The Global Reporting Initiative, the European Coalition for Corporate Justice, and the European Trade Union Confederation are making the calls as the Commission closes its consultation on non-financial disclosure by companies. [[Public consultation on disclosure of non-financial information by companies, European Commission, DG Internal Market, closed on 28 January 2011. http://ec.europa.eu/internal_market/consultations/2010/non-financial_reporting_en.htm ]]
The organizations have each submitted replies to the consultation asking for new regulation to bring non-financial reporting by medium and large companies in line with the needs of contemporary society.
Companies’ stakeholders, including directly affected communities and the public at large, need comprehensive and credible information on corporate social and environmental impacts to identify problems with and monitor progress of the companies they deal with.
Investors also need such information since they are increasingly concerned with the environmental and social policies and risk management strategies of the companies they invest in.
The current system does not create a level playing field among business, as in most EU countries reporting by companies on their non-financial impacts is voluntary. A number of companies currently publish voluntary reports on the environmental, social and governance impacts of their business. However, because of their voluntary nature, these do not always provide a full picture of a company’s activities.
Mandatory, standardized reporting would ensure that reports are comparable and that all companies would have an equal advantage: since all organizations would be required to report on the same issues, whether their impact is positive or negative.
Teresa Fogelberg, Deputy Chief Executive at the Global Reporting Initiative, said:
“Although reporting on sustainability impacts is becoming increasingly commonplace, it is still not a mainstream activity. At the Global Reporting Initiative, we produce guidelines that enable all companies and other organizations to produce comparable reports on their sustainability performance. We are not asking the European Commission to reinvent the wheel, but to look at what many big companies are already doing and create new regulation that requires all large and medium sized companies to be transparent about the impact they are having on the world. Only then can we follow a clear path to a sustainable economy.”
Filip Gregor, Chair of the Board of the ECCJ said:
“A company’s environmental and social impacts are a crucial part of its business. We need a mandatory system that allows investors and other stakeholders to assess the company’s performance. That means that information should be based on clear indicators, covering core areas – including human rights, environmental standards and corruption risks. These will allow a company’s performance to be compared with other companies in the sector and allow investors and others to assess the company’s exposure to risk.”
John Monks, General Secretary of the ETUC said:
“Workers are deeply concerned with the employment, social and environmental impacts and policies of their companies, both as employees and as citizens. It is high time that companies be required to provide information on these impacts on the basis of comprehensive and comparable standards. Workers should be involved not only in the process of developing these standards at the supranational level but should also have a right to engage management on this issue at the company level.”
The GRI, ECCJ and ETUC call for regulation that must ensure:
• Mandatory reporting, using clearly defined indicators developed with the involvement of stakeholder groups
• Reporting throughout the supply chain
• Objective information on whether the company has been involved in, or risks being involved in, violations of international standards for human rights and environmental protection
The UN Special Rapporteur on Business and Human Rights, John Ruggie, has highlighted some gaps in corporate governance. [[UN Special Representative on business and human rights, John Ruggie has said: "The root cause of the business and human rights predicament today lies in the governance gaps created by globalization - between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation." (Protect, Respect, Remedy, 2008)]] The Commission should draw on his recommendations in developing regulation and ensure that all relevant stakeholders, including business, workers and civil society, are fully consulted during the process.
- The European Trade Union Confederation (ETUC) was founded in 1973 to speak with a single voice, on behalf of the common interests of workers, at European level. It now represents 83 trade union organisations in 36 European countries, plus 12 industry-based federations.
- The European Coalition for Corporate Justice (ECCJ) promotes corporate accountability by bringing together national platforms of civil society organizations including NGOs, trade unions, consumer advocacy groups and academic institutions from all over Europe.
For more information about the Global Reporting Initiative, contact:
Media Relations Manager
Global Reporting Initiative
Tel: +31(0)20 531 0067
Out of hours: +31(0)63 0399 531
E-mail: [email protected]
For more information about the ETUC, contact:
European Trade Union Confederation
Tel: +32 (0)2 224 0533
E-mail: [email protected]
For more information about the ECCJ, contact
Chair of the Board
European Coalition for Corporate Justice
Tel: +420 775 154 083
E-mail: [email protected]