By Sarah E. White | 05 October 2012
The government stance on corporate social responsibility (CSR) reporting varies across the globe from a voluntary initiative to a mandatory requirement. While CSR reporting may not be mandatory in some jurisdictions, companies are under increasing pressure to demonstrate that they are responsible citizens. Company stakeholders are demanding corporate accountability and transparency through straightforward CSR reporting.
According to KPMG’s 2011 International Corporate Responsibility Reporting Survey, the percentage of companies reporting on their CSR initiatives from 2008-2011 rose from 74% to 83% in the U.S., from 62% to 79% in Canada, and from 91% to 100% in the U.K. The survey also indicates percentage of corporate reporting by region, including Europe with 70%, the Americas with 69%, Middle East and Africa with 61%, and Asia Pacific with 49%.
In the U.S., President Obama has called on the federal government, the nation’s largest consumer of energy, to set an example in increasing sustainability and energy efficiency. President Obama signed Executive Order 13514 in October 2009 requiring agencies to report and reduce greenhouse gas pollution. The federal government’s sustainability goals and reporting requirements may encourage companies to develop their own.
Several U.S. government agencies, such as the Environmental Protection Agency (EPA), the Securities and Exchange Commission (SEC), and Federal Trade Commission (FTC) are increasing their scope of sustainability disclosure oversight. In February 2010, the SEC issued an interpretive release to provide guidance to public companies regarding the SEC’s non-financial disclosure requirements as they apply to climate change matters. Effective in December 2011, the EPA established mandatory greenhouse gas (GHG) reporting requirements (40 CFR Part 98) for large sources and suppliers in the United States. In response to requirements in the 2010 Dodd-Frank Act, the SEC adopted conflict minerals reporting requirements. The FTC has issued Guides for the Use of Environmental Market Claims (Green Guides) to address sustainability reporting at the product level.
Environment Canada, a Canadian government department, has several initiatives, including the Carbon Disclosure Project, the National Pollutant Release Inventory, and the Greenhouse Gas Emissions Reporting Program to ensure that corporate sustainability performance information is accessible and usable.
Effective in March 2010, South Africa’s third report on corporate governance (King III), recommended that companies integrate sustainability reporting and disclosure with financial reporting.
In October 2011, the European Commission issued a press release communicating a new definition and strategy for corporate social responsibility for the years 2011 through 2014. The European Commission now defines CSR as “the responsibility of enterprises for their impacts on society” and calls for public authorities of the EU Member States to support corporate social responsibility through a mix of voluntary policy measures and necessary complementary regulation. In the Single Market Act, the European Commission announced its intention to adopt proposed legislation aimed at improving the transparency of company disclosure of social and environmental information. Of the 27 EU member states, only 15 have national policy frameworks to support corporate social responsibility.
During the June 2012 U.N. Conference on Sustainable Development (Rio+20), Member States agreed that corporate sustainability reporting was important and encouraged companies to integrate sustainability information into their reporting cycle. Four Member States, including Brazil, Denmark, France, and South Africa are working with Global Reporting Initiative (GRI) and the United Nations Environment Programme (UNEP) to further encourage integrated reporting.
As interest in sustainability and CSR reporting continues to grow, organizations should expect more initiatives and regulatory requirements addressing CSR reporting.