CSR Parliamentary Report Points to NFPs
Monday, 3rd July 2006 at 1:07 pm
A Parliamentary Joint Committee inquiry into corporate social responsibility encourages a greater take up of CSR across Australia and recommends it be driven by incentives rather than regulation. And the report also includes the Not for Profit sector’s own management of non-financial impacts and risks.
In June 2005, the Parliamentary Joint Committee on Corporations and Financial Services (PJC), made up of members from both sides of politics from the House of Representatives and the Senate, began an inquiry into Corporate Responsibility: Managing Risk and Creating Value.
The PJC handed down its final report and recommendations for legislative and regulatory reform, on 21 June 2006.
The report makes some 29 recommendations two of which are particularly aimed at the Not for Profit sector.
The Parliamentary Joint Committee heard evidence regarding the community sector’s own management of non-financial impacts and risks. The question of whether NFP organisations should meet the same standards as profit-driven corporations was discussed, particularly in the context of the community sector needing to legitimise its own advocacy of these principles by setting a good example.
The committee said it recognised that corporations may feel unfairly targeted by measures affecting their interests that do not apply equally to Not for Profit incorporated entities of similar size.
The Australian Council of Social Service (ACOSS) suggested to the inquiry that many NGOs are keen to implement corporate responsibility initiatives, but those with limited resources often found this to be a difficult burden.
The committee recommended that the corporate Not for Profit sector should endeavour to meet the same standards as the corporate for-profit sector in considering the interests of stakeholders.
Furthermore it recommended that the Australian Government should consider options to encourage NGOs to implement corporate responsibility initiatives within their own operations.
These should include options to educate NGOs of the benefits of corporate responsibility and to provide best practice examples of corporate responsibility business partnerships between NGOs and the for-profit sector.
The committee recommended that the Australian Government, in collaboration with relevant NFP organisations, develop educational materials for community organisations to promote the benefits of corporate responsibility within their own organisations.
St James Ethics Centre (SJEC) welcomed the PJC Report saying it has given the Australian business community an opportunity to take the lead in responsible business practice, in lieu of a regulatory approach.
SJEC says it hopes that business will rise to the challenge and engage with voluntary reporting mechanisms such as the Corporate Responsibility Index in order to demonstrate performance improvement in the area of corporate responsibility.
The committee recommended that the Australian Government consider options for providing regulatory relief to corporations which voluntarily undertake specified corporate responsibility activities.
The committee said regulatory relief should be linked to the types of activities that companies are undertaking, that is the non-financial sphere. The sort of activities that
may be eligible for regulatory relief include: Voluntarily participating in the Corporate Responsibility Index for a specified period…”
St James Ethics Centre is in favour of the Committee’s support for a voluntary principles-based approach to corporate responsibility, avoiding a ‘tick the box’ compliance culture.
Dr Simon Longstaff, Executive Director, St James Ethics Centre says he supports a prudent framework of legislation, regulation and surveillance.
He says the parliamentary committee has struck the right note in its report – affirming that the test for business is not simply that it act responsibly – but that it measure and report on its performance and, in doing so, build community confidence, limit risk and generate sustainable performance.
He says an essential element of a voluntary approach is ensuring that adequate assistance is available for companies desiring to implement, measure and report on their performance.
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