UK should be ashamed for blocking EU corporate transparency reform
The UK has today succeeded in watering down new European rules designed to boost corporate transparency, by blocking plans that would have required large private companies to report on their environmental and social impacts, alongside firms listed on stock exchanges.
However, MEPs have defended some of the important improvements they proposed to the initial proposal, such as a requirement for companies to report on the most significant risks to people and planet posed by their suppliers.
Commenting on the news, Friends of the Earth campaigner Julian Kirby said:
“The UK Government, represented by Business Secretary Vince Cable, should be ashamed of blocking corporate transparency rules for large private companies – so much for the Coalition and Liberal Democrat pledges to make businesses more accountable.
“While requiring listed companies to report on their social and environmental impacts is a step in the right direction, glaring loopholes remain that mean tens of thousands of private firms in Europe won’t have to reveal how their operations affect people and the environment.
“Transparency is vital to help identify and then tackle the many problems linked to making our everyday products, from dangerous working conditions and factory deaths to the destruction of natural habitats.
“How British politicians apply the EU legislation after the election will reveal what they care more about – ordinary people and a healthy planet, or their billionaire friends and donors.”
Friends of the Earth campaigner Julian Kirby added:
“It’s welcome that the non-financial reporting directive contains guidance that will help companies start to measure their consumption of key natural resources such as land, water and materials, as well as carbon emissions.
“This is the first stage in creating a resource-efficient EU which is less vulnerable to price and supply shocks.”
Notes to editors
1. The new non-financial reporting reform is an amendment to the Accountancy Directive.
2. Companies and high-profile business figures urged EU decision makers not to weaken the legislation, including:
* Unilever CEO Paul Polman and IKEA Head of Sustainability Steve Howard expressed their support for amendments to help companies establish due diligence systems to improve transparency throughout their supply chains (letters from IKEA/Unilever sent to Vince Cable and other key EU decision makers 30 Jan 2014
* Former UN special representative for business and human rights, John Ruggie, who created the UN Guiding Principles for business, said in a letter to Cable that to be truly effective and avoid a split playing-field, the EU rules must apply to all companies, not just listed ones.
3. As only 6% of large EU companies report information about social and environmental impacts on an annual basis, the current voluntary approach is not working.
4. The amendments were also supported in the UK by a broad alliance of NGOs and unions – including the CORE coalition for corporate justice http://corporate-responsibility.org/ – as well as investors, consumer groups and NGOs and others in France, Italy, Germany and China, as well as tens of thousands of their supporters, who see the transparency legislation as a crucial first step towards preventing human rights abuses and environmental problems in production.
5. More than 12,000 people have signed a petition asking Business Minister Vince Cable to stand up to business-as-usual lobbyists and ensure the UK backs strong corporate transparency legislation, as part of Friends of the Earth’s Make It Better campaign for products produced in ways that protect people and the environment. www.foe.co.uk/makeitbetter/petition. And a further 50,000 Cafod supporters also backed calls for tough transparency legislation.
6. Since launching in November 2012, Friends of the Earth’s Make It Better campaign has pressured the world’s smartphone brands to admit to using tin mined in environmentally devastating ways in Indonesia, and to commit to industry-wide action to tackle problems there.
For press information please contact the Friends of the Earth media team on 020 7566 1649.