Trends in Corporate Responsibility Reporting FEI Canada June 12, 2015
Introduction Corporate responsibility reporting Corporate Responsibility (CR) reporting it s now the norm Why report? Companies with a CR report (%) 100% 80% 95 93 83 79 60% 64 62 40% 41 20% 83 Public Investors Government 0% 2005 2008 2011 2013 World (top 250 companies) Canada (top 100 companies) Management Source: KPMG (2013), The KPMG Survey of Corporate Responsibility Reporting 2013 1
Why report? THE PUBLIC CARES Public Maintain your social license to operate Canadians level of trust in industry sectors Chemicals Pharmaceuticals Media Telecommunications Energy Financial services Banks Automotive Consumer packaged goods Entertainment Food and beverage Brewing and spirits Consumer electronics man Source: Edelman Trust Barometer (2014) Annual Global Study Technology 47% 54% 55% 57% 59% 60% 62% 63% 66% 66% 68% Corporate Responsibility (CR) reporting as an instrument to build public trust and strengthen credibility 71% 71% 74% 2
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Why report? INVESTORS CARE Investors Responsible investments are on the rise Evolution of $1 invested in value-weighted stocks by sustainability metrics ($) 25 20 15 10 5 0 High sustainability Low sustainability Source : Harvard Business School (2011) The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance CDN$ 1 Trillion Assets under management (AUM) using one or more RI strategies >30% Canadian RI assets now account for 31% of Canadian AUM (41 PRI signatories) Source: Responsible Investment Association (2015) 2015 Canadian Responsible Investment Trends Report. 3
Why report? GOVERNMENTS CARE Government Governments are stepping up their game Mandatory sustainability reporting (EU) Mandatory integrated reporting (SA) Executive compensation (US) Government Payments (CA) SGER (AB) SGER (AB) Ontario Benefits Act (ON) 180 Number of mandatory (130) and voluntary (50) initiatives on CR reporting in 45 countries & regions Source: Carrots and Sticks, 2013 edition International Canada (provincial) 4
Why report? MANAGEMENT CARES Management Corporate Responsibility is good business Attract capital investors Drive product innovation Enhance market position Attract talent Enhance brand Resource efficiencies (waste, water, energy) Avoided costs (e.g. lost time, fines, carbon levy) Operational risks Reputational resilience Regulatory compliance 5
Why report? MANAGEMENT CARES (Cont d) Management Corporate Responsibility is good business Visualization of future earnings at risk Copyright 2015 KPMG International, New Vision of Value 6
Trends and good practices Company responses Integration of corporate responsibility reporting Blended reporting Standardization Materiality Quantification Approach to integrating non-financial data into financial reports (%) 34% 14% 1% 52% Non-financial data integrated into financial reports Planning to integrate nonfinancial data into financial reports in the next 2 years No plans to integrate nonfinancial data into financial reports Don t know Source: Verdantix / Deloitte (2014), CFOs and Sustainability 7
Trends and good practices Company example SAB Miller Interactive corporate responsibility reporting Source: http://www.sabmiller.com/sustainability/reporting/sam-tool 8
Trends and good practices Company example Nike Inc Transparency on supply chain Source: http://about.nike.com/pages/manufacturing 9
Trends and good practices Company examples Nestlé Reporting on shared value creation Screen shot from Nestlé Report Source: http://www.nestle.com/ 10
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