F O C U S

O N

T H E

M I N I N G

S E C T O R

Preview of
KPMGs International Survey
of Corporate Sustainability
Reporting 2002

G l o b a l

S u s t a i n a b i l i t y

S e r v i c e s

2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.

Introduction

Since the publication of KPMGs International Survey of Environmental Reporting in 1999, there has
been significant change in the number, scope and quality of reports1 produced by companies. Results
of KPMGs International Survey of Corporate Sustainability Reporting 2002 show that reporting is
becoming mainstream for big corporations with 45% of Global Fortune Top 250 companies now
publishing a report*. The focus of these reports is shifting from the inclusion of only environmental
performance to combined environmental, social and economic reports, and an increasing number of
reports are being externally verified. Companies are also adopting new approaches to reporting, such as
Web-based reports, developing reports for specific stakeholder groups or issues, and preparing shadow
accounts that incorporate social and environmental costs.
In todays business environment, companies are facing increasing pressure to make the right financial
decisions while demonstrating their legitimacy and sustainability. Stakeholders are also becoming
increasingly concerned about the way in which decisions are made, and are asking for greater
accountability and involvement.
There are still many companies, for whom sustainability is not a core business issue, but a compliance to
legislation or nice to have accessory with little business relevance. However, companies included in the
2002 survey report that embracing sustainability can enhance business performance in many ways,
including:
Reducing operating costs and improving efficiency
Developing innovative products and services for access to new markets
Improving reputation and brand value through integrity management
Recruiting and retaining excellent people
Gaining better access to investors capital
Adding to the value of the company through the financial markets appreciation of good
sustainability performance
Reducing a companys liabilities through integrated risk management.

This Mining Sector briefing report highlights some of the results from the survey that relate to the
mining sector, and compares the performance of mining companies to the global corporate world.
Graphics presented in this report may differ slightly to those presented in the main survey.
We hope that this report offers an insight into the current trends in reporting within the mining sector
and, together with the results of KPMGs comprehensive survey, will provide convincing material
regarding the importance of Sustainable Development.

Survey methodology

The main survey focused on the state of reporting for the following companies:

The Global Fortune Top 250 companies from the Global Fortune 500 (hereafter, the GFT250)
Top 100 companies in 19 countries2

As the list of the GFT250 companies includes only one mining sector company, the mining sector analysis
in this briefing paper is based mainly on the Top 100s database.
The main survey of the Top 100s included 42 mining companies, but some additional analysis was
conducted for this briefing report on a further 11 mining companies from five countries3 in order to get a
more comprehensive picture of the state of play in the Mining sector.
The reports surveyed were analyzed by country, sector and the level and type of reporting. More detailed
explanation of the methodology employed can be obtained from the actual survey.

Sector comparison

The Top 100s sample was analyzed by sector to discover which sectors are leading the field of reporting.
The results, which are presented graphically in Figure 1, show that the Utilities sector is leading with
50 percent of companies in that sector publishing reports. The Mining sector analysis from the survey
revealed that 33 percent of companies in that sector produced reports. Analysis of the enlarged mining
sector sample revealed that reports were produced by 42 percent of companies surveyed. Both of these
samples are below the average for the GFT250, but well above the average for the Top 100s sample.

*Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.
1 The term reports in this survey includes environmental, health and safety, social, community and sustainability reports, and a
combination of these. Annual financial reports will specifically be referred to as such.
2 Australia, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Japan, Netherlands, Norway, Slovenia,
South Africa, Spain, Sweden, United Kingdom, United States.
3 Brazil, Canada, Chile, South Africa, USA.

2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.

Sector analysis of the percentages of Top 100s companies

producing corporate reports.
Figure 1 :

Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.

50%
46%
45%
43%
38%
37%
33%
30%
28%
25%
25%
24%
15%
12%
9%
6%

23%

Global trends

The prevalence of reporting was also analyzed by country in both the Top 100s and GFT250 samples.
The results for the Top 100s sample are presented in Figure 2.

Corporate reporting in the Top 100s sample, analyzed by country

Figure 2 :

Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.

72%
49%
36%
35%
32%
32%
29%
26%
25%
21%
19%
14%
12%
11%
11%
8%
5%
2%
1%

The high proportion of reporters in Japan could be as a result of the guidelines on environmental
reporting and environmental performance indicators issued by the Ministry of Environment in Japan in
2001. Countries that lead the field in full sustainability reporting were Canada (8 out of 19), USA (7 out
of 36) and Germany (6 out of 32).
Similar analysis was done on the enlarged Mining sector sample, but the full results are not shown here
as the small size of the sample resulted in many countries having less than five mining companies. The
results did show, however, that the majority of mining companies included in the survey were in
Australia (10) and South Africa (21), and that the percentage of mining companies producing reports in
these two countries was 80 percent and 5 percent, respectively. Due to the low level of reporting in South
Africa, the proportion of mining companies producing reports was recalculated excluding the South
African companies. This calculation showed that reports were produced by 71 percent of the non-South
African mining companies, again suggesting that sustainability issues already command a high profile in
the Mining sector outside of South Africa compared to other sectors.

