encourages companies to adopt Integrated Reporting.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
26www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member
firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
26
AssuranceofCRdatacontinuessteadygrowth
The number of companies investing in third-party assurance of their CR reporting has grown steadily since 2005.
Assurance of CR data is now accepted standard practice among G250 companies with more than two thirds (67 percent) of these companies seeking
assurance.
While assurance rates among the N100 are lower (currently 45 percent), KPMG expects a majority of N100 companies to have their CR data assured
within the next two to five years if recent trends continue.
The data suggests that assurance rates increase most rapidly in countries where high rates of CR reporting have been achieved. For example, between
2015 and 2017 there was a 14 percentage point increase in assurance of CR data in Taiwan and Japan, and a 12 percentage point increase in the US – all
of which have high CR reporting rates of 88 percent or above.
Growth in independent assurance of CR information
G250N100 G250N100
2017
67%
45%
2015
63%
42%
2013
59%
38%
2011
46%
38%
2008
40%
39%
2005
30%
33%
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
27www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
27www.kpmg.com/crreporting |
Kazuhiko Saito
Managing Partner,
Sustainability
Services, KPMG
in Japan
Paris Agreement and
investor pressure drive
demand for assurance in
Japan
Leading Japanese companies
have set a trend for investing in
assurance of CR data in recent years
and their example has encouraged
others to follow suit.
Other drivers for assurance include
pressure to demonstrate that GHG
emissions data is reliable and accurate.
The Paris Agreement has had a
significant effect in Japan, with many
companies seeking to prove that they have reduced GHG
emissions and are on a pathway consistent with the 2˚C
scenario outlined in the agreement.
There has also been serious investor pressure. Japan’s
Government Pension Investment Fund (GPIF), the world’s
largest fund, recently signed the Principles for Responsible
Investment (PRI) which means it is demanding more reliable
ESG information from its investee companies. The fact that
assurance of CR data helps to achieve or is required for listing
on sustainable stock indexes, such as the Dow Jones
Sustainability Index, has also helped to drive up assurance
rates in Japan.
Bill O’Mara
Global Head of
Audit, KPMG
International
Financial stakeholders
recognize the role
of “non-financial”
data in long-term
value creation
Investors and other financial
stakeholders are increasingly
aware that environmental, social
and governance (ESG) issues,
previously considered “nonfinancial”,
are relevant to the
financial performance and longterm
value creation potential of
a business.
As a result, we are seeing greater demand for assurance,
which promotes reliability in this information. I believe the
growing awareness and engagement of investors, audit
committees and management is one of the key drivers
behind the growth in assurance of corporate responsibility
data. Recent developments such as the reporting
recommendations of the Task Force on Climate-related
Financial Disclosures are likely to reinforce this growth
trend.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
28www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
28
GRIremainsthemostpopularframework
forCRreporting
The majority of N100 (74 percent) and G250 companies (89 percent) are using some
kind of guidance or framework for their reporting. The GRI framework is the most
commonly used, with 63 percent of N100 reports and 75 percent of G250 reports
applying it. Meanwhile, 13 percent of N100 and 12 percent of G250 companies are
using stock exchange guidelines.
One in ten (N100) companies using GRI has reported in line with the new standards,
introduced at the end of 2016.
Use of GRI Guidelines vs GRI Standards
GRI G3
GRI G4
GRI
Standards
2%
88%
10%
Base: 2,230 N100 companies that apply the GRI Framework
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Tim Mohin
Chief Executive, GRI
GRI Standards
mirror increasing
sophistication
of CR reporting
It’s pleasing to see that
GRI remains the most widely
adopted sustainability
reporting framework according
to this year’s survey results.
The number of businesses
that have already adopted the
GRI Standards is also
encouraging.
The evolution of GRI’s reporting guidelines into modular
standards mirrors the ongoing sophistication of
sustainability reporting. It also means the GRI Standards
are more suitable for incorporation into government and
market regulator reporting policies and we have seen
references in around 100 policies worldwide from
countries, regions and stock exchanges.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
29www.kpmg.com/crreporting |
Acknowledging
thefinancialrisks
ofclimatechange
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
30www.kpmg.com/crreporting |
Threequartersofcompaniesworldwideyetto
acknowledgeclimatechangeasafinancialrisk
KPMG’s analysts studied the annual financial reports of 4,900 companies worldwide to understand how many acknowledge that
climate change poses a financial risk to their business.
They found that only 28 percent of these companies currently acknowledge the financial risk of climate change in their annual reports, meaning that almost three quarters (72 percent) do not.
Among the world’s 250 largest companies (G250), a higher 48 percent acknowledge the risk, although this global rate conceals some significant differences between countries (see page 34).
Companies that acknowledge the financial risk of climate change
in their annual reports
28%
72%
N100
Yes
No
48%
52%
G250
Yes
No
Task Force increases pressure on companies
to disclose financial risks of climate change
In 2015, the Financial Stability Board highlighted climate change as a risk
to the stability of the global financial system and set up the Task Force
on Climate-related Financial Disclosures (TCFD). The Task Force has
brought together companies that prepare financial data and users of that
data (investors, lenders and insurers) to recommend how companies
should disclose the financial risks of climate change. These
recommendations focus on the disclosure of physical risks from
extreme weather such as storms and droughts, and commercial risks
related to the global transition to a lower carbon economy. The
recommendations were submitted to the G20 in July 2017.
As a result, pressure is growing on companies to improve their
disclosure of climate-related financial risk. UK investment house Aviva
Investors, for example, has announced that it will vote against the
annual reports and accounts of investee companies that do not report in
line with the Task Force’s recommendations.
For more on the TCFD see: www.fsb-tcfd.org
Base: 4,900 N100 companies and 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
31www.kpmg.com/crreporting |
Veryfewcompaniesquantifyclimate
risksormodeltheirfinancialimpacts
Of those companies that do acknowledge climate change as a financial risk in their financial
reporting, a relatively high proportion of both the N100 (63 percent) and G250 (76 percent) provide
some narrative description of the potential impacts.Very few, however, are currently quantifying
the potential impact of those risks in financial terms or modeling it using scenario analysis or
other methodologies as theTCFD recommends.
