kpmg csr reporting survey 2008

8/8/2019 KPMG CSR Reporting Survey 2008

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KPMGInternationalSurvey ofCorporate

ResponsibilityReporting 2008

K P M G I N T E R N AT I O N A L



ContentsForeword 1 Lord Michael Hastings of Scarisbrick CBE, Global Head of Citizenshipand 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 112.1 Objectives 12 2.2 Methodology 12

Chapter 3 The State of Corporate Responsibility 13 Reporting in 20083.1 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 Process4.1 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 109Appendices 111I List of Tables and Figures 112II List of Terms 113III Key Contributors 113IV 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 rapidglobal transformation with increaseddemand on corporations to performnot only financially but to be goodcorporate citizens. One of the mostimportant aspects of this transformationis the critical importance CorporateSocial Responsibility (CSR) programs.Climate change; community health,education and development; andbusiness sustainability are some of themost pressing issues of our time.Businesses are increasingly involved inthese areas as are their clients and theirpeople. This raises the importance of

accurately and transparently accountingfor and reporting these activities.

Auditors have long played an importantrole in the financial reporting processand we believe strongly in the strategicvalue of CSR reporting. We want useour leadership position in this area to

help develop this field and promotebest practices by highlighting currentdevelopments and historical trends.

KPMG conducts the InternationalSur vey of Corporate R esponsibilityReporting every three years to gaininsight into CSR reporting and tocontribute to the evolving globaldialogue on transparency andaccountability. The 2008 survey wasconducted in 22 countries and withmore than 2200 businesses around theworld.

As you will see in the results, therehas been an important shift in thisdirection with CSR reporting becomingthe norm instead of the exceptionwithin the world’s largest companies.Three years ago only 50 percent ofcompanies surveyed included CSR intheir reporting, in this survey the

number jumped to 80 percent. Morecompanies report the information as itrelates to specific objectives and morecompanies include this information intheir annual reports.

Our goal is to further the ideal thatcorporate responsibility reporting andassurance practices become ascommonplace as financial reportingand assurance. I believe you will findthis report relevant to your businessand that it will stimulate your ideasand help facilitate your move to includeCSR in your overall reporting.

Lord MichaelHastings ofScarisbrick CBEGlobal Head ofCitizenship and Diversity,KPMG International

In a world of changing expectations,companies must account for the waythey impact the communities andenvironments where they operate.It is encouraging to see that nearly80 percent of the world’s largest250 companies are now doingprecisely this - reporting on theirsocial and environmental performance.

But would these reports pass the“greenwash” test? For the first time inthe 15 years we have been doing thissurvey, we think they just might.

Nearly all of the Global 250 companiesthat report also publish a corporateresponsibility strategy with definedobjectives. Our findings show thatmanagement systems are maturing,

and that reporting is likely the result ofa systematic approach to corporateresponsibility that includes a strategy,management system, stakeholderengagement, reporting, and assurance.

But the true judges of a company’sreport quality are its readers - thecompany’s stakeholders. The KPMGsurvey was expanded this year to probethe depth of stakeholder involvementin a company’s corporate responsibilitystrategy and reporting. Althoughstakeholder engagement is becoming

more formalized, there is still roomfor greater transparency about whostakeholders are and how companiesare responding to their concerns.

In terms of report quality, there is alsoa growing trend in using outside viewsto confirm a company's account of itscorporate responsibility performance.Third parties such as stakeholder panels,subject matter experts, and professionalassurance providers all have a role toplay in helping to ensure that credibleinformation guides companies onprogress toward what really matters:a more sustainable future.

Wim BartelsGlobal Head,KPMG SustainabilityServicesPartner, KPMGin the Netherlands





Executive Summary

The purpose of this survey was to track reporting trends in the world’slargest companies. The sample of over 2200 companies includes theGlobal 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 responsibilityreporting can be found in Chapters 1 and 2.





The State of Corporate Responsibility Reporting in 2008 Chapter 3 provides an overviewof the main trends in reporting.

One of the most significant findingsof the 2008 survey is that corporateresponsibility reporting has gonemainstream - nearly 80 percent ofthe largest 250 companies worldwideissued reports, up from about50 percent in 2005.

National trendsNational level companies trail the G250with only 45 percent of the total sampleissuing reports, but numbers vary fromless than 20 percent in Mexico to morethan 90 percent in Japan.

DriversEthical considerations and innovationemerged as some of the most commondrivers for reporting, while riskmanagement fell in the G250 group.

KPMG InsightReporting is now the norm, not theexception, among the world’s largestcompanies. Since motivations forreporting have shifted away fromreactive and risk management factorsand toward aspirational andinnovative ones, we expect reportingto become more common at thenational level and in smallercompanies in the near future.

Corporate Responsibility Strategy and Reporting ProcessChapter 4 looks at the process behind corporate responsibilityreporting and how reporting fits into a company’s overall strategyand management system.

StrategyThree-quarters of G250 companies havea corporate responsibility strategy thatincludes defined objectives.

StakeholdersNearly two-thirds of G250 companiesengage with their stakeholders in astructured way, up from 33 percentin 2005. However, most companiesdo not use existing channels like annualgeneral meetings (AGMs) to engageanalysts and investors aboutenvironmental and social issues.

FrameworksMore than three-quarters of the G250and nearly 70 percent of the N100 usethe GRI Guidelines for their reporting.

ValueMore than half of the world’s largest250 companies publicly disclose newbusiness growth opportunitiesand/or the financial value of corporateresponsibility.

KPMG InsightAlthough the N100 companies aretrailing their global counterparts, weare seeing a distinctive maturing ofcorporate responsibility managementsystems overall. Reporting is nowmore likely to occur within thecontext of an overarching strategyand management system. The use ofthe GRI Guidelines by the majority ofG250 and N100 companies showsthat this has become a leadingstandard for reporting. Stakeholderengagement is an area that could bestrengthened - and included as partof a broad-ranging approach tocorporate responsibility strategy andreporting. Now that some of theworld’s largest companies have beenable to quantify the business case forcorporate responsibility and reporting,

it is likely that the practice will spreadthrough countries and sectors to thesmaller players.





Executive Summary continued

Topics in Corporate Responsibility ReportingChapter 5 looks inside reports to selected issues companies aredisclosing information on: corporate governance, supply chain,and climate change.

Corporate governanceAlthough 92 percent of G250companies disclose a corporategovernance code of conduct or ethics,only 59 percent report on incidentsof non-compliance with the code.

Supply chainNearly all G250 companies have asupply chain code of conduct, but onlyhalf disclose the details of how it isimplemented and monitored.

Climate changeWhile 62 percent of G250 companiesdisclose information about climaterisks, 69 percent of N100 companiesdo not. Whereas understanding therisks starts with understanding thefootprint, a large part of the G250(41 percent) need to develop this.Carbon footprint reporting is focusedlargely on the own operations.

KPMG InsightIn theory the link between corporategovernance and corporateresponsibility seems clear, but inpractice many companies do notappear to be making the connectionand capitalizing on the potentialbenefits. Reporting on supply chainrisk and reporting by suppliers bothlook set to increase as investors,and customers in particular, demandgreater responsibility andtransparency. Whereas carbonfootprint reporting is not as commonas might be expected, there are otherindications that companies are takingthe risks and opportunities associatedwith climate change seriously.

Assurance and Corporate Responsibility Reporting Chapter 6 examines trends in assurance and reveals who is using it,how, and why.

Formal assuranceFormal third party assurance of G250reports jumped from 30 percent to 40percent in the past three years, andthe trend is similar at the national levelwith 39 percent of N100 reportscontaining formal assurance.

Third party commentaryTwenty seven percent of reportsincluded other types of third partycommentary, such as stakeholder

panels or subject matter expertstatements.

ProvidersMajor accountancy organizations arethe leading providers of assurancein corporate responsibility reporting.

Standar ds and qualityThe consistency and quality ofassurance approaches is demonstratedby an increase in the use of standards.G250 companies are less likely to askfor reasonable (positive) assurancethan N100 companies.


KPMG Insight

As stakeholders become morespecific about the information theyneed and corporate responsibilitymanagement systems mature,combining comments from partiessuch as stakeholder panels with asystematic assurance process couldprovide the desired level of assuranceabout both report content and quality.With the N100 group at par with theG250 in terms of using formalassurance (40 percent), this mayindicate that new reporting companieswill adopt this practice as standard

procedure over the next three years.




Chapter 1

Corporate ResponsibilityReporting in Context

In a world of ever changing challenges companies are shifting awayfrom risk management approaches and toward an approach that haslearning and innovation at its heart. Reporting is necessity if companiesare to know and understand their social and environmental impacts,and how to minimize the dangers and maximize the opportunitiesassociated with new and emerging challenges.





Achieving robust economic growth andvitality in a way that does not hinderfuture generations from realizing thesesame goals is an urgent aspiration.Known as “sustainable development”this is possbily the main challenge ofour times. Historically governmentshave taken a lead role in shaping futuredirections through policy making andincentives. However, due to the rise ofeconomic power in the private sectorover the past half century, and increasedinterconnectivity brought about byglobalization over the past two decades,it has become clear that companieshave a major role to play in the pursuitof a more sustainable future.

Companies can play a vital role byensuring that the direct and indirectimpacts caused in the normal courseof business are positive for theenvironment and people, and by usingtheir vast reserves of knowledge,innovation, creativity, and other

resources to help find solutions tosome of the social and environmentalchallenges we are facing as a globalsociety today or in the future. This isknown as corporate responsibility.

There are two issues in particular,however, that make it difficult forcompanies to know how they shouldact in the face of such challenges,thus making sustainable developmenta moving target:

• Imperfect informationThe complexities of physical,biological, and social systems, andhow they interact and react understress or changing conditions, arenot fully known. Therefore companiesmay not know how they haveimpacted an ecosystem or communityuntil long after the fact, or may notbe able to predict how a new setof business activities may affectthese systems.

• Evolving expectationsThere are constant and “real time”discussions underway at globaland local le vels about the rolesgovernments, businesses, andcitizens should play in the pursuitof a more sustainable future.

As new information about how we areimpacting our social and ecologicalsystems becomes available, and asdialogues between public, private, andthird sectors mature, companies mustcontinuously adjust and innovate toremain competitive.

Comparing results from the 2008KPMG International Survey ofCorporate Responsibility Reporting tofindings from the same survey in 2005,it is clear that the rules of thesustainability game change fast.

1.1 Looking backThe first part of this decade was marredby corporate scandals, with companiescoming under scrutiny for dubiousaccounting practices and corporategovernance approaches. This causedregulators, shareholders, employees,and consumers to demand better waysof tracking the health and value of acompany – ways that included a

departure from the traditional financialreport. Looking back, this permanentlyshaped the future of reporting, bothfinancial and otherwise.

In the lead-up to the 2005 Survey, thecontext within which companies werereporting was being shaped by thefollowing developments:

• Worldwide demand for transparencyand accountability at an all time high.

• Expansion of corporate governance

expectations and a renewedcommitment to ethics.

• Demand for a more completepicture of the health and stability ofa company, where not only financialresults are considered but also riskmanagement practices and value-creation in the environmental andsocial arena.

• Significant discussions around

regulation and mandatorytransparency on governance, ethics,and other non-financial issues.





Chapter 1Corporate Responsibility Reporting in Context

1.2 Looking AheadThe context in which companiesoperate evolves constantly as lessonsare learned, new information becomesavailable, and dialogues aboutexpectations mature. In the three yearssince KPMG’s last survey release, muchhas happened to shape the landscapeof corporate responsibility andreporting. Some of these issues anddevelopments are discussed below.

Principal global frameworksThe dominant codes and standards

guiding corporate responsibilitypractices are designed to improvecontinuously over time in order tocapture lessons learned and newinformation, as well as reflect currentviews on the roles and expectations ofcompanies. Developments in the pastthree years have affected the state ofcorporate responsibility reporting today.

Most significantly for reporting, theGlobal Reporting Initiative (GRI) releasedthe third iteration of its SustainabilityReporting Guidelines (G3 Guidelines) in

late 2006, after a two-year developmentprocess involving some 3000stakeholders worldwide. By 2008 themajority of companies that had reportedusing the earlier version of GRIGuidelines, G2, had made the switch tothe G3 version. With greater emphasison the reporting process and furtherelaboration of methods for calculatingindicators, this new version could helpencourage greater comparability,materiality, and rigor with reporting.

The International Organization for

Standardization (ISO) is developing theISO 26000 Guidance Standard on SocialResponsibility. Even though this is notgoing to be a certification standard, it isanticipated that it will impact corporatepractice when it is released partly dueto the dominant position ISO has

already established via the widespreaduse of its 14001 environmentalmanagement standard.

The importance of transparency andaccountability was magnified in 2008when the United Nations GlobalCompact (UNGC) - whose frameworkguides corporate commitment to socialand environmental issues in the form of10 principles - marked nearly 1000companies as inactive or delisted fromtheir active pool of participants for not

communicating on progress with theCompact.

Human rights have emerged as a fast-changing issue for businesses to watch.The UN “Norms on the Responsibilitiesof Transnational Corporations and OtherBusiness Enterprises with Regard toHuman Rights” has been the subject ofongoing dialogue between business,governments, and civil society on theexpectations of big business vis-à-vishuman rights.

Assurance standards have alsocontinued to evolve as a reflection ofthe changing landscape. In somecountries the IAASB standard,ISAE3000, has been further iterated asa specific assurance standard forcorporate responsibility reporting, whileAccountAbility’s AA1000AS is currentlyundergoing a major revision processand will be reissued in late 2008. Theimportance of reliable data on carbonemissions has also been recognizedby the IAASB, which recently set upa working group to look at developing

a specialized accounting standard.Issue-specific frameworks have beendeveloped to fill gaps on emergingissues. Some key examples includethe Equator Principles, Principles forResponsible Investment (PRI), and theEnvironment, Social, and Governance

(ESG) framework issued by GoldmanSachs, all for use in the financialservices sector. For climate change,the Carbon Principles help guideemerging carbon markets, whileparticipation in the Carbon DisclosureProject has increased substantially,as has uptake of the Greenhouse GasProtocol (GHG Protocol).

Climate changeAfter decades of scientific study andactivism, the issue of climate change

finally broke through into mainstreamawareness, thanks in part todevelopments under the various UNclimate directives, and the efforts offormer US Vice President Al Gore andother advocates, who were awardedthe Nobel Peace Prize in 2007.The uptake of market-basedmechanisms for emissions tradingand carbon offset have witnessedsignificant growth. With climatechange firmly on the political andconsumer agendas, large companiesworldwide have started to try and

understand the risks and opportunitiesin a carbon-constrained world.

Supply chainOne of the challenging aspects ofcorporate responsibility managementand reporting is that the boundary ofresponsibility often extends beyond thereach of a corporation’s ownership anddirect control. This was exemplifieddramatically in 2007 when Mattel hadto recall 20 million children's toyscontaminated with lead and pet foodmakers had to recall 60 million tins oftainted food as a result of a lapse inquality control in Chinese factorieswhich brought to light the difficultiescompanies have in ensuring theirexpectations are met. 1 Companies,especially in the retail sector, have beenworking 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 laborstandards in the supply chain. Afteryears of avoiding direct engagement,the company with the world's largestsupply chain, WalMart, announcedvarious environmental and socialreforms and targets for itssuppliers.These examples make itevident that companies are beginningto integrate corporate responsibilityinto supply chain management.

Corporate governance

Firmly on the agenda for most of thisdecade, the credit crisis that emergedin 2007-2008 has been a reminder thatwhen navigating new or unregulatedterritory, companies should conductthemselves with the highest degreeof ethics - or face tough consequences.Recognizing that corporate responsibilityis able to inform, and manifest, goodgovernance, companies have beenexperimenting with uniting these twoconcepts in order to strengthen strategyand risk management.

A new era for corporateresponsibility reportingAs the rules of the game continueto change for companies, reporting isessential for understanding and trackingsocial and environmental impacts sothat adjustments can be made toreduce negative and increase positiveimpacts. Reporting helps informdecisions by governing bodies,strengthen risk management systems,and point to new opportunities forinnovation in products and services.

In addition to strengthening internalsystems, reporting is helpingcompanies manage externalrelationships as well.

The ability of a company to communicateits activities and performance effectivelyto its key stakeholders, such ascustomers, employees, investors,suppliers, and community groups, helpsit to build trust and credibility amongthose groups that matter to a companymost. 2 It can also be critical to acompany’s long-term success, viability,and growth.

Now firmly entrenched as a commonpractice among the world’s biggest

companies, corporate responsibilityreporting is building value for companiesin many ways. Some include:

• Differentiating the company in themarketplace based on its corporateresponsibility strategy andcommitments;

• Maintaining a license to operate withthe public or specific stakeholders;

• Attracting fav orable financingconditions as financial markets wake

up to ESG (environmental, social, andgovernance) issues and demandbetter information on social andenvironmental performance;

• Encouraging innovation through abetter understanding of stakeholderneeds or future risks;

• Attracting and retaining workers in anera of high employee expectationsand stiff competition for talent; and

• Enhancing reputation by providing

truthful and robust information ontough issues. 3

“There is recognition that all of ushave a responsibility to contribute tosustainable development and tokeep under scrutiny our respectiveactions, activities and choices, andtheir implications. As we findourselves addressing global issuessuch as water, food security, climatechange, and others, it is clear thatthe availability of basic social andenvironmental performanceinformation is essential. Increasingcomparability in reporting isnecessary to improve ourassessment of the sustainabilitytrends that are unfolding rapidlybefore us, and to urgently move usfrom just thinking about theseissues to really knowing how torespond to these issues.

We must deepen, widen, andaccelerate the practice of sustainabilityreporting if we are to respond as aglobal society commensurate with thepace and direction of the changesaround us, and if we are to succeed insustaining our habitat and ourselves.”

Angela CropperDeputy Executive Director, UnitedNations Environment Programme(UNEP), and Assistant SecretaryGeneral, United Nations

2 See the KPMG and SustainAbility report, “Count Me In: The Readers Take on Sustainability Reporting.” www.kpmg.nl/sustainability3 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’slargest companies. The sample includes the global fortune 250, and the100 largest companies in 22 countries. KPMG examined informationdisclosed publicly by these companies to discern historical andemerging trends in corporate responsibility reporting.





2.1 ObjectivesThis study was designed to examinereporting trends among the world’slargest companies. It is the sixth in aseries conducted by KPMG and variousco-sponsors since 1993 and is issuedevery three years. 4 The goal of the studywas to examine corporate responsibility

2.2 MethodologyThe basis of the study was a survey

that captured over 50 data points aboutcorporate responsibility informationdisclosed (or not) by each company inthe sample. The survey allowed KPMGto compile data on historical trendsby tracking the same issues that it hadin previous surveys, such as reportingprevalence by sector and country,use of standards, role and use ofassurance, and drivers for reporting.The survey was expanded this yearto track emerging issues such asclimate change, corporate responsibilitystrategy and management, andtechniques used during the reportingprocess, such as materiality andstakeholder engagement.

The research sample included the top250 companies listed on the F ortuneGlobal 500 5 (G250) for the year 2007.In addition, the survey included the 100largest companies by revenue (N100)from 22 countries, except in Swedenwhere the sample was limited to thelargest 70. The 22 countries are listedin Table 2.1. 6

The 100 largest companies in each ofthe 22 countries were identified usingrevenue rankings from a recognized

related information issued by hundredsof companies from every sector andregion in order to distill historic trendsin corporate responsibility reporting anduncover new issues and practices thatare emerging.

national source. In some instances

where a ranking was not available orwas incomplete, substitutes such asmarket capitalization or other sector-appropriate measures were usedto compile or complete the revenueranking list. All corporations wereeligible to be included regardlessof their ownership structure (privatelyheld, publicly traded) or operationalstructure (holding companies).

Since the purpose of the survey was toexamine trends in public disclosure, onlycorporate responsibility informationavailable in the public domain was used.Sources were limited to:

• Corporate responsibilityor sustainability reports;

• Company websites; and

• Annual financial reports.

Corporate responsibility reports orsimilar information issued by companiesbetween mid-2007 and mid-2008 weresought in the first instance. If thecompany did not issue a report in thistime frame, 2006 reports were used.Information issued prior to 2006 wasnot included.

Table 2.1Participating Countries 2008

Australia Norway

Brazil Portugal

Canada Romania

Czech Republic South Africa

Denmark South Korea

Finland Spain

France Sweden

Hungary Switzerland

Italy The Netherlands

Japan United Kingdom

Mexico United States

KPMG has a worldwide network ofnational sustainability practices.Twenty-two volunteered to participatein this study.

Source: KPMG Global Sustainability Services, October 2008

A note on terminologyThe term “corporate responsibility”is used throughout the survey todescribe the ethical, economic,environmental, and social impactsand issues that concern the privatesector. There are many differentterms used to capture this concept,including sustainability, corporate

social responsibility, corporatecitizenship, ESG (environmental,social, and governance), and others.

4 For a catalogue of previous reports visit: www.kpmg.com/survey5 Top 250 companies included in the Fortune Global 500 ranking 2007 – Link: h ttp://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 CorporateResponsibilityReporting in 2008Chapter highlights• Corporate responsibility reporting

has gone mainstream - nearly 80percent of the largest 250companies worldwide (G250)issued reports, and an additionalfour percent integrated corporateresponsibility information into theirannual reports.

• The rate of reporting among thelargest 100 companies (N100) in 22countries is 45 percent on average,with the highest numbers in Japan(88 percent) and the UK (84 percent).

• Integration of corporate responsibilityinformation into annual reportsis on the rise in France, Norway,Switzerland, Brazil, and South Africa.

• Ethical considerations andinnovation increased as the mostcommon reasons for reportingamong both the G250 and N100,while risk management fell in theG250 group.





“In these challenging times it is now perhaps more crucial than ever forcompanies to show their commitment to transparency through sustainabilityreporting. Effective public disclosure of economic, environmental, and socialperformance can enable a company to rise above the rest and take advantageof the opportunity to position itself as a forward-thinking leader among an

increasingly sophisticated constituency of stakeholders. No longer is publishinga sustainability report merely a matter of mitigating risk to reputation andcosts. More than ever, employees, investors, and consumers are looking tothe companies from which they buy, invest in, and work for to join them inaddressing the critical sustainability issues of the day in innovative ways.”

Judy HendersonBoard of Directors, Global Reporting Initiative

3.1 Corporate Responsibility Reporting at the Global LevelThe G250 companies are drawn fromthe Fortune Global 500 List (2007)and represent over a dozen industrysectors (see Figure 3.1). Finance,insurance, and securities companiesdominate the sample, followed by oiland gas, utilities, electronics andcomputers, and automotive. Two-hundred-and-eighteen of the 250are publicly traded enterprises.

A dramatic rise in reporting has occurredin large global companies (G250) sincethe last KPMG survey in 2005.

Figure 3.2 shows that the number ofG250 companies that issue stand-alonecorporate responsibility reports hasrisen from 52 percent to 79 percent,or 197 of 250 companies in total.