2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.

Code of business conduct

A code of business conduct describes the responsibilities of a company towards its stakeholders and the
way in which staff (should) put this into practice. Codes vary from half a page to sometimes as much as
80 pages. The linking of a code of business conduct to sustainability performance is an indication that a
company recognizes the links between sustainability performance and business performance. The results
presented in Figure 3 show that the Mining sector is ahead of both the Top 100s and the GFT250 in
terms of reference to a code of business conduct.

Percentage of companies referring to a code of business conduct

Figure 3 :

Verification

Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.

An increasing focus on information which is critical internally for management and is vital externally for
stakeholders to form their views, calls for a corresponding increase in the robustness of assurance
provided. A rigorous assurance process enhances credibility of the information reported and highlights
opportunities to improve reporting processes and the information they generate, ensuring that future
reporting cycles are more efficient and less resource intensive - in terms of both time and costs. If
carefully implemented and fully integrated into existing assurance processes, verification can become a
strong component of the overall corporate strategy to manage, monitor and report on key business risks.
The results presented in Figure 4 show that less than one third of the companies in the Top 100s and the
GFT250 had their reports verified, and that the Mining sector is leading with respect to report
verification. Companies should evaluate the business case for verification, and should consult their key
stakeholders in order to determine whether verification would add value and credibility to the data
presented for that business.

Comparisons of the percentage of verification statements in non-financial reports

Figure 4 :

Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.

See over page for Overview,

Summary and conclusions
2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.

Corporate Sustainability Reporting - survey results

Overview

A growing number of companies are including information or narrative about their performance on
sustainable development issues in their Annual Reports. This shows a commitment to dealing with and
reporting on these issues as the Annual Reports are viewed by a wide range of stakeholders, including
financial lenders, customers and communities. The results of the survey showed that 49 percent of
companies surveyed included environmental, social or sustainability information in their Annual Reports.
Analysis of the extended Mining Sector sample showed that 74 percent of the companies mentioned
these issues in their Annual Reports, which clearly shows that these issues already command a high
profile in the Mining industry compared to other sectors.
The analysis of the Top 100 companies in each of the 19 participating countries and of the GFT250
revealed that 23 percent and 45 percent, respectively, of companies produced a report. The content of
reports is changing from covering only environment or HSE, to including information regarding
performance in social and community development as well. The ultimate aim of some companies is to
produce a fully integrated sustainability report, which covers economic, social and environmental
information. Figure 5 shows the proportion of companies currently publishing the various types of report
that are in existence today.

Comparison of the proportions of different types of corporate reports produced

by companies in the Top 100s, the GFT250 and the Mining Sector.
Figure 5 :

Source: KPMG International Survey of Corporate Sustainability Reporting 2002, The Netherlands.

These graphics show that the mining sector is already recognizing

the importance of producing sustainability reports rather than
focusing only on one area of sustainable development.

Summary and conclusions

Corporate Social Responsibility is a business reality for todays mining companies. No one would
dispute the fact that methods of operation that were acceptable as recently as 20 years ago may not
be tenable today. Many social responsibility issues have long been part of doing business for the
worlds leading mining companies who are used to dealing with environmental and social issues in
their operations. The survey shows that reporting of performance in these areas is well established
in the mining sector and that far from being laggard, the industry is leading the way in some of
these initiatives.
Good environmental stewardship and social responsibility are clear examples of good management
and there is no disputing the clear link between good management and business performance.
At the same time, the development and wealth creation that the mining industry has brought to
communities around the globe should not be forgotten. In order to continue with this, mining
companies must be allowed to make a reasonable return for their shareholders while operating in a
responsible manner. The MMSD initiative is to be applauded as a groundbreaking project to engage
all stakeholders in the industry to seek out a mutually satisfactory platform on which to build on.

2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.

Contact Details
Kate Hay, Global Sustainability Co-ordinator, KPMG
e-mail : hay.kate@kpmg.nl
www.kpmg.com
or your local KPMG office

The information contained herein is of a general nature and is not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act
upon such information without appropriate professional advice after a thorough examination of the particular situation.

Focusing on the mining sector

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2002 KPMG LLP. KPMG LLP, a UK limited liability partnership, is a member of KPMG International, a Swiss nonoperating association. All rights reserved.
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Data may change between this preview report and the main KPMG International Survey on Sustainability Reporting 2002 due to differences in date of publication.

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