While some see Nike ruling as a step toward openness, it may bringclose to CSR reports

A study by CSR Network, a consulting firm focused on corporate social responsibility, reports that 50 of the world's 100 largest companies now produce environmental and social annual reports along with standard financial ones. More than 200 social and environmental reports are posted at CSRwire, a wire service devoted to social responsibility news. This time next year, there may be none.

A study by CSR Network, a consulting firm focused on corporate social responsibility, reports that 50 of the world's 100 largest companies now produce environmental and social annual reports along with standard financial ones. More than 200 social and environmental reports are posted at CSRwire, a wire service devoted to social responsibility news. This time next year, there may be none.

I've written before about the California Supreme Court ruling that classified a Nike press release about working conditions at its overseas suppliers as commercial speech - a designation previously applied only to paid ads.

I make no apologies for writing about it again, because it's the most serious issue facing PR today.

I've recently spoken to many activists, who almost unanimously see the verdict as a triumph. Conventional wisdom says that if the ruling stands, it will make companies more honest about sensitive social, environmental, and political issues.

That may be so in matters of immediate conflict, where companies will still feel the need to defend themselves. But in areas of voluntary disclosure - like publishing environmental and social reports - there will still be great incentive for companies to remain silent.

There's no doubt that under the California ruling, a social report would qualify as commercial speech, thus losing its Constitutional protection.

That means if a company makes any error in fact (intentional or unintentional), or if the report as a whole was judged to create a misleading impression of company activities, then the company could be found guilty of deceptive advertising.

At that point, it could be forced to surrender any profits it made in California that are attributable to the misleading statements and ordered to conduct a publicity campaign to correct any misunderstanding. The costs could run into the millions. Even companies that exercised extreme caution would be open to frivolous or malicious lawsuits.

Under the circumstances, most companies will weigh the benefit of publishing social and environmental reports against potential costs. Since most still view social reporting as something nice, rather than something necessary, it's hard to imagine they'll put themselves in legal jeopardy.

That ought to concern the activist movement, which rightly sees social reporting as a way to continually raise the bar, to put pressure on companies to improve their performance on environmental, labor, and other issues.

It was nice to see Fortune cover this matter in its September 2 issue (Can We Talk?). But it's hard to escape the notion that those most affected by the ruling, including PR pros in particular, and corporate America in general, are still not as concerned as they should be about the potential fallout.

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