A large Survey of the state of the art of Corporate Environmental Management within Europes Top Companies has been published by Royal NIVRA, the Dutch recognised professional
body for approximately 13,000 registeraccountants working in positions in which the quality of infor-mation and reporting is paramount. Royal NIVRAs primary task is to advance the quality of profes-sional
services provided by registeraccountants, both for the public good and to foster the mutual in-terests of registeraccountants.
The report presents the results of a research investigation carried out by two members of NIVRAs technical department into the state of the art of corporate environmental management
(CEM) amongst Europes largest companies. Against a background of growing interest in and concern for the environmental management and performance of European companies, the investigation provides an opportune comparison and benchmarking of CEM issues within economic sectors
and European countries, as well as for Europe as a whole.
The NIVRA 2000 survey is concerned with CEM issues at corporate level, i.e. for the organisation as a whole on a global basis, rather than just at site or regional level. This mirrors the increased importance now being given to environmental issues both in the renewed debate on corporate governance and in response to demands from society for greater transparency and openness by global businesses. It is also part of the wider issues surrounding stakeholder dialogue and the emergence of a stakeholder society, all of which are aspects of a growing re-assessment of the inter-relationships between business organisations, society and the natural environment.
The purpose of the NIVRA 2000 European corporate environmental management (CEM) survey is to provide a snap shot of the state of the art of corporate environmental management (CEM) within
Europes largest companies at the present time. Covering 15 economic sectors and 18 European countries, the survey was carried out by means of a postal questionnaire which was sent to over 650 of the largest companies in Europe.
The focus of the research is on the management of environmental issues at a corporate (i.e. global)level. To date, much of the concern with the environmental performance of business organisations has been focused on environmental risks at site or regional levels. However, investors, lenders, employees, international non-governmental organisations (NGOs) and other financial and non-financial
stakeholder groups, arguably, wish to be reassured that senior corporate executives are on the ball
in terms of their respective organisation’s management, accountability and stewardship of environmental issues on a global basis.
The results of the survey are presented two-fold:
(a) a ranking of each participating company, using a five-stage model of corporate environmental
management (five-stage CEM model) developed specifically for the project to identify Europes
leaders and laggards in this area of corporate governance; and,
(b) a comparison and benchmarking of the state of the art of CEM, by country and by economic sector,
and for Europe as a whole, based on the written responses to the postal questionnaire.
For the purpose of the research, the five-stage CEM model was used to evaluate six parameters of a
companys CEM, viz.: general; environmental policy; risk analysis; management responsibility; internal
and external information and communication; and environmental performance monitoring. Based on
the overall scores for each of these six parameters, there appears to be significant room for improve-ment
for the majority of companies. The top scoring company, Otto Versand of Germany, was the only company to score more than 80% of the maximum possible under the five-stage CEM model. Only
eight out of a total of 187 participating companies achieved a score of 75% or more. The average
score was 53%, with less than half (47%) of the participants scoring between 40% and 60% of the
maximum.
In terms of each economic sectors performance, one of the most revealing aspects of our study is the
range between the highest and lowest scoring sectors, suggesting that industry sector may be one of
the driving forces in terms of an organisations approach to CEM issues. The three highest scoring
sectors were processing (63%), chemicals (56%) and energy utilities (54%). The three poorest per-formers
were contracting and construction (38%), retail and leisure (42%) and electronic and electrical
engineering (46%).
On a country basis, our results provide some evidence which suggests that the home country of thein which a organisation company is centrally locatedmay also be one of the drivers of CEM also influences the state of corporate environmental management (although the range of scores, from the highest to the lowest, is less in the case of countries compared to that of economic sectors). This may be
in response to governmental environmental policies, laws, regulations, etc. existing in the home country.
The three leading countries were Sweden (60%), Austria (56%) and Germany (55%). The three lowest scoring countries were Norway (40%), Belgium (41%) and Spain (42%).
The questionnaire responses were structured according to various aspects of CEM including: environmental
policy; management responsibility; environmental management systems; risk analysis and product stewardship; stakeholder dialogue; external verification of corporate environmental, health and
safety reports; and, strategic business planning. Based on the aggregated responses to the question-naire,
we may tentatively offer some overall conclusions on the state of the art of CEM within large European companies at corporate level at the present time:
Almost all (91%) large European companies have implemented a corporate environmental policy (CEP) of some form or other, with the most popular CEP commitments being in relation to reduction of environmental impacts arising during production and processes, compliance with laws and
regulations, and continuous environmental improvement. The least popular commitment was found to be in relation to continuous dialogue with stakeholders.
European companies appear to be ring-fencing their environmental management function around
their own activities rather than extending it to include the whole product/service life cycle. The
benefit of the latter, however, is that it leads to an increased understanding of a companys possi-ble
contribution to improved environmental performance and environmental protection.
The extent to which environmental issues have become a fundamental boardroom activity is still
an open question. Although a high percentage (81%) of participating companies most senior cor-porate
environmental officer reports to the CEO, the President, the executive board or the super-visory
board, only 34% had appointing a member of the main board of directors with specific re-sponsibility
for environmental issues. The most common practice appears to be the appointment
of a separate environmental co-ordinator for the whole group.