Companies describing, quantifying or modeling climate risk in financial reports N100 G250
Provide a narrative description of
potential impacts
76%
63%
Quantify potential risks in financial
terms
2% 2%
Model potential impacts using
scenario analysis
3%2%
Acknowledge financial risk of climate
change but do not describe the
potential impacts
18%
33%
Base: 1,386 N100 companies & 119 G250 companies that acknowledge climate change as a financial risk in their annual report
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Note: Numbers do not add up to exactly 100 due to rounding
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with
KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other
member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
31www.kpmg.com/crreporting |
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
32www.kpmg.com/crreporting |
Whatisdrivingacknowledgementof
climateriskintheleadingcountries?
Taiwan, France, South Africa, US and Canada lead the world
There are five countries where a majority of the top 100 companies already acknowledge climate change
as a financial risk in their annual financial reports. They are: Taiwan (88 companies), France (76 companies),
South Africa (61 companies), US (53 companies) and Canada (52 companies).
Taiwan: the Taiwanese Stock Exchange (TWSE) listing requirements and newly introduced
Stewardship Principles for Institutional Investors have likely contributed to the high rates in
Taiwan.
France: a 2015 amendment to the Energy Transition for Green Growth law has required
investors to disclose how they integrate climate considerations into their investment policies,
their climate-related financial risk, the greenhouse gas (GHG) implications of their investments
and how they contribute to meeting French and international climate objectives. This has
likely had a knock-on effect on the number of French companies acknowledging climate risk
in their financial reporting.
South Africa: climate change impacts have been high on the business agenda as severe
droughts have affected the country in recent years. The South African government is also
consulting on introducing a carbon tax as part of its response to The Paris Agreement, which –
if passed – is expected to impact companies in the Mining, Utilities and Chemicals sectors in
particular.
Canada: many of Canada’s largest companies operate in climate impacted sectors such as Oil
& Gas, Mining and Forestry & Paper. Also, many of the country’s largest pension funds have
lent their support to the TCFD recommendations.
US: US Securities & Exchange Commission (SEC) regulation requires disclosure related to
climate change in SEC filings. US corporate culture is also focused on efficient management
and avoidance of risk in order to prevent charges of negligence and potential litigation. Some
of the US’s largest investors are also members of the TCFD, so there may also be an informal
influence at play here.
Bill Murphy
National Leader,
Sustainability
Services, KPMG
in Canada
Climate risk
disclosure likely to
increase further in
Canada
I am not surprised that
more than half of the Canadian
companies included in this year’s
survey acknowledge climate
change as a financial risk in their
annual reports. Many of Canada’s
largest companies operate in the
extractive and financial services
sectors, where physical and
transitional climate-related risks have become increasingly
important strategic considerations. Additionally, many of
Canada’s largest institutional investors have shown
support for the TCFD recommendations.
Going forward, climate risk disclosures will expand further
due to the increasing expectations of securities regulators,
the investor community and other stakeholders. Report
issuers will need to provide more consistent information
within their sectors and, in particular, align disclosures
with the TCFD recommendations. I also expect to see
more forward-looking information and, especially for
sectors that are significantly exposed to physical and
transitional risks, the inclusion of scenario analysis
regarding the potential impacts of climate change on their
products, revenues and profitability.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
33www.kpmg.com/crreporting |
MixedpictureforTCFDpriority
sectorsamongtheN100
The TCFD recommendations
provide specific supplemental
guidance for certain players in the
Financial Services sector, namely
banks, insurance companies, asset
owners and asset managers.
Supplemental guidance has also
been provided for four other sectors
considered potentially most
affected by climate change and the
transition to a lower carbon
economy, namely Energy;
Transport, Materials & Buildings;
Agriculture, Food & Forest Products.
When looking at N100 companies,
this survey shows that Forestry,
Food, Oil & Gas, Utilities and
Automotive sectors (which broadly
correspond to the TCFD priority
sectors) have a higher than average
rate of acknowledging climate risk.
On the other hand, Financial
Services, Construction & Materials
and Transport & Leisure have a
lower than average rate. It should
be noted, however, that there are
currently no industry sectors in
which a majority of N100
companies acknowledge the
financial risk of climate change.
Sectoral view: N100 companies acknowledging
climate risk in financial reports
Forestry & Paper 44%
Chemicals 43%
Mining 40%
Oil & Gas 39%
Utilities 38%
Automotive 38%
Technology, Media & Telecommunications 35%
Food & Beverages 32%
Construction & Materials 25%
Industrials, Manufacturing
24%
& Metals
Financial Services 24%
Personal & Household Goods 23%
Retail 23%
Transport & Leisure 20%
Healthcare 14%
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
33 | www.kpmg.com/crreporting © 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of
independent firms are affiliated with KPMG International. KPMG International provides no client services. No member
firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG
International have any such authority to obligate or bind any member firm. All rights reserved.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
34www.kpmg.com/crreporting |
Climateriskreporting:theworld’slargestcompanies
(G250)
There are significant differences between countries
The world’s 250 largest companies can reasonably be expected to lead
the way when it comes to acknowledging and disclosing the financial
risks of climate change to their business.
While the survey shows that less than half the G250 (48 percent)
currently acknowledge the risk, deeper analysis reveals significant
differences between companies according to where they are
headquartered.
For example, in France, Germany and the UK, a majority of G250
companies do acknowledge the financial risks of climate change in their
reporting. Just under half the G250 companies based in the US and Japan
do so. Lower rates of climate risk acknowledgment in other countries and
regions reduce the overall global rate.
National view: G250 companies acknowledging
climate change as a financial risk
Germany
UK
US
Japan
90%
61%
60%
49%
48%
France
Base: 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
35www.kpmg.com/crreporting |
Sectoral view changes when
looking at the world’s largest
companies
When looking specifically at the world’s
250 largest companies (G250) the sectoral
view changes significantly. Around two
thirds of the world’s largest Retail firms
(67 percent) are acknowledging climate
risk in their financial reporting, whereas
this sector lags in the N100 sample. This
may be because world-leading retailers
are more likely to be aware of the
potential impact of climate change on
their complex global supply chains.
The Oil & Gas sector has a relatively high
rate of climate risk acknowledgement in
both the G250 and N100 research
samples. This might be expected given
that investors and campaigners have been
putting oil and gas companies under
pressure to disclose their climate risks for
many years now.
It is notable that even the world’s largest
Financial Services firms have a relatively
low rate of climate risk acknowledgement
(36 percent).
