KPMG CSR Reporting Survey 2008

105984 Corp responsibility Survey FULL 23/10/08 14:09 Page c1
KPMG
International
Survey of
Corporate
Responsibility
Reporting 2008
K P M G I NT E R N AT I O N A L
Contents
Foreword 1
Lord Michael Hastings of Scarisbrick CBE, Global Head of Citizenship
and Diversity, KPMG International 2
Wim Bartels, Global Head, KPMG Sustainability Services,
Partner, KPMG in the Netherlands 2
Executive Summary 3
Quick Reference Guide 6
Chapter 1 Corporate Responsibility Reporting in Context 7

1.1 Looking back 8
1.2 Looking ahead 9
Chapter 2 About the Survey 11

2.1 Objectives 12
2.2 Methodology 12
Chapter 3 The State of Corporate Responsibility 13

Reporting in 2008
3.1 Corporate Responsibility Reporting at the Global Level 14
3.2 A Closer Look at Reporting in 22 Countries 15
3.3 Integration of Corporate Responsibility Information into Annual Reports 17
3.4 Beyond the Trend Line: Drivers for Reporting 18
Chapter 4 Corporate Responsibility Strategy 21

and Reporting Process
4.1 Strategy and Objectives 22
4.2 Management and Frameworks 28
4.3 Stakeholder Engagement 31
Special Focus Investor Relations 33
4.4 Reporting and the Use of Standards 35
Special Focus Global Reporting Initiative Guidelines 36
Chapter 5 Topics in Corporate Responsibility Reporting 41

5.1 Corporate Governance 42
5.2 Supply Chain 46
5.3 Climate Change 49
Chapter 6 Assurance and Corporate Responsibility Reporting 55

6.1 Global Trends in Assurance 56
6.2 A Closer Look at Assurance by Country and Sector 57
6.3 Assurance: Why, Who and What 62
6.4 Assurance Standards and Opinions 65
Spotlight (by country) 67
The Way Forward 109
Appendices 111
I List of Tables and Figures 112
II List of Terms 113
III Key Contributors 113
IV KPMG’s Global Sustainability Services key contact information 114
© 2008 KPMG International. KPMG International provides no client services and is a Swiss cooperative with which the independent member firms of the KPMG network are affiliated.
1 KPMG International Survey of Corporate Responsibility Reporting 2008
Foreword
KPMG International Survey of Corporate Responsibility Reporting 2008 2
Today we are in the midst of a rapid help develop this field and promote number jumped to 80 percent. More
global transformation with increased best practices by highlighting current companies report the information as it
demand on corporations to perform developments and historical trends. relates to specific objectives and more
not only financially but to be good companies include this information in
corporate citizens. One of the most KPMG conducts the International their annual reports.
important aspects of this transformation Survey of Corporate Responsibility
is the critical importance Corporate Reporting every three years to gain Our goal is to further the ideal that
Social Responsibility (CSR) programs. insight into CSR reporting and to corporate responsibility reporting and
Climate change; community health, contribute to the evolving global assurance practices become as
education and development; and dialogue on transparency and commonplace as financial reporting
business sustainability are some of the accountability. The 2008 survey was and assurance. I believe you will find
most pressing issues of our time. conducted in 22 countries and with this report relevant to your business
Businesses are increasingly involved in more than 2200 businesses around the and that it will stimulate your ideas
these areas as are their clients and their world. and help facilitate your move to include
people. This raises the importance of CSR in your overall reporting.
accurately and transparently accounting As you will see in the results, there
for and reporting these activities. has been an important shift in this
direction with CSR reporting becoming Lord Michael
Auditors have long played an important the norm instead of the exception Hastings of
role in the financial reporting process within the world’s largest companies. Scarisbrick CBE
and we believe strongly in the strategic Three years ago only 50 percent of Global Head of
value of CSR reporting. We want use companies surveyed included CSR in Citizenship and Diversity,
our leadership position in this area to their reporting, in this survey the KPMG International
In a world of changing expectations, and that reporting is likely the result of In terms of report quality, there is also
companies must account for the way a systematic approach to corporate a growing trend in using outside views
they impact the communities and responsibility that includes a strategy, to confirm a company's account of its
environments where they operate. management system, stakeholder corporate responsibility performance.
It is encouraging to see that nearly engagement, reporting, and assurance. Third parties such as stakeholder panels,
80 percent of the world’s largest subject matter experts, and professional
250 companies are now doing But the true judges of a company’s assurance providers all have a role to
precisely this - reporting on their report quality are its readers - the play in helping to ensure that credible
social and environmental performance. company’s stakeholders. The KPMG information guides companies on
survey was expanded this year to probe progress toward what really matters:
But would these reports pass the the depth of stakeholder involvement a more sustainable future.
“greenwash” test? For the first time in in a company’s corporate responsibility
the 15 years we have been doing this strategy and reporting. Although
survey, we think they just might. stakeholder engagement is becoming Wim Bartels
Nearly all of the Global 250 companies more formalized, there is still room Global Head,
that report also publish a corporate for greater transparency about who KPMG Sustainability
responsibility strategy with defined stakeholders are and how companies Services
objectives. Our findings show that are responding to their concerns. Partner, KPMG
in the Netherlands
management systems are maturing,
Executive Summary
The purpose of this survey was to track reporting trends in the world’s
largest companies. The sample of over 2200 companies includes the
Global Fortune 250 (G250) and the 100 largest companies by revenue
(N100) in 22 countries. The survey presents historical data where possible,
drawing from five previous surveys conducted by KPMG firms since 1993.
Only information available in the public domain was used for this survey,
such as company websites, corporate responsibility reports,
and annual reports issued in 2007-2008.
More details on the survey methodology and the context for corporate responsibility
reporting can be found in Chapters 1 and 2.
The State of Corporate Responsibility Reporting in 2008
Chapter 3 provides an overview National trends

National level companies trail the G250 KPMG Insight
of the main trends in reporting.
with only 45 percent of the total sample Reporting is now the norm, not the
One of the most significant findings issuing reports, but numbers vary from exception, among the world’s largest
of the 2008 survey is that corporate less than 20 percent in Mexico to more companies. Since motivations for
responsibility reporting has gone than 90 percent in Japan. reporting have shifted away from
mainstream - nearly 80 percent of reactive and risk management factors
the largest 250 companies worldwide Drivers and toward aspirational and
issued reports, up from about Ethical considerations and innovation innovative ones, we expect reporting
50 percent in 2005. emerged as some of the most common to become more common at the
drivers for reporting, while risk national level and in smaller
management fell in the G250 group. companies in the near future.
Corporate Responsibility Strategy and Reporting Process
Chapter 4 looks at the process behind corporate responsibility

KPMG Insight
reporting and how reporting fits into a company’s overall strategy
and management system. Although the N100 companies are
trailing their global counterparts, we
are seeing a distinctive maturing of
Strategy Frameworks corporate responsibility management
Three-quarters of G250 companies have More than three-quarters of the G250 systems overall. Reporting is now
a corporate responsibility strategy that and nearly 70 percent of the N100 use more likely to occur within the
includes defined objectives. the GRI Guidelines for their reporting. context of an overarching strategy
and management system. The use of
Stakeholders Value the GRI Guidelines by the majority of
Nearly two-thirds of G250 companies More than half of the world’s largest G250 and N100 companies shows
engage with their stakeholders in a 250 companies publicly disclose new that this has become a leading
structured way, up from 33 percent business growth opportunities standard for reporting. Stakeholder
in 2005. However, most companies and/or the financial value of corporate engagement is an area that could be
do not use existing channels like annual responsibility. strengthened - and included as part
general meetings (AGMs) to engage of a broad-ranging approach to
analysts and investors about corporate responsibility strategy and
environmental and social issues. reporting. Now that some of the
world’s largest companies have been
able to quantify the business case for
corporate responsibility and reporting,
it is likely that the practice will spread
through countries and sectors to the
smaller players.
Executive Summary continued
Topics in Corporate Responsibility Reporting

Chapter 5 looks inside reports to selected issues companies are
KPMG Insight
disclosing information on: corporate governance, supply chain,
and climate change. In theory the link between corporate
governance and corporate
responsibility seems clear, but in
Corporate governance Climate change practice many companies do not
Although 92 percent of G250 While 62 percent of G250 companies appear to be making the connection
companies disclose a corporate disclose information about climate and capitalizing on the potential
governance code of conduct or ethics, risks, 69 percent of N100 companies benefits. Reporting on supply chain
only 59 percent report on incidents do not. Whereas understanding the risk and reporting by suppliers both
of non-compliance with the code. risks starts with understanding the look set to increase as investors,
footprint, a large part of the G250 and customers in particular, demand
Supply chain (41 percent) need to develop this. greater responsibility and
Nearly all G250 companies have a Carbon footprint reporting is focused transparency. Whereas carbon
supply chain code of conduct, but only largely on the own operations. footprint reporting is not as common
half disclose the details of how it is as might be expected, there are other
implemented and monitored. indications that companies are taking
the risks and opportunities associated
with climate change seriously.
Assurance and Corporate Responsibility Reporting
Chapter 6 examines trends in assurance and reveals who is using it,

KPMG Insight
how, and why.
As stakeholders become more
specific about the information they
Formal assurance Providers
need and corporate responsibility
Formal third party assurance of G250 Major accountancy organizations are
management systems mature,
reports jumped from 30 percent to 40 the leading providers of assurance
combining comments from parties
percent in the past three years, and in corporate responsibility reporting.
such as stakeholder panels with a
the trend is similar at the national level
systematic assurance process could
with 39 percent of N100 reports Standards and quality
provide the desired level of assurance
containing formal assurance. The consistency and quality of
about both report content and quality.
assurance approaches is demonstrated
With the N100 group at par with the
Third party commentary by an increase in the use of standards.
G250 in terms of using formal
Twenty seven percent of reports G250 companies are less likely to ask
assurance (40 percent), this may
included other types of third party for reasonable (positive) assurance
indicate that new reporting companies
commentary, such as stakeholder than N100 companies.
will adopt this practice as standard
panels or subject matter expert
procedure over the next three years.
statements.
Quick Reference Guide

Use this navigator to jump quickly to topics
in the report that interest you.
Topic Page
Trends in G250 reporting 14
Trends in N100 reporting 15
Corporate responsibility strategy 22
Stakeholder engagement 31
GRI Guidelines 35
Corporate governance reporting 42
Supply chain reporting 46
Climate change reporting 49
Assurance 55
Chapter 1
Corporate Responsibility
Reporting in Context
In a world of ever changing challenges companies are shifting away
from risk management approaches and toward an approach that has
learning and innovation at its heart. Reporting is necessity if companies
are to know and understand their social and environmental impacts,
and how to minimize the dangers and maximize the opportunities
associated with new and emerging challenges.
Achieving robust economic growth and resources to help find solutions to • Evolving expectations
vitality in a way that does not hinder some of the social and environmental There are constant and “real time”
future generations from realizing these challenges we are facing as a global discussions underway at global
same goals is an urgent aspiration. society today or in the future. This is and local levels about the roles
Known as “sustainable development” known as corporate responsibility. governments, businesses, and
this is possbily the main challenge of citizens should play in the pursuit
our times. Historically governments There are two issues in particular, of a more sustainable future.
have taken a lead role in shaping future however, that make it difficult for
directions through policy making and companies to know how they should As new information about how we are
incentives. However, due to the rise of act in the face of such challenges, impacting our social and ecological
economic power in the private sector thus making sustainable development systems becomes available, and as
over the past half century, and increased a moving target: dialogues between public, private, and
interconnectivity brought about by third sectors mature, companies must
globalization over the past two decades, • Imperfect information continuously adjust and innovate to
it has become clear that companies The complexities of physical, remain competitive.
have a major role to play in the pursuit biological, and social systems, and
of a more sustainable future. how they interact and react under Comparing results from the 2008
stress or changing conditions, are KPMG International Survey of
Companies can play a vital role by not fully known. Therefore companies Corporate Responsibility Reporting to
ensuring that the direct and indirect may not know how they have findings from the same survey in 2005,
impacts caused in the normal course impacted an ecosystem or community it is clear that the rules of the
of business are positive for the until long after the fact, or may not sustainability game change fast.
environment and people, and by using be able to predict how a new set
their vast reserves of knowledge, of business activities may affect
innovation, creativity, and other these systems.
1.1 Looking back
The first part of this decade was marred In the lead-up to the 2005 Survey, the • Demand for a more complete
by corporate scandals, with companies context within which companies were picture of the health and stability of
coming under scrutiny for dubious reporting was being shaped by the a company, where not only financial
accounting practices and corporate following developments: results are considered but also risk
governance approaches. This caused management practices and value-
regulators, shareholders, employees, • Worldwide demand for transparency creation in the environmental and
and consumers to demand better ways and accountability at an all time high. social arena.
of tracking the health and value of a
company – ways that included a • Expansion of corporate governance • Significant discussions around
departure from the traditional financial expectations and a renewed regulation and mandatory
report. Looking back, this permanently commitment to ethics. transparency on governance, ethics,
shaped the future of reporting, both and other non-financial issues.
financial and otherwise.
Chapter 1
Corporate Responsibility Reporting in Context
1.2 Looking Ahead

The context in which companies already established via the widespread (ESG) framework issued by Goldman
operate evolves constantly as lessons use of its 14001 environmental Sachs, all for use in the financial
are learned, new information becomes management standard. services sector. For climate change,
available, and dialogues about the Carbon Principles help guide
expectations mature. In the three years The importance of transparency and emerging carbon markets, while
since KPMG’s last survey release, much accountability was magnified in 2008 participation in the Carbon Disclosure
has happened to shape the landscape when the United Nations Global Project has increased substantially,
of corporate responsibility and Compact (UNGC) - whose framework as has uptake of the Greenhouse Gas
reporting. Some of these issues and guides corporate commitment to social Protocol (GHG Protocol).
developments are discussed below. and environmental issues in the form of
10 principles - marked nearly 1000 Climate change
Principal global frameworks companies as inactive or delisted from After decades of scientific study and
The dominant codes and standards their active pool of participants for not activism, the issue of climate change
guiding corporate responsibility communicating on progress with the finally broke through into mainstream
practices are designed to improve Compact. awareness, thanks in part to
continuously over time in order to developments under the various UN
capture lessons learned and new Human rights have emerged as a fast- climate directives, and the efforts of
information, as well as reflect current changing issue for businesses to watch. former US Vice President Al Gore and
views on the roles and expectations of The UN “Norms on the Responsibilities other advocates, who were awarded
companies. Developments in the past of Transnational Corporations and Other the Nobel Peace Prize in 2007.
three years have affected the state of Business Enterprises with Regard to The uptake of market-based
corporate responsibility reporting today. Human Rights” has been the subject of mechanisms for emissions trading
ongoing dialogue between business, and carbon offset have witnessed
Most significantly for reporting, the governments, and civil society on the significant growth. With climate
Global Reporting Initiative (GRI) released expectations of big business vis-à-vis change firmly on the political and
the third iteration of its Sustainability human rights. consumer agendas, large companies
Reporting Guidelines (G3 Guidelines) in worldwide have started to try and
late 2006, after a two-year development Assurance standards have also understand the risks and opportunities
process involving some 3000 continued to evolve as a reflection of in a carbon-constrained world.
stakeholders worldwide. By 2008 the the changing landscape. In some
majority of companies that had reported countries the IAASB standard, Supply chain
using the earlier version of GRI ISAE3000, has been further iterated as One of the challenging aspects of
Guidelines, G2, had made the switch to a specific assurance standard for corporate responsibility management
the G3 version. With greater emphasis corporate responsibility reporting, while and reporting is that the boundary of
on the reporting process and further AccountAbility’s AA1000AS is currently responsibility often extends beyond the
elaboration of methods for calculating undergoing a major revision process reach of a corporation’s ownership and
indicators, this new version could help and will be reissued in late 2008. The direct control. This was exemplified
encourage greater comparability, importance of reliable data on carbon dramatically in 2007 when Mattel had
materiality, and rigor with reporting. emissions has also been recognized to recall 20 million children's toys
by the IAASB, which recently set up contaminated with lead and pet food
The International Organization for a working group to look at developing makers had to recall 60 million tins of
Standardization (ISO) is developing the a specialized accounting standard. tainted food as a result of a lapse in
ISO 26000 Guidance Standard on Social Issue-specific frameworks have been quality control in Chinese factories
Responsibility. Even though this is not developed to fill gaps on emerging which brought to light the difficulties
going to be a certification standard, it is issues. Some key examples include companies have in ensuring their
anticipated that it will impact corporate the Equator Principles, Principles for expectations are met.1 Companies,
practice when it is released partly due Responsible Investment (PRI), and the especially in the retail sector, have been
to the dominant position ISO has Environment, Social, and Governance working for the best part of a decade
1 See “101 Dumbest Moments in Business”, http://money.cnn.com/galleries/2007/fortune/0712/gallery.101_dumbest.fortune/index.html
to reinforce environmental and labor The ability of a company to communicate

“There is recognition that all of us
standards in the supply chain. After its activities and performance effectively
years of avoiding direct engagement, to its key stakeholders, such as have a responsibility to contribute to
the company with the world's largest customers, employees, investors, sustainable development and to
supply chain, WalMart, announced suppliers, and community groups, helps keep under scrutiny our respective
various environmental and social it to build trust and credibility among actions, activities and choices, and
reforms and targets for its those groups that matter to a company their implications. As we find
suppliers.These examples make it most.2 It can also be critical to a ourselves addressing global issues
evident that companies are beginning company’s long-term success, viability, such as water, food security, climate
to integrate corporate responsibility and growth. change, and others, it is clear that
into supply chain management. the availability of basic social and
Now firmly entrenched as a common environmental performance
Corporate governance practice among the world’s biggest
information is essential. Increasing
Firmly on the agenda for most of this companies, corporate responsibility
decade, the credit crisis that emerged reporting is building value for companies comparability in reporting is
in 2007-2008 has been a reminder that in many ways. Some include: necessary to improve our
when navigating new or unregulated assessment of the sustainability
territory, companies should conduct • Differentiating the company in the trends that are unfolding rapidly
themselves with the highest degree marketplace based on its corporate before us, and to urgently move us
of ethics - or face tough consequences. responsibility strategy and from just thinking about these
Recognizing that corporate responsibility commitments; issues to really knowing how to
is able to inform, and manifest, good respond to these issues.
governance, companies have been • Maintaining a license to operate with
experimenting with uniting these two the public or specific stakeholders; We must deepen, widen, and
concepts in order to strengthen strategy
and risk management. accelerate the practice of sustainability
• Attracting favorable financing
reporting if we are to respond as a
conditions as financial markets wake
A new era for corporate up to ESG (environmental, social, and global society commensurate with the
responsibility reporting governance) issues and demand pace and direction of the changes
As the rules of the game continue better information on social and around us, and if we are to succeed in
to change for companies, reporting is environmental performance; sustaining our habitat and ourselves.”
essential for understanding and tracking
social and environmental impacts so • Encouraging innovation through a
that adjustments can be made to Angela Cropper
better understanding of stakeholder Deputy Executive Director, United
reduce negative and increase positive needs or future risks;
impacts. Reporting helps inform Nations Environment Programme
decisions by governing bodies, (UNEP), and Assistant Secretary
• Attracting and retaining workers in an General, United Nations
strengthen risk management systems, era of high employee expectations
and point to new opportunities for and stiff competition for talent; and
innovation in products and services.
• Enhancing reputation by providing
In addition to strengthening internal truthful and robust information on
systems, reporting is helping tough issues.3
companies manage external
relationships as well.
2 See the KPMG and SustainAbility report, “Count Me In: The Readers Take on Sustainability Reporting.” www.kpmg.nl/sustainability
3 See KPMG in Australia’s “Sustainability Reporting: A Guide.” www.kpmg.au
Chapter 2
About the Survey
This survey was designed to examine reporting trends in the world’s

largest companies. The sample includes the global fortune 250, and the
100 largest companies in 22 countries. KPMG examined information
disclosed publicly by these companies to discern historical and
emerging trends in corporate responsibility reporting.
2.1 Objectives Table 2.1

This study was designed to examine related information issued by hundreds Participating Countries 2008
reporting trends among the world’s of companies from every sector and
Australia Norway
largest companies. It is the sixth in a region in order to distill historic trends
series conducted by KPMG and various in corporate responsibility reporting and Brazil Portugal
co-sponsors since 1993 and is issued uncover new issues and practices that
Canada Romania
every three years.4 The goal of the study are emerging.
was to examine corporate responsibility Czech Republic South Africa
Denmark South Korea
Finland Spain
2.2 Methodology France Sweden
The basis of the study was a survey national source. In some instances Hungary Switzerland
that captured over 50 data points about where a ranking was not available or
corporate responsibility information was incomplete, substitutes such as Italy The Netherlands
disclosed (or not) by each company in market capitalization or other sector- Japan United Kingdom
the sample. The survey allowed KPMG appropriate measures were used
to compile data on historical trends to compile or complete the revenue Mexico United States
by tracking the same issues that it had ranking list. All corporations were
in previous surveys, such as reporting eligible to be included regardless KPMG has a worldwide network of
prevalence by sector and country, of their ownership structure (privately national sustainability practices.
use of standards, role and use of held, publicly traded) or operational Twenty-two volunteered to participate
assurance, and drivers for reporting. structure (holding companies). in this study.
The survey was expanded this year
to track emerging issues such as Since the purpose of the survey was to Source: KPMG Global Sustainability Services, October 2008
climate change, corporate responsibility examine trends in public disclosure, only

strategy and management, and corporate responsibility information
techniques used during the reporting available in the public domain was used.
process, such as materiality and Sources were limited to:
stakeholder engagement.
• Corporate responsibility
The research sample included the top or sustainability reports; A note on terminology
250 companies listed on the Fortune The term “corporate responsibility”
• Company websites; and
Global 500 5 (G250) for the year 2007. is used throughout the survey to
In addition, the survey included the 100 • Annual financial reports. describe the ethical, economic,
largest companies by revenue (N100) environmental, and social impacts
from 22 countries, except in Sweden Corporate responsibility reports or and issues that concern the private
where the sample was limited to the similar information issued by companies sector. There are many different
largest 70. The 22 countries are listed between mid-2007 and mid-2008 were terms used to capture this concept,
in Table 2.1.6 sought in the first instance. If the including sustainability, corporate
company did not issue a report in this social responsibility, corporate
The 100 largest companies in each of time frame, 2006 reports were used. citizenship, ESG (environmental,
the 22 countries were identified using Information issued prior to 2006 was social, and governance), and others.
revenue rankings from a recognized not included.
4 For a catalogue of previous reports visit: www.kpmg.com/survey
5 Top 250 companies included in the Fortune Global 500 ranking 2007 – Link: http://money.cnn.com/magazines/fortune/global500/2007/full_list/index.html)
6 For a full list of contact details of participating KPMG member firms’ Sustainability Practices worldwide see inside back cover. Of the 40 practices, 22 voluntarily contributed to this study.
Chapter 3
The State of Corporate

Responsibility
Reporting in 2008
Chapter highlights
• Corporate responsibility reporting • The rate of reporting among the • Ethical considerations and
has gone mainstream - nearly 80 largest 100 companies (N100) in 22 innovation increased as the most
percent of the largest 250 countries is 45 percent on average, common reasons for reporting
companies worldwide (G250) with the highest numbers in Japan among both the G250 and N100,
issued reports, and an additional (88 percent) and the UK (84 percent). while risk management fell in the
four percent integrated corporate G250 group.
responsibility information into their • Integration of corporate responsibility
annual reports. information into annual reports
is on the rise in France, Norway,
Switzerland, Brazil, and South Africa.
“In these challenging times it is now perhaps more crucial than ever for
companies to show their commitment to transparency through sustainability
reporting. Effective public disclosure of economic, environmental, and social
performance can enable a company to rise above the rest and take advantage
of the opportunity to position itself as a forward-thinking leader among an
increasingly sophisticated constituency of stakeholders. No longer is publishing
a sustainability report merely a matter of mitigating risk to reputation and
costs. More than ever, employees, investors, and consumers are looking to
the companies from which they buy, invest in, and work for to join them in
addressing the critical sustainability issues of the day in innovative ways.”
Judy Henderson
Board of Directors, Global Reporting Initiative
3.1 Corporate Responsibility Reporting at the Global Level

The G250 companies are drawn from A dramatic rise in reporting has occurred An additional four percent of
the Fortune Global 500 List (2007) in large global companies (G250) since companies in this sample do not issue
and represent over a dozen industry the last KPMG survey in 2005. stand-alone reports but do integrate
sectors (see Figure 3.1). Finance, corporate responsibility data into their
insurance, and securities companies Figure 3.2 shows that the number of annual financial reports, for a total of
dominate the sample, followed by oil G250 companies that issue stand-alone 207 companies. This is an astounding
and gas, utilities, electronics and corporate responsibility reports has 30 percent jump in reporting over
computers, and automotive. Two- risen from 52 percent to 79 percent, a three-year period.
hundred-and-eighteen of the 250 or 197 of 250 companies in total.
are publicly traded enterprises.
Figure 3.1 Companies by sector (G250)

