Environmental reporting in the UK: An analysis of emerging trends
Jan Bebbington and Carlos Larrinaga1
Abstract
This paper develops two related aspects. The first aspect considers the possibility for
the systematic measuring and evaluation of reporting trends in stand alone corporate
social responsibility reports. In particular, the paper argues that systematic surveys of
stand alone reporting are necessary to supplement surveys of reporting which can be
found in the Annual Report and Accounts package. This aspect of the paper is
developed by reference to an attempt to capture environmental reporting information
from companies in the UK electricity industry from 1997 to 2001. In order to achieve
such a task, a simple research instrument was proposed as an initial data gathering
mechanism. The second aspect of the paper examines trends in environmental
reporting for this sample of companies. Trends in reporting are observed with
particular sub-elements of the research instrument being favoured/not favoured within
reports. In addition, using principle component analysis, elements of reporting which
are usually found to occur together are suggested and discussed. Finally, links
between financial and non-financial reporting by this sample are examined. In brief,
this paper seeks to describe how environmental reporting may be analysed and
attempts to analyse one cohort of reporters. It is hoped that this work will provide the
basis from which more systematic and sophisticated analysis of corporate social
responsibility reporting in general may be developed in the future.
1
The authors are, respectively, Professor of Accounting and Sustainable Development, University of
St Andrews and Associate Professor of Accounting, Universidad de Burgos. Correspondence should be
addressed to: Jan Bebbington, School of Management, The Gateway, North Haugh, University of St
Andrews, St Andrews, KY15 9SS, Scotland. Email: jan.bebbington@st-andrews.ac.uk.
Environmental reporting in the UK: An analysis of emerging trends
1. Introduction
Since the early 1990s companies in the UK have produced stand alone reports which
purport to address their environmental, social and sustainable development impacts
(see SustainAbility & UNEP, 2000, 2002, 2004 and ACCA & CorporateRegister.com,
2004 for descriptions of the broad characteristics of these reports). Collectively, these
reports are often described as corporate social responsibility reporting (hereafter
CSRR). CSRR has not emerged from a vacuum. Rather, there is a long history of
reporting within the Annual Report and Accounts package on non-financial issues and
these disclosures have been the subject of considerable academic scrutiny (for a tiny
sample of work in this area see: Neimark, 1992; Gray et al., 1995; Adams et al., 1996;
Deegan and Rankin, 1996; Adams and Harte, 1998; Buhr, 1998; Adams and
Kausirkun, 2000, Larrinaga et al., 2002 Campbell, 2004). Despite the development of
CRRR, accounting scholars have yet to analyse these reports in the same level of
detail as has been devoted to Annual Report and Accounts disclosure. At the same
time, the production of CSRR has become widespread practice in the UK and
elsewhere around the world (ACCA & CorporateRegister.com, 2004). There is,
however, a small literature developing in this area (see, for example, Milne et al.,
2001, 2003; Buhr, 2002; Kolk, 2003 and Adams 2004). This paper seeks to
contribute to this literature by describing some trends in CSRR in a small selection of
UK reports.
This paper attempts to systematically describe stand alone CSRR of companies within
the electricity industry in the UK (between 1997 and 2001) and has two aims.2 First,
the methods by which this data was gathered are described (noting that there are
challenges in identifying whether or not a report exists, obtaining reports and
developing ways to interrogate reports). Second, we present an analysis of the CSRR
with several elements being examined: (i) the topic areas around which disclosure is
focused, (ii) the extent to which elements of disclosure are related to each other (by
way of principal component analysis) and (iii) any relationships that appear to emerge
from a comparison of Annual Report and Account disclosures and CSRR disclosures.
2. Research methods discussion
Data was gathered from companies in the UK electricity industry in the UK between
1997 and 2001 in order to track disclosures over this time period in Annual Report
and Accounts package as well as in CSRR. The study was conducted on one industry
group as we wished to eliminate the impact which industry segment may have on
reporting practices (whereby different aspects of an industry’s operation may affect
their environmental impacts and hence the data they present in CSRRs). In addition,
this industry contains several reporters who have reported for a considerable period of
2
The project from which this data is drawn was a comparative study of environmental reporting in
Spain and the UK in the Annual Report and Accounts package as well as in CSRR. The project has
generated this and another paper. The other paper from the study evaluates the broad patterns of
reporting in each jurisdiction and uses the high level summary of the data to explore the extent to
which regimes of reporting exist in each place. This paper, in contrast, examines the reporting data for
the UK only and in considerably more depth than the other paper. There is, as a result, very limited
overlap between the two papers.
time and hence could be seen to be mature reporters.3 The data presented, therefore,
is likely to reflect better than average reporting practices compared with UK
companies in general (if one assumes that length of reporting is correlated with
quality).4 Most of the larger firms in the industry provided CSRR disclosures during
the time frame analysed. This homogeneity with regard to reporting practice has been
encouraged, inter alia, by a trade body which previously represented the industry (the
Electricity Association). In addition, given the relatively obvious environmental
impact of electricity generation, there is much for companies to report on. A
summary of the pattern of report generation is contained in Table 1 and this table also
describes the sample of reports analysed.
