RSS feedsHailed as the simplest environmental reporting framework for businesses yet
produced, the Prince of Wales' Accounting for Sustainability project published
its first report in December. BT
chairman Sir Mike Rake said it was easier to understand and less expensive than
other environmental reporting models.
The report has been published to provide practical guidance and measures to help companies tackle sustainability. One of the key factors of the project is the Connected Reporting Framework. It has gone through a consultation process which included NGOs and accountancy institutes as well as being tested by HSBC, EDF Energy and Aviva with their actual data.
Key principles
The report narrows down the key indicators that a company should work towards.
It does not try to encompass a one-size-fits-all approach for businesses, but
rather leaves it to the company in question and provides principles that they
should follow.
There is a brief guide on the various elements that are needed within a
company to ensure that sustainability reporting becomes part of a company's
policy. The project is divided into two categories with the first being to embed
sustainability issues into the company, something which Sainsbury's hopes to
apply in the future. The report lists 10 ways in which this can be done:
• Board and senior management commitment;
• Understanding and analysing the key sustainability drivers;
• Integrating the key sustainability drivers into the company's strategy;
• Ensuring that sustainability is the responsibility of everyone and not just a
specific department;
• Processes that enable sustainability issues to be taken into account clearly
and consistently in day-to-day decision making;
• Extensive and effective sustainability training;
• Monitoring and reporting sustainability performance;
• Including sustainability targets and objectives in performance appraisal;
• Breaking down the company-wide targets and objectives for individual
subsidiaries, divisions and departments; and
• Promote sustainability and celebrate success.
Generally, reporting on environmental impacts can be costly, complicated and inconsistent. However, Rake believes that less can be more and by making things less complex it will not necessarily become less comprehensive.
The other principle factor of the project is the actual reporting of sustainability. To tackle the problem the project created a more precise method, calling it the Connected Reporting Framework. The idea is that all areas of a company should show their sustainability performance in a connected way, reflecting the company's overall strategy.
Clear framework
There are five key elements:
• Explanations on how sustainability is connected to the operational strategy of
the company as well as the provision of targets;
• The five key environmental indicators that all companies should consider
reporting on are: polluting emissions, energy use, water use, waste and
significant use of other finite resources;
• Further information should be given where the company has material impacts;
• Inclusion of industry benchmarks, where available, for key performance
indicators to aid performance appraisal; and
• The impact of the company's products and/or services, the impact of its
suppliers and the use of its product or services by consumers or customers.
The project has set up a website to provide tools for companies that want to pursue this style of sustainability reporting. However it is a voluntary contribution and, as yet, there are no plans for this framework to replace the environmental reporting businesses must adhere to, via the business review requirements of the Companies Act.
