KPMG: 97% of firms keen on corporate sustainability

By FARA AISYAH / Graphic By TMR

Malaysian companies are acknowledging the importance of a corporate sustainability report which is paramount to strengthening credibility among stakeholders, while gaining a competitive business advantage in the pursuit of business longevity.

A recent survey by audit firm KPMG revealed that a total of 97% of the top 100 companies by revenue in Malaysia (N100) reported their corporate sustainability performance.

The KPMG Survey of Corporate Responsibility Reporting 2017 also showed that the global average was 72%.

The report comprises results collated from the largest 100 companies by revenue in each of 49 countries, amounting to 4,900 companies in total.

KPMG Management and Risk Consulting Sdn Bhd head of governance and sustainability Kasturi Nathan said these statistics indicate a strong shift in the focus among top risk companies.

“Companies now see sustainability reporting as a way to strengthen their credibility among their stakeholders, with a clear acceptance that sustainability practices and meaningful dis- closure reporting can become catalysts to gaining a competitive business advantage in the pursuit of business longevity,” she said in a statement yesterday.

The survey also showed that 93% 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% on a global ranking.

KPMG’s CR survey revealed that integrated reporting still shows little traction in the country, with only 5% of the N100 companies stating that their annual report is “integrated”.

The assurance of sustainability data is also still relatively low, as only 9% of the N100 companies have their sustainability information in annual reports subject to a third-party independent assurance, compared to the global average of 45%.

Kasturi said the assurance of sustainability data will increase in popularity as more and more investors and stakeholders are aware that companies’ “non-financial” information can have a material impact in the ability of businesses to build, as well as protect value, both in the short and long terms.

“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.

An increasing number of companies in Malaysia, with 25% of the N100 companies stated that their annual or sustainability report has been prepared in accordance to the Global Reporting Initiative guidelines.

Of the total, 12% of the companies aligned their sustainability effort to the United Nation’s Sustainable Development Goals (SDG).

The SDG 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 11th Malaysia Plan.

Both of these strongly demonstrate that companies in Malaysia are accelerating themselves to become global business partners.