Posted By George Wedgwood
See Press release on this proposal from the EU to UK Regulations for Financial Reporting etc. at: http://www.dti.gov.uk/cld/pdfs/pn177.pdf

It will affect all quoted companies and “The OFR will improve the quality of the reporting and complete the corporate
jigsaw to give investors a clearer picture. It will also help the owners of the
business better understand their organisations and think about how people
perceive them."

Consultation closes on 6 August - see the draft at www.dti.gov.uk/cld/financialreview.htm

The OFR will have to include 'non-financial' information like what may affect its performance and people so there may be elements of CSR embedded. However, "The Government proposes to take up
the option allowed by the directive of excluding medium-sized companies from
the requirement to provide non-financial information," so we may only see the small amount of large companies reporting on people performance issues such as H&S - and most of them already do!

Read the Draft and you will see in Section;

3.33 A poor record on environmental or health and safety matters, for
example, could adversely affect a company’s standing and business
prospects. For regulated sectors, non-compliance could lead to the loss
of licence to operate, and in some cases, imprisonment for directors. The
OFR requires such matters to be covered, both where they constitute a
significant external risk to the company, and where the company’s impact on
others through its activities, products or services, affects its performance. For
example, information which could be necessary for shareholders to make an
assessment of the business includes:
• an explanation of risk management approaches employed by a company
that stores, transports or uses significant volumes of hazardous or toxic
substances that risk damaging the health of workers or others, or polluting
the environment or;
• how a company that is a heavy user of natural resources, which may
become scarce or the price of which may change significantly, is intending
to reduce its dependency on such resources;
• how a company that may be susceptible to the impacts of climate change
plans to mitigate the risks and take advantage of the opportunities presented
by a changing climate;
• current and likely future compliance record for companies operationally
dependent upon legal consents for discharges to air, land or water;
• an explanation of the risk management approaches employed by a company
to assess the operational impact on biodiversity where failure to avoid or
mitigate damage would put development consents at risk.

So if you are a quoted company, it will be worth having a read! Regards, George