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NGOs call for stronger corporate reporting rules

Proposed measures to make large companies report on the environmental impact of their operations do not go far enough, according campaigners.

The European Commission has proposed to make it compulsory for companies with more than 500 employees to put the information in their annual reports, something which is currently only voluntary.

The proposals follow consultation which started in November 2010. They will pass to the European Parliament and the European Council, made up of heads of state of member states, for negotiation and agreement on a final text.

However, Friends of the Earth (FoE) and the European Coalition for Corporate Justice (ECCJ), have said that the proposals are not strong enough.

The ECCJ said that although the proposals were a welcome initial step, they would not guarantee ethical corporate behaviour.

ECCJ, which represents 250 organisations in 15 countries, says that the proposals would allow too much discretion about how to report and what on, and lacked any way to enforce the requirement.

It says companies would only be required to disclose risks and policies related to the environment, social and human rights, only as far as they endangered the company and shareholders.

ECCJ coordinator Jerome Chaplier said: “We fear companies will only identify and disclose the risks that affect their economic performance, and won’t take responsibility for the impacts they have on the people and the planet.”

“Without clear guidance and sanctions attached to the proposal, the accuracy and reliability of the information companies provide cannot be guaranteed and citizens’ trust in companies cannot be restored,” he added.

Michael Warhurst, who is heading up FoE’s work on Resource Use, tweeted that the proposals announced yesterday “needed strengthening”.

In a briefing paper last October, Friends of the Earth said the new legislation should include a way to allow stakeholders to challenge incorrect or misleading reporting, as well as include clear indicators that assure that information provided is reliable, relevant and comparable.

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