The ACCA UK Environmental Reporting Awards
1999 was the ninth cycle of the ACCA UK Environmental
Reporting Awards and the level of participation was the highest
yet: 64 reports were submitted from which a shortlist of 16 reports
was selected for further consideration by the judging panel. The
overall winner of the 1999 reporting awards was United Utilities
Plc. In the view of the judges, the report of United Utilitiesa
public company since 1989"addresses the full environmental
aspects of the group's operations (which include energy supply
and distribution, water, wastewater and telecommunications) including
its international operations. The range of issues covered and
the innovative reporting approaches demonstrated in the report
were commended by the judges, who felt unreservedly that this
report should be overall winner in 1999."
The panel of judges recommended that awards
should also be made in the following categories:
Joint runners-up for the overall
award (ScottishPower and British Airports Authority plc)
A special commendation for best "first
time reporter" (Biffa Waste Services Limited)
A special commendation for best "SME
reporter" (Bovince Limited)
A special commendation for best "supply
chain reporter" (B&Q)
According to the ACCA panel, the quality of
the shortlisted reports this year was extremely high, with many
companies embracing wider issues than their environmental performance.
Since its launch in 1999, a number of companies have begun to
use the DETR's greenhouse gas reporting guidelines. Both the quality
and quantity of target setting has improved. The sustainability
reporting guidelines issued by the Global Reporting Initiative
(GRI), have begun to be referred to by a number of companiesEastern
Group published the UK's first full GRI style report. The number
of independent verification statements included in environmental
reports has increased.
While the overall quality of reporting is improving,
there does appear to be a widening gap developing between the
good reporters and the very weakest, which often do not identify
the key environmental issues relevant to their business. This
year, the reports reviewed by the judges showed less diversity
of reporting style and greater convergence around a more or less
recognisable reporting model. Possibly as a result of this trend,
the judges noted fewer reporting innovations.
The level and extent of financial disclosures
remains disappointingly low, with most reports lacking environmental
financial data dealing with issues such as environmental expenditure
(operational and other costs such as fines and taxes), environmental
revenue (such as savings incurred), liabilities and risks.
Some companies still tend to discuss sustainability
in a loose manner without first addressing environmental issues
in an adequate way. Cross-references to other material should
be included, in particular links should be provided for all reports
and websites, including mention of the availability of the environmental
report in the annual report and accounts.
Experience has tended to show that even those
SMEs that are aware of their environmental impacts often lack
the resources (financial, time, staff) to properly assess their
real environmental impacts, measure their environmental performance
or produce a public report. As an SME that reports on its environmental
performance and targets, Bovince Limited is certainly the exception
to the usual rule, with an ISO 14000 certification, an EMAS accreditation,
an Investors in People achievement and a published environmental
report under its belt. Bovince employs less than 70 full-time
staff. Quite an achievement.
The number of NGOs and public sector bodies
producing an environmental report continues to be minimal, but
the ACCA were encouraged by the participation of The Environment
Agency and Stroud District Council in this year's Awards. Both
these organisations have acknowledged and measured their own environmental
impacts, and reported on them accordingly.
The judges have observed that the level of financial
data in most environmental reports continues to be very low. This
view tallies with the results of the PIRC survey of the FTSE 350
published in early 1999. Two reports are available, however, which
highlight the need for greater financial disclosure.
As well as commenting on the strengths and weaknesses
of the current crop of environmental reports, the ACCA judges
usually try to comment on what they perceive to be emerging issues,
or areas where further experimentation or greater emphasis is
Normalisation and trends: Environmental
performance indicators are becoming more frequent in environmental
reports, but sometimes data is presented in an unhelpful way.
Data should be presented both as a unit per product (or similar),
for exampleCO2 tonnes/quantity of product and as absolute
values, for exampleCO2 tonnes, so that real performance
improvement can be measured.
Communication: the growing length of
a number of environmental reports has led to a data dense and
text heavy approach to corporate reporting which has necessitated
the need for summation. This may be resolved in the production
of an additional, but shorter summary report with links provided
to more detailed reports or websites for those who wish to become
better informed. Also, the inclusion of executive summaries in
each report could also achieve this objective.
Increased focus on more frequent reporting and
more extensive reporting using the internet present challenges
both to reporters and to verifiers. Preparers must seek to establish
the reporting boundaries more clearly than is currently done,
and verifiers will need to ensure that continuous or interim reporting
is subject to external monitoring.
Verification: Although the number of
verification statements has increased, the quality and depth of
them could still be improved. Most statements simply address the
data collection method and offer little by way of interpretation
of the data reported. Similarly, very few verifiers reports indicate
that site visits and site specific testing has occurred. Future
statements should begin to address the following in order to enhance
(1) Should other data be included that is
not currently being measured?
(2) Is any improved environmental performance
significant in relation to the company?
(3) Are all key issues addressed?
(4) Are the targets that have been set too
easy to achieve?
Resource Use and Bio-diversity: there
is a trend in mainland Europe of increased reporting of inputs,
such as energy, material and water use. This information is essential
for measuring the environmental performance of a company. Bio-diversity
is an area that is frequently neglected but which requires far
Outsourcing: outsourcing of some (significant)
part of an entity's operations can lead to misleading environmental
reporting unless the fact that outsourcing has occurred is acknowledged.
It may be appropriate to explore the notional environmental burden
or footprint shifted as a consequence of outsourcing. Stakeholders
will wish to know what environmental performance standards are
enforced by the reporting entity as part of the outsourcing agreement
and how the subsequent performance is monitored and reported back.
Better explanations: explanations of
variations in environmental performance (and failure to achieve
pre-determined performance standards) could be further improved.
Direct and indirect effects: many companies
focus on direct effects while neglecting to investigate and report
on their sometimes significant indirect (upstream and downstream)
Key impacts: reporters do not always
clearly identify the main environmental impacts of their operations
and their products. Without such a statement at the beginning
it is impossible to make an informed judgement concerning the
reliability or significance of the performance data that follows.