British company reporting to include climate risk

British companies must step up disclosure of how climate change will impact
their business to satisfy heightened investor appetite for information about all
non-financial risks, a
report
from
KPMG
suggests.

In a survey of corporate responsibility reporting processes from 2,200
companies across the globe ­ including constituents of the
Global
Fortune 250 index and the top 100 largest companies by revenue
across 22 countries ­ KPMG found that while non-financial reporting was common,
69% of companies surveyed did not include any information about the risks posed
by climate change. Almost two-thirds of the respondents (62%) said they did not
report their carbon footprint and only 8% of the Global Fortune 250 index
reported both their own carbon footprint and that of their value chain.

“In these uncertain times investors are looking for as much clearly
accessible information as they can get from a company and that is likely to
include environmental, social and governance information,” says Richard Sharman,
head of sustainability services at KPMG UK.

“Investors want to know about anything that might carry risk. What they don’t
know, they will be suspicious about.”

Geographical variance
The report adds that though 80% of the constituents of the Global Fortune 250
index produce corporate responsibility data, either separately or as part of
their annual reports ­ 30% more than when the survey was last undertaken in 2005
­ there is still much variation between countries on companies reporting about
climate change and their carbon footprint.

KPMG says that enhanced transparency and disclosure of both financial and
non-financial matters in corporate reports will grow in importance “as the
global economy enters what could be a prolonged downturn.”

KPMG’s global head of sustainability services Wim Bartels adds: “Over the
coming months and years, as we try and rebuild a more stable global economic
system, increased transparency, accountability and information about the ethics,
corporate governance and key non-financial risks facing companies will become of
greater value to investors.”

The accountancy firm also found that the UK had one of the highest numbers of
companies (second only to Japan) to add non-financial disclosure to their
reporting, compared with other countries.