New proposals amount to a significant step towards a mandatory framework for social and environmental reporting.
BAA, BUPA, Jaguar and Orange are among the members of Business in the Community’s new benchmark initiative. The Index of Corporate Responsibility, launched officially on July 10, aims to encourage a greater consistency of reporting in four key impact areas: marketplace, community, environment and employees. The performance indicators used in the benchmark are based on those identified by the Business Impact Review Group’s 1999 report, Winning with Integrity. Contact Katherine Sharp, BITC, on 0870 600 2482 (http://www.iosreporting.org)
Adopting an external standard to illustrate a company’s commitment to corporate citizenship can be a cheaper and easier option than using an inhouse system, according to a report published by the Institute of Business Ethics on July 11. However, it is essential to make the right choice out of the wide range of external standards now available. A thorough analysis of business goals, competitor activities, and the company’s capacity to measure the relevant data are highlighted as vital factors in deciding which standard to adopt. Contact Katherine Parker, IBE, on 020 7798 6040 (http://www.ibe.org.uk)
Small and medium sized businesses across Europe are the focus of an online initiative by CSR Europe that aims to promote greater integration and disclosure of socially responsible practices. The SME Key, launched in July, is being piloted in the UK, Finland, Italy, France and Belgium. Contact Madhavi Bhatt, CSR Europe, on 00 32 2 541 1610 (http://www.smekey.org)
A new assurance framework designed to improve the surety of data contained in CSR and sustainability reports was recently released by AccountAbility. The AA1000S Standard, which was launched in June and is subject to a three-month consultation process, is structured around five guiding principles: completeness, materiality, responsiveness, accessibility and evidence. Contact Nicole Dando, AccountAbility, on 020 7549 0400 (http://www.accountability.org.uk) A fifth of the FTSE250 reported on CSR issues for the first time in 2001-2002, yet almost two-fifths still ‘produce nothing of substance’, according to a survey by Salter Baxter in July. Contact Nigel Salter, Salter Baxter, on 020 7401 9401 (http://www.salterbaxter.com)
Over one in fourteen people employed in the UK are ‘teleworkers’ – people using information and communications technologies to work away from an office environment. Nearly three quarters (67%) of these teleworkers are men, according to the Office of National Statistics’ annual labour market trends report, published on June 6. The figure is relatively high for Europe; fewer than one in 25 Spaniards, French and Italians have adopted teleworking, although one in six Finns are already working on the move. However, research by the Institute of Employment Studies published on July 15 estimates that the number of people in Europe will use ICT to work from home or from multiple locations will increase from 3.7m to 27m by 2010. Meanwhile, EU-level employer and trade union representatives made the first move to ensure that this emerging group of mobile workers receives the same employment benefits as employees working at the employers premises in an agreement signed on July 16. Contact ONS on 020 7533 5714 (http://www.statistics.gov.uk); Sue Kent, IES, on 01273 678322 (http://www.employmentstudies. co.uk)
reporting
Large companies will be required to present an annual narrative report, setting out the main factors underlying the company’s performance and its future prospects, known as an Operating and Financial Review. Directors will also be responsible for deciding whether information relating to employment, the environment, and social and community issues, are “relevant, material and necessary” to achieve the objective of the OFR. If so, the inclusion of this information would be required.
More detailed rules on what should be included in the OFR, and the disclosure format, will be decided by a newly created Standards Board. The OFR is designed to replace the current Directors’ Report in which CSR items such as UK charitable donations, political donations, payment times for suppliers and policies towards disabled employees are currently disclosed. The company’s auditors would be required to report on the OFR, but only so far as to check it complied with the rules and was not inconsistent with the accounts, rather than to verify the content.
Duties of directors
The duties of directors will include a responsibility, for the first time, to consider business relations with employees, customers, suppliers, communities and the environment.
Process
Published on July 16, the proposals are open for consultation until the end of November, and will no doubt undergo significant changes before presentation to parliament during the 2003/04 session at the earliest, with actual implementation following two or more years after that.
COMMENT:
New proposals amount to a significant step towards a mandatory framework for social and environmental reporting.
These proposals amount to a significant step towards a mandatory framework for social and environmental reporting. It is difficult to see how any consumer-facing company will be able to claim CSR issues are of no relevance to its current performance or future prospects, given the reputational threats. So most large companies will have to present in their main annual reports a broadly-based assessment of their impacts on all stakeholders, where material. This raises big questions for the growing practice of social reporting, notably how specialist reports fit alongside the annual report. All in all, these proposals, including those relating to directors’ duties and responsibilities for the impact of the company’s operations on the environment and communities, are significant developments and should strengthen the hand of CSR managers in making the case internally.
COMMENTS