Finance, insurance & securities 78
Oil & gas 25
Trade & retail 24
Electronics & computers 22
Automotive 18
Metals, engineering & other manufacturing 15
Communications & media 15
Other services 13
Utilities 12
Food & beverage 8
Pharmaceuticals 7
Chemicals & synthetics 4
Transport 4
Construction & building materials 3
Source: KPMG Global Sustainability Services, October 2008 Mining 2
Figure 3.2 Companies with a stand-alone corporate KPMG Insight

responsibility report (G250)
The question is no longer “Who is
reporting?” but “Who is not?”
Corporate responsibility reporting
52%
is now a mainstream expectation
Yes
of companies. Since more than
80 percent of the world’s 250 largest
79% companies now report on corporate
responsibility, we can expect this
trend to roll out rapidly at the
0% 10% 20% 30% 40% 50% 60% 70% 80% country and sector levels in the
2005 2008 coming years.
Source: KPMG Global Sustainability Services, October 2008
Chapter 3
3.2 A Closer Look at Reporting in 22 Countries
A closer look at trends in reporting from As European countries continue to reports into annual reports - 12 percent
countries on every continent reveals the determine how to ensure or stimulate of Norwegian and French companies are
diversity of drivers, practices, and reporting on social and environmental doing so, as are nearly 20 percent of
influences affecting a company’s decision issues in their countries, some companies South Africa’s largest companies.
to report and how. are taking a “first to market” position. Companies in some of these countries
Spanish companies jumped to 59 percent were early adopters of reporting, so this
Nearing saturation from 25 percent, adding 34 new trend may indicate that integration of
Companies in Japan and the United corporate reporters since 2005. This is financial and non-financial information will
Kingdom (UK) have topped the tables in a reflection of a strong sustainable become more widespread in the near
rates of corporate responsibility reporting development agenda pushed forward by future. In France it is common for
over the last decade. Although there was government and civil society, and the companies that are part of international
not much room for growth, there were 8 leadership of some Spanish companies group structures to submit corporate
and 13 percentage point increases in that embraced reporting early on. These responsibility data for aggregation at the
stand-alone reports in Japan and the UK influences may also explain the rapid rise global level in a stand-alone report, and
respectively, and an additional 5 percent of reporting in the Netherlands and Italy then to include some corporate
and 7 percent of companies that - both doubled reporting output in the responsibility information in the country-
integrate their corporate responsibility past three years to land at about the level annual financial report as well.
and financial reporting. Reporting in 60 percent mark.
these countries is now the norm for top Strong showing
companies, although for very different Canada added 19 new reporting Brazil, Portugal, South Korea, and
reasons. Companies listed on the companies to its tally, also arriving at Switzerland joined the study for the first
Japanese stock exchange adhere to clear the 60 percent mark. Many of the new time this year and are clustered in the
environmental performance and entrants since 2005 are companies middle of the pack with 56, 49, 42,
reporting regulations, and this is slowly associated with the energy boom Canada and 28 stand-alone reports respectively.
expanding to include economic and has been experiencing. As the extractive Mexico is trailing with only 17 percent
social issues. In the UK, impending and energy sectors grow, so do concerns of N100 companies reporting, but it is
regulation via the Companies Act does about ensuring economic development significant for a first year entrant to have
simmer quietly in the background, but in a way that leaves positive social and nearly one-fifth of its top companies.
louder still are consumer, media, environmental legacies. It is also a reflection of wider trends in
employee, and shareholder voices corporate responsibility and reporting
demanding greater accountability and Swedish companies are staying one step that are starting to take root in Mexico
transparency on key issues. ahead of regulation. New laws for and elsewhere in Latin America.
reporting passed in late 2007 mandated
Accelerating growth all 55 state-owned companies to issue Rising in the East
Extraordinary jumps in reporting since reports on their environmental, economic, Although numbers are still comparatively
2005 occurred in some countries, as and social performance by 2009. This may low in Hungary, Romania, and Czech
shown in Figure 3.3. Companies based explain the tripling of reporting companies Republic, with a quarter or less of N100
in the United States (US) are some of the in Sweden over the past three years. companies reporting, KPMG believes
largest and most influential in the world, this is the region to watch.
so it is significant to find that 41 new Increasing integration
US companies issued a corporate Totals for stand-alone reports ticked Companies are keen to show they are on
responsibility report since 2005, bringing upward in Australia (14 new reports), par with Western European expectations
the US N100 total to 73 percent. Although Norway (10), Finland (10), South Africa (8), on environment and human rights. First
late to the game compared to other and France (7), while there was no growth movers in this region are distinguishing
markets such as Japan and the UK, US in Danish reporting, which held steady at themselves from competitors in the local
companies are now becoming aware of 22 companies. However, companies in and global marketplaces with corporate
their global reach and impacts on society, these countries are some of the first to responsibility, and reporting is a channel
and have significantly increased their level integrate their corporate responsibility they can use to showcase industry
of transparency on these topics. best practice.
Figure 3.3 Companies with stand-alone and integrated

corporate responsibility reports, by country 2005-2008 (N100)
100%
88% 5%
90%
7%
84%
80%
80%
73% 1%
22%
70%
71%
3%
2%
1%
59% 4%
60%
60%
60%
59%
59%
12%
3%
56%
50%
21%
3%
49%
47%
8%
19%
40%
42%
41%
41%
40%
12%
37%
30%
32%
1%
31%
31%
2%
29%
28%
26%
25%
25%
25%
23%
23%
20%
22%
22%
20%
18%
17%
15%
14%
10%
0%
Japan
United Kingdom
United States
Canada
Netherlands
Sweden
Italy
Spain
Brazil
Portugal
France
South Korea
Finland
Australia
Switzerland
South Africa
Hungary
Norway
Romania
Denmark
Mexico
Czech Republic
‘05 CR Report: Stand-alone ‘08 CR Report: Stand-alone ‘08 CR Report: Integrated in Annual Report Source: KPMG Global Sustainability Services, October 2008
KPMG Insight
In the next several years we could expect reporting by companies in the US, Spain, the Netherlands, Italy, Canada,
Sweden, and Brazil to track against the same trend line witnessed in Japan and the UK - toward the 100 percent mark.
Brazilian companies will have an impact on their Latin American peers and competitors so we expect the practice
to take hold in this region. As Central and Eastern European economies open and grow, so too will a commitment to
corporate responsibility. As a result, the outlook for reporting looks positive in this region.
Time will tell whether or not corporate responsibility reporting will become integrated into annual reports, as seen in Brazil,
Switzerland, South Africa, France, Norway, Australia and others, or if it will remain a stand-alone practice. We think that the
potential of regulation, along with the tendency of economic stakeholders (investors, customers) to demand greater social and
environmental information, could stimulate widespread integration of corporate responsibility information into annual reports.
However, if the trend toward integration does continue upward, companies would be wise to evolve their communications
strategies in pace. Reporting is more than just a book, website, or data set. It is a continuous process that must involve
and reflect the needs of its stakeholders. Integrating corporate responsibility information into annual reports may meet the
needs of some stakeholders, but may exclude others. The challenge ahead will be to get the right information to the right
stakeholders, and at the right time and in the right form.
Chapter 3
3.3 Integration of Corporate Responsibility Information into Annual Reports
One of the most watched trends in of economic, environmental, and social even fewer G250 companies (eight
reporting over the past 15 years has data in annual financial reports, as percent) have taken up the practice
been the degree to which corporate some early movers started to-date (see figures 3.4 and 3.5).
responsibility information is presented in experimenting with this technique.
annual financial reports. Many advocates Results from this survey (see Figure Despite lower levels of full integration,
of corporate responsibility reporting 3.3) seem to show that significant nearly half the G250 companies that
contend that such data are helpful to progress is being made in this area, issue stand-alone corporate
analysts, investors, senior management, with 20 percent of N100 companies in responsibility reports are making
boards, and other users of annual reports Brazil and South Africa integrating their reference to key environmental and
because it helps to show a more three- reports, and Switzerland, France, social data in their annual reports,
dimensional view of the company’s Australia, and Norway not far behind. as are over 30 percent of N100
current value and future potential. companies. This reflects the growing
But overall, integration at both the interest and demand for sustainability
In the early part of this decade there G250 and N100 level remains the data from analysts, investors, and
were indications that a trend was exception not the rule. Only a minority company leadership.
developing toward full integration of N100 companies (nine percent) and
Figure 3.4 Level of integration Figure 3.5 Level of integration KPMG Insight
of corporate responsibility of corporate responsibility
Although the growth in corporate
information into annual information into annual
responsibility references in annual
reports (G250) reports (N100) reports is encouraging, the majority
are still issued without any
environmental and social information.
As corporate responsibility reporting
matures in the coming decade,
we predict a greater demand and
aptitude for environmental and social
data by traditional financial report
readers, such as the investor
community. Necessary developments
include standardization of reporting
metrics, several years of comparable
data for companies across countries
and sectors, robust and trustworthy
data, and a move towards eXtensive
None 40% None 55% Business Reporting Language
Limited (CR section in the Annual Report only) 49% Limited (CR section in the Annual Report only) 33%
(XBRL) or other ways of transferring
data in real-time to analysts.
Combined (CR reporting combined with Annual Report) 8% Combined (CR reporting combined with Annual Report) 9%
Fully integrated Fully integrated
(CR reporting fully integrated in the Annual Report) 3% (CR reporting fully integrated in the Annual Report) 3%
Source: KPMG Global Sustainability Services, October 2008 Source: KPMG Global Sustainability Services, October 2008
3.4 Behind the Trend Line: Drivers for Reporting

The world’s top performing companies Ethics and economics Ethical considerations as a stated
would not engage in the practice of As in previous years, the overall drivers driver for reporting jumped up from 53
reporting unless they were benefiting for reporting are ethical and economic percent to nearly 70 percent since this
from it. The trend lines would not be considerations. Although these study was last conducted. In the past
so distinctively on the rise unless there responses are fairly broad, they three years there have been dozens of
was a clear business case for reporting. indicate that companies realize they scandals in accounting, environment,
This survey gathered the most-cited operate in a context where they play governance, and human rights, and as
motivations for reporting as stated by key roles in contributing to healthy a result business trust has been
the world’s largest 250 companies societies, ecosystems, and economies nudging lower 7 while the sustainable
in their reports or on their websites. - and that it is in their best interest to development agenda has been inching
(See results in Figure 3.6.) maintain and improve these spheres. higher. Interestingly in this same time
7 See Edelman’s Trust Barometer 2008, www.edelman.com/trust/2008/
Figure 3.6 Drivers for corporate responsibility reporting (G250)
Ethical considerations 53%

69%
Economic considerations 74%

68%
Reputation or brand 27%

55%
Innovation and learning 53%

55%
Employee motivation 47%

52%
Risk management or risk reduction 47%

35%
Strengthened supplier relationships 13%

32%
Access to capital or increased shareholder value 39%

29%
Market position (market share) improvement 21%

22%
Improved relationships with governmental authorities 9%

21%
Cost savings 9%
17%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005 2008 Source: KPMG Global Sustainability Services, October 2008
Chapter 3
period, risk management dropped have an expanded boundary of This scored 44 percent compared to
12 percentage points from 47 percent responsibility, especially among the the G250’s 55 percent. Brand as a
to 35 percent as a driver for G250 world’s largest 250 companies. driver for reporting was much higher in
corporate reporting. Contrast this with the N100 population, with 70 percent
the growth in responses on brand and Investors as a key driver or audience citing it as a key reason for reporting.
reputation (nearly doubled from 27 for reporting have dropped 10 percentage Risk management still comes in fairly
percent to 55 percent) and the high points from 39 percent to 29 percent. high at 40 percent, indicating that,
score of learning and innovation This seems counterintuitive to the unlike companies in the G250 sample,
(55 percent). This could indicate that trends seen in Figure 3.3, which show N100 companies still perceive
companies are taking proactive steps a slow but steady increase in the corporate responsibility and reporting
to adjust to the social and economic appearance of corporate responsibility as a risk management tool and not
challenges of our time. Brand and information in annual financial reports. yet as a pathway to opportunity
reputation are difficult to quantify Although cost savings are not often and innovation.
or decipher, but these results seem cited as a driver for reporting, this
to indicate that companies have nearly doubled as a response in the
determined that mishandling or past three years, showing that there
avoiding their social and environmental are still bottom line savings associated
responsibilities could be detrimental with having management and KPMG Insight
to their brand worth. measurement systems in place that The reporting process remains an
support reporting.
untapped opportunity to build key
People in the driver’s seat
relationships and understand
Survey findings also indicated the National trends
important constituencies better. We
importance of relationships that For N100 companies the findings were
expect to see relationships continue
companies have with various stakeholder generally similar to the G250 results.
groups and how these relationships can to grow as a key motivation for
Companies in 16 out of the 22 countries
be advanced with reporting. all cited two of the three top drivers: reporting. One trend to watch is
Consumers and employees top the list, ethical considerations, economic supply chain relationships. Early
and both became more important than considerations, and reputation/brand. indications are that G250, and to
in 2005 with over 50 percent of The only deviations were France, Norway, some extent N100 companies, are
companies pointing to improving these and Romania, which cited market position demanding more information about
relationships as reasons for reporting. as one of their top two key drivers, while the way their products and services
Although only 21 percent of companies Japan, Mexico, and Portugal cited are created in the supply chain.
said governmental relationships were innovation and employee motivation as
important, this is more than double their top two drivers. It is interesting that With the trend lines tracking
than in 2005 and shows the higher in Norway, 40 out of the 100 companies downward in the G250 sample for
priority governments are placing cited government relations as a driver risk management as a key driver, we
on sustainable development overall. - a top three result for that country. think it is no coincidence that
A key change since 2005 is in supplier learning and innovation is on the rise.
relationships as a driver for reporting, Less important to N100 companies Corporate responsibility can be of
which jumped from 13 percent to was the opportunity to learn and greatest value when it is a proactive,
32 percent, and may reflect innovate through their commitment to forward-looking, innovative approach.
acknowledgment that companies corporate responsibility and reporting.
“I am pleased to offer some brief thoughts about KPMG’s latest detailed report on corporate responsibility reporting. We have
certainly come a long way since the days when few companies were reporting and this is very gratifying. Indeed, sustainability
reporting is an important prerequisite for becoming a member of the World Business Council for Sustainable Development.
Going forward, there are three important issues for sustainability reporting. Firstly, sustainability reporting must address
the sustainability issues that are relevant to the company.
Secondly, sustainability reporting must be a part of the management of business performance. Increasingly this information
should not be in separate sustainability reports but part of broader company annual performance reports.
Thirdly, we need to recognize that different stakeholders have different needs in relation to this information.
Investors and financial analysts for example, will have different requirements to employees or local communities.
When these three steps happen consistently, sustainability reporting will truly be of benefit to both business and the
broader community.”
Bjorn Stigson
President, World Business Council for Sustainable Development
Chapter 4
Strategy and Reporting
Process
Chapter highlights
• Three-quarters of G250 companies • Sixty-three percent of G250 • Most companies do not use existing
have a corporate responsibility companies use a structured channels such as AGMs and investor
strategy that includes defined approach to stakeholder dialogue, presentations to engage analysts
objectives. up from 33 percent in 2005. and investors about environmental
and social issues.
• More than half of the world’s • More than three-quarters of the
largest 250 companies publicly G250 and nearly 70 percent of the • Sixty percent of all companies
disclose new business growth N100 apply the GRI Guidelines for surveyed consult with their
opportunities and/or the financial their reporting. stakeholders and/or use the GRI
value of corporate responsibility. Guidelines as a basis for determining
the content of their reports.
4.1 Strategy and Objectives
Reporting is just one component Instead, the survey assessed whether Whereas only 13 of the companies
of a strategic approach to corporate or not corporate responsibility that published a strategy did not
responsibility management, which reporting by leading companies is publish a report.
includes other essential elements such linked to broader corporate strategies
as defining strategy, developing and and management approaches. The N100 companies as a group trail
implementing policies and procedures, the G250 significantly when it comes
and evaluating performance. The Big Picture to having corporate responsibility
About three-quarters of the Global 250 strategies in place. Just over 40 percent
Corporate responsibility reporting has have a publicly communicated of the N100 companies surveyed
been criticized over the years for being sustainability strategy in place that reveal their corporate responsibility
an exercise in public relations rather includes stated objectives (see Table strategy and objectives. Three-hundred
than a reflection of an actual 4.1). Most of these have also issued a and-two companies issue reports but
commitment within the company. corporate responsibility report, do not have a strategy in place.
The survey was expanded this year presumably under the umbrella of their Conversely, 145 do have a publicly
to present a more nuanced analysis overarching strategy. Survey results communicated strategy but do not
by looking beyond reporting as just found that only 37 G250 companies issue corporate responsibility reports.
a proxy for corporate commitment that do issue a report do not have an
to social and environmental issues. overall corporate responsibility strategy.
Figure 4.1 Japan 86%

Companies with France 79%
a publicly available United Kingdom 65%
corporate Norway 63%
responsibility United States 61%

Brazil
strategy, by 60%
Netherlands 55%
country (N100)
Sweden 54%
Finland 44%
Spain 44%
Italy 42%
Australia 38%
50%
Portugal 37%
Hungary 35%
23%
Canada 32%
Romania 28%
South Korea 28%
Denmark 26%
Switzerland 26%
South Africa 21%
Czech Republic 16%
Mexico 14%
Source: KPMG Global Sustainability Services, October 2008 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Chapter 4
When the N100 sample is broken About half of the companies in Sweden, Keeping things private
down by country, it is clear there are the Netherlands, Brazil, US, and Norway Ownership type is a key variable
wide differences. Japan, also at the issue reports in the context of an overall affecting the prevalence of corporate
top of the reporting table (Figure 3.3), corporate responsibility strategy. responsibility strategies, particularly
leads with 86 percent of companies Perhaps it is surprising to find some within the N100 group. Publicly traded
utilizing a corporate responsibility of the countries that topped the companies and those owned by the
strategy and objectives. However, its reporting tables (Figure 3.3) nearing state are the most likely to have
reporting peer, the UK, falls 20 points the bottom of the strategy table— strategies in place (54 percent and 48
lower at only 65 percent. France is not South Africa, Sweden, Canada, and percent respectively; see Figure 4.2).
far behind Japan, possibly indicating Australia. This could indicate that This could be due to impending
that the involvement of regulatory although reporting has spread quickly regulation, high brand profiles,
bodies or stock exchanges in through N100 companies in some involvement of shareholders, and
encouraging disclosure of social and countries, the development of a full higher political awareness and
environmental data helps to accelerate corporate responsibility management commitment to corporate responsibility
development of a strategic approach system takes more time. within these types of companies.
to corporate responsibility.
Figure 4.2 Companies with a publicly available corporate responsibility strategy,

by ownership (N100)
Listed on stock exchange 54%
State/country owned company 48%
Co-operatives 41%
Subsidiary of foreign company 34%
Owned by foundations 33%
Owned by professional investors 24%
Family owned/owned by management 14%
0% 10% 20% 30% 40% 50% 60%
Results for cooperatives and Shallow promises or deep change In this respect, the N100 companies
companies owned by foundations fell When weighing a company’s that have stated objectives are just as
in the middle of the table at 41 percent commitment to its corporate likely as G250 companies to track their
and 33 percent respectively. Although responsibility strategy, this survey performance. Eighty-eight percent of
this indicator has not been tracked considered: companies with objectives disclose
historically, it may indicate that performance indicators and 80 percent
community-owned and -managed • Whether the strategy has provide actual data on progress. This
enterprises, and organizations with stated objectives; may indicate that companies inclined
philanthropic missions, are more likely to develop specific objectives for
to embrace corporate responsibility • Whether key performance indicators corporate responsibility are also very
and develop strategies around it. This have been developed as a way likely to measure progress toward
could be explained by closer economic to track performance against these achieving them.
ties to local communities and a objectives; and
perception that business success is As seen in Figure 4.2, privately-owned
correlated to the success of the • Whether data on these indicators enterprises are far less likely to have
societies in which they operate. are available. a corporate responsibility strategy in
place. Not surprisingly, this group
Family-owned and private equity- See Table 4.1 below for survey findings. also lags behind others in identifying
owned enterprises do not have the indicators and providing data.
same accountability to the broader Performance indicators are metrics
public for their business activities, by which a company can measure its
especially their financial results. This progress against stated objectives.
general lack of transparency and Of the 184 G250 companies that
accountability may account for the define corporate responsibility
relatively low prevalence of disclosed objectives, 89 percent disclosed
corporate responsibility strategies and performance indicators. Of this same
objectives. This could be interpreted to number, 81 percent actually provide
mean they are simply not disclosing, or data on progress toward objectives.
they might not consider corporate
responsibility to be a key business issue.
Table 4.1 Companies with corporate responsibility strategy, objectives,

indicators, and data (G250 and N100)
Population Strategy with objectives Performance indicators Data provided for

identified linked to objectives performance indicators
G250 (250 total) 73% 65% 60%

N100 (2170 total) 43% 38% 34%
Chapter 4
Business case quantified to efficiency or risk aversion, or top line Breaking this result down by sector at
With corporate responsibility strategies growth due to new innovations in the N100 level reveals that more than
in place, particularly in the G250 products and services as a direct 50 percent of forestry and electronics
community where objectives are set response to social or environmental companies are reporting on business
and progress is measured by the challenges. value (see Figure 4.3). It is interesting
majority, businesses should be able to see this top spot shared by sectors
to quantify, at least roughly, the value The N100 companies are trailing, but with such different risks, opportunities,
of their strategic commitments. not too far behind considering the and histories with corporate
overall pace of development of responsibility issues.
Indeed, 54 percent of the G250 have corporate responsibility management
disclosed business opportunities in this demographic. Thirty one percent A second cluster of companies fall
and/or the financial value of corporate of N100 companies are reporting the in the 40 percent range, including
responsibility. This value could be business opportunities or financial utilities, oil and gas, and chemicals.
in terms of bottom line savings due value of corporate responsibility.
Figure 4.3 Companies reporting on business opportunities/financial value of corporate

responsibility, by sector (N100)
Forestry, pulp & paper 53%
Electronics & computers 50%
Utilities 44%
Oil & gas 41%
Chemicals & synthetics 41%
Communications & media 38%
Food & beverage 34%
Automotive 32%
Finance, insurance & securities 29%
Construction & building materials 28%
Transport 27%
Mining 27%
Metals, engineering & other manufacturing 25%
Other services 22%
Pharmaceuticals 15%
Trade & retail 15%
0% 10% 20% 30% 40% 50% 60%
These are traditionally the hardest and financial, construction, companies have moved substantially
hit sectors on corporate responsibility transportation, mining, and metals, all away from a public relations and risk
issues, namely on environment below the 30 percent line. Most management approach to corporate
and climate. This result may indicate notably, pharmaceutical and retail responsibility toward one that is
that leaders in these industries are sectors cluster around the 15 percent integrated deeply in their
not only responding to, but also mark. Considering the high public businesses.The UK, though keeping
benefiting from, corporate visibility and prevalence of corporate pace with Japan in terms of N100
responsibility initiatives. responsibility issues such as supply reporting (Figure 3.3), falls behind
chain labor and environmental issues, more than 20 percentage points when
Still, several high-impact and these results are discouraging. it comes to quantifying the results of
economically dominant industry their corporate responsibility strategy
sectors continue to have low With 80 percent of companies in Japan (Figure 4.4).
prevalence, including the automotive able to quantify the business case for
sector in the 30 percent range, corporate responsibility, it seems that
Figure 4.4. Japan 80%

Companies reporting Norway 54%
on business Netherlands 49%
opportunities/ Brazil 47%
financial value Spain 47%

