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Article

26 Mar 2007

Author:
Tony Jackson, Financial Times

Bang goes CSR [Corporate Social Reponsibility]

Last week's official report on the explosion at BP's Texas City refinery raises an important issue of corporate governance. BP's safety culture, said the chairman of the US Chemical Safety Board, had been "terrifying". But BP's reporting on health and safety has been exemplary. What does that tell us about such reporting in general?...[BP] had employed Ernst & Young, its auditors, to examine its health and safety procedures...The auditors gave BP a clean bill of health just two days before the explosion...Perhaps we should turn the question around. How far can investors trust published financial reports? In the end, they cannot. But they know these accounts are important and analyse them accordingly...There is much argument over whether reporting on corporate social responsibility (CSR) should be mandatory. That seems largely irrelevant. In the end, such reporting will only be as useful as the institutions make it.