Most of the world’s biggest emerging market companies have failed when it comes to transparency, creating an environment for corruption to thrive in their businesses and in the places they operate. So says a new report from Transparency International (TI). The anti-corruption pressure group calls for these multinational firms to do much more to stop corruption.
In the latest edition of Transparency in Corporate Reporting: Assessing Emerging Market Multinationals 100 of the fastest-growing companies based in 15 emerging market countries and operating in 185 countries around the world scored an average of 3.4 out of 10, where zero is the least transparent and 10 is the most transparent. The average score fell slightly by 0.2 compared to the last time the survey was taken in 2013.
José Ugaz, Chair of Transparency International, said: “Pathetic levels of transparency in big emerging market companies raises the question of just how much the private sector cares about stopping corruption, stopping poverty where they do business and reducing inequality. Time and again we see huge corruption scandals involving multinationals, such as Odebrecht Group or China Communications Construction Company, doing immense damage to local economies. Through adequate transparency and anti-corruption measures and will from the top this could have been prevented. Although many companies say they want to fight corruption, this is not enough. Action speaks louder than words.”
The 75 companies from BRICS countries (Brazil, Russia, India, China and South Africa) did no better, failing to beat the average score as poor-performing Chinese companies dragged the whole group lower. Companies from BRICS countries produce about 30 per cent of global GDP, giving them a clear obligation to take responsibility for their actions.
Chinese companies, which account for a third of those assessed, had the weakest overall performance, scoring an average of 1.6 out of 10 with just one making it to the top 25. “Customers should demand the companies they patronize live up to the highest anti-corruption standards or risk losing their business,” Ugaz said.
Exhaustive lists of subsidiaries, affiliates, joint ventures and other entities must be easily accessible, allowing local stakeholders to understand the economic and social impact of multinational business in their societies, TI added.
To download the full report visit http://www.transparency.org/whatwedo/publication/transparency_in_corporate_reporting_assessing_emerging_market_multinat.