United States 40%
of corporate
Portugal 38%
responsibility,
Sweden 36%
by country (N100)
Italy 36%
United Kingdom 36%
Australia 29%
Finland 29%
Canada 26%
Switzerland 21%
France 20%
Hungary 19%
Denmark 14%
Mexico 12%
South Africa 12%
South Korea 12%
Czech Republic 11%
Romania 8%
Source: KPMG Global Sustainability Services, October 2008 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Chapter 4
It is interesting to see that in lag in their ability to report on

powerhouse economies like Brazil, the business case for corporate
US, and Spain, only about 40 percent responsibility.
of companies are calculating
financial value. Also interesting to note is that some
countries with high rates of reporting
France and Switzerland, leaders in are finding themselves at or below
presenting corporate responsibility the one-third mark, notably Canada,
data alongside annual financial data Australia, Finland, and Sweden.
to analysts and investors (Figure 3.3),
KPMG Insight
G250 companies have started to move beyond simply making public claims about their social and environmental issues
and are implementing strategies that include detailed objectives, performance indicators, and reporting progress against
their objectives. The growing use of assurance, as detailed in Chapter 6, also supports this trend. Very few G250 and even
fewer N100 companies issue a sustainability report in the absence of an overall strategy with defined objectives. This
increases the chances that reports are meaningful reflections of a company’s corporate responsibility performance.
With just over half of the G250 now quantifying the business value of integrating corporate responsibility into their
operations, we think a tipping point is near. Criticisms of the business case for corporate responsibility and reporting are
being put to rest while implementing and committing to a corporate responsibility strategy appears to be paying off.
Breaking down the N100 sample by sector and country reveals that a move away from a reactive, risk management
approach toward a proactive, strategic approach is underway. Companies in countries where reporting has accelerated
over the past three years, such as France, Spain, Canada, Sweden and others, seem to have been responding to demand
for disclosure, but they have not always been able to set overall strategies nor quantify the value of their commitment to
corporate responsibility at the same pace. Japanese companies seem to be the most consistent; most report, the vast
majority do so in the context of a sustainability strategy, and quantify the value of corporate responsibility. Companies
in other countries would do well to follow suit and maximize the value of corporate responsibility commitments.
4.2 Management and Frameworks
The best strategies are ineffective corporate responsibility, yet Figure 3.2 reports that do not reflect their true
unless robust and accountable revealed that 79 percent actually issue performance.
management systems are in place sustainability reports. This leaves about
to ensure they are implemented 35 companies reporting without The gap is narrower in the N100 group,
cohesively and consistently. a publicly disclosed system for where 45 percent issue a sustainability
managing, measuring, and reporting. report and 41 percent disclose that
Table 4.2 reveals an interesting gap in Without a systematic approach they have a management, measurement,
the G250 group: 64 percent disclosed to manage and monitor corporate and reporting system in place.
that they have established systems for responsibility initiatives, these
managing, measuring, and reporting on companies are in danger of issuing
Table 4.2: Elements of Corporate Responsibility Management Systems (G250 and N100)
Population Strategy with Management and Corporate “As global integration moves ahead
objectives measurement responsibility report I am encouraged that a growing
identified system (from Figures number of corporations realize that
(From Table 4.1) 3.2 and 3.3) market success and the ability to
proactively manage environmental,
G250 (250 total) 73% 64% 79% social, and governance issues are
two sides of the same coin, and
N100 (2170 total) 43% 41% 45% that relevant disclosure and
reporting can be a driver to achieve
greater sustainability. Just as the
business case for sound strategies,
Normative frameworks for Business use of these norms is good ethical behavior, and reporting
corporate responsibility increasing, most notably with the UN becomes more apparent, much is
Normative standards and codes for Global Compact (see Figure 4.5). In the yet to be done. Science tells us that
corporate responsibility, developed G250 group, explicit use of the major disruptions are ahead, while
either by governments or in multi- Universal Declaration of Human Rights, the political will for sustaining
stakeholder processes, can guide ILO Conventions, and the United openness and nondiscrimination in
trade and investment is weakening
companies in their development of Nations Global Compact (UNGC), all
in many parts of the world. Clearly
strategy and management systems. rose five percentage points from 2005
we need to redouble efforts so that
Some, such as the International Labour to reach 21 percent, 24 percent, and
good performance translates into
Organization (ILO) Core Conventions 40 percent respectively.
greater market sustainability and
and the Universal Declaration of inclusion of the poor.”
Human Rights, provide the foundations
for social and environmental issues in
international law. Georg Kell
Executive Director,
United Nations Global Compact
Chapter 4
Figure 4.5 International frameworks used by companies, 2005-2008 (G250)
35%
UN Global Compact
40%
19%
ILO Core Conventions

24%
16%
Universal Declaration of Human Rights

21%
11%
OECD Guidelines for Multinational Enterprises
13%
NA
Sector specific framework/standards
12%
4%
ICC Business Charter
3%
3%
Sullivan Principles
2%
0% 10% 20% 30% 40% 50% 60%

2005 2008 NA Not available Source: KPMG Global Sustainability Services, October 2008
About one-fifth of N100 companies Economic Co-Operation and

Spotlight on Equator declared their participation in the Development (OECD) Guidelines for
Principles UNGC, and even fewer (about 15 Multinational Enterprises, International
The Equator Principles is an industry- percent) cited the ILO Conventions and Chamber of Commerce (ICC) Business
developed standard designed to help Universal Declaration of Human Rights Charter for Sustainable Development,
guide financial institutions in as guiding sources for their systems. and the Global Sullivan Principles of
considering social and environmental This could be a reflection of weaker Social Responsibility (GSP).
issues when financing major projects linkages to the international
such as dams, roads, and other community or it could indicate a Corporate responsibility
infrastructure. This framework was preference for national- or industry- management standards
cited by 42 percent of the financial focused codes and frameworks. The environmental management
institutions in the G250 group, and system issued by the International
by 19 percent of those in the N100 A minority of G250 and N100 Organization for Standardization (ISO)
group, as being influential in the companies surveyed applied other known as ISO14001 is by far the most
design of their approval procedures codes such as the Organisation for widely used system by corporations.
for project financing.
More information:
www.equator-principles.com
Figure 4.6 Management standards and guidelines used by companies (G250 and N100)
41%
ISO14001
51%
5%
Sector-specific management systems
7%
5%
EMAS
8%
5%
AA1000
10%
3%
SA8000
5%
0% 10% 20% 30% 40% 50% 60%

N100 G250 Source: KPMG Global Sustainability Services, October 2008
Over 50 percent of G250 (see Figure

4.6) and over 40 percent of N100 KPMG Insight
companies use it. Although nearly all G250 companies that issued corporate responsibility reports
had a strategy in place, fewer had an actual management and measurement
Various other voluntary standards for system in place. This might indicate a gap between strategic aspirations and
environmental management, human actual implementation, and increased chances of “greenwash” in reporting.
rights, and labor management are used This only applies to a minority of G250 companies and is one area where the
on average by about five percent of
N100 outperform their larger counterparts. We do think the trend is moving
G250 and N100 companies. The only
toward a maturing of management systems for corporate responsibility,
notable change since 2005 is the use
in which all basic program elements are present (strategy, management,
of the AccountAbility AA1000 series,
and reporting).
cited by five percent of the G250
in 2005 and by 10 percent in 2008.
Chapter 4
4.3 Stakeholder Engagement
Businesses are influenced by people reported that they engaged in informal This is an important step in the right
within and outside their company, and stakeholder dialogue, whereas 62 direction, considering that the historical
they in turn influence the circumstances percent say they conduct formal or data show structured stakeholder
of people both inside and out. These are structured stakeholder engagement. This engagement to be a fairly new
known as “stakeholders” and companies represents a doubling since 2005, up phenomenon and good stakeholder
communicate with them on a daily basis from 33 percent, of companies involved relationships are known to take time
through the normal course of business. in formal engagements. The N100 are to forge.
Customers, suppliers, regulators, slightly less likely to engage, with 35
neighbors, employees, providers of percent involved in informal dialogues Only 37 percent of the G250, and
capital, and many others, all have a stake and 42 percent taking structured 20 percent of the N100, say they use
in the way companies conduct approaches to stakeholder relations. stakeholder dialogue to help define their
themselves. corporate responsibility strategy. Therein
In their corporate responsibility reports, lies an enormous opportunity for
Understanding the way a company 65 percent of G250 companies disclose companies to better harness the
impacts the economic, environmental, details of who their stakeholders are and information and insights they gain from
and social circumstances of its how they are engaged. This trend is on these dialogues, especially to seek to
stakeholders, and vice versa, is at the the rise, up from 57 percent in 2005, reduce risks and exploit new creative
heart of corporate responsibility. In order indicating greater transparency and business opportunities with corporate
to develop a proactive, strategic implying greater comfort in relation to responsibility.
approach, and a workable management stakeholders. Less than half of the N100
and reporting system that will help companies disclosed information about Stakeholder dialogue is an important
change circumstances for the better for whom they considered to be their element in the elaboration of corporate
all parties, stakeholders should be part of stakeholders in their corporate responsibility reports. Twenty-five
the process. Identifying and prioritizing responsibility report (47 percent), percent of G250 and 14 percent
stakeholders, and being transparent leaving them well behind their larger of N100 companies claim to use
about which groups and individuals a counterparts. stakeholder feedback for reporting
company is engaging with, is a key part purposes. From one perspective these
of building credibility and trust. Higher purpose figures may be seen as positive, as they
Of the G250 that utilize formal may indicate the company is engaging
Serious engagement stakeholder engagement techniques, the with a wider set of stakeholders for
Many G250 companies engage in both majority (59 percent) say they do so to a wider set of purposes (i.e., not just
informal and structured forms of dialogue better understand stakeholder for the preparation of a corporate
with stakeholders. Fifty four percent expectations (see Figure 4.7). responsibility report).
Figure 4.7 Stated purpose for conducting stakeholder engagement (G250 and N100)
36%
Understanding key stakeholder expectations
59%
20%
Defining CR Strategy
37%
14%
Elaborating CR Report
25%
0% 10% 20% 30% 40% 50% 60%

On the other hand, these figures may are common tools and show a good mix issues: annual general meetings (AGMs),
also be considered fairly low since of in-person and anonymous channels analyst presentations, and direct
without engaging directly with for stakeholders, as shown in Figure 4.8. interactions with customers. This could
stakeholders, a company risks leaving A trend toward a more personalized be an indication that corporate
key issues out of their reports. approach may be increasing as individual responsibility is not fully integrated as a
meetings and employee-specific contact priority in a company’s main operations.
Direct line points are on the rise as key channels of It may also be a reflection, especially
In terms of most-used channels and communication. in the G250 population, of a lack of
methods for engaging with stakeholders, attention paid to environmental risks
the trends are similar in the G250 Some of the best-established forums for and opportunities by investors and
and N100 samples. Roundtables, stakeholder communications include the other providers of capital.
questionnaires, and web-based feedback least utilized for corporate responsibility
Figure 4.8 Means of engaging stakeholders (G250 and N100)
23%
Round tables/dialogues
44%
22%
Ad hoc communications
38%
23%
Questionnaires
36%
21%
Web based feedback/forum
32%
20%
Individual meetings
32%
21%
Media
29%
19%
Employee specific contact points
29%
19%
Annual General Meeting (AGM)
25%
16%
Analyst presentations/expert opinion
23%
12%
Direct customer contacts at point sale
16%
11%
Other
11%
0% 10% 20% 30% 40% 50%
Special Focus
Investor Relations
Investors are a key driver for integrating corporate responsibility management

into core business practice, and an important audience for reports. The niche
responsible investment community is an active stakeholder with the world’s
top publicly traded companies. Nearly 90 percent of the G250 are listed on
stock exchanges and about half report that they are also listed on a socially
responsible index such as the FTSE4GOOD or the Dow Jones Sustainability
Index. It has been estimated that just over 10 percent of all funds invested 8
in the US are subject to responsible investment criteria, but the majority of

funds remain in mainstream portfolios.
Only a minority 16 percent of G250 there was a trend toward including Top management addressed investors
companies quantified the value of corporate responsibility information about corporate responsibility issues
corporate responsibility performance in annual reports. Yet the majority in only 16 percent of G250 companies.
specifically for their analyst and of companies do not appear to be There was little evidence that investors
investor stakeholders. These findings using existing communications were an intended audience of corporate
could suggest that companies are channels to reach out to investors with responsibility reports in 50 percent of
not yet capturing the attention of information and performance results G250 corporate responsibility reports.
mainstream investors and analysts about corporate responsibility. For
through their reporting. example, less than half of G250
companies include corporate
In Chapter 3 it was found that about responsibility information in their
a third of companies cited shareholder annual report or a link to the full report
value as a driver for reporting and that on investor relations web pages.
8 Social Investment Forum (SIF) “2007 Report on Socially Responsible Investing Trends in the United States.” www.socialinvest.org
“Asset owners and their managers need to be cognizant of how well companies are managing their environmental, social
and governance (ESG) risks and opportunities in the ever-changing global economy. A full understanding of how well
companies are tackling such challenges requires comprehensive reporting by companies guided by relevant legislation,
as well as voluntary approaches such as GRI’s Guidelines and the WRI/WBCSD Greenhouse Protocol. Investors will be
expecting to see a full reporting of ESG issues that have a material impact on a company's long-term prospects.
Whereas until recently responsible investment was seen as a niche activity, a new understanding of fiduciary duty as
evidenced in key developments such as the Principals for Responsible Investment and the Enhanced Analytics Initiative
should stimulate the take up of responsible investment strategies by mainstream investors. The turmoil in financial
markets this year underlines the need for transparency, accountability and responsible behavior by companies and
investors. In its 25-year history EIRIS has seen responsible investment move from being something taken up by only
a handful of concerned investors into a global and increasingly mainstream phenomenon.”
Peter Webster
Executive Director, EIRIS
Talk back place to discuss stakeholder relations. “Closing the loop” and being transparent
Dialogue, by definition, involves a two- Thirty-eight percent of the G250 about what the company is doing with
way conversation. However, even though published stakeholder feedback in their stakeholder inputs is an important part
62 percent of the G250 engaged in reports, which is up slightly from 32 of building relationships.
structured stakeholder dialogues, less percent in 2005. The N100 are on par
than half of these publicly respond to with the G250 trend, with 35 percent The 2008 survey aimed to discover how
feedback (32 percent). The proportion is publishing stakeholder comments and companies structure their corporate
somewhat better in the N100 group, feedback in their reports. responsibility reports, the reporting
where 42 percent use structured standards they follow and the content
dialogues and 26 percent respond in the The gap between the number of they choose to include.
public domain to stakeholder feedback. companies with a structured approach
and those that actually respond in the
Only a minority of companies used their public domain to stakeholder concerns
corporate responsibility reports as a could place trust and credibility at risk.
KPMG Insight
Stakeholder engagement is a key part of corporate responsibility activities and we were encouraged to see the growth in
structured approaches in both the G250 and N100 groups. However, there is still a long way to go. Stakeholder engagement
should be part of a comprehensive approach for every corporate responsibility strategy, management system, and report.
Companies could make inroads with stakeholders by simply responding publicly to stakeholder feedback. They could do this
by including stakeholder feedback in their reports and by being more transparent about the identity of their stakeholders. In the
past few years, companies have been rewarded with greater trust when disclosing who their stakeholders are, and what
issues are of interest.
Beyond the proactive responsible investment community, analysts have not been systematically engaged as key stakeholders.
There are a variety of reasons for this, but as businesses are beginning to quantify the value of corporate responsibility (Figure
4.3), they are speaking to investors. We expect this community to be better engaged through well-established channels (annual
general meetings, investor relations communications) and as data become more credible (via assurance) and accessible via
technology like eXtensible Business Reporting Language (XBRL).
Chapter 4
4.4 Reporting and the Use of Standards
Reporting standards This is perhaps counterintuitive since

More than three-quarters (77 percent) most of these are multinational
of the G250 and 69 percent of the N100 organizations, and it is somewhat
reporting companies follow the Global surprising that a higher number of N100
Reporting Initiative’s (GRI) Sustainability companies do not use national standards
Reporting Guidelines. About 20 percent for reporting. Instead, like their global
of both cohorts use internally-developed counterparts, most look to the
company frameworks as the basis for international GRI standard.
reporting (see Figure 4.9). Even fewer
use national standards, though the figure
is slightly higher among the G250.
Figure 4.9 Reporting standards and guidelines used by companies (G250 and N100)
69%
GRI Guidelines
77%
19%
Company developed criteria
20%
17%
National reporting standard
19%
13%
Other
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Special Focus
GRI Guidelines
The majority of companies surveyed now use the Global Reporting Initiative’s
(GRI) Sustainability Reporting Guidelines as the basis for their reporting. GRI
develops these Reporting Guidelines using a global consensus-seeking
process that involves reporting organizations such as companies, as well as
report readers and users like employees, investors, and non-governmental
organizations. GRI issued its first set of Guidelines in 2000, the second in
2002 (known as the G2 Guidelines) and the third in late 2006 (G3 Guidelines).
The Guidelines consist of two parts: companies to declare the extent Application levels also require responses
to which they actually apply the to a series of queries on “Strategy
• Reporting Principles: these help Guidelines. In the G2 version, a and Profile” as well as “Management
guide the reporting process, such company could strive to be “In Approach” so that readers can
as engaging with stakeholders, Accordance” with the Guidelines, interpret performance results in
selecting material indicators, which would indicate they applied context. Finally, a company can
and adhering to a high standard them to the maximum extent. In the indicate they utilized third party
of report quality. G3 version the system is known as assurance by adding a “+” to their
“Application Levels.” This allows declared level.
• Reporting Indicators: these form companies to clearly state whether
the basis of quantitative disclosure they used the Guidelines to the For more information on the G3
on economic, environmental, and maximum extent (A level) or to lesser Guidelines: www.globalreporting.org
social issues. extents (B and C levels).
Complementing the Guidelines is a The lowest Application Level, C, was

series of Sector Supplements. These designed to make it easy for new
are custom-built to reflect unique reporting organizations to get started,
social and environmental issues and to provide a way for these
and corresponding stakeholder needs organizations to improve year by year,
in different industry sectors. increasing transparency and rising
through the B and A levels. For a C
The Guidelines are designed to be Level application, the company must
applied flexibly by any type of only report on 10 GRI indicators. At the
organization and across all regions and B Level this moves up to 20, and at
sectors. Since it is up to each company the A Level all 50 GRI “core” indicators
(and its stakeholders) to decide which must be represented, either with data
principles and indicators to use, the or a valid explanation for why the
Guidelines contain a system for indicator is not reported.
Chapter 4
G2 Guidelines G3 Guidelines Of the companies that do declare an

The G2 Guidelines were in circulation The G3 Guidelines only became Application Level, 11 percent of the
from 2002-2006. Only 13 percent of available in late 2006, and most of the G250 and 20 percent of the N100
the G250 companies that claim their reports analyzed in this survey cover the declared the C Level. It is clear from
reports are based on the GRI 2006-2007 performance period. To find Figure 4.10 that assurance is not
Guidelines are still using the G2 that 160 companies claimed to use the applied as often at this level. Of the
version. Half of these reports declared G3 Guidelines shows a remarkably G250, 43 percent and 37 percent of
they were “In Accordance” with the quick uptake of the new version. the N100 declared the B Application
G2 Guidelines (see GRI box for further Level, and both are just slightly more
explanation). This may indicate that there was a likely to utilize assurance at this level.
fairly easy transition between the two For the A Application Level, 48 percent
The proportions are similar in the versions for experienced reporting of G250 and 44 percent of N100 have
N100 population. Twelve percent are companies. However, it also shows declared their use of it, and the
still issuing reports based on the G2 that new reporters are starting with G3 majority is also using third party
Guidelines and half of these are directly. Of the 160 G250 companies assurance. (Note: All percentages are
“In Accordance”- level reports. using the G3 Guidelines, 37 percent based on the actual number of
declared an Application Level, as did companies that do declare Application
nearly half of the N100 (47 percent) Levels: G250=98 and N100=336).
companies that reported on the basis
of the G3 Guidelines.
Figure 4.10 GRI Application Level declarations (G250 and N100)
16%
C
9%
4%
C+
2%
15%
B
18%
22%
B+
25%
9%
A
9%
35%
A+
39%
0% 10% 20% 30% 40%

Contentious content The number of companies citing Of the 77 percent of G250 companies
KPMG believes that a good report is stakeholder consultation as a key that claim to use the GRI Guidelines,
one that reflects the company’s overall determinant for selecting indicators nearly half say they use the indicators
strategy and objectives, covers issues nearly doubled in the G250 category as a starting point for deciding what
and topics that are material to the since 2005, up to nearly 40 percent. content to include in reports whereas
company and its stakeholders, and The trend is only slightly lower in the only one-third say they use GRI’s
provides details on performance that N100 group. Risk analysis declined as reporting principles as a starting point.
does not leave out the “tough” topics. a technique for selecting indicators
since 2005, in line with the lower The proportion of N100 companies
In line with evidence pointing to a score it also received as a driver using the GRI Guidelines is similar;
trend that reporting is happening as for reporting (see Chapter 3). nearly half (46 percent) use the indicators
part of a broader corporate as a starting point for issues selection
responsibility management system, About 60 percent of all companies and 36 percent use the principles.
Figure 4.11 shows that nearly 60 cited the Global Reporting Initiative’s
percent of all companies selected Sustainability Reporting Guidelines
report content based on their own as the framework they use to select
strategy and objectives. report content. This is up from
40 percent in 2005.
Figure 4.11 Methods used to select report content, 2005 (G250) and 2008 (G250 and N100)
40%
GRI guidelines 59%
62%
NA
The company's own CR/sustainability strategy 59%
55%
21%
Stakeholder consultation 34%
38%
3%
Business principles 24%
18%
0%
Risk assessment/ issue analysis 19%
18%
13%
Other 12%
13%
0%
AA1000 principles 9%
11%
0% 10% 20% 30% 40% 50% 60% 70%

‘05 G250 ’08 N100 ‘08 G250 NA Not available Source: KPMG Global Sustainability Services, October 2008
Chapter 4
Reporting format A majority of G250 companies that

One of the challenges companies face issue reports use a full PDF document,
with reporting is determining how to according to results presented in
put together a corporate responsibility Figure 4.12. Seventy-five percent
report in a single printed or electronic present corporate responsibility-related
document that reflects all the issues information on the company's website.
of importance to the company and its This allows companies to utilize
stakeholders, but is still easy to use functionality for searching and
and navigate for a wide variety of customizing to better meet the needs
readers with very different needs and of various stakeholders. N100
interests. Therefore, developing a clear companies use similar methods,
reporting strategy with defined target just on a smaller scale: 46 percent
group(s) and relevant content can issue an PDF version and 53 percent
assist in avoiding over-generalized, present data online. Many companies
lengthy, or irrelevant content. use a combination of both PDF
and web versions.
Figure 4.12 Reporting format (G250 and N100)
46%
Full PDF report

77%
53%
CR webpage
75%
20%
Other
19%
5%
Executive Summary (only)
7%
9%
Does not release any sustainability information
4%
0% 10% 20% 30% 40% 50% 60% 70% 80%

Chapter 5
Reporting – Topics
and Issues
Chapter highlights
• Although 92 percent of G250 Publicly traded companies and implemented and monitored.
companies disclose a code of cooperatives are more likely to
conduct or ethics, only 59 percent report on corporate governance • Sixty-nine percent of N100
report on non-compliance with issues than other types of companies do not disclose any
the code. companies. risks related to climate change.
• Sixty-eight percent of G250 • Over 90 percent of G250 • Sixty percent of G250 companies
companies have a corporate companies have a supply chain report on new business
governance section in their reports, code of conduct, but only half opportunities associated with
up from 61 percent in 2005. disclose details of how it is climate change.
Each company has a unique set of interest to a majority of stakeholders)

“In determining long-term business
corporate responsibility issues were selected for deeper research
strategy today, a board cannot ignore
depending on the type of business it is on disclosure trends: corporate
sustainability issues that are pertinent
as well as its location, size, and other governance, supply chain, and climate
to the business of the company.
factors. This distinctiveness is reflected change. The survey examines the
And if those issues can be turned
in a company’s report as it depth to which each is covered
from risks into business opportunities,
communicates performance on the and reveals some insights into how
the company will differentiate itself
economic, environmental, and social companies are handling these
from its competitors.
issues that concern them. For this important corporate responsibility
survey, three key issues deemed issues. One of the hallmarks of the G3
relevant to most companies (and of Guidelines from the Global Reporting
Initiative is that the preparer of the
annual report should be applying his
or her mind to the indicators that
5.1 Corporate Governance
are pertinent to the business of
the company. By preparing a
Corporate governance has gained It seems most G250 companies have sustainability report, many factors
prominence as a key corporate responded to these pressures, as 92 are brought to the forefront of the
responsibility issue over the course of percent (or 229 out of 250) disclose a board’s mind in developing a long-
this decade. This is for a variety of code of conduct or ethics. The N100 term strategy. Thus, sustainability
reasons, including higher expectations companies trail significantly with only reporting improves the quality
from stakeholders about company 64 percent publishing a code of conduct of long-term strategic planning.
boundaries and responsibilities, high or ethics. In terms of implementation,
profile ethics-related scandals, and however, far fewer are willing to be Good governance, strategy, and
emerging national legislation and transparent. Only 59 percent of G250 sustainability have become
standards. and 34 percent of N100 report on non inseparable. Mindless compliance
compliance incidents with their codes. with quantitative aspects of
governance is not good governance.
Instead, the development of a
long-term strategy mindful of the
sustainability issues pertinent to
the company will constitute good
quality governance.”
Mervyn E King SC
Chairman of the United Nations
Steering Committee on Corporate
Governance and Oversight
Chapter 5
Corporate Responsibility Reporting – Topics and Issues
Reporting on governance Figure 5.1 shows that only about 50 14 percent, again highlighting the lack
Sixty-eight percent of G250 companies percent of family- and state-owned of transparency about corporate
have a section or chapter in their reports companies are transparent about responsibility issues overall among
dedicated to corporate governance. corporate governance practices. this group (see Figure 5.2).
Although this is up from 61 percent in
2005 and constitutes a solid majority, Only 42 percent (920) of the N100 The missing link: governance and risk
this number could have been expected have a corporate governance section According to Sir Adrian Cadbury, well-
to be much higher considering the - far fewer than the G250 population. known pioneer of best practice in
focus from media and investors on this By ownership, similar trends arise in corporate governance, “Corporate
issue, especially in Europe and the US this group, with stock listed companies governance is concerned with holding
over the past few years. nearing the 60 percent mark. the balance between economic and
social goals and between individual
Broken down by ownership it is clear This could be attributable to legislation and communal goals. The aim is to
that companies with more publicly in countries such as France and South align as nearly as possible the interests
accessible ownership structures are Africa where companies are required of individuals, corporations and
more accountable - over 70 percent to follow a code of conduct - and be society.” 9
of cooperatives and stock listed transparent about it - if they are listed
companies have a stand-alone section on the stock exchange. Family-owned Therefore, the practice of corporate
on corporate governance. In contrast, companies rate the lowest at only responsibility could be described as
Figure 5.1 Reports with a separate section on corporate governance, by ownership (G250)
Owned by foundations 100%
Co-operatives 75% 25%
Family owned/owned by management 50% 50%
State/country owned company 53% 47%
Listed on stock exchange 70% 30%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes No Source: KPMG Global Sustainability Services, October 2008
9 Institute of Directors, South Africa, 2002. King II Report on Corporate Governance. www.iodsa.co.za
the practical day-to-day work of a of information, unforeseen or future The long-term sustainability of
visionary board upholding industry threats, and impacts or complications business depends on free and fair
best practice in corporate governance. that may emerge in the long- and competition. Corruption in all its forms,
short-term. The theoretical link to such as extortion and bribery, not only
Yet in their reports, only a minority of corporate responsibility is clear here undermine business success but also
G250 and N100 companies described by taking into account stakeholder contribute directly to poverty,
how good governance incorporated views, and by better understanding inequality, crime, and insecurity. Three-
corporate responsibility - 43 percent economic, environmental, and social quarters of G250 companies disclose
and 27 percent respectively. This issues and complexities, a company their codes and practices related to
survey shows that although there can better manage its risks. Yet the stamping out bribery and corruption,
seems to be an obvious link between figures once again prove that the but only 44 percent of N100
corporate responsibility and good theoretical is not yet widely practiced companies publish their policies
governance, in reality this is not widely in reality. Only 43 percent of G250 and and procedures in this area.
recognized. 29 percent of N100 companies make
the link between risk management and
One essential element of corporate corporate responsibility in their reports.
governance is to mitigate risks to the This reflects earlier findings that risk
company by making decisions that reduction is not a dominant driver for
take into account the full spectrum reporting (see Figure 3.6).
Figure 5.2 Reports with a separate section on corporate governance, by ownership (N100)
Owned by professional investors 15% 85%
Owned by foundations 40% 60%
Co-operatives 34% 66%
Subsidiary of foreign company 25% 75%
Family owned/owned by management 14% 86%
State/country owned company 41% 59%
Listed on stock exchange 58% 42%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Yes No Source: KPMG Global Sustainability Services, October 2008
Chapter 5
Who is in charge? of specialized sustainability units, rather

