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© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
2
The 10th edition of KPMG’s survey analyzes reporting from a record 4,900 companies in 49 countries.
The survey spotlights four major emerging trends within CR reporting:
— Reporting on the UN Sustainable Development Goals (SDGs)
— Reporting on carbon reduction targets
— Reporting on climate-related financial risk
— Reporting on human rights
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
3
Research samples: the N100 and G250
The N100 refers to a worldwide sample of 4,900 companies comprising the top 100 companies by revenue in each of the 49 countries researched in this study.
N100
The G250 refers to the world’s 250 largest companies by revenue based on the Fortune 500 ranking of 2016.
G250
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
4
KPMG has been tracking
in corporate responsibility reporting since 1993.
quantitative global trends
This survey finds N100 companies continue to catch up steadily with the G250.
Growth in global CR reporting rates since 1993
Base: 1765 N100 companies that report carbon reduction targets, 156 G250 companies that report carbon reduction targets
Note: The underlying trend of 75 percent applies when looking at the same sample of countries in 2015 and 2017. The overall N100 rate in 2017 is 72 percent due to the inclusion of 5 new countries with relatively low reporting rates in the 2017 research.
Source:KPMG Survey of Corporate Responsibility Reporting 2017
12%18%
24%18%
41%
53%
64% 71% 73% 72%
35%
45%
64%
83%
95%93% 92% 93%
0
10
20
30
40
50
60
70
80
90
100
1993 1996 1999 2002 2005 2008 2011 2013 2015 2017
N100 G250
75%Underlying trend
93%
6© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
CR reporting in the Americas region has risen by an impressive 6 percentage points in the last two years. It is the region with the highest reporting rate in 2017
Base: 4900 N100 companies
Note: The underlying trends of 78 percent for Asia Pacific and 77 percent for Europe apply when looking at the same sample of countries in both 2015 and 2017. The overall Asia Pacific regional rate in 2017 is 77 percent and the overall European regional rate in 2017 is 73 percent due to the inclusion of new countries with relatively low reporting rates in the 2017 research.
Source:KPMG Survey of Corporate Responsibility Reporting 2017
Middle East & AfricaEuropeAsia PacificAmericas
2017
83% 78% 77% 52%
Middle East & AfricaEuropeAsia PacificAmericas
2015
77% 79% 74% 53%
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
7
The survey finds the mixed picture across Europe continues.
The divergence between Western and Eastern Europe observed in 2015 remains.
CR reporting rates: Western Europe vs Eastern Europe
Base: 2,400 N100 companies in Europe
Note: The underlying trend of 82 percent applies when looking at the same sample of countries in 2015 and 2017. The overall Western Europe rate in 2017 is 75 percent due to the inclusion of 3 new countries with relatively low reporting rates in the 2017 research.
Source:KPMG Survey of Corporate Responsibility Reporting
79%
61%
82%
65%
0
10
20
30
40
50
60
70
80
90
Western Europe Eastern Europe
2015
2017
9 countries now have CR reporting rates of over 90%. Top countries are from Europe, ASPAC, the Americas and Africa.
Source: KPMG Survey of Corporate Responsibility Reporting 2017
99% 99% 97% 94%UK Japan India Malaysia France
99%
Denmark South Africa US Mexico
94% 92% 92% 90%
More than ¾ of the world’s biggest companies now integrate financial and non-financial data in their annual financial reports, suggesting they believe CR information is relevant for investors
Companies that include CR information in annual financial reports
Base: 4,900 N100 companies and 250 G250 companies
Note: The underlying trend of 60 percent applies when looking at the same sample of countries in 2015 and 2017. The overall N100 rate in 2017 is 57 percent due to the inclusion of 5 new countries with relatively low reporting rates in the 2017 research.
Source: KPMG Survey of Corporate Responsibility Reporting 2017
78%65% G250
56% N100
2015 2017
60%
10© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“Integrated Reporting” has taken off in Japan, Brazil, Mexico and Spain
Actual number of "Integrated Reports": top countries
Base: 4,900 N100 companies
Note: 2015 Integrated reporting rate restated for South Africa
Source: KPMG Survey of Corporate Responsibility Reporting 2017
South Africa
+2
Japan
+21
Spain
+9
The Netherlands
-1
21
88 90
4227 36 27 2621
Brazil
+16
Mexico
+16
622
521
20152017
Assurance of CR data has more than doubled among the G250 in the last 12 years indicating that the largest companies see value in promoting the reliability of this information.
Growth in independent assurance of CR information
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source:KPMG Survey of Corporate Responsibility Reporting 2017
42%38%38%39%45%
2015
63%
2013
59%
2011
46%
2008
40%
2005
30%
33%
2017
67%
N100G250
13© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
13
In September 2015, the UN adopted the Sustainable Development Goals (SDGs), a set of 17 goals to end poverty, protect the planet, and ensure prosperity for all.