Sectoral view: G250 companies acknowledging climate change as a financial risk
67%Retail
65%Oil & Gas
54%Utilities
53%Automotive
47%Technology, Media &
Telecommunications
46%Industrials,
Manufacturing & Metals
36%Financial Services
25%Healthcare
Base: 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Note: Graphic shows only sectors with 10 or more G250 companies
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are
affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG
International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
All rights reserved.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
36www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
36www.kpmg.com/crreporting |
Wim Bartels
Member of the TCFD
and Partner, Corporate
Reporting, KPMG in the
Netherlands
Climate risk disclosure puts climate change on the Chief Financial
Officer’s agenda
In the coming years, we can expect to see a sharp increase in reporting on the financial risks from
climate change, building on the rates demonstrated in this year’s survey. Climate change is introducing
greater risk and uncertainty into the financial system, both by causing physical damage to companies’ assets,
infrastructure and supply chains, and by catalyzing market transformations that threaten to make some
traditional business models obsolete and create opportunities for others. As a result, investors and central
banks are pushing for greater disclosure. The Financial Stability Board’s Task Force on Climate-related
Financial Disclosures (TCFD) has also been influential in driving this and its recommendations of July 2017
will likely become the de facto framework for reporting of this kind in coming years.
Climate-related risk disclosure is very different from reporting carbon emissions or environmental impacts.
It’s about turning the telescope around, understanding the impact of a changing climate on the company and
asking searching questions. Does the company need to move its operations? Is its supply chain vulnerable to
weather events? Will it be it be able to take out insurance in future? Should it change its business model
entirely?
This change in reporting approach will also require a change in roles and responsibilities. Traditionally, thinking about climate change has
been the function of corporate responsibility or sustainability teams, but now the responsibility needs to sit with the executive who has the
best understanding of a company’s financial risks and opportunities – namely the CFO.
For companies that have just begun the process of reporting on climate-related financial risks, or have not yet started at all, a qualitative
approach is a good foundation and the TCFD’s guidelines are helpful here. Companies should bring together the main stakeholders from
around the business to look at the potential financial risks and opportunities presented by climate change, and then carry out qualitative
scenario analysis. For example, if you are a brewing corporation what would happen if you ran out of water in critical production locations or
if the costs of water rise dramatically? If you’re an oil company, will you still have a market for your products in ten or 20 years’ time? After
that, companies can start building sophisticated models that properly project the full gamut of financial risks and opportunities associated
with climate change, eventually integrating these models into their decision making and adapting the business strategy accordingly.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
37www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
37www.kpmg.com/crreporting |
SteveWaygood
Chief Responsible
Investment Officer,
Aviva Investors
Significant progress but a long way to go
Half the world’s largest companies are acknowledging climate change as a financial risk so the glass is
definitely half full. There has been significant progress over the last decade, and the ground-breaking work of
the Task Force on Climate-related Financial Disclosures (TCFD) should encourage even further disclosure in
the future. But we still have an incredible distance to travel – and even 100 percent disclosure will not on its
own move the world to a two degrees (or less) trajectory. That’s why we need to keep pushing for further
action beyond disclosure.
We do need to see change on a global level though – driven by the standard setters that help regulate global
markets. I’d like to see the International Organization of Securities Commissions change its listing rules to
promote climate-related disclosure.
Investors have a key role to play in improving the quality of disclosure. I would urge others to take an active
approach to ownership and stewardship through engagement and voting. At Aviva Investors, we are
encouraging the companies we own to examine their exposure to climate risk. We will ask them how they plan
to act on the TCFD recommendations and we have already announced that we will vote against companies that do not disclose against the
TCFD’s recommendations.
There is also a role for governments and regulators – more needs to be done to extend the valuable work the TCFD has accomplished. I am
skeptical that voluntary disclosures will get us far enough, fast enough; research shows it is only when governments mandate disclosure
that it becomes widespread, consistent and comparable.
The relatively low rates of Financial Services companies currently acknowledging climate change as a financial risk is a sector-specific
concern. However, the recommendations of the TCFD show the way forward and include guidance on how the finance sector can
implement the guidelines. I would like to see more of the world’s leading financial institutions publishing their own response to TCFD, as
Aviva has done. In order to drive further climate-related risk disclosure in future, I would like to see governments and regulators fund
publicly available sector-based climate risk scenarios to help boards govern the risks and produce their own company level scenario plans.
The more that companies use consistent inputs to their decision making, the more comparable their disclosures will be and this will help the
finance sector manage climate risks more effectively.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
38www.kpmg.com/crreporting |
LinkingCRactivityto
theSustainable
DevelopmentGoals
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
39www.kpmg.com/crreporting |
SDGsemergeasacleartrendinCRreporting
In September 2015, the UN adopted the Sustainable
Development Goals (SDGs), a set of 17 goals to end
poverty, protect the planet, and ensure prosperity for
all as part of a new global sustainable development
agenda. Each goal has specific targets to be achieved
over the next 15 years.
KPMG’s survey shows that the SDGs have resonated strongly with
businesses worldwide in less than two years since their launch. Around four
in ten CR reports from both N100 and G250 companies make a connection
between the company's CR activities and the SDGs.
This is a clear trend that has emerged in a short space of time and strongly
suggests that the SDGs will have a growing profile in CR reporting over the
next two to three years.
Number of companies that connect their CR activities
to the SDGs
N100
39%
G250
43%
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
40www.kpmg.com/crreporting |
World’s top 10 countries for connecting CR activity with the SDGs
There are only three countries where a majority of the top 100 companies reference the SDGs in their CR reporting, although
others come close. All the top 10 are European or Latin American countries.
Sweden
60 Portugal
58 Mexico
51 France
47 Netherlands
47
Finland
46
Spain
46
Colombia
44
UK
43
Italy
41
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Tomas
Otterström
Partner,
Sustainability
Services, KPMG
in Finland and
KPMG
in Sweden
Acting on
the SDGs is
the next
challenge
Swedish
companies are
leading the world
when it comes to
referencing the
SDGs in their
reporting and there
are many reasons
behind this including
culture and politics.
Nordic companies
in general are
increasingly interested in demonstrating
how they create value in society and the
SDGs provide a means for doing so.
The next challenge for business is to
come through with meaningful
contributions to the global effort to
achieve the SDGs. Reporting needs to
evolve so that it can quantify, verify and
effectively communicate what impact
companies are actually having on the
goals.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
41www.kpmg.com/crreporting |
Ricardo Zibas
Director,
Sustainability
Services, KPMG in
Brazil
High profile
publicity for
SDGs pays
dividends in
Latin
America
In Latin
America, there has
been huge effort
on the part of
NGOs and industry
bodies like the
WBCSD to publicize the SDGs as the
preeminent framework for designing and
implementing sustainability activities.