An additional four percent ofcompanies in this sample do not issuestand-alone reports but do integratecorporate responsibility data into theirannual financial reports, for a total of207 companies. This is an astounding30 percent jump in reporting overa three-year period.

Figure 3.1 Companies by sector (G250)


Finance, insurance & securities 78Oil & gas 25Trade & retail 24Electronics & computers 22Automotive 18Metals, engineering & other manufacturing 15Communications & media 15Other services 13Utilities 12Food & beverage 8Pharmaceuticals 7Chemicals & synthetics 4Transport 4Construction & building materials 3Mining 2

Figure 3.2 Companies with a stand-alone corporateresponsibility report (G250)

52%

Yes

79%

0% 10% 20% 30% 40% 50% 60% 70% 80%

2005 2008Source: KPMG Global Sustainability Services, October 2008

KPMG InsightThe question is no longer “Who isreporting?” but “Who is not?”Corporate responsibility reportingis now a mainstream expectationof companies. Since more than

80 percent of the world’s 250 largestcompanies now report on corporateresponsibility, we can expect thistrend to roll out rapidly at thecountry and sector levels in thecoming years.





Chapter 3The State of Corporate Responsibility Reporting in 2008

3.2 A Closer Look at Reporting in 22 Countries A closer look at trends in reporting fromcountries on every continent reveals thediversity of drivers, practices, andinfluences affecting a company’s decisionto report and how.

Nearing saturationCompanies in Japan and the UnitedKingdom (UK) have topped the tables inrates of corporate responsibility reportingover the last decade. Although there wasnot much room for growth, there were 8and 13 percentage point increases instand-alone reports in Japan and the UKrespectively, and an additional 5 percentand 7 percent of companies thatintegrate their corporate responsibilityand financial reporting. Reporting inthese countries is now the norm for topcompanies, although for very differentreasons. Companies listed on theJapanese stock exchange adhere to clearenvironmental performance andreporting regulations, and this is slowlyexpanding to include economic andsocial issues. In the UK, impendingregulation via the Companies Act doessimmer quietly in the background, butlouder still are consumer, media,employee, and shareholder voicesdemanding greater accountability andtransparency on key issues.

Accelerating growthExtraordinary jumps in reporting since2005 occurred in some countries, asshown in Figure 3.3. Companies basedin the United States (US) are some of thelargest and most influential in the world,so it is significant to find that 41 newUS companies issued a corporateresponsibility report since 2005, bringing

the US N100 total to 73 percent. Althoughlate to the game compared to othermarkets such as Japan and the UK, UScompanies are now becoming aware oftheir global reach and impacts on society,and have significantly increased their levelof transparency on these topics.

As European countries continue todetermine how to ensure or stimulatereporting on social and environmentalissues in their countries, some companiesare taking a “first to mark et” position.Spanish companies jumped to 59 percentfrom 25 percent, adding 34 newcorporate reporters since 2005. This isa reflection of a strong sustainabledevelopment agenda pushed forward bygovernment and civil society, and theleadership of some Spanish companiesthat embraced reporting early on. These

influences may also explain the rapid riseof reporting in the Netherlands and Italy- both doubled reporting output in thepast three years to land at about the60 percent mark.

Canada added 19 new reportingcompanies to its tally, also arriving atthe 60 percent mark. Many of the newentrants since 2005 are companiesassociated with the energy boom Canadahas been experiencing. As the extractiveand energy sectors grow, so do concernsabout ensuring economic developmentin a way that leaves positive social andenvironmental legacies.

Swedish companies are staying one stepahead of regulation. New laws forreporting passed in late 2007 mandatedall 55 state-owned companies to issuereports on their environmental, economic,and social performance by 2009. This mayexplain the tripling of reporting companiesin Sweden over the past three years.

Increasing integrationTotals for stand-alone reports tickedupward in Australia (14 new reports),

Norway (10), Finland (10), South Africa (8),and France (7), while there was no growthin Danish reporting, which held steady at22 companies. However, companies inthese countries are some of the first tointegrate their corporate responsibility

reports into annual reports - 12 percentof Norwegian and French companies aredoing so, as are nearly 20 percent ofSouth Africa’s largest companies.Companies in some of these countrieswere early adopters of reporting, so thistrend may indicate that integration offinancial and non-financial information willbecome more widespread in the nearfuture. In France it is common forcompanies that are part of internationalgroup structures to submit corporateresponsibility data for aggregation at the

global level in a stand-alone report, andthen to include some corporateresponsibility information in the country-level annual financial report as well.

Strong showingBrazil, Portugal, South Korea, andSwitzerland joined the study for the firsttime this year and are clustered in themiddle of the pack with 56, 49, 42,and 28 stand-alone reports respectively.Mexico is trailing with only 17 percentof N100 companies reporting, but it issignificant for a first year entrant to havenearly one-fifth of its top companies.It is also a reflection of wider trends incorporate responsibility and reportingthat are starting to take root in Mexicoand elsewhere in Latin America.

Rising in the EastAlthough numbers are still comparativelylow in Hungary, Romania, and CzechRepublic, with a quarter or less of N100companies reporting, KPMG believesthis is the region to watch.

Companies are keen to show they are onpar with Western European expectations

on environment and human rights. Firstmovers in this region are distinguishingthemselves from competitors in the localand global marketplaces with corporateresponsibility, and reporting is a channelthey can use to showcase industrybest practice.





Figure 3.3 Companies with stand-alone and integrated

corporate responsibility reports, by country 2005-2008 (N100)

8 0 %

J a p a n

8 8 %

5 %

7 1 %

U n i t e d

K i n g d o m

8 4 %

7 %

3 2 %

U n i t e d

S t a t e s

7 3 %

1 %

4 1 %

C a n a d a

6 0 %

2 %

2 9 %

N e t h e r l a n d s

6 0 %

3 %

2 0 %

S w e d e n

5 9 %

1 %

3 1 %

I t a l y

5 9 %

2 5 %

S p a i n

5 9 %

4 %

B r a z i l

5 6 %

2 2 %

P o r t u g a

l

4 9 %

3 %

4 0 %

F r a n c e

4 7 %

1 2 %

S o u t h

K o r e a

100%

4 2 %

3 1 %

F i n l a n d

4 1 %

3 %

90%

2 3 %

A u s t r a l i a

3 7 %

8 %

80%

S w

i t z e r l a n d

2 8 %

2 1 %

70%

1 8 %

S o u t h

A f r i c a

2 6 %

1 9 %

60%

H u n g a r y

2 5 %

1 %

50%

1 5 %

N o r w a y

2 5 %

1 2 %

40%

R o m a n i a

2 3 %

30%

2 2 %

D e n m a r k

2 2 %

2 %

20%

M e x i c o

1 7 %

10%

C z e c h

R e p u b l i c

1 4 %

0%

‘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 InsightIn 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 practiceto take hold in this region. As Central and Eastern European economies open and grow, so too will a commitment tocorporate 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 thepotential 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 communicationsstrategies in pace. Reporting is more than just a book, website, or data set. It is a continuous process that must involveand reflect the needs of its stakeholders. Integrating corporate responsibility information into annual reports may meet theneeds of some stakeholders, but may exclude others. The challenge ahead will be to get the right information to the rightstakeholders, and at the right time and in the right form.






3.3 Integration of Corporate Responsibility Information into Annual ReportsOne of the most watched trends inreporting over the past 15 years hasbeen the degree to which corporateresponsibility information is presented inannual financial reports. Many advocatesof corporate responsibility reportingcontend that such data are helpful toanalysts, investors, senior management,boards, and other users of annual reportsbecause it helps to show a more three-dimensional view of the company’scurrent value and future potential.

In the early part of this decade therewere indications that a trend wasdeveloping toward full integration

of economic, environmental, and socialdata in annual financial reports, assome early movers startedexperimenting with this technique.Results from this survey (see Figure3.3) seem to show that significantprogress is being made in this area,with 20 percent of N100 companies inBrazil and South Africa integrating theirreports, and Switzerland, France,Australia, and Norway not far behind.

But overall, integration at both theG250 and N100 level remains theexception not the rule. Only a minorityof N100 companies (nine percent) and

even fewer G250 companies (eightpercent) have taken up the practiceto-date (see figures 3.4 and 3.5).

Despite lower levels of full integration,nearly half the G250 companies thatissue stand-alone corporateresponsibility reports are makingreference to key environmental andsocial data in their annual reports,as are over 30 percent of N100companies. This reflects the growinginterest and demand for sustainabilitydata from analysts, investors, andcompany leadership.

Figure 3.4 Level of integrationof corporate responsibilityinformation into annualreports (G250)

None 40%Limited(CR section in the Annual Report only) 49%Combined (CR reporting combined with Annual Report)8%Fully integrated(CR reporting fully integrated in the Annual Report) 3%


Figure 3.5 Level of integrationof corporate responsibilityinformation into annualreports (N100)

None 55%Limited(CR section in the Annual Report only) 33%Combined (CR reporting combined with Annual Report)9%Fully integrated(CR reporting fully integrated in the Annual Report) 3%


KPMG InsightAlthough the growth in corporateresponsibility references in annualreports is encouraging, the majorityare still issued without anyenvironmental and social information.

As corporate responsibility reportingmatures in the coming decade,we predict a greater demand andaptitude for environmental and socialdata by traditional financial reportreaders, such as the investorcommunity. Necessary developmentsinclude standardization of reportingmetrics, several years of comparabledata for companies across countriesand sectors, robust and trustworthydata, and a move towards eXtensiveBusiness Reporting Language

(XBRL) or other ways of transferringdata in real-time to analysts.





3.4 Behind the Trend Line: Drivers for ReportingThe world’s top performing companieswould not engage in the practice ofreporting unless they were benefitingfrom it. The trend lines would not beso distinctively on the rise unless therewas a clear business case for reporting.This survey gathered the most-citedmotivations for reporting as stated bythe world’s largest 250 companiesin their reports or on their websites.(See results in Figure 3.6.)

Ethics and economicsAs in previous years, the overall driversfor reporting are ethical and economicconsiderations. Although theseresponses are fairly broad, theyindicate that companies realize theyoperate in a context where they playkey roles in contributing to healthysocieties, ecosystems, and economies- and that it is in their best interest tomaintain and improve these spheres.

Ethical considerations as a stateddriver for reporting jumped up from 53percent to nearly 70 percent since thisstudy was last conducted. In the pastthree years there have been dozens ofscandals in accounting, environment,governance, and human rights, and asa result business trust has beennudging lower 7 while the sustainabledevelopment agenda has been inchinghigher. 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 reduction35%

47%

Strengthened supplier relationships 13%32%

Access to capital or increased shareholder value29%

39%

Market position (market share) improvement 21%22%

Improved relationships with governmental authorities 9%

21%

Cost savings 9%

0% 10%

17%

20% 30% 40% 50% 60% 70% 80% 90% 100%

2005 2008 Source: KPMG Global Sustainability Services, October 2008





period, risk management dropped12 percentage points from 47 percentto 35 percent as a driver for G250corporate reporting. Contrast this withthe growth in responses on brand andreputation (nearly doubled from 27percent to 55 percent) and the highscore of learning and innovation(55 percent). This could indicate thatcompanies are taking proactive stepsto adjust to the social and economicchallenges of our time. Brand andreputation are difficult to quantifyor decipher, but these results seemto indicate that companies havedetermined that mishandling oravoiding their social and environmentalresponsibilities could be detrimentalto their brand worth.

People in the driver’s seatSurvey findings also indicated theimportance of relationships thatcompanies have with various stakeholdergroups and how these relationships canbe advanced with reporting.

Consumers and employees top the list,and both became more important thanin 2005 with over 50 percent ofcompanies pointing to improving theserelationships as reasons for reporting.Although only 21 percent of companiessaid governmental relationships wereimportant, this is more than doublethan in 2005 and shows the higherpriority governments are placingon sustainable development overall.A key change since 2005 is in supplierrelationships as a driver for reporting,which jumped from 13 percent to32 percent, and may reflectacknowledgment that companies

have an expanded boundary ofresponsibility, especially among theworld’s largest 250 companies.

Investors as a key driver or audiencefor reporting have dropped 10 percentagepoints from 39 percent to 29 percent.This seems counterintuitive to thetrends seen in Figure 3.3, which showa slow but steady increase in theappearance of corporate responsibilityinformation in annual financial reports.Although cost savings are not oftencited as a driver for reporting, thisnearly doubled as a response in thepast three years, showing that thereare still bottom line savings associatedwith having management andmeasurement systems in place thatsupport reporting.

National trendsFor N100 companies the findings weregenerally similar to the G250 results.Companies in 16 out of the 22 countriesall cited two of the three top drivers:

ethical considerations, economicconsiderations, and reputation/brand.The only deviations were France, Norway,and Romania, which cited market positionas one of their top two key drivers, whileJapan, Mexico, and Portugal citedinnovation and employee motivation astheir top two drivers. It is interesting thatin Norway, 40 out of the 100 companiescited government relations as a driver- a top three result for that country.

Less important to N100 companieswas the opportunity to learn andinnovate through their commitment tocorporate responsibility and reporting.

This scored 44 percent compared tothe G250’s 55 percent. Brand as adriver for reporting was much higher inthe N100 population, with 70 percentciting it as a key reason for reporting.Risk management still comes in fairlyhigh at 40 percent, indicating that,unlike companies in the G250 sample,N100 companies still perceivecorporate responsibility and reportingas a risk management tool and notyet as a pathway to opportunityand innovation.

KPMG InsightThe reporting process remains anuntapped opportunity to build keyrelationships and understandimportant constituencies better. Weexpect to see relationships continueto grow as a key motivation forreporting. One trend to watch issupply chain relationships. Earlyindications are that G250, and tosome extent N100 companies, aredemanding more information aboutthe way their products and servicesare created in the supply chain.

With the trend lines trackingdownward in the G250 sample forrisk management as a key driver, wethink it is no coincidence thatlearning and innovation is on the rise.Corporate responsibility can be of

greatest value when it is a proactive,forward-looking, innovative approach.





“I am pleased to offer some brief thoughts about KPMG’s latest detailed report on corporate responsibility reporting. We havecertainly come a long way since the days when few companies were reporting and this is very gratifying. Indeed, sustainabilityreporting 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 addressthe sustainability issues that are relevant to the company.

Secondly, sustainability reporting must be a part of the management of business performance. Increasingly this informationshould 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 thebroader community.”

Bjorn StigsonPresident, World Business Council for Sustainable Development





Chapter 4

Corporate ResponsibilityStrategy and ReportingProcessChapter highlights• Three-quarters of G250 companies

have a corporate responsibilitystrategy that includes definedobjectives.

• More than half of the world’slargest 250 companies publiclydisclose new business growthopportunities and/or the financialvalue of corporate responsibility.

• Sixty-three percent of G250companies use a structuredapproach to stakeholder dialogue,up from 33 percent in 2005.

• More than three-quarters of theG250 and nearly 70 percent of theN100 apply the GRI Guidelines fortheir reporting.

• Most companies do not use existingchannels such as AGMs and investorpresentations to engage analystsand investors about environmentaland social issues.

• Sixty percent of all companiessurveyed consult with theirstakeholders and/or use the GRIGuidelines as a basis for determiningthe content of their reports.





4.1 Strategy and ObjectivesReporting is just one componentof a strategic approach to corporateresponsibility management, whichincludes other essential elements suchas defining strategy, developing andimplementing policies and procedures,and evaluating performance.

Corporate responsibility reporting hasbeen criticized over the years for beingan exercise in public relations ratherthan a reflection of an actualcommitment within the company.

The survey was expanded this yearto present a more nuanced analysisby looking beyond reporting as justa proxy for corporate commitmentto social and environmental issues.

Instead, the survey assessed whetheror not corporate responsibilityreporting by leading companies islinked to broader corporate strategiesand management approaches.

The Big PictureAbout three-quarters of the Global 250have a publicly communicatedsustainability strategy in place thatincludes stated objectives (see Table4.1). Most of these have also issued acorporate responsibility report,

presumably under the umbrella of theiroverarching strategy. Survey resultsfound that only 37 G250 companiesthat do issue a report do not have anoverall corporate responsibility strategy.

Whereas only 13 of the companiesthat published a strategy did notpublish a report.

The N100 companies as a group trailthe G250 significantly when it comesto having corporate responsibilitystrategies in place. Just over 40 percentof the N100 companies surveyedreveal their corporate responsibilitystrategy and objectives. Three-hundredand-two companies issue reports butdo not have a strategy in place.

Conversely, 145 do have a publiclycommunicated strategy but do notissue corporate responsibility reports.


Figure 4.1Companies witha publicly availablecorporateresponsibilitystrategy, bycountry (N100)

Japan 86%

France 79%

United Kingdom 65%

Norway 63%

United States 61%

Brazil 60%

Netherlands 55%

Sweden 54%

Finland 44%

Spain 44%

Italy 42%

Australia 38% 50%

Portugal 37%

Hungary23% 35%

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 4Corporate Responsibility Strategy and Reporting Process

When the N100 sample is brokendown by country, it is clear there arewide differences. Japan, also at thetop of the reporting table (Figure 3.3),leads with 86 percent of companiesutilizing a corporate responsibilitystrategy and objectives. However, itsreporting peer, the UK, falls 20 pointslower at only 65 percent. France is notfar behind Japan, possibly indicatingthat the involvement of regulatorybodies or stock exchanges inencouraging disclosure of social andenvironmental data helps to acceleratedevelopment of a strategic approachto corporate responsibility.

About half of the companies in Sweden,the Netherlands, Brazil, US, and Norwayissue reports in the context of an overallcorporate responsibility strategy.Perhaps it is surprising to find someof the countries that topped thereporting tables (Figure 3.3) nearingthe bottom of the strategy table—South Africa, Sweden, Canada, andAustralia. This could indicate thatalthough reporting has spread quicklythrough N100 companies in somecountries, the development of a fullcorporate responsibility managementsystem takes more time.

Keeping things privateOwnership type is a key variableaffecting the prevalence of corporateresponsibility strategies, particularlywithin the N100 group. Publicly tradedcompanies and those owned by thestate are the most likely to havestrategies in place (54 percent and 48percent respectively; see Figure 4.2).This could be due to impendingregulation, high brand profiles,involvement of shareholders, andhigher political awareness andcommitment to corporate responsibilitywithin these types of companies.

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 andcompanies owned by foundations fellin the middle of the table at 41 percentand 33 percent respectively. Althoughthis indicator has not been trackedhistorically, it may indicate thatcommunity-owned and -managedenterprises, and organizations withphilanthropic missions, are more likelyto embrace corporate responsibilityand develop strategies around it. Thiscould be explained by closer economicties to local communities and aperception that business success iscorrelated to the success of thesocieties in which they operate.

Family-owned and private equity-owned enterprises do not have thesame accountability to the broaderpublic for their business activities,especially their financial results. Thisgeneral lack of transparency andaccountability may account for therelatively low prevalence of disclosedcorporate responsibility strategies and

objectives. This could be interpreted tomean they are simply not disclosing, orthey might not consider corporateresponsibility to be a key business issue.

Shallow promises or deep changeWhen weighing a company’scommitment to its corporateresponsibility strategy, this surveyconsidered:

• Whether the strategy hasstated objectives;

• Whether key performance indicatorshave been developed as a wayto track performance against theseobjectives; and

• Whether data on these indicatorsare available.

See Table 4.1 below for survey findings.

Performance indicators are metricsby which a company can measure itsprogress against stated objectives.Of the 184 G250 companies thatdefine corporate responsibilityobjectives, 89 percent disclosedperformance indicators. Of this same

number, 81 percent actually providedata on progress toward objectives.

In this respect, the N100 companiesthat have stated objectives are just aslikely as G250 companies to track theirperformance. Eighty-eight percent ofcompanies with objectives discloseperformance indicators and 80 percentprovide actual data on progress. Thismay indicate that companies inclinedto develop specific objectives forcorporate responsibility are also verylikely to measure progress towardachieving them.

As seen in Figure 4.2, privately-ownedenterprises are far less likely to havea corporate responsibility strategy inplace. Not surprisingly, this groupalso lags behind others in identifyingindicators and providing data.

Table 4.1 Companies with corporate responsibility strategy, objectives,indicators, and data (G250 and N100)

Population Strategy with objectivesidentified

Performance indicatorslinked to objectives

Data provided forperformance indicators

G250 (250 total) 73% 65% 60%

N100 (2170 total) 43% 38% 34%


© 2008 KPMG International. KPMG International provides no client services and is a Swiss cooperative with which the independent member firms of t he KPMG network are affiliated.





Business case quantifiedWith corporate responsibility strategiesin place, particularly in the G250community where objectives are setand progress is measured by themajority, businesses should be ableto quantify, at least roughly, the valueof their strategic commitments.

Indeed, 54 percent of the G250 havedisclosed business opportunitiesand/or the financial value of corporateresponsibility. This value could bein terms of bottom line savings due

to efficiency or risk aversion, or top linegrowth due to new innovations inproducts and services as a directresponse to social or environmentalchallenges.

The N100 companies are trailing, butnot too far behind considering theoverall pace of development ofcorporate responsibility managementin this demographic. Thirty one percentof N100 companies are reporting thebusiness opportunities or financialvalue of corporate responsibility.

Breaking this result down by sector atthe N100 level reveals that more than50 percent of forestry and electronicscompanies are reporting on businessvalue (see Figure 4.3). It is interestingto see this top spot shared by sectorswith such different risks, opportunities,and histories with corporateresponsibility issues.

A second cluster of companies fallin the 40 percent range, includingutilities, oil and gas, and chemicals.

Figure 4.3 Companies reporting on business opportunities/financial value of corporateresponsibility, 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 hardesthit sectors on corporate responsibilityissues, namely on environmentand climate. This result may indicatethat leaders in these industries arenot only responding to, but alsobenefiting from, corporateresponsibility initiatives.

Still, several high-impact andeconomically dominant industrysectors continue to have lowprevalence, including the automotivesector in the 30 percent range,

and financial, construction,transportation, mining, and metals, allbelow the 30 percent line. Mostnotably, pharmaceutical and retailsectors cluster around the 15 percentmark. Considering the high publicvisibility and prevalence of corporateresponsibility issues such as supplychain labor and environmental issues,these results are discouraging.

With 80 percent of companies in Japanable to quantify the business case forcorporate responsibility, it seems that

companies have moved substantiallyaway from a public relations and riskmanagement approach to corporateresponsibility toward one that isintegrated deeply in theirbusinesses.The UK, though keepingpace with Japan in terms of N100reporting (Figure 3.3), falls behindmore than 20 percentage points whenit comes to quantifying the results oftheir corporate responsibility strategy(Figure 4.4).


Figure 4.4.Companies reportingon businessopportunities/ financial valueof corporateresponsibility,by country (N100)

Japan 80%

Norway 54%

Netherlands 49%

Brazil 47%

Spain 47%

United States 40%

Portugal

Sweden

Italy

38%

36%

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%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%





It is interesting to see that inpowerhouse economies like Brazil,US, and Spain, only about 40 percentof companies are calculatingfinancial value.

France and Switzerland, leaders inpresenting corporate responsibilitydata alongside annual financial datato analysts and investors (Figure 3.3),

lag in their ability to report onthe business case for corporateresponsibility.

