Environmental impact reporting 'still necessary'

Environment minister Elliot Morley, said his message came on the back of media coverage concerning the removal of the Operating and Finance Review (OFR), which suggested that environmental reporting was no longer necessary.

Mr Morley, said this was "simply not the case" and urged businesses to report on their environmental impacts, especially as new Government guidelines would "make it easier than ever to do so."

"All quoted and large private companies preparing the new 'Business Review' will need to report significant environmental issues," he said.

"The Business Review represents a significant advance in narrative reporting standards, including those for environmental reporting. But these reports required under the EU Accounts Modernisation Directive need not be a burden. To help companies make the most of these opportunities, we have produced a set of new easy-to-use guidelines."

He added the Department for the Environment, Food and Rural Affairs' (DEFRA) guidelines could be used by all companies, "not just those that are legally obliged to prepare a Business Review".

Review needed

Department of Trade and Industry (DTI) minister, Malcolm Wicks commented: "Removing the OFR has reduced costs for business. But this does not mean companies shouldn't report their performance on employee and environmental issues.

"Indeed, companies are increasingly reporting these issues. This is a trend we are keen to encourage and the new Business Review will stimulate this further."

The Accounts Modernisation Directive introduces requirements for over 1,200 quoted companies to provide a business review, including information on environmental or employee matters "to the extent necessary for an understanding of a company's development, performance or position."

Medium private companies must also produce a business review, although they do not need to produce performance indicators relating to non-financial information.

'Most significant'

Sir Digby Jones, director general of the CBI, welcomed the reporting guidelines from DEFRA. He said: "I am a strong believer in businesses communicating their successes and being honest about the challenges faced.

"Companies that understand their links with the communities they operate in, and their impact on the environment, are most likely to prosper in the long-term."

DEFRA said that the guidelines would help businesses address their "most significant environmental impacts" and report in a way that would satisfy their shareholders and "other stakeholders".

They outline how environmental impacts can be measured through key performance indicators (KPIs) - in many cases making use of standard business data that may already be available.

According to DEFRA, 80% of UK businesses have just five or fewer significant KPIs against which the guidelines recommend they should report their performance. Elliot Morley said that this meant that firms had "no excuse" to not report on their impact on the environment."

The new 'Environmental Reporting Guidelines - Key Performance Indicators (KPIs)' publication can be downloaded from the DEFRA website - see link above/right.