[Table 1 about here]
There were several challenges in gathering data for this exercise. First, determining
what organisations could be deemed to be in the electricity industry. Second,
determining if reporting had happened, obtaining reports for analysis and dealing with
variations in reporting form created challenges. Third, a framework for analysing
disclosures had to be developed. Each challenge is dealt with in turn.
The electricity industry in the UK was in considerable flux during the time period
examined. While some companies merged and demerged during the period, other
companies sold off and brought various elements of other company’s operations.
There are, however, a number of the companies which remained fairly uniform over
the period and we have concentrated on CSRR of these entities. As a result, we have
analysed a cohort of reporters in the electricity industry who consistently produce
reports (with the exception of three entities who produced one or two reports during
the period). The task of deciding who should be included in the analysis was assisted
by Electricity Association documents titled The UK Electricity Industry and the
Environment (Electricity Association, 1998, 1999, 2000). These reports were useful
for identifying the overall context of activities of the industry and Electricity
Association members, who owned them and where they operated (see also Electricity
Association, 2003).
The first challenge in data gathering was knowing if a particular company produced a
CSRR, and if it did, obtaining the report. There were two particularly useful sources
of data on who reports: the websites of the companies themselves and the register of
CSRR maintained by The Corporate Register (www.corporateregister.com). This
web site was reliable, in our experience, in terms of stating whether or not a report
existed. In addition, it contains (where relevant) pdfs of reports which can be
downloaded and also provides a short history of organisations so that you can identify
corporate name changes as well as ultimate holding companies (and whether or not
the holding companies produce CSRR). In this way, it is possible to piece together
3
Companies in this sample started reporting in: 1991 (BNFL), 1992/93 (National Power, Powergen,
Scottish Hydro Electric and Yorkshire Electricity) and by 1995 (National Grid, Scottish Power). As
such they were among the earliest UK reporters.
4
On the basis of anecdotal evidence (observing reporting and talking with those who undertake it), it
appears that in the first two or three years of reporting reporting quality develops quite rapidly. This
could arise because often there is a lone individual in charge of developing a report and the task is
usually so large as to make it impossible to develop reporting to a mature phase in on year. In addition,
reporting is often a journey of exploration and discovery for the individuals and organisations and as
such there is much to learn in the first few years.
the reporting patterns of companies over time. Further, and usefully, organisations
themselves often state in the opening part of the CSRR if the report is the first,
second, sixth (or whatever) report in a series. In this way, once a company is
identified as a reporter you can move back and forward in time to identify their full
reporting pattern. Company web sites also provided information on past reports, but
when organisations changed names, merged or de-merged information on prior
practices was invariably lost. In addition, websites tended not to contain material
which was more than a couple of years old and hence are not useful for studies that
seek to cover a number of years (unless the sites were accessed and reports printed off
at the time they were current).
CSRR analysed for this project were a stand alone reports, and invariably hard copies
of the report were sought. Reports were obtained from several sources, namely: (i)
the Centre for Social and Environmental Accounting Research library collection of
reports, (ii) the British Library collection of reports (in London) yielded some reports
(while noting that this collection is not large or complete) and (iii) from the
companies themselves. Where reports which were several years old were sought,
companies had often run out of hard copies and/or could not locate these reports.
Reliance on library stores of reports, therefore, was important.
At around the end of the period which was examined for this paper, web reporting
started to emerge (indeed, National Grid produced web reporting during the last year
of the study). Web based reporting takes two forms: (i) instead of producing a hard
copy CSRR, a pdf document is produced and is available (but only on the web), and
(ii) the functionality of the web was used to provide data on the organisation’s
impacts and, as a result, is not the same type of information provision as a stand alone
report. If CSRR is presented as a document, the file could be printed and treated like
a hard copy report, albeit that the amount of material provided may be more than a
physical hard copy report on account of the fact that the cost of printing a larger
document would not have to be borne in the web only approach. Deciding if and how
to include a website with CSR information on it in the same data set as hard copy
reports was more difficult. In this particular instance where a website was clearly of a
‘different’ nature than a stand alone report, we excluded the company from the
analysis as we believed that we were not comparing like with like. The BT CSR
website, for example, is a qualitative different proposition than a stand alone report.