Also interesting to note is that somecountries with high rates of reportingare finding themselves at or belowthe one-third mark, not ably Canada,Australia, Finland, and Sweden.

KPMG InsightG250 companies have started to move beyond simply making public claims about their social and environmental issuesand are implementing strategies that include detailed objectives, performance indicators, and reporting progress againsttheir objectives. The growing use of assurance, as detailed in Chapter 6, also supports this trend. Very few G250 and evenfewer N100 companies issue a sustainability report in the absence of an overall strategy with defined objectives. Thisincreases 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 theiroperations, we think a tipping point is near. Criticisms of the business case for corporate responsibility and reporting arebeing 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 acceleratedover the past three years, such as France, Spain, Canada, Sweden and others, seem to have been responding to demandfor disclosure, but they have not always been able to set overall strategies nor quantify the value of their commitment tocorporate responsibility at the same pace. Japanese companies seem to be the most consistent; most report, the vastmajority do so in the context of a sustainability strategy, and quantify the value of corporate responsibility. Companiesin other countries would do well to follow suit and maximize the value of corporate responsibility commitments.





4.2 Management and FrameworksThe best strategies are ineffectiveunless robust and accountablemanagement systems are in placeto ensure they are implementedcohesively and consistently.

Table 4.2 reveals an interesting gap inthe G250 group: 64 percent disclosedthat they have established systems formanaging, measuring, and reporting on

corporate responsibility, yet Figure 3.2revealed that 79 percent actually issuesustainability reports. This leaves about35 companies reporting withouta publicly disclosed system formanaging, measuring, and reporting.Without a systematic approachto manage and monitor corporateresponsibility initiatives, thesecompanies are in danger of issuing

reports that do not reflect their trueperformance.

The gap is narrower in the N100 group,where 45 percent issue a sustainabilityreport and 41 percent disclose thatthey have a management, measurement,and reporting system in place.

Table 4.2: Elements of Corporate Responsibility Management Systems (G250 and N100)

Population Strategy withobjectivesidentified

(From Table 4.1)

Management and Corporatemeasurement responsibility report

system (from Figures3.2 and 3.3)

G250 (250 total) 73% 64% 79%

N100 (2170 total) 43% 41% 45%


Normative frameworks forcorporate responsibilityNormative standards and codes forcorporate responsibility, developedeither by governments or in multi-stakeholder processes, can guidecompanies in their development ofstrategy and management systems.Some, such as the International LabourOrganization (ILO) Core Conventionsand the Universal Declaration ofHuman Rights, provide the foundationsfor social and environmental issues ininternational law.

Business use of these norms isincreasing, most notably with the UNGlobal Compact (see Figure 4.5). In theG250 group, explicit use of theUniversal Declaration of Human Rights,ILO Conventions, and the UnitedNations Global Compact (UNGC), allrose five percentage points from 2005to reach 21 percent, 24 percent, and40 percent respectively.

“As global integration moves aheadI am encouraged that a growingnumber of corporations realize thatmarket success and the ability toproactively manage environmental,social, and governance issues aretwo sides of the same coin, andthat relevant disclosure andreporting can be a driver to achievegreater sustainability. Just as the

business case for sound strategies,good ethical behavior, and reportingbecomes more apparent, much isyet to be done. Science tells us thatmajor disruptions are ahead, whilethe political will for sustainingopenness and nondiscrimination intrade and investment is weakeningin many parts of the world. Clearlywe need to redouble efforts so thatgood performance translates intogreater market sustainability andinclusion of the poor.”

Georg KellExecutive Director,United Nations Global Compact






Figure 4.5 International frameworks used by companies, 2005-2008 (G250)

UN Global Compact 35%40%

ILO Core Conventions 19%24%

Universal Declaration of Human Rights16%

21%

OECD Guidelines for Multinational Enterprises11%

13%

Sector specific framework/standards

ICC Business Charter

Sullivan Principles

NA12%

4%3%

3%2%

0% 10% 20% 30% 40% 50% 60%

2005 2008 NA Not available Source: KPMG Global Sustainability Services, October 2008

Spotlight on EquatorPrinciplesThe Equator Principles is an industry-developed standard designed to helpguide financial institutions inconsidering social and environmentalissues when financing major projectssuch as dams, roads, and otherinfrastructure. This framework wascited by 42 percent of the financialinstitutions in the G250 group, andby 19 percent of those in the N100group, as being influential in thedesign of their approval procedures

for project financing.More information:www.equator-principles.com

About one-fifth of N100 companiesdeclared their participation in theUNGC, and even fewer (about 15percent) cited the ILO Conventions andUniversal Declaration of Human Rightsas guiding sources for their systems.This could be a reflection of weakerlinkages to the internationalcommunity or it could indicate apreference for national- or industry-focused codes and frameworks.

A minority of G250 and N100companies surveyed applied othercodes such as the Organisation for

Economic Co-Operation andDevelopment (OECD) Guidelines forMultinational Enterprises, InternationalChamber of Commerce (ICC) BusinessCharter for Sustainable Development,and the Global Sullivan Principles ofSocial Responsibility (GSP).

Corporate responsibilitymanagement standardsThe environmental managementsystem issued by the InternationalOrganization for Standardization (ISO)known as ISO14001 is by far the mostwidely used system by corporations.





Figure 4.6 Management standards and guidelines used by companies (G250 and N100)

41%ISO1400151%

5%Sector-specific management systems7%

5%EMAS8%

5%AA1000

10%

3%SA8000 5%

0% 10% 20% 30% 40% 50% 60%Source: KPMG Global Sustainability Services, October 2008N100 G250

Over 50 percent of G250 (see Figure4.6) and over 40 percent of N100companies use it.

Various other voluntary standards forenvironmental management, humanrights, and labor management are usedon average by about five percent ofG250 and N100 companies. The onlynotable change since 2005 is the useof the AccountAbility AA1000 series,cited by five percent of the G250in 2005 and by 10 percent in 2008.

KPMG InsightAlthough nearly all G250 companies that issued corporate responsibility reportshad a strategy in place, fewer had an actual management and measurementsystem in place. This might indicate a gap between strategic aspirations andactual implementation, and increased chances of “greenwash” in reporting.This only applies to a minority of G250 companies and is one area where theN100 outperform their larger counterparts. We do think the trend is movingtoward a maturing of management systems for corporate responsibility,in which all basic program elements are present (strategy, management,and reporting).






4.3 Stakeholder EngagementBusinesses are influenced by peoplewithin and outside their company, andthey in turn influence the circumstancesof people both inside and out. These areknown as “stakeholders” and companiescommunicate with them on a daily basisthrough the normal course of business.Customers, suppliers, regulators,neighbors, employees, providers ofcapital, and many others, all have a stakein the way companies conductthemselves.

Understanding the way a companyimpacts the economic, environmental,and social circumstances of itsstakeholders, and vice versa, is at theheart of corporate responsibility. In orderto develop a proactive, strategicapproach, and a workable managementand reporting system that will helpchange circumstances for the better forall parties, stakeholders should be part ofthe process. Identifying and prioritizingstakeholders, and being transparentabout which groups and individuals acompany is engaging with, is a key part

of building credibility and trust.Serious engagementMany G250 companies engage in bothinformal and structured forms of dialoguewith stakeholders. Fifty four percent

reported that they engaged in informalstakeholder dialogue, whereas 62percent say they conduct formal orstructured stakeholder engagement. Thisrepresents a doubling since 2005, upfrom 33 percent, of companies involvedin formal engagements. The N100 areslightly less likely to engage, with 35percent involved in informal dialoguesand 42 percent taking structuredapproaches to stakeholder relations.

In their corporate responsibility reports,

65 percent of G250 companies disclosedetails of who their stakeholders are andhow they are engaged. This trend is onthe rise, up from 57 percent in 2005,indicating greater transparency andimplying greater comfort in relation tostakeholders. Less than half of the N100companies disclosed information aboutwhom they considered to be theirstakeholders in their corporateresponsibility report (47 percent),leaving them well behind their largercounterparts.

Higher purposeOf the G250 that utilize formalstakeholder engagement techniques, themajority (59 percent) say they do so tobetter understand stakeholderexpectations (see Figure 4.7).

This is an important step in the rightdirection, considering that the historicaldata show structured stakeholderengagement to be a fairly newphenomenon and good stakeholderrelationships are known to take timeto forge.

Only 37 percent of the G250, and20 percent of the N100, say they usestakeholder dialogue to help define theircorporate responsibility strategy. Thereinlies an enormous opportunity for

companies to better harness theinformation and insights they gain fromthese dialogues, especially to seek toreduce risks and exploit new creativebusiness opportunities with corporateresponsibility.

Stakeholder dialogue is an importantelement in the elaboration of corporateresponsibility reports. Twenty-fivepercent of G250 and 14 percentof N100 companies claim to usestakeholder feedback for reportingpurposes. From one perspective these

figures may be seen as positive, as theymay indicate the company is engagingwith a wider set of stakeholders fora wider set of purposes (i.e., not justfor the preparation of a corporateresponsibility 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%

N100 G250 Source: KPMG Global Sustainability Services, October 2008





On the other hand, these figures mayalso be considered fairly low sincewithout engaging directly withstakeholders, a company risks leavingkey issues out of their reports.

Direct lineIn terms of most-used channels andmethods for engaging with stakeholders,the trends are similar in the G250and N100 samples. Roundtables,questionnaires, and web-based feedback

are common tools and show a good mixof in-person and anonymous channelsfor stakeholders, as shown in Figure 4.8.A trend toward a more personalizedapproach may be increasing as individualmeetings and employee-specific contactpoints are on the rise as key channels ofcommunication.

Some of the best-established forums forstakeholder communications include theleast utilized for corporate responsibility

issues: annual general meetings (AGMs),analyst presentations, and directinteractions with customers. This couldbe an indication that corporateresponsibility is not fully integrated as apriority in a company’s main operations.It may also be a reflection, especiallyin the G250 population, of a lack ofattention paid to environmental risksand opportunities by investors andother providers of capital.

Figure 4.8 Means of engaging stakeholders (G250 and N100)


Round tables/dialogues 23%44%

Ad hoc communications 22%38%

Questionnaires 23%36%

Web based feedback/forum 21%32%

Individual meetings 20%32%

Media 21%29%

Employee specific contact points 19%29%

Annual General Meeting (AGM) 19%25%

Analyst presentations/expert opinion 16%23%

Direct customer contacts at point sale 12%

16%

Other 11%11%

0% 10% 20% 30% 40% 50%





Special Focus

Investor Relations

Investors are a key driver for integrating corporate responsibility managementinto core business practice, and an important audience for reports. The nicheresponsible investment community is an active stakeholder with the world’stop publicly traded companies. Nearly 90 percent of the G250 are listed onstock exchanges and about half report that they are also listed on a sociallyresponsible index such as the FTSE4GOOD or the Dow Jones SustainabilityIndex. It has been estimated that just over 10 percent 8 of all funds investedin the US are subject to responsible investment criteria, but the majority offunds remain in mainstream portfolios.

Only a minority 16 percent of G250companies quantified the value ofcorporate responsibility performancespecifically for their analyst andinvestor stakeholders. These findingscould suggest that companies arenot yet capturing the attention ofmainstream investors and analyststhrough their reporting.

In Chapter 3 it was found that abouta third of companies cited shareholdervalue as a driver for reporting and that

there was a trend toward includingcorporate responsibility informationin annual reports. Yet the majorityof companies do not appear to beusing existing communicationschannels to reach out to investors withinformation and performance resultsabout corporate responsibility. Forexample, less than half of G250

companies include corporateresponsibility information in theirannual report or a link to the full reporton investor relations web pages.

Top management addressed investorsabout corporate responsibility issuesin only 16 percent of G250 companies.There was little evidence that investorswere an intended audience of corporateresponsibility reports in 50 percent ofG250 corporate responsibility reports.

8 Social Investment Forum (SIF) “2007 Report on Socially Responsible Investing Trends in the United S tates.” www.socialinvest.org





“Asset owners and their managers need to be cognizant of how well companies are managing their environmental, socialand governance (ESG) risks and opportunities in the ever-changing global economy. A full understanding of how wellcompanies 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 beexpecting 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 asevidenced in key dev elopments such as the Principals for Responsible Investment and the Enhanced Analytics Initiativeshould stimulate the take up of responsible investment strategies by mainstream investors. The turmoil in financialmarkets this year underlines the need for transparency, accountability and responsible behavior by companies andinvestors. In its 25-year history EIRIS has seen responsible investment move from being something taken up by onlya handful of concerned investors into a global and increasingly mainstream phenomenon.”

Peter WebsterExecutive Director, EIRIS

Talk backDialogue, by definition, involves a two-way conversation. However, even though62 percent of the G250 engaged instructured stakeholder dialogues, lessthan half of these publicly respond tofeedback (32 percent). The proportion issomewhat better in the N100 group,where 42 percent use structureddialogues and 26 percent respond in thepublic domain to stakeholder feedback.

Only a minority of companies used theircorporate responsibility reports as a

place to discuss stakeholder relations.Thirty-eight percent of the G250published stakeholder feedback in theirreports, which is up slightly from 32percent in 2005. The N100 are on parwith the G250 trend, with 35 percentpublishing stakeholder comments andfeedback in their reports.

The gap between the number ofcompanies with a structured approachand those that actually respond in thepublic domain to stakeholder concernscould place trust and credibility at risk.

“Closing the loop” and being transparentabout what the company is doing withstakeholder inputs is an important partof building relationships.

The 2008 survey aimed to discover howcompanies structure their corporateresponsibility reports, the reportingstandards they follow and the contentthey choose to include.

KPMG InsightStakeholder engagement is a key part of corporate responsibility activities and we were encouraged to see the growth instructured approaches in both the G250 and N100 groups. However, there is still a long way to go. Stakeholder engagementshould 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 thisby including stakeholder feedback in their reports and by being more transparent about the identity of their stakeholders. In thepast few years, companies have been rewarded with greater trust when disclosing who their stakeholders are, and whatissues 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 (Figure4.3), they are speaking to investors. We expect this community to be better engaged through well-established channels (annualgeneral meetings, investor relations communications) and as data become more credible (via assurance) and accessible viatechnology like eXtensible Business Reporting Language (XBRL).






4.4 Reporting and the Use of StandardsReporting standardsMore than three-quarters (77 percent)of the G250 and 69 percent of the N100reporting companies follow the GlobalReporting Initiative’s (GRI) SustainabilityReporting Guidelines. About 20 percentof both cohorts use internally-developedcompany frameworks as the basis forreporting (see Figure 4.9). Even feweruse national standards, though the figureis slightly higher among the G250.

This is perhaps counterintuitive sincemost of these are multinationalorganizations, and it is somewhatsurprising that a higher number of N100companies do not use national standardsfor reporting. Instead, like their globalcounterparts, most look to theinternational GRI standard.

Figure 4.9 Reporting standards and guidelines used by companies (G250 and N100)


GRI Guidelines69%

77%

Company developed criteria19%

20%

National reporting standard17%

19%

Other13%

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. GRIdevelops these Reporting Guidelines using a global consensus-seekingprocess that involves reporting organizations such as companies, as well asreport readers and users like employees, investors, and non-governmentalorganizations. GRI issued its first set of Guidelines in 2000, the second in2002 (known as the G2 Guidelines) and the third in late 2006 (G3 Guidelines).

The Guidelines consist of two parts:

• Reporting Principles: these helpguide the reporting process, suchas engaging with stakeholders,selecting material indicators,and adhering to a high standardof report quality.

• Reporting Indicators: these formthe basis of quantitative disclosureon economic, environmental, andsocial issues.

Complementing the Guidelines is aseries of Sector Supplements. Theseare custom-built to reflect uniquesocial and environmental issuesand corresponding stakeholder needsin different industry sectors.

The Guidelines are designed to beapplied flexibly by any type oforganization and across all regions andsectors. Since it is up to each company(and its stakeholders) to decide whichprinciples and indicators to use, the

Guidelines contain a system for

companies to declare the extentto which they actually apply theGuidelines. In the G2 version, acompany could strive to be “InAccordance” with the Guidelines,which would indicate they appliedthem to the maximum extent. In theG3 version the system is known as“Application Levels.” This allowscompanies to clearly state whetherthey used the Guidelines to themaximum extent (A level) or to lesserextents (B and C levels).

The lowest Application Level, C, wasdesigned to make it easy for newreporting organizations to get started,and to provide a way for theseorganizations to improve year by year,increasing transparency and risingthrough the B and A levels. For a CLevel application, the company mustonly report on 10 GRI indicators. At theB Level this moves up to 20, and atthe A Level all 50 GRI “core” indicatorsmust be represented, either with dataor a valid explanation for why the

indicator is not reported.

Application levels also require responsesto a series of queries on “Strategyand Profile” as well as “ManagementApproach” so that readers caninterpret performance results incontext. Finally, a company canindicate they utilized third partyassurance by adding a “+” to theirdeclared level.

For more information on the G3Guidelines: www.globalreporting.org






G2 GuidelinesThe G2 Guidelines were in circulationfrom 2002-2006. Only 13 percent ofthe G250 companies that claim theirreports are based on the GRIGuidelines are still using the G2version. Half of these reports declaredthey were “In Accordance” with theG2 Guidelines (see GRI box for furtherexplanation).

The proportions are similar in theN100 population. Twelve percent arestill issuing reports based on the G2Guidelines and half of these are“In Accordance”- level reports.

G3 GuidelinesThe G3 Guidelines only becameavailable in late 2006, and most of thereports analyzed in this survey cover the2006-2007 performance period. To findthat 160 companies claimed to use theG3 Guidelines shows a remarkablyquick uptake of the new version.

This may indicate that there was afairly easy transition between the twoversions for experienced reportingcompanies. However, it also showsthat new reporters are starting with G3directly. Of the 160 G250 companiesusing the G3 Guidelines, 37 percentdeclared an Application Level, as didnearly half of the N100 (47 percent)companies that reported on the basisof the G3 Guidelines.

Of the companies that do declare anApplication Level, 11 percent of theG250 and 20 percent of the N100declared the C Level. It is clear fromFigure 4.10 that assurance is notapplied as often at this level. Of theG250, 43 percent and 37 percent ofthe N100 declared the B ApplicationLevel, and both are just slightly morelikely to utilize assurance at this level.For the A Application Level, 48 percentof G250 and 44 percent of N100 havedeclared their use of it, and themajority is also using third partyassurance. (Note: All percentages arebased on the actual number ofcompanies that do declare ApplicationLevels: G250=98 and N100=336).

Figure 4.10 GRI Application Level declarations (G250 and N100)

16%C 9%

4%C+

2%

15%B

18%

22%B+25%

9%A9%

35%A+39%

0% 10% 20% 30% 40%






Contentious contentKPMG believes that a good report isone that reflects the company’s overallstrategy and objectives, covers issuesand topics that are material to thecompany and its stakeholders, andprovides details on performance thatdoes not leave out the “tough” topics.

In line with evidence pointing to atrend that reporting is happening aspart of a broader corporateresponsibility management system,Figure 4.11 shows that nearly 60percent of all companies selectedreport content based on their ownstrategy and objectives.

The number of companies citingstakeholder consultation as a keydeterminant for selecting indicatorsnearly doubled in the G250 categorysince 2005, up to nearly 40 percent.The trend is only slightly lower in theN100 group. Risk analysis declined asa technique for selecting indicatorssince 2005, in line with the lowerscore it also received as a driverfor reporting (see Chapter 3).

About 60 percent of all companiescited the Global Reporting Initiative’sSustainability Reporting Guidelinesas the framework they use to selectreport content. This is up from40 percent in 2005.

Of the 77 percent of G250 companiesthat claim to use the GRI Guidelines,nearly half say they use the indicatorsas a starting point for deciding whatcontent to include in reports whereasonly one-third say they use GRI’sreporting principles as a starting point.

The proportion of N100 companiesusing the GRI Guidelines is similar;nearly half (46 percent) use the indicatorsas a starting point for issues selectionand 36 percent use the principles.

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






Reporting formatOne of the challenges companies facewith reporting is determining how toput together a corporate responsibilityreport in a single printed or electronicdocument that reflects all the issuesof importance to the company and itsstakeholders, but is still easy to useand navigate for a wide variety ofreaders with very different needs andinterests. Therefore, developing a clearreporting strategy with defined targetgroup(s) and relevant content canassist in avoiding over-generalized,lengthy, or irrelevant content.

A majority of G250 companies thatissue reports use a full PDF document,according to results presented inFigure 4.12. Seventy-five percentpresent corporate responsibility-relatedinformation on the company's website.This allows companies to utilizefunctionality for searching andcustomizing to better meet the needsof various stakeholders. N100companies use similar methods,just on a smaller scale: 46 percentissue an PDF version and 53 percentpresent data online. Many companiesuse a combination of both PDFand web versions.

Figure 4.12 Reporting format (G250 and N100)


Full PDF report 46%77%

CR webpage53%

75%

Other

Executive Summary (only)

20%19%

5%7%

Does not release any sustainability information9%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80%





Chapter 5

Corporate ResponsibilityReporting – Topicsand IssuesChapter highlights• Although 92 percent of G250

companies disclose a code ofconduct or ethics, only 59 percentreport on non-compliance withthe code.

• Sixty-eight percent of G250companies have a corporategovernance section in their reports,up from 61 percent in 2005.

Publicly traded companies andcooperatives are more likely toreport on corporate governanceissues than other types ofcompanies.

• Over 90 percent of G250companies have a supply chaincode of conduct, but only halfdisclose details of how it is

implemented and monitored.

• Sixty-nine percent of N100companies do not disclose anyrisks related to climate change.

• Sixty percent of G250 companiesreport on new businessopportunities associated withclimate change.





Each company has a unique set ofcorporate responsibility issuesdepending on the type of business it isas well as its location, size, and otherfactors. This distinctiveness is reflectedin a company’s report as itcommunicates performance on theeconomic, environmental, and socialissues that concern them. For thissurvey, three key issues deemedrelevant to most companies (and of

interest to a majority of stakeholders)were selected for deeper researchon disclosure trends: corporategovernance, supply chain, and climatechange. The survey examines thedepth to which each is coveredand reveals some insights into howcompanies are handling theseimportant corporate responsibilityissues.

5.1 Corporate GovernanceCorporate governance has gainedprominence as a key corporateresponsibility issue over the course ofthis decade. This is for a variety ofreasons, including higher expectationsfrom stakeholders about companyboundaries and responsibilities, highprofile ethics-related scandals, andemerging national legislation andstandards.

It seems most G250 companies haveresponded to these pressures, as 92percent (or 229 out of 250) disclose acode of conduct or ethics. The N100companies trail significantly with only64 percent publishing a code of conductor ethics. In terms of implementation,however, far fewer are willing to betransparent. Only 59 percent of G250and 34 percent of N100 report on noncompliance incidents with their codes.

“In determining long-term businessstrategy today, a board cannot ignoresustainability issues that are pertinentto the business of the company.And if those issues can be turnedfrom risks into business opportunities,the company will differentiate itselffrom its competitors.

