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Companies are good at disclosing, cursorily at least [DNA : Daily News & Analysis (India)]
[January 18, 2014]

Companies are good at disclosing, cursorily at least [DNA : Daily News & Analysis (India)]

(DNA : Daily News & Analysis (India) Via Acquire Media NewsEdge) Bangalore: Companies are increasingly making corporate responsibility (CR) disclosures, but are lagging in the quality of these disclosures. In fact, disclosures on supply chain social and environmental impacts is extremely low among India's top 100 companies - 71 per cent do not even discuss these impacts.

Only 13 per cent company reports mention some supply chain improvement targets and less than 10 per cent reports disclose progress on supply chain improvements, according to the 'India Corporate Responsibility Reporting Survey 2013' published by leading consultancy KPMG on Thursday.

Companies are good in talking about impacts of their commodities. Three-quarters of Indian CR reports discuss some social and environmental impacts of their products and services. But only one in 10 reports discuss these impacts in details, while the rest have a limited discussion on social and environmental impacts of their products and services.

CR, also referred to as 'sustainability' or 'business responsibility', looks at the ethical, environmental and social aspects of business beyond the financial parameters. The 2013 edition of the KPMG India survey supplements the 8th KPMG International survey, published first in 1993. The India survey is the most comprehensive research on CR reporting in India and covers top 100 listed companies by revenue (N100).

Three out of four of India's N100 companies have some amount of CR disclosure. About 45 per cent use standard frameworks for CR disclosure. Some 31 per cent of India's N100 comprehensively reports on CR through separate reports.

It is the information technology (IT) sector which is among the leading sectors with all N100 IT companies producing separate CR reports, while the financial services sector lags with no separate CR reports.

But environment is definitely a concern, with 71 per cent of CR reports indicating climate change as a key environmental and social change (or 'sustainability megaforce') that will impact businesses while energy & fuel, water scarcity and material resource scarcity are other key megaforces discussed.

More number of companies identify business opportunities (71 per cent) related to CR indicating that it is now viewed as value driver apart from the traditional linkage of CR to primarily manage reputation or brand value. Only one in four N100 CR reports establish the linkage of how stakeholder inputs are considered in identifying critical issues for long term sustainability of the company.

Methodology The survey analyses reporting trends of N100 companies - top 100 (by gross revenues for financial year 2012-13) publicly listed entities in India. The research and analysis was conducted on the quantitative trends and qualitative aspects of CR reporting. Publicly available information through company websites, annual reports, CR reports, third-party websites and other nonfinancial information disclosure of N100 companies have been used to gather base information for the survey.

What was assessed The survey analysed companies for quality of reporting through a scoring criteria on seven key aspects of reporting - strategy, risk and opportunity; materiality; targets and indicators; suppliers and value chain; stakeholder engagement; governance for CR; transparency and balance. Indian CR reports score 40 out of maximum possible 100 on quality of reporting as compared to score of 59 by global 250 large corporations.


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