Additionally, thanks to the way the SDGs
were designed, many companies have
mapped their existing CR reporting onto
to SDGs in order to demonstrate how
they are contributing to sustainable
development.
Regulators and industry bodies are also
supportive. For example, The Brazilian
Corporate Sustainability Index, an index
on the Sao Paolo Stock Exchange,
encourages companies to commit to the
SDGs and embed them in their
management approach.
Sung Woo Kim
Regional Lead for
Sustainability
Services in ASPAC
and Partner,
KPMG in South
Korea
Slow
uptake of
SDGs in
ASPAC will
gain pace in
more
developed
markets
In general,
business awareness
and understanding
of the SDGs in Asia
Pacific is relatively
low right now.
What’s more, reporting trends in the region
tend to be driven by mandatory
disclosure requirements from
governments, stock exchanges and
investors, and the SDGs have yet to fully
take root among these particular
stakeholders.
However, I do think adoption of the SDGs
in Asia Pacific will increase in the years to
come. In the more economically
developed countries such as Australia,
South Korea and Taiwan, it is only a
matter of time before more companies
embrace the SDGs; for now the largest
global companies are setting the pace in
doing so. For developing countries, the
transition to including the SDGs in
corporate responsibility vision and
strategy will be slower unless
regulation is introduced.
Forestry & Paper sector
leads worldwide
65%
of Forestry & Paper
companies make a
connection with the
SDGs in their CR
reporting. This is the
highest sectoral rate
among the N100 sample.
Sami Lundgren
Vice President,
Environment and
Responsibility, UPM
Forestry companies
are often early
adopters in CR
In 2015, we revised our
corporate responsibility targets,
setting a new timeline of 2030 and
increasing our level of ambition.
That process coincided with the
launch of the SDGs, which also
have a timeline of 2030, so it
seemed logical for UPM to align
its own corporate responsibility
strategy and targets with the
global goals. While the timing of the SDGs was fortunate for
us, it doesn’t surprise me that the Forestry & Paper sector
as a whole has been progressive in linking its corporate
responsibility activities to the SDGs. In many countries, the
Forestry & Paper sector is relatively mature in its
sustainability approach. Many forestry sites have contributed
to the wellbeing of local communities for more than a
century and, at the same time, the industry has had to
ensure that it uses natural resources like timber and water in
a responsible manner. As a result, Forestry & Paper firms
are often among the first to adopt new corporate
responsibility practices.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
42www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
42www.kpmg.com/crreporting |
SDGreportingamongthe
world’slargestcompanies
National view: G250 companies that connect CR activity
with the SDGs
Among the world's largest companies (G250), European companies are leading
the way, while US companies lag behind.
Germany83%
France63%
UK60%
Japan46%
US31%
Base: 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Sectoral view:
G250 companies
that connect CR
activity with the
SDGs
G250 companies in
consumer-facing sectors
are leading the pack
when it comes to
connecting their CR
activities with the SDGs.
In heavy industry, it is the
exception not the rule.
Base: 233 G250 companies that report
on CR
Source: KPMG Survey of Corporate
Responsibility Reporting 2017
Note: Graphic shows only sectors
where 10 or more G250
companies are headquartered
58%
Utilities
58%
Automotive
57%
Retail
56%
Technology, Media &
Telecommunications
47%
Healthcare
37%
Financial
Services
30%
Industrials,
Manufacturing
& Metals
28%
Oil & Gas
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
43www.kpmg.com/crreporting |
Acknowledging
humanrightsasa
businessissue
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third
parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Humanrightsisfirmlyonthe
agendaasaglobalbusinessissue
Most companies acknowledge the issue, but many have yet to disclose
a policy.
In 2011, the UN endorsed the Guiding Principles on Business & Human Rights. These principles establish the
responsibility of businesses to respect human rights, avoid infringing them and to remedy any negative human
rights impacts they are involved with.
Six years on, KPMG’s survey shows that a majority of the world’s largest companies now recognize human
rights as a business issue. Almost three quarters (73 percent) of N100 CR reports and nine out of ten (90
percent) G250 reports acknowledge the issue.
However, despite the high number of companies acknowledging human rights as a business issue, only around
two thirds of these (62 percent of both the G250 and N100) report that they have a human rights policy in place
at their organizations. The human rights policy is the fundamental building block of corporate action on human
rights; therefore the lack of such a document at many companies suggests they still have work to do.
Furthermore, only one third of those acknowledging the issue also referenced the UN Guiding Principles which
indicates that only a minority of businesses are yet prepared to align themselves publicly with the Principles.
CR reports that acknowledge human rights as an issue for the business
73% 90%
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
wwwwww..kkpmgpmg..ccom/om/ccrrerrepoportingrting || 4444
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
45www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any
such authority to obligate or bind any member firm. All rights reserved.
45www.kpmg.com/crreporting |
Richard Boele
KPMG Global
Business & Human
Rights Leader and
Partner, KPMG in
Australia
We are at a tipping
point for business and
human rights
We’re reaching a tipping
point where the vast majority of
companies now acknowledge
human rights as an issue for their
business.
This progress is heartening.
However, challenges remain.
Around a third of companies that
acknowledge human rights as a
business issue also refer to the UN
Guiding Principles in their CR
reports, but many still lack the
ability to implement these principles. Companies must
move from simply reporting human rights risks to
identifying, responding to and remediating the impacts.
This will require a step change in mindset.
What’s more, over the next few years, a significant
amount of work is required to further test and explore
what good human rights business performance actually
looks like. For example, are financial proxies the right
way to go? Does putting a dollar value on human rights
help or harm people, and does it actually help
companies understand their human rights performance?
What alternative ways are there to measure
performance? These questions will have to be
answered to ensure continued progress in the field of
business and human rights.
North America and Eastern Europe lag behind
Western European companies are the most likely worldwide to acknowledge human
rights as a business issue, but rates are significantly lower in Eastern Europe, North
America and the Middle East & Africa.
Regional view: CR reports that acknowledge human
rights as an issue for the business
Asia Pacific
72%
Middle East
& Africa
68%
Europe
75%
Americas
69%
79%
61%
Western Europe
Eastern Europe
65%
71%
North America
Latin America
Base: 3,543 N100 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
45www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG
International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any
such authority to obligate or bind any member firm. All rights reserved.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
46www.kpmg.com/crreporting |
CompaniesinIndia,
theUKandJapanare
themostlikelyto
discusshumanrights
The ten countries where companies are most likely
to discuss human rights in their CR reporting are in
Western Europe, Latin America and Asia Pacific.