One of the hallmarks of the G3Guidelines from the Global ReportingInitiative is that the preparer of the

annual report should be applying hisor her mind to the indicators thatare pertinent to the business ofthe company. By preparing asustainability report, many factorsare brought to the forefront of theboard’s mind in developing a long-term strategy. Thus, sustainabilityreporting improves the qualityof long-term strategic planning.

Good governance, strategy, andsustainability have becomeinseparable. Mindless compliance

with quantitative aspects ofgovernance is not good governance.Instead, the development of along-term strategy mindful of thesustainability issues pertinent tothe company will constitute goodquality governance.”

Mervyn E King SCChairman of the United NationsSteering Committee on CorporateGovernance and Oversight





Chapter 5Corporate Responsibility Reporting – Topics and Issues

Reporting on governanceSixty-eight percent of G250 companieshave a section or chapter in their reportsdedicated to corporate governance.Although this is up from 61 percent in2005 and constitutes a solid majority,this number could have been expectedto be much higher considering thefocus from media and investors on thisissue, especially in Europe and the USover the past few years.

Broken down by ownership it is clearthat companies with more publiclyaccessible ownership structures aremore accountable - over 70 percentof cooperatives and stock listedcompanies have a stand-alone sectionon corporate governance. In contrast,

Figure 5.1 shows that only about 50percent of family- and state-ownedcompanies are transparent aboutcorporate governance practices.

Only 42 percent (920) of the N100have a corporate governance section- far fewer than the G250 population.By ownership, similar trends arise inthis group, with stock listed companiesnearing the 60 percent mark.

This could be attributable to legislationin countries such as France and SouthAfrica where companies are requiredto follow a code of conduct - and betransparent about it - if they are listedon the stock exchange. Family-ownedcompanies rate the lowest at only

14 percent, again highlighting the lackof transparency about corporateresponsibility issues overall amongthis group (see Figure 5.2).

The missing link: governance and riskAccording to Sir Adrian Cadbury, well-known pioneer of best practice incorporate governance, “Corporategovernance is concerned with holdingthe balance between economic andsocial goals and between individualand communal goals. The aim is toalign as nearly as possible the interestsof individuals, corporations andsociety.” 9

Therefore, the practice of corporateresponsibility 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 avisionary board upholding industrybest practice in corporate governance.

Yet in their reports, only a minority ofG250 and N100 companies describedhow good governance incorporatedcorporate responsibilit y - 43 percentand 27 percent respectively. Thissurvey shows that although thereseems to be an obvious link betweencorporate responsibility and goodgovernance, in reality this is not widelyrecognized.

One essential element of corporategovernance is to mitigate risks to thecompany by making decisions thattake into account the full spectrum

of information, unforeseen or futurethreats, and impacts or complicationsthat may emerge in the long- andshort-term. The theoretical link tocorporate responsibility is clear here by taking into account stakeholderviews, and by better understandingeconomic, environmental, and socialissues and complexities, a companycan better manage its risks. Yet thefigures once again prove that thetheoretical is not yet widely practicedin reality. Only 43 percent of G250 and29 percent of N100 companies makethe link between risk management andcorporate responsibility in their reports.This reflects earlier findings that riskreduction is not a dominant driver forreporting (see Figure 3.6).

The long-term sustainability ofbusiness depends on free and faircompetition. Corruption in all its forms,such as extortion and bribery, not onlyundermine business success but alsocontribute directly to poverty,inequality, crime, and insecurity. Three-quarters of G250 companies disclosetheir codes and practices related tostamping out bribery and corruption,but only 44 percent of N100companies publish their policiesand procedures in this area.

Figure 5.2 Reports with a separate section on corporate governance, by ownership (N100)


Owned by professional investors

Owned by foundations

Co-operatives

Subsidiary of foreign company

Family owned/owned by management

15%

14%

25%

34%

40%

85%

60%

66%

75%

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





Who is in charge?One way to assess the importance orpriority a company places on corporateresponsibility is to determine who isresponsible for implementing it, andwhether or not there is a direct lineto the board of directors.

A minority of G250 (37 percent) and amajority of N100 (63 percent) do notdisclose who is responsible forcorporate responsibility. Of those thatdo disclose, over half have separatecorporate responsibility departments,or utilize committees whose membersrepresent the broad scope of corporateresponsibility impacts and issues.

One trend to note is that corporateresponsibility is primarily the domain

of specialized sustainability units, ratherthan housed within a communicationsor public relations department. This isslightly more likely to be the case inthe G250 group and may be the resultof corporate responsibility becomingmore ingrained as a strategic elementof a company’s management system(see Figure 5.3).

In terms of reporting, 62 percent ofG250 and 35 percent of N100companies describe how non-financialdata are gathered and managed. Thisreinforces a trend toward havinginternal audit departments review andmanage corporate responsibility datajust as they do all other operationalsystems and controls. Internal auditdepartments typically have a directline to the board.

KPMG InsightEstablishing a link between corporateresponsibility and governance - andthe link between corporateresponsibility and risk management- can help to strengthen a company’smanagement approach overall.Family-owned companies are nottypically held to account in the publicdomain for financial or non-financialperformance, but for those with aheavy social or environmentalfootprint, this may becomeunavoidable in the near future. Weexpect to see the role of publicrelations departments diminish ascorporate responsibility is betterintegrated into governance and riskmanagement functions or inspecialized sustainability units.

Figure 5.3 Department where corporate responsibility is managed (G250 and N100)


Sustainability unit (separate)48%

55%

CSR Committee11%

13%

Public Relations department8%

17%

Other (CEO, Board, Strategy)

Risk department

Audit department

0% 22%

6%

3%4%

4%3%

0% 10% 20% 30% 40% 50% 60%





5.2 Supply chainIn financial accounting, companiesreport on the entities they own. But insustainability reporting, the boundaryof responsibility for social andenvironmental impacts andperformance may extend beyond thesetraditional lines. Today, companies arebeing held to account for actions takenby companies in their value chain thatthey may not own or control. 10

Code of conductG250 companies are taking note ofrisks in the supply chain: 63 percentof them present data on this topicin their reports. Over the past several

years some high profile environmental,quality, and human rights crises haveput supply chain risk in the spotlight,so it is somewhat surprising thatreporting on risk is down from68 percent in 2005. Just 38 percentof N100 companies report on supplychain risk. This lower figure isconsistent with general findings in thissurvey that put N100 companiesbehind the G250 in most aspects ofcorporate responsibility reporting, butthis could also be attributed to the factthat many of these companies aresuppliers themselves.

Of the G250 companies that domention supply chain risk, 77 percentdescribe how their code of conduct isintegrated into supply chainmanagement. Of the 617 N100companies that mention supply chainrisk, 74 percent describe how the codeof conduct is integrated into supplychain management, on par with theG250 level of transparency in this case.

“Working conditions in the global supply chain is an increasingly sensitive topic for retailers. We are aware of thechallenges around human rights, social standards, and compliance in our supply chain. Carrefour has responded over thepast decade by working with the International Federation for Human Rights (FIDH) to closely monitor working conditionswithin its supply chain, develop a Supplier Charter in 2000 signed by all its suppliers of controlled products, and implementvoluntary 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 onlabor 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 partin the creation of the Global Social Compliance Programme (GSCP) together with key retailers and manufacturers. GSCPoffers a global platform to promote knowledge exchange and build consensus on best practices in order to increasecomparability and transparency between existing standards and systems, whether individual or collaborative. One of theprogram’s principles is to encourage key civil society stakeholders to join our efforts to guarantee integrity andinclusiveness. 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 messagefor our suppliers as well as for governments.”

Véronique Discours-BuhotSustainability Director, Carrefour Group

10 Global Reporting Initiative (2007). “The GR I 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 i n Global Supply Chains.” Both at www.globalreporting.org.






Management and resultsReports revealed much about thedepth to which corporate responsibilityis integrated into supply chainmanagement. See Table 5.1 for detailson the type of information companiesmake available. It is interesting to notethat in both G250 and N100 categories,companies were slightly better atdisclosing results and policies thanthey were at disclosing strategy.

Disclosure by sector and countryG250 companies have a fairly goodrecord on addressing supply chain issues

in their reports, (see Figure 5.4.).All mining and chemical sectorcompanies do so, and upward of two-thirds of pharmaceuticals, media, food,and electronics sectors disclose thebasics of their supply chain. The onlynotable departures in the N100group are forestry and automotive, whichperform much better at the national level.

More details are revealed when theN100 sample is examined by country,(see Figure 5.5.). Companies in Japan,

UK, Brazil, and the Netherlands, areahead of the pack in disclosing supply

chain risk. US, Spain, and South Africaare not far behind - at about the 50percent mark - with high levels ofdisclosure on this topic possibly due tocustomer awareness and the very realthreat of litigation. Perhaps surprisingis the low level of disclosure fromcompanies in Canada, Finland, Denmark,Australia, Switzerland, France, andSouth Korea - all typically home tolarge multinational companies withsignificant supply chains and relativelystrong reporting practices overall.

Figure 5.4 Reports that address supply chain risks, by sector (G250 and N100)

47%Chemicals and synthetics 100%

47%Mining 100%

57%Electronics & computers 91%

54%Food & beverage 88%39%

Automotive78%

37%Communications & media 73%25%Pharmaceuticals 71%

37%Other services 69%30%Transport 67%

35%Metals, engineering & other manufacturing

29%Trade & retail 22% 63%36%Finance, insurance & securities 54%

44%Utilities50%

32%Oil & gas50%

36%Construction & building materials

50%Forestry, pulp and paper

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%






KPMG InsightCompanies are beginning to operationalize their codes of conduct for suppliers, forexample by making environmental and social considerations a part of selection andintegrated 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 inthe supply chain. Aligning these can help companies and their suppliers achievebetter results. Very few companies currently disclose the actual results of theircorporate responsibility supplier audits, but this is an area that will grow as supplychain 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%







5.3 Climate changeClimate change has emerged as oneof the most important and urgentcorporate responsibility issues.Pressure from media, consumers,investors, NGOs, and governments hasbeen brought to bear on companiesaround the world, but survey resultsshow that corporate response andspeed is mixed.

Business risks and opportunitiesClimate change can pose various risksto companies, including ph ysical,

regulatory, litigation, or reputational.Of the G250, 57 percent address thebusiness risk of climate change in their

reports, but the majority of 68 percent(nearly 1500 companies) in the N100do not, an astounding gap consideringthe social, economic, and politicalprominence of the issue today.

By sector, 100 percent of the miningcompanies in the G250 address thebusiness risks of climate change,showing strong leadership. Aboutthree-quarters of utilities, metals, oiland gas, and chemicals are addressingthese risks. The next cluster of sectors

- communications, electronics, andfinance - is not far behind, with about60 percent disclosing.

As indicated in chapter 3 of this report,survey results found that some at-risksectors are lagging in their disclosureabout corporate responsibility issuesin general. In this case the automotive,transport, and construction sectorsare in danger of missing the chanceto mitigate key climate change risksbefore they manifest.

The trends are similar for the N100group but on a smaller magnitude, andmining companies do not have the track

record at the national level that they doat the global level (see Figure 5.6).

Figure 5.6 Reports that address climate change risks, by sector (G250 and N100)


Mining43%

100%

Utilities54%

83%

Metals, engineering & other manufacturing35%

80%

Oil & gas53%

76%

Chemicals and synthetics38%

75%

Communications & media 30%67%

Electronics & computers 37%59%

Finance, insurance & securities 35%58%

Automotive 25%50%

Pharmaceuticals 15%43%

Trade & retail 15%38%

Food & beverage 27%38%

Other services 23%31%

Transport25%

37%

Forestry, pulp and paper0%

50%

Construction & building materials0%

0% 10%

24%

20% 30% 40% 50% 60% 70% 80% 90% 100%





Going one step further, 64 percent ofG250 companies and 34 percent ofN100 companies describe how theyare going to mitigate the businessrisks associated with climate change.With the majority of N100 companiesnot tracking risks and implementingmitigation programs, a majoropportunity for better management ofclimate risk could be missed.

Nearly 60 percent of G250 companiesalso see the flipside and describe newbusiness opportunities associated withclimate risk. This is occurring in theN100 population but at a lower levelwith only 27 percent disclosing newbusiness opportunities associated withclimate change.

In terms of which risks pose thegreatest threat, 44 percent of G250companies fear the physical risks ofclimate change like extreme weather,changing agricultural patterns, flood risk,and ecology and biodiversity change.Although companies are not asconcerned about the potential oflitigation brought against them for theirown contribution to the climate crisis,they are concerned that governmentsare starting to tighten up regulationssuch as on carbon emissions, and 17percent are aware that their reputationis at stake as the climate crisis grows.Figures are remarkably similar for N100companies, as seen in Figure 5.7.

Figure 5.7 Climate change risks, by type (G250 and N100)


Physical Risk44%

46%

Regulatory Risk31%

32%

Reputational Risk17%17%

Litigation Risk6%

7%

0% 10% 20% 30% 40% 50%






Carbon footprintNearly half the G250 cohort disclosedcarbon emissions for its own operations,and an additional eight percentexpanded this to include their valuechain. But 41 percent of G250 and 62percent of N100 did not report on theircarbon footprint (see Figure 5.8).

Further insight is gained by breakingresults down by country. UK companieslead others rather significantly on thedisclosure of their carbon footprint,and are well ahead of the curve. Thiscould be due to the high profile thisissue has gained in the country overthe past several years.

A second cluster of companies fromEurope come in around the 40 percentmark: Italy, Spain, France, and Sweden,but they are topped by Japanesecompanies, which near the 50 percentmark for carbon disclosure.

North America and Australia are oftencited as having some of the heaviestcarbon footprints, and their industrialsectors contribute significantly.Companies here do trail their Europeancounterparts; only 32 percent ofcompanies in the US and Australiadisclose their carbon footprint in theirreports, and 42 percent do so inCanada (See Figure 5.9).

An interesting finding is that Finnishand French companies are among thefirst to report on the carbon footprintof their entire value chains – theseearly movers may stimulate an upwardtrend among other nations such asHungary, Portugal, Switzerland, Spain,Japan, and the UK, which are alsostarting to take steps in this direction.

Figure 5.8 Carbon footprintdisclosure (G250)

Only for its own operations 48%For its own operations plus its value chain 8%Other 3%Not at all 41%


“For Global 500 companies a backdrop of regulatory uncertainty is delaying strategic investment decisions and seniormanagement are calling for greater visibility on climate change related policy in order to better anticipate the impact ofcarbon markets and carbon prices. Despite the uncertainty with regard to regulation, 74% of Global 500 companiesresponding to CDP have put emissions reduction plans in place. We can see from 2008 responses to CDP an increasein levels of engagement from companies, with more companies reporting than ever before. Carbon disclosure andclimate change reporting is becoming critical for investors to fully assess their risks, liabilities and opportunities acrosstheir portfolios and this information provides greater understanding of which companies will be the winners in thetransition to a low carbon economy.”

Paul DickinsonExecutive 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%

Finland20% 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 operationsFor its own operations plus its value chainOtherNot at all Source: KPMG Global Sustainability Services, October 2008




Chapter 6

Corporate ResponsibilityReporting Assurance

Chapter highlights• Formal assurance 12 increased from

30 percent to 40 percent in G250reports, with a similar trend at thenational level (39 percent).

• Twenty-seven percent of reportscontained other types of third partycommentary, with seven percent ofthese combining commentary withformal assurance.

• Major accountancy organizationsare still leading the corporateresponsibility reporting assurancefield.

• Consistency and quality of assuranceapproach is demonstrated by anincrease in the use of standards.

• G250 companies are less likelyto ask for reasonable (positive)assurance than N100 companies.

There is a wide variety of approachescompanies take when it comes toreport assurance. This latest surveylooked at several key aspects ofassurance, including the type ofassurance opinion provided, thechoice of assurance provider, whichparts of the report are assured, andwhy companies seek assurance.

12 Formal statement with conclusions issued by an independent professional assurance provider





6.1 Global Trends in AssuranceVoluntarily including the views of athird party in corporate responsibilityreports is a choice that an increasingnumber of companies are making. Inthis year’s survey, 56 percent of G250companies that issued a reportincluded some form of third partycommentary. Just under half of N100companies (49 percent) did the same.

After remaining steady at about 30percent in 2002 and 2005, the number

of G250 companies that utilized formalassurance in their report jumped to 40percent in 2008. The trend is similar inthe N100, where 39 percent included aformal assurance statement in theirreport. See Figures 6.1 and 6.2.

Even though stakeholders, includingshareholders and consumers, showconcern about the veracity ofenvironmental and social claims bymajor companies - notably in public

relations campaigns about the“greening” of business - formalassurance is still only undertaken bya minority of the companies in thesurvey, both in the G250 and N100samples. This raises questions aboutwhat drives companies to seekassurance on corporate responsibilityreports. See section 6.3 for furtherinsight on this issue.

Figure 6.1 Reports that include a formal assurancestatement (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 assurancestatement (N100)

39%

Yes 33%

27%

0% 5% 10% 15% 20% 25%

2008 2005 2002 Source: KPM

30% 35%

G Global Sustain

40% 45%

ability Services, October 2008





Chapter 6Corporate Responsibility Reporting Assurance

6.2 A Closer Look at Assurance by Country and SectorThe term “formal assurance” is used todescribe formal statements issued byindependent professional assuranceproviders, including accounting,certification, and technical firms. Thesestatements are the result of asystematic, evidence-based processthat allows the provider to drawconclusions on the quality of the reportand its data and, in some cases, the

underlying systems and processes usedto gather and present the information.

Country trends in formal assuranceOver 60 percent of reports issued bycompanies in France, Spain, SouthKorea, and Italy, include a formalassurance statement, as seen inFigure 6.3. From Table 6.1 it is clearthat the use of formal assurance in

Spain and France has grown veryquickly - both countries are up nearly20 percentage points since 2005. It isalso interesting to see that in countrieslike Japan and the UK where nearly alltop 100 companies report, only aboutone-quarter and one-half of companiesutilize a form of assurance,respectively.

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 assurancetrends have been tracked in Brazil,Mexico, Czech Republic, and Hungary,but it is evident that the use ofassurance is growing as rapidlyas the practice of reporting itself.

Although less than 20 percent of NorthAmerican companies utilize formalassurance, this is growing significantly;Canada has doubled since the previoussurvey, and assurance in the US isup from three percent to 14 percentthis year.

While the percentage of reports withassurance in many European countrieshas stayed relatively stable (UK,Netherlands, Italy, and Norway), wesee a big jump in Denmark, Finland,and Sweden in this survey after aninitial dip in 2005. Due to legislation,companies in Scandinavian countrieswere some of earliest withenvironmental reports and assurance,but some were slower to embracebroader corporate responsibilityreporting and assurance coveringeconomic and social issues.

This trend may indicate that as reportingpractices mature there is a tendency toinclude formal assurance. In Sweden,new legislation on reporting for publiclyowned companies, which includes arequirement on assurance, may bedriving adherence to a more robustapproach overall.

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.

© 2008 KPMG International. KPMG International provides no client services and is a Swiss cooperative with which the independent member firms of t he KPMG network are affiliated.





Sector trends in formal assuranceIn both the G250 and N100 samples,the mining, utilities, and oil and gassectors hold the top three positionsin terms of percentage of reportswith formal assurance. Over halfof companies in the G250 chemical,pharmaceutical, oil and gas, andutilities sectors use formal assurance.The mining sector has increased itscommitment to assurance significantlysince 2005, jumping from ninthposition to the top of the table.There are many factors that may haveinfluenced this result. One may bemedia scrutiny of this sector in recentyears, especially its health, safety,and working conditions, and theenvironmental and community impactsof its operations.

National agreements such as thereporting and auditing requirements ofthe South African Mining Charter mayalso have influenced this result.

The finance sector, with the criticalindirect impacts it exerts on theenvironment and communities throughinfrastructure project financing, credit,and investment, is also in the top halfof the graph with 44 percent of reportsincluding a formal assurancestatement.

Sectors such as retail, forestry,and construction remain below the10 percent mark despite growingconcern about the economic,environmental, and social footprintsof these companies.

This trend is in line with lower levels ofreporting in these sectors as well (seechapter 3), but it is also important toconsider that the comple xity ofoperations, including supply chain andoutsourcing models, tend to makeassurance difficult and expensive. Itcould be that these companies preferselective assurance, concentrating onthose areas that stakeholders are mostconcerned about, but this survey didnot investigate this angle.

The trend line is ticking upward inother key sectors such as transport,communications, and automotive,all with about one-third of reportsincluding a formal assurancestatement.

Figure 6.4 Reports that include a formal assurance statement, by sector (G250)

Mining 100%Utilities 75%

Oil & gas 59%Chemicals and synthetics 50%

Pharmaceuticals 50%Electronics & computers 47%

Finance, insurance & securities 44%

Automotive 35%

Transport 33%

Communications & media (telecommunications) 33%

Food & beverage 20%

Metals, engineering & other manufacturing 17%

Other services 11%Trade & retail 6%

Construction & building materials 0%

Forestry, pulp and paper 0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%






Third party commentaryInstead of a formal assurancestatement, some companies opt toinclude the views or commentary ofother external parties in their reports.The commentary may be frominfluential stakeholder groups orreputable experts in a specialistcorporate responsibility field. Somecompanies opt for a panel ofstakeholders or experts to providebroader insight into their activities andperformance. The commentary oftenincludes views on management,performance, and progress, as well asrecommendations. It may also includecomments on whether the reportincludes, in their view, all the relevant

or material issues but does not(usually) provide formal conclusions onthe quality of the reported informationon these issues.

Of the G250, 27 percent make use ofthird party comments from peoplewho are not professional assuranceproviders. Fewer N100 companies usethis method (18 percent).

Only seven percent of G250companies combine formal assurancewith comments from others, whichseems to indicate that G250companies currently choose onetechnique or the other but rarelycombine them.

Individual experts on issues or peopleknowledgeable in the sector or nationalcontext are most commonly engagedfor third party comments from G250companies. The trends are nearlyidentical in the N100 group.

Non-governmental organizations(NGOs), academics, and stakeholderpanels are all engaged at fairly similarrates, percentage wise, for G250 andN100 companies. The category“Other” consists mainly of committeesof experts (as opposed to individualexperts) and rating agencies.

