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RR69 - The State of Corporate Environmental Reporting in Ireland
O'Dwyer, 2001
Executive summary
This research study assesses the current state of external environmental reporting by Irish listed companies and commercial state-sponsored bodies. The report provides an opportunity to review corporate external reporting practices at a time when environmental impacts from all sectors of Irish society are coming under increased scrutiny, particularly with the recent publication of the Irish government’s National Climate Change Strategy. Furthermore, despite widespread research into the extent of external environmental reporting in western Europe, there is little evidence of the nature of its practice in the Republic of Ireland. This project fills this research gap by indicating the current state of practice. In line with most prior international research, the focus is primarily on environmental reporting in the corporate annual report, although an assessment of the nature of reporting in stand-alone publicly available environmental reports, where available, is also undertaken.
Summary of the research findings
The core findings in the study are as follows and are divided according to the two main sample groups analysed.
Listed companies (83 companies)- 34% (28 companies) of listed companies sampled undertook some form of environmental reporting in their corporate annual report.
- The average length (volume) of disclosure for disclosing companies came to 0.57 pages of the annual report.
- There was evidence of increased incidence and length (volume) of reporting compared with a 1995 survey of Irish listed companies’ disclosure practices (see O’ Dwyer and Gray, 1998).
- One listed company produced a stand-alone publicly available environmental report.
- The most popular categories of environmental disclosure related to environmental policy statements and information on the environmental benefits of products and processes.
- Most disclosures were undertaken in the ‘Operating and financial review’ (or equivalent) and ‘Chair’s statement’/’Chief Executive Officer’s (CEO) review’ sections of the annual report.
- The main industry sectors to disclose information were the manufacturing/processing and exploration/extractive sectors. No company in the financial/other or property development sectors undertook any disclosures.
- Disclosures were primarily positive in orientation. There was no evidence of negative news disclosures in any annual report.
- 56% (nine bodies) of state-sponsored bodies undertook some form of environmental reporting in their annual reports.
- The average length (volume) of disclosure for disclosing companies came to 3.72 pages of the annual report. This average declined to 1.29 pages when an exceptional level of disclosure in one body (Coillte) was excluded from the sample.
- One body produced a stand-alone publicly available environmental report. However, this was issued in 1997.
- The most popular categories of environmental disclosure related to environmental policy statements and information on the environmental benefits of products and processes.
- Most disclosures were undertaken in the ‘Operating and financial review’ (or equivalent) and ‘Chair’s statement’/’Chief Executive Officer’s (CEO) review’ sections of the annual report.
- Disclosures were primarily positive in orientation and there was no evidence of negative news disclosures in any annual report.
The results indicate that, apart from companies whose core activities have an easily observable environmental impact, there is little evidence of extensive environmental reporting, either in terms of its quantity or its quality. In most instances, disclosing companies are at the very early stages in their consideration of environmental reporting. There was some evidence, from responses to requests for stand-alone environmental reports, that many companies possessed formal policy statements but neglected to include information regarding these in their annual reports, thereby suggesting that it is not only disclosing companies who possess environmental policies. Furthermore, from these responses, it was clear that some companies produce environmental information internally, or collate it for submission to the Environmental Protection Agency, but neglect to disclose it publicly. It is suggested that collating this information and disclosing it as a separate section of the annual report may be a means of initiating greater levels of reporting.