German firms produce highest quality carbon reporting, followed by UK, Japan, France and US, according to new KPMG analysis
Carbon reporting from the world’s largest companies lacks consistency, making it almost impossible for stakeholders to compare company performance easily and accurately, according to the 2015 edition of the KPMG Survey of Corporate Responsibility Reporting.
The quality of carbon information, published by the world’s largest 250 companies in annual financial and corporate responsibility reports, was analysed by KPMG using a scoring methodology focused on publically available data, targets and communications.
Commenting on the report’s findings, Vincent Neate, UK Head of Climate Change and Sustainability says: “There is a clear need for improvement and global reporting guidelines on carbon to help companies improve their reporting and help investors and other groups make informed decisions. Industry bodies, regulators, standard setters, investors and others all have a role to play.”
While UK companies have some of the highest disclosure rates, thanks to mandatory reporting, only 83 percent of the UK companies analysed have targets for reducing their carbon emissions. Less than half of these companies (42%) are providing enough information to understand how they are progressing against any targets set.
Vincent comments “While it is positive to see the increase in reporting by UK firms; without more information on how targets are being set, and how the company is then tracking against them, it is very difficult for anyone to draw a meaningful conclusion on the company’s performance using the data currently available.”
KPMG’s study follows a recent proposal to the G20 by the Financial Stability Board for a task force to develop consistent climate-related disclosures for companies to help lenders, insurers, investors and other stakeholders to understand material risks. The Climate Standards Disclosure Board (CDSB) has also introduced a voluntary framework aimed at helping companies include investor-relevant climate information in mainstream financial reporting.
The KPMG Survey of Corporate Responsibility Reporting includes a view of global trends in Corporate Responsibility (CR) reporting based on analysis of reporting by 4,500 companies across 45 countries. It shows that the highest rates of CR reporting are now found in emerging economies such as India, Indonesia, Malaysia and South Africa. These high rates are often driven by regulation, either from governments or stock exchanges. The research also shows that it is now standard business practice to include CR information in the annual financial report, with more than half (56 percent) of the 4,500 companies studied doing this.
Looking ahead, Vincent concludes: “While it is encouraging to see that the UK has made great strides in CR reporting, companies can’t rest on their laurels. They now need to focus on better communication of progress against national carbon emission targets, and taking more action to report on the in-direct emissions of products and services once they are passed out of the company’s control and onto the end user.”
For more information and to download a copy of the report visit www.kpmg.com/crreporting
For media enquiries, please contact:
Ann Burton, KPMG Press Office
T: +44 (0)20 7311 6497
M: +44 (0)7467 339 719
Follow us on twitter: @KPMGuk
About the report
The KPMG Survey of Corporate Responsibility Reporting is now in its 9th edition and was first published in 1993. Research is carried out by professionals in KPMG member firms and is based on publicly available information published by companies in their corporate responsibility reports, annual financial reports and websites. In the 2015 edition, the sample of the world’s 250 largest companies is based on the 2014 Fortune 500 listing. Global trends in CR reporting are based on a study of reporting from the top 100 companies by revenue in each of the 45 countries.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 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.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.