Figure 6.5 Reports that includethird party commentary(other than formal assurance),by type (G250)

Stakeholder panel 15%Academics 20%Individual experts 29%NGO 13%Other stakeholder group (e.g. community) 7%Other 16%

Figure 6.6 Reports that includethird party commentary(other than formal assurance),by type (N100)

Stakeholder panel 17%Academics 18%Individual experts 23%Non Governmental Organization (NGO) 18%Other stakeholder group (e.g. community) 3%Other 20%

Source: KPMG Global Sustainability Services, October 2008 Source: KPMG Global Sustainability Services, October 2008






KPMG InsightSector results indicate an overall trend toward increasing demand for an independent third party opinion on corporateresponsibility reports. The highest use of assurance still tends to be in sectors with known impacts and high mediaattention. However, the trend analysis indicates that other drivers for assurance are arising in different sectors. These maybe legislative in countries that require assurance on environmental indicators for certain sectors, or it may be throughhealthy 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 theircustomers on claims about corporate responsibility. Increasingly, the large retail chains, especially supermarkets, areattracting more public attention as they branch out to a much wider range of products and make claims about productsourcing and packaging. Use of assurance in this sector is low, but this may change as customers start to seek betterinformation in the future. On the other hand, business-to-business sectors such as metals, engineering, forestry, andconstruction, 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 beinteresting 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 ifcompanies are looking for a way to bolster a report’s credibility in the eyes of a specific stakeholder group, then this mightbe an effective approach. In particular, the use of stakeholder panels in 15 percent of cases seems positive. One areawhere these can add value is in the choice of issues addressed in the report—in other words, whether the report includesall the issues that are important to stakeholders. Combining this with a formal, systematic assurance process couldprovide 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 informationenhances the credibility of a company’s reporting. Providing assurance on corporate responsibility reporting requires thatwe find ways to determine the types of information that should be included in such reports, as well as the appropriatecriteria 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 firststep in the process to achieve greater consistency in providing assurance on corporate responsibility issues, and drawsfrom the International Framework for Assurance Engagements and International Standards on Assurance Engagements3000, “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 thiswas considered a welcome development.

As issues like environmental sustainability and social performance become vital business concepts, the accountancyprofession will continue working to design and deliver the services necessary to report on and assure reports in this field.”

Fermin Del VallePresident, International Federation of Accountants (IFAC)





6.3 Assurance: Why, Who, and What Why: Quality a key driverCompanies have many options whendeveloping an assurance process tosupport their corporate responsibilitymanagement and reporting activities.Understanding what companies wantto get out of assurance and why theyuse it can help explain their decisions,such as who to engage for assuranceand what parts of the report or processto assure.

Both G250 and N100 companies statethat the credibility of the report andthe quality of the reported informationare the main drivers for seekingassurance on a report (Figure 6.7).However, the contribution of assuranceto improving and ensuring the qualityand reliability of a company’sunderlying reporting processes is alsoappearing as one of the top drivers forusing assurance.

Readers and users of reports need tobe able to trust that what they arereading is true and accurate, andutilizing some form of assurance is oneway that companies can improve thecredibility of their report. This driver iscited by about one-fifth of N100 andG250 companies alike.


Figure 6.7 Drivers for assurance (G250 and N100)

Improve quality of reported information18%

21%

Reinforce credibility among stakeholders18%

20%

Improve reporting processes14%

16%

Drive Performance 6%4%

Other

Primarily responding to legal requirements

5%3%

2%2%

0% 10% 20% 30% 40%






Who: choice of assurance providersThe majority of G250 companies thatengaged assurance providers selectedmajor accountancy organizations. Thiscould be due to the trend toward amore comprehensive approach toassurance that covers the full reportand the process behind it, rather thanjust isolated sections such asenvironmental indicators. Withinvestors starting to show interest

in corporate responsibility data, andwith regulation on the horizon in manycountries, there is an increased focuson information systems and controls,which may lead companies seekingan assurance provider to opt for amajor accountancy organization.

Specialist assurance providers andtechnical experts account for about20 percent of total engagements

among N100 companies. The use ofcertification bodies is on the rise atthe country level but the G250 havenotably moved away from this group.In both populations the use oftechnical or issue experts andspecialist assurance provider firmsis on the rise.


Figure 6.8 Choice of assurance provider, 2005-2008 (G250 and N100)

60%65%

Major accountancy organization58%

70%

8%18%

Certification bodies21%

13%

20%11%

Technical experts firm2%

13%

7%4%

Other19%

6%

5%

11%Specialist assurance provider0%

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 allCompanies can choose to have theirentire report assured or they canidentify parts of the report whereit is especially important that theinformation (often specific data)be assured.

The G250 and the N100 are split rightdown the middle with about halfrequesting assurance on the full report

and half seeking assurance on specificparts of the report.

Of those requesting assurance on onlyparts of the report, 74 percent of theG250 and 69 percent of the N100identify specific indicators they wantassured. Thirty-five percent of bothG250 and N100 companies ask forassurance on report chapters orsections.

KPMG InsightIt is interesting that improving the quality of a report and the underlying systems both increased as stated drivers forassurance while adding credibility as a driver went down slightly. This may reflect the current stage or maturity of reportingin the companies covered by the survey. As companies progress toward integrating corporate responsibility into theiroverall business strategy and management, they will develop and implement internal systems, controls, and compliancemechanisms.

In terms of assurance scope, we know from our member firms’ experience that indicator assurance is often driven bynational legislative requirements on specific indicators and is also common in early stages of corporate responsibilityreporting where companies only have reporting systems for a small number of indicators. Longer-term reporters andsector 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 responsibilityperformance by raising internal awareness, identifying areas for improvement (for example, making links to governanceand management), and by ensuring that performance management and control is based on reliable information.






6.4 Assurance Standards and OpinionsStandardsSince the last survey, the use of theInternational Standard for AssuranceEngagements (ISAE) 3000 has becomeobligatory for accounting firms doingcorporate responsibility assuranceif there is no national alternative.As a result, the use of this standardhas increased considerably since 2005and now reflects the strong position

of the major accounting organizationsin assuring reports.

The corporate responsibility assurancestandard AA1000AS, issued by thenon-profit organization AccountAbility,has also increased in use since 2005,being referenced in 36 percent ofassurance reports (up from 10 percent)among the N100.

Figure 6.9 Assurance standards used, 2005-2008 (G250)

ISAE300024%

62%

AA1000AS18%

33%

Other NA

0%

‘05 G250

19%

10% 20%

’08 G250 NA Not availabl

30% 40%

e Source: KPMG

50% 60% 70%

Global Sustainability Services, October 2008

Figure 6.10 Assurance standards used, 2005-2008 (N100)

ISAE300014%

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: reasonableversus limitedAn area that has aroused muchdiscussion over the last years amongreporting organizations, assuranceproviders, as well as interestedstakeholders, is the level of assurancethat is appropriate. Financial accounts aresubject to a vigorous process that resultsin a “reasonable level” of assurance witha positively stated conclusion.

The survey shows that the majority ofthe G250 (51 percent) obtain reportassurance that is a “limited level” ofassurance—a lower level that requiresless work from the assurance providerand therefore lower costs. This resultsin a negatively stated conclusion, whichperhaps does not adequately conveythe considerable amount of workundertaken to assure the report andunderlying processes. From a company

perspective, choosing a limited levelis not surprising since assurance oncorporate responsibility informationis mainly a voluntary activity.

Thirty percent of the G250 opt forpositive (reasonable) assurance and14 percent for a mixture of the two.Among the N100 the percentageseeking reasonable assuranceis higher.

Figure 6.11 Level of assurance (G250 and N100)

Limited: negative form of opinion48%

51%

Reasonable: positive form of opinion30%

37%

Combination of limited and reasonable12%

14%

Other 11%6%

0% 10% 20% 30% 40% 50% 60%


KPMG InsightThe move toward a corporate responsibility strategy with defined objectives, as well as increasing stakeholder interest inthe reliability of information in reports, may lead to demands for reasonable assurance, especially on the performance datafor strategic environmental and social indicators. To satisfy other stakeholders it is possible to combine this with limitedassurance on the rest of the report. Further research would be needed to see whether, for example, there is alreadya 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

AustraliaPublic disclosure of sustainability-related information is increasingly onthe agenda for Australian companies, with reports being developed withboardroom input and reviewed by mainstream analysts. Climate changehas been a key driver of the sustainability agenda along with theintroduction of the National Greenhouse and Energy Reporting System

(NGER) and the Carbon Pollution Reduction Scheme (CPRS) by theAustralian government and the revision of the Australian SecuritiesExchange (ASX) Principle 7, which now includes the considerationof 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%


AnalysisAt the time of this survey, based onnumbers, the N100 in Australia isdominated by one industry sector:finance, insurance, and securities(38 percent). Our analysis indicatesthat this sector is not well representedin sustainability reporting. As

sustainability-related issues, mostnotably climate change, increasinglypermeate through the economy it willbe interesting to observe changes inthe levels of reporting in coming years.

In 2008, 68 percent of ASX N100companies published information onsustainability. Although this level ofreporting lags behind that observed inother developed countries around theworld, it has more than doubled since2005. It is also important to recognize

that there are key differences betweenthe Australian landscape and overseasmarkets, such as reportingrequirements.

The increased number of reportingentities obtaining external verificationindicates a growing recognition of thevalue provided by external assurance.Our survey findings indicate that 25companies (37 percent of reporters) arecurrently seeking independent third party

comments. Although this is not matchingthe uptake of sustainability reporting, thisis explained by the fact that organizationsmay not seek assurance or other thirdparty commentary in their first yearof reporting.





Figure II Integration level CRreporting

No integration (separate CR report only) 28%Partial (CR report & CR section in the Annual Report) 3%Limited(CR section in the Annual Report only) 23%Combined (CR reporting combined with Annual Report)6%Fully integrated(CR reporting fully integrated in the Annual Report) 8%No CR reporting 32%


Figure III 3rd party comments

Only assurance 18%Only other 3rd party comments 6%

Both assurance & 3rd party comments 1%No 3rd party comments 75%


Highlight - Australia68 report

8 fully integrate corporateresponsibility reportingand annual reporting

24 utilize 3rd party comments

24 percent of the 38 financialinstitutions report

34 report on their owncarbon footprint

InterviewRob Kella - Chief Risk Officer, Qantas Airways Limited

What does sustainability meanin your business?Sustainability is about creating long-termshareholder value by managing a rangeof complex issues, including the safetyand security of our employees andcustomers, responding to climate changeand reducing our environmental impact,creating and sustaining a diverse andtalented workforce, and supportingsocioeconomic development.

What do you see as the main

business drivers to report onsustainability and to seek assuranceon sustainability reports?Reporting demonstrates how wemanage our sustainability risks andimpacts. It identifies areas forimprovement and supports target-setting and performance management.Investors and other stakeholders seekgreater transparency and consistency inreporting. External assurance enhancesthe credibility of reports, providingstakeholders with confidence that dataand information are relevant, accurate,and complete, and it helps us to

improve our reporting, managementcontrols, and data capture systems.

What do you consider to be thekey developments in Australia thathave influenced the developmentof sustainability reporting in recentyears?In Australia, one of the biggest drivershas been regulatory and legislativechanges, including the revision ofour corporate governance principlesto include the proposed considerationof sustainability risks and theintroduction of a carbon reductionscheme (e.g. emissions trading).

How is sustainability reportingintegrated into your company’smanagement and accountabilityprocesses?Sustainability is part of our riskmanagement program and is governedby the Board. Performance againstsustainabilit y targets, which are linkedto remuneration, is reported ona monthly basis to managementand on a regular basis to ExecutiveManagement and Board committees.Sustainability considerations areincluded in business decisions

to achieve integration.

Sustainability Reporting: A GuideKPMG in Australia and the Group of100, representing the senior financeofficers of Australia’s leadingenterprises, have developed a goodpractice guide for companies andorganizations engaged in thepreparation of sustainability reports.

The publication, entitled “SustainabilityReporting: A Guide,” will providedirectors and senior executives with atimely and useful tool when addressingthis rapidly evolving area of reporting.




Spotlight

BrazilKPMG Brazil’s sustainability team is proud to contribute to KPMG’s sixthInternational Survey of Corporate Responsibility Reporting; as sustainabilityhas become a major part of local discussions in this country. Brazil’sindustrial growth has had a profound impact on environmentaland social infrastructure, and local companies are conscious that strong

and transparent communication with their stakeholders is essential tosustainable 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%Source: KPMG Global Sustainability Services, October 2008

AnalysisIn Brazil, corporate sustainability resistance from Brazilian companies are better prepared to engage inperformance is now seen as an (not all companies issue corporate dialogue with their stakeholdersimportant driver of business. One of responsibility reports) that see through their corporate responsibilitythe key challenges for many companies reporting as more of an additional reports. In contrast, sectors with ais how to develop business strategies cost than an opportunity to improve. lower impact on the environment, suchand transparent communication to On the other hand, we observed that as communications and media or tradeenhance 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 ofdemonstrates 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.





We noted that companies with highimpact on the environment, besidesissuing a corporate responsibilityreport, have also opted to seekassurance (Figure III) to enhance thecredibility of their reports. However,70 percent of Brazilian companies

still do not include any third partycomments in their reports.

No integration (separate CR report only) 31%

Partial (CR report & CR section in the Annual Report) 16%

Limited(CR section in the Annual Report only) 8%Combined (CR reporting combined with Annual Report)16%

No CR reporting 14%

Fully integrated (CR reporting fully integrated in the Annual Report) 15%




Only assuranceOnly other 3rd party comments

12%

9%



Brazilian Green EthanolIn June 2007, São Paulo state subscribed to a “Green Protocol”(responsible for nearly 25 percent sponsored by UNICA and the Sãoof the world’s ethanol) issued the Paulo state government. This ProtocolAgro-environmental Protocol with calls for the eradication of pre-harvestthe sugarcane sector to promote burning by 2014 in areas whereindustry best practices that would harvesting can be mechanized and bymove the industry beyond 2017 where mechanization is currently

business-as-usual. not feasible.

The Protocol has established goals forproducers in an effort to phase outmanual cutting. Over 130 plants have

InterviewAlessandro Giuseppe Carlucci - CEO, Natura Cosméticos S.A.

What does corporate responsibility requires an urgent change inmean to your business? consumption and production standards.Natura’s growth was guided by an We created the Carbon Neutralentrepreneurial approach that seeks Program to offer our customersto create value for society as a whole products with neutral greenhousein a sustainable manner, valuing and gases emissions - from the harvestingrespecting the interests and rights of raw materialsof our stakeholders. to final disposal in the environment.

What are the main business drivers To what extent does corporateto report and seek assurance on a responsibility influence innovationcorporate responsibility report? in your products or services?

We believe that transparent Working with socially diversecommunication strengthens the communities like farmers and Indianscompany's connections with its helps us to better protect biodiversity,stakeholders, contributing to brand as products are grown and harvestedrecognition and efficient risk in different places and in different ways.management. The need for transparency This approach is a source of innovationand credibility leads us to hire that Natura strives to promote throughindependent auditors to provide an open scientific research model andexternal verification of our corporate partnerships with universities andresponsibility report. institutes. Practicing corporate

responsibility has therefore helped usDoes your company address climate to build technology innovation networkschange risks and/or opportunities that bring together the scientificrelated to its product portfolio? knowledge of universities and theThe crisis related to global warming knowledge of traditional communities.


Highlight - Brazil86 report


100 percent of oil & gas, forestry,electronics, and chemicals sectorreport

60 have a corporate responsibilitystrategy





Spotlight

CanadaIn the past 18 months there has been an unprecedented increase inmedia attention focused on sustainability issues. Regulatory responsesto climate change are a key topic in provincial and federal electioncampaigns. Securities regulators are also showing increased interestin the quality of disclosure on environmental risks. Within this context

it is no surprise that the number of large Canadian companies preparingcorporate responsibility reports has increased to 60 percent, up from41 percent in 2005.


Other services (5) 100%Trade & retail (19) 100%


Communications & media (5) 90%Metals, engineering & other manufacturing (5) 86%

Construction & building materials (2) 75%Food & beverage (3) 75%

Electronics & computers (2) 71%Transport (4) 60%

Automotive (7) 50%Mining (7) 50%

Pharmaceuticals (2) 50%Oil & Gas (8) 40%

Utilities (10) 40%Forestry, pulp & paper (3) 33%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Source: KPMG Global Sustainability Services, October 2008

AnalysisThe pattern of reporting by sectorreflects differences in regulation, typeof ownership, and reliance onvoluntary standards. One-hundredpercent of corporate responsibilityreporting in the finance sector reflectsregulations that require Canadian

financial institutions with CAN$1 billionin equity to report on their contributionsto Canadian society. Relatively lowlevels of corporate responsibilityreporting in the utilities sector mayreflect the fact that many provincial

utilities are not publicly listedcompanies. Low levels of reportingwithin the forest and chemicalindustries likely reflect significantreliance on voluntary standardsto demonstrate performance(e.g., Sustainable Forestry Initiative,

Responsible Care).

Sixty-two percent of Canadiancompanies reported on social andenvironmental performance in theirannual reports. This reflects growing

demand from Canadian investors,particularly institutional investors,for non-financial information to bepresented in conjunction with financialinformation. Only two percent of thecompanies surveyed have fullyintegrated corporate responsibility

information into their annual reports,indicating the continuing challenge ofreporting on a true “triple bottom line.”

More Canadian companies are seekingassurance on corporate responsibility






No integration (separate CR report only) 18%Partial (CR report & CR section in the Annual Report)35%Limited(CR section in the Annual Report only) 18%Combined (CR reporting combined with Annual Report)7%Fully integrated(CR reporting fully integrated in the Annual Report) 2%No CR reporting 20%




No 3rd party comments 86%


Highlight - Canada80 report


100% of trade & retail and financialservices report

40% of oil & gas and utilities report

42 report on their carbon footprint

InterviewEllen Pekeles - Senior VP Strategy, Vancity

What have been the keydevelopments in corporateresponsibility in the last few years?There is increased consumer demandand stakeholder pressure for companiesto behave responsibly. In turn, companieshave begun to differentiate themselvesand demonstrate leadership throughcorporate responsibility.

What major developments do youenvision in the next few years?Increasingly sophisticated consumers will

distinguish between greenwashing andreal environmental commitment, andexercise greater “green” buying power.At the same time, we expect a growingrealization among reporters that theintegration of corporate responsibilityleads to a better-run business, includingbetter management of enterprise risk.

How are the business drivers to reporton corporate responsibility changing?Reporting on corporate responsibilityis seen as a way to build or rebuildstakeholder loyalty and trust and isincreasingly viewed as an internal

management tool for improvingbusiness performance.

What are the main driversto seek assurance?Assurance helps to meet stakeholderdemands for accuracy and full disclosureof material issues, as well as drivinginternal system and processimprovements. It enhances the credibilityof our corporate responsibility report andindicates the importance managementascribes to non-financial information.

To what extent does corporateresponsibility influence innovation

in Vancity’s products and services?We have developed several productsto support our community leadershipfocus areas: acting on climate change,facing poverty, and growing the socialeconomy. We track the value of ourcommunity leadership portfoliomonthly and set annual growth targets.Community leadership is integratedinto our new strategic plans, whichwill further drive product and serviceinnovation in the future.

reports but the number still trailsmany other countries in the surveyby a considerable margin. Notably,the pattern of assurance in the USis similar to Canada.

The increasing need for more reliable

and timely non-financial data fordecision-making and for regulatoryreporting is expected to drive demandfor assurance in North America overthe next few years.

Climate ChangeClimate change legislation is atvarying degrees of developmentand implementation in a number ofprovinces and federally. It is also avery hot topic for Canadian media.Corporations are being asked toprovide specific, measurable

information about the environmentalimpact of their own operations and,increasingly, the impact of the supplychain as well.

For exporters, climate changeperformance could potentially actas a barrier to trade. Within thiscontext, 35 percent of Canadiancompanies addressed the businessrisks associated with climate change,and 39 percent disclosed their

carbon footprints in their corporateresponsibility reports.





Spotlight

The Czech RepublicAlthough it may seem that corporate responsibility issues have not beena priority for companies in the Czech Republic, a growing awareness ofthe importance of corporate responsibility has been visible in the businesscommunity. 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.


Chemicals & synthetics (1) 100%Electronics & computers (7) 43%

Mining (4) 25%

Food & beverage (5) 20%Oil & Gas (10) 20%

Automotive (11) 18%Finance, insurance & securities (15) 13%

Metals, engineering & other manufacturing (9) 11%Trade & Retail(12) 8%Other Services (2) 0%

Communications & media (3) 0%Construction & building materials (7) 0%

Transport (2) 0%Pharmaceuticals (4) 0%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisAddressing corporate responsibilityissues helps a business gain credibilityamong stakeholders and distinguishitself from competitors. The trendtoward corporate citizenship is takinghold in a growing number ofbusinesses, but for many companies,

reporting on corporate responsibilityis not a primary focus. Reporting onenvironmental and social impacts isnot compulsory by law in the CzechRepublic, so it is rather a matter of

image and positive public perceptionthat drives companies to report. As inother parts of the world, it is mainlycompanies in the industrial sector,followed by businesses in electronicsand finance, that are pioneeringreporting practices.

Sixty-seven percent of companies inthe Czech Republic do not report oncorporate responsibility issues at all.Companies that do report most often

include corporate responsibilityinformation in a separate sectionof their annual report, but 14 percentof companies issue a corporateresponsibility report. The number ofreports receiving third party assuranceis still very low in the Czech Republic.

Ninety-four percent of the companiessurveyed do not include any third partycomments in their reporting.






No integration (separate CR report only) 11%Partial (CR report & CR section in the Annual Report) 1%Limited(CR section in the Annual Report only) 19%Combined (CR reporting combined with Annual Report)2%No CR reporting 67%






Highlight - The Czech Republic33 report


Reporting leaders include chemicals,electronics, mining, food & beveragesectors


InterviewMr. Petr Pudil - Chairman and CEO, Czech Coal a.s.

What does corporate responsibilitymean in your business?Historically, the mining and utilitiesindustries have been underconsiderable social pressure. Theconcept of corporate responsibility hasthus penetrated into corporatestrategies through various specificissues like the health and safety ofminers, mass redundancies, or severeenvironmental impacts.

What do you consider to be the keydevelopments that have influencedthe growth of corporate responsibilityand corporate responsibility reportingin recent years?The dynamic development of corporateresponsibility and corporateresponsibility reporting is a sign of anera in which stakeholders want morethan just a good product or a nicebrand image. Moreover, the risingsupply and demand for reporting isof the same nature as the rise of theinformation society: people want moreand better information.

How is corporate responsibilityreporting integrated into yourcompany’s processes?Internal processes were the initialreason why we started our corporateresponsibility reporting program.Later on we implemented externalstandards in our internal reportingactivities – the GRI Guidelines.Nowadays, we aspire to have ourmanagement and accountabilityprocesses and our corporate

responsibility reporting to be two equalsides of one corporate strategy.

How do you integrate corporateresponsibility into your day-to-daymanagement?Corporate responsibility is a behaviorintegral to the day-to-day managementof the Czech Coal Group. Providingrelevant and truthful information,including negative information, tovarious stakeholder groups and gettingtheir feedback is a daily activity anda natural part of every manager’s jobin the company.

From exploitation to responsibilityDespite being in an early phase ofreporting, lately there has been visiblegrowth in the number of companiesshowing genuine interest in corporateresponsibility. Reporting, methodologies,carbon footprint calculations, andrestrictions will have no impact,

however, without the personalcommitment from people in acompany. Although there is still muchto improve, a socially and

environmentally responsible approachto business in the Czech Republichas a good base on which to build.Therefore, a growing number andincreased quality of corporateresponsibility reports can beanticipated in the coming years.