India, the UK and Japan lead the world, and all
three countries have some regulation in place
mandating or encouraging human rights
disclosure.
Number of N100 companies that acknowledge
human rights in CR reporting: top ten countries
95
85 83 82 78 77 76 74 72 72
India
UK
Japan
Taiwan
Sweden
France
Denmark
Brazil
Portugal
Mexico
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
John Morrison
Chief Executive,
Institute for Human
Rights and Business
Corporate reporting on human rights still
has a long way to go
We are still in the early days of human rights reporting. The
fact is, it is currently impossible to properly track a company’s
human rights impacts through its annual corporate responsibility
reports. So reporting formats will inevitably have to evolve. In future,
I expect to see new forms of disclosure that offer both greater
transparency and timeliness. One example might be through the use
of blockchain technology in the supply chain, which would allow for
unalterable reporting and assurance every step of the way.
Awareness of the human rights issues that companies should report
on will also evolve. For example, in the coming years there is
likely to be a backlash against data and technology companies that
have been collecting and using consumer data en masse. As the right to privacy becomes
increasingly prominent, big data and technology companies will have to be more transparent
about how they collect, store, and use our information.
The language and ideas of human rights are also likely to be a basis for a future universal
framework for social impact reporting among global businesses. While other frameworks
abound, the concept of human rights has been around for 70 years. This means it has
long been understood and is widely accepted – even if it can be an uncomfortable fit for
some businesses.
Santhosh
Jayaram
Partner, Sustainability
Services, KPMG
in India
Regulation driving human rights reporting
in India
The recent ratification by India of International Labour Organization
(ILO) Conventions 138 and 182 clearly indicates the importance of human
rights to the country. From a corporate reporting point of view, the
Business Responsibility Report (BRR), an annual disclosure mandated by
the Securities and Exchange Board of India (SEBI), requires the top 500
listed companies to report on nine core principles, one of which focuses
on human rights. This mandate can be credited as the driver for most of
India's top 100 companies proactively disclosing their performance on
human rights practices while also substantiating the same through
existing policies and mechanisms.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
47www.kpmg.com/crreporting |
Miningcompaniesarethemostlikelytoacknowledge
humanrights
The Mining sector leads when it comes to acknowledging human
rights as a business issue, with almost nine in ten reporters in the
N100 doing so (and 100 percent among the G250).
This high rate might be expected given that mining companies rely on good relationships with
local communities in order to operate their mining assets successfully over long periods.
Reporting on human rights performance can be an essential part of maintaining social licenseto-operate
for these businesses. The same can be said for the Oil & Gas sector where a
relatively high 77 percent of reporters in the N100 acknowledge human rights as a
business issue.
Financial Services trails among the N100 (66 percent), although rates are far higher (92
percent) among G250 Financial Services firms. This suggests a large gap in reporting on
human rights between very large global Financial Services firms and the next tier down.
Sectoral view: Companies acknowledging human rights as an issue
for business
88% 84% 83% 80% 77% 75% 75% 71% 70% 70% 69% 69% 68% 66% 63%
Mining
Automotive
Technology,Media&
Telecommunications
Personal&Household
Goods
Oil&Gas
Chemicals
Industrials,Manufacturing
&Metals
Construction&Materials
Forestry&Paper
Healthcare
Retail
Food&Beverages
Utilities
FinancialServices
Transport&Leisure
Base: 3,543 N100 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Val Smith
Director and Head
of Corporate
Sustainability,
Citigroup
Val Smith
Director and Head
of Corporate
Sustainability,
Citigroup
Human rights is a challenging
but critical issue for Financial
Services firms
Financial services firms have a
responsibility to respect human rights wherever
they do business. While the due diligence
process can be challenging – especially
considering the types of financing and various
clients across sectors – it’s incumbent on the
company to identity potential impacts, and to
understand its leverage to drive change as a
lender, investor or insurer. The pressure to act
from investors and other stakeholders is ever
increasing and inaction can have significant
business and reputational impacts on a company.
Some relatively smaller Financial Services firms may lack the
resources and experience to tackle human rights as a business issue
compared to large global companies, which may account for the
differences between G250 and N100 Financial Services firms in this
survey. While this is a very real challenge felt by many, so too are the
risks of avoiding this issue, which could potentially hinder companies’
ability to do business in future.
Companies of all sizes can only benefit from understanding the
connections between their business and human rights, one step at a
time if needed.
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
48www.kpmg.com/crreporting |
Linkingcarbon
targetstotheglobal
climategoal
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49www.kpmg.com/crreporting |
Morecompaniessetcarbontargets
A solid majority of the world’s largest companies (G250) now
disclose targets to cut their carbon emissions: the percentage in
2017 stands at 67 percent of reporting companies up from 58
percent in 2015.
Among the N100, this survey shows that 50 percent of reporting companies set
carbon reduction targets (no figure available for 2015).
Yet, of those that do set internal carbon reduction targets for their business, around
two thirds of both N100 and G250 companies do not acknowledge the external targets
being set by national governments, regional authorities (such as the EU) or the UN.
G250 companies that set carbon reduction targets
67%
G250
58%
2017
2015
Base: 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Adrian King
KPMG Global
Sustainability
Reporting &
Assurance Leader
and Partner, KPMG
Australia
Pressure grows to link carbon
targets to the bigger picture
Public scrutiny of companies’ carbon
emissions has ratcheted up since the adoption
of The Paris Agreement on Climate Change in
2015. Under the agreement, almost every
country in the world has committed to play an
active part in keeping the global temperature
rise to 2°C or less above pre-industrial levels.
Against this background of global commitment
to climate action, it is no longer considered
enough for companies to set arbitrary carbon
reduction targets with no connection to the
bigger picture. Instead, pressure is growing on
companies to cut their carbon emissions in line
with the greater global goal.
As a result, in coming years, KPMG expects to
see many more companies setting carbon
reduction strategies that are linked to national,
regional or global climate goals, and
communicating those strategies more clearly in
their CR reporting.
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
50www.kpmg.com/crreporting |
Mostcarbontargetsarenotlinkedtogreaterclimategoals
Around one quarter reference Paris Agreement goal
Although most companies (around two thirds) that set carbon targets for their business
don’t yet acknowledge the external targets being set by governments and others, a
significant minority of around one third does. KPMG analysts expect this minority group to
grow into the majority over the next 5 years.