One way to assess the importance or than housed within a communications KPMG Insight
priority a company places on corporate or public relations department. This is Establishing a link between corporate
responsibility is to determine who is slightly more likely to be the case in responsibility and governance - and
responsible for implementing it, and the G250 group and may be the result the link between corporate
whether or not there is a direct line of corporate responsibility becoming responsibility and risk management
to the board of directors. more ingrained as a strategic element - can help to strengthen a company’s
of a company’s management system management approach overall.
A minority of G250 (37 percent) and a (see Figure 5.3). Family-owned companies are not
majority of N100 (63 percent) do not typically held to account in the public
disclose who is responsible for In terms of reporting, 62 percent of domain for financial or non-financial
corporate responsibility. Of those that G250 and 35 percent of N100 performance, but for those with a
do disclose, over half have separate companies describe how non-financial heavy social or environmental
corporate responsibility departments, data are gathered and managed. This footprint, this may become
or utilize committees whose members reinforces a trend toward having unavoidable in the near future. We
represent the broad scope of corporate internal audit departments review and expect to see the role of public
responsibility impacts and issues. manage corporate responsibility data relations departments diminish as
just as they do all other operational corporate responsibility is better
One trend to note is that corporate systems and controls. Internal audit integrated into governance and risk
responsibility is primarily the domain departments typically have a direct management functions or in
line to the board. specialized sustainability units.
Figure 5.3 Department where corporate responsibility is managed (G250 and N100)
48%
Sustainability unit (separate)
55%
11%
CSR Committee
13%
17%
Public Relations department
8%
0% 22%
Other (CEO, Board, Strategy)
6%
3%
Risk department
4%
4%
Audit department
3%
0% 10% 20% 30% 40% 50% 60%

5.2 Supply chain

In financial accounting, companies years some high profile environmental, Of the G250 companies that do
report on the entities they own. But in quality, and human rights crises have mention supply chain risk, 77 percent
sustainability reporting, the boundary put supply chain risk in the spotlight, describe how their code of conduct is
of responsibility for social and so it is somewhat surprising that integrated into supply chain
environmental impacts and reporting on risk is down from management. Of the 617 N100
performance may extend beyond these 68 percent in 2005. Just 38 percent companies that mention supply chain
traditional lines. Today, companies are of N100 companies report on supply risk, 74 percent describe how the code
being held to account for actions taken chain risk. This lower figure is of conduct is integrated into supply
by companies in their value chain that consistent with general findings in this chain management, on par with the
they may not own or control.10 survey that put N100 companies G250 level of transparency in this case.
behind the G250 in most aspects of
Code of conduct corporate responsibility reporting, but
G250 companies are taking note of this could also be attributed to the fact
risks in the supply chain: 63 percent that many of these companies are
of them present data on this topic suppliers themselves.
in their reports. Over the past several
“Working conditions in the global supply chain is an increasingly sensitive topic for retailers. We are aware of the
challenges around human rights, social standards, and compliance in our supply chain. Carrefour has responded over the
past decade by working with the International Federation for Human Rights (FIDH) to closely monitor working conditions
within its supply chain, develop a Supplier Charter in 2000 signed by all its suppliers of controlled products, and implement
voluntary monitoring systems. Although we strongly believe that a social audit is a necessary tool, it isn’t sufficient on its
own, so we supplement this process by partnering with local NGOs to train our suppliers’ employees and managers on
labor rights. This has been particularly successful in Bangladesh.
Failure to ensure decent working conditions is not an option. It is not a competitive issue either. This is why we took part
in the creation of the Global Social Compliance Programme (GSCP) together with key retailers and manufacturers. GSCP
offers a global platform to promote knowledge exchange and build consensus on best practices in order to increase
comparability and transparency between existing standards and systems, whether individual or collaborative. One of the
program’s principles is to encourage key civil society stakeholders to join our efforts to guarantee integrity and
inclusiveness. These experts sit on the Advisory Board, where their role is to advise and challenge us on the strategy,
direction, and best practice for each step of the program and to help monitor and evaluate progress.
Our challenge today is to build upon our respective efforts to develop a clear and consistent global approach and message
for our suppliers as well as for governments.”
Véronique Discours-Buhot
Sustainability Director, Carrefour Group
10 Global Reporting Initiative (2007). “The GRI sustainability reporting cycle: A handbook for small and not-so-small organizations”. And Global Reporting Initiative (2008).
“Small, Smart and Sustainable: Experiences of SME reporting in Global Supply Chains.” Both at www.globalreporting.org.
Chapter 5
Management and results in their reports, (see Figure 5.4.). chain risk. US, Spain, and South Africa
Reports revealed much about the All mining and chemical sector are not far behind - at about the 50
depth to which corporate responsibility companies do so, and upward of two- percent mark - with high levels of
is integrated into supply chain thirds of pharmaceuticals, media, food, disclosure on this topic possibly due to
management. See Table 5.1 for details and electronics sectors disclose the customer awareness and the very real
on the type of information companies basics of their supply chain. The only threat of litigation. Perhaps surprising
make available. It is interesting to note notable departures in the N100 is the low level of disclosure from
that in both G250 and N100 categories, group are forestry and automotive, which companies in Canada, Finland, Denmark,
companies were slightly better at perform much better at the national level. Australia, Switzerland, France, and
disclosing results and policies than South Korea - all typically home to
they were at disclosing strategy. More details are revealed when the large multinational companies with
N100 sample is examined by country, significant supply chains and relatively
Disclosure by sector and country (see Figure 5.5.). Companies in Japan, strong reporting practices overall.
G250 companies have a fairly good UK, Brazil, and the Netherlands, are
record on addressing supply chain issues ahead of the pack in disclosing supply
Figure 5.4 Reports that address supply chain risks, by sector (G250 and N100)
47%
Chemicals and synthetics 100%
47%
Mining 100%
57%
54%
Food & beverage 88%
39%
Automotive 78%
37%
25%
Pharmaceuticals 71%
37%
Other services
69%
30%
Transport
67%
35%
Metals, engineering & other manufacturing
Trade & retail 29%

22% 63%
36%
Finance, insurance & securities
54%
Utilities 44%
50%
Oil & gas 32%
50%
Forestry, pulp and paper 50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

KPMG Insight
Companies are beginning to operationalize their codes of conduct for suppliers, for
example by making environmental and social considerations a part of selection and
integrated into supplier contracts. Many have a code in place, but this is not always
linked to an overall strategy and management system for corporate responsibility in
the supply chain. Aligning these can help companies and their suppliers achieve
better results. Very few companies currently disclose the actual results of their
corporate responsibility supplier audits, but this is an area that will grow as supply
chain management systems mature.
Table 5.1 Level of disclosure on supply chain management systems (G250 and N100)
Aspect of supply chain management G250 N100

(Sample size: 250) (Sample size: 2170)
Strategy (mission, vision stated) 64% 40%

Tactical (policies in place) 68% 42%
Operational (procedures described) 66% (total: 164) 44% (total: 961)
Specific operational procedures described Sample size: 164 Sample size: 961
• Code of conduct included in supplier selection 89% 74%
• Code of conduct included in supplier contracting 82% 68%
• Code of conduct included in regular supplier auditing 59% 38%
• Provides data on number of suppliers audited for code of conduct 15/250 (6%) 65/2170 (3%)
Figure 5.5 Reports that address supply chain risks, by country (N100)
Japan 65%
Brazil 64%
United Kingdom 64%
Netherlands 61%
United States 53%
Spain 52%
South Africa 51%
Portugal 47%
Italy 46%
Norway 44%
Sweden 44%
South Korea 37%
France 33%
Australia 32%
Switzerland 30%
Denmark 28%
Finland 28%
Canada 24%
Hungary 16%
Mexico 12%
Romania
6%
Czech Republic
5%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Chapter 5
5.3 Climate change

Climate change has emerged as one reports, but the majority of 68 percent As indicated in chapter 3 of this report,
of the most important and urgent (nearly 1500 companies) in the N100 survey results found that some at-risk
corporate responsibility issues. do not, an astounding gap considering sectors are lagging in their disclosure
Pressure from media, consumers, the social, economic, and political about corporate responsibility issues
investors, NGOs, and governments has prominence of the issue today. in general. In this case the automotive,
been brought to bear on companies transport, and construction sectors
around the world, but survey results By sector, 100 percent of the mining are in danger of missing the chance
show that corporate response and companies in the G250 address the to mitigate key climate change risks
speed is mixed. business risks of climate change, before they manifest.
showing strong leadership. About
Business risks and opportunities three-quarters of utilities, metals, oil The trends are similar for the N100
Climate change can pose various risks and gas, and chemicals are addressing group but on a smaller magnitude, and
to companies, including physical, these risks. The next cluster of sectors mining companies do not have the track
regulatory, litigation, or reputational. - communications, electronics, and record at the national level that they do
Of the G250, 57 percent address the finance - is not far behind, with about at the global level (see Figure 5.6).
business risk of climate change in their 60 percent disclosing.
Figure 5.6 Reports that address climate change risks, by sector (G250 and N100)
43%
Mining 100%
54%
Utilities 83%
35%
53%
Oil & gas 76%
38%
30%
37%
35%
Finance, insurance & securities
58%
25%
Automotive
50%
15%
Pharmaceuticals
43%
15%
Trade & retail
38%
Food & beverage 27%
38%
Other services 23%
31%
Transport 37%
25%
0%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Going one step further, 64 percent of In terms of which risks pose the
G250 companies and 34 percent of greatest threat, 44 percent of G250
N100 companies describe how they companies fear the physical risks of
are going to mitigate the business climate change like extreme weather,
risks associated with climate change. changing agricultural patterns, flood risk,
With the majority of N100 companies and ecology and biodiversity change.
not tracking risks and implementing Although companies are not as
mitigation programs, a major concerned about the potential of
opportunity for better management of litigation brought against them for their
climate risk could be missed. own contribution to the climate crisis,
they are concerned that governments
Nearly 60 percent of G250 companies are starting to tighten up regulations
also see the flipside and describe new such as on carbon emissions, and 17
business opportunities associated with percent are aware that their reputation
climate risk. This is occurring in the is at stake as the climate crisis grows.
N100 population but at a lower level Figures are remarkably similar for N100
with only 27 percent disclosing new companies, as seen in Figure 5.7.
business opportunities associated with
climate change.
Figure 5.7 Climate change risks, by type (G250 and N100)
46%
Physical Risk
44%
31%
Regulatory Risk
32%
17%
Reputational Risk
17%
6%
Litigation Risk
7%
0% 10% 20% 30% 40% 50%

Chapter 5
Carbon footprint North America and Australia are often Figure 5.8 Carbon footprint
Nearly half the G250 cohort disclosed cited as having some of the heaviest
carbon emissions for its own operations, carbon footprints, and their industrial
disclosure (G250)
and an additional eight percent sectors contribute significantly.
expanded this to include their value Companies here do trail their European
chain. But 41 percent of G250 and 62 counterparts; only 32 percent of
percent of N100 did not report on their companies in the US and Australia
carbon footprint (see Figure 5.8). disclose their carbon footprint in their
reports, and 42 percent do so in
Further insight is gained by breaking Canada (See Figure 5.9).
results down by country. UK companies
lead others rather significantly on the An interesting finding is that Finnish
disclosure of their carbon footprint, and French companies are among the
and are well ahead of the curve. This first to report on the carbon footprint
could be due to the high profile this of their entire value chains – these
issue has gained in the country over early movers may stimulate an upward
the past several years. trend among other nations such as
Hungary, Portugal, Switzerland, Spain,
A second cluster of companies from Japan, and the UK, which are also Only for its own operations 48%
Europe come in around the 40 percent starting to take steps in this direction. For its own operations plus its value chain 8%
mark: Italy, Spain, France, and Sweden, Other 3%
but they are topped by Japanese Not at all 41%
companies, which near the 50 percent
mark for carbon disclosure.
“For Global 500 companies a backdrop of regulatory uncertainty is delaying strategic investment decisions and senior
management are calling for greater visibility on climate change related policy in order to better anticipate the impact of
carbon markets and carbon prices. Despite the uncertainty with regard to regulation, 74% of Global 500 companies
responding to CDP have put emissions reduction plans in place. We can see from 2008 responses to CDP an increase
in levels of engagement from companies, with more companies reporting than ever before. Carbon disclosure and
climate change reporting is becoming critical for investors to fully assess their risks, liabilities and opportunities across
their portfolios and this information provides greater understanding of which companies will be the winners in the
transition to a low carbon economy.”
Paul Dickinson
Executive Director, Carbon Disclosure Project
Figure 5.9 Carbon footprint disclosure, by country (N100)
UK 63% 8% 4% 25%
Japan 47% 11% 6% 36%
Sweden 47% 9% 7% 37%
France 44% 15% 3% 38%
Spain 42% 8% 50%
Canada 42% 2% 4% 52%
Italy 45% 1% 54%
Netherlands 36% 6% 4% 54%
Finland 20% 17% 3% 60%
Australia 32% 4% 3% 61%
Portugal 30% 8% 1% 61%
US 32% 4% 2% 62%
Brazil 29% 6% 1% 64%
Switzerland 27% 8% 1% 64%
South Korea 31% 3% 66%
Norway 30% 4% 66%
South Africa 25% 1% 4% 70%
Denmark 19% 6% 2% 73%
Hungary 11% 9% 2% 78%
Mexico 10% 90%
Romania 6% 94%
Czech Republic 2% 2% 96%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Only for its own operations

For its own operations plus its value chain
Other
Not at all Source: KPMG Global Sustainability Services, October 2008
Chapter 5
The survey found that most G250 are

taking measures to reduce their carbon Spotlight on the Carbon Disclosure Project (CDP)
footprint. One-fifth still report that they The Carbon Disclosure Project, founded in 2000, represents 385 global
use carbon offsetting, which is by institutional investors, with more than $57 trillion in assets under management.
many different actors, including NGO’s As an independent not-for-profit organisation, CDP collects key climate change
and governments, seen as a “band data from more than 1550 major corporations around the globe and has
aid” measure that does not get to the assembled the largest corporate greenhouse gas emissions database in the
heart of the problem. But many are world. CDP also works with multinational corporations to facilitate the collection
finding ways of incorporating of climate change relevant data from their supply chain. Reports and company
renewable energy into their supply responses can be found at www.cdproject.net.
sources, and many are taking proactive
steps to reduce energy consumption.
The numbers were fairly similar for the
G250 and N100 groups. See figures
5.10 for an overview of G250 results.
Figure 5.10 Measures taken KPMG Insight

to reduce carbon footprint (G250)
Companies are aware that real measures must be taken to address the
problem of climate change, not just band-aid solutions. With the high profile
that climate and carbon has presently - and with the shadow of regulation
looming - we expected higher disclosure on carbon footprint and risk. But looking
backward to see the emissions it has already produced and then taking steps
to reduce them in the future is only the first step in a company’s climate
change management strategy. Companies must also cast their eyes forward
and look into the future. What risks and opportunities await with greater
regulation, a changing climate, and a carbon-constrained future? How will
companies remain competitive when the rules of the game change? We think
that an era of innovation is approaching in which companies will change
and adapt their products and services to avert risks and to harness the
opportunities presented by climate change in the near future.11
A reduction of energy consumption 42%

A replacement of fossil fuels
with renewable energy 26%
Offsetting of emissions 18%
Other 13%
11 See KPMG International report on climate change risk, “Climate Changes Your Business.” www.kpmg.nl
Chapter 6
Reporting Assurance
Chapter highlights
• Formal assurance12 increased from • Major accountancy organizations • G250 companies are less likely
30 percent to 40 percent in G250 are still leading the corporate to ask for reasonable (positive)
reports, with a similar trend at the responsibility reporting assurance assurance than N100 companies.
national level (39 percent). field.
There is a wide variety of approaches
• Twenty-seven percent of reports • Consistency and quality of assurance companies take when it comes to
contained other types of third party approach is demonstrated by an report assurance. This latest survey
commentary, with seven percent of increase in the use of standards. looked at several key aspects of
these combining commentary with assurance, including the type of
formal assurance. assurance opinion provided, the
choice of assurance provider, which
parts of the report are assured, and
why companies seek assurance.
12 Formal statement with conclusions issued by an independent professional assurance provider
6.1 Global Trends in Assurance
Voluntarily including the views of a of G250 companies that utilized formal relations campaigns about the
third party in corporate responsibility assurance in their report jumped to 40 “greening” of business - formal
reports is a choice that an increasing percent in 2008. The trend is similar in assurance is still only undertaken by
number of companies are making. In the N100, where 39 percent included a a minority of the companies in the
this year’s survey, 56 percent of G250 formal assurance statement in their survey, both in the G250 and N100
companies that issued a report report. See Figures 6.1 and 6.2. samples. This raises questions about
included some form of third party what drives companies to seek
commentary. Just under half of N100 Even though stakeholders, including assurance on corporate responsibility
companies (49 percent) did the same. shareholders and consumers, show reports. See section 6.3 for further
concern about the veracity of insight on this issue.
After remaining steady at about 30 environmental and social claims by
percent in 2002 and 2005, the number major companies - notably in public
Figure 6.1 Reports that include a formal assurance

statement (G250)
40%
Yes 30%
29%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2008 2005 2002 Source: KPMG Global Sustainability Services, October 2008
Figure 6.2 Reports that include a formal assurance
statement (N100)
39%
Yes 33%
27%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2008 2005 2002 Source: KPMG Global Sustainability Services, October 2008
Chapter 6
Corporate Responsibility Reporting Assurance
6.2 A Closer Look at Assurance by Country and Sector

The term “formal assurance” is used to underlying systems and processes used Spain and France has grown very
describe formal statements issued by to gather and present the information. quickly - both countries are up nearly
independent professional assurance 20 percentage points since 2005. It is
providers, including accounting, Country trends in formal assurance also interesting to see that in countries
certification, and technical firms. These Over 60 percent of reports issued by like Japan and the UK where nearly all
statements are the result of a companies in France, Spain, South top 100 companies report, only about
systematic, evidence-based process Korea, and Italy, include a formal one-quarter and one-half of companies
that allows the provider to draw assurance statement, as seen in utilize a form of assurance,
conclusions on the quality of the report Figure 6.3. From Table 6.1 it is clear respectively.
and its data and, in some cases, the that the use of formal assurance in
Figure 6.3 Reports that include a formal assurance statement, by country (N100)
France 73%
Spain 70%
South Korea 67%
Italy 61%
United Kingdom 55%
Portugal 48%
Denmark 46%
Netherlands 44%
Australia 42%
South Africa 36%
Sweden 33%
Switzerland 31%
Norway 30%
Finland 30%
Czech Republic 29%
Mexico 29%
Brazil 27%
Japan 24%
Hungary 23%
Canada 19%
United States 14%
Romania 4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
This is the first year that assurance While the percentage of reports with This trend may indicate that as reporting
trends have been tracked in Brazil, assurance in many European countries practices mature there is a tendency to
Mexico, Czech Republic, and Hungary, has stayed relatively stable (UK, include formal assurance. In Sweden,
but it is evident that the use of Netherlands, Italy, and Norway), we new legislation on reporting for publicly
assurance is growing as rapidly see a big jump in Denmark, Finland, owned companies, which includes a
as the practice of reporting itself. and Sweden in this survey after an requirement on assurance, may be
initial dip in 2005. Due to legislation, driving adherence to a more robust
Although less than 20 percent of North companies in Scandinavian countries approach overall.
American companies utilize formal were some of earliest with
assurance, this is growing significantly; environmental reports and assurance,
Canada has doubled since the previous but some were slower to embrace
survey, and assurance in the US is broader corporate responsibility
up from three percent to 14 percent reporting and assurance covering
this year. economic and social issues.
Table 6.1 Reports with formal assurance statement 2002-2008, by country (N100)
Country 2002 (percent) 2005 (percent) 2008 (percent)
France 14 40 73
Spain 27 44 70
Italy 66 70 61
UK 53 53 55
Denmark 45 31 46
Netherlands 38 40 44
Australia 42 43 42
South Africa 100* 22 36
Sweden 15 5 33
Finland 29 19 30
Norway 20 33 30
Japan 26 31 24
Canada 10 10 19
USA 2 3 14
(Selected countries where historical data are available) Source: KPMG Global Sustainability Services, October 2008
*Only one report issued in 2002.
Chapter 6
Sector trends in formal assurance National agreements such as the This trend is in line with lower levels of
In both the G250 and N100 samples, reporting and auditing requirements of reporting in these sectors as well (see
the mining, utilities, and oil and gas the South African Mining Charter may chapter 3), but it is also important to
sectors hold the top three positions also have influenced this result. consider that the complexity of
in terms of percentage of reports operations, including supply chain and
with formal assurance. Over half The finance sector, with the critical outsourcing models, tend to make
of companies in the G250 chemical, indirect impacts it exerts on the assurance difficult and expensive. It
pharmaceutical, oil and gas, and environment and communities through could be that these companies prefer
utilities sectors use formal assurance. infrastructure project financing, credit, selective assurance, concentrating on
The mining sector has increased its and investment, is also in the top half those areas that stakeholders are most
commitment to assurance significantly of the graph with 44 percent of reports concerned about, but this survey did
since 2005, jumping from ninth including a formal assurance not investigate this angle.
position to the top of the table. statement.
There are many factors that may have The trend line is ticking upward in
influenced this result. One may be Sectors such as retail, forestry, other key sectors such as transport,
media scrutiny of this sector in recent and construction remain below the communications, and automotive,
years, especially its health, safety, 10 percent mark despite growing all with about one-third of reports
and working conditions, and the concern about the economic, including a formal assurance
environmental and community impacts environmental, and social footprints statement.
of its operations. of these companies.
Figure 6.4 Reports that include a formal assurance statement, by sector (G250)
Mining 100%
Utilities 75%
Oil & gas 59%
Pharmaceuticals 50%
Finance, insurance & securities 44%
Automotive 35%
Transport 33%
Communications & media (telecommunications) 33%
Food & beverage 20%
Other services 11%
Trade & retail 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Third party commentary or material issues but does not Individual experts on issues or people
Instead of a formal assurance (usually) provide formal conclusions on knowledgeable in the sector or national
statement, some companies opt to the quality of the reported information context are most commonly engaged
include the views or commentary of on these issues. for third party comments from G250
other external parties in their reports. companies. The trends are nearly
The commentary may be from Of the G250, 27 percent make use of identical in the N100 group.
influential stakeholder groups or third party comments from people
reputable experts in a specialist who are not professional assurance Non-governmental organizations
corporate responsibility field. Some providers. Fewer N100 companies use (NGOs), academics, and stakeholder
companies opt for a panel of this method (18 percent). panels are all engaged at fairly similar
stakeholders or experts to provide rates, percentage wise, for G250 and
broader insight into their activities and Only seven percent of G250 N100 companies. The category
performance. The commentary often companies combine formal assurance “Other” consists mainly of committees
includes views on management, with comments from others, which of experts (as opposed to individual
performance, and progress, as well as seems to indicate that G250 experts) and rating agencies.
recommendations. It may also include companies currently choose one
comments on whether the report technique or the other but rarely
includes, in their view, all the relevant combine them.
Figure 6.5 Reports that include Figure 6.6 Reports that include
third party commentary third party commentary
(other than formal assurance), (other than formal assurance),
by type (G250) by type (N100)
Stakeholder panel 15% Stakeholder panel 17%