Spotlight

DenmarkThis is the analysis for Denmark as part of KPMG’s sixth InternationalSurvey of Corporate Responsibility Reporting. The findings of the surveyand the development of corporate responsibility reporting in Denmark arediscussed below. Overall, the survey findings indicate that corporateresponsibility reporting and a higher level of transparency is about to

become best practice in many countries and sectors.






Oil & Gas (2) 50%

Utilities (2) 50%


Transport (7) 29%

Construction & building materials (12) 25%






Automotive (2) 0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisDenmark has a minimum of naturalresources and heavy industry, focusinginstead on light industry, trading, finance,and other non-industrial sectors.When companies started reportingon the environment and corporateresponsibility 15-20 years ago, Denmark

had some trendsetting companies inpharmaceuticals, metals, and buildingmaterials that were engaging inhigh-quality non-financial reporting.

Looking at reporting per sector in2008, it is clear that sectors withenvironmental dilemmas still have thehighest degree of reporting eventhough the number of companies inthese sectors is rather limited.

Sectors such as trading, automotive,electronics, and other services havenot yet started to report on corporateresponsibility. The Danish financial

sector has now started reporting oncorporate responsibility; this was notthe case in 2005.

Companies that started reporting yearsago on corporate responsibility aremoving rapidly toward different levelsof integrated reporting. Only threecompanies that prepared corporateresponsibility reports did not includecorporate responsibility information in












Highlight - Denmark40 report


Of the 19 trade & retail companiesin the sample, none report


InterviewPreben Andreasen - Head of HSE Aalborg Portland

What does corporate responsibilitymean in your business?We produce cement and concrete,which is a very energy-intensivebusiness, so our focus is mainly onenergy and climate, including reducingCO2 emissions.

What do you consider to be the keydevelopments outside AalborgPortland that have influenced thedevelopment of corporateresponsibility and corporateresponsibility reporting in the lastfew years?I think there has been an increasedfocus on the climate issue in mostsectors, which means we have beenlooking at significant signs of climatechange - these will change conditionsfor many business sectors, especiallyenergy -intensive industries.

What is the main driver for AalborgPortland to report on corporateresponsibility?

For us, a main driver is to informexternal stakeholders, including

politicians, about our environmentalperformance. We are workinginternationally and it is important to usthat local politicians understand ourbusiness challenges. We have for thesame reason prepared high-qualityenvironmental reports for many years,and we are very proud that we won theEuropean award for best environmentalreporting in 2004, and Danish reportingawards a number of times.

What are the main drivers to seekassurance on your environmentalreport?Our production site in Aalborg hasenvironmental certificates of ISO14001, Energy, and EMAS-registrationand therefore our managementsystems and reporting are verifiedby a Danish certification body. We havealso had our environmental data verifiedto be sure that the quality of data isreliable and satisfactory. All in all,we use external verifiers to ensurethe quality of our routines and data

sampling, and to give credibilityto the report.

their annual reports. Novo Nordiskand Novozymes have fullyintegrated reports.

We expect this development tocontinue, supported by legislationwith requirements in respect of CRinformation in the Management’sReview of the annual report.

The use of third party assurance hasincreased compared to 2005, as 11percent of the companies includedassurance opinions in their corporateresponsibility reports in 2008.

The survey indicates that the 'Big Four'audit firms carry out 9 of the 11assurance engagements in Denmark;

the certification bodies also carry outsome assurance work on corporateresponsibility reports.

Normally the assurance standard ISAE3000, is used for verification, but inrecent years the AA1000 standardhas also been used.





Spotlight

FinlandThe corporate responsibility reporting landscape in Finland has evolvedover the past few years. Of the top 100 companies, based on revenue,the majority reports on corporate responsibility issues at least on somelevel. The eagerness of different sectors to report varies, as does theformat of the reports. On the whole, a lot has been achieved, but as

reporting practices and standards develop alongside growing expectationsof stakeholders, it is important that Finnish companies make sure theykeep up.




Transport (3) 67%Electronics & computers (5) 60%

Other services (7) 57%Communications & media (4) 50%

Food & beverage (4) 50%Automotive (4) 50%

Chemicals & synthetics (4) 50%Metals, engineering & other manufacturing (19) 37%

Oil & gas (4) 25%Trade & retail (13) 23%

Construction & building materials (11) 9%Mining (1) 0%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisWhen looking at corporate responsibilityreporting by sector, the utilities(100 percent) and forestry, pulp, andpaper (80 percent) sectors seem to bevery diligent reporters. However, theyare small sectors within this survey.The finance, insurance, and securities

sector includes 12 companies,and the percentage that reports -67 percent - is high. Metals, engineering,and other manufacturing industriesrepresent the biggest sector in the

survey (19 companies), but only 37 percent of its companies report on corporate responsibility issues.

According to the survey, 65 percentof companies report on corporateresponsibility issues. Twenty-onepercent of companies include acorporate responsibility section intheir annual report, and about thesame number (20 percent) producea stand-alone corporate responsibility

report. Only one percent of companiesissue a fully integrated report whereas35 percent do not report on corporateresponsibility issues at all.

A vast majority (82 percent) of thetop 100 companies in Finland do notinclude third party comments in theircorporate responsibility reports, andonly 13 percent have their reportsassured by a third party.












Highlight - Finland65 report


Reporting leaders include utilities,forestry, financial, and transportsectors


InterviewSusanna Monni - Executive Director, Finnish Business and Society

How do you view corporateresponsibility in Finland atthe moment?It carries much more weight nowadays.We are especially good at datacollection. The companies that havethe best corporate responsibilityreports in Finland are also top-notchglobally. On the other hand, we needmore focus on the business value ofcorporate responsibility because wetend to concentrate on only the ethical

and moral aspects.

What do you consider to be the keydevelopments that have influencedthe development of corporateresponsibility and corporateresponsibility reporting in thelast few years?There is a GRI boom in Finland.Companies that are starting to developtheir corporate responsibility strategyare adopting the GRI Guidelines forreporting. However, those who havebeen active in corporate responsibilityfor a number of years are reducing the

number of indicators they report onand are starting to focus instead onmaterial issues.

In your view, what are the mainbusiness drivers to report oncorporate responsibility?For some it is important to be ableto participate in various indices orto project transparency. Excellentcorporate responsibility reportingcan also be a way for a company to

differentiate itself from competitorswhen it comes to marketing, recruitment,and financing, for example.

In your opinion, what are the mainreasons to seek assurance oncorporate responsibility reports?I think the main driver is beingtransparent and credible tostakeholders. Getting externalassurance is also a learning anddevelopment process that gives acompany the opportunity for dialoguewith an expert.

There is a growing trend globally toseek assurance and/or other thirdparty comments to build trust amongstakeholder groups. This practice isalso expected to increase in Finland.

InnovationSusanna Monni, Executive DirectorFiBS, on corporate responsibilityinnovation in different sectors:

“In the forest industry corporateresponsibility is at the heart ofcompany strategy. Some ICTcompanies have been able to adoptinnovative business approaches, suchas Nokia’s Village Phone program.

In the energy sector we have seena few innovations, but the requiredinvestments are high and will probablyneed an incentive programme fromthe government before real progressis seen. Social innovations have notyet taken off, but there is big potential.”





Spotlight

FranceAccording 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 isby choice that almost half of these companies issue the information in a

separate report. It is in these reports that companies disclose their policyon corporate responsibility, the systems they have in place to implementit, as well as performance indicators for achieving their goals.



Oil & gas (5) 100%



Automotive (8) 75%

Utilities (8) 75%

Other Services (11) 73%







Transport (4) 25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe percentage of French N100companies that issued a corporateresponsibility report doubled to 83percent in 2008. The percentage ofcompanies issuing a corporateresponsibility report separate from anannual report (47 percent) was similar

in 2008 to what it was in 2005. Somecompanies combine information abouttheir social and environmentalperformance with financial informationin a single report, as a way to illustratethat corporate responsibility is

becoming more fully integrated intooperations. The level of detail disclosedin stand-alone reports is usually similarto the information provided in reportsthat are fully integrated. The integratedreports, however, rarely discloseinformation on commitments to

performance.

Companies from all sectors issuecorporate responsibility reports.Reporting is especially common in theoil and gas, metals and engineering,

and chemicals and synthetics sectors,largely because of the pressure andhigh expectations of stakeholders andanalysts. Two-thirds of companies fromnon-industrial sectors, such as finance,insurance, and securities, disclose onsocial and environmental performance.

However, only 25 percent of companiesfrom the transportation sector issuereports, even though their activitiescontribute to climate change and theyshare a similar obligation to corporateresponsibility as other sectors.






No integration (separate CR report only) 37%Partial (CR report & CR section in the Annual Report) 7%Limited(CR section in the Annual Report only) 24%Combined (CR reporting combined with Annual Report)13%Fully integrated(CR reporting fully integrated in the Annual Report) 2%No CR reporting 17%






Highlight - France83 report


100% of chemicals, oil & gas,and metals & engineeringcompanies report

79 have a corporate responsibilitystrategy in place

InterviewClaude Nahon - Director, Environment and Sustainability, EDF Group

What does corporate responsibilitymean in your business?Corporate responsibility and sustainabledevelopment concern every aspect ofour business. At EDF we deal with theissue on two levels: in terms of ourproducts and in terms of our industry.Electricity is an essential resource forindividual development, so our aim atEDF is to make electricity available at alow cost. From our perspective, it is aquestion of access to energy worldwide.

In terms of our industry, it means dealingwith our environmental impact on boththe global scale (such as climate change)and locally (such as the production ofwaste, water consumption, and localenvironmental concerns).

What do you consider to be the keydevelopments influencing thedevelopment of corporateresponsibility and corporateresponsibility reporting in the lastfew years?The key external factors that haveinfluenced the development of corporate

responsibility are crises such as the 2003heat wave in Europe, as well as greaterawareness of the carbon market andsustainable development. Over the lasttwo years we have also witnessed ageneral awakening to climate changeissues.

How is corporate responsibilityreporting integrated into yourcompany’s management andaccountability processes?

We have taken measures internallyto make sustainable development anintegral part of the group’s strategicmanagement systems. These includesetting up sustainable developmenttrophies and having our non-financialreporting verified externally by ourauditors. Sustainable developmentstrategy is also an integral part of ourISO 14001 approach and managementtraining program.

Today, 55 percent of French N100companies include third partycomments in their reports. Thesecomments may be assurancestatements, third party comments,or both. Increasingly, this type ofopinion is expected by those in the

French market, particularly analystsand stakeholders.

CarrefourThis year Group Carrefour issued achallenges booklet that sets out fiveissues they consider to be key Groupchallenges: a balanced diet,responsible consumption, the socialconditions of manufacturing, being aresponsible employer, and climate

change. This guide sets out Carrefour’spolicy as well as practical solutions formeeting these five key economic,social, and environmental challenges.

The guide allows stakeholders tounderstand Group priorities easily andunambiguously. It also allows theGroup to explain its main action plansin succinct detail.





Spotlight

HungaryThe growth of corporate responsibility in Hungary has accelerated significantlysince the accession to the European Union in 2004. Companies withdifferent corporate cultures, approaches, and drivers for reporting aremore and more active in the field of corporate responsibility, but there isstill room for improvement with local stakeholder engagement, integration,

and transparency. Media, government, and civil society are generallyspeaking considered to be the key promoters of the development ofcorporate responsibility, both as a business ethic and a reporting practice.




Transport (4) 50%

Oil & gas (2) 50%

Automotive (7) 43%



Utilities (11) 27%







0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisAwareness in Hungary of corporateresponsibility is relatively high, drivenby multinational companies applyinggroup level values, policies, andprocedures, as well as corporateresponsibility-related events, mediacoverage, and government initiatives.

Sectors in the focus of the publicinterest are more likely to be involvedin reporting (Figure I). The financialsector has made the most significant

progress in reporting recently, withmore than 50 percent of companiesissuing reports.

Almost 60 percent of the surveyedcompanies are involved insustainability reporting either at agroup or local level. Of those thatreport locally, 25 companies preparea separate report, and nine issuean annual report with a corporateresponsibility section (Figure II).

Disclosed objectives, key performanceindicators, impacts, and results achievedprove that reporting goes beyond amere public relation exercise in mostcases. However, the majority ofreporting companies have not addressedthe financial impact of sustainability.

Forty-one percent of companies applyGRI’s G3 as a reporting standard andguideline, with the most widely-usedapplication level being B/B+.






No integration (separate CR report only) 25%Limited(CR section in the Annual Report only) 9%Combined (CR reporting combined with Annual Report)1%No CR reporting 66%






Highlight - Hungary44 report ( 25 stand-alone)


Of the 19 trade & retail companies,5% report


InterviewChristopher Mattheisen - CEO, Magyar Telekom

What are the key factors that haveinfluenced the development ofcorporate responsibility reportingin the last few years?The Global Reporting Initiative (GRI)is one of the main driving forces insustainability reporting. Since 2002 wehave prepared our sustainability reportsbased on the GRI Guidelines (once“In Accordance With”). Hot topics havechanged over time, but right now thereis a strong focus on climate changeand supply chain.

What are the main business driversto report on corporate responsibility?There are several reasons to report oneconomic, social, and environmentalperformance. First, you can only developwhat you measure. Another reasonis to promote accountability and tomaintain trust and credibility amongall stakeholders. Third party verificationis also a tool for credibility.

How do you address conflictsbetween business strategy andcorporate responsibility?Magyar Telekom’s business andsustainability strategies are harmonized.We create long-term shareholder valueby embracing opportunities to provideservices that can contribute tosustainable development.

Does your company address climatechange risks and/or opportunities?To avoid the risks arising from climatechange, we regularly check and measureweather conditions at our base stations,for example. ICT holds real promise forreducing CO2 emissions for ourcompany as it can help reduce or replacetravel emissions, the need for realestate, the use of materials, and so on.Audio and video conferencing, onlinebilling, telecommuting, intelligentbuildings, e-learning, and remote healthcare are other examples. Climate changerisks at the global level also depend oninformation and the speed of accessingthis information, where again ICT playsan important role.

The importance of an externalindependent assurance provider hasnot yet been widely recognized. Only15 percent of reporters included athird party opinion or a formalassurance statement (Figure III).However, assurance could assist in

enhancing transparency and theaccuracy of data presented in non-financial reports.

Areas for possible development1. Sustainable strategies: corporateresponsibility strategy, objectives, andkey performance indicators that are inline with business strategy.

2. Stakeholder engagement: structuredstakeholder dialogue system for definingkey stakeholders, roles (expectation

gathering, strategy development, reportpreparation), communication channels,forms, and frequency.

3. Report locally: companies reportingon group level are also to discloseinformation about its local impacts.

4. Report content: prepare morefocused CR reports presentingobjectives set, tangible impacts,results achieved, dilemmas,development areas, new objectivesfor the next reporting period accordingto the stakeholder expectations.

5. Financial impact assessment: analyzeand report on risks and opportunitiesof sustainability with financial impact.

6. Assurance: include third party opinionand/or professional assurance statementenhancing credibility and accuracy.





Spotlight

ItalyDuring the last few years, Italian companies have paid increased attentionto corporate responsibility issues. Italian companies have started to makethe link between corporate responsibility and risk management, and todevelop 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 tofull integration of corporate responsibility in business strategy is still long,and tools for incorporating it in business processes need improving.





Oil & gas (10) 90%

Automotive (8) 88%

Utilities (11) 82%







Transport (3) 33%



0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe large number of Italian companiesreporting on social and environmentalperformance is proof of an increasedinterest in the business opportunitiesoffered by corporate responsibility.The number of companies reportingon these issues increased to 65 percent.

Of the companies that reported, 59percent published a separate corporateresponsibility report (up from 31 percentin 2005), and 33 disclosed informationon corporate responsibility issues in

their annual report - a positive trendover the last three years. Only threecompanies fully combined theircorporate responsibility reports andannual reports.

Of 59 corporate responsibility reportsissued, 12 are published by finance,insurance, and securities companies,nine each by oil and gas companiesand by utilities companies, and sevenby automotive companies.

Among these sectors the most activeis the oil and gas sector, comprising 90percent of companies reporting oncorporate responsibility issues.

Forty of 65 companies reporting oncorporate responsibility issues askedfor a third party statement on theirdisclosures. Thirty-six companiessought formal assurance of theirreports, mainly (56 percent) providedby major accountancy firms.






No integration (separate CR report only) 25%Partial (CR report & CR section in the Annual Report)31%

Limited(CR section in the Annual Report only) 6%Combined (CR reporting combined with Annual Report)3%No CR reporting 35%






Highlight - Italy65 report


100% of electronics, forestry,and chemicals companies report

42 have a corporateresponsibility strategy

45 disclose their carbon footprint

InterviewMario Boella - Chairman of ASSIREVI, Association of Italian Audit Firms

When should a company getits report assured?Reporting companies in Italy are notlikely to seek report assurance, butassurance can add value to a report.We have to remember that trust andtransparency are the main pillars ofa corporate responsibility report andthat the primary aim of the assurancestatement is to distinguish the reportfrom all other kinds of communicationon sustainabili ty. However, when it

comes to assurance we have to takeinto account the size of a company.Large companies certainly get themost value from assurance becausethey have different types of stakeholders,such as socially responsible investors.

What is ASSIREVI’s role inpromoting the assurance ofcorporate responsibility reports?Our association has been working forseveral years to promote reporting onnon-financial information, and in particularcorporate responsibility reports.

We will be publishing a researchdocument that provides guidelineson assuring corporate responsibilityreports, related to the internationalstandard, “Assurance EngagementsOther Than Audits or Reviews ofHistorical Financial Information”(ISAE 3000).

Is ISAE 3000 the main assurancestandard for corporate responsibilityreports in Italy?

ISAE 3000 is the most diffusedaccountancy standard for non-financialinformation in Italy. This is becauseit is a generic standard that establishesbasic procedures and essentialprocedures for reporting accountants.In its last revision, AccountAbility’sstandards, the AA1000, also becamemore compatible with ISAE 3000.

Third party comments, which are notformal assurance statements, arerather unusual in Italy. In fact, onlyfour reports contain this kind ofstatement and three of them areItalian branches of foreign companies.

Climate ChangeThe corporate responsibility issue thatis getting the most attention from majorItalian companies is climate change.Italian companies take climate changeinto consideration when defining theirsustainability policy and, above all, theytry hard to set up tools to monitor their

carbon footprint. Nevertheless, Italiancompanies are rarely aware of thebusiness risks and opportunities relatedto climate change.

Many of them report on their carbonfootprint and measures adoptedto reduce emissions, but onlya few companies implement aneffective environmental strategyon climate change.





Spotlight

JapanCompanies in Japan are keenly aware of corporate responsibility, with99 percent of its N100 companies reporting on corporate responsibilityissues in either stand-alone reports or in annual reports. Regardless ofsector, corporate responsibility reporting is an expected practice of anynational or multinational company in Japan. However, external assurance

has not yet taken hold in a significant way.




Transport (7) 100%

Automotive (14) 100%


Oil & gas (6) 100%

Utilities (4) 100%








0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisFigure I shows corporate responsibilityreporting by sector. Practically allcompanies whose business activitieshave a rather direct impact on theenvironment, such as the manufacturing,transport, and energy and utilitiessectors, publish reports - nearly

100 percent. Companies whosebusiness activities tend to have a moreindirect effect on the environment,such as trade and retail, finance,insurance and securities,

communications and media, andconstruction and building materials,issue fewer reports, although the rateis still high.

Figure II shows the integration levelof corporate responsibility reporting.Seventy-four percent of the N100companies publish separate reportswhile also dedicating a section of theirannual report to corporate responsibilitymatters. Ninety-five percent of the

N100 companies include somecorporate responsibility informationin their annual report. The resultindicates that corporate responsibilityis regarded as a key issue forshareholders, investors, and otherstakeholders.

Figure III gives insight into the role ofthird party comments. More than halfof the N100 companies receive thirdparty opinion whereas only 22 of the












Highlight - Japan99 report


80 report on business opportunitiesor the value of corporateresponsibility

Innovation and employee motivationare top reporting drivers

Case studySumitomo Chemical Co., Ltd

The corporate responsibility activitiesof Sumitomo Chemical Co., Ltd. arestrongly linked to the various initiativesof the International Council of ChemicalAssociations (ICCA). ICCA’s commitmentto health, safety, and environmentalperformance is put into action via itsResponsible Care, High ProductionVolume (HPV), Long-Range Research(LRI), and Global Product Strategy(GPS) initiatives.

The CEO of Sumitomo Chemical Co,Hiromasa Yonekura, serves as thechairperson of the global warming andenergy policy working group at ICCA.Because of this involvement,Sumitomo Chemical sets strategiesaiming to increase energy efficiencythrough the use of benchmarks.Sumitomo Chemical is also working onintroducing climate-friendly chemicalproducts to other markets such asautomotive, electricity, and housing,by applying the LCA method andcooperating with other chemicalcompanies.

Sumitomo Chemical has also introducedOlyset ® net, a long-lasting insecticidalnet that makes a significant contributionto the global fight against malaria.In recognition of this, TIME Magazinenamed the Olyset ® mosquito net oneof “The Most Amazing Inventions of2004.” To realize its ambition tomanufacture Olyset ® net locally,Sumitomo Chemical transferred itstechnology to a Tanzanian company,whose total production reaches

10 million units per year. This transferhas created more than 3,000 jobs inTanzania, and the profits generatedfrom the sale of Olyset ® net arereturned to the country in the form ofschool construction and other projects.

corporate responsibility reportsreceived formal assurance. It seemsthat companies often deem third partycomments and assurance to besomewhat interchangeable, as onlyfour companies seek both opinionand assurance.

Kyoto Protocol commitment In 1997, Japan ratified the KyotoProtocol and in doing so committedto reduce greenhouse gas (GHG)emissions by an average of six percentagainst 1990 levels over a five-yearperiod (2008-2012). To achieve thistarget, Nippon Keidanren of the Japan

Business Federation set a “KeidanrenVoluntary Action Plan on theEnvironment” in 1997.

Thirty-four industries covering morethan 80 percent of all CO 2 emissionsfrom the industrial and energy sectorshave participated. The plan determinesnumerical targets for CO 2 emissionsreduction set by each industry.





Spotlight

MexicoWith almost two million square kilometers of territory and 110 millionpeople, Mexico is the fifth largest country in the Americas and the12th largest economy in the world, with strong commercial relations withthe US. Corporate responsibility practices in Mexico are evolving fromphilanthropic efforts to standards-based reporting with corporate

governance practices for stronger transparency and accountabilityto both shareholders and the wider community.


Oil & gas (1) 100%Mining (2) 50%


Food & beverage (9) 44%Chemicals & synthetics (5) 20%

Finance, insurance & securities (13) 15%Electronics & computers (8) 13%

Metals, engineering & other manufacturing (8) 13%Trade & retail (22) 9%Other services (1) 0%

Communications & media (7) 0%Transport (3) 0%

Automotive (7) 0%Pharmaceuticals (1) 0%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisCorporate responsibility reporting hasmade progress in the last few yearswith more companies developing acorporate responsibility performancestrategy, especially in those industrysectors with higher impact. In reporting,these sectors have found a useful

vehicle for both addressing stakeholders’concerns and managing exposure torisk. Reporting is still not a widespreadpractice across other industry sectors

however, such as forestry, pulp andpaper, automotive, and utilities.

