LARGE companies should have to report on their social and environmental policy performance, according to a report.

The Institute for Public Policy Research (IPPR) argues that the move would improve business practice.

Government proposals will require 1,000 of the UK's largest companies to publish an operating and financial review, in which they will need to report on performance and prospects.

The IPPR said the Government should take a more active role and not leave directors to decide what activity is material to the business. It should encourage reporting on social and environmental performance, the institute said.

The report draws on the results of a national survey of 500 UK company directors carried out by NOP last year, which showed that 39 per cent of large companies monitored emissions of carbon dioxide and other greenhouse gases, and that 44 per cent had a policy in relation to reducing emissions.

Nick Pearce, acting director of the IPPR, said: "The effectiveness of the Government's soft interventions in business practice could be significantly enhanced by boosting openness in company performance on social and environmental policies."

Disclosure of performance would give shareholders and other groups the information they need to influence company policies for the better.

Mr Pearce said: "This would help the Government to deliver its public policy objectives."

Published: 02/12/2003