Of those that do link their own carbon targets to external targets, the majority refer to The
Paris Agreement 2°C goal. This equates to around one quarter (23 percent) of companies
that disclose carbon targets. This does not necessarily mean that these companies have yet
fully aligned their targets with The Paris Agreement, but they have at least acknowledged
the global climate goal in their reporting.
Companies linking their carbon reduction targets to
national, regional or global goals
G250
N100
23% 23%
6% 2%
7% 6%
63%
69%
Linked to global 2o
target (Paris
Agreement)
Linked to regional
targets (e.g. EU
targets)
Linked to national
targets
(NDCs/INDCs)
Not linked to any other
targets
N100
Base: 1,765 N100 companies that report carbon reduction targets, 156 G250 companies that report carbon reduction targets
Source: KPMG Survey of Corporate Responsibility Reporting 2017
Science-based targets
gain ground
Science-based targets help companies
demonstrate to investors, suppliers, their
workforce and the general public that they are
prepared for the transition to a low-carbon
economy. With a clear direction of travel set by
more than 190 countries in The Paris Agreement,
science-based targets reduce risks and help
companies align to the low-carbon economy of
tomorrow.
We expect the use of science-based targets to
increase significantly as investors seek a uniform
view of their investments worldwide and look for
assurance that these companies are well set for
a low-carbon future. Likewise, a growing number
of companies are looking at their supply chains
as a way to reduce their indirect emissions, and
in many cases, are looking at science-based
target setting as a tool to accomplish this. These
trends, along with the 300+ companies that have
already committed to set a science-based target
through the SBT initiative, will help turn sciencebased
target setting from a relatively new
practice into a common business practice.
Alberto Carrillo
Pineda
Leader of Science
Based Targets (SBT)
Initiative, CDP
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
51www.kpmg.com/crreporting |
Howwecanhelp
KPMG’s Sustainability Services network
comprises several hundred sustainability
professionals at around 60 KPMG member
firms worldwide.
Local knowledge, global experience
Our network combines specialist sustainability expertise with
in-depth understanding of the business landscape in your
country. At the same time, our member firms are connected
through our Global Center of Excellence for Sustainability
Services and can access the best international experience for
whatever challenge your organization faces.
Integrated services
As well as working shoulder-to-shoulder with our clients, we
work closely with our KPMG colleagues right across the KPMG
network including Tax, Audit, Risk Consulting, Deal Advisory
and Management Consulting. This means we can integrate
sustainability services into a seamless solution for your
business needs.
Specialists in corporate responsibility
reporting and assurance
Our professionals can help you to:
— Understand the environmental and social
issues that are material for your organization
and your stakeholders
— Align your corporate responsibility activities
with the Sustainable Development Goals and
assess your contributions to achieving the
goals
— Choose the right reporting approach and
frameworks for your business
— Integrate financial and non-financial information
in your reporting
— Report information for specific purposes, such
as sustainability indices
— Benchmark the quality of your reporting against
industry peers
— Gain independent assurance for your internal
and external reporting systems and for your
corporate responsibility or sustainability
reporting
— Verify the sustainability performance of your
suppliers.
Specialists in carbon and climate risk
reporting
Our professionals can help you to:
— Comply with the TCFD recommendations on
disclosure of climate-related financial risk
— Understand and comply with carbon-reduction
and carbon reporting legislation worldwide
— Become familiar with best practice carbon
reporting and benchmark your reporting against
peers
— Report carbon information to the CDP
— Gain third-party assurance of your carbon and
climate risk data
— Identify and reduce climate-related risk in your
supply chain.
Specialists in business and human
rights
KPMG has a dedicated network of specialist
consultants in business and human rights. Our
professionals can help you to:
— Design your human rights policy and build
internal commitment
— Assess the human rights risks in your
operations and supply chain
— Develop strategies to prevent and mitigate any
human rights impacts
— Monitor and report on your organization’s
human rights performance.
Contact
KPMG Global Center of Excellence for
Sustainability Services
sustainabilityservices@kpmg.com
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties,
nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
51www.kpmg.com/crreporting |
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
52www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of
independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG
International have any such authority to obligate or bind any member firm. All rights reserved.
Methodology
Professionals at 49 KPMG member firms carried
out thousands of hours of research for this
survey.They reviewed annual financial and
corporate responsibility reporting from the
largest 100 companies, by revenue, in their own
countries and regions.
Research sources included PDF and printed reports as well as
web-only content published between 1 July 2016 and 30 June
2017. If a company did not report during this period, reporting
from 2015 was reviewed. However, no reporting published prior
to June 2015 was included in the research for this survey.
The survey findings are based on analysis of publicly available
information only, and no information was submitted directly by
companies to KPMG member firms.
The survey refers to two research samples:
The N100 – the largest 100 companies in each
of 49 countries: 4,900 companies in total.
Professionals at KPMG member firms identified the N100 in their
country based on a recognized national source, or where a
ranking was not available or was incomplete, by market
capitalization or another appropriate measure. All company
ownership structures were included in the research: publiclylisted
and state, private and family-owned.
The G250 – the largest 250 companies in the world.
The G250 was identified as the top 250 companies listed in the
Fortune Global 500 ranking for 2016.1 The G250 is for the most
part a subset of the N100 research sample. 7 companies in the
G250 sample are not included in the N100.
1http://fortune.com/global500/2016 Accessed 27 September 2017
N100 research sample: national breakdown
The N100 research sample in this survey includes companies headquartered in the following 49
countries and regions. Five KPMG member firms participated in the research for the first time in 2017:
Austria, Cyprus, Luxembourg, Thailand and Turkey. Indonesia, which participated in the 2015 survey,
did not participate in 2017. Some findings of this survey point to the underlying trend which is based on
the 44 countries that participated in both the 2015 and 2017 surveys.
