THE Forum of Private Business (FPB) says that the use of environmental social factors as a means of assessing a company's performance is a step too far and will increase red tape.

The small business association is responding to a proposed corporate ethics bill.

It would make environmental and social reporting a legal requirement.

Companies of any size would have to provide yearly social, environmental and financial reporting.

It would also require companies to consult stakeholders, including employees, on big projects.

Excluded

"FPB believes small firms should be excluded from any such legislation on the grounds that this would be another Government sledgehammer to crack a nut," said Garry Parker, of FPB.

"This is an initiative that may suit big business but would be a straitjacket for our members.

"It's a bit rich for any Government, UK or EU, to expect busy entrepreneurs to waste more of their valuable time reporting any voluntary social activity back to the state.

"They are already over-burdened with costly red tape as it is."

The Bill was proposed by Labour MP Linda Perham.

It would also establish a new regulatory body to oversee environmental and social standards in the UK.