Academics 20% Academics 18%
Individual experts 29% Individual experts 23%
NGO 13% Non Governmental Organization (NGO) 18%
Other stakeholder group (e.g. community) 7% Other stakeholder group (e.g. community) 3%
Other 16% Other 20%
Source: KPMG Global Sustainability Services, October 2008 Source: KPMG Global Sustainability Services, October 2008
Chapter 6
KPMG Insight
Sector results indicate an overall trend toward increasing demand for an independent third party opinion on corporate
responsibility reports. The highest use of assurance still tends to be in sectors with known impacts and high media
attention. However, the trend analysis indicates that other drivers for assurance are arising in different sectors. These may
be legislative in countries that require assurance on environmental indicators for certain sectors, or it may be through
healthy competition where competitors are catching up to the leaders in best practice.
Companies with consumers tend to have a more market-driven approach that includes providing assurance to their
customers on claims about corporate responsibility. Increasingly, the large retail chains, especially supermarkets, are
attracting more public attention as they branch out to a much wider range of products and make claims about product
sourcing and packaging. Use of assurance in this sector is low, but this may change as customers start to seek better
information in the future. On the other hand, business-to-business sectors such as metals, engineering, forestry, and
construction, do not have a direct link to, and therefore have less pressure from, the end consumer.
Although China was not included in the survey, the first reports with formal assurance were issued in 2008. It will be
interesting to watch developments there.
Alongside formal assurance, the inclusion of the views and commentary from other third parties seems to be increasing.
From the survey it is difficult to say how effective these statements are in reassuring the users of the report, but if
companies are looking for a way to bolster a report’s credibility in the eyes of a specific stakeholder group, then this might
be an effective approach. In particular, the use of stakeholder panels in 15 percent of cases seems positive. One area
where these can add value is in the choice of issues addressed in the report—in other words, whether the report includes
all the issues that are important to stakeholders. Combining this with a formal, systematic assurance process could
provide a company with the level of assurance it wants, both in terms of report content and quality.
“Management and stakeholders alike are increasingly recognizing that assurance on corporate responsibility information
enhances the credibility of a company’s reporting. Providing assurance on corporate responsibility reporting requires that
we find ways to determine the types of information that should be included in such reports, as well as the appropriate
criteria on which assurance might be provided.
IAASB is actively working on this issue, focusing in particular on the growing volume of carbon trading. This work is a first
step in the process to achieve greater consistency in providing assurance on corporate responsibility issues, and draws
from the International Framework for Assurance Engagements and International Standards on Assurance Engagements
3000, “Assurance Engagements Other than Audits or Review of Historical Financial Information.”
Research conducted by IFAC associated with the development of its Financial Reporting in Supply Chain report (2007),
found that auditors are considering the overall risks that organizations face, including the sustainability risks, and that this
was considered a welcome development.
As issues like environmental sustainability and social performance become vital business concepts, the accountancy
profession will continue working to design and deliver the services necessary to report on and assure reports in this field.”
Fermin Del Valle

President, International Federation of Accountants (IFAC)
6.3 Assurance: Why, Who, and What
Why: Quality a key driver Both G250 and N100 companies state Readers and users of reports need to
Companies have many options when that the credibility of the report and be able to trust that what they are
developing an assurance process to the quality of the reported information reading is true and accurate, and
support their corporate responsibility are the main drivers for seeking utilizing some form of assurance is one
management and reporting activities. assurance on a report (Figure 6.7). way that companies can improve the
Understanding what companies want However, the contribution of assurance credibility of their report. This driver is
to get out of assurance and why they to improving and ensuring the quality cited by about one-fifth of N100 and
use it can help explain their decisions, and reliability of a company’s G250 companies alike.
such as who to engage for assurance underlying reporting processes is also
and what parts of the report or process appearing as one of the top drivers for
to assure. using assurance.
Figure 6.7 Drivers for assurance (G250 and N100)
18%
Improve quality of reported information
21%
20%
Reinforce credibility among stakeholders
18%
14%
Improve reporting processes
16%
6%
Drive Performance
4%
5%
Other
3%
2%
Primarily responding to legal requirements
2%
0% 10% 20% 30% 40%

Chapter 6
Who: choice of assurance providers in corporate responsibility data, and among N100 companies. The use of
The majority of G250 companies that with regulation on the horizon in many certification bodies is on the rise at
engaged assurance providers selected countries, there is an increased focus the country level but the G250 have
major accountancy organizations. This on information systems and controls, notably moved away from this group.
could be due to the trend toward a which may lead companies seeking In both populations the use of
more comprehensive approach to an assurance provider to opt for a technical or issue experts and
assurance that covers the full report major accountancy organization. specialist assurance provider firms
and the process behind it, rather than is on the rise.
just isolated sections such as Specialist assurance providers and
environmental indicators. With technical experts account for about
investors starting to show interest 20 percent of total engagements
Figure 6.8 Choice of assurance provider, 2005-2008 (G250 and N100)
60%
65%
Major accountancy organization
58%
70%
8%
18%
Certification bodies
21%
13%
20%
11%
Technical experts firm
2%
13%
7%
4%
Other
19%
6%
5%
11%
Specialist assurance provider
0%
4%
0% 10% 20% 30% 40% 50% 60% 70%
‘05 N100 ‘08 N100 ’05 G250 ‘08 G250 Source: KPMG Global Sustainability Services, October 2008
What: some or all and half seeking assurance on specific

Companies can choose to have their parts of the report.
entire report assured or they can
identify parts of the report where Of those requesting assurance on only
it is especially important that the parts of the report, 74 percent of the
information (often specific data) G250 and 69 percent of the N100
be assured. identify specific indicators they want
assured. Thirty-five percent of both
The G250 and the N100 are split right G250 and N100 companies ask for
down the middle with about half assurance on report chapters or
requesting assurance on the full report sections.
KPMG Insight
It is interesting that improving the quality of a report and the underlying systems both increased as stated drivers for
assurance while adding credibility as a driver went down slightly. This may reflect the current stage or maturity of reporting
in the companies covered by the survey. As companies progress toward integrating corporate responsibility into their
overall business strategy and management, they will develop and implement internal systems, controls, and compliance
mechanisms.
In terms of assurance scope, we know from our member firms’ experience that indicator assurance is often driven by
national legislative requirements on specific indicators and is also common in early stages of corporate responsibility
reporting where companies only have reporting systems for a small number of indicators. Longer-term reporters and
sector leaders with more mature reporting processes tend toward assurance that has a broader scope.
Few companies state that improving corporate responsibility performance is a direct driver for seeking assurance. However,
our firms’ experience shows that the assurance process can contribute indirectly to overall corporate responsibility
performance by raising internal awareness, identifying areas for improvement (for example, making links to governance
and management), and by ensuring that performance management and control is based on reliable information.
Chapter 6
6.4 Assurance Standards and Opinions

Standards of the major accounting organizations
Since the last survey, the use of the in assuring reports.
International Standard for Assurance
Engagements (ISAE) 3000 has become The corporate responsibility assurance
obligatory for accounting firms doing standard AA1000AS, issued by the
corporate responsibility assurance non-profit organization AccountAbility,
if there is no national alternative. has also increased in use since 2005,
As a result, the use of this standard being referenced in 36 percent of
has increased considerably since 2005 assurance reports (up from 10 percent)
and now reflects the strong position among the N100.
Figure 6.9 Assurance standards used, 2005-2008 (G250)
24%
ISAE3000
62%
18%
AA1000AS
33%
NA
Other
19%
0% 10% 20% 30% 40% 50% 60% 70%

‘05 G250 ’08 G250 NA Not available Source: KPMG Global Sustainability Services, October 2008
Figure 6.10 Assurance standards used, 2005-2008 (N100)
14%
ISAE3000
54%
10%
AA1000AS
36%
21%
Other
21%
0% 10% 20% 30% 40% 50% 60%

'05 N100 ‘08 N100 Source: KPMG Global Sustainability Services, October 2008
Level of assurance: reasonable The survey shows that the majority of perspective, choosing a limited level
versus limited the G250 (51 percent) obtain report is not surprising since assurance on
An area that has aroused much assurance that is a “limited level” of corporate responsibility information
discussion over the last years among assurance—a lower level that requires is mainly a voluntary activity.
reporting organizations, assurance less work from the assurance provider
providers, as well as interested and therefore lower costs. This results Thirty percent of the G250 opt for
stakeholders, is the level of assurance in a negatively stated conclusion, which positive (reasonable) assurance and
that is appropriate. Financial accounts are perhaps does not adequately convey 14 percent for a mixture of the two.
subject to a vigorous process that results the considerable amount of work Among the N100 the percentage
in a “reasonable level” of assurance with undertaken to assure the report and seeking reasonable assurance
a positively stated conclusion. underlying processes. From a company is higher.
Figure 6.11 Level of assurance (G250 and N100)
48%
Limited: negative form of opinion
51%
37%
Reasonable: positive form of opinion
30%
12%
Combination of limited and reasonable

14%
11%
Other
6%
0% 10% 20% 30% 40% 50% 60%

KPMG Insight
The move toward a corporate responsibility strategy with defined objectives, as well as increasing stakeholder interest in
the reliability of information in reports, may lead to demands for reasonable assurance, especially on the performance data
for strategic environmental and social indicators. To satisfy other stakeholders it is possible to combine this with limited
assurance on the rest of the report. Further research would be needed to see whether, for example, there is already
a link between the level of assurance and the scope of the assurance engagement (i.e., whether the engagement covers
indicators only, or whole reports).
Spotlight
Australia
Public disclosure of sustainability-related information is increasingly on
the agenda for Australian companies, with reports being developed with
boardroom input and reviewed by mainstream analysts. Climate change
has been a key driver of the sustainability agenda along with the
introduction of the National Greenhouse and Energy Reporting System
(NGER) and the Carbon Pollution Reduction Scheme (CPRS) by the
Australian government and the revision of the Australian Securities
Exchange (ASX) Principle 7, which now includes the consideration
of sustainability-related issues as a material business risk.
Figure I CR reporting per sector
Electronics & computers (2)

100%
Forestry, pulp & paper (2)
100%
Mining (5)
80%
Oil & gas (5)
80%
Utilities (5)
80%
Food & beverage (3)
67%
Trade & retail (6)
50%
Communications & media (4)
50%
Metals, engineering & other manufacturing (6)
50%
Construction & building materials (8)
50%
Chemicals & synthetics (2)
50%
Other services (7)
43%
Transport (3)
33%
Automotive (3)
33%
Finance, insurance & securities (38)
24%
Pharmaceuticals (1)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
At the time of this survey, based on In 2008, 68 percent of ASX N100 The increased number of reporting
numbers, the N100 in Australia is companies published information on entities obtaining external verification
dominated by one industry sector: sustainability. Although this level of indicates a growing recognition of the
finance, insurance, and securities reporting lags behind that observed in value provided by external assurance.
(38 percent). Our analysis indicates other developed countries around the Our survey findings indicate that 25
that this sector is not well represented world, it has more than doubled since companies (37 percent of reporters) are
in sustainability reporting. As 2005. It is also important to recognize currently seeking independent third party
sustainability-related issues, most that there are key differences between comments. Although this is not matching
notably climate change, increasingly the Australian landscape and overseas the uptake of sustainability reporting, this
permeate through the economy it will markets, such as reporting is explained by the fact that organizations
be interesting to observe changes in requirements. may not seek assurance or other third
the levels of reporting in coming years. party commentary in their first year
of reporting.
Figure II Integration level CR Highlight - Australia
reporting
68 report
8 fully integrate corporate
responsibility reporting
and annual reporting
24 utilize 3rd party comments
24 percent of the 38 financial
institutions report
34 report on their own
carbon footprint
No integration (separate CR report only)

Partial (CR report & CR section in the Annual Report)
28%
3%
Interview
Rob Kella - Chief Risk Officer, Qantas Airways Limited

Limited (CR section in the Annual Report only) 23%
Combined (CR reporting combined with Annual Report) 6%
Fully integrated
What does sustainability mean What do you consider to be the

(CR reporting fully integrated in the Annual Report) 8%
in your business? key developments in Australia that
No CR reporting 32%
Sustainability is about creating long-term have influenced the development
shareholder value by managing a range of sustainability reporting in recent
Source: KPMG Global Sustainability Services, October 2008 of complex issues, including the safety years?
and security of our employees and In Australia, one of the biggest drivers
customers, responding to climate change has been regulatory and legislative
and reducing our environmental impact, changes, including the revision of
Figure III 3rd party comments creating and sustaining a diverse and our corporate governance principles
talented workforce, and supporting to include the proposed consideration
socioeconomic development. of sustainability risks and the
introduction of a carbon reduction
What do you see as the main scheme (e.g. emissions trading).
business drivers to report on
sustainability and to seek assurance How is sustainability reporting
on sustainability reports? integrated into your company’s
Reporting demonstrates how we management and accountability
manage our sustainability risks and processes?
impacts. It identifies areas for Sustainability is part of our risk
improvement and supports target- management program and is governed
setting and performance management. by the Board. Performance against
Investors and other stakeholders seek sustainability targets, which are linked
greater transparency and consistency in to remuneration, is reported on
reporting. External assurance enhances a monthly basis to management
the credibility of reports, providing and on a regular basis to Executive
stakeholders with confidence that data Management and Board committees.
Only assurance 18%
and information are relevant, accurate, Sustainability considerations are
Only other 3rd party comments 6% and complete, and it helps us to included in business decisions
Both assurance & 3rd party comments 1%
improve our reporting, management to achieve integration.
No 3rd party comments 75%
controls, and data capture systems.
Sustainability Reporting: A Guide
KPMG in Australia and the Group of

100, representing the senior finance
officers of Australia’s leading
enterprises, have developed a good
practice guide for companies and
organizations engaged in the
preparation of sustainability reports.
The publication, entitled “Sustainability
Reporting: A Guide,” will provide
directors and senior executives with a
timely and useful tool when addressing
this rapidly evolving area of reporting.
Spotlight
Brazil
KPMG Brazil’s sustainability team is proud to contribute to KPMG’s sixth
International Survey of Corporate Responsibility Reporting; as sustainability
has become a major part of local discussions in this country. Brazil’s
industrial growth has had a profound impact on environmental
and social infrastructure, and local companies are conscious that strong
and transparent communication with their stakeholders is essential to
sustainable development. We hope the results of the survey reflect this.
Electronics & computers (1) 100%

Oil & gas (4) 100%
Forestry, pulp & paper (3) 100%
Chemicals & synthetics (2) 100%
Utilities (15) 87%
Food & beverage (6) 83%
Metals, engineering & other manufacturing (11) 82%
Finance, insurance & securities (30) 77%
Transport (4) 75%
Trade & retail (7) 71%
Mining (3) 67%
Communications & media (10) 60%
Other services (2) 50%
Automotive (2) 50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
In Brazil, corporate sustainability resistance from Brazilian companies are better prepared to engage in
performance is now seen as an (not all companies issue corporate dialogue with their stakeholders
important driver of business. One of responsibility reports) that see through their corporate responsibility
the key challenges for many companies reporting as more of an additional reports. In contrast, sectors with a
is how to develop business strategies cost than an opportunity to improve. lower impact on the environment, such
and transparent communication to On the other hand, we observed that as communications and media or trade
enhance their economic, environmental, 78 percent of all companies in the and retail, do not demonstrate a
and social performance. survey have a separate or fully serious commitment.
integrated corporate responsibility
Figure I CR reporting per sector report. In general, sectors with high Figure II demonstrates the number of
demonstrates that the adoption of impact on the environment, such as oil Brazilian companies issuing separate,
this new approach still finds certain and gas or chemicals and synthetics, stand-alone CR reports.
Figure II Integration level CR Highlight - Brazil

reporting
86 report
100 percent of oil & gas, forestry,
electronics, and chemicals sector
report
60 have a corporate responsibility
strategy
No integration (separate CR report only) 31%

Partial (CR report & CR section in the Annual Report) 16%
Interview
Alessandro Giuseppe Carlucci - CEO, Natura Cosméticos S.A.
Fully integrated
What does corporate responsibility requires an urgent change in
(CR reporting fully integrated in the Annual Report) 15% mean to your business? consumption and production standards.
No CR reporting 14% Natura’s growth was guided by an We created the Carbon Neutral
entrepreneurial approach that seeks Program to offer our customers
Source: KPMG Global Sustainability Services, October 2008 to create value for society as a whole products with neutral greenhouse
in a sustainable manner, valuing and gases emissions - from the harvesting
respecting the interests and rights of raw materials
Figure III 3rd party comments of our stakeholders. to final disposal in the environment.
What are the main business drivers To what extent does corporate
to report and seek assurance on a responsibility influence innovation
corporate responsibility report? in your products or services?
We believe that transparent Working with socially diverse
communication strengthens the communities like farmers and Indians
company's connections with its helps us to better protect biodiversity,
stakeholders, contributing to brand as products are grown and harvested
recognition and efficient risk in different places and in different ways.
management. The need for transparency This approach is a source of innovation
and credibility leads us to hire that Natura strives to promote through
independent auditors to provide an open scientific research model and
external verification of our corporate partnerships with universities and
responsibility report. institutes. Practicing corporate
responsibility has therefore helped us
Only assurance 12% Does your company address climate to build technology innovation networks
Only other 3rd party comments change risks and/or opportunities that bring together the scientific
9%
related to its product portfolio? knowledge of universities and the
The crisis related to global warming knowledge of traditional communities.
Brazilian Green Ethanol

We noted that companies with high In June 2007, São Paulo state subscribed to a “Green Protocol”
impact on the environment, besides (responsible for nearly 25 percent sponsored by UNICA and the São
issuing a corporate responsibility of the world’s ethanol) issued the Paulo state government. This Protocol
report, have also opted to seek Agro-environmental Protocol with calls for the eradication of pre-harvest
assurance (Figure III) to enhance the the sugarcane sector to promote burning by 2014 in areas where
credibility of their reports. However, industry best practices that would harvesting can be mechanized and by
70 percent of Brazilian companies move the industry beyond 2017 where mechanization is currently
still do not include any third party business-as-usual. not feasible.
comments in their reports.
The Protocol has established goals for
producers in an effort to phase out
manual cutting. Over 130 plants have
Spotlight
Canada
In the past 18 months there has been an unprecedented increase in

media attention focused on sustainability issues. Regulatory responses
to climate change are a key topic in provincial and federal election
campaigns. Securities regulators are also showing increased interest
in the quality of disclosure on environmental risks. Within this context
it is no surprise that the number of large Canadian companies preparing
corporate responsibility reports has increased to 60 percent, up from
41 percent in 2005.
Other services (5)

100%
Trade & retail (19)
100%
100%
90%
86%
75%
Food & beverage (3)
75%
71%
Transport (4)
60%
Automotive (7)
50%
Mining (7)
50%
Pharmaceuticals (2)
50%
Oil & Gas (8)
40%
Utilities (10)
40%
33%
26%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The pattern of reporting by sector utilities are not publicly listed demand from Canadian investors,
reflects differences in regulation, type companies. Low levels of reporting particularly institutional investors,
of ownership, and reliance on within the forest and chemical for non-financial information to be
voluntary standards. One-hundred industries likely reflect significant presented in conjunction with financial
percent of corporate responsibility reliance on voluntary standards information. Only two percent of the
reporting in the finance sector reflects to demonstrate performance companies surveyed have fully
regulations that require Canadian (e.g., Sustainable Forestry Initiative, integrated corporate responsibility
financial institutions with CAN$1 billion Responsible Care). information into their annual reports,
in equity to report on their contributions indicating the continuing challenge of
to Canadian society. Relatively low Sixty-two percent of Canadian reporting on a true “triple bottom line.”
levels of corporate responsibility companies reported on social and
reporting in the utilities sector may environmental performance in their More Canadian companies are seeking
reflect the fact that many provincial annual reports. This reflects growing assurance on corporate responsibility
Figure II Integration level CR Highlight - Canada
reporting
80 report
100% of trade & retail and financial
services report
40% of oil & gas and utilities report
42 report on their carbon footprint

Interview
Ellen Pekeles - Senior VP Strategy, Vancity

Fully integrated
What have been the key What are the main drivers
developments in corporate to seek assurance?
No CR reporting 20%
responsibility in the last few years? Assurance helps to meet stakeholder
There is increased consumer demand demands for accuracy and full disclosure
Source: KPMG Global Sustainability Services, October 2008 and stakeholder pressure for companies of material issues, as well as driving
to behave responsibly. In turn, companies internal system and process
have begun to differentiate themselves improvements. It enhances the credibility
and demonstrate leadership through of our corporate responsibility report and
Figure III 3rd party comments corporate responsibility. indicates the importance management
ascribes to non-financial information.
What major developments do you
envision in the next few years? To what extent does corporate
Increasingly sophisticated consumers will responsibility influence innovation
distinguish between greenwashing and in Vancity’s products and services?
real environmental commitment, and We have developed several products
exercise greater “green” buying power. to support our community leadership
At the same time, we expect a growing focus areas: acting on climate change,
realization among reporters that the facing poverty, and growing the social
integration of corporate responsibility economy. We track the value of our
leads to a better-run business, including community leadership portfolio
better management of enterprise risk. monthly and set annual growth targets.
Community leadership is integrated
How are the business drivers to report into our new strategic plans, which
on corporate responsibility changing? will further drive product and service
Reporting on corporate responsibility innovation in the future.
is seen as a way to build or rebuild
Only assurance 12%
stakeholder loyalty and trust and is
Only other 3rd party comments 2% increasingly viewed as an internal
No 3rd party comments 86% management tool for improving
business performance.
Climate Change
reports but the number still trails Climate change legislation is at For exporters, climate change
many other countries in the survey varying degrees of development performance could potentially act
by a considerable margin. Notably, and implementation in a number of as a barrier to trade. Within this
the pattern of assurance in the US provinces and federally. It is also a context, 35 percent of Canadian
is similar to Canada. very hot topic for Canadian media. companies addressed the business
Corporations are being asked to risks associated with climate change,
The increasing need for more reliable provide specific, measurable and 39 percent disclosed their
and timely non-financial data for information about the environmental carbon footprints in their corporate
decision-making and for regulatory impact of their own operations and, responsibility reports.
reporting is expected to drive demand increasingly, the impact of the supply
for assurance in North America over chain as well.
the next few years.
Spotlight
The Czech Republic
Although it may seem that corporate responsibility issues have not been
a priority for companies in the Czech Republic, a growing awareness of
the importance of corporate responsibility has been visible in the business
community. There is enough awareness, so that the Czech Republic can,
for the first time ever, contribute to KPMG’s International Survey of
Corporate Responsibility Reporting.

100%
43%
Mining (4)
25%
Food & beverage (5)

20%
Oil & Gas (10)

20%
Automotive (11)
18%

13%

11%
Trade & Retail(12)

8%
Other Services (2)
0%
0%
0%
Transport (2)
0%
Pharmaceuticals (4)
0%
Utilities (6)
0%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Addressing corporate responsibility image and positive public perception include corporate responsibility
issues helps a business gain credibility that drives companies to report. As in information in a separate section
among stakeholders and distinguish other parts of the world, it is mainly of their annual report, but 14 percent
itself from competitors. The trend companies in the industrial sector, of companies issue a corporate
toward corporate citizenship is taking followed by businesses in electronics responsibility report. The number of
hold in a growing number of and finance, that are pioneering reports receiving third party assurance
businesses, but for many companies, reporting practices. is still very low in the Czech Republic.
reporting on corporate responsibility Ninety-four percent of the companies
is not a primary focus. Reporting on Sixty-seven percent of companies in surveyed do not include any third party
environmental and social impacts is the Czech Republic do not report on comments in their reporting.
not compulsory by law in the Czech corporate responsibility issues at all.
Republic, so it is rather a matter of Companies that do report most often
Figure II Integration level CR Highlight - The Czech Republic
reporting
33 report
Reporting leaders include chemicals,
electronics, mining, food & beverage
sectors

11%
1%
Interview
Mr. Petr Pudil - Chairman and CEO, Czech Coal a.s.
What does corporate responsibility How is corporate responsibility

No CR reporting 67%
mean in your business? reporting integrated into your

Historically, the mining and utilities company’s processes?
industries have been under Internal processes were the initial
considerable social pressure. The reason why we started our corporate
concept of corporate responsibility has responsibility reporting program.
thus penetrated into corporate Later on we implemented external
Figure III 3rd party comments strategies through various specific standards in our internal reporting
issues like the health and safety of activities – the GRI Guidelines.
miners, mass redundancies, or severe Nowadays, we aspire to have our
environmental impacts. management and accountability
processes and our corporate
What do you consider to be the key responsibility reporting to be two equal
developments that have influenced sides of one corporate strategy.
the growth of corporate responsibility
and corporate responsibility reporting How do you integrate corporate
in recent years? responsibility into your day-to-day
The dynamic development of corporate management?
responsibility and corporate Corporate responsibility is a behavior
responsibility reporting is a sign of an integral to the day-to-day management
era in which stakeholders want more of the Czech Coal Group. Providing
than just a good product or a nice relevant and truthful information,
brand image. Moreover, the rising including negative information, to
Only assurance 4% supply and demand for reporting is various stakeholder groups and getting
Only other 3rd party comments
of the same nature as the rise of the their feedback is a daily activity and
2%
information society: people want more a natural part of every manager’s job
and better information. in the company.
From exploitation to responsibility
Despite being in an early phase of environmentally responsible approach

reporting, lately there has been visible to business in the Czech Republic
growth in the number of companies has a good base on which to build.
showing genuine interest in corporate Therefore, a growing number and
responsibility. Reporting, methodologies, increased quality of corporate
carbon footprint calculations, and responsibility reports can be
restrictions will have no impact, anticipated in the coming years.
however, without the personal
commitment from people in a
company. Although there is still much
to improve, a socially and
Spotlight
Denmark
This is the analysis for Denmark as part of KPMG’s sixth International
Survey of Corporate Responsibility Reporting. The findings of the survey
and the development of corporate responsibility reporting in Denmark are
discussed below. Overall, the survey findings indicate that corporate
responsibility reporting and a higher level of transparency is about to
become best practice in many countries and sectors.

