TRANSPARENCY

IN CORPORATE
REPORTING:
ASSESSING EMERGING
MARKET MULTINATIONALS
www.transparency.org
ISBN: 978-3-943497-39-7
2013 Transparency International. All rights reserved.
Printed on 100% recycled paper.
Authors: Barbara Kowalczyk-Hoyer, Susan Ct-Freeman
Research assistants: Liliya D. Akhmadullina, Tim Bergman, Ting-Fung Chan,
Kristine Suet Tuen Kwok, Juliana Mari Sakai
Design: www.soapbox.co.uk
Cover photo: istockphoto.com/Nikada
Every effort has been made to verify the accuracy of the information contained in
this report. All information was believed to be correct as of August 2013. Nevertheless,
Transparency International cannot accept responsibility for the consequences of its
use for other purposes or in other contexts.
We would like to thank all the individuals who contributed to all stages of the research
and preparation of the report.
Support was provided by Deutsche Gesellschaft
fr Internationale Zusammenarbeit (GIZ) GmbH.
Transparency International is the global civil society organisation leading
the fight against corruption. Through more than 90 chapters worldwide and
an international secretariat in Berlin, we raise awareness of the damaging
effects of corruption and work with partners in government, business and
civil society to develop and implement effective measures to tackle it.
CONTENTS
1. EXECUTIVE SUMMARY 4
2. INTRODUCTION 7
3. RATIONALE AND METHODOLOGY 9
4. REPORTING ON ANTI-CORRUPTION PROGRAMMES 12
COMPANY RESULTS 15
OWNERSHIP STRUCTURE 17
5. ORGANISATIONAL TRANSPARENCY 18
COMPANY RESULTS 20
OWNERSHIP STRUCTURE 22
6. COUNTRY-BY-COUNTRY REPORTING 24
COMPANY RESULTS 26
OWNERSHIP STRUCTURE 29
KEY FINANCIAL REPORTING ON DOMESTIC OPERATIONS 29
7. BRICS: SPECIAL SECTION 32
INDEX: BRICS RESULTS 34
REPORTING ON ANTI-CORRUPTION PROGRAMMES 35
ORGANISATIONAL TRANSPARENCY 36
COUNTRY-BY-COUNTRY REPORTING 37
8. RECOMMENDATIONS 38
9. ANNEXES 43
ANNEX 1: METHODOLOGY 43
ANNEX 2: QUESTIONNAIRE 46
ANNEX 3: DATA TABLES 48
LIST OF TABLES, DIAGRAMS AND BOXES 51
ENDNOTES 52
TRANSPARENCY
IN CORPORATE
REPORTING
Scale 010 where 0 is least transparent and
10 is most transparent. This index is based
on the unweighted average of results in all
three categories.
ACP result for reporting on
anti-corruption programmes
OT result for organisational transparency
CBC result for country-by-country reporting
Diagram 1
Index results
Petrobras
Hindalco Industries
Gazprom
Suzlon Energy
Marcopolo
Infosys Technologies
Sabanci Holding
Bidvest Group
Vedanta Resources
Dr. Reddy's Laboratories
Femsa
Sappi
Norilsk Nickel
Lupin Limited
Bumi Resources
Lenovo Group
Sasol
Falabella
Tenaris
PTT
Wipro
Reliance Industries
Amrica Mvil
Saudi Basic Industries
Tata Consultancy Services
Tata Motors
Mahindra & Mahindra
Tata Chemicals
United Company Rusal
Petronas
Bharti Airtel
Tata Steel
Tata Global Beverages
Tata Communications
ACP OT CBC
7.1
6.6
6.6
6.4
6.3
6.2
6.2
6.1
6.0
5.9
5.8
5.7
5.7
5.7
5.6
5.5
5.4
5.4
5.4
5.3
5.2
5.2
5.1
5.0
5.0
4.9
4.9
4.9
4.8
4.8
4.7
4.7
4.7
4.6
92%
92%
92%
85%
88%
69%
81%
73%
77%
85%
85%
73%
65%
77%
85%
77%
38%
88%
73%
85%
42%
50%
85%
69%
50%
92%
65%
77%
77%
50%
54%
65%
35%
88%
88%
75%
75%
75%
100%
100%
75%
81%
75%
75%
88%
81%
75%
63%
75%
88%
75%
75%
88%
75%
75%
75%
63%
63%
75%
44%
75%
69%
38%
75%
56%
75%
75%
50%
34%
31%
30%
34%
1%
17%
30%
30%
29%
17%
2%
16%
30%
30%
9%
0%
50%
0%
0%
0%
38%
30%
6%
19%
25%
10%
6%
0%
30%
18%
32%
0%
30%
0%
AVERAGE:
3.6/10
3 in 4 companies
scored less than 5
Note: companies covered in this report may
provide support to Transparency International
chapters worldwide.
Charoen Pokphand Group
ACP OT CBC
4.6
4.6
4.6
4.6
4.5
4.5
4.4
4.4
4.3
4.2
4.2
4.2
4.1
4.1
4.1
3.9
3.8
3.8
3.7
3.5
3.5
3.4
3.4
3.4
3.4
3.4
3.3
3.1
3.1
3.0
3.0
2.9
2.9
Zoomlion
Gruma
Bharat Forge
Crompton Greaves
Natura
Ko Holding
Larsen & Toubro
Indorama Ventures
Embraer
Brasil Foods
Evraz Group
Johnson Electric
Gerdau
Gedeon Richter
DP World
LAN Airlines
China Communications Construction Company
JBS
Severstal
Suntech Power
El Sewedy Electric
Bajaj Auto
Sinohydro
BYD Company Limited
Magnesita Refratrios
Emirates Airlines
Mexichem
Grupo Bimbo
ZTE
Indofood Sukses Makmur
Votorantim Group
Shanghai Electric Group
65%
62%
38%
58%
35%
69%
77%
54%
50%
19%
50%
50%
23%
15%
27%
42%
15%
88%
19%
31%
58%
50%
0%
62%
19%
38%
31%
0%
42%
15%
58%
12%
0%
56%
75%
94%
75%
100%
44%
56%
75%
75%
81%
75%
75%
75%
75%
88%
75%
100%
25%
75%
75%
44%
38%
100%
38%
75%
63%
38%
81%
44%
75%
31%
75%
88%
16%
1%
5%
4%
1%
21%
0%
3%
3%
26%
1%
0%
26%
33%
8%
0%
0%
0%
18%
0%
3%
16%
2%
3%
7%
0%
30%
13%
7%
1%
0%
2%
0%
ACP OT CBC
Mabe
Chery Automobile
China Shipbuilding Industry Corporation
Odebrecht Group
Fung Group
Galanz Group
China National Chemical Corporation
Geely - Zhejiang Geely Holding Group
China Shipping Group
China National Offshore Oil Corporation
China Minmetals
Chint Group
Aluminium Corporation of China
Anshan Iron and Steel Group
Coteminas
China International Marine Containers Group
Wanxiang Group
Sinomach
LDK Solar
Sinochem
China State Construction Engineering Corporation
Baosteel Group
Huawei Technologies
Lukoil
Cosco Group
WEG
Alfa
Sinosteel
Thai Union Frozen Products
Camargo Corra Group
Etisalat
Yanzhou Coal Mining Company
Haier 2.8
2.8
2.8
2.8
2.8
2.7
2.7
2.4
2.3
2.2
2.2
2.0
1.9
1.9
1.9
1.8
1.4
1.3
1.3
1.3
1.3
1.0
0.8
0.8
0.7
0.7
0.5
0.4
0.2
0.2
0.1
0.0
0.0
35%
19%
0%
58%
8%
54%
50%
46%
50%
54%
62%
46%
50%
31%
12%
35%
42%
8%
8%
38%
19%
31%
15%
23%
15%
19%
8%
12%
0%
0%
4%
0%
0%
50%
63%
75%
25%
75%
25%
31%
25%
19%
13%
0%
13%
6%
25%
38%
19%
0%
31%
31%
0%
19%
0%
6%
0%
6%
0%
6%
0%
6%
0%
0%
0%
0%
0%
3%
9%
1%
0%
3%
0%
0%
0.5%
0%
4%
1%
1%
0%
7%
0%
0%
0%
0%
0%
0%
0%
2%
0%
0%
1%
0%
0%
0%
6%
0%
0%
0%
1. EXECUTIVE SUMMARY
Transparency International conducted research into the public reporting practices
of 100 emerging markets companies comprising a list of Global Challengers 2011.
1

Based on the methodology of previous Transparency International studies,
researchers collected and analysed publicly available data on three dimensions
of transparency:
Reporting on anti-corruption programmes: covering inter alia bribery,
facilitation payments, whistleblower protection and political contributions.
Organisational transparency: including information about corporate holdings.
Country-by-country reporting: including revenues, capital expenditure
and tax payments.
These three elements were assessed because of their importance in raising the level
of corporate transparency and accountability which in turn helps minimise the risk
of corruption.
The information a company reports about its anti-corruption systems is an indicator
of its awareness and commitment to combatting corruption. While robust disclosure
practices do not reduce all risk of corruption, they are a sign of the right tone from
top management, reflecting an awareness of corruption risks and a commitment to
manage them effectively that is essential for companies operating across borders.
Reporting on information related to company holdings, such as subsidiaries,
branches, affiliates, joint ventures and the like is relevant in the context of combatting
corruption because it lets citizens, civil society, regulators, lawmakers and investors
know where a company is operating, and it makes the company more accountable
in those countries.
Country-by-country reporting provides the transparency needed for companies
to be held accountable for their activity in a particular country. Disclosing key
financial data enables citizens to evaluate whether the company is contributing in a
manner appropriate to its level of activity and, as such, to identify potential cases of
corruption. Despite some encouraging results the report finds that the disclosure
practices of emerging market companies are inadequate. The observed levels of
transparency fall short of the standards expected of large companies aspiring to
become global players. Based on the data analysis, the average company score is
36 per cent (3.6 out of a maximum of 10 points in the overall index). Only one in four
of the 100 companies achieved an overall score of at least 50 per cent.
This result reflects a lack of recognition of the importance of transparency as
a building block of good governance, including the management of corruption
risks. These emerging market companies also lag behind in their acceptance of
the responsibility that falls upon multinational companies to fulfil the transparency
expectations of stakeholders. However, the fact that some companies perform
well in certain aspects of the survey indicates that improvement is possible and
dispels the argument often put forward by companies that disclosure puts them
at a competitive disadvantage.
The report dedicates a section to the performance of companies from the BRICS.
2

This is of interest in view of their importance within emerging markets and in the
world economy as a whole.
Results show that companies from China lag behind in every dimension with an
overall score of 20 per cent (2 out of a maximum of 10). Considering their growing
4 Transparency International
influence in markets around the world, this poor performance is of concern. In
contrast, Indian firms perform best in the BRICS with a result of 54 per cent (5.4 out
of a maximum of 10) and several occupy the top positions in the overall Index. In the
third (country-by-country reporting) dimension of the study, an area of disclosure that
has proven to be a challenge for most companies, Indian firms stand out against the
weaker performances of the other BRICS firms with a score of 29 per cent.
