Faith, hope and...choice: Larry Fink’s latest chairman’s letter to investors
Blackrock’s Chairman and Chief Executive Officer (CEO), Larry Fink’s, long-awaited annual letter is here. These are the highlights.
Today, organisations are facing a multitude of challenges – environmental, social, economic and political – and all of these create new risks and opportunities for boards and businesses.
Identifying areas that need improvement and planning for growth requires leaders to address what is really happening within their organisations.
Kay Baldock is the national managing partner - brand and growth at KPMG and financial services audit partner with a portfolio of clients. She says impact reports are an effective way to measure progress, and track important changes that an organisation wants to make.
The author of KPMG’s 2022 “Our Impact Report”, Baldock says this kind of reporting is likely to become more common as boards and businesses navigate an increasingly complex landscape. Baldock says it is becoming a non-negotiable.
“Our key stakeholders wanted to know where the organisation stands on some really critical issues, and this is one mechanism to do that,” she says.
KPMG’s report has given the organisation an opportunity to tell its story – and to hold itself accountable.
“We have made commitments in our focus areas of planet, people, prosperity and governance including making this information accessible to everyone and providing transparency around those commitments.”
For those organisations wanting to produce their first impact report, Baldock suggests they have a clear focus on what they want to stand for and the changes they want to make.
The themes in KPMG’s report outline what the organisation is about while also demonstrating what they are doing to be good corporate citizens.
KPMG went company-wide to create the report, including identifying a project lead within the organisation and ensuring key people were on the same page.
Baldock says the valuable outcome of the report is having an ability to set targets based on the numbers. For KPMG that now includes their people targets with an aim to increase the percentage of women at partner level to 40% by 2026. Currently the ratio is 73% men – 27% women.
Another evolving area is climate disclosures. As a partnership, KPMG is not required to comply with the XRB’s climate disclosure standards, but Baldock says the organisation has committed to releasing a disclosure statement that aligns with these standards within the next year.
“Many of our clients are held accountable, and so we wanted to hold ourselves accountable to the same standards. We’re walking side-by-side with our clients having completed that initial assessment, and are now trying to embed those processes into the organisation.”
One of the positive outcomes of impact reporting is seeing where the organisation is succeeding. The downside is reporting on findings that aren’t so rosy.
Baldock says whether good or bad, organisations need to stand by their transparency, and that includes reporting the facts.
“You just have to report the facts and let them speak for themselves. As we progress, we will have more data and we will share [that] as we move forward, and as we collect and report more data, we will also be able to report a trend analysis in the key areas to provide an overall view.”
Later this year, KPMG will begin work on their second impact report with the release projected to take place in the first quarter of next year and every year following.
Baldock says regardless of organisations evolving and processes and metrics changing, reporting the facts is essential.
“We put our stake in the ground and it's a non-negotiable. Each year we need to hold ourselves accountable and come back and report on that - it's important to stay true to your commitments,” Baldock says.
Impact reports can be an effective way to set targets and measure them.
KPMG recommends directors and leaders look to the following questions when starting the impact reporting process for their organisations: