Danish firms face new disclosure requirementsJuly 2008
Denmark is to introduce legislation that will require the country's 1000 largest businesses to report on corporate responsibility in annual reviews.
The legislation, coming into effect in 2009, is one element of a 30-point government action plan on responsible business that ministers hope will make Denmark a corporate responsibility leader.
As well as covering large private businesses, the reporting requirement will apply to state-owned companies, institutional investors and unit trusts. All will have to state whether they have corporate responsibility policies, what they are, and how they implement them. They will also be encouraged to include sections on how they are taking responsibility for climate change.
The new law will be similar to recent UK legislation requiring companies to produce annual business reviews that take social and environmental issues into account. The Danish version is likely to be wider in scope.
A permanent Social Responsibility Council will be established to advise the Danish government, with representatives from trade bodies, the financial sector, and the Danish Consumer Council and other civil society groups. The action plan also includes undertakings to:
provide advice for smaller firms
prepare a biennial progress report, from 2010, on Danish businesses' observance of the UN Global Compact and its Principles for Responsible Investment.
'systematically embed social responsibility requirements ' into state procurement
build an online portal on responsible business practice.
Bendt Bendtsen, the economic and business affairs minister, said the plan was part of an overall strategy for marketing Denmark, one element of which is to make the country's businesses 'internationally renowned for responsible growth'. However, Bendtsen emphasized that the government did not intend to mandate responsible business behaviour beyond a requirement that companies provide details of what they are doing.
'It is entirely up to the individual company whether it wants to set up a [CSR] policy', he said. 'The government will not introduce legislation specifying how companies must work with corporate social responsibility in detail. But we want the largest companies to explain what they are doing.' In this respect Denmark has gone further than Sweden, which recently confirmed it would not widen mandatory reporting beyond state-owned companies. (EP10, issue 2, p3).
Christian Honoré, head of corporate responsibility at Danish medical instruments business Coloplast, told EP that many of the elements could be expected to have a significant impact on companies. 'However, we still have to see how these intentions will be enacted in concrete laws', he said.
Officials will review progress against the action plan in 2012.
Denmark has adopted far-reaching guidelines on the transparency of private equity funds, including the disclosure of CSR policies and 'a description of the fund's principles for social responsibility in its investment policy'. The Danish Venture Capital and Private Equity Association code brought in last month requires a higher level of disclosure than that adopted by the industry in the UK (EP9, issue 8, p3).
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