Most large companies carry out reporting of corporate responsibility activities but the quality of information provided needs to be improved, says a survey released today.
KPMG India Corporate Responsibility Reporting Survey 2013 also reveal that companies believe responsibility of this agenda lies with the board or the CEO.
The findings also come against the backdrop of the government making it mandatory for certain class of profitable companies to shell out at least two per cent of three year average annual net profit towards social welfare activities.
"Reporting on Corporate Responsibility (CR) is evolving as a standard business practice in India, undertaken by almost three quarters (73 per cent) of large Indian companies," the survey report done by the consultancy.
CR also referred to as 'sustainability' or 'business responsibility' looks at the ethical, environmental and social aspects of business beyond the financial parameters, the report said.
The findings are based on an analysis of reporting by covers top 100 listed companies by revenue (N100).
As per the report, 45 companies surveyed use standard frameworks to do CR reporting while 31 have separate reports comprehensively covering aspects of CR strategy, governance, targets and commitments, and performance.
"Only one in four N100 CR reports (26 per cent) establish the linkage of how stakeholder inputs are considered in identifying critical issues for long term sustainability of the company," it said.
Further, the survey found that almost half of the top 100 listed companies' CR reports identify board or CEO as holding the "ultimate responsibility for CR agenda".
However, reporting is low when it comes to linkage of CR performance and executive remuneration.
"Only 1 in 5 (19 per cent) CR reports are more balanced with in-depth discussion on key challenges and dilemmas," the report said.
In terms of sector, Information Technology leads the way with all N100 IT companies producing separate CR reports.
"71 per cent of CR reports reckon climate change as a key environmental and social change that will impact businesses," it noted.
Various aspects including strategy, risk and opportunity; targets and indicators; and stakeholder engagement, were taken into account.
"Regulations like Clause 55 (Business Responsibility Reporting) of the listing agreement and CSR disclosure under the new Companies Act will drive the reporting agenda in India.
"It is no more a choice for companies to report or not to report," Head of KPMG Climate Change and Sustainability Services in India Raajeev Batra said.
