Updated: CSR reports hits mainstream, but carbon disclosure lags behind

The number of large multinational firms releasing corporate responsibility data either in stand alone reports, or as part of their annual financial reports has increased significantly in the last three years, according to a new survey from accountancy giant KPMG.

The study found that 80 per cent of Global Fortune 250 companies now release corporate responsibility data, covering issues such as climate change strategy, environmental policies and employee and stakeholder relations, up from 50 per cent just three years ago.

Speaking to BusinessGreen.com, Lynton Richmond, head of sustainability assurance at KPMG in the UK, said that the survey confirmed that both the quantity and quality of corporate responsibility reporting was increasing.

"Companies have been reporting on non-financial issues for a while, but it is getting more and more standardised and formalised," he said. "And as some companies raise the bar that pressure increases for other firms to follow suit, as people begin to ask "if company A is doing this, whay aren't you?""

However, an accompanying survey of the 100 largest firms in 22 countries found that levels of CSR reporting still vary hugely from region to region, while disclosure of climate change related data remains patchy.

Overall, 45 per cent of these "national-level" companies released CSR data, with levels of reporting ranging from just 20 per cent of large companies in Mexico and Czech Republic issue reports to over 90 per cent in Japan and the UK.

Richard Sharman, head of sustainability services at KPMG in the UK, said that with the vast majority of large firms in developed economies such as Japan, the UK and the US now releasing CSR reports pressure was continuing to mount for firms top improve the quality of their reports and include more CSR data in their formal annual reports.

"While non-financial reporting in the UK is in good health compared to many other countries, we would expect to see an increasing trend towards its integration with mainstream company reporting," he said, adding that investors would increasingly demand information on non-financial issues at a time when economic uncertainty made them more attuned to potential risks.

"In these uncertain times, investors and stakeholders are looking for as much clearly accessible information as they can get from a company," he said. "That is likely to increasingly include environmental, social and governance information. Investors want to know about anything that might carry risk. What they don’t know, they will be suspicious about. That is why companies need to ensure that they are communicating effectively and in a joined-up way."

One area where many firms need to improve their reporting, according to the survey, is in the disclosure of climate change-related risks.

The survey found that more than two thirds of the 2,200 companies surveyed do not publish any information about climate change risks and 62 per cent do not report their own carbon footprint.

However, the study also revealed signs that where firms are producing CSR reports, they are taking greater steps to ensure that they are robust, with 40 per cent of firms surveyed using independent assurance providers to verify the accuracy of their reports, rising from 30 per cent three years ago.

Furthermore, seventy per cent of those companies issuing reports claimed to adhere to best practice guidelines set out by the Global Reporting Initiative standards body.

Richmond said there was a strong business case for firms to embrace standardised reporting, arguing that CSR reports could help firms attract and retain employees, highlight green credentials to corporate and public sector customers who require suppliers to meet environmental critieria, and demonstrate to governments and NGOs that a firm is serious about addressing climate change and carbon emissions.