PFS Program: 41% of the Largest Listed Companies in 11 Central and Eastern European (CEE) Countries Publish Stand-alone English-language Environmental, Social and Governance (ESG) Reports Online; Seve

October 14, 2009 1:03 PM EDT

13th Edition of the PFS Program's Regional Survey: Reporting on Corporate Social Responsibility (CSR) by the Largest Listed Companies in 11 Central and Eastern European (CEE) Countries

WARSAW, Poland--(BUSINESS WIRE)-- Released by the PFS Program

Today, the Partners for Financial Stability (PFS) Program publishes its 13th semi-annual Survey of Reporting on Corporate Social Responsibility (CSR) by the Ten Largest Listed Companies (by market capitalization) in 11 Central and Eastern European (CEE) Countries. PFS Program Interns Kamila Andrukiewicz (Poland), Aleksa Mihajlovi (Serbia), Irena Petkovska (Macedonia) and Anna Wolska (Poland) conducted the survey, under the supervision of PFS Program Director Geoffrey Mazullo, from August 1 through September 30, 2009.

Companies in Czech Republic, Estonia, Latvia, Lithuania, Slovakia and Slovenia were surveyed for the 13th time; companies in Hungary and Poland were surveyed for the 12th time; and companies in Bulgaria, Croatia and Romania were surveyed for the 11th time. Moreover, a seventh analysis of peer companies (the ten largest listed companies by market capitalization) in Brazil, Russia, India and China (BRIC) as well as Ukraine allows for ongoing benchmarking with these emerging market peers.

PFS Program surveys analyze the annual reports and websites of the ten largest listed companies in the above-mentioned 11 CEE countries in order to document the current disclosure practices of this "blue-chip" peer group and identify best practice among the peer group. Whereas the universe of companies surveyed may change over time due to changes in a company's market capitalization, the semi-annual surveys of reporting on CSR represent a snapshot of this peer group's CSR disclosure practices on a given day twice a year. Furthermore, by analyzing disclosures in both annual reports and websites, the surveys track the timing of the publication of the annual report and the related yet separate issue of periodic disclosure, namely, how blue-chip companies keep their websites data-rich and up-to-date. The surveys enable companies to benchmark their disclosure practices against peers on a national, industry and regional basis.

This survey analyzes companies' disclosures in English (in the English-language annual report and on the English-language company website) during the time period August 1 - September 16, 2009 on the following three topics: corporate governance, environmental policy and social policy. The record date for the disclosures is September 16, 2009.

On September 16, 2009 all ten companies surveyed in all CEE countries except Croatia, Romania and Slovenia have an English-language website. 96% of the 110 CEE companies surveyed have a 2008 or 2007 English-language annual report online on the same record date.

In marked contrast to all 12 previous surveys, this edition of the survey documents increased disclosure in almost all areas analyzed. In 27 of the 30 categories surveyed, disclosure increased. In some categories, the increase was significant. Disclosure of information on shareholder rights increased in the annual report to 69%, from 47% in April 2009 and on company websites to 64%, from 51% in April 2009. Disclosure of information on environmental considerations in supply chain management increased in the annual report to 24%, from 19% in April 2009 and on company websites to 39%, from 30% in April 2009. In these and many other categories, new thresholds were attained. In three categories of social policy, disclosure in the annual report decreased.

45 of the 110 CEE companies surveyed (41%) issue a stand-alone English-language environmental, social and governance (ESG) report, compared with 41 companies (37%) in April 2009 and 28 companies (25%) in September 2008. This is the first time that the 40% threshold has been exceeded, and represents continuation of an ongoing trend during the past two years.

It also demonstrates that gap between best-practice in extra-financial reporting in CEE blue-chip companies is closing vis-a-vis peers in Brazil, Russia, India and China (BRIC). In BRIC, 19 companies (47.5%) issue a stand-alone English-language ESG report in September 2009. The number is unchanged since April 2009, and represents a slight increase vis-a-vis 18 companies in September 2008. As a group, BRIC blue-chips generally outperform CEE peers; however, the gap continues to narrow and a few CEE countries approach the disclosure levels found in BRIC. One Ukrainian company issues a stand-alone English-language ESG report in September 2009.