Sustainable development has earneda strong position on the governmentagenda, with a section devoted to it inthe 2007–2012 National DevelopmentPlan. Newcomers to reporting as wellas other companies have followed theguidelines proposed by the CEMEFI(Mexican Philanthropy Center), which

has gathered information on 273companies as of 2008. Awarenessof corporate responsibility is growing,and more sectors will join the effortin years to come.

The number of companies that reporton corporate responsibility is only27 percent of the total surveypopulation. This indicates that thereis a huge opportunity for companies









Only assurance 3%Both assurance & 3rd party comments 2%



Highlight - Mexico27 report


Of the 22 trade & retail companies,nine percent report

Innovation and employee motivationare top reporting drivers

10 report their carbon footprint

Case studyPetróleos Mexicanos (PEMEX)

PEMEX is a government-controlledbody that was created as a decentralizedgovernment agency of the FederalPublic Administration. Its core purposeis to drive the nation’s central andstrategic development activitiesin the state’s petroleum industry.PEMEX holds the number 11 positionas a crude oil producer and is one ofthe three main suppliers of crude oilfor the US market. In 2007, total salesamounted to approximately US$104.5

billion. Active personnel at PEMEXat the end of 2007 rose to 154,802workers.

PEMEX has been publishing corporateresponsibility reports since 1999.

The 2007 report complies with theindicators set forth in the GlobalReporting Initiative (GRI) Guidelinesand was the first Mexican GRIApplication Level A+ report -the highest level. Moreover, the reportmeets the guidelines of the UnitedNations Global Compact forcommunication in progress. The reportaddressed the needs of a complexsector, including the national oil andgas Industry, a vast list of stakeholders,

and a citizen participation groupcomprised of highly renownedspecialists to address citizens’concerns.

to identify the benefits of corporateresponsibility and align them to theirbusiness strategy. Ten percent of theMexican N100 dedicate a separatesection to corporate responsibilityin their annual report, and sevenpercent issue only a separate report.

Regarding third party comments andexternal assurance, only five companiesused external sources to comment orverify the contents of their reports,therefore relying on the internalknowledge of the company as theonly source for assurance. This is due

to the low penetration of internationalstandards in the reports and the useof informal practices developed in-house.

These tend to be refined asstakeholders demand more objectivityand transparency in how the reportwas produced.





Spotlight

PortugalThe results show a significant increase in reporting from the PortugueseN100 companies compared to 2006, when a similar study was performedby KPMG in Portugal. At that time, 10 percent of N100 issued either asustainability report or a chapter in the annual report, a much lowernumber than today. This increase in reporting is a result of the growing

awareness of, and commitment, to sustainability issues amongPortuguese companies.




Mining (1) 100%

Oil & gas (6) 83%


Forestry, pulp & paper 5) 80%

Utilities (4) 75%



Automotive (12) 42%


Transport (5) 40%




0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisSince 2005 there has been a significantincrease in reporting among N100companies operating in Portugal.The leading sectors include companieswith high environmental impact, withmore than 50 percent of companiesreporting information about performance

on sustainability issues. Anotherremarkable change is that the finance,insurance, and securities sector havemore than 60 percent of companiesreporting on sustainability.

Half of the 61 N100 companiesthat report do not only issue a separatecorporate responsibility report.Integrating information into annualreports is often a preferred option dueto a lack of resources for reporting andthe perception among companies that

the effort is not worth the cost ofissuing a separate report. Nevertheless,reporting is still considered relevant tothese companies.

Few corporate responsibility reports inPortugal contain third party comments.This is consistent with the lowpercentage of reporting companiesthat have their report externallyassured. Although report assurancein Portugal is increasing, companies

need to understand the benefits of thisprocess and kind of analysis, especiallywith regard to materiality.












Highlight - Portugal61 report


100% of metals & engineering,mining, and electronicscompanies report

Innovation and ethical considerationsare top reporting drivers


InterviewVasco de Mello - Chairman, BCSD Portugal

What do you consider to be the keydevelopments that have influencedcorporate responsibility and corporateresponsibility reporting in the lastfour years?It has been influenced, by the increasingawareness of sustainability issues suchas energy and climate or ecosystems,among all stakeholders. It has also beeninfluenced by the momentum thatholistic approaches to risk managementhave gained in capital markets.

In your view, what are the mainbusiness drivers for reportingon corporate responsibility?Two fundamental drivers: 1) Corporatemanagement systems and performanceimprovement; and 2) reputation assetmanagement and stakeholderinvolvement.

What are the main driversfor assurance on corporateresponsibility reports?Third party assurance is vital to promotemateriality and maybe a competitive

advantage as far as reputation assetsare concerned. It may also add value

to the organization throughbenchmarking and improving/adoptingbetter and more efficient practices.

In your view, how is risk managementlinked to corporate responsibility?Risk management and corporateresponsibility are closely intertwined.The growing complexity of businessrequires new tools, ever moreinnovative and versatile. The integratedapproach to business provided bycorporate responsibility is key to better

risk management and adjustment,adding new issues and indicatorsto classic fundamentals.

To what extent does corporateresponsibility influence innovationin products/services development?Corporate responsibility’s influenceon innovation (products/services)is a combination of factors that varystrongly from business to business.In most cases, it is based on costefficiency, new consumer expectationsoriented for sustainability values, and

new business opportunities related tonew green technologies and solutions.

The importance of the third sectorThe social economy sector is nowreceiving greater recognition at theEuropean Union Member State level,particularly by financial institutions,because it represents importantsources of entrepreneurship and jobs.In Portugal this sector represents

about 4.2 percent of GDP andemploys, on average, 250,000 people.

Portuguese financial institutions, likeBanco Espírito Santo, are committed tocreating value for the wide charity andcommunity network by providingspecific products and services tailoredto their needs, as well as financialtraining for the managers of these

institutions.





Spotlight

RomaniaThis is the first year since the inception of KPMG’s International Survey ofCorporate Responsibility that Romanian companies have been surveyed.One of the most significant findings of the survey was that there was adifference in commitment to corporate responsibility reporting betweenmultinational companies operating in Romania, which are more active in

reporting, and Romanian-owned companies, which have less interest. Thisresult could indicate that Romanian companies are less mature than globalcompanies when it comes to disclosing non-financial information voluntarily.



Utilities (6) 50%







Oil & gas (13) 8%


Transport (2) 0%

Automotive (8) 0%



0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe top sectors in sustainabilityreporting are electronics andcomputers as well as utilities, neitherof which are very well represented inRomania’s N100 (only 8 companies).Food and beverage, as well as metals,engineering and other manufacturing,

rank second in reporting, but manyof the companies in these sectorsare multinationals. Sectors very wellrepresented in the N100 are oil and gasand trade and retail (32 companies),

but neither of these sectors producemany corporate responsibility reports(8 percent and 16 percent, respectively).

Of the 24 percent of N100 companiesthat report on corporate responsibility,about two-thirds issued only a separatecorporate responsibility report. Sixpercent of Romanian companiesinclude some information onsustainability in their annual reportand in a separate corporate

responsibility report. Seventy-sixpercent of N100 companies do notreport on corporate responsibilit y at all.

Of the 24 companies that report oncorporate responsibility, only onecompany sought assurance of itsreport and just one company includedcomments from a third party in itsreport. This extremely low level ofassurance - and low level of corporate






No integration (separate CR report only) 17%Partial (CR report & CR section in the Annual Report) 6%Limited(CR section in the Annual Report only) 1%No CR reporting 76%






Highlight - Romania24 report


Reporting leaders includeelectronics and utilities sectors

Market position and economicconsiderations are key reportingdrivers

28 have a corporate responsibilitystrategy

Case studyHolcim (Romania)

Holcim Romania has committed itself tosustainable development, and integratedthe principles of value-creation,sustainable environmental performance,and corporate social responsibility into itsbusiness strategy.

Working in partnership with itsstakeholders, Holcim (Romania) isworking to improve the quality of lifeof its workforce, their families, and thecommunities within which the

company operates. The company’spolicy and global standards oncorporate responsibility are applied toits employment practices,occupational health and safety,community involvement, andcustomer and supplier relations.

Transparent communication, includingthe annual Romanian SustainableDevelopment Report (since 2005) helpsto build the trust and respect of allstakeholders. High business ethics andpersonal integrity also support thecredibility and reputation of the company.

Increased awareness among the publicand decision-makers about globalwarming and other environmentalconcerns has contributed to a preferencefor products and services that help toalleviate climate change. Apart fromproducing cement in modern, energy-efficient plants, Holcim Romania has alsostarted to use alternative fuels derivedfrom waste. New products with asmaller carbon footprint (Tenco, Structo,road binders) reflect the efforts of the

company to produce more cement forthe growing Romanian market in a moresustainable way (less CO2 emissions pertonne of cementitious material).

In recognition of the company’s effortsaround the world, in 2008 the HolcimGroup was named “Leader of theIndustry” in the Dow JonesSustainability Index and, for the fourthyear in a row, acknowledged as thecompany with the best sustainabilityperformance in the building materialsindustry.

responsibility reporting in general reflects a lack of awareness andinterest among stakeholders inRomania on sustainability andcorporate responsibility. Thesenumbers also suggest that companiesdo not yet appreciate the benefits of

reporting and assurance on businessdevelopment.

Romania’s Approach to Climate Change Romania has been a signatory of theUNFCCC since 1992 and ratified it in1994. Romania was also among thefirst countries to ratify the KyotoProtocol in 2001, and committed itselfto reduce the level of greenhouse gas(GHG) emissions to eight percent of

1989 levels. Even though Romania wasalready 34 percent below the Kyototarget (mostly due to low economicactivity), the government neverthelessacted proactively by putting into place

a national strategy and action planon climate change. The businesscommunity’s awareness and readinessto manage climate change risk,however, is very limited and thesectors that are not directly affectedby the European Union Emission

Trading Scheme (EU ETS) directivedo not appear to be prepared.









Only assurance 15%Both assurance & 3rd party comments 1%



Highlight - South Africa86 report ( 17 stand-alone)


Reporting leaders include utilities,forestry, mining, andcommunications sectors


Case studyMateriality vs. Full Disclosure

Top South African companies tend touse the Global Reporting Initiative (GRI)Guidelines. In most cases they reporton a large set of GRI indicators in theirprinted report but provide very littleinformation on sustainability strategy,context, and material issues. However,due in part to the influence of GRI’sG3 principles-based framework, somecompanies are starting to approachreporting in a more focused way.The focus of the reports is no longer

strictly on performance measures,but on how sustainability presentstheir company with challenges andopportunities.

A sustainability example of thisapproach is the report released bySasol in 2007. In addition to detail ontheir strategy, management systems,and stakeholder engagement, Sasol’ssustainability report focuses on theirfour material sustainability risks:promoting improved safety

performance, addressing the challengeof climate change, responding tothe challenge of skills development,and encouraging black economicempowerment in their South Africanoperations.

According to Sasol South Africanstakeholders have responded wellto this approach. Not only is it morecost-effective and environmentallysensitive (fewer pages), but the

report communicates key messagesto stakeholders, who do not needto search through huge documentsfor information. Stakeholders whoare particularly interested can obtainmore detail from the web.

For its report, Sasol was awarded thebest South African SustainabilityReporting Award by the Association ofChartered Certified Accountants (ACCA).

This low level of assurance reflectstwo influences: low demand forassurance from stakeholders, and alack of awareness among companiesabout the benefits of assurance, suchas improvements in businessmanagement.

Climate Change in South AfricaA key driver for sustainability reportingis a heightened awareness of climatechange, brought on by electricityshortages in the country. As a resultof the insufficient generation capacityof the national energy supplier, Eskom,South Africa is coming to realize that

reducing power consumption is notonly necessary to combat climatechange but is an economic imperative.

Companies are therefore includingclimate change as a key risk in theirreporting and management structures,demonstrated by a 74 percent responserate for South Africa’s first CarbonDisclosure Project Report (2007).





Spotlight

South KoreaThere is a growing awareness about the importance of corporateresponsibility reporting in South Korean businesses. Corporate responsibilityreporting is expected to spread to public enterprises, medium-sizedcorporations and their affiliates, as well as global businesses. In thisrespect, corporate responsibility reporting is establishing itself as

a “must,” not an “option,” in corporate management.



Utilities (6) 83%

Oil & gas (4) 75%


Transport (6) 50%




Automotive (7) 29%

Trade & retail (11) 27%22%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe analysis of corporate responsibilityreporting by business sector (Figure I)shows that reporting was mostprevalent in electronics and computers,utilities, and oil and gas sectors. This isperhaps not surprising due to the linkbetween the nature of their respective

industries and their environmentalfootprint, as well as the emergingopportunities to provide servicesrelated to corporate responsibility,such as climate change.

It is noteworthy that the importance ofcorporate responsibility reporting hasexpanded to various industries in 2008compared to 2005 - the number ofcompanies publishing reportsskyrocketed from 11 in 2005 to 42 in2008 (Figure II). This growth is due to

the fact that many global customers aswell as various civil organizations aredemanding it and putting pressure oncorporations. It is expected that CEOs

of many corporations will come toperceive the importance of reportingon environmental and social performanceand begin reporting in order to keep upwith this global trend.

In total, 30 of the companies reportingon corporate responsibility had theirreports assured by a third party(Figure III). Out of these 30 companies,a very high number (28) opted for






No integration (separate CR report only) 42%Limited(CR section in the Annual Report only) 12%No CR reporting 46%






Highlight - South Korea54 report ( 39 stand-alone)


Reporting leaders includeelectronics, utilities, andoil & gas sectors


InterviewYoung-Chan Nam - Executive Vice President, Head of Management

Support Division, SK TelecomWhat does corporate responsibilitymean in your business?As a company serving more than halfthe Korean population, it is crucial forSK Telecom to ensure the well-being ofboth current and potential customers.The pursuit of customer value is thekey to corporate responsibility atSK Telecom.

To what extent does CR influenceinnovation in your products orservices?

Sustainability concerns are effectivelyreflected in the product and servicedevelopment process. SK Telecomencourages customer participation atevery step, from planning todistribution, and applies a human-centered innovation approach to deliverservices that customers truly need. Wealso partner with external institutionsto prepare for future trends such assustainability.

How is CR integrated into yourcompany’s management andaccountability processes?A corporate citizenship committeewas recently established, with threeoutside directors and two internaldirectors to respond to demands forgreater accountability and sustainabilityin a strategic manner. To embedsustainability in day-to-day operations,Ethics Management Agents areappointed in 55 departmentsthroughout the company.

Which measures does your companyhave in place to reduce thecompany’s carbon footprint?Every year all offices set a goal forreducing energy use and awards aregiven to the best performers. We areintroducing natural air-conditioningsystems to reduce electricityconsumption at base stations. Lookingahead, SK Telecom aims to contributeto the transition toward a Low-CarbonEconomy (LCE) not only by reducingour own footprints but by providingsolutions for our customers to reducetheir footprints.

external assurance, with the othertwo choosing a different form of thirdparty comment. Many South Koreancorporations tend to regard third partyverification as important for ensuringthe objectivity of their reports andenhancing their credibility.

POSCOPOSCO is providing a vocationaltraining program for married womenfor the first time in Korea. POSCOopened the program to those whodemonstrate strong potential, in orderto help them find work and promotetheir participation in society. Women

who complete the program areconverted to full-time employee statusand deployed to positions accordingto their aptitude and ability.

They are entitled to enjoy the sameworking conditions as their malecounterparts. Moreover, POSCO plansto expand female dressing rooms andother convenience facilities to providea better working environment forfemale employees.





Spotlight

SpainCorporate responsibility reporting has come a long way in Spain in the lastfew years. However, in comparison with countries where reporting ismore well-established, there is room for improvement. Spanish reportingcompanies 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 companiesin Spain do not report on corporate responsibility at all.



Utilities (5) 100%

Finance, insurance & securities (19) 84%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%


AnalysisIn the survey Spain’s rate of reportingon corporate responsibility is aboveaverage in all sectors except forestry,pulp, and paper. Sectors that contributesignificantly to GDP, such asconstruction, finance, and insurance andsecurities, have some of the highest

rates of reporting, with 80 percent ormore of companies reporting oncorporate responsibility. However, justover half of automotive companies,

significant in number and important forthe local economy, publish corporateresponsibility reports.

Integration of corporate responsibilityinformation into annual reports is farfrom the norm in Spain. One-third of

the companies surveyed do not reporton corporate responsibility at all, whileroughly another one-third publish onlya corporate responsibility report,separate from their annual report.

This leaves just under one-third of Spain’s 100 largest companiesintegrating corporate reporting into their annual reports. This is, in general, below average among the surveyed countries.

Spain ranks high in assurance ofcorporate responsibility reports,placing in the top end in relation to thecountries surveyed. However, a littlemore than half of the N100 companies












Highlight - Spain67 report


100% of utilities and electronicscompanies report


47 report financial value or businessopportunities associated withcorporate responsibility

Case studyACCIONA

ACCIONA’s mission is to be a leaderin the creation, development, andmanagement of infrastructure, energy,and water, and to contribute activelyto social well-being, sustainabledevelopment, and creating value for itsstakeholder groups. The companyoperates in 30 countries with over35,000 employees, and had earningsof 7,953 M € in 2007. ACCIONA’scommitment to sustainability has takenthe company to a leadership position

in the Dow Jones Sustainability Indexheavy construction sector, for thesecond straight year.

Stakeholder engagementDuring 2007, ACCIONA undertook anextensive exercise to identify its mainstakeholders in its key markets.A wide-ranging consultation wasdeveloped aimed at communicatingthe company’s commitments toopinion leaders and understandingtheir expectations. Country-specificanalyses on environmental and socialissues, together with the consultation,

were used to develop market-specificaction plans.

Committee of Independent ExpertsFor the second year, the company hasengaged with a Committee ofIndependent Experts whose role isto ask questions on issues that theCommittee believes to be relevant forACCIONA’s stakeholders. This panelthen issues an opinion on whether thecompany’s report contains sufficient

and appropriate information aboutthese issues. This initiative, along withformal assurance of its report, is key tocreating and maintaining the trust ofstakeholders.

Carbon footprintThe company is convinced of the needfor a Low-Carbon Economy (LCE) andis committed to reducing its carbonfootprint. As part of this effort,ACCIONA reports in detail aboutits climate change strategies andperformance, including a weekly reporton its website on avoided emissions.

lack any kind of third party commentsin their reports. Spain’s N100companies show preference for usingformal third party assurance only(36 percent), distantly followed bycompanies that combine assurancewith other third party comments

(eight percent) and companies thatopt for other third party commentsonly (five percent).

TrustRecently, KPMG GSS Spain andFundación Alternativas, a local thinktank, conducted an opinion surveyamong corporate responsibilityspecialists. The survey’s aim was toanalyze the level of trust in Spanishcompanies, as well as understand how

corporate responsibility practices areperceived by an informed segment ofthe public. Over 80 percent of thosesurveyed believe that in the last fewyears corporate responsibility

commitments have had a positiveeffect on how Spanish companies aregoverned and managed, and on theirawareness of social, ethical, andenvironmental issues. Maybe someoneis reading all those reports after all.





Spotlight

SwedenSince the last KPMG survey in 2005, the number of Swedish companiesin the N70 that publish a sustainability report has more than doubled. Thismight be a result of the increasing interest from stakeholders, due to thefocus on climate issues over the last two years. Today companies aremore 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%






Oil & gas (4) 50%





Transport (3) 33%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisIt is not surprising to see thatcompanies in resource-intensivesectors are well-represented whenwe look at the number of corporateresponsibility reports by sector. A moreinteresting result is that in trade andretail, 71 percent of the companies

have a corporate responsibility report.This could be due to an increasingfocus on supply chain management,which is a key issue to companiesin this sector with suppliers indeveloping countries.

A total of 84 percent of the SwedishN70 companies have some form ofcorporate responsibility reporting andamong these, as many as 7 are state-owned. This means that the state-owned companies are in the forefrontwhen it comes to reporting on social

and environmental performance. Thiscould be a result of the active role theSwedish government plays when itcomes to putting demands on state-owned companies about sustainabilityperformance and reporting.

Of the companies reporting oncorporate responsibility, 14 have anassurance statement. The assuranceproviders are dominated by the Big Four,with KPMG in the lead. DNV providesassurance on one sustainability report.Seven percent of the companies

included comments from other thirdparties in their sustainability report, suchas stakeholder panels or ethical analysts,who commented on sustainabilityperformance and/or the sustainabilityreport itself.






No integration (separate CR report only) 25%Partial (CR report & CR section in the Annual Report)16%Limited(CR section in the Annual Report only) 24%Combined (CR reporting combined with Annual Report)19%No CR reporting 16%






Highlight - Sweden59 report ( 26 stand-alone)


Reporting leaders include mining,utilities, and automotive sectors

54 have a corporate responsibilitystrategy in place


Case studySupply Chain and IKEA

IKEA discloses a lot of detailedinformation with regard to supply chainmanagement. As IKEA has suppliers incountries where the risk of labor rightsabuses are perceived as high, they areobligated to work on these issues in asystematic way, which can be followedup on both internally and externally.IKEA’s 2007 Social & EnvironmentalResponsibility Report is noteworthybecause of its transparency on itssupply chain. For example, IKEA

reported on the top five purchasingcountries as well as how many IKEAsuppliers are IWAY approved (IKEAWay on Purchasing Home FurnishingProducts). China is number one in thetop five purchasing countries at 22percent, yet at the same time has thelowest number of IWAY approvedsuppliers (four percent). IKEA seemsaware that transparency also calls forcompleteness, and has disclosedwell-developed information about thechallenges in Asia in general, andin China specifically.

Arvid Grindheim, Head of Compliance,IKEA Group, Social & EnvironmentalAffairs, confirms that transparency insustainability reporting is deliberate.IKEA has worked with IWAY in astructured way since 2000 and hasalways communicated the status andfollow-up internally. Since 2004 IKEAhas also communicated the status ofIWAY in its corporate responsibility report.

“We face challenges with the suppliers

in China, and IKEA is only one amongmany companies that work hard withthe implementation of the Code ofConduct. We want to be open about thesituation and also explain what type ofchallenges we face in China. There is noreason why we should hide these figuresfrom anyone, ” says Arvid Grindheim.

Sustainability reporting guidelinesIn November 2007 the Swedishgovernment was the first governmentin the world to publish mandatoryguidelines for sustainability reportingfor all state-owned companies. These“Guidelines for external reporting bystate-owned companies” state that

GRI Guidelines are to be used forsustainability reports. Moreover, theguidelines state that the sustainability

report shall be subject to assurance bya third party. The requirements in theguidelines are amongst the most far-reaching requirements for sustainabilityreporting by a (public) shareholder'.





Spotlight

SwitzerlandBased on this survey, the Swiss N100 companies can be divided into twodistinct groups. The first group represents large multinationals at theforefront of industry best practices, including corporate responsibilityreporting. The second group represents relatively medium-sizedcompanies that are just beginning to formally adopt sustainability and

corporate responsibility reporting. Assurance of corporate responsibilityreports is a relatively new phenomenon in Switzerland and only a smallnumber of companies have implemented this.