In this sample, we did not include National Grid in 2001 for this reason, but believed
that Powergen’s web reporting was akin to a stand alone report. These are not easy
decisions to make, nor were differences clearly delineated. Further, given that CSRR
data exists in the public domain in some way, it appears relevant to scrutinise it in
some manner. How this issue could be resolved and how information could then be
compared together requires further consideration as there is likely to be greater use of
web reporting going forward in time (see Adams and Frost, 2004).
The next challenge for analysing CSRR is deciding how disclosure should be captured
and categorised. CSRR disclosure analysis in the Annual Report and Accounts
package has built up over many years and, as a result, expectations about what one
may find in reports are fairly well established. In addition, given there are mandatory
aspects to reporting (but see, for example Adams et al., 1995, Larrinaga et al., 2002
and Patten, 2005 who note that legislative requirements are not always adhered to)
some elements of a disclosure analysis instrument are relatively straight forward to
determine. In the case of CSRR, however, the issues are more complex. In the first
instance there is no legally mandated disclosure requirements for CSRR because the
reports themselves are voluntarily produced. Further, given there have been no prior
studies of reporting (of which we are aware) inductively developing knowledge of
what may be found in reports has yet to develop. As a result, a decision was taken to
use some template of what one would expect reporting to contain as the basis for the
research instrument. In this context, the Association of Chartered Certified
Accountants judging criteria for the Environmental Reporting Awards Scheme
(hereafter ACCA ERAS) was simplified and used for analysis (the instrument as
applied to this study is reproduced in Appendix I).5
Simple counts of the presence or absence of various characteristics were used to
gather data for this study. Decision rules about these element were developed to aid
coding and 86% of the reports were coded by the two authors with any variation in
coding between the authors being reconciled. The decision not to undertake content
analysis of the space devoted to each element was dictated by two considerations.
First, the research project for which the data was gathered focused on whether or not
putative regimes of reporting were developing and as such whether or not a reporting
element was present was more important than the quantity of reporting. Second,
given our work was exploratory with respect to analysis of CSRR, we judged it
premature to undertake more sophisticated content analysis until some sense of the
usefulness of the interrogation instrument categories could be evaluated. Further, it is
our impression that coding a full report using some template may be very difficult
(noting that, in contrast, Annual Report and Account disclosures have coded only
elements of reports not whole reports). Hence this paper provides some information
on one attempt to analyse reports with more experimentation in this area being
warranted.
In summary, this section of the paper has described the data collected for this study as
well as airing some of the issues that arose in seeking to gather that data. The
ACCA’s ERAS judging criteria have been used as a template for what CSRR should
consist of and it has been simplified and used to analyse the reports listed in Table 1.
Counts of whether or not any one disclosure satisfies the ACCA criteria were used to
convert the content of the report into counts of presence/absence of reporting elements
(noting that often there were disclosures in several parts of the report which would
warrant an affirmative count in the instrument). Using this data, the paper moves on
to discuss the patterns of reporting arising from the analysis .
3. Patterns of reporting
Table 2 summarises the broad patterns of reporting obtained from the above analysis.
Simple percentages are presented in the first instance (and which indicate the
percentage of reports in which at least one instance of the reporting element was
Using the elements of the Global Reporting Initiative (hereafter GRI) guidelines for ‘sustainable
development’ reporting would also be a possible framework for analysing more recent reports which
purport to address issues of sustainable development. In our particular case, the GRI was not an
appropriate set of expectations regarding environmental reporting in the time frame covered. The GRI
could, however, plausibly be used in the same way as we have used the awards scheme judging
template.
5
found) and a number of comments can be made on the basis of the pattern of
environmental report disclosures (hereafter ERD).
[Table 2 about here]
First, to the extent to which quality of reporting could be inferred from coverage of
elements of the ACCA ERAS judging criteria (as measured by yearly average ERD
scores), the quality of the reports over the five years does not increase substantially
(and indeed declines in the final year of the study). The lack of marked improvement
in reporting is not remarkable as the majority of these reporters have been reporting
for several years and may, therefore, be considered to be ‘mature’ reporters.
The perceived fall in ERD scores from 2000 to 2001 was investigated in more depth
(noting that we are dealing with relatively small numbers of reporters in each year).
