Lords fight to save ethical investment
November 3, 2006 9:00 AM
Lib Dems in the House of Lords will today be demanding reporting standards be included in the controversial Companies Bill.
The Bill requires companies to report on the social and environmental effects of their activities in their annual report but as it currently stands, provides no guidance or standards on how this should be done. The Lib Dem amendment would introduce these reporting standards to guide companies and allow potential investors and customers to more accurately assess the information provided in the report.
Lord Razzall, who has submitted the amendment, commented:
"We welcome the new requirement that the business review should contain information about relationships but to be effective this requirement needs to be supported by clear reporting standards to ensure uniform compliance"
David Howarth MP, who led the Liberal Democrats on the Companies Bill in the Commons, added:
"Without clear reporting standards the Business Reviews risks becoming nothing more than a marketing tool for unscrupulous companies and a source of confusion for others.
"Businesses are complaining that they don't know what to do with the Business Review. This amendment would make it clear - it would provide the guidance that they are demanding.
"More importantly, it would enable potential investors and consumers to accurately assess and compare the ethical standards of different companies. There is already a £10 billion market for ethical investment in the UK and introducing reporting standards would give ethical investors and customers the information they need to make informed decisions. For ethical companies their claims would have independent verification allowing them to stand out from the crowd."
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