Better business

The Environment Agency’s sixth report on the environmental performance of business is our most rounded yet – and we’ve concluded that many large businesses are doing well. But some are not, and SMEs especially need help.

We all agree that it is important that we have a good quality of life now and provide an even better life for our children. And we all know that an ethical company is one that invests in improving the environment, rather than risking the costs of a prosecution for poor performance. The environment can and will damage your pocket and your reputation if you neglect it.

An overall improvement

Decoupling – achieving increased output without harming the environment – needs to be at the heart of business, and for many it is. We are pleased to see an overall improvement in performance. Congratulations to those businesses that have contributed to this. We have named a few, and appreciate the efforts of the unsung majority. Pollution incidents caused by industry are down 12% from 694 to 613. The farming industry and waste industry are major contributors to this improvement, and the chemicals and food and drink industries have helped. We measure the performance of operators and 59% scored good A and B grades in 2003, compared to 49% in 2002. The minerals, metals and fuel and power industries did particularly well. We can translate this into pounds – sites that perform better will be charged less for regulation.

Modernising our approach

But it’s not all good news. Some sites performed badly in 2003. These sites need to improve, but all of us have to recognise our role. At the Agency we are modernising our regulatory approach and working with industry to do this. Businesses need to think about how much fuel, raw materials and water they use, who deals with their waste, and whether they would like to live next to their own plant.

While more operators performed well in 2003, more also performed badly. We rated 28 sites the worst possible E grade this year. Many were in sectors we looked at for the first time: eight in textiles and six in paper and pulp. But many poor performers were in sectors that should know better. The chemicals, fuel and power, metals and waste industries all scored some Es. The water industry caused 23% more serious pollution incidents in 2003 than in 2002. SMEs need to become more aware – less than a quarter think that their business can cause damage, but they cause up to 80% of all pollution incidents.

The increase in greenhouse gases and nitrogen oxides (a cause of air pollution) is of major concern this year. Greenhouse gases from the industrial sources we regulate rose by 5% and nitrogen oxides by 9%. We recognise that much of this is because of everyone’s increased demands for cheap power, which has been met by coal-fired power stations. To reduce overall carbon dioxide releases, we must all look at our energy efficiency and think about the source of our power. As major fuel users, the fuel and power and chemicals industries have a significant part to play, which will be facilitated by the Emissions Trading Scheme.

Horrendous offences

And then there are some businesses that behave so badly we need to take them to court. Some offences are so horrendous they attract huge fines. Two waste management companies – the Cleansing Services Group (£250,000) and Eurocare Environmental Services (£100,000) – attracted the biggest fines this year. But at an average of £8,412, fines against businesses are not large enough to prevent offences and do not reflect the damage done to the environment or match the costs avoided. Eleven companies received large fines in both 2002 and 2003. But we are campaigning to change this and we have powerful allies. No trade association endorses such poor performance, and the Environmental Audit Commission supports our call for stronger penalties. This might mean higher fines or holding individuals personally responsible. In 2003, we prosecuted 11 company directors for an average of £5,000 and we are pressing for yet higher personal fines or penalties such as custodial sentences or community punishment orders.

The Environment Agency has a remit to regulate industry, and we seek ways to make this more effective in order to deliver improvements.

Many businesses share these aims; and we produce reports such as Spotlight on Business to help them. We believe that working with industry towards environmental improvement is the way forward.