Multinationals Take Up Global CSR ReportingResults of the 2003 Benchmark Survey

Material World, highlights the findings of the fourth Benchmark Survey of Global Environmental and Social Reporting (the 2003 Survey). The research project evaluates global reporting among the 100 largest companies in the world. The concept results from the simple proposition that global economic actors have global environmental and social impacts and should be encouraged to produce global, as opposed to national, environmental and social reports. The report examines leaders and best practices of the most sophisticated reporters, identifies the leading companies, sectors and issues that the leaders are reporting on. This years Survey reports many different topics including geographical trends and non-reporters, progress towards integrated sustainability reporting, and building trust through independent assurance.

The 2003 Benchmark Survey found that 75% of reporting companies are now reporting on efforts to reduce Greenhouse Gas (GHG) emissions and other climate change mitigation activities. For the second survey running the Computers and Electronics sector has topped the list in Greenhouse Gas reporting and Climate Change mitigation, with 80% of companies reporting in this area. This year the scope of the Benchmark Survey was expanded to include climate change mitigation activities as well as reporting on GHG emissions. An additional category on mobile sources of CO2 was also introduced, but reporting in this area remains low. Just 17% of reporting companies (8% of total companies) and 20% of electronics companies discussed mobile sources of CO2 in their reports.

Many of the companies in the Computers and Electronics sectors have demonstrated strong reporting on environmental performance over the past four years, partly driven by a strong geographical emphasis on environmental stewardship by the Japanese companies (60% of the sector is Japanese), but increasingly the Benchmark Survey is identifying commercial drivers for reducing GHG emissions. Findings in the Benchmark Survey suggest that GHG reporting will be standard among leading firms by 2005. The business case for GHG management asserts that firms can make money and do the right thing. Although skeptics remain in some sectors, disbelievers can change course suddenly. In order to take advantage of the emerging benefits of GHG management and reporting, firms need to establish a baseline CO2 inventory now and participate in discussions of GHG measurement standardization. The importance of reporting emissions has gained more momentum in the past year as companies and the investment community have begun to recognize the increased business value of environmental reporting. The leaders in reporting of GHG emissions this year were Hitachi and Matsushita, as they included mobile sources of CO2.

Reporting in the automotive sector has grown in maturity over the last four years and is now level with the Computers and Electronics sector, with 90% of the sector also producing a global report. Two Automotive companies are among leading social reporters both globally and in the U.S. Overall reporting on diversity rose from 38% to 65% and from 25% to 60% in the automotive sector. Fifty percent of automotive companies reported on human rights this year, compared with 54% of all reporting companies. Ford and General Motors consider stakeholder issues sufficiently material to their business to include them not only in reporting but also in company decision making. Reporting priorities remain predominantly environmental, but social indicators are working their way onto the reporting agenda. Sixty percent of automotive companies are now reporting on diversity, up from 25% in 2001 and in line with reporting across other sectors. Forty percent of companies published a social report this year.

Material World demonstrates trends and highlights key findings of corporate environmental and social reporting of the worlds 100 largest companies. It focuses on the question of materiality – what do companies regard as reporting priorities and how do these align with those of stakeholders. As global reporting expands to cover not just environmental policy and performance but also social, economic and integrated aspects of company behavior, reporters will inevitably become more selective in what they include. In attempting to produce valuable and meaningful reports, many companies are struggling to decide what is material and to whom. The question of materiality is increasingly focusing on stakeholder expectations. Findings of the 2003 Benchmark Survey suggest that stakeholder involvement in shaping company priorities and influencing reporting is still limited.

Report by Bruce M. Kahn, PhD, Cameron-Cole

For more information:
Riva Krut, Cameron-Cole.
Julie Owen, CSR Network.