Proving How Green You Are – Archive Article
December 13, 2008

RADIO 2GB NEWS COMMENTARY BROADCAST ON FRIDAY MAY 5 2000 ON RADIO 2GB’S “BRIAN WILSHIRE PROGRAMME” AT 9 PM, AND ON MAY 7 2000 ON “SUNDAY NIGHT LIVE” AT 10.30 PM

Nowadays it pays to be “green”. It also pays to prove that you are “green”. Then you may be rewarded. You can do well by doing good.

“BCA Papers”, the magazine of the Business Council of Australia, has an article by Chris Burnup on “Environmental Performance and Public Reporting”. This is a contribution to the discussion over the movement around the world to increase the level and scope of public environmental reporting. At present, few companies either in Australia or overseas go beyond the mandatory requirements.

However, emerging trends suggest that there will be an increased pressure on companies in all sectors to report. For example, there is a nexus forming between investment decisions and the way in which companies report on what they are doing to help the environment.

The bigger picture of all is the movement towards drawing up accounts with a “triple bottom line”. The first bottom line is the standard system of financial figures. The second bottom line is the social impact that a company has on the community. The third bottom line is the environmental impact. There are, however, many issues to be sorted out before we have a set system for working out the social and environmental impacts of a company.

For example, some Australian mining companies have issued environmental reports because it easy to see how their operations affect the environment. Similarly Sydney Water has also issued its reports. But most other companies and corporations may have far less obvious impacts on the natural environment.

However, the feeling is that this is a trend which is here to stay and that we need to find ways of creating such accounting systems. The debate now is not so much about whether to create such systems – but how.

Indeed, in February, Environment Australia published “A Framework for Voluntary Public Environmental Reporting – An Australian Approach.” Therefore, even the Government is now getting in on the act. It is supporting three industry associations (including the Business Council of Australia) to promote public environmental reporting to Australian businesses.

A specific incentive to do so is the creation of the Dow Jones Sustainability Group Index. This appears to create a link between, on the one hand, sustainable performance and protecting the environment with, on the other hand, investor attraction. There are other matters to be taken in consideration but the investor will see what companies have a good environmental record and so are worth investing in. They can invest with a clear conscience.

Therefore, companies will need to develop appropriate indicators to assess their environmental records for reporting purposes. There have an incentive to do so because of investment decisions being made by environmentally-conscious investors.

At a time of growing concern about the environment, it is pleasing to see that some progress is being made by Australian companies to not only be green, but to be seen to be green to – and prove in their annual reports that they are green.