This final article in a
series offering practical advice on how to quantify, manage and improve
corporate ethical performance, looks at reporting issues
The
internet provides corporations with the means to collect and publish
more information more frequently and efficiently than has ever been
possible before.
How do you know that the information
you are gathering from disparate operations and then publishing, is
accurate, relevant to stakeholders and embedded in performance
improvement processes? How can society trust that the information gives
an accurate and a comprehensive view of your performance and priorities
for improvement?
Transparency is crucial to create
verifiable statements for stakeholders in a world where a company’s
request to ‘trust me’ prompts stakeholders to respond, ‘show me’
(report) and, increasingly, ‘prove it to me’ (provide independent
assurance or verification).
Reporting on non-financial
issues should balance good and bad news, demonstrate senior management
commitment and be tied to key performance indicators. In the financial
arena, critical information to report is defined by a comprehensive set
of standards. But in the environmental and social arena, neither the
corporate itself nor the independent auditor can make this decision in
isolation. This is why stakeholder ‘panels’ are increasingly seen as an
essential part of deciding what to report, how often, and to what
extent the information should be independently audited.
Helpful guidelines are provided by the Global Reporting Initiative,
which seeks to offer a common framework for sustainability reporting.
However, it will be up to you to ensure that effective internal
measurement and reporting systems are in place to provide information
that is:
useful and relevant both internally and externally
complete, accurate and comparable over time
has an appropriate level of assurance.
This will prepare you in the coming world of multiple stakeholders,
extensive transparency and real time reporting. There is a need for a
reporting and assurance approach that, as its starting point, focuses
on understanding the business risks, processes and controls at both
strategic and operational levels. Effective internal and external
assurance processes will help ensure that non-financial information is
auditable, that improvement opportunities are realised at an early
stage and that the information reported can be relied upon by both your
management and your stakeholders.
This will be key to
achieving and demonstrating real improvements in performance and
avoiding the sceptics’ cry of ‘it’s all just corporate whitewash’.
Melanie Eddis is a Manager within KPMG’s Sustainability
Advisory Services group
