Corporate Responsibility (CR) reporting has become a global business practice but companies still have a long way to go in order to satisfy investors, a survey by KPMG has found.
The KPMG Survey of Corporate Responsibility Reporting found that three quarters of Fortune 2012's 250 world largest companies (G250) acknowledge risks to their business from environmental and social 'megaforces', such as resource scarcity and climate change, in corporate responsibility (CR) reports. But only 5% of them quantify and report the potential impact of these risks on financial performance.
KPMG climate change and sustainability services global chairman Yvo de Boer said: "Environmental and social risks can impact the supply chain, productivity, financial performance, reputation and brand value. So it is disappointing to see that so many companies still shy away from quantifying these risks in financial terms."
De Boer added that more and more investors accept that environmental and social 'megaforces' put company value at stake. "As their understanding grows, they will expect companies to be transparent about the risk they face, what the financial impacts of those risks could be and what the company is doing to mitigate them" he said. "Our research suggests that many companies still have a long way to go on that front."
Nevertheless, KPMG's survey revealed a change in businesses' approach to CR. "Corporate responsibility is no longer simply a moral issue and companies recognise this," De Boer said. He believes this is the reason why more businesses are adopting CR reporting.
Out of the 4,100 companies taking part in the survey across 41 countries, 71% practice CR reporting. In 1993, when the survey was first published, the average global CR reporting rate was 12%.
Asia Pacific is the region which has seen the biggest increase in CR reporting with an average CR reporting rate of 71% in 2013 against 49% in 2011.
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