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Independent on Sunday

Hewitt to block Bill for social reporting. By Severin Carrell. 25 January 2004.

Ministers are to block attempts by MPs and charities to introduce new rules that would force companies to publish reports on the ecological and social impact of their businesses.

Government sources have made it clear that Patricia Hewitt, the Secretary of State for Trade and Industry, will oppose a private member's Bill on corporate social responsibility (CSR) when it comes before the Commons on Friday.

The decision has provoked a fresh row over the Prime Minister's claims that he wants more honest reporting on CSR issues by British industry, following allegations that most UK companies use social responsibility simply as a public relations tool.

In 2000, Tony Blair challenged the top 350 UK companies to publish annual environmental reports by the end of 2001 - a target that has yet to be met. The DTI has also outlined plans for limited CSR reporting in its company law reform White Paper.

But charities backing the Bill, including Christian Aid and Amnesty International, have been told that ministers fear it goes too far and will lead to accusations that business is being saddled with red tape.

The Bill, proposed by the Labour MP Andy King, would require all companies to issue annual CSR reports, as well as placing a duty on directors to protect the environment, workers' rights and health and safety. More than 300 MPs have signed Commons motions calling for binding CSR reporting legislation. However, without ministerial support, it is unlikely to become law.

The row exposes growing tensions within the City on the question. Kingfisher Group, which owns the DIY chain B&Q, and institutions such as Insight Investments, the £70bn investments arm of the high-street bank HBOS, broadly support CSR reporting regulations.

Executives at Insight Investments argue that the City needs clear rules to ensure companies are fairly compared by shareholders - which is currently very difficult.