1. Angola
2. Australia
3. Austria
4. Belgium
5. Brazil
6. Canada
7. Chile
8. China
9. Colombia
10. Cyprus
11. Czech Republic
12. Denmark
13. Finland
14. France
15. Germany
16. Greece
17. Hungary
18. India
19. Ireland
20. Israel
21. Italy
22. Japan
23. Kazakhstan
24. Luxembourg
25. Malaysia
26. Mexico
27. New Zealand
28. Nigeria
29. Norway
30. Oman
31. Peru
32. Poland
33. Portugal
34. Romania
35. Russia
36. Singapore
37. Slovakia
38. South Africa
39. South Korea
40. Spain
41. Sweden
42. Switzerland
43. Taiwan (ROC)
44. Thailand
45. The Netherlands
46. Turkey
47. United Arab Emirates
48. UK
49. US
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG
network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties,
nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
52www.kpmg.com/crreporting |
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
53www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm
third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
53www.kpmg.com/crreporting |
N100 research sample: regional breakdown
Middle East
& Africa
Europe
(Western Europe 37%,
Eastern Europe 12%)
Asia Pacific
Americas
(North America 4%,
Latin America 10%)
14%
22%49%
14%
(Middle East 8%,
Africa 6%)
Base: 4,900 N100 companies
Source: The KPMG Survey of Corporate responsibility Reporting 2017
N100 research sample: sectoral breakdown
Financial Services 18%
Industrials, Manufacturing & Metals 11%
Technology, Media &
Telecommunications (TMT) 10%
Retail 9%
Food & Beverages 8%
Transport & Leisure 7%
Utilities 6%
Automotive 6%
Construction & Materials 5%
Oil & Gas 5%
Healthcare
4%
Personal & Household Goods
3%
Chemicals
3%
Mining
2%
Forestry & Paper
1%
Other
2%
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with
KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other
member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Base: 4,900 N100 companies
Source: The KPMG Survey of Corporate responsibility Reporting 2017
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
54www.kpmg.com/crreporting |
G250 research sample: number of G250 companies in each country
75
US
2
Mexico
5
Brazil
4
India
49
China
7
South
Korea
3
Australia
25
Japan
4
Russia
5
Switzerland
18
Germany
5
The Netherlands
10
UK
20
France
4
Spain
5
Italy
Taiwan
Thailand
Norway
Malaysia
Luxembourg
Denmark
Belgium
Saudi Arabia
Indonesia1
1
1
1
1
1
1
1
1
Base: 250 G250 companies
Source: The KPMG Survey of Corporate responsibility Reporting 2017
G250 research sample:
regional breakdown
37%
33%
30%
0%
5%
10%
15%
20%
25%
30%
35%
40%
AsiaPacific
Americas
Europe
Base: 250 G250 companies
Source: The KPMG Survey of Corporate responsibility
Reporting 2017
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no
client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any
member firm. All rights reserved.
54www.kpmg.com/crreporting |
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
55www.kpmg.com/crreporting |
G250 research sample:
sectoral breakdown
Financial Services 23%
Technology, Media &
Telecommunications 13%
(TMT)
Oil & Gas 10%
Industrials,
Manufacturing 10%
& Metals
Retail 8%
Automotive 8%
Healthcare 6%
Utilities 5%
Food & Beverages 4%
Construction
& Materials 3%
Transport & Leisure 2%
Personal &
Household Goods 2%
Chemicals
2%
Other
3%
Base: 250 G250 companies
Source: The KPMG Survey of Corporate responsibility
Reporting 2017
55www.kpmg.com/crreporting |© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are
affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG
International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
All rights reserved.
Industry classification
Companies were allocated to an industry sector according to the International Classification Benchmark (ICB) system.
Automotive
Automobiles, Parts and Tires
Chemicals
Commodity Chemicals, Specialty Chemicals
Construction & Materials
Building Materials & Fixtures, Heavy Construction
Financial Services
Banks, Non-life Insurance, Life Insurance, Real Estate
Investment & Services, Real Estate Investment Trusts,
Financial Services, Equity Investment Instruments, Nonequity
Investment Instruments
Food & Beverages
Beverages (Brewers, Distillers & Vintners, Soft Drinks),
Food producers (Farming, Fishing & Plantations, Food
Products), Tobacco
Forestry & Paper
Forestry and Paper
Healthcare
Pharmaceuticals & Biotechnology, Health Care
Equipment & Services (Health Care Providers, Medical
Equipment, Medical Supplies)
Industrials, Manufacturing & Metals
Industrial Metals & Mining (Aluminium, Non-ferrous
Metals, Iron & Steel),Aerospace & Defense, General
Industrials (Containers & Packaging, Diversified
Industrials), Industrial Engineering (Commercial Vehicles
& Trucks, Industrial Machinery), Oil Equipment, Services
& Distribution (including Pipelines), Alternative Energy
(Renewable Energy Equipment, Alternative Fuels)
Mining
Coal, Diamonds & Gemstones, General Mining, Gold
Mining, Platinum & Precious Metals
Oil & Gas
Oil & Gas Producers, Exploration & Production,
Integrated Oil & Gas
Personal & Household Goods
Household Goods & Home Construction (Durable
Household Products, Non-durable Household Products,
Furnishings, Home Construction), Leisure Goods
(Consumer Electronics, Recreational Products, Toys),
Personal Goods (Clothing & Accessories, Footwear,
Personal Products)
Retail
General Retailers (Apparel Retailers, Broadline Retailers,
Home Improvement Retailers, Specialized Consumer
Services, Specialty Retailers), Food & Drug Retailers
(and Wholesalers),
Transport & Leisure
Travel & Leisure (Airlines, Gambling, Hotels,
Recreational Services, Restaurants & Bars, Travel &
Tourism), Industrial Transportation (Delivery Services,
Marine Transportation, Railroads, Transportation
Services, Trucking)
Technology, Media & Telecommunications (TMT)
Fixed Line Telecommunications, Mobile
Telecommunications, Software & Computer Services
(and Internet), Technology Hardware & Equipment
(Computer Hardware, Electronic Office Equipment,
Semiconductors, Telecommunications Equipment),
Electronic & Electrical Equipment, Media (Broadcasting
& Entertainment, Media Agencies, Publishing)
Utilities
Electricity, Gas, Water & Multi-utilities
Other
Support services (Business Support Services, Business
Training & Employment Agencies, Financial
Administration, Industrial Suppliers, Waste & Disposal
Services)
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No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
56www.kpmg.com/crreporting |
Acknowledgments
Lead authors
José Luis Blasco
Global Head, KPMG
Sustainability Services
Adrian King
KPMG Global
Sustainability Reporting
& Assurance Leader
Co-authors
Mark McKenzie
Director, KPMG Global
Center of Excellence for
Sustainability Services
Madeleine Karn
Assistant Manager,
KPMG Global Center of
Excellence for
Sustainability Services
Researchers
Kugu Alper
Dimitris Apostolidis
Rahul Arora
Carmen Auer
Michael Bancroft
Joanne Beatty
Mike Boonen
Salvador Javier Cavero Artero
Catherine Chung
Nathalie Clement
Roopa Davé
Gargi Dhongde
Leopald Eggersdorfer
Åsa Ekberg
Cherine Fok
Patrick Francois
Lucy Hamnett
Laetitia Hamon
Lorena Herrera
Michiel Huijgen
Brice Javaux
Santhosh Jayaram
Ricardo Jimenez
Imran Jiwa
Katie Kaars Sijpesteijn
Viliam Kaceriak
Shruti Karkhedkar
Shoko Kato
Desislava Kavaldzhieva
Marcin Kawa
Michaela Kegel
Honza Kerver
Nina Killstrom
Radoslaw Kowalski
Diana Kozhemzharova
Anikó Kraft
Raema Elysha Kvithyatharan
Michelle Kwa
Zoe Li
Francesca Lifrieri
Fernando Lopez
Angelica M Joya
Sebastian Martheyn
Luciano Massatoshi
Jozef Melichar
Natasha Maryanne Menon
Valeria Merino
Erica Miles
Marieke Miltenburg
Dhiraj Kumar Mishra
Steven Mulkens
Gabit Musrepov
Charnyapornpong Natchawat
Eddie Ng
Chinedu Odunukwe
Gloria Ojo
Maximiliano Ordoñez
Julia Paterson
Ana Perez Uematsu
Caroline Pope
Lucie Prajzlerova
Prathmesh Raichura
Nathalie Rondeau
Anette Rønnov
Martim Santos
Katharina Schoenauer
Celeste Sepulveda
Markellos Sergiou
Hetika Shah
Rony Shalit
Ang-Ting Shih
Ana Stivanin
Istvan Szabo
Farah Theo
Alin Tiplic
Ekaterina Trutneva
Carmit Tzur
Arnaud Van Dijk
Julie Vasadi
Harsh Vasoya
George Wales
Kim Webb
Andrea Hwa-Young Woo
Heather Zanoni
© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of
independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm
has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG
International have any such authority to obligate or bind any member firm. All rights reserved.
