American Chamber of Commerce in Romania

Nearly every Global Fortune 250 (G250) company now reports its corporate responsibility activity, while reporting by firms in the pharmaceuticals, consumer markets, and construction industries has more than doubled since KPMG International last conducted its global survey in 2008.

In what KPMG believes to be the most comprehensive survey of corporate responsibility (CR) reporting ever published, the KPMG International Survey of Corporate Responsibility Reporting 2011 reviewed trends of each of the G250, as well as 3,400 companies worldwide, representing the national leaders in 34 countries and 15 industry sectors.

The survey found that CR reporting is now undertaken by 95 percent of the G250, while the largest 100 companies (N100) in each country surveyed increased reporting by 11 percent since 2008, to 64 percent overall, with developing nations showing a fast uptake.

Almost half of the G250 companies report gaining financial value from their CR initiatives. In the absence of a regulatory global sustainability reporting standard, the drive for consistency and accessibility to quality data was highlighted in the findings. The Global Reporting Initiative (GRI) Sustainability Reporting Guidelines are used by 80 percent of the G250 and 69 percent of N100 companies and are gaining widespread adoption as the de facto reporting standard.

Countries leading reporting in the survey in 2008 continue to dominate today with the United Kingdom and Japan at 100 percent and 99 percent, respectively, of companies reporting.

• South Africa’s King Corporate Governance Commission code is attributed as the reason for the sharp increase in CR reporting in that country, which has risen to third place with 97 percent reporting, up from 45 percent in 2008;

• The Americas at 69 percent overall (with the U.S. at 83 percent and Canada at 79 percent) and the Middle East and Africa region (61 percent) are quickly gaining ground;

• China, new to the survey this year, demonstrates rapid uptake with 60 percent of its largest companies reporting on corporate responsibility;

• Lowest ranked were New Zealand and Chile (27 percent), India (20 percent) and Israel (18 percent);

• Australia passed the midpoint on CR reporting, increasing from 45 to 57 percent;

• Nordic countries saw a sharp rise in CR reporting with the change attributed to heightened public interest in CR issues as well as government regulation.

Wim Bartels, Global Head of KPMG’s Sustainability Assurance said the global momentum in corporate responsibility demands both higher quality CR information and greater use of assurance to maintain standards and stakeholder confidence.

“Unlike financial reporting, the disclosure of sustainability metrics to the market is largely unregulated. Restatements are four times higher compared to financial reporting and demonstrate that CR reporting has some way to go.”

Reporters that engaged formal assurance professionals were twice as likely to restate their reports as those without, demonstrating that assurance providers are demanding higher quality data, also signifying the need for increased focus on internal processes.

“This survey shows almost half of the G250 companies report gaining financial value from their CR initiatives. CR has moved from being a moral imperative to a critical business imperative. The time has now come to enhance CR reporting information systems to bring them up to the level that is equal to financial reporting, including a comparable quality of governance controls and management,” urged Mr. Bartels.

Further figures with respect to assurance are:

• 51 percent of mining and 46 percent of utility companies conduct assurance with numbers dwindling across other sectors;

• 46 percent of G250 and 38 percent of N100 companies use assurance as a strategy for verifying CR reporting, which for the G250 is higher than in 2008 but still falls short of a majority; and

• India (80 percent) and South Korea (75 percent) lead the way in assurance.

Mr Bartels said that when it comes to CR reporting uptake, size matters.

“The findings show that bigger companies are twice as likely to report as those with revenues under U.S. $1 billion. This also presents an opportunity for smaller companies to leverage the benefits of CR reporting as a financial and reputational differentiator,” said Mr Bartels.

Geta Diaconu, Director Sustainability Advisory Services at KPMG in Romania comments: “The second survey carried out by KPMG in Romania, related to CR reporting on the top N100 (ranked on their revenue in 2010) revealed a significant increase to 54% of Romanian companies reporting on CR, compared to 24% in 2008. This substantial progress reflects an increasing awareness related to the importance of non-financial information disclosure as well as related to the financial benefits such a voluntary reporting might create for the reporters. When we analysed the main business drivers that lead Romanian N100 companies to report on CR, the findings showed that these are brand reputation and economic considerations, showing that companies focus on their image on the market and on strengthening relationships with the stakeholders, but are at the same time aware of the financial advantages provided by the disclosure of non-financial information.”

23% of the CR reporting Romanian companies (including multinationals that publish a Group report) request assurance or third party comments for their CR reports, which compared with 2% in 2008 demonstrates that companies see the benefits of providing credibility of the reported data, which can be achieved through a third party verification, continues Geta Diaconu.

In terms of reporting format, the survey shows that Romanian companies tend to disclose sustainability related information in a stand-alone report, either pdf/hardcopy or on-line (interactive web pages), rather than in a section of their annual report (integrated reporting).

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About the Survey

The KPMG International Survey of Corporate Responsibility Reporting 2011 was designed to examine reporting trends among the world’s largest companies. It is the seventh in a series conducted by KPMG and various partners since 1993 and is issued every three years. Thirty-four of KPMG’s member firms participated in this study including: Australia, Brazil, Bulgaria, Canada, Chile, China, Denmark, Finland, France, Germany, Greece, Hungary, India, Israel, Italy, Japan, Mexico, New Zealand, Nigeria, Portugal, Romania, Russia, Singapore, Slovakia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Ukraine, the Netherlands, the United Kingdom, and the United States. Analysts searched only publicly available information such as websites, corporate responsibility reports, and financial reports, and collected information on over 34 data points from each company associated with corporate responsibility reporting, standards, processes, drivers, and issues. The sample included the Global Fortune 250 (2010), and the 100 largest companies by revenue from 34 countries.

About KPMG:

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 150 countries and have 138,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

KPMG in Romania operates from five offices; located in Bucharest, Cluj-Napoca, Constanta, Iasi and Timisoara. We currently employ more than 600 partners and staff, both Romanians and expatriates.