The implementation of consistent, company-wide environmental information systems (EIS) is still
some way off. Less than one third of participants reported having an EIS throughout the organisa-tion
on a consistent basis, with 17% stating that they had no EIS at any of their sites at the present
time. The general picture raises certain concerns from a corporate governance perspective given
that a consistent environmental information system is a conditio sine qua non for monitoring envi-ronmental
performance and informing internal and external stakeholders. This could give rise to serious risks at corporate level in that management may be receiving environmental information
that is not obtained, processed and reported in a consistent way and therefore may contain poten-tial
misstatements (inaccurate or incomplete). This again may lead to wrong decisions in relation
to CEM.
The introduction of an environmental management system (EMS) appears to be receiving higher priority, with almost two-thirds of participants reporting that they have an EMS throughout their organisation.
However, almost 10% reported having no EMS anywhere within the entire organisa-tion.
The requirement to have an EMS throughout the organisation is most popular among the
more environmentally sensitive sectors.
A large percentage (80%) of the companies in our survey conduct environmental risk assess-ments
beyond that necessary for ensuring legal compliance. However, the boundaries of such as-sessments
appear to be restricted largely to the activities and operations of the organisation (eco-profiles).
Only a small percentage (9%) of the companies in our study reported that they carry out
regular risk analysis extending over the entire life cycle of their products or processes (eco-balance).
Thus, life cycle analysis (LCA) appears to be a marginal activity, suggesting that most companies still have only a limited understanding of the full environmental impacts of the products
or services in which they do business.
Large European companies appear to monitor environmental performance issues at corporate level on an annual, rather than on a monthly or quarterly, basis. A significant minority appears not to carry out such activities at all, particularly in relation to the analysis of differences between ac-tual
environmental performance and targets and the evaluation of the results of internal EMS audits.
Stakeholder engagement appears to be one area where there is considerable room for improvement.
Overall, 56% of participating companies reported that they do not consult or engage with
their stakeholders on key environmental issues. Moreover, although two-way dialogue is the most
popular form of stakeholder engagement (19% of companies), very few companies (5%) are actively involved in interactive, two-way engagement (in which decisions are based on consensus
agreement amongst all parties involved) with all their stakeholders.
Almost all (91%) large European companies have implemented a corporate environmental policy
(CEP) of some form or other, with the most popular CEP commitments being in relation to reduc-tion
of environmental impacts arising during production and processes, compliance with laws and regulations, and continuous environmental improvement. The least popular commitment was
found to be in relation to continuous dialogue with stakeholders.
European companies appear to be ring-fencing their environmental management function around
their own activities rather than extending it to include the whole product/service life cycle. The
benefit of the latter, however, is that it leads to an increased understanding of a companys possi-ble
contribution to improved environmental performance and environmental protection.
The extent to which environmental issues have become a fundamental boardroom activity is still
an open question. Although a high percentage (81%) of participating companies most senior cor-porate
environmental officer reports to the CEO, the President, the executive board or the super-visory
board, only 34% had appointing a member of the main board of directors with specific re-sponsibility
for environmental issues. The most common practice appears to be the appointment
of a separate environmental co-ordinator for the whole group.
The implementation of consistent, company-wide environmental information systems (EIS) is still
some way off. Less than one third of participants reported having an EIS throughout the organisa-tion
on a consistent basis, with 17% stating that they had no EIS at any of their sites at the present
time. The general picture raises certain concerns from a corporate governance perspective given
that a consistent environmental information system is a conditio sine qua non for monitoring envi-ronmental
performance and informing internal and external stakeholders. This could give rise to serious risks at corporate level in that management may be receiving environmental information
that is not obtained, processed and reported in a consistent way and therefore may contain poten-tial
misstatements (inaccurate or incomplete). This again may lead to wrong decisions in relation
to CEM.
The introduction of an environmental management system (EMS) appears to be receiving higher
priority, with almost two-thirds of participants reporting that they have an EMS throughout their or-ganisation.
However, almost 10% reported having no EMS anywhere within the entire organisa-tion.
The requirement to have an EMS throughout the organisation is most popular among the
more environmentally sensitive sectors.
A large percentage (80%) of the companies in our survey conduct environmental risk assess-ments
beyond that necessary for ensuring legal compliance. However, the boundaries of such as-sessments
appear to be restricted largely to the activities and operations of the organisation (eco-profiles).
Only a small percentage (9%) of the companies in our study reported that they carry out
regular risk analysis extending over the entire life cycle of their products or processes (eco-balance).
Thus, life cycle analysis (LCA) appears to be a marginal activity, suggesting that most
companies still have only a limited understanding of the full environmental impacts of the products
or services in which they do business.
Large European companies appear to monitor environmental performance issues at corporate
level on an annual, rather than on a monthly or quarterly, basis. A significant minority appears not
to carry out such activities at all, particularly in relation to the analysis of differences between ac-tual
environmental performance and targets and the evaluation of the results of internal EMS
audits.
Stakeholder engagement appears to be one area where there is considerable room for improve-ment.
Overall, 56% of participating companies reported that they do not consult or engage with
their stakeholders on key environmental issues. Moreover, although two-way dialogue is the most
popular form of stakeholder engagement (19% of companies), very few companies (5%) are ac-tively
involved in interactive, two-way engagement (in which decisions are based on consensus
agreement amongst all parties involved) with all their stakeholders.
