More companies are disclosing information about their environmental performance in their annual reports and accounts, but the quality of information is too varied and in some cases "basic", according to the Environment Agency.
A review of Britain’s biggest
publicly-listed businesses commissioned by the
Environment Agency and released today, has found almost all companies are now referring to
environmental issues in their 2009-2010
annual reports and accounts, while a majority were providing statistics on how they were performing in key areas such as energy use, waste and water. However, the study found only a quarter were providing 'quantitive’ figures, such as total tonnes of carbon dioxide emitted, in line with Government guidance.
"More businesses are being open about their environmental risks, but it is a concern that there is still a wide variation in the quality of reporting and that less than one in three businesses surveyed provided data in line with Defra guidance," said Environment Agency chief executive Paul Leinster.
In 2006, the Government issued voluntary guidance on green reporting and environmental Key Performance Indicators (KPIs) to help business meet their new requirements under the 2006 Companies Act. This law requires directors to report on environmental matters in their annual reports and
accounts.
Study findings
Today’s Environmental Disclosures report, carried out by Trucost plc, is the third review of its kind by the Environment Agency and shows 99 per cent of FTSE-listed companies made some form of environment disclosure on issues ranging from
waste, pollution and
biodiversity.
A third of companies (67 per cent) where disclosing quantified data on at least one of three environmental key performance indicators – carbon emissions, water use and waste disposal. This was up from 42 per cent that did this in 2006.
A total of 25 per cent of companies made quantified disclosures following Government guidelines, most frequently on energy and climate change (22 per cent). However, just 12 per cent did so on waste and 10 per cent on water use.
Reports on environmental incidents such as accidents and spillages, still remained "very low" the report said, despite tripling from one per cent to three per cent. There were also few disclosures on spending, taxes, penalties and fines.
Mandatory reportingThe 2008 Climate Change Act requires the Government to introduce mandatory carbon reporting for businesses in April 2012, or explain to Parliament why such
regulations have not been made.
Today, the Environment Agency called on all UK businesses to improve reporting on their environmental impacts and pointed to 11 examples of good environmental reporting, including insurance group Aviva and utility company Scottish & Southern, highlighted in the study.
"The increasing financial significance of many environmental risks and opportunities means that now more than ever investors need clear, comparable environmental information to help them decide where to invest their money. Businesses that measure their environmental impacts and risks are also better placed to manage and reduce them, " said Leinster.
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