Publicly listed companies, whose shares are traded on stock exchanges, perform
considerably better than unlisted companies which include privately held and
state-owned companies. For example, the publicly listed firms score 53 per cent
on reporting on anti-corruption programmes whereas the state-owned and
private companies score 30 per cent and 27 per cent respectively. Stock market
listing requirements definitely have a positive impact on a companys level of
disclosure. This was also observed in a previous Transparency International study
on the extractive sector where listed companies performed better than state-
owned companies.
3
Companies included in this report operate in a range of different industries. The
biggest sub-sample is Basic Materials, comprised of 28 companies, followed by
Industrials with 23 and Consumer Goods with 20 companies. The rest of the sample
is distributed among six other industries (See Annex 1 for the details of the sample).
REPORTING ON ANTI-CORRUPTION
PROGRAMMES
With an average score of 46 per cent, company performance in this dimension
varies widely. Whilst some companies achieve a near-perfect score, others, half of
which are privately held, do not register a single point. Although public reporting
on anti-corruption programmes is only a proxy for actual company performance in
this area, weak levels of reporting may indicate poor or non-existent anti-corruption
programmes and a lack of commitment to countering corruption. But there is
ground for optimism. Fifteen companies achieve a score above 80 per cent which
demonstrates that strong performance is possible and that substantial improvement
over the next few years is an attainable target.
ORGANISATIONAL TRANSPARENCY
The average result achieved in this dimension is 54 per cent. Approximately 10 per
cent of the sample scores zero.
4
A majority of companies provide information
on their subsidiaries, but in spite of these results the concept of materiality
a threshold for disclosure which is defined by accounting standards, regulators
and stock exchange rules limits detailed disclosure by many companies. Very
few companies disclose the countries of operations of their subsidiaries and
other related entities, which means that these remain hidden from public view
and scrutiny.
COUNTRY-BY-COUNTRY REPORTING
Emerging market companies in the sample achieve an encouraging result in
country-by-country reporting. Although it may appear low, the average score
of 9 per cent registers well above the 4 per cent result of the 105 largest global
companies assessed in the 2012 Transparency International report on transparency
in corporate reporting.
5
This result is largely due to the 20 Indian companies in the
survey which score an average of 29 per cent.
5 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
In India, domestic legal requirements have led to Indian companies providing
more extensive financial information on their subsidiaries. They also report on the
countries in which their subsidiaries are incorporated. This information is useful and
beneficial, although it is not a perfect substitute for country-by-country reporting.
Information on country-level operations by the 20 Indian companies is therefore
much more complete than the other companies in the sample. This demonstrates
not only the transparency benefits of such legal requirements but also that
companies can readily provide such information if they are so inclined or motivated.
With the notable exception of the Indian companies, most emerging market
companies in the sample are still a very long way from disclosing financial data
across all countries of operations. Most of the companies disclose little or no
financial data on a country-by-country basis, with companies from China disclosing
the least.
RECOMMENDATIONS
Based on these findings, Transparency International recommends that emerging
market companies should, first and foremost, become more publicly accountable.
An initial but critical step is for emerging market companies to recognise their
responsibility to be transparent for the benefit of stakeholders, both domestic and
international. The BRICS, in view of their importance among emerging markets
and of their current efforts to formalise and expand the influence of their grouping,
should collectively take the lead on this issue. BRICS companies should challenge
firms from developed economies in all aspects of their activities including their anti-
corruption practices.
Emerging market companies should develop and implement best practice anti-
corruption policies and programmes and publish comprehensive information on
these programmes. They should also publish complete lists of their subsidiaries,
affiliates, joint ventures and other related entities, including their stake in those
entities and their locations and make public individual financial accounts for each
country of operations.
Governments and civil society also have a role to play in fostering greater
transparency among emerging market companies. Governments can do so by
strengthening the legal requirements for corporate disclosure.
Civil society organisations can help shift company attitudes by focusing advocacy
efforts on multinational businesses located or operating in their countries to
encourage them to improve the depth and scope of their commitments to
transparency, and in particular, to improve their level of anti-corruption reporting.
Likewise, investors can exert additional pressure by demanding that emerging
market companies report on anti-corruption programmes, organisational
transparency and country-by-country reporting and factor this information into their
investment decisions.
An expanded list of recommendations can be found on page 38 of this report.
6 Transparency International
2. INTRODUCTION
As the world continues to experience a period of rapid economic change and
uncertainty, one fact is indisputable. The growing strength of emerging economies
is reshaping the world order.
According to some estimates, 70 per cent of world growth over the next few years
will come from emerging markets, with China and India accounting for 40 per
cent of that growth.
6
In its latest Human Development Report, the United Nations
Development Programme projects that by 2020, the combined economic output of
three leading developing countries alone Brazil, China and India will surpass the
aggregate production of Canada, France, Germany, Italy, the United Kingdom and
the United States.
7
This Transparency International study assesses the transparency of corporate
reporting by 100 major emerging market companies that are seen as Global
Challengers. These rapidly expanding companies, identified as rising stars of the
world economy, come from 16 different countries.
Corruption is a risk for all companies, whether they are based in London, Shanghai
or Mexico City. In addition to the more well-recognised and devastating effects
corruption has on society at large, corruption destroys corporate reputations,
inhibits entrepreneurship, weakens free markets and undermines the stability vital
to successful economies.
For emerging market companies, as for all global multinationals, corporate
transparency must be a key component of robust anti-corruption practice.
Although transparency achieved through more comprehensive disclosure does
not necessarily equal good performance, Transparency International believes that
reporting demonstrates a companys commitment to countering corruption and
makes companies more easily accountable for shortcomings. Following the July
2012 publication of Transparency in Corporate Reporting: Assessing the Worlds
Largest Companies, a report which analyses the disclosure practices on a range
of corruption-relevant measures among the 105 largest publicly listed multinational
companies, Transparency International set out to conduct a new survey based
on the same methodology that assesses large companies incorporated in
emerging markets.
When focusing on companies in rapidly developing economies, it is impossible to
ignore the importance of the BRICS (Brazil, Russia, India, China and South Africa)
with their demographic and geographic importance and dynamic economies.
Furthermore, their influence on the world stage, as they become a more formalised
geopolitical grouping via their annual summits and plans for common institutions,
calls for a special focus on companies from these countries in this report. BRICS
companies account for three-quarters of the sample in this survey.
In view of the growing economic and political clout of emerging markets and the
rapid advances of emerging market companies both domestically and across
borders, the hope is that these Global Challengers will adhere not only to applicable
legal and regulatory standards but that they will go above and beyond them to
achieve the highest standards of ethics and transparency. As markets become
global, company standards of behaviour and levels of transparency must become
higher and more universally applied.
As investors increasingly seek returns from emerging markets, it is in their interest
to consider the serious risks posed by companies with inadequate anti-corruption
7 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
programmes and transparency. Transparency International has long advocated
that by reporting publicly on relevant policies, procedures, activities and operations,
companies not only mitigate the risk of corruption but also provide the necessary
information to make them accountable to investors, journalists and civil society.
The same applies to companies from emerging markets.
Stakeholder demands for greater corporate transparency have led to the
introduction of recent legislation mandating more detailed financial disclosure.
For example, the United States 2010 Dodd-Frank Wall Street Reform and Consumer
Protection Act
8
requires country-level reporting of all payments to governments
(US and foreign) by extractive companies registered on the US stock exchange.
Similar rules were recently adopted for European companies in the oil, gas, mining
and logging industries.
9
A recent European proposal would compel companies
to be more transparent about sustainability issues including governance and
anti-corruption practices.
10
These developments are relevant to emerging market
companies and should influence their practice as they move into developed markets.
In fact, emerging market companies have a unique opportunity to position
themselves, not only as leading companies in the marketplace, but also as leading
corporate citizens by adopting the most advanced anti-corruption and transparency
practices. Global companies from developed markets have spent the last two
decades learning, often at high cost to their bottom lines and their reputations, how
to achieve improved levels of anti-corruption practice. Emerging market companies
should make use of those lessons to raise their own standards and become world
leaders in this area.
8 Transparency International
3. RATIONALE
AND METHODOLOGY
Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
builds on Transparency Internationals existing work in combating corruption in
the private sector. The methodology for this study has been used previously by
Transparency International, most recently for the July 2012 report Transparency in
Corporate Reporting: Assessing the Worlds Largest Companies.
This study assesses the transparency of corporate reporting by 100 major emerging
market companies comprising the list of Global Challengers 2011, and is based
on data collected or made available between 21 January and 18 March 2013. It is
possible that relevant information may have been published by companies after 18
March 2013, but it could not be taken into account in this report as this was the
closing date for data collection.
Transparency is measured on corporate reporting of three dimensions:
1. anti-corruption programmes
2. organisational structure
3. country-by-country reporting of revenues, transfers and value sharing
The principal outcomes of this report are:
The production of an overall index that ranks companies from the best to the
worst performers across all three dimensions.
The production of three separate company rankings, one for each dimension.
The production of rankings for BRICS countries.
9 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
DATA COLLECTION AND ANALYSIS
Multilingual researchers collected the data exclusively from information or
documents publicly available on each companys global website, including relevant
links embedded in the websites.
Data collection was guided by a questionnaire structured along the three dimensions
of transparency of corporate reporting:
Reporting on anti-corruption programmes: the 13 questions in this section
were based on the UN Global Compact Transparency International Reporting
Guidance on the 10th Principle Against Corruption.
11
The guidance was derived
from the Business Principles for Countering Bribery
12
whose development was
led by Transparency International.
Organisational transparency: the eight questions in this section focused on
disclosure of the companies related entities, including subsidiaries, associates,
joint ventures and other holdings.
Country-by-country reporting: five questions relating to country-level financial
data were posed for each country in which a company stated it operated.
In conducting the research, Transparency International did not investigate the
veracity or completeness of the published information and did not make any
judgement about the integrity of the information or practices disclosed. All data
points were independently validated by a second researcher. The methodology and
data were shared with each of the companies and they were given the opportunity
to review their individual results. Of the 100 companies surveyed, 17 took advantage
of the opportunity to review their data. This input from the companies was validated
by the researchers and corrections to the scores were made if necessary.
More details on methodology and the scoring system used to compile company
rankings and the overall index can be found on page 43.
10 Transparency International
BOX 1: BEST PRACTICE
TOP PERFORMER OVERALL WITH A SCORE OF 7.1
Tata Communications (India, Telecommunications, publicly listed)
92% in reporting on anti-corruption programmes discloses all
information except for regular programme monitoring.
88% in organisational transparency discloses all information except for
countries of operations for material subsidiaries.
34% in country-by-country reporting discloses revenues, pre-tax
income and income taxes for all material subsidiaries, revenues on
country-level for 13 countries out of 34.
