KPMG Survey of Corporate Responsibility Reporting 2017, a total of 97 percent of the Top 100 companies by revenue in Malaysia (N100) reported on their corporate sustainability performance, compared to the global average of 72 percent.
Petaling Jaya, 24 October 2017– Based on the KPMG Survey of Corporate Responsibility Reporting 2017, a total of 97 percent of the Top 100 companies by revenue in Malaysia (N100) reported on their corporate sustainability performance, compared to the global average of 72 percent.
The survey also showed that 93 percent of the N100 companies included Corporate Responsibility (CR) information (also known as sustainability information) into their respective annual reports, coming second only to India at 98 percent on a global ranking involving 49 countries.
According to Kasturi Nathan, Head of Governance & Sustainability at KPMG Management and Risk Consulting Sdn Bhd, these statistics indicate a strong shift in the focus amongst the top companies, saying, “Companies now see sustainability reporting as a way to strengthen their credibility among their stakeholders, with a clear acceptance that sustainability practices and meaningful disclosure reporting can become catalysts to gaining competitive business advantage in the pursuit of business longevity.”
On the other hand, KPMG’s CR survey found that integrated reporting still shows little traction in the country with only five percent of the N100 companies stating that their annual report is ‘integrated’. Furthermore, the assurance of sustainability data is still relatively low as only nine percent of the N100 companies have their sustainability reports or sustainability information in annual reports subject to a third-party independent assurance, compared to the global average of 45 percent.
Kasturi believes that the assurance of sustainability data will increase in popularity as more and more investors and stakeholders are aware that the companies’ “non-financial” information can have a material impact in the ability of businesses to build and protect value both in the short and the long term.
“The pressure on firms to up their game on sustainability disclosure is growing by the day. The demand for companies to integrate financial and non-financial data in their annual report is expected to rise. Investors want to be comforted that companies can ensure the sustainability of their business operations,” she added.
More positively, an increasing number of companies in Malaysia (25 percent of N100 companies) stated that their annual or sustainability report has been prepared in accordance to the Global Reporting Initiative (GRI) guidelines or standards. Furthermore, 12 percent of the N100 companies have aligned their sustainability effort to the United Nation’s Sustainable Development Goals (SDGs).
Both of these strongly demonstrate that companies in Malaysia are accelerating themselves to become global business partners. The SDGs is a set of global goals to eradicate poverty, protect the planet and ensure prosperity for all, which resonates strongly with businesses in Malaysia and clearly mirrors the sustainability focus promoted by the Eleventh Malaysia Plan.
KPMG’s CR survey further reported that 36 percent of the N100 companies acknowledge human rights as a sustainability issue for their business, while 45 percent stated their intention to improve the environmental, social and governance performance of their suppliers.
However, only three percent acknowledged climate change as a risk to their business compared to 28 percent globally. Similarly, only 10 percent of the N100 companies reported on their carbon reduction targets.
“Companies in Malaysia are increasingly aware that their responsibility extends well beyond the boundaries of their business. As a result it is critical for them to update their risk profile to include such issues like human rights, health and safety, corruption or air emissions. This will allow them to anticipate how their business, but also their supply chain and business partners identify and manage the impact on the economy, environment and society in which the company operates,” commented Kasturi.
To view and download the global KPMG Survey of Corporate Responsibility Reporting 2017 report, go to www.kpmg.com/crreporting.
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About the survey
The KPMG Survey of Corporate Responsibility Reporting has been published since 1993. The 2017 survey is the 10th edition.
Research sources included PDF and printed reports as well as web-only content published between 1 July 2016 and 30 June 2017. If a company did not report during this period, reporting from 2015 was reviewed. However, no report published prior to June 2015 was included in the research for this survey. The survey findings are based on analysis of publicly available information only, and no information was submitted directly by companies to KPMG member firms.
The survey refers to two research samples:
N100 – the largest 100 companies by revenue in each of 49 countries: 4,900 companies in total. Professionals at KPMG member firms identified the N100 in their country based on a recognized national source, or where a ranking was not available or was incomplete, by market capitalization or another appropriate measure. All company ownership structures were included in the research: publicly-listed and state, private and family-owned.
G250 – the largest 250 companies in the world.
The G250 was identified as the top 250 companies listed in the Fortune Global 500 ranking for 2016. The G250 is for the most part a subset of the N100 research sample. 7 companies in the G250 sample are not included in the N100
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 189,000 people working in member firms around the world. KPMG first established a presence in Malaysia in 1928. 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.