PLATFORM: Making the grade with an honest report - Corporations can gain credibility via an environmental report which shows they are aware of shareholders’ concerns, says Cindy Forde

’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 ago.

’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

ago.



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

stakeholders.



Shareholders sent a strong message to Shell at last year’s AGM,

expressing concern over environmental and ethical policy, particularly

in Nigeria.



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

tool.



The environmental report is no longer the poor relation of the annual

report, but a powerful marketing communication tool in its own

right.



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.



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