In recent years, one increasingly popular way for companies to show green credentials has been through the environmental audit - a snapshot of the way the company affects the environment in terms of its physical products, its emissions and its energy consumption. According to consultants KPMG, 79 out of the FTSE-100 companies now produce reports on their environmental practices. But, beyond their obvious PR value, how useful are environmental audits to the companies themselves?
KPMG itself points to several business benefits, among them the ability to demonstrate progress in environmental management to stakeholders, a stronger internal commitment to improved environmental performance, identifying areas where management systems need to be strengthened and increased employee awareness of the environmental policies of the company.
Two companies in KPMG's survey, BAA and National Power, also found that environmental reporting had contributed directly to new business opportunities.
During recent work in Australia concerning bids to acquire various airport management contracts, BAA benefited from the fact that the current owners (Australian Federal Airports Corporation) place a strong emphasis on environmental management capabilities when considering bidders, and are introducing new environmental rules to back their concerns.
BAA, as part of a consortium, won a contract for manageing Melbourne airport. In most cases, says BAA, being able to provide detailed reports of environmental target-setting and performance over a number of years may not be the deciding factor, but it certainly does no harm.
'Environmental reporting and the process of collating data for the report is an important component of our planning process,' says Steve Adrain, environmental planning manager at National Power. Furthermore, the report has acted as a useful marketing tool in winning business overseas, he adds. 'For example, partners in overseas joint ventures have stated that they were more willing to work with companies that had a proven record in environmental management. The report has undoubtedly helped National Power to demonstrate this.' Meanwhile the Body Shop, already renowned for its tree-hugging tendencies, claims that its environmental audits have cut its fuel bills and reduced its packaging and transport costs. The company's head of environmental audit, Samantha Towle, says that auditing provides a very accurate picture of the business and where improvements are needed.
The growing need for environmental audits has itself been good for corporate Britain, spawning new twin industries: consultancies, which help companies live up to environmental standards, and other independent Government-approved agencies which operate the certification systems. Having the new environmental standard, ISO 140001, can be useful, not least because it is often necessary to work in other countries which have more stringent environmental standards.
And in the UK, says Barrie Mould, technical director at one environmental consultancy firm, W S Atkins, people are beginning to realise that the environment is just as much a risk area for a company as health and safety. Not monitoring it properly can damage company image - and the balance sheet. 'You lose employee morale if the company is seen as dirty and non-involved,' he warns. More ominously, perhaps, there is also supply-chain pressure. 'Companies like Sony won't buy from you unless you have a good track record.'.