While there are no specific laws mandating corporate social
responsibility reporting in Australia, there are nevertheless good
risk mitigation reasons for businesses to adopt it.
In 2014, the European Parliament passed legislation requiring
large companies headquartered in the European Union to disclose
information regarding environmental, social, employee, human
rights, anticorruption, bribery and board diversity issues for
their organisations. There is an implementation period, which means
they are required to be fully compliant for the 2017 financial
Similar initiatives are taking place in other countries,
including South Africa and Singapore. For companies caught by this
wave of legislation, reporting about corporate social
responsibility will no longer be voluntary. Larger Australian
enterprises that have subsidiaries in countries caught by the
changes may also be affected.
KPMG's 2015 Survey of Corporate Responsibility Reporting
indicated that including CSR data in annual financial reports is
now a firmly established global trend. Almost 3 in 5 companies in
the international group surveyed do this now, compared with only 1
in 5 in 2011.
As 7-Eleven recently discovered, human rights issues can have a
big impact on a business. Following the media investigation
(prompted by some whistle blowers coming forward), it was alleged
there was systemic underpayment of workers at 7-Eleven's stores
with the complicity of head office in the exploitation of workers.
Plaintiff law firm Maurice Blackburn is now acting for over 60
employees, with reportedly hundreds more inquiries.
Businesses that are interested in reviewing their human rights
impact should consider:
Adopting a human rights due diligence framework, such as the
one outlined in the United Nations Guidelines on Business and Human
Rights (which contains specific guidance for corporate
Embedding the commitment to respect human rights in a statement
of policy, which specifies the expectations of personnel and
Reviewing practices and procedures to ensure they align with
the policy statement;
Putting in place a fair and easily accessible grievance
Undertaking regular human rights audits, with consideration
being given to reporting the findings to stakeholders.
In 2015, Unilever published the findings of its human rights
audit, which also details the process Unilever went through to
determine the most important human rights issues that needed to be
covered. The report has been seen as a benchmark for reporting on
human rights issues and has earned Unilever significant praise and
There appears to be some empirical data suggesting that product
quality and investor returns are not enough for success these days.
Customers and investors have a genuine interest in seeing that
business practices are sustainable financially, ethically and
The voluntary CSR reporting platforms provide businesses with
the opportunity to clearly communicate a message to their customers
and investors that their business genuinely shares a desire to be
good corporate citizens.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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