Denmark

2. The state duty to protect human rights

2.2 Recommendations from the Council for CSR on the state duty to protect [page 10]

“In November 2011, the Danish Council for CSR started working on recommendations to the Government on how the UNGPs on the state duty to protect could be implemented. The council finished its work in January 2012 where the recommendations were handed over to the Government. Among other initiatives, the Council for CSR recommended that the Danish Government:
– Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights; …”

2.3 Actions taken

Companies owned or controlled by the state [page 13]

“In 2008 the Danish Government introduced a statutory CSR reporting requirement which obligates all state-owned public limited companies irrespective of their sizes to report on CSR in the management’s review in their annual reports (GP 4)…”

Reporting requirement on human rights impact [page 14]

“Another priority for the Danish Government has been to strengthen the existing legal reporting requirement for the largest Danish companies and all state-owned companies (GP 3d).

Since 2009, large companies including all state-owned companies and institutional investors in Denmark have been required to report on their work on corporate social responsibility. This means that while Danish businesses are free to choose whether or not they wish to have a CSR policy there is a statutory requirement that they must take a position on CSR in their annual reports.

If the company has a CSR policy, the company must account for this policy in their annual reports, including any CSR standards, guidelines or principles the company employs. Secondly, the company must report how these policies are translated into action, including any systems or procedures used. Thirdly, the company must evaluate what has been achieved through the CSR initiatives during the financial year, and any expectations it has regarding future initiatives. If the company does not have any social responsibility policies, this must be reported.

In June 2012, this reporting requirement was expanded so that the largest Danish companies from 2013 expressly must state in their reports what measures they are taking to respect human rights and to reduce their impact on the climate. This means that if a company has a policy on human rights or climate issues, it must report according to the existing structure; what is the policy, how has the policy been translated into action and what has been achieved through the initiatives. If the company does not have policies for human rights or climate issues, this must also be disclosed. The purpose is to further strengthen Danish companies’ activities in relation to human rights and climate change which will be beneficial to society overall, but also to the individual company.

Three years after the reporting requirement was introduced, analyses show that companies generally appear to have been encouraged to report on CSR. In the course of the first three years of the legal requirement’s existence, nearly 50% of the companies reported on CSR for the first time. Secondly, there have been significant improvements in reporting practices in a number of areas. There is, nevertheless, still room for improvement as regards reporting consistency and reporting on the results of the CSR work. For information on Danish companies reporting on human rights see section 3.3.”

3. The corporate responsibility to respect human rights

3.3 Actions taken

Evaluation of CSR reporting in large and listed Danish companies [page 18]

“In 2008, Danish Government introduced a legal requirement for large companies in the Danish Financial Statements Act (see section 2.3 page 6 for more on the reporting requirement). Since the statutory CSR reporting was introduced a survey on the effects of the legal requirement has been conducted in three consecutive years. The surveys were based on a rolling group of participants, meaning that the same group of companies has been surveyed the previous years. Since the group has been subject to the reporting requirement for three years it includes – in the last survey – very few companies reporting for the first time. As expected, there have also been few changes in the choice of topics and content in the reports.

In the financial year 2010, a significant increase in the number of companies reporting actions relating to human rights (38% compared to 16% in 2009) and labour rights (35% compared to 16% in 2009) was noted. In the 2011 financial year, these reporting topics were as common as in 2010. Due to recent developments in international CSR principles (in particular the development of the UN Guiding Principles on Business and Human Rights), an increased focus on human rights, in particular, can be expected in the future. Following the latest amendment of Section 99a of the Danish Financial Statements Act, companies thus have to report on the topics of human rights and climate with effect from the 2013 financial year.”

Award for Best Non-financial Report [page 19]

“The Danish trade organization of auditing, accounting, tax and corporate finance, “FSR – Danish Auditors” annually announces the company with the best CSR report both for large companies and SMEs. The reports are judged by a panel of selected representatives from Danish businesses, organization, financial sector, educational institutions, etc. As part of the evaluation the judges look at whether companies also report on difficult subjects such as adverse human rights impacts.”

Further on, in the section Recommendations from the Council for CSR on the State Duty to Protect [page 10], the NAP states:

“Among other initiatives, the Council for CSR recommended that the Danish Government:

• Expands the existing Danish corporate non-financial reporting requirement to include mandatory reporting on human rights.”

Appendix 1, GP 3d

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles) [page 27]

“Mandatory CSR reporting

As part of the first national action plan for CSR, the Danish Government introduced a reporting requirement to ensure that major businesses, institutional investors and unit trusts report on their CSR work in the management review of the annual reports. The duty to report for major businesses, institutional investors and unit trusts has entailed an obligation to report on their CSR policies and how they implement the policies in practice. Businesses and investors must also report if they have yet to set up policies for the area. This fact must appear from the management review of the businesses’ annual reports.”

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 27]

“Reporting on human rights and climate 

From 2013 the 1,100 largest Danish companies and all state-owned limited liability companies must report on CSR in their annual reports. The Government will introduce a bill proposing that the largest Danish companies and state-owned limited liability companies in future must expressly state in their reports what measures they are taking to respect human rights and reduce their impact on the climate.”

Appendix 1, GP 10 continued

Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles) [page 32]

“The Government has pro-actively supported the European Commission’s proposal for an EU Directive as regards disclosure of non-financial and diversity information. The Danish government finds that the expected European regulation is a timely opportunity for Europe and European companies to further strengthening reporting practices with regard to human rights. In addition it sends an important signal globally that while transparency is important in itself, a leveling playing field is needed.”