How to Report on the Sdgs: What Good Looks Like and Why It Matters

How to Report on the Sdgs: What Good Looks Like and Why It Matters

EDGE OF PAGE EDGE OF PAGE MARGIN MARGIN CROP MARKS CROP MARGIN MARGIN CROP MARKS CROP How to report on the SDGs What good looks like and why it matters February 2018 kpmg.com/sdgreporting CROP MARKS CROP MARGIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. kpmg.com/sdgreporting | 0 All rights reserved. MARGIN CROP MARKS CROP MARGIN MARGIN EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE MARGIN MARGIN CROP MARKS CROP MARGIN MARGIN CROP MARKS CROP Contents What this study is about and who it is for 2 Lead authors What does good SDG reporting look like? 3 Executive summary 6 José Luis Blasco Understanding the SDGs Global Head of KPMG Sustainability Services José Luis heads the Sustainability Services practice at KPMG in Spain as well Key findings 8 as leading KPMG’s global Sustainability Services network. José Luis advises What does good look like? 10 major companies on incorporating the risks and opportunities of environmental and social megatrends into their corporate strategies. Recommendations for readers 12 Prioritizing the SDGs Key findings 13 Adrian King What does good look like? 16 KPMG Global Lead for Sustainability Reporting & Assurance Services Recommendations for readers 20 Adrian is the Partner in Charge of the Sustainability Services practice at KPMG in Australia. He has more than 25 years’ experience working with global public Measuring the SDGs and private companies to provide financial and non-financial advisory, reporting Key findings 21 and assurance services. Adrian was the Global Head of KPMG’s Sustainability Services network from 2014 to 2017. What does good look like? 23 Recommendations for readers 27 Conclusion 28 Santhosh Jayaram Partner, Sustainability Services, KPMG in India Methodology 29 Santhosh is the Partner and Head of Sustainability and CSR Advisory at KPMG How we can help 30 in India. In this role he leads one of the largest sustainability consulting teams in South-Asia. Santhosh specializes in areas of extra-financial risk assessment, Acknowledgments 31 responsible business, corporate sustainability, product sustainability, sustainability reporting and climate change. CROP MARKS CROP MARGIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is© a 2018Swiss KPMG entity Internationalwith which the Cooperative independent (“KPMG member International”). firms of the KPMGKPMG Internationalnetwork are affiliated.provides no client kpmg.com/sdgreporting | 1 All rights reserved. services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. All rights reserved. MARGIN CROP MARKS CROP MARGIN MARGIN EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE MARGIN MARGIN CROP MARKS CROP MARGIN MARGIN CROP MARKS CROP What this study is about and who it is for How to use this document Four in ten of the world’s largest companies already reference the UN Sustainable Development Goals To understand what good SDG (SDGs) in their corporate reporting, suggesting that business interest in the SDGs has grown quickly reporting looks like according to 1 KPMG’s 9 quality assessment since their launch in September 2015. criteria go to What does good SDG reporting look like? However, there is not yet an established process, benchmark or standard for reporting on the SDGs, even though many 2,3 organizations are developing tools and communities to help companies respond. Sustainability professionals at KPMG member For an overview of how the firms have found that many of their clients are unsure about how to report on the SDGs, where to start and what good SDG world’s largest companies are reporting looks like. currently performing see the Executive summary. This KPMG study aims to help by proposing quality criteria for SDG reporting which readers can use as a guide for their own organization's reporting. Also, by analyzing how reporting from the world's largest companies measures up against these criteria, For a more detailed look at how this study will help readers to benchmark their own reporting against this global leadership group. As KPMG’s long-standing series companies are currently of surveys of corporate responsibility reporting has shown, the reporting behavior of the largest companies often predicts trends performing, examples of good subsequently adopted by businesses worldwide. practice, advice from leading companies and KPMG’s This study will be valuable to sustainability, corporate responsibility and communications professionals with responsibility for recommendations for readers, shaping their company’s SDG reporting. It will also help investors, asset managers and ratings agencies with an interest in see the three themed sections: environmental, social and governance (ESG) information to understand what SDG reporting they should be looking for and requesting from the companies they invest in. Understanding Readers of this study will learn: Prioritization What good SDG reporting How the world’s largest Which companies Measurement looks like at this early stage companies are performing are doing it well and what they can teach others that To see a breakdown of the are embarking on their research sample and SDG reporting journey understand more about the research process, see the 1KPMG (2017) The road ahead: Survey of Corporate Responsibility Reporting 2017 Methodology. 2UN Global Compact (UNGC), UN Development Programme (UNDP), World Business Council for Sustainable Development (WBCSD), Global Reporting Initiative (GRI), World Economic Forum et al 3University of Cambridge Institute for Sustainability Leadership (2017) Towards a sustainable economy. The commercial imperative for business to deliver on the UN sustainable development goals CROP MARKS CROP MARGIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. kpmg.com/sdgreporting | 2 All rights reserved. MARGIN CROP MARKS CROP MARGIN MARGIN EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE MARGIN MARGIN CROP MARKS CROP MARGIN MARGIN CROP MARKS CROP What does good SDG reporting look like? Figure 1: Nine assessment criteria for SDG KPMG's nine quality criteria for SDG reporting maturity 1 Understanding reporting Does the reporting demonstrate the business For the purpose of this study, KPMG case for taking action on the SDGs? professionals established a robust set of nine criteria to analyze and compare the maturity of Reporting should convince investors and other SDG reporting by large companies (see Figure 1). stakeholders that the company’s SDG activity is based on a thorough assessment of the business risks and opportunities of the SDGs. The criteria are grouped into three themes: By doing so, a company can generate confidence that its SDG activity is well planned and both relevant to, and aligned with, its Understanding 1 business strategy. Does the CEO and/or Chair’s message talk about the SDGs? Prioritization 2 Reporting should demonstrate leadership commitment to the SDGs as part of the company’s long-term strategy. Discussing the Measurement SDGs in the CEO or Chair’s message not only 3 sets out the company’s direction in relation to critical global issues but also gives a clear signal They are based on the insights of KPMG that the company’s action on the SDGs is driven Sustainability Services professionals combined with from the very top of the organization. 4 key elements of the SDG Compass and guidance Does the reporting assess the business’s from the International Integrated Reporting Council impact on the SDGs? (IIRC).5 Reporting should clearly communicate the Researchers adopted a straightforward assessment SDG Compass and <IR> positive and negative impacts a company has on The SDG Compass was developed by the Global Reporting Initiative (GRI), the UN process by awarding one point to each company for Global Compact and the World Business Council for Sustainable Development the SDGs, showing how the company is both each of the nine criteria satisfied, resulting in a (WBCSD), and is widely recognized as a leading strategic tool to guide business contributing to global problems, as well as action on the SDGs. helping to solve them. Transparency leads to maximum score of three under each theme and a Guidance from the International Integrated Reporting Council (IIRC) identifies a similar maximum score of nine in total. This was framework for contributing to the SDGs through the integrated reporting <IR> value trust - if a company does not demonstrate that it considered sufficient data to provide a base level creation process. fully understands its impacts, its efforts to address those impacts can lack credibility. view of reporting maturity among the G250 sample. 4https://sdgcompass.org/ 5https://integratedreporting.org/tag/sdgs/ CROP MARKS CROP MARGIN © 2018 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. kpmg.com/sdgreporting | 3 All rights reserved. MARGIN CROP MARKS CROP MARGIN MARGIN EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE EDGE OF PAGE MARGIN MARGIN CROP MARKS CROP MARGIN MARGIN CROP MARKS CROP 2 Prioritization 3 Measurement Does the reporting identify priority SDGs for

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