By Chara De Lacey, Head of Business Integrity, and Tilly Prior, Senior Programme Officer.

Corporate corruption has a corrosive social, environmental and economic impact. The drivers are multifaceted, as are the opportunities for preventing it. What is clear, however, is that transparency is a fundamental part of any process to reduce corruption, bribery or otherwise, and build trust and accountability.

Regulatory reforms prohibiting bribery and other forms of corruption have driven investors’ and other stakeholders’ demand for reliable and comparable corporate data. This goes hand in hand with increased focus on companies’ environmental, social and governance (ESG) performance, within which anti-corruption is a key component, and related reporting expectations.

Our new report with the International Federation of Accountants (IFAC) and World Economic Forum’s Partnering against Corruption Initiative (the Forum) provides a comprehensive review of anti-corruption sustainability disclosures by 600 of the world’s largest companies (by market capitalisation) across 15 jurisdictions, including the UK.  

Global findings

The findings reveal significant inconsistency in anti-bribery and corruption disclosure expectations and corporate practices.

Of the companies assessed, 23 didn’t report any sustainability information. Of the remaining 577, 27 didn’t disclose anti-corruption information as part of their sustainability reporting1.. But this means that the vast majority (550 companies or 95%) disclosed anti-corruption information as a core sustainability topic.

Unsurprisingly, the highest rate of disclosure is at the policy level with 90% of the companies assessed disclosing an anti-corruption policy.  At the other end of the scale, disclosures concerning corruption-related complaints (25%), incidents (37%), and monetary cost (4%) lagged. This finding chimes with our Open Business research and finding that corporate disclosures tend to focus on policy rather than procedures and outcomes.

In addition, while beneficial ownership information is vital to the fight against corruption, just 9% of companies disclosed their beneficial ownership within their sustainability reports, although some companies will disclose this separately.

Most companies in the study use international reporting standards for their disclosures. However, a company’s jurisdiction was found to have the strongest correlation with disclosure and assurance practices, which highlights a key role for policy makers to shape reporting requirements.

How did UK companies do?

Although the UK has one of the strongest anti-bribery laws globally, not all UK companies assessed (98%) disclosed anti-corruption information, in contrast to 100% of the Brazilian, Indian, Korean and EU (Germany, France and Italy) companies. UK companies, however, had one of the highest disclosure rates for anti-bribery and code of ethics policies (97% apiece) and had the highest rate for anti-bribery training (74%).

There were some worrying findings. For example, UK companies had a below-average disclosure rate for whistleblower training (8% against a global average of 9.8%), anti-fraud policy (15% against 24.5%), conflict of interest policy (31% against 37%), and data assurance (5% against 29%).

From transparency to trust

Transparency is increasingly expected in the corporate world. That most of the largest companies report anti-corruption information as part of their sustainability disclosures provides a reason to be hopeful. However, weaknesses in key areas mean it’s not possible to build a full picture of a company’s performance.

Assessing the quality of disclosures wasn’t the focus of this specific research, but supporting high-quality corporate anti-corruption reporting was the core aim of our earlier report, Open Business. In that report, we set out how companies can strengthen their disclosures on preventative measures such as their anti-corruption programme, how policies are implemented, beneficial ownership information, organisational structure, whistleblowing, how they address material incident findings, and political engagement activities.

Companies should disclose comparable, reliable and meaningful anti-corruption information as part of their sustainability disclosures. This will not only demonstrate their anti-corruption performance as part of wider ESG efforts, but ultimately build trust with their stakeholders.

1. The study reviewed companies’ sustainability reports and sustainability disclosures within their annual and integrated reports to identify the core topics covered, reporting standards used and whether data was audited. Anti-corruption was categorised into eight topics: anti-corruption, code of ethics, whistleblower mechanisms, anti-bribery, anti-fraud, anti-money laundering, conflict of interest and third parties. Corporate political engagement disclosures were not included in this study.