Corporate Responsibility reporting here to stay in Canada: KPMG Survey

Survey shows room for improvement with low reporting on supply chain impact

March 24, 2014
by By PurchasingB2B Staff

TORONTO—Corporate responsibility (CR) reporting has evolved into a mainstream business practice over the past two decades, and is now undertaken by over three quarters (83 percent) of the top 100 companies in Canada (up from 79 percent in 2011), according to the 8th KPMG Survey of Corporate Responsibility Reporting.

According to KPMG, the survey, which analyzes current global trends across 41 countries with a particular focus on the quality of CR reporting by the world’s top 250 companies, provides insights to help Canadian companies determine their own CR reporting approaches and assess and improve the quality of their reports.

“Corporate Responsibility reporting is now a standard business practice across the country, and companies that do not publish a report may be putting themselves at risk of falling behind their competitors,” said Bill Murphy, KPMG’s partner and national leader, climate change and sustainability services. “The important questions to now ask are ‘what are our most significant environmental and social impacts?’, ‘how are we managing these?’ and ‘how should we report our performance and progress?”

Key implications for Canadian businesses and organizations to consider:

  • Supply chain reporting needs more focus: Many companies fail to fully report on the impact of their supply chains. Industry sectors with significant supply chain risks, including chemicals, utilities and oil & gas, tend to have the lowest levels of reporting on supply chain issues.
  • Reporting the financial risks: Despite acknowledging the risks to their businesses from environmental and social factors, most large companies are not reporting the potential financial impacts of these risks. The oil & gas and financial services sectors lead the pack in terms of financial risk reporting.
  • Corporate governance: Less than a quarter of the largest companies around the world report a clear link between corporate responsibility performance and executive remuneration. This aspect of corporate governance, linking a clearly defined CR strategy to performance-based executive remuneration, will be a growing trend in Canada in the coming years.
  • Third-party assurance gains acceptance: It is becoming standard practice to have CR and sustainability data externally assured. The percentage of Canadian companies who include a formal assurance statement in their CR report has grown from 21 per cent in 2011 to 34 per cent in 2013, with the expectation for this to increase over time.

The 2013 survey shows that CR reporting is a standard business practice globally as well as here in Canada – with 71 per cent of companies worldwide publishing a report, compared with 64 per cent in 2011 and 12 per cent in 1993.

The challenge for companies is to use the CR reporting process to identify the most important environmental, social and governance issues, said KPMG. They then must bring these issues into the heart of corporate strategy to manage risks, unlock opportunities and build long-term value.