BEST SCORES IN REPORTING ON ANTI-CORRUPTION PROGRAMMES: 92%
Tata Communications (India, Telecommunications, publicly listed)
Tata Global Beverages (India, Consumer goods, publicly listed)
Tata Steel (India, Basic materials, publicly listed)
Vedanta Resources (India, Basic materials, publicly listed)
BEST SCORES IN ORGANISATIONAL TRANSPARENCY: 100%
Emirates Airlines (UAE, Consumer services, state-owned)
Johnson Electric (China, Industrials, publicly listed)
Petronas (Malaysia, Oil and gas, state-owned)
Shanghai Electric (China, Industrials, publicly listed)
United Company Rusal (Russia, Basic materials, publicly listed)
BEST SCORES IN COUNTRY-BY-COUNTRY REPORTING: 50%
Falabella (Chile, Consumer services, publicly listed) all information on
revenues and income tax, partial information on community contributions
description of projects
BEST UNLISTED COMPANIES
Petronas (state-owned) best overall index score: 6.3
Votorantim Group (private) and Petronas (state-owned) best in reporting
on anti-corruption programmes: 88%
Emirates Airlines (state-owned) and Petronas (state-owned) best in
organisational transparency: 100%
Odebrecht Group (private) best in country-by-country reporting: 6%
11 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
4. REPORTING ON
ANTI-CORRUPTION
PROGRAMMES
istockphoto.com/MACIEJ NOSKOWSKI
HIGHEST PERFORMING
TATA COMMUNICATIONS, TATA GLOBAL BEVERAGES,
TATA STEEL, VEDANTA RESOURCES
0%
WORST PERFORMING
CHAROEN POKPHAND GROUP, CHERY AUTOMOBILE,
EL SEWEDY ELECTRIC, EMIRATES AIRLINES, ETISALAT,
FUNG GROUP, MABE, ODEBRECHT GROUP
46%
AVERAGE
92%
4. REPORTING ON ANTI-
CORRUPTION PROGRAMMES
For companies, the first line of defence against the risk of bribery and corruption
must be a comprehensive anti-corruption programme which is fully implemented
and monitored on a regular basis. The recommended elements of such a
programme are described in the Business Principles for Countering Bribery,
13

which were developed by Transparency International in collaboration with a multi-
stakeholder group comprised of leading companies, business ethics experts,
academics and trade union representatives.
Transparency International believes that public disclosure of measures to counter
corruption is key to improving corporate transparency, which in turn underpins
good governance. Furthermore, the external communication of a companys anti-
corruption programme confirms a companys commitment to ethical conduct, not
only in the eyes of its employees, but also in the eyes of other stakeholders including
business partners, investors and citizens.
In 2009, Transparency International and the UN Global Compact jointly issued
Reporting Guidance on the 10th Principle Against Corruption.
14
This tool derived
from the Business Principles for Countering Bribery, sets clear recommendations
to companies on the elements of their anti-corruption programmes that should be
publicly disclosed.
Since 2008, Transparency International has conducted four studies assessing
disclosure practices among companies with respect to their anti-corruption
programmes. These studies have highlighted significant progress on that front with
many of the assessed companies having recognised the value of public reporting
and the need to respond to stakeholder demands for greater transparency. As
a result, they have opted to make public documents such as codes of conduct
or anti-corruption policies and, in some cases, they have introduced new, more
comprehensive anti-corruption policies and disclosed them to the public.
SIGNS OF PROGRESS
There was a small overlap between the companies surveyed in this study and
those covered in the June 2012 study Transparency in Corporate Reporting:
Assessing the Worlds Largest Companies. The five companies included in
both reports are: Amrica Mvil, Gazprom, Petrobras, Reliance Industries
and Saudi Basic Industries.
While the performance of Petrobras remained almost unchanged, the scores
of the other four companies improved considerably in this study. The positive
change was primarily observed in the first dimension, reporting on anti-
corruption programmes, and was in large part due to the publication of
updated or newly disclosed documents on their websites.
14 Transparency International
BOX 2: IS REPORTING ON ANTI-CORRUPTION
PROGRAMMES MEANINGFUL?
Some argue that company reporting on anti-corruption programmes is
a superficial indicator and that reporting and actual compliance or good
behaviour are not the same thing.
While recognising that reporting and compliance are not the same,
there are strong arguments supporting the value of good reporting:
Public commitments make a company accountable to all its stakeholders
and to the general public.
Public commitments facilitate monitoring by stakeholders and the
general public.
The legal and reputational risks to which a company exposes itself
by making false public statements act as a deterrent to false or
exaggerated claims.
Reporting focuses the attention of the company on its practices and
drives improvement.
The publication of anti-corruption policies by companies has a positive
impact on employees at home and abroad because it underscores the
companys commitment and support for ethical behaviour.
COMPANY RESULTS
The 100 emerging market companies evaluated in this study achieved an average
result of 46 per cent in reporting on anti-corruption programmes, the first dimension
in this study. This means that on average companies scored 6 out of a possible
13 points. In the 2012 Transparency International report assessing the reporting
performance of the worlds 105 largest listed companies, the average score on
reporting on anti-corruption programmes was 68 per cent.
No company achieved the full score of 100 per cent. However, Tata
Communications, Tata Global Beverages, Tata Steel and Vedanta Resources
(all publicly listed companies incorporated in India) scored 92 per cent each, only
a point short of a perfect score.
Eight companies scored zero in this dimension: Charoen Pokphand Group, Chery
Automobile, El Sewedy Electric, Emirates Airlines, Etisalat, Fung Group, Mabe and
Odebrecht Group. Interestingly, 50 per cent of the worst performing companies
in this dimension are privately owned, even though privately owned companies
constitute only 12 per cent of the overall sample.
15 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
Companies scored very differently on each of the 13 questions measured in the
first dimension. However, the question that achieved the highest score sought to
assess whether their public documents included a commitment to complying with
all relevant laws, including anti-corruption laws. Of the 100 companies surveyed,
79 published a statement to that effect. Only six companies were found to have a
public statement on the prohibition of facilitation payments, the poorest result in
this dimension.
Diagram 2
Reporting on anti-corruption programmes
Where 100% means full transparency on anti-corruption programmes
Sample average 46%
0% 20% 40% 60% 80% 100%
Charoen Pokphand Group, Chery Automobile, El Sewedy Electric,
Emirates Airlines, Etisalat, Fung Group, Mabe, Odebrecht Group
China Shipbuilding Industry Corporation
China International Marine Containers Group, China National
Chemical Corporation, Coteminas, Thai Union Frozen Products
China Communications Construction Company, Galanz Group, LDK Solar
Bharat Forge, China Minmetals, China Shipping
Group, Severstal, Shanghai Electric Group
Aluminium Corporation of China, BYD, Geely Zhejiang Geely Holding Group,
Indofood Sukses Makmur, Larsen & Toubro, Yanzhou Coal Mining Company
China National Offshore Oil Corporation, Crompton Greaves
Gruma
Bajaj Auto, Chint Group, Sinochem, ZTE
Haier, Hindalco Industries, Johnson Electric, Sinomach
Anshan Iron and Steel Group, Falabella, Gedeon Richter, Sinohydro
Lupin Limited, Suntech Power, Wanxiang Group, Zoomlion
Baosteel Group, WEG
Alfa, China State Construction Engineering Corporation,
Cosco Group, Dr. Reddy's Laboratories, Indorama Ventures,
Ko Holding, Marcopolo, Mexichem, Natura, Norilsk Nickel
Embraer, Lukoil, Sinosteel, Suzlon Energy
Camargo Corra Group, Gerdau, Grupo Bimbo, JBS
DP World, Huawei Technologies, Magnesita Refratrios
Bidvest Group, Gazprom, LAN Airlines, Reliance Industries
Evraz Group, Femsa, United Company Rusal
Amrica Mvil, Lenovo Group, Mahindra & Mahindra
Brasil Foods, Infosys Technologies, Sabanci Holding, Tata Motors, Tenaris, Wipro
Tata Chemicals
Bharti Airtel, Bumi Resources, PTT, Sappi, Saudi
Basic Industries, Tata Consultancy Services
Petrobras, Petronas, Sasol, Votorantim Group
Tata Communications, Tata Global Beverages, Tata Steel, Vedanta Resources
4%
0%
8%
12%
15%
19%
23%
27%
35%
38%
42%
46%
50%
54%
62%
65%
69%
73%
77%
81%
92%
85%
88%
58%
31%
16 Transparency International
OWNERSHIP STRUCTURE
The sample for this survey includes companies with different ownership structures.
Of the 100 companies, 71 are listed on stock markets. Of the 29 remaining
companies, 17 are state-owned (among which 15 are Chinese) and 12 are in private
hands with no publicly listed shares.
The publicly listed companies performed better on average than the two other
groups with an average of 53 per cent. As was observed in a previous Transparency
International study, listed companies exhibit higher public reporting standards owing
in part to mandatory reporting obligations and the need to respond to pressures
from investors. In contrast to the listed companies, state-owned and privately owned
companies had similar scores of 30 per cent and 27 per cent respectively.
Diagram 3
Reporting on anti-corruption programmes:
Results by question
Proportion of companies scoring 1, 0.5, or 0
respectively out of 100 companies
Compliance with laws
79 21
Zero-tolerance statement
12 35 53
Code applies to all employees
1 36 63
Leadership support 6 37 57
Improper gifts, hospitality 12 43 45
Whistleblowing system 3 48 49
Prohibition of retaliation for reporting 1 51 48
Code applies to suppliers 8 55 37
Monitoring of the programme 15 60 25
Code applies to agents 3 74 23
Prohibition of facilitation payments 1 94 5
Transparent political contributions 3 64 33
Anti-corruption training 8 47 45
0 points 0.5 point 1 point
Number of companies receiving:
Diagram 4
Reporting on anti-corruption programmes:
Average company performance
by ownership structure
Where 100% means full transparency on anti-corruption programmes
Publicly listed
(71 companies)
53%
Private
(12 companies)
27%
State-owned
(17 companies)
30% Sample average 46%
0% 10% 20% 30% 40% 50% 60%
17 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
5. ORGANISATIONAL
TRANSPARENCY
istockphoto.com/Nikada
HIGHEST PERFORMING
EMIRATES AIRLINES, JOHNSON ELECTRIC, PETRONAS,
SHANGHAI ELECTRIC, UNITED COMPANY RUSAL
0%
WORST PERFORMING
ANSHAN IRON & STEEL GROUP, CHERY AUTOMOBILE,
CHINA NATIONAL OFFSHORE OIL CORPORATION, CHINA
SHIPBUILDING INDUSTRY CORPORATION, CHINT GROUP,
GALANZ GROUP, GEELY ZHEJIANG GEELY HOLDING
GROUP, HUAWEI TECHNOLOGIES, MABE, ODEBRECHT
GROUP, WANXIANG GROUP
54%
AVERAGE
100%
5. ORGANISATIONAL
TRANSPARENCY
Large international companies are often organised using complex structures.
They include extensive networks of subsidiaries, affiliates, joint ventures and other
holdings which may be incorporated in different jurisdictions, including secrecy
jurisdictions, and whose relationships may be difficult to detect. Understanding
complex company structures and other critical information such as intra-
company financial flows is only possible if companies are transparent about their
organisational structure.
