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Where is the list of 1100 businesses required to do this reporting?


There is no list showing businesses subject to the reporting requirement. The Act applies to businesses in accounting classes C and D. The Danish Financial Statements Act is based on four accounting classes – A, B, C and D – such that businesses are subject to different reporting requirements depending on the class to which they belong.

Some class C businesses will be exempt from the reporting requirement because they are subsidiaries to a parent company that reports the information for the entire group. Businesses themselves are responsible for ascertaining to which accounting class they belong.

The accounts department at a business will usually have information about a business’ accounting class.

What happens to the reports?

The reports form part of the management review businesses prepare and submit to the Danish Commerce and Companies Agency each year together with their annual financial statements. The Agency then publishes this information.

Information on a business's social and environmental responsibility is often sought by business stakeholders. It can therefore be of major benefit to the business to make this information available, for example, on the business website.

What if a business does not exercise CSR?


The reporting requirement in the Danish Financial Statements Act only applies to businesses which have CSR policies. If a business neither has, nor wishes to establish, social or environmental policies beyond what the legislation requires, they must simply state in their management review that they have no CSR policies.

What if a business prepares other CSR reports? May these be used, or must a new report be prepared?

The legislation has been worded so as to be as flexible as possible for businesses in terms of how they prepare their report on CSR and where they publish it. 

Businesses may choose either to include the report as part of their management review or, in the management review, they can refer to the report on their website.

If a business already prepares a report on CSR, such as a sustainability report, the business may simply refer to this. However, this report must fulfil the statutory requirements, i.e. it must report on the business's social responsibility policies, how these are implemented in practice, and what the business has achieved through its initiatives.

If a business has acceded to the UN Global Compact or the Principles for Responsible Investment (PRI) and publishes the associated progress report, the business is exempt from having to prepare a separate report on CSR.

When is this information to be reported?


The Act entered into force on 1 January 2009. This means that the information businesses are required to report must be included with their annual financial statements for 2009. For most businesses, this will mean that their report on CSR must be submitted during 2010.

Are reports on CSR subject to supervision?

Information on CSR is subject to the same type of auditing as the other information in the management review. Even if the business chooses to place the information elsewhere, it is still subject to the same consistency check as if it were published in the management review. The auditor's responsibilities and duties are neither increased nor diminished due to the information being published on a website or in a supplementary report.

A business's management review is subject to a "consistency check" by the auditor. This means that the auditor must examine whether the information in the management review is consistent with information in the annual financial statements and other factors of which the auditor is aware.

This consistency check does not mean that the auditor has to take special action to obtain further information. The auditor bases the check purely on information the auditor has become aware of while auditing the annual financial statements.

Which language must be used for reporting on CSR?

The report must be in the same language as the other parts of the annual report, i.e. in Danish, unless the business is covered by section 6(7) or (8) of the Executive Order on Submission of Reports. These provisions contain special language requirements in relation to the annual report for certain listed companies.

There is no requirement for progress reports to be in Danish.

How are financial businesses affected by the new Act?

Institutional investors, mutual funds and listed financial businesses must also report on their CSR pursuant to section 132 of Executive Order no. 1310 of 16/12/2008, section 135 of Executive Order no. 1305 of 16/12/2008 and section 24 of Executive Order no. 1307 of 16/12/2008.

The same information requirements apply to the financial institutions mentioned as apply to the approx. 1100 largest non-financial Danish businesses.