For Clients and Friends of Potomac Communications Group, Inc.
More Companies Issuing
Environmental Annual Reports
uring the last 10 years, the corporate environmental report has come into its own. More and more companies – and even some industry organizations – are publishing voluntary reports to inform regulators, investors, the media, and the public about their efforts to comply with federal and state laws and to meet their own strategic environmental goals.
“For large companies, reporting on environmental performance has become almost as common as reporting on financial performance,” says PCG Vice President Russ Dawson. “Investors, analysts, and the business media, among others, are increasingly interested in the environmental challenges that companies face and what they’re doing to solve problems.”
The concept of the annual corporate environmental report came with the formation of the Coalition for Environmentally Responsible Economies (CERES), in the wake of the 1989 Valdez oil spill in Alaska. CERES set out to improve corporate environmental performance by developing criteria that investors and others could use to monitor and assess that performance. Among their criteria was an annual self-evaluation of performance in such areas as compliance, sustainability, energy conservation, product safety, environmental restoration, risk reduction and governance.
Only a handful of large companies – such as Arizona Public Service, Sun Company, BankBoston, and General Motors – have embraced the rigid CERES principles in full. But hundreds of others have recognized the value of an annual environmental report. Some spend most of the year compiling and analyzing information. Recently, entire industries have started reporting on their performance. The American Forest & Paper Association, for example, publishes an annual assessment of the progress member companies make in carrying out its Sustainable Forestry Initiative.
Over the years, many companies have expanded the content of their reports. In New York, Con Edison’s 1997 report for the first time includes a look at the company’s worker safety and health programs as well as its environmental accomplishments. Reports also present related information such as data on energy and water use. Yet as companies cover more ground, some are also becoming more specific, supplementing company-wide information with details on individual business units or facilities.
Perhaps the most significant change, however, is the effort companies are making to deliver information to larger audiences. Many now use the Internet to distribute their reports. International Paper even includes a comment card in its report to solicit input and constructive criticism from readers. Jim Foster, IP’s director of environmental communications, says comment cards received on past reports have been overwhelmingly positive – about 9 to 1.
Nonetheless, the decision by a company to prepare its first environmental report is not an easy one. Internal skeptics ask tough questions: Will the report invite unwanted scrutiny of company operations? Is it a good idea to tell people how many violations we had? Are we making ourselves vulnerable to a lawsuit or negative press? Company lawyers will want to weigh these and other questions carefully.
But on the most fundamental question – Is it a good idea to publish an annual environmental report? – a growing number of large companies have answered with a resounding yes.
PCG has helped American Forest & Paper Association, Con Edison and other clients with their annual environmental reports.
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