56www.kpmg.com/crreporting |
Local contacts
Argentina
Martin Mendivelzua
mmendivelzua@kpmg.com.ar
Australia
Adrian V. King
Global Sustainability Reporting &
Assurance Leader
avking@kpmg.com.au
Austria
Peter Ertl
pertl@kpmg.at
Azerbaijan
Vugar Aliyev
valiyev@kpmg.az
Belgium
Mike Boonen
mboonen@kpmg.com
Brazil
Ricardo Zibas
rzibas@kpmg.com.br
Canada
Bill J. Murphy
billmurphy@kpmg.ca
Chile
Luis Felipe Encina
lencina@kpmg.com
China
Maria Cheng
maria.cheng@kpmg.com
Colombia
Maria Teresa Agudelo
magudelo@kpmg.com
Cyprus
Iacovos Ghalanos
iacovos.ghalanos@kpmg.com.cy
Czech Republic
Zuzana Majcikova
zmajcikova@kpmg.cz
Denmark
Niels Vendelbo
nielsvendelbo@kpmg.com
Finland & Sweden
Tomas Otterström
tomas.otterstrom@kpmg.fi
France
Philippe Arnaud
parnaud@kpmg.fr
Germany
Jens Laue
jlaue@kpmg.com
Greece
George Raounas
graounas@kpmg.gr
Hungary
István Szabó
istvan.szabo@kpmg.hu
India
Santhosh Jayaram
santhoshj@kpmg.com
Indonesia
Craig Rawlings
craigrawlings@kpmg.com.sg
Ireland
Michael Hayes
michael.hayes@kpmg.ie
Caroline Pope
caroline.pope@kpmg.ie
Israel
Oren Grupi
ogrupi@kpmg.com
Italy
PierMario Barzaghi
pbarzaghi@kpmg.it
Japan
Kazuhiko Saito
kazuhiko.saito@jp.kpmg.com
Yoshitake Funakoshi
yoshitake.funakoshi@jp.kpmg.com
Kazakhstan
Saken Zhumashev
szhumashev@kpmg.kz
Luxembourg
Gilles Poncin
gilles.poncin@kpmg.lu
Malaysia
Kasturi Nathan
kasturi@kpmg.com.my
Mexico
Jesus Gonzalez
jesusgonzalez@kpmg.com.mx
Netherlands
Bernd Hendriksen
hendriksen.bernd@kpmg.nl
New Zealand
Erica Miles
emiles@kpmg.co.nz
Nigeria
Tomi Adepoju
tomi.adepoju@ng.kpmg.com
Norway
Anette Rønnov
anette.ronnov@kpmg.no
Peru
Rosario Calderon
rccalderon@kpmg.com
Philippines
Henry D. Antonio
hantonio@kpmg.com
Poland
Krzysztof Radziwon
kradziwon@kpmg.pl
Portugal
Martim Santos
martimsantos@kpmg.com
Romania
Gheorghita Diaconu
gdiaconu@kpmg.com
Russia, Ukraine,
Georgia & Armenia
Igor Korotetskiy
ikorotetskiy@kpmg.ru
Singapore
Sharad Somani
sharadsomani@kpmg.com.sg
Slovakia
Quentin Crossley
qcrossley@kpmg.sk
South Africa
Shireen Naidoo
shireen.naidoo@kpmg.co.za
South Korea
Sungwoo Kim
Regional Leader, Asia Pacific
KPMG Sustainability Services
sungwookim@kr.kpmg.com
Spain
José Luis Blasco Vazquez
Global Head, KPMG
Sustainability Services
jblasco@kpmg.es
Switzerland
Anne Van Heerden
annevanheerden@kpmg.com
Taiwan
Niven Huang
nivenhuang@kpmg.com.tw
Thailand
Paul Flipse
pflipse@kpmg.co.th
Turkey
Sirin Soysal
ssoysal@kpmg.com
UAE and Oman (Lower Gulf)
Raajeev Batra
raajeevbatra@kpmg.com
Hanife Ymer
hymer1@kpmg.com
UK
Paul Holland
paul.holland@kpmg.co.uk
US
Katherine Blue
kblue@kpmg.com
Uruguay
Martin Clerino
martinclerino@kpmg.com
Venezuela
Jose O. Rodrigues
jrodrigues@kpmg.com
KPMG’s Global Center of
Excellence for Climate Change
and Sustainability
sustainabilityservices@kpmg.com
kpmg.com/sustainability
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Publication name: The KPMG Survey of Corporate
Responsibility Reporting 2017
Publication number: 134802
Publication date: October 2017
Designed by CREATE | CRT085180 | October 2017