Environmental Impact under Scrutiny

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Byline: Kit Bingham

Companies seeking a more robust approach to measuring their environmental impact have a new tool at hand. Trucost, an environmental rating company, has launched a service that values ecological costs as a proportion of a company's turnover.Simon Thomas, chairman of Trucost, says: "We exist to help companies and investors quantify and value the hidden external costs of doing business. Our environmental cost calculator models the complex interactions between the economy and the environment to identify environmental impacts and express them in financial terms. There is a long-standing need for such a quantitative approach."

Trucost has compiled a library of prices for almost 1,000 natural resources and emissions and uses survey data to identify the environmental goods and services used by a company and sector. The aim is to provide companies with information to decide whether a given environmental cost is material, as well as to model the financial impact of environmental legislation or taxes.

The firm has used its calculator to adjust the annual results of FTSE 100 companies based on their use of environmental goods and services. …