In the current era of consumerist society, the role of corporate giants has expanded beyond the frontier of 'only-for-profit'.

This huge sector now determines the parameters of global governance structure , influences pattern of political decision-making, promotes economic alliances and features uniform life style round the world.

Such leading role in world affairs demands a specific, explicit and standardized explanation of corporate social responsibility. Besides, there is need of a mechanism of social audit in order to make sure that social responsibilities are being fulfilled.

Presently, non-financial reporting is one of the tools that many companies exercise to undertake the process of social audit. Firms volunteer an overview of their commitment and progress towards environment and social responsibility in these reports and make it public to ensure transparency and accountability.

Non-financial report, says Lord Brown -- Chief Executive of the British Petroleum, is 'to report on more than just our financial performances and tell a broader story as clearly as we can'. And that means not just boasting, but submitting to some form of reliable audit.

The scope of such an audit covers the actual difference that company is making to the lives of people and surrounding environment. It is more than illusion of 'feeling good' by virtue of some individual success stories. Story telling is all very well, but unless it is relevant to a company's performances it is best left to fiction writers.

Providing a small water scheme to the community, for example; does not compensate the damage caused by the unlimited and unaccounted emission of carbon dioxide. Offering wage labour to some of the community members does not neutralize the irreversible loss of natural resources.

Constructing one room dispensary does not undo the effects of pollution caused by waste dumping. What is needed is to record and make public all such damages along with the development initiatives that a company undertakes to balance them.

Considering on these premises, a new ranking of non-financial reports carried out by the United Nations Environment Programme and a top credit rating agency the Standard and Poor's show that the style and content of these reports vary greatly.

Some firms spent much time and effort giving out information of uncertain value. Others undermine their publications' credibility by saying one thing and doing another.

There is little agreement among the followers of best practices as to what best practices should be. That makes it difficult to compare the performance on environmental and social issues across the industries or across the time.

This gives rise to need for developing harmonization; developing uniform and standardized format of audit and reporting. The only tool standardizing the non-financial reports is the Global Reporting Initiative.

This is a checklist of dozens of questions to which almost all of the best reporting firms pay lip-service. They choose what pleases them and often ignore crucial queries.

The only audit performed on these reports is 'the assurance statement'. Many of these are written by the consulting firms that have arisen in response to this new business opportunity. The challenge is as to how a genuine transformation in the corporate sector can be initiated towards more integrated and human centred development.

The world development report-2005 presents the most convincing strategy for this purpose; a better investment climate for everyone. This means a) corporate sector needs facilitation and not barriers b) investment climate should benefit the society as a whole, not only firms c) firms and entrepreneurs need opportunities and incentives to invest productively and d) gap between the policies and practices needs to be reduced.

To achieve these core goals the state and the society has to a) bring corporate sector out of isolation -- mainstreaming and b) create an environment that foster the competitive process -- creative destruction.

So far, the successful tool for mainstreaming of corporate sector is the private-public-partnership. In such a setup, social audit and non-financial reporting evolves as a joint venture of facilitation and not an isolated act of inspection.

At the same time, corporate sector comes out of its compartmentalization towards the ground realities inherent with down-trodden society. The second tool -- creative destruction means an environment in which firms have opportunities and incentives to test their ideas, strive for success, and prosper or fail.

A survey of nearly 30,000 firms in 53 developing countries reveals that the firms facing strong competitive pressure are at least 50 per cent more likely to innovate than those reporting no such pressure.

This contributes to higher productivity and faster growth. Besides, competitive market also leads to conducive-environment for undertaking social audit in accordance with agreed environmental and social protocol.

The state, civil society and the corporate sector has to acknowledge and internalize three main realities in order to achieve the goal of integrated and human-centred development; business is part of society and not outside the society, poverty is a space that can be converted into economic growth and environment, development and social empowerment progress concurrently. Taking these ground realities as the basic premise, corporate sector can be integrated into mainstream development.