Coming clean on environmental performance: Research predicts widening gap between different industries

A widening gap between industry sectors that disclose information on their environmental performance and those that do not is forecast by researchers in a report from Warwick Business School.

Stephanie Stray and Joan Ballantine, found that UK companies in the energy sector, where environmental disclosure is already very common, were more likely to state their future intentions to give information than the banking sector where environmental disclosure is rare and unlikely to increase in the future. The other leader in terms of environmental disclosure was the water sector where annual environmental reports are mandatory.

"One gains the impression that the banking sector as a whole has little interest in the issue of environmental reporting and where it does take place it is a relatively token gesture, not undertaken with any serious conviction," say Dr Stray and Ms Ballantine.

Other sectors examined were food and drink, automobiles and electronics. Overall, 34.4% of companies from all sectors said they disclosed environmental information now and a further 14.5% said they would do so in the future. Nearly one fifth (18.5%) said they would not be providing information in the future and 35.9% did not know what their company's intentions were.

The research results, which were drawn from 227 companies, also showed that, regardless of sector, larger companies were more likely to report on their environmental performance than small firms.

Over half (55%) of the sample did not have an environmental policy statement and, even where companies had such a statement, they did not necessarily disclose environmental information. Nearly a fifth were reporting on their environmental performance but had no clear environmental policy statement in place.

The researchers also uncovered a dearth of consultation about environmental disclosure. Considerably less than half the sample in the energy, water and food and drink industries consulted external parties regarding the nature of the information to be disclosed, and the results were even worse in the other three industries.

"The results of the study indicate that environmental disclosure remains a minority activity that can take many diverse forms," the researchers conclude.