This study evaluates organisational transparency by assessing the amount of
information companies disclose on their related holdings, particularly information on
majority and minority holdings: names, percentages owned by the parent company,
country of incorporation and countries of operations. The regulatory requirements
for such disclosure are limited and differ from one country to the next.
Organisational transparency is important for many reasons, not least because
company structures can be made deliberately opaque for the purpose of hiding
the proceeds of corruption. But on a more basic level, it is important because
it allows local stakeholders to know which companies are operating in their
territories, bidding for government licences or contracts, or have applied for
or obtained favourable tax treatment. It also informs local stakeholders about
which international networks these companies may belong to and how they are
related to other companies operating in the same country. In addition, through full
disclosure of corporate holdings, stakeholders can gain more complete knowledge
of financial flows such as intra-company transfers and payments to governments.
Organisational transparency allows citizens to hold companies accountable for the
impact they have on their communities.
COMPANY RESULTS
The average result for the organisational transparency dimension is 54 per cent.
On average, companies scored 4.3 out of 8 possible points. This falls considerably
below the average company score of 72 per cent achieved in the same category by
the top 105 companies assessed in Transparency Internationals 2012 report.
Five companies achieved a perfect score of 100 per cent: Emirates Airlines, Johnson
Electric, Petronas, Shanghai Electric and United Company Rusal. Three of these
companies are publicly listed and two are state-owned. No specific industry or
country pattern could be detected.
Eleven companies scored zero in this dimension: Anshan Iron and Steel Group,
Chery Automobile, China National Offshore Oil Corporation, China Shipbuilding
Industry Corporation, Chint Group, Galanz Group, Geely Zhejiang Geely Holding
Group, Huawei Technologies, Mabe, Odebrecht Group and Wanxiang Group. Nine
out of the eleven worst performers are incorporated in China, seven of which are
privately owned and four state-owned.
20 Transparency International
Diagram 5
Organisational transparency
Where 100% means full organisational transparency
75%
Bharat Forge, Bharti Airtel, Bidvest Group, Bumi Resources, BYD Company Limited, China Communications
Construction Company, Crompton Greaves, DP World, Dr. Reddy's Laboratories, Embraer, Etisalat,
Falabella, Gazprom, Gerdau, Hindalco Industries, Indofood Sukses Makmur, Indorama Ventures, Ko Holding
Lupin Limited, Marcopolo, Natura, Norilsk Nickel, PTT, Reliance Industries, Sasol,
Severstal, Tata Chemicals, Tata Consultancy, Tata Global Beverages, Tata Motors,
Tata Steel, Thai Union Frozen Products, Zoomlion, ZTE
0% 20% 40% 60% 80% 100%
Anshan Iron and Steel Group, Chery Automobile, China National Offshore Oil Corporation,
China Shipbuilding Industry Corporation, Chint Group, Galanz Group, Geely Zhejiang Geely
Holding Group, Huawei Technologies, Mabe, Odebrecht Group, Wanxiang Group
China Minmetals, China National Chemical Corporation, China Shipping Group,
China State Construction Engineering Corporation, Fung Group
Baosteel Group, Lukoil
Aluminium Corporation of China, Cosco Group, Sinomach
Camargo Corra Group, Sinochem, Sinosteel, Votorantim Group, WEG
Alfa, China International Marine Containers Group, Coteminas, JBS
Bajaj Auto, Infosys Technologies, LDK Solar, Magnesita Refratrios, Mexichem
Evraz Group, Grupo Bimbo, Suntech Power, Vedanta Resources
Haier, Petrobras
Brasil Foods, LAN Airlines, Suzlon Energy
Femsa, Sappi, Sinohydro, Wipro, Yanzhou Coal Mining Company
Sabanci Holding
Amrica Mvil, El Sewedy Electric, Larsen & Toubro, Mahindra & Mahindra
Charoen Pokphand Group, Gruma, Lenovo Group,
Saudi Basic Industries, Tata Communications, Tenaris
Gedeon Richter
Emirates Airlines, Johnson Electric, Petronas, Shanghai Electric Group, United Company Rusal 100%
94%
88%
81%
75%
69%
63%
56%
50%
44%
38%
31%
25%
19%
13%
6%
0%
Sample average 54%
21 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
OWNERSHIP STRUCTURE
When analysed by ownership structure, the companies achieved similar results
to those in the first dimension on reporting on anti-corruption programmes, with
publicly listed companies outperforming the rest of the sample.
Publicly listed companies achieved an average score of 67 per cent. Johnson
Electric, Shanghai Electric and United Company Rusal achieved 100 per cent.
Lukoil came in last with a score of 13 per cent.
Unlisted companies generally disclose the least amount of information with
respect to their company structure and received low average scores: state-owned
companies averaged 24 per cent and privately owned companies 15 per cent.
Among the 17 state-owned companies, four received zero scores and two, Emirates
Airlines and Petronas, achieved full scores, demonstrating that state ownership
is not in and of itself a barrier to organisational disclosure. The rest of the sample
scored between 6 per cent and 63 per cent.
Among the 12 privately owned companies, seven scored zero, four remained in the
below-average zone of 6 per cent to 31 per cent and only one company, Thailands
Charoen Pokphand Group, achieved a high score of 88 per cent.
Diagram 6
Organisational transparency:
Average company performance
by ownership structure
Where 100% means full organisational transparency
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
67%
24%
15%
Sample average 54%
Publicly listed
(71 companies)
Private
(12 companies)
State-owned
(17 companies)
22 Transparency International
istockphoto.com/samxmeg
6. COUNTRY-BY-COUNTRY
REPORTING
istockphoto.com/tupatu76
HIGHEST PERFORMING
FALABELLA
0%
WORST PERFORMING
38 OUT OF 100 COMPANIES
9%
AVERAGE
50%
6. COUNTRY-BY-COUNTRY
REPORTING
This section evaluates country-by-country disclosure of international operations by
the 100 emerging market companies in the sample. An industry-neutral set of criteria
was used to measure the disclosure by country of financial reporting of revenues,
capital expenditure, income before tax, income tax and community contributions.
The importance of country-by-country reporting was first recognised and advocated
in the extractive sector as a transparency practice required to help prevent the
resource curse which has afflicted many resource rich countries in the developing
world. Most prominent among relevant legislative changes is the 2010 Dodd-
Frank Wall Street Reform and Consumer Protection Act which makes mandatory
country-level reporting of all payments to governments (US and foreign) by extractive
companies registered on the US stock exchange. In the European Union, legislators
recently adopted similar rules for European companies in the oil, gas, mining and
logging industries.
However, this information is useful in preventing and detecting corruption in all
industries. Key financial data give citizens the possibility to understand the activities
of a particular company in their country and to monitor the appropriateness of their
payments to governments.
COMPANY RESULTS
In this dimension, the average score was 9 per cent. Although this score is low
compared to the average results registered in the previous two dimensions (46
per cent and 54 per cent), when compared to the results for country-by-country
reporting achieved by the largest 105 global companies evaluated in our 2012 study,
it is more than twice as high as that groups 4 per cent score.
This encouraging result among emerging market companies can be credited in large
part to the 20 Indian companies in the survey, which scored an average of 29 per
cent. It should be noted that Indian law requires companies to provide key financial
information on their subsidiaries.
15

Without this strong Indian performance, the average result of the sample would have
been similar to that of the weak score of the 105 largest global companies.
The best performing company was Falabella, a Chilean retailer, which achieved a
50 per cent score. On the other side of the ledger, 38 companies, or more than one-
third of the sample, scored zero.
26 Transparency International
Diagram 7
Country-by-country reporting
Where 100% means a company is fully transparent in all
its countries of operation
0% 10% 20% 30% 40% 50%
Alfa, Aluminium Corporation of China, Anshan Iron and Steel Group, Brasil
Foods, Bumi Resources, Charoen Pokphand Group, Chery Automobile, China
International Marine Containers Group, China National Chemical Corporation,
China National Offshore Oil Corporation, China Shipbuilding Industry
Corporation, China Shipping Group, Chint Group, Cosco Group, Coteminas,
Fung Group, Galanz Group, Gazprom, Haier, JBS, Lenovo Group, Lukoil, Mabe,
Natura, Petrobras, Sabanci Holding, Sasol, Shanghai Electric Group,
Sinochem, Sinohydro, Sinomach, Tenaris, Thai Union Frozen Products,
Votorantim Group, Wanxiang Group, WEG, Zoomlion, ZTE
Cosco Group
Baosteel Group, Camargo Corra Group, China State Construction
Engineering Corporation, DP World, Geely Zhejiang Geely Holding Group,
Johnson Electric, Ko Holding, Petronas, Severstal
China Communications Construction Company, China Minmetals,
Emirates Airlines, Saudi Basic Industries
Embraer, Grupo Bimbo, Indorama Ventures, Magnesita
Refratrios, Sinosteel, Yanzhou Coal Mining Company
Gerdau, Huawei Technologies
Gedeon Richter
Bidvest Group, Odebrecht Group, Sappi
BYD Company Limited, LDK Solar, Suntech Power
Gruma
Etisalat, PTT
Vedanta Resources
El Sewedy Electric
Amrica Mvil, LAN Airlines, Mexichem
Tata Consultancy Services, United Company Rusal
Indofood Sukses Makmur, Marcopolo
Femsa
Evraz Group
Dr. Reddy's Laboratories
Crompton Greaves, Larsen & Toubro
Tata Motors
Bajaj Auto, Hindalco Industries, Infosys Technologies, Mahindra & Mahindra,
Norilsk Nickel, Reliance Industries, Tata Chemicals, Tata Steel, Wipro
Tata Global Beverages
Suzlon Energy
Bharat Forge
Bharti Airtel, Tata Communications
Lupin Limited
Falabella 50%
38%
34%
33%
32%
31%
30%
29%
26%
25%
21%
19%
18%
17%
16%
13%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0.5%
0%
Sample average 9%

27 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
Within this dimension, information on country-level revenues was the most frequently
disclosed data point (19 per cent on average). Capital expenditure, on the other
hand, was the least frequently disclosed information (only 2 per cent on average).
BOX 3: SUBSIDIARY-BY-SUBSIDIARY VS.
COUNTRY-BY-COUNTRY REPORTING
More than 20 companies in the sample report financial data on
a subsidiary-by-subsidiary basis. They are:
all companies based in India
PTT (Thailand)
This reporting is a positive step towards greater transparency because:
It constitutes a good basis to evaluate subsidiary performance and
related payments.
It allows for more transparency in inter-company flows within
multinational corporations.
However, country-by-country reporting is preferable because:
Larger subsidiaries may have cross-border operations. In this case,
country-level disclosure is lost by reporting only on a subsidiary level.
To comply with regulatory requirements, some companies report on
material subsidiaries only but smaller subsidiaries may be omitted.
There may be several such non-material subsidiaries in a given country,
making the companys presence in that country quite relevant overall.
Why does Transparency International advocate country-by-country reporting?
It exposes the link between the parent company and the local jurisdiction
in which it operates, making companies accountable in both places.
It provides a basis for comparison between companies operating
in a particular country, making it possible for citizens to monitor the
appropriateness of payments to governments.