As is evident from Table 1, one reporter disappeared from the analysis and four
reporters joined the sample between 2000 and 2001. The reporter who left had, in
2000, scored just above the average ERD score. The joiners in 2001, in contrast, had
average ERD scores of (60%, 55%, 46% and 40%) respectively. As a result, the
decline in average performance over all companies would have been affected by these
lower ERD scoring companies joining the 2001 sample. In examining the lower
scorers and comparing their scores to the last reports we have for these organisations
(most usually 1999) it was observed that the ERD score did not vary substantially
from the scores these organisations had previously obtained. In addition, one of the
other additions in 2001 was the first report of a company formed after the demerger of
National Power (and their ERD score could have been affected by time pressures on
CSRR brought about by the demerger). We also examined the performance of high
scorers in 2000 relatively to their 2001 ERD scores. In one instance the score
increased but in two ERD scores decreased. As a result, while there is a fall in ERD
scores in the 2001 year the change can be explained by companies leaving/joining this
sample (which is itself relatively small). What this exercise also demonstrates,
however, is that disclosures by companies vary year by year and appear to be
sensitive to larger organisational changes (such as mergers and demergers) in a way
that Annual Report and Account disclosures do not appear to be. One inference
which may be taken from this is that CSRR is a discretionary activity for many
organisations and is undertaken with minimum human resources.
The second pertinent point relates to the pattern of disclosures around sub-elements of
ERD. 13 elements of reporting remained strongly represented throughout the sample
and over the time period and coalesce around certain areas. In the first instance
information about the entity, its performance and goals are most usually found
(corporate context; policy; targets & objectives; details of ISO certification sought or
obtained; regulatory compliance; absolute data; normalised data; trend data; inputs
data; and outputs data). The second area where ERD scores were high is in elements
which may add credibility to reports (with the provision of a way to provide feedback
on the report and third party verification statements rating highly). Product
stewardship information, in the case of electricity, demand management, also had a
high ERD score over the period.
Third, some elements of the ACCA ERAS framework were poorly represented over
the whole time period covered by the study (taking a relatively arbitrary cut off of an
average of a 30% ERD score). These elements appear to coalesce around two aspects.
First and more importantly, information which would enable a reader to put data and
performance in some sort of context scores poorly (for example, details of data
gathering policies for report; performance indicators; details of internal audit
procedures; comparison with sector data and to a lesser extent identifying report
audience). The second set of aspects involve items that would be helpful but (for
example in the case of full cost accounting) are more aspirational in nature. Likewise,
over this time period corporate governance processes may not have developed to such
an extent that a named board member with responsibility for the environment existed
in many of these organisations (certainly if they did, it was not disclosed).
In addition to the descriptive statistics presented, principle component analysis was
used to assess the validity of the research instrument and to further understand trends
in the environmental reports. As a result, 13 different factors were found, accounting
for 76.7% of the total variance. After applying a varimax rotation, the first factor
accounted for 7.33% of the variance and the 13th factor accounted for 4.96% of the
variance. While it could be argued that this is a disappointing outcome of the
analysis, it is also indicative of the validity of the research instrument as it suggests
that the factors identified by the instrument are not correlate with each other. Hence it
could be argued that the instrument describes a wide variety of characteristics of the
reports. In addition, it also suggests that CSRR is a varied practice and that
pronounced trends are yet to emerge. Table 3 contains a summary of the data
generated from this part of the analysis.6
[Table 3 about here]
Considering the 13 factors identified sheds some light on aspects of reporting that
may be related to each other. These relationships are suggestive of organisational
functions/rationales which may dictate that certain aspects of reporting emerge from
internal organisational processes. Table 4 examines the 13 factors found and suggests
what they may be indicative of.
[Table 4 about here]
In many instances the components identified in Table 4 could be linked to some
plausible organisation based story about CSRR (while noting that given they are
represented in separate components and they are not statistically correlated with each
other). Components 1, 4, 8 and 12 (going beyond the boundaries; openness;
responsibility and stakeholder focus) could all be seen to relate in some way to the
extent to which an organisation has an outward orientation with respect to CRRR,
with a focus on communicating the broader context of impacts to stakeholder groups.
