Firms offered yardstick forimpact on environment

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UNQUANTIFIED environmental reports are likely to become as unacceptable as unquantified financial reports. This, at least, is the view of Business in the Community's environment arm.

It is all very well to cite the old business maxim that if you can't measure it, you can't manage it. But companies are under increasing pressure from investors, consumers, regulators and others to deliver detailed information about their impact on the environment.

Helping companies grapple with the complexities of environmental issues is the aim of A Measure of Commitment - Guidelines for Measuring Environmental Performance, published by Business in the Environment last week and launched in conjunction with the national environment unit of KPMG Peat Marwick, the accountants and management consultants.

'Performance measurement is an integral part of environmental management, but is a relatively new area with little guidance available on what companies should measure and how to go about it,' says the organisation.

The guide includes case studies prepared with the help of several companies, including such well-known names as BT and Ford as well as smaller businesses. These are designed to help provide companies with a practical framework within which performance measures can be developed and give managers ideas and examples of measures in different areas of environmental performance.

'In general there are no absolute rules on what constitutes good performance,' says BiE.

Because this depends on the values and priorities of individual companies, their stakeholders and the sectors in which they operate, guidance is needed on how they can adapt general principles and experience to their own situations.

The publication by BiE, set up to promote business links with society at large, is just the latest in a series. But it is also a response to the demands of investors, pressure groups and ever more sophisticated customers for information on environmental impact.

Demand has also been prompted by the impending second part of the 1990 Environmental Protection Act, due to come into force next spring.

Only last month, for instance, the environmental research group of the Institute of Chartered Accountants published a report called Business, Accountancy and the Environment. The reason was made clear in the foreword by Ian Plaistowe, president of the institute. 'Good environemntal practice is an integral part of good business practice and should permeate all aspects of the business,' he said.

Among the disclosures that the report recommends should be part of the annual reporting cycle are the company's environmental policy, the extent to which it complies with regulations and industry guidelines, as well as significant environmental risks that are not required to be disclosed as contingent liabilities.

The prominence of the Confederation of British Industry and the Hundred Group of Finance Directors, representing the finance directors of Britain's biggest companies, in the field suggests this is a big boys' problem. But even the smallest organisations can have a serious impact on their surroundings - and often do not have the controls necessary. One of the aims of the BiE publication is to deal with this deficiency.