’Name and shame for firms that fudge’, ’Companies face threat of
compulsory reporting’ and ’Minister gives warning over coming clean on
green tally’, are just some of the fire and brimstone headlines that
have hit the press lately in the wake of a speech made by Michael
Meacher, Minister for the Environment, at the Association of Chartered
Certified Accountants (ACCA) Environmental Awards ceremony a few weeks
This is threatening stuff, designed to scare companies into shaping up
on the environmental reporting front.
But it’s surprising that this sort of approach is necessary at all.
Companies wishing to enhance corporate reputation, desirability to
investors and relationships with customers and stakeholders in general,
are overlooking an important opportunity if they are not already
producing an environmental report.
In January, Deputy Prime Minister John Prescott stated that companies
employing over 250 staff would be expected to report on environmental
issues. Pensions Investment Research Consultants published a report in
March which showed that, of the FTSE 350 companies, 65 per cent already
report in some form. The problem is that much information is issued in a
haphazard fashion that is neither measured nor measurable. Consequently,
many reports are of little value to their intended audiences.
Last April, the ACCA urged the Government to set rules for environmental
reporting as certain data is particularly useful to the financial sector
in evaluation of risk. Perceived deficiencies in environmental
performance can lead to exclusion from certain portfolios. The
Government is encouraging companies to adopt common standard to make
reports more useful.
It’s time to tell people what they need to know, not what we want them
to hear. Disclosing honestly builds trust and credibility among
Shareholders sent a strong message to Shell at last year’s AGM,
expressing concern over environmental and ethical policy, particularly
Initial reluctance from the board to be managed by shareholder
referendum, gave way to commendable revision in the company’s statement
of business principles, making Shell the first multinational to commit
to upholding the UN declaration of human rights.
This year, Shell has embraced stakeholder involvement with the
publication of the report ’Profits and principles - does there have to
be a choice?’.
While there are still not ’official guidelines’ for effective
environmental reporting, a content list aimed at satisfying emerging
criteria should at least include: a company profile; a description of
environmental policy and management systems; a list of environmental
compliance violations; an account of a product’s environmental impact
from inception to disposal, and an outline of stakeholder involvement
and emissions data.
Evidently, the ’green glossy’ has outlived its usefulness as a PR
The environmental report is no longer the poor relation of the annual
report, but a powerful marketing communication tool in its own
Competitive companies need a well-designed document that reflects
corporate values, commitment to the environment and a clear
understanding of stakeholder expectations.
Is there any point in waiting to be ’named and shamed’ into cranking out
a band-aid report that waffles on about the birds and bees? Far cleverer
to use this opportunity to be seen leading the new mood of profitability
through good corporate citizenship.