Trends in Corporate Social Responsibility Reporting

Arjan de Draaijer

KPMG Global Sustainability ServicesTM

Contents

The Main Elements of Corporate Social Responsibility Corporate Social Responsibility Reporting Trends External Drivers for CSR Reporting Internal benefits of CSR Reporting CSR Reporting in Practice Q&A

Global Sustainability Services

Sustainable Development and Companies

3

Sustainable Development

Sustainable development comprises economic and social development that protect and enhance the natural environment and social equity

Contribution of companies

Corporate Social Responsibility

Creating value by responding to societys needs

Global Sustainability Services

Corporate Social Responsibility: Main Elements

Company
Strategy & Management Dialogue

Stakeholders
Economic Business Principles Social

Transparancy Accountability

Environmental
Communication

Annual CSR Report

Global Sustainability Services

Companies with Annual CSR Reports

4th KPMG International Survey on Corporate Sustainability Reporting (2002)

1993 1996 1999 2002 0%

HSE

13% 17% 24% 18% 5% 10% 15% 20% 10% 25% 30%

28%

Sustainability/ Social

Top 100 companies in 19 countries (total 1900 companies) CSR Report Environment, Health & Safety Report
Global Sustainability Services

CSR Reporting by Industry Sector

Utilities Communications and media Chemicals & synthetics Forestry, pulp & paper Oil & gas Transport Mining Pharmaceuticals Automotive Electronics & computers Food & beverage Metals, engineering & other manuafacturing Trade & retail Finance, securities & insurance Construction & building materials Other service 0%
50% 46% 45% 43% 38% 37% 33% 30% 28% 25% 25% 24% 15% 12% 9% 6%

10%

20%

30%

40%

50%

60%

Source: KPMG International Survey on Corporate Sustainability Reporting 2002

Global Sustainability Services

CSR Corporate Reporting Trends From environmental reports to integrated CSR reports (including social issues)
10% of top 100 companies report on CSR GRI SA8000 (Global Compact)

Use of criteria and standards

Stakeholder involvement
Issue identification Stakeholder dialogue Interviews in the report

Global Sustainability Services

CSR Corporate Reporting Trends

Assurance

External credibility Internal performance improvement tool Internet based Separate specialist and general audience reports Local reports Asia: product focus, mainly environmental US: focus on philanthropy, corporate governance Europe: stakeholder focus, integration in core business Latin America: mix, emerging
Global Sustainability Services

Other forms of reporting

Regional differences

Contents

The Main Elements of Corporate Social Responsibility Corporate Social Responsibility Reporting Trends External Drivers for CSR Reporting Internal benefits of CSR Reporting CSR Reporting in Practice Q&A

Global Sustainability Services

Growing Number of NGOs and Consumer Organisations

10

45000
Nr of NGOs

40000 35000 30000 25000 20000 15000 10000 5000 0 1960 1970 1980 1990 2000
Source: Echo research

Year

critically monitoring company behaviour

Global Sustainability Services

Brand / Reputation is at Stake

11

Global Sustainability Services

Transparancy : Response to Growing Distrust

High
Prove it to me Trust Show me Tell me Low Low Transparency To obtain the trust of stakeholders, companies must become more transparent High

12

Involve me

Global Sustainability Services

External Drivers for CSR Reporting

13

Business issue

Risk management Supply chain requirement Number of countries require mandatory reporting Sustainability Indexes (DJSI, FTSE) SRI Mainstream investors (increasingly)

Laws and Regulations

Financial Sector Pressure

Global Sustainability Services

Contents

14

The Main Elements of Corporate Social Responsibility Corporate Social Responsibility Reporting Trends External Drivers for CSR Reporting Internal benefits of CSR Reporting CSR Reporting in Practice Q&A

Global Sustainability Services

The CSR Report: Snapshot of the CSR Performance

15

Principles

Policy defined

Policy communicated

Policy implemented

Best practices

Performance data

Impact data

CSR Issues in the Report

Economic

Social

Environmental

Maturity of CSR Issues

Global Sustainability Services

The External Benefits are only the Tip of the Iceberg

16

External benefits:

Credibility towards stakeholders Shows leadership of company Information for financial sector

Global Sustainability Services

Internal Benefits of CSR Reporting

17

Raises awareness Increases employee motivation

Stimulates evaluating existing practices Continuous improvement

Identifies information for benchmarking purposes Provides (additional) management information Alignment of vision and practices Contributes to achieving objectives/targets Provides starting point for strategy development
Global Sustainability Services

Contents

18

The Main Elements of Corporate Social Responsibility Corporate Social Responsibility Reporting Trends External Drivers for CSR Reporting Internal benefits of CSR Reporting CSR Reporting in Practice Q&A

Global Sustainability Services

CSR Reporting in Practice

19

Outside in
Study External Standards Benchmark Competitors

Stakeholder Analysis

Develop Sustainability Report

Develop Framework Writing Process Develop Launching plan Data Collection Verfication

Sustainability report

Accompanying Launching Plan

Inside out
Internal Survey

Global Sustainability Services

Balanced Reporting: The Key to Succes

Stakeholders view on Company

20

high Underappreciation

CSR Performance

CSR leaders

Overappreciation low
CSR Communication
Global Sustainability Services

high

Become a respected business partner.

21

.through balanced CSR reporting

Global Sustainability Services

Contents

22

The Main Elements of Corporate Social Responsibility Corporate Social Responsibility Reporting Trends External Drivers for CSR Reporting Internal benefits of CSR Reporting CSR Reporting in Practice Q&A

Global Sustainability Services

Questions?

KPMGs Global Sustainability Services TM

Arjan de Draaijer DeDraaijer.Arjan@KPMG.nl