UK: New bill would inject substance into corporate social responsibility

The Corporate Responsibility Bill has been tabled following the government's failure to include clear proposals on business transparency and accountability to stakeholders in its own recently published Companies Bill white paper.

Linda Perham, MP for Ilford North, who has tabled the Bill, said:

"More than 300 MPs have expressed their support for more comprehensive laws promoting better corporate accountability. The weight of opinion in Britain, Europe and around the world suggests governments must act. People are concerned by the growing social and environmental impacts corporate activities have on their lives. The Government must recognise this."

There is widespread cross-party support for reform in this area, with more than 300 MPs having already signed an Early Day Motion supporting the Bill's aims, and clear popular support for the measures - a recent poll for DEFRA found 71% of the British public agree that the Government should ask all businesses to report on their impact on the environment [1].

There is also growing support from members of the business community for mandatory regulation in this area so that a 'level playing-field' can be created - meaning companies who take corporate social responsibility seriously would not have to compete with 'free-riders' in their industries who do not. The Corporate Responsibility Bill puts duties on companies for:

• Mandatory reporting: Certain companies will be required to publish annual reports explaining the significant social, environmental and economic impacts of their operations;
• Stakeholder consultation: Companies must take reasonable steps to consult with and respond to broader affected stakeholders where proposed projects would have a 'significant impact' on them;
• Directors' duties: Expands the present duties of company directors from just considering the financial success of a company to require them to also consider environmental, social and economic impacts of their operations, as well as the interests of all their stakeholders (not just shareholders).

The Corporate Responsibility Bill is backed by the CORE (Corporate Responsibility) Coalition, which includes Amnesty International UK, Christian Aid, Friends of the Earth and the trade union UNISON [2]. It spells out how corporate responsibility regulations for business could actually help the Government meets its sustainable development targets. The CORE Coalition is urging the Government to include the Bill's proposals in the Companies Bill when it is laid before Parliament.

Friends of the Earth Director Tony Juniper said:

"The Government is currently allowing British companies to exploit the natural environment and ignore the needs of local communities in the name of profit. A voluntary approach to corporate responsibility clearly does not work. The Government must adopt the CORE Bill now and show that it is serious about the promises it has made on sustainable development."

Amnesty International's UK Programme Director for Economic Affairs, Peter Frankental, said:

"The current laws governing corporate conduct were set out nearly 150 years ago and are now completely inadequate in a global economy with complex supply chains. There have been too many cases of business complicity in serious human rights abuses in countries all over the world. We need mandatory social reporting to make companies accountable for their business activities, and to create a 21st century framework for business that ensures it is accountable to all its stakeholders."

Editors' Notes

Read The Corporate Responsibility Bill in full (You will need a PDF Reader, free from Adobe)

[1] Survey of Public Attitudes to Quality of Life and to the Environment: 2002, see www.defra.gov.uk

[2] For a full list of organisations supporting CORE's campaign for the Bill, see www.corporate-responsibility.org

About the CORE Coalition

The Corporate Responsibility (CORE) Coalition was formed in response to the Government's failure in the Modernising Company Law White Paper to specify rules requiring companies to be more transparent and be held accountable to their wider stakeholders. The founding members of CORE were Amnesty International, Christian Aid, Friends of the Earth, New Economics Foundation and Traidcraft. The coalition is now supported by over fifty organisations, including NGOs, church groups and trade unions. See: www.corporate-responsibility.org for more information...

About Amnesty International UK's Business Group

More information about Amnesty International UK's Business Group is available online...