Patricia Hewitt has set out plans that would require all quoted companies to publish reports on their social and environmental policies.

Speaking at a business seminar, the trade and industry secretary said the proposals would "give investors a clearer picture" of corporate policies.

The minister said the draft regulations for the Operating Financial Review (OFR) were designed to provide more informative information about a company.

The OFR is the directors' overview of the company, giving shareholders information on a company's objectives, strategy, past performance and future prospects.

Under the plans, which have been published for consultation, all quoted companies - around 1,290 according to the DTI - would complete an OFR.

The move is said to build on existing best practice and follows the recommendations of the independent company law review.

An OFR issued under the proposed format would include information such as the company's policy towards its employees, customers and suppliers.

It could also set out the business's impact on the environment, social impacts and impacts on the wider community.

"The OFR will improve the quality of the reporting and complete the corporate jigsaw to give investors a clearer picture," said Hewitt.

"It will also help the owners of the business better understand their organisations and think about how people perceive them.

"Shareholder engagement is a success when there is an informed, healthy, open dialogue between investors and business.

"Good companies need committed, engaged investors and good investment decisions are based upon quality information. Greater transparency will bring greater market confidence and trust, enabling companies to prosper and flourish."

She added that the OFR would also provide information "useful to other vital stakeholders such employees, customers and environmental groups".

Responding to the draft regulations, the Association of British Insurers welcomed the "light touch approach".

"We will of course be looking carefully at the details," said Mary Francis, director general of the ABI.

"But in principle the government’s approach appears hugely preferable to one that makes detailed reporting on a broad range of issues mandatory, regardless of their relevance to the company concerned."