New legislation to make companies more accountable for their actions has left campaigners disappointed today, amid accusations that that the Government has failed to heed demands to make business more transparent.
Environment and development group campaigners responded positively to the announcement that the Government will use the Companies Bill to make companies report on their supply chains, but pointed out that there will still be no common standard on what supply chain information companies include. There is also frustration that the requirement will not apply to large private companies; and that there will not be adequate audit requirements to ensure the information is correct.
Friends of the Earth’s Head of Corporate Accountability, Craig Bennett said: "It’s great that the Government has acknowledged the need for more information about human rights and environmental issues down supply chains. But with no legal standard to work to, the results will be patchy at best."
The Government’s amendments to the Companies Bill will only require public companies to report on their social and environmental impacts, and only where these issues affect company profits.
Despite months of pressure from campaigners, the reporting requirements are still weaker than they were in November 2005, when the Chancellor abolished the Operating Financial Review Regulations.
Julian Oram, head of trade and corporates at ActionAid, said, "In real terms, the requirements for businesses to report on how they affect communities and the environment are arguably weaker than they were 12 months ago. Despite positive indications in the run up to this week, it’s frustrating that the government will not go further on this."
Campaigners led by CORE and the Trade Justice Movement are calling for all medium and large private companies, as well as listed companies, to be made to report on their social, environmental, employee and supplier issues. As it stands, only listed companies will be affected by this legislation.
Matthew McGregor, from War on Want, said: "It is unacceptable that Tesco will be covered, though not Asda and that BA will face regulation, but not Virgin. We are calling for changes across the board to bring the companies into line with their wider responsibilities."