Those of us that care about the general wellbeing of the Earth and its inhabitants inevitably feel frustrated about the slow advancement of genuine Corporate Responsibility. Some companies of course are more responsible than others, and should get credit for their efforts, but profit priority gets in the way of other important successes in many companies. Of course companies do need to follow applicable laws, be it general corporate laws or environmental or human rights laws but at the moment these laws are not universal and even if they exist in some places of the world they may not be enforced.
I was pleased to see that in a recent report of the UN Conference on Trade and Development (UNCTAD) – The World Investment Report 2011 it is recommended that governments take on a wider role in enforcing Corporate Responsibility. According to its website one of UNCTAD’s focuses is “ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.”
Some initiative is already being taken on the governmental of certain countries to require reporting of environmental and social factors (e.g. Swedish state owned companies are required to report and listed companies in the UK and France).
Although CSR reporting requirements are a positive development, most of the requirements leave companies a lot of flexibility in terms of what and how to report. Even when information disclosure is a legal requirement companies can largely choose the information they put out and avoid putting out information which is likely to be seen in a negative light, even if this information is key to the sustainability of the company.
Hopefully the UN recommendations will influence governments to take further measures to increase the transparency of companies. As European governments are amongst the most advanced in promoting responsible practices perhaps the EU could take a lead and develop a legal framework using the most prominent standards as basis such as the OECD Guidelines for MNEs and the reporting guidelines of GRI to ensure coherence and build on best corporate practices.
