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Reporting on Corporate Responsibility is Common Only in Top Tier

Merrill Disclosure Solutions | May 07, 2013

CR reporting mostly from the largest. Most of the world's largest companies produce a corporate responsibility report, covering issues ranging from the company's environmental performance to its human rights and labor record. According to a KPMG survey, CR reporting “is now the norm, not the exception.” The survey found that the percentage of the world's 250 largest companies engaging in corporate responsibility reporting rose from 50% to 80% between 2005 and 2008. Over 90% of the largest companies in Japan and the United Kingdom produced such reports. The rate in Mexico, however, was only 17%, and companies in many countries in the Americas did none at all. Professors Trina Hamilton and Daniel Tschopp explain that variations in reporting rates cannot be attributed solely to a country's population size or rate of development. In general, the developed world (including the United States, Canada, Japan, and Europe) does more CR reporting than the developing world, but notable exceptions exist, such as Brazil, Argentina, and Chile. Brazilian companies, for example, exceed US companies for certain kinds of reports and nearly equal American firms for all CR reporting combined.

Varies by corporate and national culture. Although the organizations that encourage CR reporting include guidelines for what information is relevant to disclose, the disclosures are voluntary. What is actually included varies according to the company and country of origin. Some jurisdictions take one sort of corporate responsibility more seriously than others, for example, reporting more on environmental impacts than on working conditions or wages. The authors reviewed reports modeled on the Global Reporting Initiative (GRI), the UN Global Compact's Communication on Progress (COP), and the AccountAbility AA1000AS standard. The first two models are much more widely used in the Americas. For 2010 in the Americas, the authors located 503 GRI reports, 978 COP reports, and only 14 AA1000AS. The UN Global Compact's COP standard covers the broadest range of possible reporting interests, with not only environmental issues but also a broad range of social, labor, and human rights concerns.

Need resources and a demand for the info. Widespread adoption of CR reporting is likely to occur only when either regulators, investors, or business partners demand it, the authors observe. Companies need resources to measure, track, and report various impact statements, and such an expensive process needs a reason to exist. Sometimes large companies that operate in jurisdictions with tight regulations hope to head off lawsuits by investors or others by making reports that disclose CR-related practices. Companies in countries with large numbers of socially responsible investors also benefit by enticing capital from a segment of the market. Aspiring companies from other markets may wish to resemble top-tier firms from the dominant economies at least in part to gain access to foreign investment capital. Nonetheless, for CR reporting to thrive in a particular country requires a local constituency that benefits from it and that has a concern for the matters reported. If organizations supporting or encouraging socially responsible behavior by corporations have domestic branches, the local unit can assist local companies with information to set up their CR reporting systems.

The referenced working paper, Growth & Change, published by Wiley-Blackwell, 350 Main Street, Malden MA 02148 (USA); and PO Box 808, 1-7 Oldlands Way, Bognor Regis PO21 9FF (England). To subscribe, call (800) 835-6770 or 44 (0) 1865-778315; or visit

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