KPMG: Companies believe sustainability reporting improves performance

At present, most international companies operating in Romania publish information on sustainability as a separate report or as part of company's annual report. The number of Romanian companies reporting on sustainability has steadily increased in recent years. In 2006 only 24% of top 100 companies, ranked according to turnover in Romania, reported on sustainability. This has now increased to 34%.

Companies worldwide are monitoring and reporting on their sustainability performance as a way to improve their operations, according to the results of a new survey of 5,000 readers and writers of sustainability reports, released on 21 January 2011.

The readers and reporters survey 2010, which includes the views of 5,000 readers and writers of sustainability reports, was commissioned by the Global Reporting Initiative (GRI) and conducted by Futerra Sustainability Communications, SustainAbility Ltd. and KPMG. It was designed to find out why both people who use and people who produce sustainability reports value the reporting process.

According to the survey, 65 percent of companies that responded said the top reason for reporting on their sustainability performance was to improve internal processes. Ninety-seven percent of people who read reports say reporting itself indicates that a company is improving its sustainability performance.

Survey analysts say today's report shows that sustainability reporting is no longer just a communications exercise - it is seen as a tool for improving an organization's environmental, social and governance performance.

The survey also reveals that readers of sustainability reports see reporting as a valuable tool for commercial decision-making. More than half of those reading sustainability reports use them as a basis for investment decisions and to decide whether or not to use a company's products and services.

Investors place the highest importance on performance data when it comes to building trust. Seventy percent chose this as their number one factor in trusting an organisation's sustainability commitment.

Solitaire Townsend of Futerra Sustainability Communications, one of the authors of the report, comments: 'Sustainability reporting is busting out of its niche. New technologies mean report data pops up from smart-phone scans. New readers in emerging markets are talking about what they read, and choosing employers, investments and purchases based on Environmental Social and Governance (ESG) data. Calls for integrated and compulsory reporting are being seriously debated by governments and industry bodies. These are exciting and changing times for sustainability transparency. So, it's never been more important to understand the mindsets of those who read, and those who write reports. Reporting change delivers those insights, some of which even the authors found surprising'

Jean-Philippe Renaut of SustainAbility comments: 'It's easy to dismiss sustainability reporting - and all the work required to advance this agenda –as dull. Yet the report clearly shows that the process improves performance over time. The outcome of this can be a great basis on which to build further internal and external engagement.'

Geta Diaconu, Director, Sustainability Services, KPMG in Romania comments: 'These are exciting findings and set the scene for sustainability reporting to become even more pivotal over the next few years. Reporting is not only a reflection of the very real commitments and achievements businesses are making, but it's also a driver for transforming the way they do business. As such, further integration in the management and control cycle akin to financial reporting is now becoming even more relevant than to date.'

Other key findings of the study include:

• Reporting can be a valuable behaviour change tool. Around 40% of readers reported that sustainability reports have had a positive impact upon their behaviour as a consumer;
• Reporting builds trust. Sixty percent of readers say reading a sustainability report positively influences their commitment and connection to an organisation;
• Almost half of the readers (45%) use the information from sustainability reporting to share their views or opinion about an organisation with others.

The Global Reporting Initiative (GRI) produces the world's most widely used sustainability reporting guidelines, for organizations of any size, sector and location. GRI collects data on sustainability reports and organizes the Readers' Choice Awards every two years to highlight good reporting. As part of the 2010 Awards, GRI commissioned Futerra, SustainAbility and KPMG to conduct a survey to find out why both people who use and people who produce sustainability reports value the reporting process.

For the survey, the three organisations asked 5,000 people who either produce or read sustainability reports for their views.

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The Global Reporting Initiative (GRI) is a network-based nongovernmental organization that aims to drive sustainability and environmental, social and governance (ESG) reporting. GRI produces the world's most widely used sustainability reporting framework to enable this drive towards greater transparency. The framework, incorporating the 'G3 Guidelines', sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. GRI is committed to continuously improving and increasing the use of the Guidelines, which are freely available to the public.

Futerra's vision is to make sustainable development so desirable it becomes normal. Today, Futerra is one of the few UK communications consultancies – if not the only one – to specialise solely in sustainable development and corporate social responsibility.

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 146 countries and have 140,000 people 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.

KPMG in Romania operates from six offices located in Bucharest, Cluj-Napoca, Constanta, Iasi, Timisoara and Chişinău. We currently employ more than 600 partners and staff, both Romanians, Moldovans and expatriates.

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