KPMG recently released the latest results of an ongoing survey that tracks the worldwide trends of corporate sustainability reporting. The results of the survey reveal that the number of companies generating sustainability reports is continuing to grow, particularly in the Asia Pacific region. However, despite growth in the number of companies producing reports, the survey found that there is serious weakness in the overall quality and depth of many of these reports.
According to the survey, 93% of the largest 250 companies in the world (by revenue) now produce sustainability reports. In the U.S., 86% of the largest 250 companies do so. While the proportion of U.S. companies has remained relatively stable for several years, the Asia Pacific region has seen a massive increase. In 2011 only 49% of companies in the region produced sustainability reports. That percentage is now up to 71%.
This promising trend demonstrates the extent to which sustainability reporting has become the norm for large companies around the world. KPMG’s study also shows how standardized the practice has become. For instance, the majority of enterprises, 59% of the world’s largest companies, use third party audits. 82% of the largest 250 in the world use the Global Reporting Initiative (GRI) standards. Standardized reporting makes it easier to compare reporting performance and hold companies to account.
Perhaps just as promising as the number of companies reporting is the fact that many of those surveyed indicated that they are planning to move towards producing integrated reports within the next decade. Integrated reporting is when sustainability factors are reported along with financial information. This effectively promotes sustainability material to the same level of importance as financial information and is one of the long-term goals of GRI and other reporting activist groups.
Despite the positive trend in the number of companies providing sustainability information, the KPMG survey raises serious concerns about the quality of much of the reporting. KPMG gave the largest 250 companies in the world an average of 59 points out of 100 using their own rating system. The largest 250 U.S. companies averaged 54 points. This is a poignant reminder that although reporting has become the norm, most companies have a long way to go in developing sustainability reports that are as robust and thorough as their financial equivalents.