Together, 100 of the world’s largest companies reported social investments valued at over £7.3 billion ($12.2 billion) in 2013, according to new research published today by KPMG International. Yet few companies are reporting the impact these investments are actually having on the people they are intended to help.
These findings are contained in Unlocking the value of social investment, the latest edition of KPMG’s Sustainable Insight research series.
The KPMG study reviewed corporate reports issued between 2012 and 2013 by the 10 largest global companies in each of 10 industry sectors. It found these 100 companies and their associated corporate foundations invested, on average, the equivalent of 2.5 percent of their pre-tax profits in programs to tackle social and environmental challenges such as access to education, healthcare and disaster relief.
However, only 19 percent of these companies reported any quantified metrics for the impact of the programs they fund and only 32 percent of companies reported a detailed investment strategy.
Vincent Neate, partner and head of sustainability at KPMG said, “Our clients invest in communities outside their front doors and as far afield as Africa, South America and Mongolia. The question they are asking us today is how to make sure this investment has lasting sustainable impact. For communities’ sake it is time to recognise that properly invested philanthropic dollars are the most effective way to drive prosperity and take people out of poverty.
“Measuring the impact of these investments on the ground can be challenging, but it is important to understand how effective these programs are, how they can be improved and where the money is best spent to deliver the biggest benefits. A clear strategy for social investment is essential to this process.”
Unlocking the value of social investment is intended to help corporate responsibility managers and others involved in designing and delivering social investments to overcome some of the challenges to measuring and reporting on social programs.
It contains practical advice, case studies and a framework for better measurement and reporting of social investments and programs.
Unlocking the value of social investment can be downloaded from www.kpmg.com/sustainableinsight
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Notes to editors:
1 According to OECD data development aid from France in 2012 totalled US$ 12 billion, http://www.oecd.org/development/stats/ODA%202012%20Tables%20and%20Charts.xls (Excel 132 KB)
About the Research:
KPMG Climate change & sustainability professionals analysed information published by companies and their associated corporate foundations to assess the effectiveness of reporting on social investment and impacts.
KPMG looked at the 10 largest companies by revenue in each of the 10 sectors studied – a total of 100 companies headquartered in 11 countries. The sectors studied were:
The research was based on publically available information in corporate and foundation reports, including corporate responsibility (CR)/sustainability reports, annual financial reports (including integrated reports), and foundation annual and progress reports.
Reports were assessed for clarity of reporting on contributions to social programs, social investment strategy, goals and targets, KPIs and approaches to measuring inputs, outputs, outcomes and impacts.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
Simon Chan, PR Assistant Manager, KPMG
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.