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Since 2006, the year when the new Companies Act became law UK companies must report their environmental disclosure in their annual business’ reviews. Reports must be done in accordance with government guidance.
Back in 2003 the Energy Agency was asked by the government to assess environmental disclosures in the statutory annual report and accounts of FTSE All-Share companies listed on the London Stock Exchange. The objective was to determine a baseline before the new Companies Act became law in 2006 and so a methodology was determined for future assessments.
Since the initial assessment in 2004 the percentage of FTSE All-Share companies reporting their environmental disclosures grew from 89% to 99% according to the 2009-2010 Environmental Disclosure Summary.
Companies must make quantified disclosures based on environmental KPIs (key performance indicators) which were determined by DEFRA’s (Department for Environment Food and Rural Affairs) 2006 Reporting Guidelines for UK Business.
Among the most important environmental KPIs is waste management which was mentioned in the Business Reviews of 89% of the companies surveyed, followed by pollution (79%), climate change (62%), environmental management systems (61%), energy usage and bio-diversity and land use tied at 57% each.
Between 2006 and 2009-2010, the number of companies reporting on their environmental impacts grew considerably. The increase in discussion was greatest for biodiversity/land use and climate change, followed by energy and waste management.
“89% of the 458 companies analysed discussed waste managementt in 2009-2010, up from 76% in 2004. The biggest increases were among health care, utilities and oil and gas companies. Waste has remained the most discussed topic since 2004. Discussion rates were highest among utilities (100%) and lowest among oil and gas companies (75%). Although 85% of basic materials companies discussed waste in 2009, this is down from 95% in 2006.”
Such increase is partly due to the introduction of the WEEE Directive in 2007. The Waste Electrical and Electronic Equipment Directive affect producers, distributors and recyclers of electrical and electronic equipment including Household appliances. The aim is to prevent WEEE arising, to encourage reuse, recycling and recovery of WEEE and to improve the environmental performance of all operators involved in the lifecycle of electrical and electronic equipment, especially those dealing with WEEE.
Despite a high percentage of FTSE All-Share companies disclosing information on their waste management and disposal only 6% are doing this in accordance with government guidelines. In comparison 34% of FTSE 350 companies disclosed information in line with reporting guidelines.
The way a given company handles and reports its waste can affect its performance. Most companies could reduce waste and increase reuse and recycling to improve resource efficiency by monitoring their waste handling and disposal. Such data can then be used to reduce impacts, improve processes, reduce costs and support regulatory compliance.
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