Non-Financial Indicators
THE REPORTING OF NON-FINANCIAL INFORMATION IN ANNUAL REPORTS BY THE FTSE100
Prepared by Professor Adrian Henriques, Middlesex University, for the CORE Coalition, 2010 Page | 1
INTRODUCTION
BACKGROUND
Amnesty International, Action Aid, Friends of the Earth, Traidcraft, War on Want and WWF (UK) have been tracking environmental and social problems and finding their solutions for many years. These groups and others formed The Corporate Responsibility (CORE) Coalition in 2000 to develop the obligations of companies in respect of their environmental and social impacts, including in relation to their reporting. The current company reporting regime is very largely tailored to shareholders’ interests. As is detailed later in this report, reporting is a central part of the process through which all stakeholders can ensure that companies act in the best interests of society. CORE has played an instrumental role in securing a new obligation for the largest public companies to report on their environmental and social impacts contained within The Companies Act (2006). Company reporting is one of the main ways company directors are able to demonstrate they are fulfilling the new duty in section 172 of the Companies Act to ‘have regard to their impacts on their employees, relationships with suppliers, customers, impact on the environment’ Although the obligation secured was not what CORE campaigned for1, or as strong as what the Government initially proposed in the OFR2, it was nevertheless a significant success, 3. and a ‘step in the right direction’
CORE campaigned for the reporting requirement to be for all large and medium-sized public and private companies to report on their social and environmental impacts in a way that is proportionate to their size and complexity, with clear guidelines on what these reports should include and strengthened responsibilities on auditors disclose conflicting information. Initially the Government proposed to introduce the Operating and
Prepared by Professor Adrian Henriques, Middlesex University, for the CORE Coalition, 2010 Page | 1
INTRODUCTION
BACKGROUND
Amnesty International, Action Aid, Friends of the Earth, Traidcraft, War on Want and WWF (UK) have been tracking environmental and social problems and finding their solutions for many years. These groups and others formed The Corporate Responsibility (CORE) Coalition in 2000 to develop the obligations of companies in respect of their environmental and social impacts, including in relation to their reporting. The current company reporting regime is very largely tailored to shareholders’ interests. As is detailed later in this report, reporting is a central part of the process through which all stakeholders can ensure that companies act in the best interests of society. CORE has played an instrumental role in securing a new obligation for the largest public companies to report on their environmental and social impacts contained within The Companies Act (2006). Company reporting is one of the main ways company directors are able to demonstrate they are fulfilling the new duty in section 172 of the Companies Act to ‘have regard to their impacts on their employees, relationships with suppliers, customers, impact on the environment’ Although the obligation secured was not what CORE campaigned for1, or as strong as what the Government initially proposed in the OFR2, it was nevertheless a significant success, 3. and a ‘step in the right direction’
CORE campaigned for the reporting requirement to be for all large and medium-sized public and private companies to report on their social and environmental impacts in a way that is proportionate to their size and complexity, with clear guidelines on what these reports should include and strengthened responsibilities on auditors disclose conflicting information. Initially the Government proposed to introduce the Operating and