It sheds light on any special arrangements between governments
and companies, resulting in greater accountability.
It ensures disclosure of all holdings, material and non-material.
Diagram 8
Country-by-country reporting:
Results by question
Where 100% means a company is fully transparent in all
its countries of operation
0% 5% 10% 15% 20%
Capital expenditure
Community contribution
Income before tax
Income tax
Revenues
19%
11%
9%
5%
2%
Sample average 9%
28 Transparency International
OWNERSHIP STRUCTURE
It is in this dimension that the gap between the performance of publicly listed
companies and unlisted companies was the most striking. The 71 publicly listed
companies in the sample achieved an average score of 13 per cent, while private
and state-owned groups each scored below 1 per cent.
Only four out of twelve privately held companies and six out of seventeen state-
owned companies scored above 0. The other 19 state-owned companies disclosed
not a single data point on their international operations.
KEY FINANCIAL REPORTING
ON DOMESTIC OPERATIONS
In general, companies tend to report more fully on their domestic rather than on
their international operations. In some cases, this is due to regulatory requirements,
whereas in other cases it relates to the proportionately large size of the companys
domestic business. On average, companies in the sample scored 37 per cent in
reporting on domestic operations, which means that they scored almost two points
out of a possible five. Domestic revenues were most often disclosed whereas
domestic income before tax was least often revealed.
Russias Lukoil was the only company to report on all required items and to receive
a full score for domestic disclosure, while 12 companies disclosed not a single
required item on their domestic operations. Of these, nine were Chinese.
It is important to note that the data on domestic operations is not included in the
calculation of the overall Index. A single company ranking which includes both
domestic and international operations would give an unintended comparative
edge to companies operating in fewer countries.
Diagram 9
Country-by-country reporting:
Average company performance
by ownership structure
Where 100% means a company is fully transparent in all
its countries of operation
0% 5% 10% 15% 20%
State-owned
(17 companies)
Private
(12 companies)
Publicly listed
(71 companies)
12.7%
0.9%
0.7%
Sample average 9%
29 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
BOX 4: EMERGING MARKET MUTINATIONALS VS.
THE WORLDS LARGEST GLOBAL COMPANIES
In 2012, Transparency International published the study Transparency in
Corporate Reporting: Assessing the Worlds Largest Companies, which
evaluated the reporting practices of the 105 largest publicly listed
multinationals worldwide. Using the same methodology, the current study
evaluates 100 emerging markets companies. On average, the global sample
performed better in the first and second dimensions which were evaluated,
while the emerging markets sample performed better in the third dimension.
The performance of emerging market companies was poorer than their
global counterparts on each of the 13 questions related to reporting
on their anti-corruption programmes with an average score of 46 per
cent for the emerging market sample compared with 68 per cent for the
global sample.
With respect to organisational transparency the two samples achieved
reasonably similar scores. The score of the global sample was 72 per
cent and the adjusted score of the emerging markets sample was 67
per cent (see the note in the diagram), representing only a 5 percentage
points difference.
In the third dimension on country-by-country reporting, the emerging
markets companies performed over twice as well as the global
companies. This unexpected but encouraging result is mostly due to the
performance of the Indian companies, which constitute one-fifth of the
sample and achieved an average score of 29 per cent.
* Organisational transparency scores were measured differently in the two studies. In the case of the
July 2012 report, only six of eight questions pertaining to organisational transparency were included in
the calculations due to methodological concerns. For the purposes of the comparison in this diagram,
the scores for the emerging market companies were adjusted in the same way. This explains the
difference between the 67 per cent score shown here and the 54 per cent highlighted in the main
findings of the report.
46%
68%
Anti-corruption programmes
67%
72%
Organisational Transparency*
9%
4%
Country-by-country
0%
20%
40%
60%
100%
80%
Emerging markets sample Global sample
Emerging market companies vs. largest global
companies comparison of sample averages
30 Transparency International
istockphoto.com/Nikada
7. BRICS:
SPECIAL SECTION
istockphoto.com/visionchina
HIGHEST PERFORMING
INDIA
2/10
WORST PERFORMING
CHINA
3.5/10
AVERAGE
5.4/10
7. BRICS: SPECIAL SECTION
The growing economic and political weight of the BRICS reflects the shifting
of power from the developed economies towards emerging economies. The
dynamism of the BRICS has spawned the emergence of an expanding group of
multinationals based in these five countries but whose ambitions are much wider.
As an increasingly formalised group whose influence is growing, the BRICS warrant
particular attention in this report.
BRICS countries make up 20 per cent of global economic output and 15 per cent of
world trade. Their total contribution to global economic growth is estimated to have
soared to 50 per cent following the financial crisis.
16
Given the increasing economic
weight of the BRICS, these companies should lead the way by adopting high
standards of transparency and anti-corruption.
Among the 75 companies from the BRICS in the sample, 33 are from China, 20 from
India, 13 from Brazil, 6 from Russia and 3 from South Africa.
Companies from India performed the best overall among the BRICS with a score of
54 per cent (5.4 out of a maximum score of 10) on the strength of their performance
on country-by-country reporting. South African companies followed close behind,
leading on the first two dimensions: reporting on anti-corruption programmes and
organisational transparency. China lagged behind with a poor score of 20 per cent
(2 out of a maximum score of 10). Russian companies averaged 43 per cent (4.3 out
of a maximum score of 10).
Diagram 10
Index: BRICS average results
Scale 0 10 where 0 is the least transparent and 10 is the most
transparent. This index is based on the unweighted average
of results in all three categories.
0 1 2 3 4 5 6 7 8 9 10
China
(33 companies)
Brazil
(13 companies)
Russia
(6 companies)
South Africa
(3 companies)
India
(20 companies)
5.4
5.1
4.3
3.4
2
34 Transparency International
REPORTING ON ANTI-CORRUPTION
PROGRAMMES
The three South African companies in the sample scored highest in the BRICS
group achieving an average score of 79 per cent with individual company results
between 65 per cent and 88 per cent.
The 20 Indian companies achieved the second highest average score at 63 per
cent. The four best overall performers in this dimension were Indian companies with
a score of 92 per cent. Even the worst performer among Indian companies, Bharat
Forge, achieved a result of 15 per cent.
Companies from Russia and Brazil performed similarly, achieving average results of
54 per cent. Russian scores ranged from 15 per cent to 69 per cent, while Brazilian
scores varied from 0 per cent to 88 per cent.
The worst performers in this group were the Chinese companies, which scored 28
per cent on average. Huawei Technologies was the best performer among the 33
Chinese companies with 62 per cent. Two Chinese companies, Fung Group and
Chery Automobile, scored zero.
Diagram 11
Reporting on anti-corruption programmes:
BRICS average results
Where 100% means full transparency on anti-corruption programmes
0% 10% 20% 30% 40% 50% 60% 70% 80%
China
(33 companies)
Brazil
(13 companies)
Russia
(6 companies)
India
(20 companies)
South Africa
(3 companies)
79%
63%
54%
54%
28%
90% 100%
35 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
ORGANISATIONAL TRANSPARENCY
As in the first dimension under study in this report (reporting on anti-corruption
programmes), South Africa ranked highest followed by India, Russia, Brazil and
China. However, the spread between the countries was not as pronounced as in the
first dimension.
The South African companies achieved an average result of 71 per cent.
The Indian sub-sample came very close to the leader with an average score of 69
per cent, with individual company scores ranging from 38 per cent to 88 per cent.
Also scoring above the sample average was Russia, with an average result of 64
per cent. It is interesting to note the sharp contrast between the strongest scoring
Russian company, United Company Rusal, with a perfect score of 100 per cent, and
the weakest, Lukoil, with just 13 per cent.
Brazil and China both scored below the sample average, with 45 per cent and
31 per cent respectively. In Brazil, scores ranged between a low of 0 per cent for
Odebrecht Group and a high of 75 per cent for Embraer, Gerdau, Marcopolo and
Natura. In China, nine companies, all of them unlisted, scored zero whilst two
publicly listed companies scored 100 per cent.

Diagram 12
Organisational transparency:
BRICS average results
Where 100% means full organisational transparency
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
China
(33 companies)
Brazil
(13 companies)
Russia
(6 companies)
India
(20 companies)
South Africa
(3 companies)
71%
69%
64%
45%
31%
36 Transparency International
COUNTRY-BY-COUNTRY REPORTING
Among companies from the five BRICS countries, the best performing by far were
Indian. This was mostly related to the previously mentioned law that requires Indian
companies to disclose key financial information for all their subsidiaries. Despite
this legal obligation, however, the results among Indian companies still vary, mostly
due to their performance on voluntary country-level disclosure of revenues and
community contributions. The results ranged between 10 per cent and 34 per cent.
Also performing significantly better than average was Russia, with a result of 12 per
cent. The best performing among the Russian companies were Norilsk Nickel, Evraz
Group and United Company Rusal.
The remaining BRICS performed well below average with South Africa at 4 per
cent, Brazil at 3 per cent and China at a mere 1 per cent. Over half of the Brazilian
companies and almost two-thirds of the Chinese companies scored zero.
Diagram 13
Country-by-country reporting:
BRICS average results
Where 100% means full organisational transparency
29%
12%
4%
3%
1%
China
(33 companies)
Brazil
(13 companies)
South Africa
(3 companies)
Russia
(6 companies)
India
(20 companies)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
37 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
8. RECOMMENDATIONS
On the basis of the analysis in this report, Transparency International has formulated
the following recommendations.
TO EMERGING MARKET COMPANIES
1. Companies in the BRICS countries should lead by example.
Given their growing political and economic clout among emerging markets and
globally, companies in the BRICS group of countries should strive to lead the
way with the most advanced anti-corruption and transparency practices. BRICS
companies should take this opportunity to challenge companies from developed
economies not only in their products and services, but in all aspects of their
business, including their anti-corruption behaviour.
2. Emerging market companies should recognise
their transparency obligations to stakeholders.
As rising stars aiming to operate globally, emerging market companies should
recognise that they have an obligation to demonstrate more transparency to all their
stakeholders, both at home and abroad. A commitment to transparency should
not be dictated solely by legal disclosure requirements, where they exist, but by an
understanding that transparency is a basic responsibility.
3. Emerging market companies should raise their level
of anti-corruption practice.
Emerging market companies should work to develop best practice anti-corruption
programmes to protect themselves against the risk of bribery and corruption.
Compared to their global counterparts, emerging market companies, and in
particular, unlisted and state-owned companies, have much work to do to improve
their anti-corruption practices. They have an opportunity to improve their level
of anti-corruption practice by taking advantage of the lessons learned by global
companies in the last two decades. They should also seek opportunities to learn
from each other through the sharing of good practices.
4. Emerging market companies should make their
anti-corruption programmes publicly available.
Easy-to-access public reporting on anti-corruption programmes increases credibility
and accountability: it sends a strong and clear message to stakeholders, gives
support to employees, and enhances anti-corruption efforts.
5. Emerging market companies should publish exhaustive
lists of their subsidiaries, affiliates, joint ventures and other
related entities.
Emerging market companies should step up their disclosure practices by publishing
information on all of their related entities and this should not be limited to material
subsidiaries only.
