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JSE will not demand HIV/AIDS disclosure
Vernon Wessels. 04 July 2003. Business Report. Republished courtesy of Independent Newspapers (Pty) Ltd.
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The JSE Securities Exchange would not make it mandatory for firms on the mooted social responsibility index to disclose the prevalence or cost of HIV/AIDS, Russell Loubser, the chief executive of the bourse, said yesterday.
This flies in the face of recommendations by the Global Reporting Initiative that the extent of the pandemic and its potential cost be incorporated in a company's financial statements.
Companies could not force workers to take HIV/AIDS tests, making it difficult to determine accurately its prevalence, Loubser said.
"Demanding the disclosure of prevalence is a hugely sensitive issue. If the prevalence cannot be accurately determined then there is no point in disclosing the cost," Loubser said. But companies would need to disclose how HIV/AIDS was being managed.
The JSE was in talks with the SA Institute of Chartered Accountants on how to report on HIV/AIDS, he said.
Mike Murphy, a facilitator of the HIV/AIDS programme of the Global Reporting Initiative, said many firms knew their prevalence rates but did not want this disclosed, fearing their share prices would be hit.
But there had been a shift towards more voluntary disclosure, which would result in more companies detailing the prevalence and potential cost of HIV/AIDS, he said. "Once more companies start reporting, questions will be asked about companies which say nothing."
Although as much disclosure as possible would be preferable, the initiative would support an environment of voluntary disclosure, matched by a process of incrementalism in which firms started small but then increased the amount of information disclosed over time.
The JSE planned to launch the new index in November, said Corli le Roux, assistant legal counsel at the JSE. The name and branding of the index still had to be decided, she said.
Some refer to the index as the sustainability index.
The new index would be based on London's FTSE4Good but would be customised to suit South Africa's social and economical environment. The index would be voluntary and would target the firms listed on the FTSE/JSE Africa all share index.
The technical construction of the index had not yet been completed and criteria not yet finalised.
"A black mark will not be brought against companies that do not comply with all the requirements to make the index. But the debate needs to start happening and companies need to address issues that will impact on long-term sustainability," Le Roux said.
Philip Armstrong, the managing director of ENF Corporate Governance Services, said that on balance local companies were aware of issues around corporate citizenship and sustainability, and had not properly captured their efforts into reportable documents.
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