Mallen Baker's Blog

The curious truth behind the Danish law on CSR reporting

9 Jan 2009

A few people have gotten excited over the new Danish law to require corporate social responsibility reporting of the top 1,100 companies. But my question is this: what kind of CSR report can you write in three hours? That's the estimation the government has of how long it will take to comply with the requirements of the Act.

Overall, I'm not a great fan of governments mandating CSR reporting - even though I am a fan of companies communicating with stakeholders about their social responsibility issues.

Take this instance. There are 1,100 companies the government says will be covered by the new Act. So they all must now include information about their CSR programmes with their annual reports - including information about standards or guidelines the company is using, how the company goes about putting its principles into practice, and an assessment of its impact or results.

Or not. If you have no interest in such issues, you can just say so. So long as you disclose, there is no requirement for what you must do, or what you must seek to achieve.

Is there a proven audience for this information, so that the government should require it? I don't mean a casually interested audience - I mean one that will read 1,100 reports because it gives them useful information? A government mandate like this can all too easily be used because someone thinks in theory it's a great idea, and then it is required. But in fact, nobody then uses the information produced to make decisions.

Shouldn't one instead be engaging with the mainstream investors to understand which aspects of the agenda are important to them, and getting them to demand useful information on those aspects? Wouldn't that then drive quality and relevance of information upwards over time?

But the real kicker - and the one that makes it quite clear that this is not the radical move that some would like to think - is the government's estimation that overall 1,100 companies will use up 3,000 hours between them in order to comply with the Act.

i couldn't quite believe it when I read this, and assumed it was a fault of the translation. So I contacted the press release contact, and they confirmed it. 3 hours per company on average.

This may be CSR reporting, but not as we know it. De facto, it is the barest of summaries of what a company is, or is not, already doing without metrics, without case studies, without detail.

It may not be a bad thing to do - but it is a rather minor measure to have been welcomed in such fulsome terms by, for instance, the Global Compact, who said that the bill should become "a model for others to follow".

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