‘Firms must reveal how they influence policy’1 min read . Updated: 13 Aug 2020, 08:02 AM IST
Businesses will have to disclose products or services entailing risks to environment
NEW DELHI : Businesses will have to disclose in detail how they try to influence regulatory policies and public opinion and list the public policy positions they advocate, an expert panel set up by the corporate affairs ministry has proposed as part of a new business responsibility reporting regime.
The panel, whose report was made public by the ministry on Tuesday night, has drawn up a comprehensive mandatory reporting regime for listed and unlisted businesses above a threshold linked to sales or paid-up capital to be decided by the government. It also proposed a ‘lite’ version of the reporting regime for smaller businesses to adopt voluntarily.
Under the proposed regime, businesses have to assess their performance against specific principles of good corporate behaviour that are to be compulsorily reported and certain elements that are desirable. Disclosure of lobbying is an essential reporting requirement.
“Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent," the report said, making it an essential principle for benchmarking corporate behaviour.
Businesses also have to disclose details of public policy positions they advocate, methods resorted to for advocacy and whether information on this is available in the public domain.
Businesses also have to report in this section details of adverse judicial or regulatory orders for anti-competitive conduct in the financial year under review. The proposed Business Responsibility and Sustainability report will in effect act like a self-assessment of corporate conduct and character.
The other key reporting requirements relate to whether businesses have done enough to promote equality among male, female and other genders. Companies will have to report average pay among these categories across roles.
Businesses will also have to list products or services involving environmental risks and steps taken to solve them. The share of money spent on research to improve the environmental and social impact of the business to the total research and capital spending by the firm is another reporting area.
“With several global companies being larger than many nation states in terms of turnover, the responsibility of businesses to their stakeholders will only increase in the coming years," the report said, quoting former secretary in the ministry Injeti Srinivas.