On June 10, 2002, KPMG released the results of its latest survey on non-financial disclosures - a term it uses to describe corporate reporting on environmental, social and sustainability performance. According to firm's press release, sustainability refers to the balance among economic, environmental and social factors necessary to keep a company profitable while being responsive to society's needs. This article provides a glimpse into the emerging trends and services in this area.
KPMG's surveys of corporate non-financial reporting are conducted every three years by its Global Sustainability Services (GSS) group. These surveys probe the practices and norms for public reports issued separately from companies' annual financial reports to investors. Major trends revealed by the latest survey include the following:
- A growing number of companies issue non-financial reports. 45% of all companies in the Global Fortune Top 250 (GFT250) issued environmental, social or sustainability reports in 2002, compared with 35% in the 1999 survey.
- The United States trailed the 18 other nations included in this survey when ranked by the percentage of companies reporting on environmental, social or sustainability performance.
- 30% of U.S. companies in the GFT250 reported on their environmental, social and sustainability performance in 2002, compared with 14% in the 1999 survey.
- The percentages varied by industry. Four sectors registered 100% reporting rates: chemicals and synthetics, transportation, mining, and forestry, pulp and paper.
According to the firm's Web site, the services offered by KPMG's GSS group include the following:
- Performance measurement and reporting. KPMG provides advice on how to measure, manage and report on the relevant performance indicators.
- Integrity management. KPMG helps clients understand the associated business risks, and advises them on the implications of these risks, how they can affect company value and how they can be effectively managed.
- Assurance. KPMG offers independent opinions on public reports as a means of confirming compliance and a sound basis for organizational and stakeholder decision-making.
- Transaction support. KPMG helps identify the financial, legal and commercial implications of social and environmental issues and assists in the negotiations concerning their impact on the value and viability of the transaction.