100%
Food & beverage (6)
67%
60%
50%
Oil & Gas (2)
50%
Utilities (2)
50%
36%
Transport (7)
29%
25%
Pharmaceuticals (4)
25%
13%
Other services (5)
0%
Trade & retail (19)
0%
0%
Automotive (2)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Denmark has a minimum of natural Looking at reporting per sector in sector has now started reporting on
resources and heavy industry, focusing 2008, it is clear that sectors with corporate responsibility; this was not
instead on light industry, trading, finance, environmental dilemmas still have the the case in 2005.
and other non-industrial sectors. highest degree of reporting even
When companies started reporting though the number of companies in Companies that started reporting years
on the environment and corporate these sectors is rather limited. ago on corporate responsibility are
responsibility 15-20 years ago, Denmark moving rapidly toward different levels
had some trendsetting companies in Sectors such as trading, automotive, of integrated reporting. Only three
pharmaceuticals, metals, and building electronics, and other services have companies that prepared corporate
materials that were engaging in not yet started to report on corporate responsibility reports did not include
high-quality non-financial reporting. responsibility. The Danish financial corporate responsibility information in
Figure II Integration level CR Highlight - Denmark
reporting
40 report
Of the 19 trade & retail companies
in the sample, none report

Interview
Preben Andreasen - Head of HSE Aalborg Portland

Fully integrated
What does corporate responsibility politicians, about our environmental

mean in your business? performance. We are working
No CR reporting 60%
We produce cement and concrete, internationally and it is important to us
which is a very energy-intensive that local politicians understand our
Source: KPMG Global Sustainability Services, October 2008 business, so our focus is mainly on business challenges. We have for the
energy and climate, including reducing same reason prepared high-quality
CO2 emissions. environmental reports for many years,
Figure III 3rd party comments and we are very proud that we won the
What do you consider to be the key European award for best environmental
developments outside Aalborg reporting in 2004, and Danish reporting
Portland that have influenced the awards a number of times.
development of corporate
responsibility and corporate What are the main drivers to seek
responsibility reporting in the last assurance on your environmental
few years? report?
I think there has been an increased Our production site in Aalborg has
focus on the climate issue in most environmental certificates of ISO
sectors, which means we have been 14001, Energy, and EMAS-registration
looking at significant signs of climate and therefore our management
change - these will change conditions systems and reporting are verified
for many business sectors, especially by a Danish certification body. We have
energy -intensive industries. also had our environmental data verified
to be sure that the quality of data is
What is the main driver for Aalborg reliable and satisfactory. All in all,
Only assurance 10% Portland to report on corporate we use external verifiers to ensure
Only other 3rd party comments 1% responsibility? the quality of our routines and data
Both assurance & 3rd party comments 1% For us, a main driver is to inform sampling, and to give credibility
No 3rd party comments 88% external stakeholders, including to the report.
their annual reports. Novo Nordisk The use of third party assurance has the certification bodies also carry out
and Novozymes have fully increased compared to 2005, as 11 some assurance work on corporate
integrated reports. percent of the companies included responsibility reports.
assurance opinions in their corporate
We expect this development to responsibility reports in 2008. Normally the assurance standard ISAE
continue, supported by legislation 3000, is used for verification, but in
with requirements in respect of CR The survey indicates that the 'Big Four' recent years the AA1000 standard
information in the Management’s audit firms carry out 9 of the 11 has also been used.
Review of the annual report. assurance engagements in Denmark;
Spotlight
Finland
The corporate responsibility reporting landscape in Finland has evolved

over the past few years. Of the top 100 companies, based on revenue,
the majority reports on corporate responsibility issues at least on some
level. The eagerness of different sectors to report varies, as does the
format of the reports. On the whole, a lot has been achieved, but as
reporting practices and standards develop alongside growing expectations
of stakeholders, it is important that Finnish companies make sure they
keep up.
Utilities (3)
100%
80%
67%
Transport (3)
67%
60%
Other services (7)
57%
50%
Food & beverage (4)
50%
Automotive (4)
50%
50%
37%
Oil & gas (4)
25%
Trade & retail (13)
23%
9%
Mining (1)
0%
Pharmaceuticals (1)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
When looking at corporate responsibility survey (19 companies), but only
report. Only one percent of companies
reporting by sector, the utilities 37 percent of its companies report
issue a fully integrated report whereas
(100 percent) and forestry, pulp, and on corporate responsibility issues.
35 percent do not report on corporate
paper (80 percent) sectors seem to be responsibility issues at all.
very diligent reporters. However, they According to the survey, 65 percent
are small sectors within this survey. of companies report on corporate A vast majority (82 percent) of the
The finance, insurance, and securities responsibility issues. Twenty-one top 100 companies in Finland do not
sector includes 12 companies, percent of companies include a include third party comments in their
and the percentage that reports - corporate responsibility section in corporate responsibility reports, and
67 percent - is high. Metals, engineering, their annual report, and about the only 13 percent have their reports
and other manufacturing industries same number (20 percent) produce assured by a third party.
represent the biggest sector in the a stand-alone corporate responsibility
Figure II Integration level CR Highlight - Finland
reporting
65 report
Reporting leaders include utilities,
forestry, financial, and transport
sectors

Interview
Susanna Monni - Executive Director, Finnish Business and Society

Fully integrated
How do you view corporate number of indicators they report on

responsibility in Finland at and are starting to focus instead on
No CR reporting 35%
the moment? material issues.
It carries much more weight nowadays.
Source: KPMG Global Sustainability Services, October 2008 We are especially good at data In your view, what are the main
collection. The companies that have business drivers to report on
the best corporate responsibility corporate responsibility?
Figure III 3rd party comments reports in Finland are also top-notch For some it is important to be able
globally. On the other hand, we need to participate in various indices or
more focus on the business value of to project transparency. Excellent
corporate responsibility because we corporate responsibility reporting
tend to concentrate on only the ethical can also be a way for a company to
and moral aspects. differentiate itself from competitors
when it comes to marketing, recruitment,
What do you consider to be the key and financing, for example.
developments that have influenced
the development of corporate In your opinion, what are the main
responsibility and corporate reasons to seek assurance on
responsibility reporting in the corporate responsibility reports?
last few years? I think the main driver is being
There is a GRI boom in Finland. transparent and credible to
Companies that are starting to develop stakeholders. Getting external
their corporate responsibility strategy assurance is also a learning and
Only assurance 13% are adopting the GRI Guidelines for development process that gives a
reporting. However, those who have company the opportunity for dialogue
5%
been active in corporate responsibility with an expert.
for a number of years are reducing the
Innovation
There is a growing trend globally to Susanna Monni, Executive Director In the energy sector we have seen
seek assurance and/or other third FiBS, on corporate responsibility a few innovations, but the required
party comments to build trust among innovation in different sectors: investments are high and will probably
stakeholder groups. This practice is need an incentive programme from
also expected to increase in Finland. “In the forest industry corporate the government before real progress
responsibility is at the heart of is seen. Social innovations have not
company strategy. Some ICT yet taken off, but there is big potential.”
companies have been able to adopt
innovative business approaches, such
as Nokia’s Village Phone program.
Spotlight
France
According to the 2008 KPMG International Survey of Corporate Responsibility,
83 percent of French N100 companies report on corporate responsibility.
Although laws such as the New Economic Regulations Act (NRE 2001)
require this information in the financial reports of listed companies, it is
by choice that almost half of these companies issue the information in a
separate report. It is in these reports that companies disclose their policy
on corporate responsibility, the systems they have in place to implement
it, as well as performance indicators for achieving their goals.

100%
Oil & gas (5)
100%
100%
Food & beverage (4)
75%
Automotive (8)
75%
Utilities (8)
75%
Other Services (11)
73%
62%
50%
Pharmaceuticals (2)
50%
Trade & retail (12)
42%
36%
29%
Transport (4)
25%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The percentage of French N100 becoming more fully integrated into and chemicals and synthetics sectors,
companies that issued a corporate operations. The level of detail disclosed largely because of the pressure and
responsibility report doubled to 83 in stand-alone reports is usually similar high expectations of stakeholders and
percent in 2008. The percentage of to the information provided in reports analysts. Two-thirds of companies from
companies issuing a corporate that are fully integrated. The integrated non-industrial sectors, such as finance,
responsibility report separate from an reports, however, rarely disclose insurance, and securities, disclose on
annual report (47 percent) was similar information on commitments to social and environmental performance.
in 2008 to what it was in 2005. Some performance. However, only 25 percent of companies
companies combine information about from the transportation sector issue
their social and environmental Companies from all sectors issue reports, even though their activities
performance with financial information corporate responsibility reports. contribute to climate change and they
in a single report, as a way to illustrate Reporting is especially common in the share a similar obligation to corporate
that corporate responsibility is oil and gas, metals and engineering, responsibility as other sectors.
Figure II Integration level CR Highlight - France
reporting
83 report
100% of chemicals, oil & gas,
and metals & engineering
companies report
strategy in place

37%
7%
Interview
Claude Nahon - Director, Environment and Sustainability, EDF Group

Fully integrated
What does corporate responsibility responsibility are crises such as the 2003
mean in your business? heat wave in Europe, as well as greater
No CR reporting 17%
Corporate responsibility and sustainable awareness of the carbon market and
development concern every aspect of sustainable development. Over the last
Source: KPMG Global Sustainability Services, October 2008 our business. At EDF we deal with the two years we have also witnessed a
issue on two levels: in terms of our general awakening to climate change
products and in terms of our industry. issues.
Figure III 3rd party comments Electricity is an essential resource for
individual development, so our aim at How is corporate responsibility
EDF is to make electricity available at a reporting integrated into your
low cost. From our perspective, it is a company’s management and
question of access to energy worldwide. accountability processes?
In terms of our industry, it means dealing We have taken measures internally
with our environmental impact on both to make sustainable development an
the global scale (such as climate change) integral part of the group’s strategic
and locally (such as the production of management systems. These include
waste, water consumption, and local setting up sustainable development
environmental concerns). trophies and having our non-financial
reporting verified externally by our
What do you consider to be the key auditors. Sustainable development
developments influencing the strategy is also an integral part of our
development of corporate ISO 14001 approach and management
responsibility and corporate training program.
Only assurance 21% responsibility reporting in the last
few years?
12%
The key external factors that have
influenced the development of corporate
Carrefour
Today, 55 percent of French N100 This year Group Carrefour issued a The guide allows stakeholders to
companies include third party challenges booklet that sets out five understand Group priorities easily and
comments in their reports. These issues they consider to be key Group unambiguously. It also allows the
comments may be assurance challenges: a balanced diet, Group to explain its main action plans
statements, third party comments, responsible consumption, the social in succinct detail.
or both. Increasingly, this type of conditions of manufacturing, being a
opinion is expected by those in the responsible employer, and climate
French market, particularly analysts change. This guide sets out Carrefour’s
and stakeholders. policy as well as practical solutions for
meeting these five key economic,
social, and environmental challenges.
Spotlight
Hungary
The growth of corporate responsibility in Hungary has accelerated significantly
since the accession to the European Union in 2004. Companies with
different corporate cultures, approaches, and drivers for reporting are
more and more active in the field of corporate responsibility, but there is
still room for improvement with local stakeholder engagement, integration,
and transparency. Media, government, and civil society are generally
speaking considered to be the key promoters of the development of
corporate responsibility, both as a business ethic and a reporting practice.

100%
67%
Transport (4)
50%
Oil & gas (2)
50%
Automotive (7)
43%
35%
Food & beverage (3)
33%
Utilities (11)
27%
Other services (5)
20%
18%
14%
Trade & retail (19)
5%
0%
Pharmaceuticals (4)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Awareness in Hungary of corporate progress in reporting recently, with Disclosed objectives, key performance
responsibility is relatively high, driven more than 50 percent of companies indicators, impacts, and results achieved
by multinational companies applying issuing reports. prove that reporting goes beyond a
group level values, policies, and mere public relation exercise in most
procedures, as well as corporate Almost 60 percent of the surveyed cases. However, the majority of
responsibility-related events, media companies are involved in reporting companies have not addressed
coverage, and government initiatives. sustainability reporting either at a the financial impact of sustainability.
group or local level. Of those that
Sectors in the focus of the public report locally, 25 companies prepare Forty-one percent of companies apply
interest are more likely to be involved a separate report, and nine issue GRI’s G3 as a reporting standard and
in reporting (Figure I). The financial an annual report with a corporate guideline, with the most widely-used
sector has made the most significant responsibility section (Figure II). application level being B/B+.
Figure II Integration level CR Highlight - Hungary
reporting
44 report (25 stand-alone)
Of the 19 trade & retail companies,
5% report

Limited (CR section in the Annual Report only)
25%
9%
Interview
Christopher Mattheisen - CEO, Magyar Telekom

No CR reporting 66%
What are the key factors that have How do you address conflicts
Source: KPMG Global Sustainability Services, October 2008 influenced the development of between business strategy and
corporate responsibility reporting corporate responsibility?
in the last few years? Magyar Telekom’s business and
The Global Reporting Initiative (GRI) sustainability strategies are harmonized.
is one of the main driving forces in We create long-term shareholder value
sustainability reporting. Since 2002 we by embracing opportunities to provide
Figure III 3rd party comments have prepared our sustainability reports services that can contribute to
based on the GRI Guidelines (once sustainable development.
“In Accordance With”). Hot topics have
changed over time, but right now there Does your company address climate
is a strong focus on climate change change risks and/or opportunities?
and supply chain. To avoid the risks arising from climate
change, we regularly check and measure
What are the main business drivers weather conditions at our base stations,
to report on corporate responsibility? for example. ICT holds real promise for
There are several reasons to report on reducing CO2 emissions for our
economic, social, and environmental company as it can help reduce or replace
performance. First, you can only develop travel emissions, the need for real
what you measure. Another reason estate, the use of materials, and so on.
is to promote accountability and to Audio and video conferencing, online
maintain trust and credibility among billing, telecommuting, intelligent
all stakeholders. Third party verification buildings, e-learning, and remote health
is also a tool for credibility. care are other examples. Climate change
Only assurance 4% risks at the global level also depend on
information and the speed of accessing
Only other 3rd party comments 9%
this information, where again ICT plays
an important role.
Areas for possible development
The importance of an external 1. Sustainable strategies: corporate 4. Report content: prepare more
independent assurance provider has responsibility strategy, objectives, and focused CR reports presenting
not yet been widely recognized. Only key performance indicators that are in objectives set, tangible impacts,
15 percent of reporters included a line with business strategy. results achieved, dilemmas,
third party opinion or a formal development areas, new objectives
2. Stakeholder engagement: structured
assurance statement (Figure III). for the next reporting period according
stakeholder dialogue system for defining
However, assurance could assist in to the stakeholder expectations.
key stakeholders, roles (expectation
enhancing transparency and the gathering, strategy development, report 5. Financial impact assessment: analyze
accuracy of data presented in non- preparation), communication channels, and report on risks and opportunities
financial reports. forms, and frequency. of sustainability with financial impact.
3. Report locally: companies reporting 6. Assurance: include third party opinion
on group level are also to disclose and/or professional assurance statement
information about its local impacts. enhancing credibility and accuracy.
Spotlight
Italy
During the last few years, Italian companies have paid increased attention
to corporate responsibility issues. Italian companies have started to make
the link between corporate responsibility and risk management, and to
develop sustainability strategies aimed at avoiding different kinds of risks,
especially reputational ones. On the flipside, they have also begun to find
new opportunities through corporate responsibility. However, the road to
full integration of corporate responsibility in business strategy is still long,
and tools for incorporating it in business processes need improving.

100%
100%
100%
Oil & gas (10)
90%
Automotive (8)
88%
Utilities (11)
82%
Other services (3)
67%
63%
43%
43%
38%
Trade & retail (12)
33%
Transport (3)
33%
Food & beverage (5)
20%
Pharmaceuticals (2)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The large number of Italian companies their annual report - a positive trend Among these sectors the most active
reporting on social and environmental over the last three years. Only three is the oil and gas sector, comprising 90
performance is proof of an increased companies fully combined their percent of companies reporting on
interest in the business opportunities corporate responsibility reports and corporate responsibility issues.
offered by corporate responsibility. annual reports.
The number of companies reporting Forty of 65 companies reporting on
on these issues increased to 65 percent. Of 59 corporate responsibility reports corporate responsibility issues asked
Of the companies that reported, 59 issued, 12 are published by finance, for a third party statement on their
percent published a separate corporate insurance, and securities companies, disclosures. Thirty-six companies
responsibility report (up from 31 percent nine each by oil and gas companies sought formal assurance of their
in 2005), and 33 disclosed information and by utilities companies, and seven reports, mainly (56 percent) provided
on corporate responsibility issues in by automotive companies. by major accountancy firms.
Figure II Integration level CR Highlight - Italy
reporting
65 report
100% of electronics, forestry,
and chemicals companies report
42 have a corporate
responsibility strategy
45 disclose their carbon footprint
No integration (separate CR report only) 25% Interview
Partial (CR report & CR section in the Annual Report) 31% Mario Boella - Chairman of ASSIREVI, Association of Italian Audit Firms
When should a company get We will be publishing a research

No CR reporting 35%
its report assured? document that provides guidelines
Source: KPMG Global Sustainability Services, October 2008 Reporting companies in Italy are not on assuring corporate responsibility
likely to seek report assurance, but reports, related to the international
assurance can add value to a report. standard, “Assurance Engagements
We have to remember that trust and Other Than Audits or Reviews of
transparency are the main pillars of Historical Financial Information”
Figure III 3rd party comments a corporate responsibility report and (ISAE 3000).
that the primary aim of the assurance
statement is to distinguish the report Is ISAE 3000 the main assurance
from all other kinds of communication standard for corporate responsibility
on sustainability. However, when it reports in Italy?
comes to assurance we have to take ISAE 3000 is the most diffused
into account the size of a company. accountancy standard for non-financial
Large companies certainly get the information in Italy. This is because
most value from assurance because it is a generic standard that establishes
they have different types of stakeholders, basic procedures and essential
such as socially responsible investors. procedures for reporting accountants.
In its last revision, AccountAbility’s
What is ASSIREVI’s role in standards, the AA1000, also became
promoting the assurance of more compatible with ISAE 3000.
corporate responsibility reports?
Our association has been working for
Only assurance 35% several years to promote reporting on
non-financial information, and in particular
4%
corporate responsibility reports.
Climate Change
Third party comments, which are not The corporate responsibility issue that Many of them report on their carbon
formal assurance statements, are is getting the most attention from major footprint and measures adopted
rather unusual in Italy. In fact, only Italian companies is climate change. to reduce emissions, but only
four reports contain this kind of Italian companies take climate change a few companies implement an
statement and three of them are into consideration when defining their effective environmental strategy
Italian branches of foreign companies. sustainability policy and, above all, they on climate change.
try hard to set up tools to monitor their
carbon footprint. Nevertheless, Italian
companies are rarely aware of the
business risks and opportunities related
to climate change.
Spotlight
Japan
Companies in Japan are keenly aware of corporate responsibility, with
99 percent of its N100 companies reporting on corporate responsibility
issues in either stand-alone reports or in annual reports. Regardless of
sector, corporate responsibility reporting is an expected practice of any
national or multinational company in Japan. However, external assurance
has not yet taken hold in a significant way.

100%
Food & beverage (4)
100%
Transport (7)
100%
Automotive (14)
100%
Pharmaceuticals (3)
100%
Oil & gas (6)
100%
Utilities (4)
100%
100%
93%
Trade & retail (10)
90%
83%
80%
80%
Other services (1)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Figure I shows corporate responsibility communications and media, and N100 companies include some
reporting by sector. Practically all construction and building materials, corporate responsibility information
companies whose business activities issue fewer reports, although the rate in their annual report. The result
have a rather direct impact on the is still high. indicates that corporate responsibility
environment, such as the manufacturing, is regarded as a key issue for
transport, and energy and utilities Figure II shows the integration level shareholders, investors, and other
sectors, publish reports - nearly of corporate responsibility reporting. stakeholders.
100 percent. Companies whose Seventy-four percent of the N100
business activities tend to have a more companies publish separate reports Figure III gives insight into the role of
indirect effect on the environment, while also dedicating a section of their third party comments. More than half
such as trade and retail, finance, annual report to corporate responsibility of the N100 companies receive third
insurance and securities, matters. Ninety-five percent of the party opinion whereas only 22 of the
Figure II Integration level CR Highlight - Japan
reporting
99 report
80 report on business opportunities
or the value of corporate
responsibility
Innovation and employee motivation
are top reporting drivers

Case study
Sumitomo Chemical Co., Ltd
Fully integrated
The corporate responsibility activities Sumitomo Chemical has also introduced

of Sumitomo Chemical Co., Ltd. are Olyset® net, a long-lasting insecticidal
No CR reporting 1%
strongly linked to the various initiatives net that makes a significant contribution
of the International Council of Chemical to the global fight against malaria.
Source: KPMG Global Sustainability Services, October 2008 Associations (ICCA). ICCA’s commitment In recognition of this, TIME Magazine
to health, safety, and environmental named the Olyset® mosquito net one
performance is put into action via its of “The Most Amazing Inventions of
Figure III 3rd party comments Responsible Care, High Production 2004.” To realize its ambition to
Volume (HPV), Long-Range Research manufacture Olyset® net locally,
(LRI), and Global Product Strategy Sumitomo Chemical transferred its
(GPS) initiatives. technology to a Tanzanian company,
whose total production reaches
The CEO of Sumitomo Chemical Co, 10 million units per year. This transfer
Hiromasa Yonekura, serves as the has created more than 3,000 jobs in
chairperson of the global warming and Tanzania, and the profits generated
energy policy working group at ICCA. from the sale of Olyset® net are
Because of this involvement, returned to the country in the form of
Sumitomo Chemical sets strategies school construction and other projects.
aiming to increase energy efficiency
through the use of benchmarks.
Sumitomo Chemical is also working on
introducing climate-friendly chemical
products to other markets such as
Only assurance 18% automotive, electricity, and housing,
by applying the LCA method and
54%
cooperating with other chemical
companies.
Kyoto Protocol commitment
corporate responsibility reports In 1997, Japan ratified the Kyoto Thirty-four industries covering more
received formal assurance. It seems Protocol and in doing so committed than 80 percent of all CO2 emissions
that companies often deem third party to reduce greenhouse gas (GHG) from the industrial and energy sectors
comments and assurance to be emissions by an average of six percent have participated. The plan determines
somewhat interchangeable, as only against 1990 levels over a five-year numerical targets for CO2 emissions
four companies seek both opinion period (2008-2012). To achieve this reduction set by each industry.
and assurance. target, Nippon Keidanren of the Japan
Business Federation set a “Keidanren
Voluntary Action Plan on the
Environment” in 1997.
Spotlight
Mexico
With almost two million square kilometers of territory and 110 million
people, Mexico is the fifth largest country in the Americas and the
12th largest economy in the world, with strong commercial relations with
the US. Corporate responsibility practices in Mexico are evolving from
philanthropic efforts to standards-based reporting with corporate
governance practices for stronger transparency and accountability
to both shareholders and the wider community.
Oil & gas (1)

100%
Mining (2)
50%
44%
Food & beverage (9)
44%
20%
15%
13%
13%
Trade & retail (22)
9%
Other services (1)
0%
0%
Transport (3)
0%
Automotive (7)
0%
Pharmaceuticals (1)
0%
Utilities (2)
0%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Corporate responsibility reporting has however, such as forestry, pulp and
has gathered information on 273
made progress in the last few years paper, automotive, and utilities.
companies as of 2008. Awareness
with more companies developing a of corporate responsibility is growing,
corporate responsibility performance Sustainable development has earned and more sectors will join the effort
strategy, especially in those industry a strong position on the government in years to come.
sectors with higher impact. In reporting, agenda, with a section devoted to it in
these sectors have found a useful the 2007–2012 National Development The number of companies that report
vehicle for both addressing stakeholders’ Plan. Newcomers to reporting as well on corporate responsibility is only
concerns and managing exposure to as other companies have followed the 27 percent of the total survey
risk. Reporting is still not a widespread guidelines proposed by the CEMEFI population. This indicates that there
practice across other industry sectors (Mexican Philanthropy Center), which is a huge opportunity for companies
Figure II Integration level CR Highlight - Mexico
reporting
27 report
Of the 22 trade & retail companies,
nine percent report
Innovation and employee motivation
10 report their carbon footprint

7%
9%
Case study
Petróleos Mexicanos (PEMEX)
PEMEX is a government-controlled The 2007 report complies with the

No CR reporting 73%
body that was created as a decentralized indicators set forth in the Global
Source: KPMG Global Sustainability Services, October 2008 government agency of the Federal Reporting Initiative (GRI) Guidelines
Public Administration. Its core purpose and was the first Mexican GRI
is to drive the nation’s central and Application Level A+ report -
strategic development activities the highest level. Moreover, the report
in the state’s petroleum industry. meets the guidelines of the United
Figure III 3rd party comments PEMEX holds the number 11 position Nations Global Compact for
as a crude oil producer and is one of communication in progress. The report
the three main suppliers of crude oil addressed the needs of a complex
for the US market. In 2007, total sales sector, including the national oil and
amounted to approximately US$104.5 gas Industry, a vast list of stakeholders,
billion. Active personnel at PEMEX and a citizen participation group
at the end of 2007 rose to 154,802 comprised of highly renowned
workers. specialists to address citizens’
concerns.
PEMEX has been publishing corporate
responsibility reports since 1999.
Only assurance 3%
to identify the benefits of corporate Regarding third party comments and These tend to be refined as
responsibility and align them to their external assurance, only five companies stakeholders demand more objectivity
business strategy. Ten percent of the used external sources to comment or and transparency in how the report
Mexican N100 dedicate a separate verify the contents of their reports, was produced.
section to corporate responsibility therefore relying on the internal
in their annual report, and seven knowledge of the company as the
percent issue only a separate report. only source for assurance. This is due
to the low penetration of international
standards in the reports and the use
of informal practices developed in-house.
Spotlight
Portugal
The results show a significant increase in reporting from the Portuguese
N100 companies compared to 2006, when a similar study was performed
by KPMG in Portugal. At that time, 10 percent of N100 issued either a
sustainability report or a chapter in the annual report, a much lower
number than today. This increase in reporting is a result of the growing
awareness of, and commitment, to sustainability issues among
Portuguese companies.

