Trends in Corporate Social Responsibility Reporting

1. Trends in Corporate Social Responsibility Reporting Arjan de DraaijerKPMG Global Sustainability ServicesTM

2. 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

3. Sustainable Development and Companies “Sustainable development comprises economic and social development that protect and enhance the natural environment and social equity” Sustainable Development Contribution of companies Creating value by responding to society’s needs Corporate Social Responsibility

4. Corporate Social Responsibility: Main Elements Company Strategy & Management Dialogue Stakeholders Economic Social Transparancy Accountability BusinessPrinciples Annual CSR Report Environmental Communication

5. 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

6. Companies with Annual CSR Reports 4th KPMG International Survey on Corporate Sustainability Reporting (2002) 28% Top 100 companies in 19 countries (total 1900 companies) CSR Report Environment, Health & Safety Report

7. Utilities 50% Communications and media 46% Chemicals & synthetics 45% Forestry, pulp & paper 43% Oil & gas 38% Transport 37% Mining 33% Pharmaceuticals 30% Automotive Electronics & computers 25% Food & beverage 25% Metals, engineering & other manuafacturing 24% Trade & retail 15% Finance, securities & insurance 12% Construction & building materials 9% Other service 6% 0% 10% 20% 30% 40% 50% 60% CSR Reporting by Industry Sector 28% Source: KPMG International Survey on Corporate Sustainability Reporting 2002

8. CSR Corporate Reporting Trends • From environmental reports to integrated CSR reports (including social issues) • 10% of top 100 companies report on CSR • Use of criteria and standards • GRI • AA1000s • (Global Compact) • Stakeholder involvement • Issue identification • Stakeholder dialogue • Interviews in the report

9. CSR Corporate Reporting Trends • Assurance • External credibility • Internal performance improvement tool • Other forms of reporting • Internet based • Separate specialist and general audience reports • Local reports • Regional differences • Asia: product focus, mainly environmental • US: focus on philanthropy, corporate governance • Europe: stakeholder focus, integration in core business • Latin America: mix, emerging

10. 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

11. Growing Number of NGO’s and Consumer Organisations Nr of NGO’s Year Source: Echo research ……critically monitoring company behaviour

12. Brand / Reputation is at Stake

13. Transparancy : Response to Growing Distrust “Involve me” High “Prove it to me” Trust “Show me” “Tell me” Low Transparency Low High To obtain the trust of stakeholders,companies must become more transparent

14. External Drivers for CSR Reporting • Business issue • Risk management • Supply chain requirement • Laws and Regulations • Number of countries require mandatory reporting • Financial Sector Pressure • Sustainability Indexes (DJSI, FTSE) • SRI • Mainstream investors (increasingly)

15. 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

16. The CSR Report: Snapshot of the CSR Performance Principles Policy communicated Bestpractices Performancedata ‘Impactdata’ Policy defined Policy implemented Environmental CSR Issues in the Report Social Economic Maturity of CSR Issues

17. The External Benefits are only the Tip of the Iceberg External benefits: Credibility towards stakeholders Shows leadership of company Information for financial sector

18. Internal Benefits of CSR Reporting • 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

19. 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

20. CSR Reporting in Practice Outside in Study External Standards Benchmark Competitors Stakeholder Analysis Develop Sustainability Report Sustainability report Develop Framework Data Collection Writing Process Verfication Develop Launching plan Accompanying Launching Plan Inside out Internal Survey

21. Balanced Reporting: The Key to Succes Stakeholder’s view on Company high Underappreciation CSR leaders CSR Performance balance Overappreciation low high CSR Communication

22. Become a respected business partner……………. ……….through balanced CSR reporting

23. 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

24. Questions? KPMG’s Global Sustainability Services TM Arjan de Draaijer DeDraaijer.Arjan@KPMG.nl