Voluntary environmental management alone will not reduce environmental impact

According to Towards Environmental Performance Management, a report co-ordinated by the Science and Technology Policy Research unit at the University of Sussex, voluntary reporting and management initiatives by industry may reduce some impacts, but is also likely to increase other negative effects. The study results from analysis of detailed environmental performance data from 430 production sites in five sectors.

Significantly, companies with certified environmental management systems, such as ISO 14001, do not perform appreciably better than those without. For example, firms with an environmental management system certified to ISO 14001 tend to have lower emissions of nitrogen to water, but at the same time, produce higher emissions of oxides of nitrogen to the air.

There are huge variations in environmental performance within industry sectors, say the authors of the report, with as much as 10-fold differences, such as with the production of hazardous wastes by printing companies. Differences between the environmental performance of firms may be due to a number of factors, say the researchers, such as differences in production processes, regulatory pressures, and the price of production inputs.

Assumptions about differences in environmental performance between larger and smaller firms may also have been over-stated, say the report’s authors. For example, in the textile finishing industry, larger firms tend to produce more pollution and waste, but smaller firms tend to use more water and energy relative to their level of sales and number of employees.

Individual company’s reporting on their environmental performance is also extremely patchy, although the report found that performance reporting does not need to be either complicated or burdensome, with the use of only a small number of indicators being adequate.

“Environmental performance reporting is a key issue for companies and their stakeholders, but only some companies have yet discovered its potential,” said Dr Frans Berkhout, head of the Environment and Energy Programme at Science and Technology Policy Research. “The best use indicators to benchmark performance, set targets, and measure progress towards greater eco-efficiency. Common standards will enable more rapid diffusion of best practice.”

According to the research, in general, the relationship between environmental performance and profitability is strongest where the environmental impact has direct costs, such as with waste generation.

Recently, Dutch accountants, NIVRA, published research which found that a significant proportion of top European companies still have considerable progress to make with regards to environmental sustainability (see related story).