100%
100%
Mining (1)
100%
Oil & gas (6)
83%
80%
Forestry, pulp & paper 5)
80%
Utilities (4)
75%
60%
Food & beverage (8)
50%
Automotive (12)
42%
Trade & retail (15)
40%
Transport (5)
40%
33%
Pharmaceuticals (4)
25%
Other services (4)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Since 2005 there has been a significant Half of the 61 N100 companies Few corporate responsibility reports in
increase in reporting among N100 that report do not only issue a separate Portugal contain third party comments.
companies operating in Portugal. corporate responsibility report. This is consistent with the low
The leading sectors include companies Integrating information into annual percentage of reporting companies
with high environmental impact, with reports is often a preferred option due that have their report externally
more than 50 percent of companies to a lack of resources for reporting and assured. Although report assurance
reporting information about performance the perception among companies that in Portugal is increasing, companies
on sustainability issues. Another the effort is not worth the cost of need to understand the benefits of this
remarkable change is that the finance, issuing a separate report. Nevertheless, process and kind of analysis, especially
insurance, and securities sector have reporting is still considered relevant to with regard to materiality.
more than 60 percent of companies these companies.
reporting on sustainability.
Figure II Integration level CR Highlight - Portugal
reporting
61 report
100% of metals & engineering,
mining, and electronics
companies report
Innovation and ethical considerations

Interview
Vasco de Mello - Chairman, BCSD Portugal

Fully integrated
What do you consider to be the key to the organization through

developments that have influenced benchmarking and improving/adopting
No CR reporting 39%
corporate responsibility and corporate better and more efficient practices.
responsibility reporting in the last
Source: KPMG Global Sustainability Services, October 2008 four years? In your view, how is risk management
It has been influenced, by the increasing linked to corporate responsibility?
awareness of sustainability issues such Risk management and corporate
as energy and climate or ecosystems, responsibility are closely intertwined.
Figure III 3rd party comments The growing complexity of business
among all stakeholders. It has also been
influenced by the momentum that requires new tools, ever more
holistic approaches to risk management innovative and versatile. The integrated
have gained in capital markets. approach to business provided by
corporate responsibility is key to better
In your view, what are the main risk management and adjustment,
business drivers for reporting adding new issues and indicators
on corporate responsibility? to classic fundamentals.
Two fundamental drivers: 1) Corporate
management systems and performance To what extent does corporate
improvement; and 2) reputation asset responsibility influence innovation
management and stakeholder in products/services development?
involvement. Corporate responsibility’s influence
on innovation (products/services)
What are the main drivers is a combination of factors that vary
for assurance on corporate strongly from business to business.
responsibility reports? In most cases, it is based on cost
Only assurance 20% Third party assurance is vital to promote efficiency, new consumer expectations
Only other 3rd party comments 4% materiality and maybe a competitive oriented for sustainability values, and
advantage as far as reputation assets new business opportunities related to
are concerned. It may also add value new green technologies and solutions.
The importance of the third sector
The social economy sector is now Portuguese financial institutions, like

receiving greater recognition at the Banco Espírito Santo, are committed to
European Union Member State level, creating value for the wide charity and
particularly by financial institutions, community network by providing
because it represents important specific products and services tailored
sources of entrepreneurship and jobs. to their needs, as well as financial
In Portugal this sector represents training for the managers of these
about 4.2 percent of GDP and institutions.
employs, on average, 250,000 people.
Spotlight
Romania
This is the first year since the inception of KPMG’s International Survey of
Corporate Responsibility that Romanian companies have been surveyed.
One of the most significant findings of the survey was that there was a
difference in commitment to corporate responsibility reporting between
multinational companies operating in Romania, which are more active in
reporting, and Romanian-owned companies, which have less interest. This
result could indicate that Romanian companies are less mature than global
companies when it comes to disclosing non-financial information voluntarily.

50%
Utilities (6)
50%
42%
Food & beverage (12)
42%
33%
29%
20%
Trade & retail (19)
16%
Oil & gas (13)
8%
0%
Transport (2)
0%
Automotive (8)
0%
Pharmaceuticals (5)
0%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The top sectors in sustainability but neither of these sectors produce responsibility report. Seventy-six
reporting are electronics and many corporate responsibility reports percent of N100 companies do not
computers as well as utilities, neither (8 percent and 16 percent, respectively). report on corporate responsibility at all.
of which are very well represented in
Romania’s N100 (only 8 companies). Of the 24 percent of N100 companies Of the 24 companies that report on
Food and beverage, as well as metals, that report on corporate responsibility, corporate responsibility, only one
engineering and other manufacturing, about two-thirds issued only a separate company sought assurance of its
rank second in reporting, but many corporate responsibility report. Six report and just one company included
of the companies in these sectors percent of Romanian companies comments from a third party in its
are multinationals. Sectors very well include some information on report. This extremely low level of
represented in the N100 are oil and gas sustainability in their annual report assurance - and low level of corporate
and trade and retail (32 companies), and in a separate corporate
Figure II Integration level CR Highlight - Romania
reporting
24 report
Reporting leaders include
electronics and utilities sectors
Market position and economic
considerations are key reporting
drivers
strategy

17%
6%
Case study
Holcim (Romania)
No CR reporting 76%
Holcim Romania has committed itself to Increased awareness among the public
Source: KPMG Global Sustainability Services, October 2008 sustainable development, and integrated and decision-makers about global
the principles of value-creation, warming and other environmental
sustainable environmental performance, concerns has contributed to a preference
and corporate social responsibility into its for products and services that help to
business strategy. alleviate climate change. Apart from
producing cement in modern, energy-
Figure III 3rd party comments Working in partnership with its efficient plants, Holcim Romania has also
stakeholders, Holcim (Romania) is started to use alternative fuels derived
working to improve the quality of life from waste. New products with a
of its workforce, their families, and the smaller carbon footprint (Tenco, Structo,
communities within which the road binders) reflect the efforts of the
company operates. The company’s company to produce more cement for
policy and global standards on the growing Romanian market in a more
corporate responsibility are applied to sustainable way (less CO2 emissions per
its employment practices, tonne of cementitious material).
occupational health and safety,
community involvement, and In recognition of the company’s efforts
customer and supplier relations. around the world, in 2008 the Holcim
Group was named “Leader of the
Transparent communication, including Industry” in the Dow Jones
the annual Romanian Sustainable Sustainability Index and, for the fourth
Development Report (since 2005) helps year in a row, acknowledged as the
Only assurance 1% to build the trust and respect of all company with the best sustainability
Only other 3rd party comments stakeholders. High business ethics and performance in the building materials
1%
personal integrity also support the industry.
credibility and reputation of the company.
Romania’s Approach to Climate Change
responsibility reporting in general Romania has been a signatory of the a national strategy and action plan
reflects a lack of awareness and UNFCCC since 1992 and ratified it in on climate change. The business
interest among stakeholders in 1994. Romania was also among the community’s awareness and readiness
Romania on sustainability and first countries to ratify the Kyoto to manage climate change risk,
corporate responsibility. These Protocol in 2001, and committed itself however, is very limited and the
numbers also suggest that companies to reduce the level of greenhouse gas sectors that are not directly affected
do not yet appreciate the benefits of (GHG) emissions to eight percent of by the European Union Emission
reporting and assurance on business 1989 levels. Even though Romania was Trading Scheme (EU ETS) directive
development. already 34 percent below the Kyoto do not appear to be prepared.
target (mostly due to low economic
activity), the government nevertheless
acted proactively by putting into place
Spotlight
South Africa
Sustainability reporting in South Africa is influenced by three major factors:

the extent of a company’s environmental impact, its size, and its exposure
to international markets and investors. This is due to the fact that companies
with large, quantifiable direct impacts face more pressure to report (e.g.,
the mining sector), and large companies have more discretionary funds to
support reporting. Multinational companies, companies that operate in
international markets, or companies with an international investor base,
produce reports in line with sustainability best practice.
Utilities (1)
100%
100%
Mining (17)
71%
60%
53%
50%
Trade & retail (17)
41%
Other services (12)
33%
33%
Transport (4)
25%
25%
Food & beverage (9)
22%
0%
Automotive (1)
0%
Pharmaceuticals (1)
0%
Oil & gas (1)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
If we exclude sectors that are and food and beverage industries issue requirement of the Johannesburg
represented by only a few companies, sustainability reports. Stock Exchange.
South African sustainability reports are
split into two distinct groups (Figure I). Eighty-six percent of companies in Very few companies (15 percent) seek
First, the majority of companies in the South Africa include some level of assurance of their sustainability reports
mining, communications and media, sustainability reporting in their annual (Figure III). In by far the majority of
and finance, insurance, and securities reports or issue a stand-alone report cases, companies that seek assurance
sectors issue reports. In contrast, (Figure II). This reflects the influence are in the mining and finance sectors,
less than 50 percent of companies of the King Code for Corporate 75 percent of which operate in
from the construction and building Governance (King II), which international markets or are owned
materials, trade and retail, electronics, recommends reporting on by non-South African companies.
transport, chemicals and synthetics, sustainability and is a listing
Figure II Integration level CR Highlight - South Africa
reporting
Reporting leaders include utilities,
forestry, mining, and
communications sectors

17%
5%
Case study
Materiality vs. Full Disclosure
No CR reporting 14%
Top South African companies tend to performance, addressing the challenge

use the Global Reporting Initiative (GRI) of climate change, responding to
Source: KPMG Global Sustainability Services, October 2008 Guidelines. In most cases they report the challenge of skills development,
on a large set of GRI indicators in their and encouraging black economic
printed report but provide very little empowerment in their South African
information on sustainability strategy, operations.
context, and material issues. However,
Figure III 3rd party comments due in part to the influence of GRI’s According to Sasol South African
G3 principles-based framework, some stakeholders have responded well
companies are starting to approach to this approach. Not only is it more
reporting in a more focused way. cost-effective and environmentally
The focus of the reports is no longer sensitive (fewer pages), but the
strictly on performance measures, report communicates key messages
but on how sustainability presents to stakeholders, who do not need
their company with challenges and to search through huge documents
opportunities. for information. Stakeholders who
are particularly interested can obtain
A sustainability example of this more detail from the web.
approach is the report released by
Sasol in 2007. In addition to detail on For its report, Sasol was awarded the
their strategy, management systems, best South African Sustainability
and stakeholder engagement, Sasol’s Reporting Award by the Association of
sustainability report focuses on their Chartered Certified Accountants (ACCA).
Only assurance 15% four material sustainability risks:
promoting improved safety
Climate Change in South Africa
This low level of assurance reflects A key driver for sustainability reporting Companies are therefore including
two influences: low demand for is a heightened awareness of climate climate change as a key risk in their
assurance from stakeholders, and a change, brought on by electricity reporting and management structures,
lack of awareness among companies shortages in the country. As a result demonstrated by a 74 percent response
about the benefits of assurance, such of the insufficient generation capacity rate for South Africa’s first Carbon
as improvements in business of the national energy supplier, Eskom, Disclosure Project Report (2007).
management. South Africa is coming to realize that
reducing power consumption is not
only necessary to combat climate
change but is an economic imperative.
Spotlight
South Korea
There is a growing awareness about the importance of corporate
responsibility reporting in South Korean businesses. Corporate responsibility
reporting is expected to spread to public enterprises, medium-sized
corporations and their affiliates, as well as global businesses. In this
respect, corporate responsibility reporting is establishing itself as
a “must,” not an “option,” in corporate management.

86%
Utilities (6)
83%
Oil & gas (4)

75%

50%
Transport (6)
50%

50%

33%

31%
Automotive (7)
29%
Trade & retail (11)

27%
22%
22%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The analysis of corporate responsibility It is noteworthy that the importance of of many corporations will come to
reporting by business sector (Figure I) corporate responsibility reporting has perceive the importance of reporting
shows that reporting was most expanded to various industries in 2008 on environmental and social performance
prevalent in electronics and computers, compared to 2005 - the number of and begin reporting in order to keep up
utilities, and oil and gas sectors. This is companies publishing reports with this global trend.
perhaps not surprising due to the link skyrocketed from 11 in 2005 to 42 in
between the nature of their respective 2008 (Figure II). This growth is due to In total, 30 of the companies reporting
industries and their environmental the fact that many global customers as on corporate responsibility had their
footprint, as well as the emerging well as various civil organizations are reports assured by a third party
opportunities to provide services demanding it and putting pressure on (Figure III). Out of these 30 companies,
related to corporate responsibility, corporations. It is expected that CEOs a very high number (28) opted for
such as climate change.
Figure II Integration level CR Highlight - South Korea
reporting
electronics, utilities, and
oil & gas sectors

Limited (CR section in the Annual Report only)
42%
12%
Interview
Young-Chan Nam - Executive Vice President, Head of Management
No CR reporting 46% Support Division, SK Telecom
Source: KPMG Global Sustainability Services, October 2008 What does corporate responsibility How is CR integrated into your
mean in your business? company’s management and
As a company serving more than half accountability processes?
the Korean population, it is crucial for A corporate citizenship committee
SK Telecom to ensure the well-being of was recently established, with three
both current and potential customers. outside directors and two internal
The pursuit of customer value is the directors to respond to demands for
Figure III 3rd party comments key to corporate responsibility at greater accountability and sustainability
SK Telecom. in a strategic manner. To embed
sustainability in day-to-day operations,
To what extent does CR influence Ethics Management Agents are
innovation in your products or appointed in 55 departments
services? throughout the company.
Sustainability concerns are effectively
reflected in the product and service Which measures does your company
development process. SK Telecom have in place to reduce the
encourages customer participation at company’s carbon footprint?
every step, from planning to Every year all offices set a goal for
distribution, and applies a human- reducing energy use and awards are
centered innovation approach to deliver given to the best performers. We are
services that customers truly need. We introducing natural air-conditioning
also partner with external institutions systems to reduce electricity
to prepare for future trends such as consumption at base stations. Looking
sustainability. ahead, SK Telecom aims to contribute
to the transition toward a Low-Carbon
Only assurance 28% Economy (LCE) not only by reducing
Only other 3rd party comments 2% our own footprints but by providing
No 3rd party comments 70% solutions for our customers to reduce
their footprints.
POSCO
external assurance, with the other POSCO is providing a vocational They are entitled to enjoy the same
two choosing a different form of third training program for married women working conditions as their male
party comment. Many South Korean for the first time in Korea. POSCO counterparts. Moreover, POSCO plans
corporations tend to regard third party opened the program to those who to expand female dressing rooms and
verification as important for ensuring demonstrate strong potential, in order other convenience facilities to provide
the objectivity of their reports and to help them find work and promote a better working environment for
enhancing their credibility. their participation in society. Women female employees.
who complete the program are
converted to full-time employee status
and deployed to positions according
to their aptitude and ability.
Spotlight
Spain
Corporate responsibility reporting has come a long way in Spain in the last
few years. However, in comparison with countries where reporting is
more well-established, there is room for improvement. Spanish reporting
companies place high importance on assurance. With more than two-
thirds of reports assured, Spain ranks second in the survey in percentage
of reports assured. However, still one-third of the largest 100 companies
in Spain do not report on corporate responsibility at all.

Utilities (5) 100%
Construction & building materials (5) 80%
Transport (4) 75%
Oil & gas (8) 63%
Automotive (15) 53%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
In the survey Spain’s rate of reporting significant in number and important for This leaves just under one-third
on corporate responsibility is above the local economy, publish corporate of Spain’s 100 largest companies
average in all sectors except forestry, responsibility reports. integrating corporate reporting
pulp, and paper. Sectors that contribute into their annual reports. This is,
significantly to GDP, such as Integration of corporate responsibility in general, below average among
construction, finance, and insurance and information into annual reports is far the surveyed countries.
securities, have some of the highest from the norm in Spain. One-third of
rates of reporting, with 80 percent or the companies surveyed do not report Spain ranks high in assurance of
more of companies reporting on on corporate responsibility at all, while corporate responsibility reports,
corporate responsibility. However, just roughly another one-third publish only placing in the top end in relation to the
over half of automotive companies, a corporate responsibility report, countries surveyed. However, a little
separate from their annual report. more than half of the N100 companies
Figure II Integration level CR Highlight - Spain
reporting
67 report
100% of utilities and electronics
companies report
44 have a corporate
47 report financial value or business
opportunities associated with
corporate responsibility

Case study
ACCIONA
Fully integrated
ACCIONA’s mission is to be a leader were used to develop market-specific

in the creation, development, and action plans.
No CR reporting 33%
management of infrastructure, energy,
and water, and to contribute actively Committee of Independent Experts
Source: KPMG Global Sustainability Services, October 2008 to social well-being, sustainable For the second year, the company has
development, and creating value for its engaged with a Committee of
stakeholder groups. The company Independent Experts whose role is
Figure III 3rd party comments operates in 30 countries with over to ask questions on issues that the
35,000 employees, and had earnings Committee believes to be relevant for
of 7,953 M€ in 2007. ACCIONA’s ACCIONA’s stakeholders. This panel
commitment to sustainability has taken then issues an opinion on whether the
the company to a leadership position company’s report contains sufficient
in the Dow Jones Sustainability Index and appropriate information about
heavy construction sector, for the these issues. This initiative, along with
second straight year. formal assurance of its report, is key to
creating and maintaining the trust of
Stakeholder engagement stakeholders.
During 2007, ACCIONA undertook an
extensive exercise to identify its main Carbon footprint
stakeholders in its key markets. The company is convinced of the need
A wide-ranging consultation was for a Low-Carbon Economy (LCE) and
developed aimed at communicating is committed to reducing its carbon
the company’s commitments to footprint. As part of this effort,
Only assurance 36% opinion leaders and understanding ACCIONA reports in detail about
Only other 3rd party comments their expectations. Country-specific its climate change strategies and
5%
analyses on environmental and social performance, including a weekly report
issues, together with the consultation, on its website on avoided emissions.
Trust
lack any kind of third party comments Recently, KPMG GSS Spain and commitments have had a positive
in their reports. Spain’s N100 Fundación Alternativas, a local think effect on how Spanish companies are
companies show preference for using tank, conducted an opinion survey governed and managed, and on their
formal third party assurance only among corporate responsibility awareness of social, ethical, and
(36 percent), distantly followed by specialists. The survey’s aim was to environmental issues. Maybe someone
companies that combine assurance analyze the level of trust in Spanish is reading all those reports after all.
with other third party comments companies, as well as understand how
(eight percent) and companies that corporate responsibility practices are
opt for other third party comments perceived by an informed segment of
only (five percent). the public. Over 80 percent of those
surveyed believe that in the last few
years corporate responsibility
Spotlight
Sweden
Since the last KPMG survey in 2005, the number of Swedish companies
in the N70 that publish a sustainability report has more than doubled. This
might be a result of the increasing interest from stakeholders, due to the
focus on climate issues over the last two years. Today companies are
more aware of their impact on the environment and on the communities
where they operate than they were three years ago.
Mining (1)
100%
Utilities (3)
100%
Automotive (6)
83%
Food & beverage (4)
75%
Trade & retail (7)
71%
67%
Other services (3)
67%
60%
Oil & gas (4)
50%
50%
Pharmaceuticals (2)
50%
33%
33%
Transport (3)
33%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
It is not surprising to see that A total of 84 percent of the Swedish Of the companies reporting on
companies in resource-intensive N70 companies have some form of corporate responsibility, 14 have an
sectors are well-represented when corporate responsibility reporting and assurance statement. The assurance
we look at the number of corporate among these, as many as 7 are state- providers are dominated by the Big Four,
responsibility reports by sector. A more owned. This means that the state- with KPMG in the lead. DNV provides
interesting result is that in trade and owned companies are in the forefront assurance on one sustainability report.
retail, 71 percent of the companies when it comes to reporting on social Seven percent of the companies
have a corporate responsibility report. and environmental performance. This included comments from other third
This could be due to an increasing could be a result of the active role the parties in their sustainability report, such
focus on supply chain management, Swedish government plays when it as stakeholder panels or ethical analysts,
which is a key issue to companies comes to putting demands on state- who commented on sustainability
in this sector with suppliers in owned companies about sustainability performance and/or the sustainability
developing countries. performance and reporting. report itself.
Figure II Integration level CR Highlight - Sweden
reporting
Reporting leaders include mining,
utilities, and automotive sectors
strategy in place

Case study
Supply Chain and IKEA
No CR reporting 16%
IKEA discloses a lot of detailed Arvid Grindheim, Head of Compliance,

information with regard to supply chain IKEA Group, Social & Environmental
Source: KPMG Global Sustainability Services, October 2008 management. As IKEA has suppliers in Affairs, confirms that transparency in
countries where the risk of labor rights sustainability reporting is deliberate.
abuses are perceived as high, they are IKEA has worked with IWAY in a
obligated to work on these issues in a structured way since 2000 and has
systematic way, which can be followed always communicated the status and
Figure III 3rd party comments up on both internally and externally. follow-up internally. Since 2004 IKEA
IKEA’s 2007 Social & Environmental has also communicated the status of
Responsibility Report is noteworthy IWAY in its corporate responsibility report.
because of its transparency on its
supply chain. For example, IKEA “We face challenges with the suppliers
reported on the top five purchasing in China, and IKEA is only one among
countries as well as how many IKEA many companies that work hard with
suppliers are IWAY approved (IKEA the implementation of the Code of
Way on Purchasing Home Furnishing Conduct. We want to be open about the
Products). China is number one in the situation and also explain what type of
top five purchasing countries at 22 challenges we face in China. There is no
percent, yet at the same time has the reason why we should hide these figures
lowest number of IWAY approved from anyone,” says Arvid Grindheim.
suppliers (four percent). IKEA seems
aware that transparency also calls for
completeness, and has disclosed
Only assurance 20% well-developed information about the
challenges in Asia in general, and
Only other 3rd party comments 7%
in China specifically.
Sustainability reporting guidelines
In November 2007 the Swedish report shall be subject to assurance by

government was the first government a third party. The requirements in the
in the world to publish mandatory guidelines are amongst the most far-
guidelines for sustainability reporting reaching requirements for sustainability
for all state-owned companies. These reporting by a (public) shareholder'.
“Guidelines for external reporting by
state-owned companies” state that
GRI Guidelines are to be used for
sustainability reports. Moreover, the
guidelines state that the sustainability
Spotlight
Switzerland
Based on this survey, the Swiss N100 companies can be divided into two
distinct groups. The first group represents large multinationals at the
forefront of industry best practices, including corporate responsibility
reporting. The second group represents relatively medium-sized
companies that are just beginning to formally adopt sustainability and
corporate responsibility reporting. Assurance of corporate responsibility
reports is a relatively new phenomenon in Switzerland and only a small
number of companies have implemented this.

89%
Pharmaceuticals (7)
71%
67%
Transport (6)
67%
63%
53%
50%
Food & beverage (6)
50%
Mining (2)
50%
Other services (7)
43%
Utilities (7)
43%
Trade & retail (14)

21%

0%
Automotive (3)
0%
Oil & gas (4)
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The finance, insurance, and securities Sixty percent of the Swiss N100 companies that have headquarters
sector leads in reporting at 90 percent companies have some form of in Switzerland but main operations in
and may reflect a growing demand in corporate responsibility reporting, other countries; and the Swiss cultural
the market for responsible investment predominantly in various combinations tendency for understatement.
opportunities (Figure I). Pharmaceuticals, with their annual report (Figure II).
construction and building materials, Forty percent of the companies do not Assurance statements in corporate
transport, and chemicals and report on corporate responsibility at all. responsibility reports show an upward
synthetics, are other sectors in This may be due to the minimal trend in the last five years. Of particular
Switzerland with above average presence of companies in sectors with interest is that companies in sectors
corporate responsibility reporting typically high rates of reporting, forming the core of the Swiss
in comparison to other countries. namely mining, oil and gas, and economy in GDP are not only at the
automotive; the presence of several forefront of reporting on corporate
Figure II Integration level CR Highlight - Switzerland

reporting
60 report, of which 26 are combined
with annual reporting
Reporting leaders include financial
services and pharmaceutical sectors

Interview
Patrick De Maeseneire - CEO, Barry Callebaut (AG)
Fully integrated
What were the triggers for Barry How do you address climate change
Callebaut to embrace sustainability? risks and opportunities?
No CR reporting 40%
Our business is based on cocoa, and We focus on five areas with significant
although we don’t own any cocoa impact on the environment and our
Source: KPMG Global Sustainability Services, October 2008 farms, we cannot turn a blind eye to business, including emissions, water
the social conditions under which consumption, energy consumption,
cocoa is grown and produced. waste, and transport. Each site has an
Figure III 3rd party comments Consumers today want assurance environment management system that
that their food is safe and produced includes key performance indicators
in an ethical and responsible way. (KPIs) and action plans for continuous
improvement monitored by a corporate
What is your sustainability auditing and evaluation system.
focus today?
Sustainability for us is about acting What is your future vision for Barry
responsibly and living our values. With Callebaut?
operations in several cocoa-producing I would like to see Barry Callebaut
countries, we focus our efforts on making steady progress toward
three spheres of activity where we our sustainability goals, in particular
believe we can achieve the greatest to contributing to improving the
impact: helping to empower cocoa livelihoods of cocoa farmers in our
farmers by supporting industry areas of operation in Africa, and
initiatives and our own programs; to increase awareness of our
helping to ensure that children are shareholders and stakeholders by
Only assurance 15%
not harmed in cocoa farming; and better quantifying these benefits.
No third party comments 85%
empowering employees by providing

a safe, healthy, and inspiring work
environment.
The sustainability debate in Switzerland
responsibility, but also in providing Strong public-private partnership will Organization, supported by scientific
assurance - for example, be the key for solving the current and academic institutions. The Swiss
pharmaceuticals (89 percent) and global socio-environmental crises and are environmentally conscious and
finance, insurance and securities Switzerland provides an excellent value their democratic tradition, which
(71 percent). Still, only 15 percent infrastructure to take this global debate will be instrumental in the success and
of the companies included external to the next level. Switzerland has been longevity of the sustainability debate.
assurance in their reporting (Figure III). home to leading institutions and
The use of third party comments forums like the World Business Council
(suppliers, business partners, etc.) for Sustainable Development, World
to enhance reporting was not evident Economic Forum, International Red
in this survey. Crescent Society, United Nations,
and the International Labor
Spotlight
The Netherlands
Some of the Netherlands’ major companies started early with reporting

on social and environmental impacts - back in the 1990s. This growth
slowed down over time, however, and in 2005 Dutch companies were
in the mid-range of global corporate responsibility reporting. Over the last
three years, however, there has been a clear shift in the Dutch corporate
world, with 60 percent of companies now reporting on corporate responsibility,
putting Dutch companies in the top ranking of corporate reporters.

