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Tax breaks encouraging companies to produce annual sustainability reports are to be considered by the Australian government after a recommendation from a parliamentary inquiry into CSR.
The inquiry says ministers should look into allowing tax write-offs on the first-year costs of sustainability reports, which are normally much higher than in subsequent years. This, it says, would ‘facilitate greater uptake’ of reporting by companies.
The year-long inquiry found the initial high cost of sustainability reporting – mainly due to staff time setting up data systems – is a ‘major impediment’ to uptake.
However, it says that once the ‘first-year hurdle’ is jumped, both the costs and management time required can drop significantly. The Sydney-based St James Ethics Centre, which helps to compile the Australian Corporate Responsibility Index, estimates the resources dedicated to reporting can fall by about two-thirds after the first year.
The cross-party committee of ten MPs and senators has suggested the incentives as one way of maintaining a voluntary approach to CSR in Australia. It comes out against CSR regulation and rejects both mandatory reporting and mandatory assurance of non-financial information other than that contained in the annual report.
Ministers are considering the tax proposal with 28 other recommendations from the inquiry, whose brief was to look at non-financial reporting and directors’ duties on social and environmental issues.
The committee also proposes the government reward companies that ‘voluntarily undertake specified corporate responsibility activities’ by requiring them to comply with fewer regulations, and calls for government seed-funding for an ‘Australian Corporate Responsibility Network’ to co-ordinate the corporate responsibility movement.
Australian businesses have generally welcomed the inquiry’s conclusions, especially its emphasis on voluntarism. ‘Given the progress on voluntary uptake of responsible business practice in Australia, we see no requirement for additional legislation or regulation at this time,’ said Tim Williams, senior sustainability adviser at Australian bank Westpac.
Hugh Grossman, research manager at the Melbourne-based rating agency Reputex, said that the inquiry had helped stimulate debate. ‘Many companies in Australia are at that teething stage where they are just about to realize the benefits of integrating CSR, [and] the recommendations are helping to bring that about,’ he said.
The inquiry says ministers should look into allowing tax write-offs on the first-year costs of sustainability reports, which are normally much higher than in subsequent years. This, it says, would ‘facilitate greater uptake’ of reporting by companies.
The year-long inquiry found the initial high cost of sustainability reporting – mainly due to staff time setting up data systems – is a ‘major impediment’ to uptake.
However, it says that once the ‘first-year hurdle’ is jumped, both the costs and management time required can drop significantly. The Sydney-based St James Ethics Centre, which helps to compile the Australian Corporate Responsibility Index, estimates the resources dedicated to reporting can fall by about two-thirds after the first year.
The cross-party committee of ten MPs and senators has suggested the incentives as one way of maintaining a voluntary approach to CSR in Australia. It comes out against CSR regulation and rejects both mandatory reporting and mandatory assurance of non-financial information other than that contained in the annual report.
Ministers are considering the tax proposal with 28 other recommendations from the inquiry, whose brief was to look at non-financial reporting and directors’ duties on social and environmental issues.
The committee also proposes the government reward companies that ‘voluntarily undertake specified corporate responsibility activities’ by requiring them to comply with fewer regulations, and calls for government seed-funding for an ‘Australian Corporate Responsibility Network’ to co-ordinate the corporate responsibility movement.
Australian businesses have generally welcomed the inquiry’s conclusions, especially its emphasis on voluntarism. ‘Given the progress on voluntary uptake of responsible business practice in Australia, we see no requirement for additional legislation or regulation at this time,’ said Tim Williams, senior sustainability adviser at Australian bank Westpac.
Hugh Grossman, research manager at the Melbourne-based rating agency Reputex, said that the inquiry had helped stimulate debate. ‘Many companies in Australia are at that teething stage where they are just about to realize the benefits of integrating CSR, [and] the recommendations are helping to bring that about,’ he said.
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