The growth in interest in corporate environmental accountability seems to parallel the interest that has been shown in corporate governance. Largely unknown at the beginning of the decade, voluntary corporate environmental reporting has progressed considerably in a short space of time to the point where, according to a recent KPMG international survey, three out of four large companies mention environmental issues in the annual report to shareholders, and one in four now issues a separate environmental performance report.
In addition, since the end of April, some 800 companies in Europe have registered under the EC Eco Management and Audit Scheme, or Emas.
The Association of Certified and Corporate Accountants (Acca) has its own Environmental Award scheme, which began in 1991 with the purpose of identifying and rewarding innovative examples of corporate environmental reporting. The success of the UK awards and the growing international recognition of the importance of environmental reporting culminated, in 1996, with Acca and the equivalent bodies in the Netherlands and Denmark, Royal Nivra and the FSR agreeing to join forces on a European award scheme. In the UK, Denmark and the Netherlands, the number of companies entering for their countries' awards has steadily increased. Similar schemes now operate in Canada, South Africa and New Zealand. It is hoped that schemes in Sweden and Norway will be drawn into the joint European award by next year. If not yet completely come of age, then environmental reporting is surely well and truly into its adolescence. Most organisations make an impact on the environment and it is important that they should be trying to assess and reduce that impact, and move away from unsustainability. The accountancy profession can and should try to help. Environmental compliance is expensive and many companies may see only the costs and not the many financial benefits which flow from being a good environmental citizen. Those benefits include, but are not limited to, recycling revenues, reduced costs through waste reduction, avoided penalties and taxes (such as the UK landfill tax), enhanced profits through eco-efficiency achievements, new revenue streams through access to new markets, reduced insurance costs and lower borrowing costs. Financial accountants are well qualified to help companies begin to quantify and report the financial consequences of improved environmental performance. …