KPMG’s survey analyzed how many companies make a connection between their corporate responsibility activities and the SDGs.
14© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
14
KPMG’s survey shows that the SDGs have resonated strongly with businesses worldwide in less than two years since their launch.
Around four in ten CR reports from both N100 and G250 companies make a connection between the company's CR activities and the SDGs.
Number of companies that connect their CR activities to the SDGs
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
39%N100N100
43%G250G250
15© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
There are only three countries where a majority of the top 100 companies reference the SDGs in their CR reporting.
All the top 10 are European or Latin American countries.
World’s top 10 countries for connecting CR activity with the SDGs
Base: 4,900 N100 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
60 58 47 47Sweden Portugal Mexico France Netherlands
51
Finland Spain Colombia UK Italy
46 46 44 43 41
16© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SDG maturity matrix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Understanding Prioritization MonitoringPerformance
Number of companies that score Top/Med/Low/0 for each of the 3 categories
Top score (3/3)
Medium score(2/3)
Low score (1/3)
No score (0/3)
Source: KPMG Survey of Corporate Responsibility Reporting 2017
17© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SDGs prioritised as most relevant to business
Source: KPMG Survey of Corporate Responsibility Reporting 2017
0%
10%
20%
30%
40%
50%
60%
13 8 3 12 5 4 7 9 11 10 6 17 16 1 15 2 14 All
18© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Business case of the SDGsBusiness case example:
“The SDGs offer business an unprecedented economic opportunity.
Pursuing these Goals could deliver valuable market opportunities, unlocking economic
growth of up to $12 trillion and creating 380 million jobs, according to estimates from the Business & Sustainable Development Commission”
Only 8% report clearly on the business case specifically for taking action on the SDGs
Germany
UK
Italy
IndiaSpain
Source: KPMG Survey of Corporate Responsibility Reporting 2017
19© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Impact of business activities on any of the SDGs
73% explain the impact of the business on the SDGs
97% companies ONLY describe the positive impacts they have on the SDGs not the negative.
Source: KPMG Survey of Corporate Responsibility Reporting 2017
20© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Impact examples
SDG1: “Together with our bottling partners, providing jobs to over 700,000 people globally” SDG8: „Our activities create
jobs, use local suppliers and support local businesses. We contribute to economic growth by paying taxes and royalties to local governments. Our projects create demand for a range of goods and services, such as construction. We assess those we work with to ensure they adhere to principles supporting the eradication of forced labour and modern slavery and the protection of labour rights. We have social investment projects to help create opportunities for individuals.”
21© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
21
KPMG reviewed reports to see how many companies disclose targets to cut their carbon emissions.
Analysts also checked to see if companies linked their targets to any external climate goals such as The Paris Agreement 2ºC goal.
22© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
A solid majority of the world’s largest companies (G250) now disclose targets to cut their carbon emissions.
Among the N100, the survey shows that 50 percent of reporting companies set carbon reduction targets
G250 companies that set carbon reduction targets
Base: 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
67%
G250
58%
2017
2015
23© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
23
Most carbon targets are not linked to greater climate goals
Companies linking their carbon reduction targets to national, regional or global goals
23% 23%
6%2%
7% 6%
63%69%
Linked to global 2o target (Paris Agreement
Linked to regional targets (e.g. EU targets)
Linked to national targets (NDCs/INDCs)
Not linked to any other targets
Base: 1765 N100 companies that report carbon reduction targets, 156 G250 companies that report carbon reduction targets
Source:KPMG Survey of Corporate Responsibility Reporting 2017
G250N100
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
24
KPMG analysts studied companies’ annual financial reports to understand how many acknowledge that climate change poses a financial risk to their business.
25© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Only 28 percent of N100companies currently acknowledge the financial risk of climate change in their annual reports.
Among the world’s 250 largest companies (G250), a higher 48 percent acknowledge the risk.
28%
72%
N100
Yes
No
48%
52%
G250
Yes
No
Companies that acknowledge the financial risk of climate change in their annual reports
Base: 4,900 N100 companies and 250 G250 companies
Source: KPMG Survey of Corporate Responsibility Reporting 2017
26© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Of those companies that do acknowledge climate change as a financial risk in their financial reporting, a relatively high proportion provide some narrative description of the potential impacts. Very few, however, are currently quantifying the potential impact of those risks.
