Corporate social responsibility (CSR) reports supposedly help companies track their environmental and social impact. The reports prove to customers and other regulators that industries are taking the lead when it comes to tackling social issues. CSR advocates even argue that this approach helps the bottom line and at least bolsters a company’s brand.
Thus far, CSR reporting has been a voluntary activity across the globe. This has left some watchdog skeptics like Friends of the Earth wondering whether CSR reporting is unverifiable PR spin. On the other side of the debate, many business leaders are fine with voluntary reports but view mandatory reporting as another regulatory burden.
According to Greenbiz.com, Denmark is now the first country to mandate CSR reporting.
- Hundreds of the largest private and state-owned companies and institutional investors in Denmark must include corporate social responsibility information in their annual financial reports beginning in 2010…
- Auditors must verify the CSR/SRI information. To incentivize companies to join the U.N. Global Compact or U.N. Principles for Responsible Investment, the Danish government will allow members to refer in the annual reports to their Communication on Progress in lieu of reporting under the new rules.
- “In the current financial crisis, it is more urgent than ever to promote greater transparency, especially in the field of environmental, social and governance performance,” Donald MacDonald, chair of the U.N. Principles for Responsible Investments, said in a statement. “For investors, corporate responsibility and the proper management of extra financial risks is essential.”
Do you think CSR reporting should be mandatory in America? Should businesses focus on delivering profits or also become agents for social and environmental change?
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