ON CORPORATE ENVIRONMENTAL STANDARDS - Follow a green giant's example.
At the beginning of April, Michael Meacher, minister for the environment, presented an award to BT, which was judged to have produced the best corporate environmental report of last year.
Making the award, the minister reiterated the government’s belief in the importance of environmental reporting, a belief first articulated in 1997 by the deputy prime minister John Prescott.
ACCA, sponsor of the award, recently recommended to the UN that company annual reports and accounts should contain an environmental review section detailing environmental policies, a summary of legal compliance status and a review of companies’ actual environmental performance.
As well as providing companies with an important tool for focusing effort, ACCA believes external environmental reporting represents an aspect of the corporate governance debate that is at least as important as financial aspects ploughed (and reploughed) by Cadbury, Greenbury and Hampel.
An illustration of mainstream acceptance of corporate environmental reporting occurred a few weeks ago, when Pensions & Investments Research Consultants published a survey of the environmental and social reporting practices of the top 350 companies.
It concluded that companies are still failing to deliver what investors want most – timely, comparable data on corporate environmental performance, environmental risk exposures and environmental liabilities.
PIRC laid part of the blame for this failure on the absence of standards – standards for environmental reporting and standards for the credible certification of environmental data.
About 70% of the UK FTSE 100 mention the environment in their annual report and accounts but only about 40% have issued separate environmental reports.
Below this level, these percentages dip alarmingly. That is why ACCA has made its recommendation to the UN, and that is why we hope New Labour will, as part of its review of company law, consider introducing environmental reporting requirements for all UK listed companies.
Roger Adams is head of ACCA’s technical and research division.