Singapore, 18 December 2013
|Singapore among countries with highest growth in corporate responsibility reporting
Corporate responsibility (CR) reporting rates in the Asia Pacific region have dramatically increased over the past two years. This is according to the latest KPMG study on CR reporting.
Simply titled The KPMG Survey of Corporate Responsibility Reporting 2013, the report studied a total of 4,100 companies comprising 100 largest companies from 41 countries including Singapore.
Findings from the eighth edition of the survey this year show that 71 percent of large companies in Asia Pacific now publish CR reports, an increase of 22 percentage points since 2011 when less than half – or 49 percent - did so.
The survey also indicates that CR reporting is now undeniably a mainstream global business practice. About 71 percent of companies worldwide published a CR report this year, compared with 64 percent in 2011 and only 12 percent in 1993 when the survey first started.
Asia Pacific's reporting rates catching up rapidly
CR reporting rates in Asia Pacific are now almost equal to Europe where 73 percent of companies issue CR reports. Rates are highest in the Americas region (76 percent of companies) and lowest in the Middle East & Africa (54 percent).
"If anyone still thinks that Asia is a corporate responsibility dead zone, this survey is clear evidence that they should think again," said Mr Sharad Somani, Head of Climate Change and Sustainability Services, KPMG in Singapore.
"The companies surveyed in the Asia Pacific region clearly recognise that doing business anywhere in a globalised 21st century world requires you to account for not just your financial performance, but also your social and environmental performance."
The reporting rate in Europe increased only slightly, partly due to lower than average reporting rates in some countries that were included in the survey for the first time in 2013. In Poland, for example, only 56 of the country’s top 100 companies issue a CR report.
Singapore among countries with most growth in CR reporting rates
Asia Pacific's surge in CR reporting is primarily due to high growth rates in several countries.
The three countries which saw the highest growth in reporting rates since 2011 are:
- India, with an increase of 53 percentage points
- Chile, with an increase of 46 percentage points
- Singapore, which saw reporting rates rise 37 percentage points from 43 percent in 2011 to 80 percent this year
Australia (+ 25 percentage points) and Taiwan (+19 percentage points) also experienced strong increases.
While CR reporting has traditionally been voluntary, governments and stock exchanges around the world are increasingly imposing mandatory reporting requirements. This is likely to have driven growth in CR reporting rates.
In India for instance, the top 100 listed companies are required by the Securities Exchange Board to report on CR in their annual reporting from financial year 2012/13. As for Singapore, the Singapore Stock Exchange (SGX) Sustainability Reporting Guide for listed companies and Code of Corporate Governance have encouraged CR reporting.
The future of CR
Many companies interviewed cited improved business performance and innovation as primary benefits from CR reporting. Many companies also highlight the positive role CR plays in the recruitment and retention of employees. They also saw CR as an important tool for strengthening relationships with external stakeholders.
Despite the significant increase in companies jumping on the CR bandwagon, there are still areas for improvement. External assurance of CR reports is still voluntary in most countries, with just France and South Africa pioneering a mandatory approach among the 41 countries surveyed.
The lowest rates of assurance are seen in countries where CR reporting is still in its infancy, including Indonesia,Israel, Kazakhstan, Malaysia, Nigeria, Singapore and the UAE.
Said Mr Somani: "It is clear that sustainability is becoming part of the business language in Singapore and across Asia Pacific. However as this survey demonstrates, quantity does not always equate to quality.
"Some companies report on their CR activities, but show no evidence of robust reporting processes, strategic objectives, or clear targets."
Developing targets, he added, provides substance to strategy and also sets the foundation for continuous improvement as companies measure performance, identify trends and adapt to future developments.
He expects the rapid growth in the quantity of reports to be matched before long by increasing sophistication in terms of quality.
"As sustainability reporting continues to mature, we anticipate that other companies across the region will follow the lead of those who have already put in place the critical building blocks of sustainability," said Mr Somani.