Base: 1,386 N100 companies & 119 G250 companies that acknowledge climate change as a financial risk in their annual reportSource: KPMG Survey of Corporate Responsibility Reporting 2017Note: Numbers do not add up to exactly 100 due to rounding
Companies describing, quantifying or modelling climate risk in financial reports
76%
63%
2% 2% 3%2%
18%
33%
N100 G250
Provide a narrative description of potential impacts
Quantify potential risks in financial terms
Model potential impacts using scenario analysis
Acknowledge financial risk of climate change but do not describe the potential impacts
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
27
In 2011, the UN endorsed the Guiding Principles on Business & Human Rights.
Six years on, KPMG analyzed reports to see how many companies are acknowledging human rights as an issue for their business
28© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The results show the human rights is firmly on the agenda as a global business issue.
Almost three quarters of N100 CR reports and nine out of ten G250 reports acknowledge the issue.
CR reports that acknowledge human rights as an issue for the business
Base: 3,543 N100 companies that report on CR, 233 G250 companies that report on CR
Source: KPMG Survey of Corporate Responsibility Reporting 2017
73% 90%
30© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Sustainability reporting has been declined, proportion of local reportsslightly increased in 2017 compared to 2015
Source: KPMG International CR Reporting Survey 2017
31© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Leading industries issue mainly global reports resulting in lower level of local community engagement and transparency
Source: KPMG International CR Reporting Survey 2017
32© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
GRI as de-facto standard for sustainability reportingGRI as reporting standard is applied by the majority of leading companies but higher levelof compliance to the latest Standards is to be ensured
Source: KPMG International CR Reporting Survey 2017
33© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Big 4 Firms dominate sustainability reporting assurance
Local reports need to catch up on assurance to increase credibility: global reports have a 3 times higher assurance rate than local reports
Source: KPMG International CR Reporting Survey 2017
34© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
SDGs are poorly reflected in local reports
Source: KPMG International CR Reporting Survey 2017
35© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Sustainability targets and results are usually not included in local reports
Source: KPMG International CR Reporting Survey 2017
To find out more download the report at www.kpmg.com/crreporting
Email us at: [email protected]
37© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG Sustainability Services – The Journey
ALTEO – sustainability reporting
2007-2014: sustainability is our core business, internal data available fromoperations SDG drive comes from strategy – no report
Acquisition of Sinergy in 2015 and IPO in 2016 – need for formal report More complex processes
Need for data unification
Financial and non-financial reports are really became „public” (transparency,branding)
The report is based on GRI G4 Reporting Guidelines Project Team of external and internal resources/experts
Commitment of the management/CEO
External professional with content proposals and methodology
GRI Aspects and Indicators on the basis of Materiality Analysis
Successfully audited and has been recognized by Green Frog Award The Report is being provided to our Key Stakeholders and has been published
on our web site and on the ALTEO’s Stock Exchange section Integrated Report – financial and non-financial – in 2019
40
Safety first in the chemical industry
Work health and safety
o By 2030 we reduce the number of events resulting fromimproper wearing of personal protective equipment by 40%.
o We will reduce the lost time injury rate• by 25% within 5 years.• by 50% by 2030.
Economic value creation:- Transparency through our audit
services- Efficiency through our tax and
advisory services
Economic and social value creation:- Rural development related
services- Equal rights in HR policies- Mentor programs
Social value creation:- Education related advisory and IT services- Learning&development programs to
employees- Education programs to university students
(dual trainings, competitions)- Lectures, mentoring and donation
Social value creation:- Cooperation with
chambers, professional organizations, universities, etc.
Environmental, economic and social value creation:- Renewable energy
and energy efficiency advisory
- Global EnergyCentre of excellence
Economic value creation:- Infrastructure, technology
developments - Major project advisory
Economic and social value creation:- Ethics&compliance- EU&gov. &NGO work- Risk consulting solutions (IA,
SDD)
Most relevant SDG-s for KPMG in Hungary
4444
SDG IN MOL GROUP AND IN OIL AND GAS SECTOR
FIRST HSE REPORT OF MOL IN 1997
INTEGRATED REPORT SINCE 2009
3 BUSINESSES, 40+ SUBSIDIARIES, 100+
INDICATORS
REASONABLE ASSURANCE FOR SELECTED
INDICATORS
REFERENCE TO SDGS IN REPORT SINCE 2017
IPIECA: MAPPING THE OIL AND GAS INDUSTRY TO THE SUSTAINABLE DEVELOPMENT GOALS: AN ATLAS
KPMG on social media KPMG app
© 2017 KPMG Advisory Ltd., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved.
The KPMG name and logo are registered trademarks of KPMG International.
Attila SágodiPartner
KPMG Tanácsadó Kft.1134 Budapest, Váci út 31.
T: +36 1 887 6611M: +36 70 333 1466E: [email protected]
István Szabó Senior manager
KPMG Tanácsadó Kft.1134 Budapest, Váci út 31.
T: +36 1 887 7278M: +36 70 370 1812E: [email protected]