Almost every single company — 98 percent, to be precise — listed on the FTSE All-Share Index now mentions the environment in their annual reports. The down side is that for at least some of those companies, mention the environment is all they do.
That’s the news from the U.K.’s Environment Agency, which yesterday published "Environmental Disclosures," its second major review of environmental reporting among FTSE companies. Since the last review, in 2004, significant progress has been made in reporting, the research found.
In 2004, only 89 percent of companies mentioned the environment in their reporting, and only 10 percent released environmental disclosures in audited sections of their reports. For the year ending March 31, 2007, the audited disclosures grew to 35 percent of the companies on the Index.
But the Agency expressed concern that, despite the near-universal awareness of environmental issues in corporate reporting, there is still plenty of room for improvement in the amount of quantitative disclosures on environmental risks and opportunities to shareholders and potential investors.
According to the research, which was conducted by Trucost for the Environment Agency, 42 percent of companies did disclose quantitative environmental data, a 15% increase since the 2004 survey, but only 29% of companies reported quantified figures on energy use or other climate change related topics.
The study also found that only 15% of companies reported on any of the environmental performance indicators recommended by DEFRA, and only 3 percent included hard data on water, waste and climate change impacts.
"I am pleased environmental reporting by FTSE listed companies has improved since our previous study in 2004. However I am disappointed and concerned that most disclosures still lack rigor, depth and quantification," said Barbara Young, Chief Executive of the Environment Agency. "Given that environmental issues such as climate change are having an increasingly financial significance for business, this survey’s findings are worrying. Such inadequate reporting gives investors and shareholders insufficient information to base their decisions on and this isn’t good for the environment or the economy,"