Transport (6) 67%





Mining (2) 50%


Utilities (7) 43%



Automotive (3) 0%

Oil & gas (4) 0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe finance, insurance, and securitiessector leads in reporting at 90 percentand may reflect a growing demand inthe market for responsible investmentopportunities (Figure I). Pharmaceuticals,construction and building materials,transport, and chemicals and

synthetics, are other sectors inSwitzerland with above averagecorporate responsibility reportingin comparison to other countries.

Sixty percent of the Swiss N100companies have some form ofcorporate responsibility reporting,predominantly in various combinationswith their annual report (Figure II).Forty percent of the companies do notreport on corporate responsibility at all.

This may be due to the minimalpresence of companies in sectors withtypically high rates of reporting,namely mining, oil and gas, andautomotive; the presence of several

companies that have headquartersin Switzerland but main operations inother countries; and the Swiss culturaltendency for understatement.

Assurance statements in corporateresponsibility reports show an upwardtrend in the last five years. Of particularinterest is that companies in sectorsforming the core of the Swisseconomy in GDP are not only at theforefront of reporting on corporate









Only assurance 15%No third party comments 85%


Highlight - Switzerland60 report, of which 26 are combinedwith annual reporting

15 utilize 3rd party commentsReporting leaders include financialservices and pharmaceutical sectors


InterviewPatrick De Maeseneire - CEO, Barry Callebaut (AG)

What were the triggers for BarryCallebaut to embrace sustainability?Our business is based on cocoa, andalthough we don’t own any cocoafarms, we cannot turn a blind eye tothe social conditions under whichcocoa is grown and produced.Consumers today want assurancethat their food is safe and producedin an ethical and responsible way.

What is your sustainability

focus today?Sustainability for us is about actingresponsibly and living our values. Withoperations in several cocoa-producingcountries, we focus our efforts onthree spheres of activity where webelieve we can achieve the greatestimpact: helping to empower cocoafarmers by supporting industryinitiatives and our own programs;helping to ensure that children arenot harmed in cocoa farming; andempowering employees by providinga safe, healthy, and inspiring workenvironment.

How do you address climate changerisks and opportunities?We focus on five areas with significantimpact on the environment and ourbusiness, including emissions, waterconsumption, energy consumption,waste, and transport. Each site has anenvironment management system thatincludes key performance indicators(KPIs) and action plans for continuousimprovement monitored by a corporateauditing and evaluation system.

What is your future vision for BarryCallebaut?I would like to see Barry Callebautmaking steady progress towardour sustainability goals, in particularto contributing to improving thelivelihoods of cocoa farmers in ourareas of operation in Africa, andto increase awareness of ourshareholders and stakeholders bybetter quantifying these benefits.

responsibility, but also in providingassurance - for example,pharmaceuticals (89 percent) andfinance, insurance and securities(71 percent). Still, only 15 percentof the companies included externalassurance in their reporting (Figure III).

The use of third party comments(suppliers, business partners, etc.)to enhance reporting was not evidentin this survey.

The sustainability debate in SwitzerlandStrong public-private partnership willbe the key for solving the currentglobal socio-environmental crises andSwitzerland provides an excellentinfrastructure to take this global debateto the next level. Switzerland has beenhome to leading institutions and

forums like the World Business Councilfor Sustainable Development, WorldEconomic Forum, International RedCrescent Society, United Nations,and the International Labor

Organization, supported by scientificand academic institutions. The Swissare environmentally conscious andvalue their democratic tradition, whichwill be instrumental in the success andlongevity of the sustainability debate.





Spotlight

The NetherlandsSome of the Netherlands’ major companies started early with reportingon social and environmental impacts - back in the 1990s. This growthslowed down over time, however, and in 2005 Dutch companies werein the mid-range of global corporate responsibility reporting. Over the lastthree 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.



Automotive (2) 100%

Utilities (4) 100%







Oil & gas (11) 55%

Transport (2) 50%




0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisIn some sectors such as utilities and(tele)communications, reporting hasnow become all but obligatory. Thefinancial sector now reports about theirimpacts on society, to which they take abroader view than before since not onlyenvironmental reporting, but also other

impacts they have on society are takeninto consideration. However, sectorsthat one would expect to report onsupply chain issues, such as the tradeand retail sector, are only marginallyreporting - a surprising result.

In terms of integration, an encouraging50 percent of companies now includecorporate responsibility reporting intheir annual report. However, we couldlook at this from a different angle:another half does not integratecorporate responsibility and annual

reporting at all. A comprehensivecommunication strategy that coversboth sides might help encouragea more complete approach to reporting.

Assurance is still not very common inthe Netherlands: only one-quarter ofcompanies seek formal assurance(G250: 40 percent). The vast majoritydo not include third party comments atall, which is perhaps surprising in anera where dialogue and trust are the

words of the day. The potential benefitsof combining formal assurance withcomments from key stakeholders areexploited by only a few companies.












Highlight - The Netherlands79 report ( 58 stand-alone) reports


100% of companies incommunications, automotive,and utilities sectors report,as do 85% of banks


Case studyRoyal BAM Group

In previous surveys the constructionsector always ranked low in corporateresponsibility reporting. However, the2008 survey shows that the sector iscatching up. In 2008, Royal BAMGroup, a leading European constructioncompany, published its first group-widesustainability report.

BAM also published a special report onclimate change in the builtenvironment. BAM recognizes that

whereas the major focus to date hasbeen on heavy industries and thetransport sector, the constructionsector is actually in the top ten ofsectors with high CO2 emissions. Inthe near future new buildings built byBAM must be energy-neutral, and theenergy use of existing buildings mustbe halved.

Royal BAM Group is keen to be at theforefront, not only in terms of socialresponsibility, but also in recognizingthat corporate responsibility plays

a role in determining the future of acompany. To set the agenda and raiseawareness both internally andexternally, BAM decided to publish thespecial report on climate change andlaunch a CO2 desk simultaneously.From this desk, partners in the supplychain can seek advice on developingclimate change objectives or takingconcrete steps to implement reductionmeasures.

Royal BAM Group sees the climatechange report and the CO2 desk asan opportunity to share theirexperience and knowledge with thesector. By doing this BAM not onlyhopes to profile itself as a leadingconstruction company but also toprovide a direct contribution to thereduction of CO2 emissions in thebuilt environment.

The way forwardA few areas still have room forimprovement:

• The “non-reporting half” could beginto incorporate carbon reporting intheir annual reports.

• Sectors with supply chain issuescould start reporting.

• Wider interest from variousstakeholder groups could move

companies to provide a corporateresponsibility report alongsidethe annual report, or in fullyintegrated reports.

Has voluntary reporting hit a ceiling?Will companies that are not reporting

need to be moved by stakeholderpressure or regulation? The next threeyears will reveal the next phaseof reporting in the Netherlands.





Spotlight

The United KingdomThis is the analysis for the UK as part of KPMG’s International Surveyof Corporate Responsibility Reporting 2008. The Survey continues to bea useful source of information for both our clients and the market inunderstanding the changing nature of CR reporting. Almost every FTSE100 company now reports externally on CR in some form, with this

becoming increasingly embedded into UK business operations.


Trade & retail (12)

Metals, engineering & other manufacturing (4)

Construction & building materials (2)

Food & beverage (7)

Electronics & computers (1)

Transport (3)

Automotive (1)

Mining (9)

Utilities (7)

Chemicals & synthetics (2)

Communications & media (10)

Finance, insurance & securities (19)

Oil & gas (6)

Other services (14)

Pharmaceuticals (3)

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

90%

84%

83%

79%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisFigure I demonstrates the continuedhigh level of corporate responsibilityreporting across UK industry. The UKremains one of the highest reportinglevels of the countries participating inthis International survey. Two-thirds ofthe sectors, which represent 50

percent of the top 100 companies,have 100 percent of the companiesissuing some form of corporateresponsibility report. All high impactindustries have 100 percent reporting,

apart from the oil and gas sector,which is at 83 percent.

It will be interesting to observe if thecompanies not reporting will requirelegislation, or further stakeholderpressure, to report on social and

environmental impacts. In our memberfirms’ experience these companiestend to be less innovative andresponsive and, in the long run, maybe less successful.

Figure II provides evidence of a trendtoward the integration of corporateresponsibility reporting within acompany’s annual report. We can seethat six percent of the top UKcompanies now have a fully integratedreport, with only 12 percent not

referring to CR within the annualreport. We expect this trend tocontinue as corporate responsibilityreports become integrated into annual












Highlight - The United Kingdom 99 report (11 stand-alone)


(48 formal assurance)65 have a corporateresponsibility strategy

64 report on supply chain risks


InterviewMark Goyder - Founder Director, Tomorrow’s Company

What has influenced thedevelopment of corporateresponsibility and corporateresponsibility reporting?First, a rise in awareness of themateriality of climate change. Second,the move toward integrated reporting,with the realization that the success ofa company is based increasingly on thehealth of its relationships. Finally thereis the recognition that corporateresponsibility is ultimately not founded

on policies or indices but on values andbehaviors. Reporting is the final link ina circle of leadership and governancethat starts with purpose and values,measures impacts, and holdscompanies to their word.

What is the main driver to seekassurance?You cannot answer this in isolation.Performance and behaviors are thefoundations of success. Companieshave incentives to focus on the first.But neglecting behavior while focusingon performance is the road to Enron.

You need a countervailing force todemand the right behaviors. It ishealthy to have that challenge frompeople who are on the outside.Assurance can provide some of that,as can an external committee ofstakeholders. But both only add valueif they are feeding from and to theeffective decision-makers.

Is it important to align corporateresponsibility strategy to business

strategy?In a nutshell, “Yesterday’s societalconcerns are today’s consumerconcerns and tomorrow’s shareholderreturns.” To be a successful businessin the future you need to redefinesuccess - to “future proof” yourbusiness it is crucial you align yourstrategy with the needs of society.

reports and, ultimately, a natural partof business strategy.

Figure III shows 48 of the companiesreporting on corporate responsibilityseek external assurance of their CRreports, demonstrating the importance

of disclosing credible information.However, the scope and quality ofthis assurance varies considerably.

Best practice corporate responsibilityactivities are increasingly involvingexternal stakeholders as a way ofverifying their approach, yet the surveyresults show this is just beginning tobe incorporated into external corporateresponsibility reporting. Somewhat

surprisingly, 42 percent of FTSE100companies have not used any form ofexternal involvement to enhance thecredibility of their reporting.





Spotlight

The United StatesKPMG’s International Survey of Corporate Responsibility Reporting reflectsthe growing importance of corporate responsibility as a key indicator ofnon-financial performance, as well as a driver of financial performance. Inthe latest survey, we have noticed a significant increase in the publicationof corporate responsibility reports in the US, from 37 percent in our 2005

survey to 74 percent in 2008. The survey findings also reflect a growingsense of responsibility in the business community to improve transparencyand accountability to the wider community - not just to shareholders.



Automotive (2) 100%




Oil & gas (8) 88%







0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


AnalysisThe increase in corporate responsibilityreporting by the top 100 companies inthe United States may be attributedto an increased focus on sustainabilityissues within US business in the lastseveral years. This year’s survey foundthat the top three drivers for corporate

responsibility reporting remained thesame as in 2005: ethical considerations,economic considerations, andinnovation and learning.

However, within these drivers, ethicalconsiderations (70 percent) replacedeconomic considerations (50 percent)as the primary driver.

We also noticed a gradual maturationof corporate responsibility programs byUS companies. Of the 74 percent thatreported publicly, 82 percent had adefined corporate responsibility orsustainability strategy, and 77 percenthad implemented management

systems for their corporate responsibilitygoals. Furthermore, 78 percent haddefined specific indicators relatingto stated objectives and 68 percentactually reported on performanceagainst the stated objectives.












Highlight - The United States78 report (42 stand-alone)


Reporting leaders includecommunications, automotive,forestry, and chemical sectors



Case studySustainability developments in the US

US regulators and lawmakers have alsofocused their attention on sustainability.Well over 200 bills in a recent sessionof Congress addressed climate changeand greenhouse gases, up from 30pieces of similar legislation just fiveyears earlier.

In Chicago, an exchange has tradedcarbon offsets since 2003. In late2008, 10 Northeastern US statesopened the nation’s first market for

trading greenhouse gas permits, withbuyer demands for “allowances” fourtimes the existing supply. SevenWestern states plan a similar systemin 2012.

Indeed, sustainability issues have aneffect beyond the industrial giants.With technology often accounting formore than half of a bank's or insurancecompany's environmental footprint,services firms may face particularpressures. Companies are monitoringtheir sustainability issues such asclimate change, supply chain integrity,

and corruption, while also seizingopportunities to develop new products,implement energy cost-savingprograms, and redesign businessprocesses.

Meanwhile, investors' demands fortransparency have prompted moreUS companies than ever before todisclose their corporate responsibilitysuccesses and risks in annualsustainability reports, often as part

of their financial statements.

Still, US companies have difficultyquantifying these emerging risksbecause little regulatory oversightexists. Knowing that uncertainty makesfinancial markets jittery, some UScompanies support better guidance onclimate change. Understanding thegovernment’s rules of the road mayhelp companies improve how theymanage climate change risks and,therefore, gain competitive advantage.

Sustainability MonitoringSustainability monitoring and reportingmay still be in the formative years inthe US, compared with more matureEuropean, Asian, and Australianmarkets. But evidence shows moreUS companies are linking their financial

performance with their social conscience,and tying profits to corporate principles.

Today, “Save the Planet” is part of thebusiness model.





The Way Forward

There is no doubt that corporate responsibility reporting has gone mainstreamfor many of the world’s largest companies and is headed in the samedirection at the national level.

This survey looked behind the reportsto shed some light on the strategyand management systems that supportaccountability and transparency on socialand environmental issues. Wediscovered a maturing field overall, withfewer companies issuing reports in theabsence of overarching strategies, butstill much to be developed on this front.

In the lead-up to the 2011 KPMGInternational Survey of CorporateResponsibilit y Reporting, we wouldexpect to see some progress in the waycompanies manage key issues. Resultswere variable when it came to linkagesbetween corporate governance andcorporate responsibility, and it seemssupply chain management and corporateresponsibility are two concepts that arejust now starting to merge. It will take

several reporting cycles until we can seewhether deep change is occurring as

a result of supply chain codes of conductand ethics. We would expect climateto be a fully managed issue by 2011,including strategy, risk management,disclosure on carbon footprint by thecompany and its wider value chain, andbusiness opportunities and innovationsafforded by climate change.

We can only surmize what issues willleap to the forefront by 2011. Somemight not be known to us now, somemight be simmering quietly in thebackground. Human rights is one towatch, as is access to food and water.

By 2011 we might expect reader andstakeholder groups to play a moreactive part in reporting and shapingthe type of information that isdisclosed, as well as its format and

timing. Technology is always a factor inbusiness development, and innovations

here may help companies manage theirdata, connect with their stakeholders,and engage in scenario planning thatproduces a clearer picture of complexcorporate responsibility risks

It seems corporate responsibilityreporting has left the experimental phaseand has now taken its place alongsideother business tools that add valuableinsight into the current state of companyperformance, and helps shed lighton future opportunities for growth,innovation and learning in an ever-changing world.





Appendices





Appendix I List of Figures and TablesChapter 3Figure 3.1 Companies by sector (G250)

Figure 3.2 Companies with a stand-alonecorporate responsibility report (G250)

Figure 3.3 Companies with stand–aloneand integrated corporate responsibilityreports, by country 2005 – 2008 (N100)

Figure 3.4 Level of integration ofcorporate responsibility information intoannual reports (G250)

Figure 3.5 Level of integration of

corporate responsibility information intoannual reports (N100)

Figure 3.6 Drivers for corporateresponsibility reporting (G250)

Chapter 4Figure 4.1 Companies with a publiclyavailable corporate responsibility strategy,by country (N100)

Figure 4.2 Companies with a publiclyavailable corporate responsibility strategy,by ownership (N100)

Figure 4.3 Companies reporting on

business opportunities/financial value ofcorporate responsibility, by sector (N100)

Figure 4.4 Companies reportingon business opportunities/financialvalue of corporate responsibility,by country (N100)

Figure 4.5 International frameworks usedby companies, 2005-2008 (G250)

Figure 4.6 Management standards andguidelines used by companies (G250 andN100)

Figure 4.7 Stated purpose for conductingstakeholder engagement (G250 and N100)

Figure 4.8 Means of engagingstakeholders (G250 and N100)

Figure 4.9 Reporting standards andguidelines used by companies (G250

and N100)

Figure 4.10 GRI Application Leveldeclarations (G250 and N100)

Figure 4.11 Methods used to selectreport content, 2005 (G250) and 2008(G250 and N100)

Figure 4.12 Reporting format(G250 and N100)

Chapter 5Figure 5.1 Reports with a separatesection on corporate governance,

by ownership (G250)Figure 5.2 Reports with a separatesection on corporate governance,by ownership (N100)

Figure 5.3 Department where corporateresponsibility is managed (G250 andN100)

Figure 5.4 Reports that address supplychain risks, by sector (G250 and N100)

Figure 5.5 Reports that address supplychain risks, by country (N100)

Figure 5.6 Reports that address climatechange risks, by sector (G250 and N100)

Figure 5.7 Climate change risks, by type(G250 and N100)

Figure 5.8 Carbon footprint disclosure(G250)

Figure 5.9 Carbon footprint disclosure,by country (N100)

Figure 5.10 Measures taken to reducecarbon footprint (G250)

Chapter 6Figure 6.1 Reports that include a formalassurance statement (G250)

Figure 6.2 Reports that include a formalassurance statement (N100)


Figure 6.3 Reports that include a formalassurance statement, by country (N100)

Figure 6.4 Reports that include a formalassurance statement, by sector (G250)

Figure 6.5 Reports that include thirdparty commentar y (other than formalassurance), by type (G250)

Figure 6.6 Reports that include thirdparty commentary (other than formalassurance), by type (N100)

Figure 6.7 Drivers for assurance (G250

and N100)Figure 6.8 Choice of assurance provider,2005-2008 (G250 and N100)

Figure 6.9 Assurance standards used,2005-2008 (G250)

Figure 6.10 Assurance standards used,2005-2008 (N100)

Figure 6.11 Level of assurance (G250and N100)

Spotlight (by country)Figure I CR reporting per sector

Figure II Integration level CR reporting


TablesTable 2.1 Participating Countries 2008

Table 4.1 Companies with corporateresponsibility strategy, objectives,indicators, and data (G250 and N100)

Table 4.2 Elements of CorporateResponsibility Management Systems(G250 and N100)

Table 5.1 Level of disclosure on supplychain management systems (G250and N100)

Table 6.1 Reports with formal assurancestatement 2002-2008, by country (N100)




Appendices continued

Appendix II List of TermsAAAccountAbility

CDPCarbon Disclosure Project

GHG ProtocolGreenhouse Gas Protocol Initiative

GRIGlobal Reporting Initiative

GSPGlobal Sullivan Principles of SocialResponsibility

IAASBInternational Auditing and AssuranceBoard

ICCInternational Chamber of CommerceBusiness Charter for SustainableDevelopment

ILOInternational Labour Organization

IoDInstitute of Directors - South Africa

IPCCIntergovernmental Panel on ClimateChante

ISAEInternational Standard for AssuranceEngagements

ISOInternational Organization forStandardization

OECDOrganisation for Economic Co-Operationand Development Guidelines forMultinational Enterprises

PRIPrinciples for Responsible Investment

SIFSocial Investment Forum

UDHRUniversal Declaration of Human Rights

UNFCCCUnited Nations Framework Conventionon Climate Change

UNGCUnited Nations Global Compact

UNHCHRUnited Nations High Comission forHuman Rights (Norms for TransnationalCorporations)

Appendix III Key ContributorsResearch conducted by:KPMG Global Sustainability Servicesoffices in 22 countries:

Australia, Brazil, Canada, Czech Republic,Denmark, Finland, France, Hungary, Italy,Japan, Mexico, Norway, Portugal,Romania, South Africa, South Korea,Spain, Sweden, Switzerland, TheNetherlands, United Kingdom, and theUnited States.

See contact information for fullcontact details.

Project coordinated by:KPMG Global Sustainability Services,The Netherlands

Wim Bartels, Martha OrdonezLizarazo, and Koen van Bommel

PO Box 745001070 DB AmsterdamThe NetherlandsTel: +31 (0) 20 656 4500Fax: +31 (0) 20 656 4510E-mail: [email protected]

Report written by:Alyson [email protected] www.alysonslater.com

Designed by:RR Donnelley GlobalDocument Solutions

Edited by:Sandra [email protected]


mailto:[email protected]


mailto:www.alysonslater.com



mailto:www.alysonslater.com






Appendix IV KPMG’s Global Sustainability Services key contact informationAustraliaOliver WildSydneyTel. +61 (2) 9335 [email protected]

BrazilAlexandre HeinermannSão PauloTel. + 55 11 2183 [email protected]

Canada

Chris Ridley-ThomasVancouverTel. +1 604 691 [email protected]

Czech RepublicPeter LuptákPragueTel. +420 (0)222 123 [email protected]

DenmarkJens FrederiksenCopenhagenTel. +45 (38) 183 [email protected]

FinlandJan MontellHelsinkiTel. +358 (40) 592 [email protected]

FrancePhilippe ArnaudParisTel. +33 (15) 568 [email protected]

HungaryÉva VárnaiBudapestTel. +36 (1) 8877 [email protected]

ItalyPierMario BarzaghiMilanoTel. +39 (02) 676 [email protected]

JapanAkira KajiwaraOsakaTel. +81 (6) 7731 [email protected]

Mexico

Jesus GonzalezMexico CityTel. +52 (55) 5246 [email protected]

The NetherlandsWim BartelsAmstelveenTel. +31 (20) 656 [email protected]

NorwaySarita BartlettOsloTel. +47 4063 [email protected]

PortugalCristina ToméLisbonTel. +351 210 110 [email protected]

RomaniaGeta DiaconuBucharestTel. +40 (21) 201 [email protected]

South AfricaShireen NaidooJohannesburgTel. +27 (11) 647 [email protected]

South KoreaJae Heum ParkSeoul+82 (2) 2112 [email protected]

SpainJosé Luis BlascoMadridTel. +34 (91) 456 [email protected]

Sweden

Jenny FranssonStockholmTel. +46 8 [email protected]

SwitzerlandVinay KaliaZurichTel. +41 (0)44 249 [email protected]

United KingdomNigel SmithLondonTel. +44 (20) 7311 [email protected]

The United StatesEric IsraelNew YorkTel. +1 (212) 872 [email protected]
















































kpmg.com

Wim BartelsGlobal Head,KPMG Sustainability ServicesPartner, KPMG in the Netherlands

Burgemeester Rijnderslaan 201185 MC AmstelveenThe NetherlandsTel + 31 (20) 656 4503Fax +31 (20) 656 4510

kpmg csr reporting survey 2008

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