Companies that provide information on the economic, environmental and social impacts of their activities are praised by the International Chamber of Commerce in a policy statement published this week. ICC says that reporting on issues other than purely financial matters benefits both producers and users. It enhances a company's reputation, builds morale among employees and can ultimately benefit a company's bottom line.
ICC says that such reporting by a so-far relatively small, but growing, number of companies is an important way to convey their commitment to responsible business conduct. It fosters further innovation and encourages other companies to do the same. ICC strongly favours a "voluntary and flexible" approach to reporting over one that is prescriptive and standardized. This allows a company to design reports that maximize their value both to the company and its key stakeholders, which in turn will encourage more companies to produce such communications. Reports with high costs and few benefits divert resources from more productive uses, ICC says.
ICC is keen to keep the process voluntary. It is "seriously concerned" that several governments are now ordering companies to provide non-financial information in their normal financial reports. Such regulation, ICC says, is likely to lead to "a mechanical and lowest-common denominator" approach to reporting." The reports "will be of little or no value to the wide range of stakeholder audiences." Instead, governments should support existing global initiatives for voluntary reporting. ICC also frowns on the number of time-consuming questionnaires sent to companies by investment funds and rating agencies. Referring agencies to a company's website for information may be a practical way of dealing with the problem.
The ICC statemen
t is the work over a period of two years of its Commission on Business in Society and reflects the experience of ICC member companies worldwide.
Full statement:
ICC views on economic, environmental and social reporting
