Corporate environmental reporting – Suggestions for an incremental and standardised framework applicable to a variety of companies especially small and medium-sized enterprises (NT TR 568)

Abstract

  Corporate environmental reporting is examined with the objective of contributing to the development of a commonly agreed framework and guidelines for environmental reporting. The framework is intended to be applicable to all kind of companies. However, the study considers the needs of reporting beginners and companies lacking resources for comprehensive reporting practices. The study includes environmental reporting on a generic level. The study pays attention to reporting practices in the Nordic countries and especially in Finland. A survey of 16 randomly selected Finnish companies, most of which are SMEs, was performed. Only a small number of the Finnish SMEs questioned had issued an environmental report or planned to do so. Lack of human resources in terms of time and expertise was one of the main reasons for not reporting. The companies were not motivated to report if stakeholders did not ask for reports. However, the companies were interested in environmental and in some cases social issues. They expressed the view that the guidelines should be brief, practical, concrete and sector specific. Comprehensiveness and complexity should be avoided. The study results on Finnish SMEs generally agree with previous studies on SMEs. A survey of the development of environmental reporting in seven selected Nordic companies showed that environmental information issued by the selected companies has decreased but reporting on social issues expanded which can probably be explained by the influence of the Global Reporting Initiative. The study shows that the Global Reporting Initiative guidelines have some weaknesses. There is a trend towards sustainability reporting though the concept of sustainability is not clear and is differently interpreted by the companies. No clear changes in reported environmental indicators can be seen. The empirical studies were complemented by a visit to the companies´ websites. Though some of the companies provided comprehensive environmental information on the web pages information was seldom clearly structured. The results of the study show that there do not exist commonly accepted and standardised definitions of terms used for environmental reports. It is therefore suggested that vague wordings should be avoided and the terminology could be based on previous work in the environmental area. The reports could thus be titled “Environmental reports” with a clarification e.g. “Environmental report – Social aspects included”. A model for a commonly accepted environmental reporting framework is suggested. The framework should be a standard. The framework offers reporting on defined levels where the lowest level is designed for SMEs or other companies lacking resources or interest for comprehensive reporting. The brief model is in its first stage and can only be characterised as an outline and an example to serve as input to further discussions. A common framework for providing environmental information on the web pages is also suggested.