The Danish CSR Reporting Requirement: Migration of CSR-Related International Norms into Companies' Self-Reglation through Company Law?

Abstract

An amendment to the Danish Financial Statements Act and related provisions for institutional investors etc. have introduced mandatory Corporate Social Responsibility (CSR) reporting for large Danish private and state-owned companies, institutional investors, etc. The reporting requirement was preceded by a governmental Action Plan on CSR which, among other initiatives, announced plans to make CSR reporting mandatory. The reporting requirement does not define CSR but provides that CSR is understood as the voluntary integration in companies’ policies and practices of human rights, social issues, environment, climate and anti-corruption, amongst others. The reporting provision established an option to report, for the purposes of the Danish Act, through submission of a Communication of Progress (CoP) Report under the United Nations Global Compact and/or the Principles for Responsible Investment (PRI). The reporting requirement seeks to promote CSR through transparency. It has a related objective of making more Danish companies participate in the Global Compact. Reporting itself is enforced through government monitoring and fines. Through drawing on civil society monitoring and social and economic sanctions, the reporting provision in a wider sense complements the rather limited international law regime in relation to adverse business social and environmental impact. Based on the role which the Danish Government’s Action Plan and the reporting requirement assign to "internationally agreed principles" and to international human rights and labour rights law in particular, the article argues that initiatives such as the Danish reporting requirement may support a trend towards migration of international human rights law into other legal systems, including national company law, companies' self-regulation and their contracts with business partners.

The author is a member of the project team of the Sustainable Companies project at the Faculty of Law, University of Oslo.

Keywords: CSR reporting, Danish accounting act, Global Compact, reflexive law