Emerging Market Companies Need to Focus on Transparency
(3BL Media/Justmeans) – Corporate disclosure is a vital component of sustainability, which has emerged as a critical success factor in recent years. With implications ranging from a company’s bottom line to global climate change, corporate transparency has become increasingly important for various stakeholders, including consumers, employees and investors.
Transparency International (TI) has just released a new report that reveals that leading companies in the world’s emerging market urgently need to shift focus on transparency in order to improve sustainability. The report titled Transparency in Corporate Reporting: Assessing Emerging Market Multinationals evaluates the disclosure practices of 100 major emerging market multinationals headquartered in 15 countries and active in 185 countries.
According to José Ugaz, Chair of Transparency International, while many emerging market companies say they want to fight corruption, their actions may not always match their words. Strong measures to raise the bar on transparency will help to cut down corruption in the local economies, mitigate poverty and reduce inequality.
In the list brought out by TI, 75 companies are from BRICS region (Brazil, Russia, India, China and South Africa). Companies from BRICS countries contribute about 30 percent of global GDP, giving them a clear obligation to take responsibility for their actions.
Some of the companies that have achieved encouraging transparency scores in the TI list include Bharti Airtel, Tata Communications, Mahindra & Mahindra, TCS, Tata Global Beverages, Tata Motors, Tata Steel, Wipro, Petronas, Tata Chemicals, Falabella, MTN Group, ZTE, Dr. Reddy’s Laboratories, Infosys Technologies, Suzlon Energy, Vedanta Resources, El Sewedy Electric, Embraer, and Indorama Ventures.
A majority of these good performers on transparency are from India, where government regulation is strong. Indian companies have the highest average score of any country – they all score 75 per cent or more – in organizational transparency largely due to the Companies Act in India.
Source: Transparency International