Environmental pressure group Friends of the Earth is attempting to make the
government consult on its controversial decision to scrap the operating and
financial review, amid growing confusion from companies over future reporting
Last week, FoE sent a letter to chancellor Gordon Brown and DTI secretary
Alan Johnson claiming the move to abandon the OFR, which would require
disclosures on environmental and social policies, was unlawful. If it does not
receive a satisfactory answer to its concerns by 21 December, it intends to seek
a judicial review in the High Court.
‘We are not able to challenge in court the government’s ability to scrap the
OFR,’ said Phil Michaels, Friends of the Earth’s legal adviser. ‘What we are
challenging is the procedure they have gone through to do that.’
He added that, if the court ruled in its favour, it could order the
government to undertake a public consultation on the move.
‘It wouldn’t necessarily stop it, but having regard to the enormous outcry
from all sides, you have to wonder whether, if they did a full and fair
consultation, they could rationally reach the decision to scrap the OFR,’ he
The letter states that the move was a breach of the government’s code of
practice on consultation. Michaels said he anticipated that any court hearing
would take place in the Spring.
The scrapping of the OFR has, meanwhile, left companies ignorant over their
future reporting obligations.
A survey by environmental research company Trucost found that just 9%
of the companies surveyed had heard of the EU accounts modernisation
directive, which contains many of the same reporting requirements as the OFR,
including obligations on environmental disclosure, and is still part of law.
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