Other components appear to relate to data and systems, notably 2, 3, 5, 7 and 13 (audit
and compliance systems; environmental data; impacts of organisation; risk
management; and policy). Of the rest of the components, one could plausible collect
some of these together under the banner of interest in external and internal
benchmarking, namely 6, 9, 10 and 11 (scope; benchmarking; own rules not others;
and trust us on our rules). Thus one could propose that for this sample of reporters,
ERD scores are driven by a mixture of: (i) the presence of data and systems to enable
6
Note, this analysis assumed that the distribution of disclosure around each element of ERD is normal.
reporting of information, (ii) some orientation to external parties with whom
communication is sought and (iii) some desire/need to benchmark the organisation in
some way.
If disclosure patterns are seen as providing some sense of the rationales which
underlie reporting decisions (as argued by the likes of Neimark, 1983; 1992; Meyer,
1986; Roberts, 1991; Amernic, 1992; Arrington and Francis, 1993; Schweiker, 1993;
Neu et al., 1998) then these disclosure patterns provide the basis for the start of some
sketching of possible determinants of reporting. First, reporting is dependent on the
development of an ability to numerate a report with some data which could be deemed
relevant for report readers. Having said this, important contextual data (on scope,
report data collection routines and such like) are not well represented in this set of
reports and as a result to ability of a report reader to get to grips with the technical
aspects of the report will be hampered. Likewise, while the ERD scores for some data
was consistently high comparison with sector (and to a lesser extent comparison with
target data) were low. If, however, reporting is more of the nature of a signalling
device to external parties that data can be gathered and reported on then the credibility
of that data may not be of prime concern. In this way, it may be that here we are also
seeing what Buhr (2002) calls a “symbolic legitimation strategy” (p.34) whereby the
ability to produce a report and a willingness to do so is more important than the
content of the report or how it affects organisational life.
In addition, the ability to report may also signal that the organisation is willing to be
open and engaging with stakeholders. Certainly the extent to which an organisation
has an external orientation was found by Adams (2002) to be an important influencing
factor in German and UK CSRR in the chemical and pharmaceutical sectors. The
second set of factors suggested to emerge from Table 4 would support this suggestion.
As a caveat, however, this set of reporters were not very forthcoming about how
stakeholder views were gathered although most elicited stakeholder views on their
report. This suggests again that while on the surface there is a openness to
stakeholder views and influence there may not be very much of substance beneath this
openness. Certainly, it was unusual in this cohort to find reference to how the views
gathered in the previous year had influenced the organisation in the current year. This
observations points in the same direction as Adams (2002) who report that for their
interviewees the “main motivation ... is to enhance corporate image and credibility
with stakeholders” (p. 244/245). Such an orientation would be in contrast with the
type of reporting which is provided to primary stakeholders, namely shareholders.
The final way in which reporting was interrogated in this study was to compare how
CSRR disclosures contrasted with reporting in the Annual Report and Accounts
package and in CSRR.7 An area of particular interest is the extent to which financial
information appears in both reporting formats but other elements of reporting also
provide an opportunity to consider if there are complementary patterns of disclosure
in the two forms examined. Table 5 presents information on disclosure in the Annual
7
As is apparent from Table 5, the study also captured counts of information disclosed in the Annual
Report and Accounts package of the companies in Table 1 around certain themes. These themes relate
to legal requirements to disclose information in Spain and an European Commission recommendation
for reporting on environmental matters in Annual Reports. This data is not of prime concern to this
particular paper but provides an additional lens on CSRR reporting.
Report and Accounts package and CSRR and three observations can be drawn from
this data.
[Table 5 about here]
First, while all the organisations in Table 5 had produced CSRRs in the years listed,
not all made reference to this fact in their Annual Reports. This is a surprising finding
and one which suggests that companies may perceive that there are different
audiences for conventional reports and CSRRs. This, along with the relatively low
disclosure scores for the majority of ARD categories suggests that while data exists
within the organisation it is not deemed appropriate to disclose this information in the
Annual Report and Accounts package. This practice is, however, changing over time
in this sample.
Second, in almost all instances of ERD disclosure listed, the number of organisations
making environmental disclosures in the Annual Report and Accounts package
gradually over time rise to match the disclosure practice in the CSRRs. This suggests
that there is some cross fertilization of reporting practices and suggests that the
direction is from the CSRR to other reporting and not vice versa. Of particular
interest in this context is that conventional financial accounting information in CSRR
in 1997 and 1998 far outstripped that in the financial statements. This could suggest
one of two things. First, it may be that the form of financial statement reporting in the
CSRR is not of the same quality as that expected in the financial statements (and this
may also explain the decline over time of financial accounting disclosure).
Alternatively, it may be that organisations are happy to report some information in
CSRRs which they would be less happy to report in financial statements. If this were
the case one has to assume that companies believe or aim for there to be separate
audiences for these different reports. Whichever is the explanation, it is interesting to
note that this finding mirrors that of Criado et al., (2005) on a more recent data set
drawn from reporting comparisons of this sort in Spain.
