2. The State Duty to Protect Human Rights

2.2 Recommendations from the Council for CSR on the state duty to protect [page 11]

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

Requires state-owned companies and governments agencies which distribute significant government funds to incorporate due diligence in their business activities;…

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 stateowned public limited companies irrespective of their sizes to report on CSR in the management’s review in their annual reports (GP 4). The same year state owned companies were required to join the UN Global Compact principles and the Principles for Responsible Investment (PRI). Businesses must accede to the Global Compact as a group, in which the parent company accedes. The parent company then reports on the group’s observance of the principles on behalf of the subsidiaries (GP 4). The Danish Government believes that public authorities, including companies owned or controlled by the state, should live up to the same requirements that private companies are expected to fulfill. Therefore, the non-judicial remedy mechanism can also examine complaints involving public authorities (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.

Annex 1: Overview of the implementation of the state duty to protect

GP4 State Duty to Protect [page 28]

States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies such as export credit agencies and official investment insurance or guarantee agencies, including, where appropriate, by requiring human rights due diligence.

Status in Denmark (initiatives implemented before the UN ratification of the Guiding Principles)

In 2008 the state financing fund, Vækstfonden, has committed to adhere to the UN Principles for Responsible Investment (PRI)…

With the 2008 national action plan for CSR a number of state owned companies were committed to join the UN Global Compact, among other DONG Energy, DSB, and Post Denmark. The national action plan also introduced a CSR reporting requirement for all state owned companies (see GP 3d). Initiatives taken or planned as a dedicated measure to implement the UNGPs (after the UN ratification of the Guiding Principles)..