Corporate sustainability strategy climate change Australia

Dan Atkins, SENIOR CONSULTANT, DELOITTE & TOUCHE - ENVIRONMENTAL SERVICES, DENMARK.

Corporate Environmental Reporting (CER) has been emerging in Europe since the beginning of the 1990's and together with the Nth American region has been the driving force behind improving the quality of environmental reports produced. The growth and attention to environmental reporting has increased dramatically over the past three years and can be evidenced by nearly all member of The World Business Council for Sustainable Development (WBCSD) now preparing annual stand alone environmental reports. The WBCSD is a coalitioninternational companies (of which more than 50 are Fortune 500), Australian members include BHP and Western Mining Corporation.

Further in the UK, for example, a recent survey has indicated that about seventy percent of Top 100 UK FTSE companies mention the environment in their annual report and accounts and forty percent have issued separate environmental reports.

In response to thegrowing trends towards environmental reporting, Deloitte & Touche have developed the "Corporate Environmental Reporting Score Card - A Benchmarking Tool for Continual Improvement". The Score Card is used to help assess how well a company's corporate environmental report or environmental section of their annual report to shareholders holds up against international criteria and current best practices.

Using the 'Score Card', Deloitte & Touche in 1997 have surveyed over 800 companies in the Nordic countries and ranked the top five CER's over 11 industry categories. A summary of some of the results and observations are as follows:

• The best performing industry sectors tended to be the energy and oil and chemicals sectors, the lower ranked performers were generally from the food, metallurgy and mining, and construction sectors.
• Overall the quality of reports were found to have increased although not significantly in comparison to the Corporate Environmental Reporting Survey - a Nordic Survey, September 1996 conducted by Deloitte & Touche. Theareas which generally scored quite well included the sections on Corporate Profile, Communication and Report Design. Areas for development were found to be the Finance and Eco-Efficiency section and the Third Party Verification of CER's.
• There has been an increase in the number of companies seeking verification of their environmental reports.

This survey has yet to be publicly released but will be available in July/August. Copies of this report and the CER Score Card can be obtained by contacting me on the below mentioned details. Other studies performed in recent times in this area throughout Europe include the UNEP "1997 Benchmark Survey". This was a comprehensive report which ranked the top 100 CER's using a set of criteria which included some differences to that used by the Deloitte & Touche survey. The results found that the Body Shop was the highest report and scored very well in the ethical criteria, the remaining companies were a grouped a lot closer together, with Baxter ranked second followed by Neste, Novo Nordisk and British Airways. Baxter has an innovative section on finance and the environment, as they have attempted to classify the savings generated from their organisation's environmental initiatives.

What we should expect to see in the future

Clearly environmental reports are still in the development stage and much refinement and improvement will occur over the next few years. Included below are some observations as to what we can expect to see in the forthcoming years:

1. The development of environmental performance indicators should continue to emerge as a critical part of an organisation's environmental management program. The work being conducted by the WBCSD focusing on developing eco-efficiency indicators. i.e. relating environmental and financial performance is very interesting and together with the ISO 14031 materials provides a good guideline for companies.

2. The growing attention by the financial community on assessing the environmental aspects of companies. Currently, there is still a large gap with the information that companies are producing and the information which is required by the investment community to base their decisions on. Various working groups are currently trying to bridge this gap.

3. The development of the triple bottom line concept (environment, social, and economy) is receiving increased attention and recent efforts by companies including Shell and General Motors are setting the scene for further developments in Corporate Reporting. Both GM and Shell have recently released their values reports (i.e. Environmental and Social Aspects), they both appear to be very detailed and should provide a basis for other companies to follow.

4. Both the UNEP and Deloitte & Touche survey's concluded on recent increases over the past few years in the amount of companies seeking verification of their environmental reports, we should expect to see this trend continue in the forthcoming years.