Third, CSRR disclosure of absolute data and outputs data was compared Annual
Report and Account disclosure. These categories of disclosure are typical examples
of the type of data you could expect in mainstream reporting mediums around the
topic areas of improvements, or environmental performance information. In this area
there was substantial mis-match between the two forms of reporting with the Annual
Report and Accounts reporting apparently not drawing from CSRR data. This
observation also chimes with the suggestions made above that the ability to produce a
report, rather than the report’s content, is a key element in CSRR. As Adams (2002)
notes, these type of findings “points to an absence of a desire to be accountable”
(p.245).
In summary, this section of the paper has presented, and sought to explain, trends in
CSRR which emerge from the examination of disclosure by firms in the UK
electricity industry between 1997 and 2001. Using a template of the expectations
drawn from the ACCA ERAS judging criteria, stand alone reports were analysed
using a simple count of whether or not there was any disclosure which accorded with
the judging criteria. In addition, relationships between disclosures were considered
along with relationships between reporting location.
Concluding comments
This paper sought to open up a discussion as to how one may start to analysis CSRR
in stand alone reports. Organisational practices in this area are now becoming
relatively widespread (at least among the larger UK companies such as the FTSE
100). At the same time, systematic academic scrutiny of reporting is lagging behind
developments in practice, in no small part due to practical issues about how to
determine a relevant sample and how to interrogate the reports. This paper has
sought, through a constrained examination of a sample of CSRRs to engage with these
issues and provides a pilot study of sorts. In addition, in examining trends in
reporting we hope that it is apparent that if one wishes to understand CSRR practices
of organisations, then more than their Annual Report and Accounts disclosures must
be addressed. The main themes emerging from this set of reporters is that reporting
concentrates around certain elements, that some of these elements appear to be related
to each other but that (as far as we have been able to discern) there are no strong
patterns evident in reporting.
This suggests that there is still much variety in reporting between individual
companies and that reporting practices are not yet fixed in form or content. In such a
dynamic environment there should be much of interest to researchers. In addition, if
one examines reporting elements which were found to arise together in this sample
(Table 3 and 4) then some stories about organisational processes which underlie
CSRR may be told and these may feed into a process of understanding these
organisational artefacts. The findings of this study are largely supportive of the
pictures which are emerging in other studies which examine CSRR. The strength of
this study, however, is in the number of observations of reporting which have been
made and also the time period over which data has been gathered. Finally, it is also
apparent that organisations have data which they routinely report in CSRR but not in
their Annual Report and Accounts package. Observations of differences in reporting
by medium sheds light on information which organisations deem to be relevant for
various report audiences. In addition, the data from this sample suggests that there is
some convergence in reporting practices over time.
In summary, CSRR is an important part of organisational story telling and examining
this form of reporting is likely to yield substantial benefits as researchers seek to
understanding how organisations are interacting with the corporate responsibility
agenda as evidenced by disclosures in stand alone reporting. This paper has
attempted to provide both a mechanism by which this type of research could be done
and a demonstration of the types of issues which are likely to emerge from such an
investigation.