38 Transparency International
The materiality criteria can result in the exclusion of many holdings that are relevant
for understanding and evaluating a companys tax structure and anti-corruption
compliance. For example, a subsidiary operating in a given country may not
meet the materiality criteria of a multinational company, although the scale of its
operations may be significant to the local population.
Such lists of all holdings do not have to be included in annual reports, but they
should be easily accessible from corporate websites in one form or another. Ideally,
they should include information on each company name, the percentage owned by
the group, the place of incorporation and basic information on company operations
(where it is and what kind of business it conducts).
6. Emerging market companies should publish individual
financial accounts for each country of operations.
Emerging market companies should publish their data on a country-by-country
basis. Currently, it is not widespread practice for emerging market multinationals
to publish this data, with the exception of Indian companies which have been
required by law to do so. The Indian example shows that, at a minimum, this level
of disclosure is achievable.
While publishing individual financial accounts for each country represents a relatively
small incremental effort for multinational companies, as the information is already
available to them internally, it will have a big impact on the countries in which they
operate. While most companies declare their commitment to supporting local
communities, they significantly hamper the monitoring of this commitment by
failing to publish adequate detailed financial information on their local operations.
Transparency of country-level activity and disclosure of profit, transfers, taxes
and government contracts are necessary preconditions to effective monitoring
of a companys impact on local economic development.
7. Emerging market companies should disclose their
organisational structure in a reasonably accessible manner.
Emerging market companies should clearly disclose and communicate their
organisational structure and operations by providing complete and easy-to-understand
information on company websites or in publicly available documents. The information
that can be found on company websites with respect to a companys organisational
structure and countries of operations is often scant, incomplete and confusing.
Ensuring that a straightforward and complete illustration or narrative explanation of how
the company is organised and where it operates is available would improve stakeholder
understanding of the company and enhance transparency. Such transparency is
important because it builds trust with stakeholders, including investors who value clear
and straightforward information when making investment decisions. A transparent,
informative and unrestricted corporate website, available in at least one international
language, should be the standard communication tool for all large emerging market
multinationals. This applies to unlisted, state-owned and publicly listed companies alike.
Most emerging market companies already make use of publicly available websites
as a basic means of corporate communication. But some still reserve a great
deal of corporate information for their registered investors, employees or selected
stakeholders. Transparency International strongly encourages all emerging market
companies to populate their public websites with the greatest possible number
of financial and non-financial reports and corporate documents. This would offer
numerous benefits: a well-founded reputation for openness and transparency
attracts more ethical employees and investors, and enhanced reporting enables
civil society to play its oversight role.
39 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
8. Unlisted emerging market companies and state-owned
enterprises should improve their disclosure practices.
Unlisted companies and state-owned enterprises are subject to fewer mandatory
reporting requirements. Consequently, their levels of transparency tend to be lower.
Privately held and state-owned companies from emerging markets should recognise
the importance of transparency and accountability in building confidence among
stakeholders and strive to improve their disclosure practices.
TO INTERNATIONAL FINANCIAL
INSTITUTIONS
1. International Financial Institutions should consider the
adoption of robust anti-corruption programme requirements.
As recommended by the B20 business leaders to G20 governments in 2013,
international financial institutions such as the World Bank and regional developments
banks should be encouraged to make their loans, investments, guarantees and
provision of other funding conditional on the beneficiaries of their financing having
in place effective internal controls, ethical standards, and compliance and anti-
corruption programmes.
17
TO GOVERNMENTS AND
REGULATORY BODIES
1. National governments in emerging markets should
consider adopting rules for mandatory company reporting
on anti-corruption measures.
Currently most company reporting on anti-corruption programmes is carried out on
a voluntary basis. In April 2013, the European Commission announced a proposal
that would require European companies with more than 500 employees to be more
transparent about their efforts to combat corruption and bribery. Governments in
emerging markets should follow suit by passing legislation making anti-corruption
reporting mandatory.
2. National governments in emerging markets should require
companies under their jurisdiction to disclose all subsidiaries,
affiliates, joint ventures and other related entities.
Most laws and regulations applying to publicly listed companies limit disclosure
of holdings to material investments. This standard, although it provides a starting
point for improved transparency, often results in limited disclosure and can lead
to the omission of many group holdings. An exhaustive list of related entities
for each multinational company should be publicly available: if not in an annual
report, then as a separate document accessible on the corporate website. Such
lists should include each entitys name, the groups ownership interest, and
the countries of incorporation and operation. This information is a necessary
precondition to enable the monitoring of financial flows into and from countries.
Transparency International encourages national regulators to impose higher
standards of transparency and require the publication of detailed information
40 Transparency International
on the organisational structures of multinational companies, regardless of industry
and ownership structure.
3. National governments in emerging markets should require
companies under their jurisdiction to report on a country-by-
country basis.
The adoption of the Dodd-Frank legislation in the United States in 2011 was
a positive and significant step towards ensuring more country-by-country
transparency in international business by requiring extractive companies registered
on a US stock exchange to report their governmental payments on a country-by-
country basis. EU legislators recently adopted new transparency rules for European
companies in the oil, gas, mining and logging industries. These companies will be
obliged to report payments of more than 100,000 made to the government in the
countries where they operate.
Transparency International recommends that all national governments in emerging
markets follow this lead and adopt legislation that promotes the highest possible
standards. Indeed, they should go beyond existing legislation and require all
multinational companies incorporated or operating in their country, regardless of
industry or ownership structure, to publicly disclose their financial accounts on a
country-by-country basis. Such transparency would greatly enhance the monitoring
of money flows, government contracts, and tax and royalty payments.
4. Accounting standards relating to financial accounting as well
as to corporate social responsibility reporting should include
corruption-relevant disclosures.
International accounting standards requiring organisational transparency and
country-by-country disclosure should be established. Such standards would
benefit companies, investors, civil society and governments. They would introduce
transparency to companies international operations and thereby expose the many
related risks. The new standards would provide much needed information to civil
society and governments, enabling them to follow financial inflows and outflows to
and from their countries, allowing for better detection of illicit money flows.
TO INVESTORS
1. Institutional and private investors should demand reporting on
anti-corruption programmes, organisational transparency and
country-by-country reporting and factor this information into
their investment decisions.
Investors should demand that emerging market companies provide them with
the information they need to make investment decisions that are consistent
with their ethical standards and strategies. It is in the interest of investors to
evaluate all of their investment risks. Transparent organisational structures, where
each subsidiary, affiliate or joint venture is identified, accompanied by country-
by-country reporting, are necessary to understand the company and identify
significant risks economic, political and reputational. Lack of transparency on
this front is a serious risk factor, which in itself should be carefully considered
by investors.
41 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
2. Risk rating agencies as well as corporate responsibility
indices should include transparency measures as an integral
part of their evaluation process.
Transparency International encourages risk rating agencies, risk and corporate
responsibility analysts and all institutions that publish indices of corporate
responsibility to include transparency and anti-corruption compliance in their
evaluation models.
Anti-corruption programmes and transparency enhancing measures lower
the risk and incidence of corruption. Therefore, ratings that fail to account for
good standards in reporting on anti-corruption programmes, transparency
in organisational structures and country-by-country operations are at best
incomplete and at worst unreliable.
TO CIVIL SOCIETY ORGANISATIONS
1. Civil society organisations should get involved in the
monitoring of multinational businesses located or operating in
their countries to promote greater transparency.
Transparency International strongly encourages civil society organisations in all
countries, including emerging markets, to monitor transparency and integrity in
multinational business. As their role and influence in the world economy increases,
emerging market companies should adhere to higher standards of transparency.
Civil society should encourage emerging market companies to apply ethical
standards that are consistent with global best practice and to adhere to those
high standards in all their operations. They should also be encouraged to report
on these practices both in their home jurisdiction, as well as others, with equal
detail and attention to the three dimensions identified in this report: anti-corruption
programmes, organisational transparency and country-by-country reporting.
2. Civil society organisations should focus advocacy efforts on
businesses located or operating in their countries to improve the
depth and scope of their commitments to transparency, and in
particular to improve their level of anti-corruption reporting.
Transparency International encourages civil society organisations to focus advocacy
efforts on achieving greater transparency in multinational business. Such advocacy
should target governments, regulators and companies with the objective of
countering illicit money flows and corruption generally. They should address all three
dimensions of corporate transparency: reporting on anti-corruption programmes,
organisational transparency and country-by-country reporting.
42 Transparency International
9. ANNEXES
ANNEX 1: METHODOLOGY
This report is designed and carried out to encourage increased levels of
transparency in international business. It analyses reporting practices of 100
large emerging market companies from diverse industries and countries.
The methodology was based on the previous Transparency International projects
and was most recently used for our July 2012 report on Transparency in Corporate
Reporting: Assessing the Worlds Largest Companies. The table below compares
the various corporate reporting studies undertaken by Transparency International.
EVALUATED
AREAS
TRANSPARENCY
IN CORPORATE
REPORTING
(2012)
PROMOTING
REVENUE
TRANSPARENCY
(2011)
TRANSPARENCY
IN REPORTING ON
ANTI-CORRUPTION
(2009)
PROMOTING
REVENUE
TRANSPARENCY
(2008)
Reporting on
anti-corruption
programmes
3 3 3 3
Organisational
disclosure
3 3 3
Country-level
disclosure
3 3 3
INDUSTRIES Various Oil and gas Various Oil and gas
NUMBER OF
COMPANIES
105 44 500 42
OWNERSHIP Publicly listed Various Publicly listed Various
Table 1
Comparison of Transparency International Studies
on Transparency in Corporate Reporting
COMPANY SELECTION
The selection of companies was based on the Boston Consulting Group list of
Global Challengers 2011. The list of companies and the structure of the sample are
presented in Annex 3.
The subject companies were not selected with a view towards reaching geographic
or industry-wide conclusions. The Industry Classification Benchmark was used to
classify companies by industry.
All companies were contacted in January 2013 when they were informed of the
research and the publication of the report including a company ranking.
43 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
Sample structure
BY INDUSTRY
1 Basic materials 28
2 Consumer goods 20
3 Consumer services 6
4 Financials 0
5 Health care 3
6 Industrials 23
7 Oil & gas, energy 10
8 Technology 5
9 Telecommunications 4
10 Utilities 1
BY OWNERSHIP
1 Publicly listed 71
2 Private 12
3 State-owned 17
BY COUNTRY
1 Argentina 1
2 Brazil 13
3 Chile 2
4 China 33
5 Egypt 1
6 Hungary 1
7 India 20
8 Indonesia 2
9 Malaysia 1
10 Mexico 7
11 Russia 6
12 Saudi Arabia 1
13 South Africa 3
14 Thailand 4
15 Turkey 2
16 United Arab Emirates 3
DATA COLLECTION AND VERIFICATION
All data were collected by desk research conducted between 21 January and
18 March 2013. The team included researchers with fluency in English, Mandarin,
Portuguese and Russian to ensure thorough understanding of original-language
source materials where it was needed. The sources included company websites
and the relevant links and documents directly accessible through them. Data for
each question were recorded and the exact sources documented (e.g. corporate
documents with page numbers or websites with dates of when the data were
downloaded). The research was based on the latest available documentation.
