Corporate Responsibility Reporting 2011
 |
2 Decembrie 2011 |
 |
KPMG ROMÂNIA S.R.L. |
Adresa
DN 1 Bucureşti Ploieşti, Nr. 69-71
013685 Bucureşti, Sector 1
Telefon
+40-21-201.22.22
Fax
+40-21-201.22.11
Website
www.kpmg.md
www.kpmg.ro
Executive Summary
Corporate responsibility (CR) reporting has become the de facto law for business
While the continued adoption of CR reporting may not surprise those active in the field, the details of how CR reporting is evolving deliver a compelling view into the expectations that companies now face.
Companies are increasingly realizing that CR reporting is about more than just being a good corporate citizen; it drives innovation and promotes learning, which helps companies grow their business and increase their organization’s value.
It seems clear, therefore, that companies not yet reporting on their CR activities are under significant pressure to start. This will be increasingly critical; not only to stay competitive in a societal context, but also to gain a better understanding of howCR activities impact and benefit the business in areas such as cost savings and new business opportunities.
Much work remains in some pockets of the world, particularly the Asia Pacific region and within privately-held companies around the world. Both must recommit themselves to enhancing transparency and creating a more level playing field through greater CR reporting.
Governments can also play a part by designing interventions that further drive the uptake of CR reporting. Strong examples of this are evident in varying degrees from Sweden to South Africa and provide compelling proof that government intervention can enhance the adoption of CR reporting overall.
CR reporting enhances financial value
Where CR reporting was once seen as fulfilling a moral obligation to society, many companies are now recognizing it as a business imperative. Today, companies are increasingly demonstrating that CR reporting provides financial value and drives innovation, reflecting the old adage of “what gets measured gets managed.” In our own experience in the market, we have witnessed countless companies discover new opportunities for business improvement by analyzing their CR reporting data and developing continuous improvement programs to effect lasting change.
Financial value overwhelmingly comes from two sources: direct cost savings and enhanced reputation in the market. Some programs provide both. ‘Green’ products, for example, not only reduce waste and cost to provide direct savings, but also provide reputational dividends from both investors and consumers. That said, the ‘green’ label may soon wear itself out as environmentally friendly products become the norm rather than the exception.
Combined reporting leads to integrated reporting
For some years now, leading companies have combined their CR reporting and financial reporting, often by merging the two into the annual report. And while this has been a valuable stepping stone in building a holistic understanding of how CR impacts the business, we believe that greater value will be gained once both sets of information are treated as part of the company’s comprehensive business performance reporting, both to internal management and external stakeholders.
Companies are also quickly evolving the method by which they communicate their CR information to their various audiences. As more and more companies start to employ multiple vehicles for communication (above and beyond their printed annual report), we expect to see companies focus on developing and implementing a comprehensive communication strategy that enhances trust and value for the company within its different stakeholder groups.
Raising the bar on data integrity
Given the evolving nature of CR reporting globally, readers or investors should not automatically take the instance of reporting adjustments to signify systemic reporting flaws. Rather, the high adjustment rate is likely an indication of maturing methodologies, definitions and inclusions that are effectively raising the benchmark for reporting standards.
However, with the increasing scrutiny of CR data by both external stakeholders and internal management, companies will quickly find that misstated data poses not only a risk to their credibility and reputation, but also impacts the management insight and innovation that CR reporting provides. As a result, greater focus must be placed on developing higher levels of data integrity through better governance, systems and controls that meet the future demands of both the company and its stakeholders.
Making the most of assurance
A growing number of companies look to external assurance providers to validate and certify their CR and integrated reports. And while most cite enhanced credibility asthe leading benefit from gaining external assurance, our experience shows that companies can gain significant internal benefits as well.
For one, assurance often provides opportunities to identify and drive process and performance improvements through the organization. But, as the following report shows, the use of assurance has also provided opportunities for organizations to sharpen their CR reporting to deliver more value to management, customers, investors and stakeholders.
Examining the Reporting Landscape
In this survey, KPMG has analyzed the reports of more than 3,400 companies globally – including the world’s 250 largest companies – to paint a clear picture of the state of CR reporting and assurance around the world. We examine a variety of key issues, including the benefits of CR reporting, the adoption of integrated reporting, the drive for global standards and the use of third-party assurance providers. Throughout, we provide valuable benchmarks and key insights into the evolving field of CR reporting that companies can use to assess themselves against and others may apply to draw further conclusions for their specific purpose.
This is the first in a series of three complementary reports. Future analysis will focus on the challenges related to water, supply chain and regulatory optimization.