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Appendix I: The research instrument
Environmental report disclosure
Yes/No
1. Corporate context (eg products, financial performance, locations,
employees)
2. Key (direct and indirect) impacts of business
3. Policy
4. Named board member responsible for environment
5. Name of person responsible for report
6. Headline achievements for current period
7. Existence of performance indicators and the rationale for their use
8. Targets and objectives and systematic reporting on these (eg extent of
achievement, future targets – and linkage to past targets)
9. Scope of the report (which elements of the organisation does it cover)
10. Policies for gathering data for the report
11. Product or service stewardship (eg a LCA, consideration of issues of
product design and final use of product) – eg demand management
12. Supplier procurement policy and issues arising from supplies
13. Report audience identified
14. Existence of an EMS
15. Details of ISO/EMAS certification
16. Details of internal audit procedures (frequency, follow up audits,
independent team to perform audits)
17. Contingency planning information and risk management data
18. Compliance with regulation information and quality of information
provided
19. Environmental impact data
a. Absolute
b. Normalised
c. Trend
d. Comparison with sector
e. Comparison with targets
20. Coverage of environmental impact data
a. Inputs to organisation
b. Outputs (emissions)
c. Transportation impacts
d. Land contamination and remediation
21. Conventional financial accounting information (expenditure, fines,
investments, provisions, contingencies)
22. Environmental financial statements and full cost accounting
23. The use of any type of reporting guidelines (eg GRI, or government
guidelines)
24. Outline of approach to gathering stakeholders views of the organisation
(adhoc surveys cf systematic process)
25. Provision for feedback by report readers and information on past
feedback exercises
26. Third party statement (with scope stated, comments on data and
recommendations)
Disclosure index (maximum number is 33)
Notes on www disclosure (where appropriate):
Table 1: Corporate social responsibility reports analysed
Year end
1999
Company
1997
BNFL
British energy
Eastern Group (& as TXU)
Innogy
London Electricity (& as LE Group)
National Grid
National Power (and International
Power in 2001 after the demerger of
National Power)
Northern Electric & Gas
Northern Ireland Electricity (owned by
Viridian)
Powergen
Scottish Hydro Electric/Scottish &
Southern (before merger Southern
Electric did not produce a report)
Scottish Power
United Utilities
Yorkshire Electricity
Total reports analysed (n=54)
√
√
√
√
√
√
√
√
√
√
√
Formed after the demerger of National Power
1
√
√
√
√
√
√
√
√
√
√
√
8
9
1998
2000
8
√
1
1
√
1
1
2001
√
√
√
√
√
9
√
√
√
√
√
√
√
√
√
1
√
√
√
√
10
√
√
√
11
√
√
√
12
√
√
1
9
√
No report present for this organisation for this year.
Web site reporting this year. Not analysed with this cohort of reporters.
√
√
√
12
Table 2: Descriptive statistics for reporting patterns by year
ERD
item
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19a
19b
19c
19d
19e
20a
20b
20c
20d
21
22
23
24
ERD item description
Corporate context
Key impacts
Policy
Board member
Report person
Headline achievements
Performance indicators
Targets & objectives
Scope of report
Data gathering policies
Product stewardship
Supplier procurement
Report audience
EMS information
ISO certification
Details internal audit
Risk management
Regulatory compliance
Absolute data
Normalised data
Trend data
Compare to sector data
Compare to target data
Inputs data
Outputs data
Transport impacts
Land contamination
Financial information
Full cost accounting
Guideline use
How stakeholder views
obtained
25 Stakeholder feedback
sought
26 Third party statement
ERD average total score
Percentage of companies disclosing in each environmental reporting category
1997
1998
1999
2000
2001
Total
(n=10)
(n=11)
(n=12)
(n=9)
(n=12)
(n=54)
%
%
%
%
%
%
100%
82%
75%
100%
100%
91%
70%
73%
67%
67%