The reporting periods covered in the company documents may differ among the
selected companies.
All data points collected were independently validated by a second researcher.
Transparency International has not undertaken to verify whether information
disclosed on websites or in reports is complete or correct. In other words, if a
company publishes what it refers to as a full list of its fully consolidated material
subsidiaries this has been accepted at face value and scored accordingly. In
addition, it is beyond the scope of this research to judge levels of integrity in
company practices.
Rather, the research focuses solely on reporting on transparency and anti-corruption
in corporate policies and procedures, which Transparency International believes
are crucial elements in ensuring good corporate governance and mitigating the risk
of corruption.
DATA SHARING AND REVIEWING
On 4 March 2013 preliminary data sets were shared with the companies.
Each company was given the opportunity to review its own data and to provide
feedback or propose corrections. Feedback was accepted until 18 March 2013.
44 Transparency International
Each data set consisted of four elements:
scores and data sources for questions 113 on anti-corruption programmes
scores and data sources for questions 1421 on organisational transparency
country-by-country data (questions 2226)
list of countries of operations
The companies were asked to review the collected data in order to verify their
completeness and accuracy. Of the 100 companies, 17 provided feedback.
All requests for corrections were carefully analysed and discussed by the research
team. Whenever necessary, further information, substantiation or documentation
was requested and obtained from companies. This process resulted in a number
of data point adjustments and in updates of some data sources which led to
improvements in the scores for 12 of the 17 companies that provided feedback.
For purposes of scoring, all sources that were published on corporate websites
on or before 18 March 2013 were taken into account.
Corrections were most often the result of one or more of the following:
the publication of new corporate documents or policies
changes to or updates of policies
identification of documents or sources that had been missed and therefore
omitted by the initial review
clarification of specific terminology
The following companies provided feedback during the data review process:
Alfa, Amrica Mvil, Bharti Airtel, Brasil Foods, Emirates Airlines, Gedeon Richter,
Gazprom, Gerdau, Ko Holding, Mabe, Mahindra & Mahindra, Natura, Petrobras,
Petronas, Saudi Basic Industries, Tata Communications, Votorantim Group.
Transparency International greatly appreciates company engagement in this process
as it contributes to the high quality of the data. As a result of this dialogue, a better
overview and understanding of diverse reporting practices and standards was gained.
QUESTIONNAIRE STRUCTURE AND SCORING
The questionnaire covers a broad spectrum of issues influencing corporate
transparency. It was constructed in the same manner as the questionnaire used for
the most recent report Transparency in Corporate Reporting: Assessing the Worlds
Largest Companies in 2012. It focuses on three dimensions:
1. reporting on anti-corruption programmes
2. organisational transparency
3. country-by-country reporting
The first dimension is derived from the UN Global Compact Transparency
International Reporting Guidance on the 10th Principle Against Corruption. It includes
13 questions; each one is allocated a score of 0, 0.5 or 1. The maximum score is 13
points. The final score for this dimension for each company is then expressed as a
percentage of the maximum possible score (between 0 and 100 per cent).
The second dimension includes eight questions. It evaluates the level of disclosure
of material, fully and non-fully consolidated entities. Reporting on names,
percentages owned by the parent company, countries of incorporation and
countries of operations is reviewed for all such entities. Again, each question is
awarded a score of 0, 0.5 or 1.
45 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
The maximum score achievable in organisational transparency is 8 points.
Companies that do not have any non-fully consolidated entities are evaluated on
their disclosure of fully consolidated entities only (maximum 4 points). The final
individual company score for this dimension is expressed as a percentage of the
maximum possible score (between 0 and 100 per cent).
The third dimension, country-by-country reporting, includes five questions, four of
them relating to basic elements of financial accounts and the fifth to community and
charitable contributions. The maximum achievable score per country is 5. The full
set of five questions applies to each country of foreign operations only.
Once all countries are scored for country-by-country reporting, a total score per
country is calculated by adding up the scores received on each of the five questions.
The individual country scores are aggregated and then divided by the number
of countries to arrive at the total score per country. The final result in country-by-
country reporting is then expressed as a percentage of the maximum possible score
(5 points per country).
For example, if a company operates in 10 foreign countries and discloses its
revenues for six of these countries, it receives one point for each of the six countries
for question number 22 which relates to revenue reporting. If the company does not
disclose any other relevant country-level information, it receives a score of zero for
questions 23, 24, 25 and 26. For that dimension, the companys score is 6 out of a
possible optimal score of 50 (five questions per country multiplied by 10 countries).
The actual score of 6 translates as 12 per cent of the best possible score of 50.
Thus, the result for this company in country-by-country reporting is 12 per cent.
The overall index is derived from taking a simple, unweighted average of the results
achieved for each dimension, rescaled from 010, where 0 is the worst and 10 the
best score.
ANNEX 2: QUESTIONNAIRE
I. DISCLOSURE OF ANTI-CORRUPTION PROGRAMMES
1. Does the company have a publicly stated commitment to anti-corruption?
2. Does the company publicly commit to be in compliance with all relevant laws,
including anti-corruption laws?
3. Does the company leadership demonstrate support for anti-corruption?
For example: is there a statement in a corporate citizenship report or in
public pronouncements on integrity?
4. Does the companys code of conduct/anti-corruption policy explicitly apply
to all employees?
5. Does the companys code of conduct/anti-corruption policy explicitly apply to all
agents and other intermediaries (third parties working on behalf of the company)?
6. Does the companys code of conduct/anti-corruption policy explicitly apply
to contractors, subcontractors and suppliers?
7. Does the company have an anti-corruption training programme for its
employees in place?
8. Does the company have a policy defining appropriate/inappropriate gifts,
hospitality and travel expenses?
9. Is there a policy that explicitly forbids facilitation payments?
46 Transparency International
10. Does the company prohibit retaliation for reporting the violation of a policy?
11. Does the company provide channels through which employees can report
potential violations of policy or seek advice (e.g. whistleblowing) in confidence?
12. Does the company carry out regular monitoring of its anti-corruption
programme?
13. Does the company have a policy prohibiting political contributions or if it does
make such contributions, are they fully disclosed?
II. ORGANISATIONAL TRANSPARENCY
14. Does the company disclose the full list of its fully consolidated material
subsidiaries?
15. Does the company disclose percentages owned in its fully consolidated material
subsidiaries?
16. Does the company disclose countries of incorporation of its fully consolidated
material subsidiaries?
17. Does the company disclose countries of operations of its fully consolidated
material subsidiaries?
18. Does the company disclose the full list of its non-fully consolidated
material holdings?
19. Does the company disclose percentages owned in its non-fully consolidated
material holdings?
20. Does the company disclose countries of incorporation of its non-fully
consolidated material holdings?
21. Does the company disclose countries of operations of its non-fully consolidated
material holdings?
(For qq.1821: Non-fully consolidated material holdings include associated
companies, joint ventures, entities consolidated by equity method)
III. COUNTRY-BY-COUNTRY DISCLOSURE
For the purposes of this study, countries of operations are those countries
(excluding the home country) in which a company is present either directly or
through its subsidiaries. The relevant list of countries of operations is based on
the companys own reporting.
For each country of the companys operations the following set of questions
was assessed:
22. Does the company disclose its revenues/sales in country X?
23. Does the company disclose its capital expenditure in country X?
24. Does the company disclose its pre-tax income (income before tax) in country X?
25. Does the company disclose its income tax in country X?
26. Does the company disclose its community/charitable contribution in country X?
47 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
ANNEX 3: DATA TABLES
# COMPANY COUNTRY OWNERSHIP INDUSTRY ACP OT CBC INDEX FEEDBACK
ON DATA
1 Alfa** Mexico publicly listed Basic materials 50% 31% 0% 2.7 yes
2 Aluminium Corporation of China** China state-owned Basic materials 19% 19% 0% 1.3
3 Amrica Mvil* Mexico publicly listed Telecommunications 73% 81% 16% 5.7 yes
4 Anshan Iron and Steel Group China state-owned Basic materials 38% 0% 0% 1.3
5 Bajaj Auto India publicly listed Consumer goods 31% 38% 30% 3.3
6 Baosteel Group China state-owned Basic materials 46% 13% 1% 2.0
7 Bharat Forge India publicly listed Industrials 15% 75% 33% 4.1
8 Bharti Airtel India publicly listed Telecommunications 85% 75% 34% 6.4 yes
9 Bidvest Group South Africa publicly listed Consumer services 65% 75% 6% 4.9
10 Brasil Foods Brazil publicly listed Consumer goods 77% 56% 0% 4.4 yes
11 Bumi Resources Indonesia publicly listed Basic materials 85% 75% 0% 5.3
12 BYD Company Limited China publicly listed Consumer goods 19% 75% 7% 3.4
13 Camargo Corra Group Brazil private Industrials 58% 25% 1% 2.8
14 Charoen Pokphand Group Thailand private Consumer services 0% 88% 0% 2.9
15 Chery Automobile China state-owned Consumer goods 0% 0% 0% 0.0
16
China Communications
Construction Company
China publicly listed Industrials 12% 75% 2% 2.9
17
China International Marine
Containers Group**
China publicly listed Industrials 8% 31% 0% 1.3
18 China Minmetals** China state-owned Basic materials 15% 6% 2% 0.8
19 China National Chemical Corporation China state-owned Basic materials 8% 6% 0% 0.5
20
China National Offshore Oil
Corporation
18
**
China state-owned Oil & gas, energy 23% 0% 0% 0.8
21
China Shipbuilding Industry
Corporation
China state-owned Industrials 4% 0% 0% 0.1
