Listed companies will have to file the new Operating and Financial Review (OFR) at the end of the next financial year, but the non-profit sector is divided over whether it will improve corporate behaviour.
In January, the Government published a final draft of the regulations that will require all UK quoted companies to produce an OFR. But the Corporate Responsibility (Core) Coalition accused the Government of losing its nerve in the face of business lobbying and producing a watered-down version of the original draft.
The OFR requires businesses to provide information on the underlying developments affecting their work, and the main risks and uncertainties, incorporating environment, employment, social and community issues.
Deborah Doane, chair of the Core Coalition, believes that the OFR's focus on the interests of shareholders, and not other stakeholders such as workers and consumers, is a missed opportunity. She claims the OFR's key performance indicators of employees and environment are too narrow - human rights, for example, has been left out.
"The OFR is clearly not intended to be a full social and environmental report," said Doane. "In the end, it may have the unintended consequence of companies disclosing less, not more.
"Business has yet to demonstrate its willingness to put social and environmental impacts before profit. And why should they? In law, companies are not liable to anyone but shareholders."
John Drummond, chief executive of CSR consultancy Corporate Culture, agrees there is a risk the OFR could unintentionally reduce corporate transparency: "The jury is still out on whether it will have a positive impact. It is possible the lawyers will take over and organisations will close down a little."
But he is optimistic that the OFR will change the way companies behave.
"It will no longer be only a retrospective look at economic performance," he says. "The OFR is also forward-looking, communicating with investors on short-, medium- and long-term risk that could affect their business. That will require companies to think differently."
But Doane remains sceptical that the OFR can deliver change and insists that true transparency can only be achieved if full social and environmental reporting becomes mandatory.