Business Accounts For Its Environmental Impacts

Forest and Bird, Issue 305, 1 August 2002, Page 7

Business Accounts For Its Environmental Impacts

KATHY OMBLER

t sounds suspiciously like obscure ‘corporate-speak’ but in fact ‘triple-bottom-line’ reporting could make a major contribution to the ‘greening’ of New Zealand. Whereas traditional company reports have focused solely on financial performance, the concept of triple-bottom-line reporting covers broader performance in three areas of commercial impact economic, environmental and social. The concept recognises that business has a greater role to play in society than mere profitmaking. While the idea is catching the imagination of New Zealand business, overseas it is already more entrenched and even, in three European countries, mandatory. At least 25 New Zealand companies have either delivered, or are about to deliver, triple-bottom-line annual reports. Leading the way has been Landcare Research, which was awarded the New Zealand Institute of Chartered Accountants’ overall award for small business annual reports last year. Landcare’s Ian Whitehouse says the award was won against ‘a lot of very successful, conventional companies. ‘T think it was really an award for triple-bottom-line reporting, he says. ‘Our annual report provides an exemplar for New Zealand companies who are thinking of following suit. Writing the report was the easy part, however. ‘Just having a good performance is not enough, he says. ‘You need to improve your performances. Once you've got the targets and commitments for the future years, it’s getting the systems in place and changing behaviour so you meet those targets that is the challenge. ‘I see companies going through triple-bottom-line

reporting, grappling with what are their core values, and it’s a very good learning and changing process. Clearly these companies will be reporting against targets, and those targets are going to improve their environmental performance, so it’s a major step towards greening New Zealand.’ A Motueka-based chartered accountant, Bruce Gilkison, who has been advocating triple-bottom-line reporting for some years, agrees with Ian Whitehouse that New Zealand’s environment will be all the better for this approach. ‘What financial reporting does is help companies to be better managed financially, because they have to do an annual report. Otherwise companies could say everything is under control, trust us, and shareholders would be in the dark. Now, by making a statement about what they are doing environmentally and socially, they can also be challenged on those points. Bruce Gilkison says a key issue is whether environmental and social reporting and auditing could be possible to the same standards of reliability and objectivity as financial reporting. ‘That is a key question, and the Institute of Chartered Accountants has this year set up a task force to look at that. Some of us think this is possible. I think you can do anything as long as you don’t overstate what is done. There have been some excellent triple-bottom-line company reports that have had that level of certainty in all areas of activity. Two examples Gilkison pointed to are Landcare Research and Watercare Services, Auckland. ‘There is a lot starting to happen quite quickly in New Zealand, a lot of major companies are starting to look at triple-bottom-line reporting

and it will pick up, he says. ‘Other countries are way further ahead, especially the United Kingdom, Canada, United States and Australia. Some European countries, for example Denmark, Netherlands and France, have made it mandatory, he says. Ian Whitehouse of Landcare Research insists there are major cost savings for companies embracing triple-bottom-line reporting. ‘The result will be that companies will use fewer resources and that will immediately flow back into cost savings. For some companies, there will be enormous added value. ‘For example, for those involved in organics, and us here at Landcare Research, it really does make sense, given

the work we do. As part of a public sector pilot project, the Ministry for the Environment is also working on its first triple-bottom-line report. Acting chief executive, Lindsay Gow, said it was important for the Ministry to ‘walk the talk’ while promoting the concept. The Ministry has been running two pilot groups, representing local authorities and central government agencies, investigating the validity of triple-bottom-line reporting. As well, the Ministry has co-funded a report by the New Zealand Business Council for Sustainable Development, which has been carrying out case studies on how eight companies have gone about working towards triple-bottom-

line reporting.