Campaigners for greater corporate social and environmental responsibility have argued that the proposals are too limited in scope, involve too few companies and are useless without sufficient enforcement.
But representatives of the business community warned that the extra administrative and financial burden of the OFR could hurt companies, with costs estimated at £29,000 per company according to government figures.
Trade secretary Patricia Hewitt published the proposals last week, saying that they were intended to improve the quality of company reporting.
However, the plans met with little support. ‘The loopholes in the rules will mean that companies can fill their reports with good news, while continuing to hide the bad from public view,’ said Martyn Williams, corporates campaigner at Friends of the Earth.
Business took a different line. ‘It looks as if the DTI has inadvertently gone too far. We must get this right or we will expose companies to unnecessary and excessive reporting burdens, not to mention damaging litigation,’ said John Cridland, deputy director general at the CBI.
The OFR is likely to become mandatory for around 1,290 quoted companies in the UK at the beginning of next year.
Concerns were also raised over the timing of the OFR’s introduction, slated for 1 January 2005 – the same day as the mandatory introduction of international financial reporting standards.
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