22 China Shipping Group China state-owned Industrials 15% 6% 0% 0.7
23
China State Construction Engineering
Corporation
China state-owned Industrials 50% 6% 1% 1.9
24 Chint Group China private Utilities 31% 0% 0% 1.0
25 Cosco Group** China state-owned Industrials 50% 19% 0% 2.3
26 Coteminas Brazil private Consumer goods 8% 31% 0% 1.3
27 Crompton Greaves India publicly listed Industrials 23% 75% 26% 4.1
28 DP World
United Arab
Emirates
publicly listed Industrials 62% 75% 1% 4.6
29 Dr. Reddys Laboratories** India publicly listed Health care 50% 75% 25% 5.0
30 El Sewedy Electric Egypt publicly listed Industrials 0% 81% 13% 3.1
31 Embraer** Brazil publicly listed Industrials 54% 75% 3% 4.4
32 Emirates Airlines
United Arab
Emirates
state-owned Consumer services 0% 100% 2% 3.4 yes
33 Etisalat
United Arab
Emirates
publicly listed Telecommunications 0% 75% 9% 2.8
34 Evraz Group Russia publicly listed Basic materials 69% 44% 21% 4.5
35 Falabella** Chile publicly listed Consumer services 38% 75% 50% 5.4
36 Femsa Mexico publicly listed Consumer goods 69% 63% 19% 5.0
37 Fung Group** China private Consumer services 0% 6% 0% 0.2
38 Galanz Group China private Consumer goods 12% 0% 0% 0.4
39 Gazprom* Russia publicly listed Oil & gas, energy 65% 75% 0% 4.7 yes
48 Transparency International
# COMPANY COUNTRY OWNERSHIP INDUSTRY ACP OT CBC INDEX FEEDBACK
ON DATA
40 Gedeon Richter Hungary publicly listed Health care 38% 94% 5% 4.6 yes
41
Geely Zhejiang Geely
Holding Group
China private Consumer goods 19% 0% 1% 0.7
42 Gerdau Brazil publicly listed Basic materials 58% 75% 4% 4.6 yes
43 Gruma Mexico publicly listed Consumer goods 27% 88% 8% 4.1
44 Grupo Bimbo Mexico publicly listed Consumer goods 58% 44% 3% 3.5
45 Haier China publicly listed Consumer goods 35% 50% 0% 2.8
46 Hindalco Industries India publicly listed Basic materials 35% 75% 30% 4.7
47 Huawei Technologies** China private Technology 62% 0% 4% 2.2
48 Indofood Sukses Makmur Indonesia publicly listed Consumer goods 19% 75% 18% 3.7
49 Indorama Ventures Thailand publicly listed Basic materials 50% 75% 3% 4.3
50 Infosys Technologies** India publicly listed Technology 77% 38% 30% 4.8
51 JBS Brazil publicly listed Consumer goods 58% 31% 0% 3.0
52 Johnson Electric China publicly listed Industrials 35% 100% 1% 4.5
53 Ko Holding** Turkey publicly listed Industrials 50% 75% 1% 4.2 yes
54 LAN Airlines Chile publicly listed Consumer services 65% 56% 16% 4.6
55 Larsen & Toubro India publicly listed Industrials 19% 81% 26% 4.2
56 LDK Solar China publicly listed Oil & gas, energy 12% 38% 7% 1.9
57 Lenovo Group** China publicly listed Consumer goods 73% 88% 0% 5.4
58 Lukoil** Russia publicly listed Oil & gas, energy 54% 13% 0% 2.2
59 Lupin Limited India publicly listed Health care 42% 75% 38% 5.2
60 Mabe
19
Mexico private Consumer goods 0% 0% 0% 0.0 yes
61 Magnesita Refratrios Brazil publicly listed Basic materials 62% 38% 3% 3.4
62 Mahindra & Mahindra** India publicly listed Industrials 73% 81% 30% 6.1 yes
63 Marcopolo Brazil publicly listed Industrials 50% 75% 18% 4.8
64 Mexichem Mexico publicly listed Basic materials 50% 38% 16% 3.4
65 Natura** Brazil publicly listed Consumer goods 50% 75% 0% 4.2 yes
66 Norilsk Nickel Russia publicly listed Basic materials 50% 75% 30% 5.2
67 Odebrecht Group Brazil private Basic materials 0% 0% 6% 0.2
68 Petrobras* ** Brazil publicly listed Oil & gas, energy 88% 50% 0% 4.6 yes
69 Petronas Malaysia state-owned Oil & gas, energy 88% 100% 1% 6.3 yes
70 PTT** Thailand publicly listed Oil & gas, energy 85% 75% 9% 5.6
71 Reliance Industries* India publicly listed Oil & gas, energy 65% 75% 30% 5.7
72 Sabanci Holding Turkey publicly listed Industrials 77% 69% 0% 4.9
73 Sappi** South Africa publicly listed Basic materials 85% 63% 6% 5.1
74 Sasol** South Africa publicly listed Basic materials 88% 75% 0% 5.4
75 Saudi Basic Industries*

** Saudi Arabia publicly listed Basic materials 85% 88% 2% 5.8 yes
76 Severstal Russia publicly listed Basic materials 15% 75% 1% 3.0
77 Shanghai Electric Group China publicly listed Industrials 15% 100% 0% 3.8
78 Sinochem** China state-owned Basic materials 31% 25% 0% 1.9
79 Sinohydro China state-owned Industrials 38% 63% 0% 3.4
80 Sinomach China state-owned Industrials 35% 19% 0% 1.8
81 Sinosteel** China state-owned Basic materials 54% 25% 3% 2.7
82 Suntech Power China publicly listed Oil & gas, energy 42% 44% 7% 3.1
83 Suzlon Energy India publicly listed Oil & gas, energy 54% 56% 32% 4.7
84 Tata Chemicals** India publicly listed Basic materials 81% 75% 30% 6.2
85 Tata Communications India publicly listed Telecommunications 92% 88% 34% 7.1 yes
49 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
# COMPANY COUNTRY OWNERSHIP INDUSTRY ACP OT CBC INDEX FEEDBACK
ON DATA
86 Tata Consultancy Services** India publicly listed Technology 85% 75% 17% 5.9
87 Tata Global Beverages India publicly listed Consumer goods 92% 75% 31% 6.6
88 Tata Motors** India publicly listed Consumer goods 77% 75% 29% 6.0
89 Tata Steel** India publicly listed Basic materials 92% 75% 30% 6.6
90 Tenaris Argentina publicly listed Basic materials 77% 88% 0% 5.5
91 Thai Union Frozen Products Thailand publicly listed Consumer goods 8% 75% 0% 2.8
92 United Company Rusal** Russia publicly listed Basic materials 69% 100% 17% 6.2
93 Vedanta Resources India publicly listed Basic materials 92% 44% 10% 4.9
94 Votorantim Group** Brazil private Basic materials 88% 25% 0% 3.8 yes
95 Wanxiang Group China private Consumer goods 42% 0% 0% 1.4
96 WEG Brazil publicly listed Industrials 46% 25% 0% 2.4
97 Wipro** India publicly listed Technology 77% 63% 30% 5.7
98 Yanzhou Coal Mining Company China publicly listed Basic materials 19% 63% 3% 2.8
99 Zoomlion China publicly listed Industrials 42% 75% 0% 3.9
100 ZTE** China publicly listed Technology 31% 75% 0% 3.5
* Companies evaluated in the 2012 report Transparency in Corporate Reporting: Assessing
the Worlds Largest Companies.
** Participant in the United Nations Global Compact.
50 Transparency International
LIST OF TABLES, DIAGRAMS AND BOXES
TABLES
1. Comparison of Transparency International Studies
on Transparency in Corporate Reporting
DIAGRAMS
1. Index results
2. Reporting on anti-corruption programmes
3. Reporting on anti-corruption programmes: Results by question
4. Reporting on anti-corruption programmes: Average company performance
by ownership structure
5. Organisational transparency
6. Organisational transparency: Average company performance
by ownership structure
7. Country-by-country reporting
8. Country-by-country reporting: Results by question
9. Country-by-country reporting: Average company performance
by ownership structure
10. Index: BRICS average results
11. Reporting on anti-corruption programmes: BRICS average results
12. Organisational transparency: BRICS average results
13. Country-by-country reporting: BRICS average results
BOXES
1. Best Practice
2. Is Reporting on Anti-Corruption Programmes Meaningful?
3. Subsidiary-by-Subsidiary vs. Country-by-Country Reporting
4. Emerging Market Multinationals vs. the Worlds Largest Global Companies
51 Transparency in Corporate Reporting: Assessing Emerging Market Multinationals
ENDNOTES
1. The list of companies assessed in
this report was taken from the Boston
Consulting Group list of Global Challengers
2011. See: www.slideshare.net/fred.
zimny/2011-bcg-companies-on-the-move-
rising-stars-from-rapdily-developing-
economies-are-reshaping-global-industries
2. The term BRIC was originally coined by
economist Jim ONeill in 2001 to describe
the four dynamic emerging economies of
Brazil, Russia, India and China. In 2010,
South Africa joined the group, following
which the acronym was changed to BRICS.
Companies from the BRICS including
South Africa are studied in this report.
3. See: Promoting Revenue Transparency:
2011 Report on Oil and Gas Companies,
Transparency International 2011. www.
transparency.org/whatwedo/pub/
promoting_revenue_transparency_2011_
report_on_oil_and_gas_companies
4. When it is adjusted to be fully comparable
to the score achieved by the largest
companies in the 2012 report, the average
score of emerging market multinationals
is 67 per cent, which compares well
with 72 per cent score achieved by the
2012 sample.
5. See: Transparency in Corporate Reporting:
Assessing the Worlds Largest Companies.
Transparency International 2012. www.
transparency.org/whatwedo/pub/
transparency_in_corporate_reporting_
assessing_the_worlds_
largest_companies
6. See: Tracking global trends: How six key
developments are shaping the business
world, Ernst &Young 2011. www.ey.com/
Publication/vwLUAssets/Tracking_global_
trends/$FILE/Tracking%20global%20
trends.pdf
7. See: Human Development Report 2013,
The Rise of the South: Human Progress
in a Diverse World. www.hdr.undp.org/en/
media/HDR_2013_EN_complete.pdf
8. See: www.sec.gov/about/laws/
wallstreetreform-cpa.pdf
9. For more information on the 9 April 2013
EU Agreement on disclosure requirements
for the extractive industry and loggers of
primary forests and on simpler accounting
requirements for small companies, see:
www.ec.europa.eu/internal_market/
accounting/country-reporting/index_en.htm
10. See: www.europa.eu/rapid/press-release_
IP-13-330_en.htm
11. See: www.unglobalcompact.org/docs/
issues_doc/Anti-Corruption/UNGC_
AntiCorruptionReporting.pdf
12. See: www.transparency.org/whatwedo/
tools/business_principles_for_countering_
bribery/1/
13. See: www.transparency.org/whatwedo/
tools/business_principles_for_countering_
bribery/1/
14. See: www.unglobalcompact.org/docs/
issues_doc/Anti-Corruption/UNGC_
AntiCorruptionReporting.pdf
15. Indian law requires that companies
report key financial information on their
subsidiaries. Such reporting, although
it is a reasonable proxy for country-by-
country reporting provided the countries
of incorporation of the subsidiaries are
also disclosed, is not ideal. Considering
the positive but limited aspects of such
reporting we awarded half scores. See
Box 3 for more information on this topic.
16. See: Backgrounder: Basic facts about
BRICS, Xinhua 26 March 2013.
www.news.xinhuanet.com/english/
world/2013-03/26/c_132262846.htm
17. See: B20G20 PARTNERSHIP FOR
GROWTH AND JOBS Recommendations
from Business 20, 2013. www.b20russia.
com/B20_WhiteBook_web.pdf
18. China National Offshore Oil Corporation
(CNOOC) is the parent company of
CNOOC Ltd., which was evaluated in
Transparency in Corporate Reporting:
Assessing the Worlds Largest Companies,
Transparency International 2012.
19. The Mexican company Mabe restricts
access to the Investor Relations pages on
its company website. These pages can
only be consulted with prior approval of the
company. The restricted pages did include
information which would have been scored
positively, had it been freely available to
the public. There were other instances
where companies indicated that they had
documents relevant to anti-corruption but
that these were only available upon request
and with prior approval. In all such cases
zero scores were given, consistent with the
intent of the study which measures public
disclosure of information.
52 Transparency International
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