Survey findings include the following:

    --  97% of the 110 CEE companies surveyed have an English-language website
        on the record date of September 16, 2009, compared with 95% in April
        2009, 96% in September 2008, 96% in April 2008, 94.5 % in September
        2007, 94% in April 2007, 94% in September 2006, 87% in April 2006, 89%
        in September 2005 and 82% in April 2005. In comparison, 100% of the BRIC
        companies surveyed and 60% of the Ukrainian companies surveyed have an
        English-language website.
    --  96% of the 110 CEE companies surveyed have either a 2008 or 2007
        English-language annual report online on the record date of September
        16, 2009 compared with 92% in April 2009, 94% in September 2008, 87% in
        April 2008, 81% in September 2007, 84% in April 2007, 71% in September
        2006, % in April 2006 and % in September 2005. In comparison, 100% of
        companies in BRIC and 20% in Ukraine have a 2008 or 2007
        English-language annual report available online.
    --  79% of the 110 CEE companies surveyed disclose employee
        development/benefits policies in the (2008 or 2007) annual report
        available online on September 16, 2009. This is the highest percentage
        recorded since the first survey was conducted in August 2003 and the
        first time that the 75% threshold was exceeded.
    --  77 of the 110 CEE companies surveyed (70%) disclose implementation of a
        corporate governance code in the (2008 or 2007) annual report available
        online as of September 16, 2009, compared with 57 companies (52%) in
        April 2009 and 60 companies (54.5%) in September 2008. This is the first
        time since the survey was first conducted that disclosure of information
        regarding compliance with a corporate governance code in the annual
        report available online reached the 70% threshold.
    --  55% of the CEE companies surveyed disclose information on compliance
        with a corporate governance code on their website, compared with 41% in
        April 2009 and 42% in September 2008. This is the first time since the
        survey was first conducted that more than 50% of the CEE companies
        surveyed disclose information regarding compliance with a corporate
        governance code on their website.
    --  53% of the 110 CEE companies surveyed report on environmental
        performance in the (2007 or 2008) annual report available online on
        September 16, 2009. This is the highest percentage recorded since the
        first survey was conducted in August 2003 and the first time that the
        50% threshold was exceeded. The percentage was 43% in April 2009, 34.5%
        in September 2008, 30% in April 2008, 33% in September 2007, 14% in
        April 2007, 25% in September 2006, 18% in April 2006 and 22% in
        September 2005.
    --  45 of the 110 CEE companies surveyed (41%) issue a stand-alone
        English-language environmental, social and governance (ESG) report,
        compared with 41 companies (37%) in April 2009 and 28 companies (25%) in
        September 2008. This is the first time that the 40% threshold has been
        exceeded, and represents continuation of an ongoing trend during the
        past two years.

Note: The survey consists of the three following documents: a report of the survey findings presenting data aggregated by country; a database of individual data by company for the ten largest listed companies in each of the 11 CEE countries; and a separate database of individual data by company for the ten largest listed companies in BRIC and Ukraine. A list of companies with stand-alone English-language ESG reports is an appendix to the survey and is published as a separate document.

Starting today, the survey is available online at:

http://www.pfsprogram.org/capitalmarkets_research.php

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About the Partners for Financial Stability (PFS) Program

The United States Agency for International Development (USAID) established the Partners for Financial Stability (PFS) Program in 1999 as a public-private partnership to help complete reforms necessary to create sound, private and well-functioning financial sectors in the eight Central and Eastern European (CEE) countries that have since joined the European Union. In 2005, the geographical focus of the program shifted to South East Europe (SEE).

East-West Management Institute (EWMI), a New York-based not-for-profit organization, is currently the primary implementing partner.

The PFS Program is mandated to fill remaining gaps in the institutional development of the financial sector in CEE and SEE countries through regional integration and cooperation, selective technical assistance programs and the practical application of lessons learned in neighbouring countries. The substantive areas covered under the PFS Program are: accounting, auditing, banking, capital markets, insurance and pension reform. For more information, please visit the PFS Program website at http://www.pfsprogram.org/

    Source: PFS Program

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