100%
Automotive (2)
100%
Utilities (4)
100%
85%
75%
75%
73%
Food & beverage (11)
64%
63%
Oil & gas (11)
55%
Transport (2)
50%
Pharmaceuticals (2)
50%
Other services (8)
38%
Trade & retail (13)
23%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
In some sectors such as utilities and In terms of integration, an encouraging Assurance is still not very common in
(tele)communications, reporting has 50 percent of companies now include the Netherlands: only one-quarter of
now become all but obligatory. The corporate responsibility reporting in companies seek formal assurance
financial sector now reports about their their annual report. However, we could (G250: 40 percent). The vast majority
impacts on society, to which they take a look at this from a different angle: do not include third party comments at
broader view than before since not only another half does not integrate all, which is perhaps surprising in an
environmental reporting, but also other corporate responsibility and annual era where dialogue and trust are the
impacts they have on society are taken reporting at all. A comprehensive words of the day. The potential benefits
into consideration. However, sectors communication strategy that covers of combining formal assurance with
that one would expect to report on both sides might help encourage comments from key stakeholders are
supply chain issues, such as the trade a more complete approach to reporting. exploited by only a few companies.
and retail sector, are only marginally
reporting - a surprising result.
Figure II Integration level CR Highlight - The Netherlands

reporting
79 report (58 stand-alone) reports
100% of companies in
communications, automotive,
and utilities sectors report,
as do 85% of banks

Case study
Royal BAM Group
Fully integrated
In previous surveys the construction a role in determining the future of a

sector always ranked low in corporate company. To set the agenda and raise
No CR reporting 21%
responsibility reporting. However, the awareness both internally and
2008 survey shows that the sector is externally, BAM decided to publish the
Source: KPMG Global Sustainability Services, October 2008 catching up. In 2008, Royal BAM special report on climate change and
Group, a leading European construction launch a CO2 desk simultaneously.
company, published its first group-wide From this desk, partners in the supply
Figure III 3rd party comments sustainability report. chain can seek advice on developing
climate change objectives or taking
BAM also published a special report on concrete steps to implement reduction
climate change in the built measures.
environment. BAM recognizes that
whereas the major focus to date has Royal BAM Group sees the climate
been on heavy industries and the change report and the CO2 desk as
transport sector, the construction an opportunity to share their
sector is actually in the top ten of experience and knowledge with the
sectors with high CO2 emissions. In sector. By doing this BAM not only
the near future new buildings built by hopes to profile itself as a leading
BAM must be energy-neutral, and the construction company but also to
energy use of existing buildings must provide a direct contribution to the
be halved. reduction of CO2 emissions in the
built environment.
Royal BAM Group is keen to be at the
Only assurance 26% forefront, not only in terms of social
Only other 3rd party comments responsibility, but also in recognizing
4%
that corporate responsibility plays
The way forward

A few areas still have room for companies to provide a corporate
improvement: responsibility report alongside
the annual report, or in fully
• The “non-reporting half” could begin integrated reports.
to incorporate carbon reporting in
their annual reports. Has voluntary reporting hit a ceiling?
Will companies that are not reporting
• Sectors with supply chain issues need to be moved by stakeholder
could start reporting. pressure or regulation? The next three
years will reveal the next phase
• Wider interest from various of reporting in the Netherlands.
stakeholder groups could move
Spotlight
The United Kingdom
This is the analysis for the UK as part of KPMG’s International Survey
of Corporate Responsibility Reporting 2008. The Survey continues to be
a useful source of information for both our clients and the market in
understanding the changing nature of CR reporting. Almost every FTSE
100 company now reports externally on CR in some form, with this
becoming increasingly embedded into UK business operations.
Trade & retail (12)

100%
100%
100%
Food & beverage (7)
100%
100%
Transport (3)
100%
Automotive (1)
100%
Mining (9)
100%
Utilities (7)
100%
100%
90%
84%
Oil & gas (6)
83%
Other services (14)
79%
Pharmaceuticals (3)
67%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
Figure I demonstrates the continued apart from the oil and gas sector, Figure II provides evidence of a trend
high level of corporate responsibility which is at 83 percent. toward the integration of corporate
reporting across UK industry. The UK responsibility reporting within a
remains one of the highest reporting It will be interesting to observe if the company’s annual report. We can see
levels of the countries participating in companies not reporting will require that six percent of the top UK
this International survey. Two-thirds of legislation, or further stakeholder companies now have a fully integrated
the sectors, which represent 50 pressure, to report on social and report, with only 12 percent not
percent of the top 100 companies, environmental impacts. In our member referring to CR within the annual
have 100 percent of the companies firms’ experience these companies report. We expect this trend to
issuing some form of corporate tend to be less innovative and continue as corporate responsibility
responsibility report. All high impact responsive and, in the long run, may reports become integrated into annual
industries have 100 percent reporting, be less successful.
Figure II Integration level CR Highlight - The United Kingdom
reporting
(48 formal assurance)
65 have a corporate
64 report on supply chain risks

Interview
Mark Goyder - Founder Director, Tomorrow’s Company
Fully integrated
What has influenced the You need a countervailing force to

development of corporate demand the right behaviors. It is
No CR reporting 1%
responsibility and corporate healthy to have that challenge from
responsibility reporting? people who are on the outside.
Source: KPMG Global Sustainability Services, October 2008 First, a rise in awareness of the Assurance can provide some of that,
materiality of climate change. Second, as can an external committee of
the move toward integrated reporting, stakeholders. But both only add value
Figure III 3rd party comments with the realization that the success of if they are feeding from and to the
a company is based increasingly on the effective decision-makers.
health of its relationships. Finally there
is the recognition that corporate Is it important to align corporate
responsibility is ultimately not founded responsibility strategy to business
on policies or indices but on values and strategy?
behaviors. Reporting is the final link in In a nutshell, “Yesterday’s societal
a circle of leadership and governance concerns are today’s consumer
that starts with purpose and values, concerns and tomorrow’s shareholder
measures impacts, and holds returns.” To be a successful business
companies to their word. in the future you need to redefine
success - to “future proof” your
What is the main driver to seek business it is crucial you align your
assurance? strategy with the needs of society.
You cannot answer this in isolation.
Performance and behaviors are the
Only assurance 48% foundations of success. Companies
have incentives to focus on the first.
8%
But neglecting behavior while focusing
on performance is the road to Enron.
reports and, ultimately, a natural part Best practice corporate responsibility

of business strategy. activities are increasingly involving
external stakeholders as a way of
Figure III shows 48 of the companies verifying their approach, yet the survey
reporting on corporate responsibility results show this is just beginning to
seek external assurance of their CR be incorporated into external corporate
reports, demonstrating the importance responsibility reporting. Somewhat
of disclosing credible information. surprisingly, 42 percent of FTSE100
However, the scope and quality of companies have not used any form of
this assurance varies considerably. external involvement to enhance the
credibility of their reporting.
Spotlight
The United States
KPMG’s International Survey of Corporate Responsibility Reporting reflects

the growing importance of corporate responsibility as a key indicator of
non-financial performance, as well as a driver of financial performance. In
the latest survey, we have noticed a significant increase in the publication
of corporate responsibility reports in the US, from 37 percent in our 2005
survey to 74 percent in 2008. The survey findings also reflect a growing
sense of responsibility in the business community to improve transparency
and accountability to the wider community - not just to shareholders.
Automotive (2) 100%
Chemicals & synthetics (2) 100%
Oil & gas (8) 88%
Pharmaceuticals (4) 75%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Analysis
The increase in corporate responsibility However, within these drivers, ethical systems for their corporate responsibility
reporting by the top 100 companies in considerations (70 percent) replaced goals. Furthermore, 78 percent had
the United States may be attributed economic considerations (50 percent) defined specific indicators relating
to an increased focus on sustainability as the primary driver. to stated objectives and 68 percent
issues within US business in the last actually reported on performance
several years. This year’s survey found We also noticed a gradual maturation against the stated objectives.
that the top three drivers for corporate of corporate responsibility programs by
responsibility reporting remained the US companies. Of the 74 percent that
same as in 2005: ethical considerations, reported publicly, 82 percent had a
economic considerations, and defined corporate responsibility or
innovation and learning. sustainability strategy, and 77 percent
had implemented management
Figure II Integration level CR Highlight - The United States
reporting
communications, automotive,
forestry, and chemical sectors
61 have a corporate

Case study
Sustainability developments in the US
Fully integrated
US regulators and lawmakers have also and corruption, while also seizing
focused their attention on sustainability. opportunities to develop new products,
No CR reporting 22%
Well over 200 bills in a recent session implement energy cost-saving
of Congress addressed climate change programs, and redesign business
Source: KPMG Global Sustainability Services, October 2008 and greenhouse gases, up from 30 processes.
pieces of similar legislation just five
years earlier. Meanwhile, investors' demands for
Figure III 3rd party comments transparency have prompted more
In Chicago, an exchange has traded US companies than ever before to
carbon offsets since 2003. In late disclose their corporate responsibility
2008, 10 Northeastern US states successes and risks in annual
opened the nation’s first market for sustainability reports, often as part
trading greenhouse gas permits, with of their financial statements.
buyer demands for “allowances” four
times the existing supply. Seven Still, US companies have difficulty
Western states plan a similar system quantifying these emerging risks
in 2012. because little regulatory oversight
exists. Knowing that uncertainty makes
Indeed, sustainability issues have an financial markets jittery, some US
effect beyond the industrial giants. companies support better guidance on
With technology often accounting for climate change. Understanding the
more than half of a bank's or insurance government’s rules of the road may
company's environmental footprint, help companies improve how they
Only assurance 10% services firms may face particular manage climate change risks and,
Only other 3rd party comments pressures. Companies are monitoring therefore, gain competitive advantage.
10%
their sustainability issues such as
climate change, supply chain integrity,
Sustainability Monitoring
Sustainability monitoring and reporting performance with their social conscience,

may still be in the formative years in and tying profits to corporate principles.
the US, compared with more mature
European, Asian, and Australian Today, “Save the Planet” is part of the
markets. But evidence shows more business model.
US companies are linking their financial
The Way Forward
There is no doubt that corporate responsibility reporting has gone mainstream

for many of the world’s largest companies and is headed in the same
direction at the national level.
This survey looked behind the reports a result of supply chain codes of conduct here may help companies manage their
to shed some light on the strategy and ethics. We would expect climate data, connect with their stakeholders,
and management systems that support to be a fully managed issue by 2011, and engage in scenario planning that
accountability and transparency on social including strategy, risk management, produces a clearer picture of complex
and environmental issues. We disclosure on carbon footprint by the corporate responsibility risks
discovered a maturing field overall, with company and its wider value chain, and
fewer companies issuing reports in the business opportunities and innovations It seems corporate responsibility
absence of overarching strategies, but afforded by climate change. reporting has left the experimental phase
still much to be developed on this front. and has now taken its place alongside
We can only surmize what issues will other business tools that add valuable
In the lead-up to the 2011 KPMG leap to the forefront by 2011. Some insight into the current state of company
International Survey of Corporate might not be known to us now, some performance, and helps shed light
Responsibility Reporting, we would might be simmering quietly in the on future opportunities for growth,
expect to see some progress in the way background. Human rights is one to innovation and learning in an ever-
companies manage key issues. Results watch, as is access to food and water. changing world.
were variable when it came to linkages
between corporate governance and By 2011 we might expect reader and
corporate responsibility, and it seems stakeholder groups to play a more
supply chain management and corporate active part in reporting and shaping
responsibility are two concepts that are the type of information that is
just now starting to merge. It will take disclosed, as well as its format and
several reporting cycles until we can see timing. Technology is always a factor in
whether deep change is occurring as business development, and innovations
Appendices
Appendix I List of Figures and Tables
Chapter 3 and N100) Figure 6.3 Reports that include a formal

Figure 3.1 Companies by sector (G250) assurance statement, by country (N100)
Figure 4.10 GRI Application Level
Figure 3.2 Companies with a stand-alone declarations (G250 and N100) Figure 6.4 Reports that include a formal
corporate responsibility report (G250) assurance statement, by sector (G250)
Figure 4.11 Methods used to select
Figure 3.3 Companies with stand–alone report content, 2005 (G250) and 2008 Figure 6.5 Reports that include third
and integrated corporate responsibility (G250 and N100) party commentary (other than formal
reports, by country 2005 – 2008 (N100) assurance), by type (G250)
Figure 4.12 Reporting format
Figure 3.4 Level of integration of (G250 and N100) Figure 6.6 Reports that include third
corporate responsibility information into party commentary (other than formal
annual reports (G250) Chapter 5 assurance), by type (N100)
Figure 5.1 Reports with a separate
Figure 3.5 Level of integration of section on corporate governance, Figure 6.7 Drivers for assurance (G250
corporate responsibility information into by ownership (G250) and N100)
annual reports (N100)
Figure 5.2 Reports with a separate Figure 6.8 Choice of assurance provider,
Figure 3.6 Drivers for corporate section on corporate governance, 2005-2008 (G250 and N100)
responsibility reporting (G250) by ownership (N100)
Figure 6.9 Assurance standards used,
Chapter 4 Figure 5.3 Department where corporate 2005-2008 (G250)
Figure 4.1 Companies with a publicly responsibility is managed (G250 and
available corporate responsibility strategy, N100) Figure 6.10 Assurance standards used,
by country (N100) 2005-2008 (N100)
Figure 5.4 Reports that address supply
Figure 4.2 Companies with a publicly chain risks, by sector (G250 and N100) Figure 6.11 Level of assurance (G250
available corporate responsibility strategy, and N100)
by ownership (N100) Figure 5.5 Reports that address supply
chain risks, by country (N100) Spotlight (by country)
Figure 4.3 Companies reporting on Figure I CR reporting per sector
business opportunities/financial value of Figure 5.6 Reports that address climate
change risks, by sector (G250 and N100) Figure II Integration level CR reporting
corporate responsibility, by sector (N100)
Figure 5.7 Climate change risks, by type Figure III 3rd party comments
Figure 4.4 Companies reporting
on business opportunities/financial (G250 and N100) Tables
value of corporate responsibility, Figure 5.8 Carbon footprint disclosure Table 2.1 Participating Countries 2008
by country (N100) (G250) Table 4.1 Companies with corporate
Figure 4.5 International frameworks used Figure 5.9 Carbon footprint disclosure, responsibility strategy, objectives,
by companies, 2005-2008 (G250) by country (N100) indicators, and data (G250 and N100)
Figure 4.6 Management standards and Figure 5.10 Measures taken to reduce Table 4.2 Elements of Corporate
guidelines used by companies (G250 and carbon footprint (G250) Responsibility Management Systems
N100) (G250 and N100)
Chapter 6
Figure 4.7 Stated purpose for conducting Figure 6.1 Reports that include a formal Table 5.1 Level of disclosure on supply
stakeholder engagement (G250 and N100) assurance statement (G250) chain management systems (G250
and N100)
Figure 4.8 Means of engaging Figure 6.2 Reports that include a formal
stakeholders (G250 and N100) assurance statement (N100) Table 6.1 Reports with formal assurance
statement 2002-2008, by country (N100)
Figure 4.9 Reporting standards and
guidelines used by companies (G250
Appendices continued
Appendix II List of Terms
AA ILO PRI
AccountAbility International Labour Organization Principles for Responsible Investment
CDP IoD SIF

Carbon Disclosure Project Institute of Directors - South Africa Social Investment Forum
GHG Protocol IPCC UDHR

Greenhouse Gas Protocol Initiative Intergovernmental Panel on Climate Universal Declaration of Human Rights
Chante
GRI UNFCCC
Global Reporting Initiative ISAE United Nations Framework Convention
International Standard for Assurance on Climate Change
GSP Engagements
Global Sullivan Principles of Social UNGC
Responsibility ISO United Nations Global Compact
International Organization for
IAASB Standardization UNHCHR
International Auditing and Assurance United Nations High Comission for
Board OECD Human Rights (Norms for Transnational
Organisation for Economic Co-Operation Corporations)
ICC and Development Guidelines for
International Chamber of Commerce Multinational Enterprises
Business Charter for Sustainable
Development
Appendix III Key Contributors
Research conducted by: Project coordinated by: Report written by:

KPMG Global Sustainability Services KPMG Global Sustainability Services, Alyson Slater
offices in 22 countries: The Netherlands alysonslater@mac.com
www.alysonslater.com
Australia, Brazil, Canada, Czech Republic, Wim Bartels, Martha Ordonez
Denmark, Finland, France, Hungary, Italy, Lizarazo, and Koen van Bommel
Designed by:
Japan, Mexico, Norway, Portugal,
Romania, South Africa, South Korea, PO Box 74500 RR Donnelley Global
Spain, Sweden, Switzerland, The 1070 DB Amsterdam Document Solutions
Netherlands, United Kingdom, and the The Netherlands
United States. Tel: +31 (0) 20 656 4500 Edited by:
Fax: +31 (0) 20 656 4510 Sandra Pederson
See contact information for full E-mail: sustainability@kpmg.nl sgpederson@comcast.net
contact details.
Appendix IV KPMG’s Global Sustainability Services key contact information
Australia Italy South Korea

Oliver Wild PierMario Barzaghi Jae Heum Park
Sydney Milano Seoul
Tel. +61 (2) 9335 7652 Tel. +39 (02) 676 31 +82 (2) 2112 7988
owild@kpmg.com.au pbarzaghi@kpmg.it jaeheumpark@kr.kpmg.com
Brazil Japan Spain

Alexandre Heinermann Akira Kajiwara José Luis Blasco
São Paulo Osaka Madrid
Tel. + 55 11 2183 3151 Tel. +81 (6) 7731 1304 Tel. +34 (91) 456 3527
aheinermann@kpmg.com.br akira.kajiwara@jp.kpmg.com jblasco@kpmg.es
Canada Mexico Sweden

Chris Ridley-Thomas Jesus Gonzalez Jenny Fransson
Vancouver Mexico City Stockholm
Tel. +1 604 691 3088 Tel. +52 (55) 5246 8410 Tel. +46 8 7239781
cridleythomas@kpmg.ca jesusgonzalez@kpmg.com.mx jenny.fransson@kpmg.se
Czech Republic The Netherlands Switzerland

Peter Lupták Wim Bartels Vinay Kalia
Prague Amstelveen Zurich
Tel. +420 (0)222 123 3945 Tel. +31 (20) 656 4503 Tel. +41 (0)44 249 2171
pluptak@kpmg.cz bartels.wim@kpmg.nl vkalia@kpmg.com
Denmark Norway United Kingdom

Jens Frederiksen Sarita Bartlett Nigel Smith
Copenhagen Oslo London
Tel. +45 (38) 183 266 Tel. +47 4063 9343 Tel. +44 (20) 7311 1621
jvfrederiksen@kpmg.dk sarita.bartlett@kpmg.no nigel.smith3@kpmg.co.uk
Finland Portugal The United States

Jan Montell Cristina Tomé Eric Israel
Helsinki Lisbon New York
Tel. +358 (40) 592 4419 Tel. +351 210 110 042 Tel. +1 (212) 872 6098
jan.montell@kpmg.fi ctome@kpmg.com ericisrael@kpmg.com
France Romania
Philippe Arnaud Geta Diaconu
Paris Bucharest
Tel. +33 (15) 568 9005 Tel. +40 (21) 201 2222
parnaud@kpmg.com gdiaconu@kpmg.com
Hungary South Africa

Éva Várnai Shireen Naidoo
Budapest Johannesburg
Tel. +36 (1) 8877 249 Tel. +27 (11) 647 6202
eva.varnai@kpmg.hu shireen.naidoo@kpmg.co.za
kpmg.com
Wim Bartels
Global Head,
KPMG Sustainability Services
Partner, KPMG in the Netherlands
Burgemeester Rijnderslaan 20
1185 MC Amstelveen
The Netherlands
Tel + 31 (20) 656 4503
Fax +31 (20) 656 4510
The information contained herein is of a general nature and is not intended to address the circumstances of any © 2008 KPMG International. KPMG International is
particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no a Swiss cooperative. Member firms of the KPMG
guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the network of independent firms are affiliated with
future. No one should act on such information without appropriate professional advice after a thorough examination KPMG International. KPMG International provides
of the particular situation. no client services. No member firm has any
authority to obligate or bind KPMG International or
The views and opinions expressed herein are those of the survey respondents and do not necessarily represent any other member firm vis-à-vis third parties, nor
the views and opinions of KPMG International or KPMG member firms. does KPMG International have any such authority
to obligate or bind any member firm. All rights
reserved. Printed in the United Kingdom.
KPMG and the KPMG logo are registered
trademarks of KPMG International, a Swiss
cooperative.
Designed and produced by KPMG LLP (UK)’s
Design Services.
Publication name: KPMG International Survey
of Corporate Responsibility Reporting 2008
Publication number: RRD-105984
Publication date: October 2008

KPMG CSR Reporting Survey 2008

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105984 Corp responsibility Survey FULL 23/10/08 14:09 Page c1

Chapter 1 Corporate Responsibility Reporting in Context 7

Chapter 2 About the Survey 11

Chapter 3 The State of Corporate Responsibility 13

Chapter 4 Corporate Responsibility Strategy 21

Chapter 5 Topics in Corporate Responsibility Reporting 41

Chapter 6 Assurance and Corporate Responsibility Reporting 55

Spotlight (by country) 67

The Way Forward 109

largest companies. The sample of over 2200 companies includes the

(N100) in 22 countries. The survey presents historical data where possible,

such as company websites, corporate responsibility reports,

and annual reports issued in 2007-2008.

The State of Corporate Responsibility Reporting in 2008

Chapter 3 provides an overview National trends

Corporate Responsibility Strategy and Reporting Process

Chapter 4 looks at the process behind corporate responsibility

Executive Summary continued

Topics in Corporate Responsibility Reporting

Assurance and Corporate Responsibility Reporting

Chapter 6 examines trends in assurance and reveals who is using it,

Quick Reference Guide

Trends in N100 reporting 15

Corporate responsibility strategy 22

Corporate governance reporting 42

Supply chain reporting 46

Climate change reporting 49

1.1 Looking back

1.2 Looking Ahead

to reinforce environmental and labor The ability of a company to communicate

This survey was designed to examine reporting trends in the world’s

2.1 Objectives Table 2.1

climate change, corporate responsibility examine trends in public disclosure, only

4 For a catalogue of previous reports visit: www.kpmg.com/survey

The State of Corporate

3.1 Corporate Responsibility Reporting at the Global Level

Figure 3.1 Companies by sector (G250)

Figure 3.2 Companies with a stand-alone corporate KPMG Insight

3.2 A Closer Look at Reporting in 22 Countries

Figure 3.3 Companies with stand-alone and integrated

3.3 Integration of Corporate Responsibility Information into Annual Reports

3.4 Behind the Trend Line: Drivers for Reporting

7 See Edelman’s Trust Barometer 2008, www.edelman.com/trust/2008/

Figure 3.6 Drivers for corporate responsibility reporting (G250)

Ethical considerations 53%

Economic considerations 74%

Reputation or brand 27%

Innovation and learning 53%

Employee motivation 47%

Risk management or risk reduction 47%

Strengthened supplier relationships 13%

Access to capital or increased shareholder value 39%

Market position (market share) improvement 21%

Improved relationships with governmental authorities 9%

2005 2008 Source: KPMG Global Sustainability Services, October 2008

Strategy and Reporting

4.1 Strategy and Objectives

Figure 4.1 Japan 86%

corporate Norway 63%

responsibility United States 61%

Figure 4.2 Companies with a publicly available corporate responsibility strategy,

Listed on stock exchange 54%

State/country owned company 48%