UK Environmental Disclosure not up to scratch
15th December 2006
According to the Environment Agency in England and Wales, 84% of FTSE 100 companies fail to disclose environmental performance in line with Government guidelines.
UK company law now requires annual reports to include key environmental performance indicators, but the Environment Agency argues most of them simply aren’t.
Their research also reveals that while the percentage of companies reporting some aspect of environmental performance has risen since 2004, the reporting is generally low quality.
Simon Thomas, the Chief Executive of Trucost, who carried out the research on behalf of the Environment Agency, had the following to say about the results:
‘The quality and usefulness of the data provided is still questionable. It is hard to see how investors and other stakeholders can use these disclosures to make informed decisions about how companies are managing their environmental impacts and risk.’
The implication of the research is that the majority of companies studied pay little attention to the materiality of what they are reporting — that is, the accuracy of the data, and its relevance to stakeholders.
The Materiality Framework, developed by LRQA in conjunction with BT Group and AccountAbility sets out a materiality determination approach for businesses, to allow them to establish what actually matters to their stakeholders.