42%
63%
100%
91%
83%
89%
83%
89%
30%
18%
42%
33%
25%
30%
70%
73%
67%
67%
42%
63%
40%
36%
50%
67%
42%
46%
10%
0%
33%
33%
0%
15%
90%
100%
100%
100%
75%
93%
20%
36%
50%
56%
58%
44%
10%
9%
11%
17%
9%
60%
91%
92%
89%
67%
80%
30%
46%
67%
67%
50%
52%
20%
25%
33%
8%
17%
90%
91%
92%
56%
42%
74%
100%
82%
92%
78%
92%
89%
30%
27%
25%
44%
17%
28%
90%
64%
67%
78%
58%
70%
80%
91%
92%
89%
92%
89%
100%
100%
92%
100%
92%
96%
70%
82%
75%
89%
83%
80%
100%
100%
92%
100%
83%
94%
20%
27%
42%
33%
25%
30%
50%
64%
58%
44%
50%
54%
100%
91%
92%
89%
83%
91%
90%
91%
92%
100%
92%
93%
60%
64%
100%
78%
58%
72%
60%
46%
58%
67%
25%
50%
80%
64%
67%
56%
33%
59%
17%
4%
10%
18%
42%
33%
50%
32%
30%
46%
33%
67%
42%
43%
80%
100%
83%
78%
75%
83%
70%
61%
64%
63%
83%
67%
78%
68%
83%
56%
76%
60%
Table 3: Principal component analysisa
ERD
factor factor factor factor factor factor factor factor
item
ERD item description
1
2
3
4
5
6
7
8
1 Corporate context
-0,198 0,000 -0,100 -0,094 -0,127 0,278 0,398 0,092
2 Key impacts
0,242 0,318 0,484 0,187 0,037 0,340 -0,300 0,299
3 Policy
0,029 -0,007 -0,136 0,146 0,159 -0,056 0,101 0,102
4 Board member
0,055 0,186 0,179 -0,159 0,045 0,093 0,354 0,559
5 Report person
0,036 -0,303 0,257 0,621 0,147 -0,016 -0,182 -0,301
6 Headline achievements
0,101 0,366 -0,100 -0,145 0,014 0,111 -0,300 -0,091
7 Performance indicators
0,197 0,113 0,094 -0,027 -0,053 0,187 0,109 0,161
8 Targets & objectives
0,221 0,296 -0,221 0,187 0,252 -0,106 -0,002 -0,189
9 Scope
-0,057 0,247 -0,274 0,072 -0,118 0,727 0,128 -0,002
10 Data gathering policies
0,204 0,154 0,040 0,108 0,082 0,174 0,054 -0,095
11 Product stewardship
0,840 0,040 0,065 -0,073 0,146 -0,047 -0,125 0,064
12 Supplier procurement
0,659 -0,116 -0,395 0,150 0,017 -0,116 0,111 -0,129
13 Report audience
0,147 0,090 0,134 0,015 -0,141 -0,003 -0,078 0,138
14 EMS
0,461 0,387 0,257 0,351 -0,080 0,030 0,367 0,026
15 ISO certification
-0,197 0,780 0,032 -0,008 -0,013 0,016 -0,083 0,055
16 Details internal audit
0,055 0,564 0,166 -0,129 0,096 -0,239 0,287 -0,177
17 Risk management
0,130 -0,008 -0,018 0,144 0,143 -0,019 0,779 0,055
18 Regulatory compliance
0,105 0,575 -0,097 0,004 0,125 0,150 -0,123 0,225
19a Absolute data
0,025 -0,065 0,216 0,166 0,832 -0,118 0,124 -0,027
19b Normalised data
0,085 0,155 0,050 -0,540 0,366 0,185 -0,154 0,297
19c Trend data
0,048 -0,100 0,663 -0,070 0,238 -0,057 0,416 -0,026
19d CF sector data
0,245 -0,117 0,079 -0,017 0,076 -0,045 0,212 0,510
19e CF targets data
-0,017 0,160 -0,034 0,050 0,092 0,041 0,030 0,087
20a Inputs data
0,079 0,079 0,855 0,135 0,121 -0,077 -0,087 0,020
20b Outputs data
0,102 0,102 0,044 -0,119 0,898 0,062 0,051 0,081
20c Transport impacts
0,763 -0,093 0,217 0,099 0,001 0,041 0,188 0,134
20d Land contamination
0,127 -0,035 0,245 0,587 -0,014 -0,414 0,209 0,282
21 Financial information
0,024 0,266 -0,200 0,118 -0,075 -0,791 0,103 0,121
22 Full cost accounting
0,019 -0,008 -0,028 0,095 0,026 -0,116 -0,066 0,781
23 Guideline use (e.g. GRI)
0,180 -0,150 -0,004 0,174 0,217 0,080 0,148 0,265
24 How gather stakeholder views
-0,056 0,000 -0,096 0,087 0,171 -0,064 0,303 -0,021
25 Feedback sought
0,073 0,101 -0,061 0,812 0,038 0,098 0,064 0,125
26 Third party statement
-0,029 0,189 0,183 0,038 0,260 -0,306 -0,045 -0,036
a
Principal component analysis. Varimax with Kaiser normalization. Rotation converged in 20 iterations.
factor
9
0,296
0,030
-0,022
-0,043
0,209
0,409
0,637
0,065
0,132
-0,041
0,076
0,066
0,192
0,141
0,065
0,103
0,065
0,099
0,052
0,129
0,054
0,427
0,099
0,139
0,061
0,098
0,071
0,044
0,113
0,539
0,052
-0,063
0,640
factor
10
-0,450
0,121
-0,127
0,070
0,135
0,363
0,054
0,067
0,039
0,054
0,052
0,045
-0,066
-0,072
0,253
-0,044
0,024
-0,558
-0,031
0,167
0,142
0,133
0,868
-0,091
0,091
-0,096
0,067
0,060
-0,049
-0,204
-0,030
0,019
0,037
factor
11
-0,021
0,287
-0,071
0,182
-0,014
0,133
0,154
0,646
-0,215
-0,794
-0,001
-0,026
0,024
0,192
-0,070
-0,021
-0,058
0,103
0,056
0,288
-0,058
0,342
0,024
-0,135
-0,023
-0,081
-0,064
0,116
-0,101
-0,323
-0,031
0,056
-0,056
factor
12
-0,179
0,021
0,127
0,022
0,072
0,111
0,097
0,070
0,109
0,039
0,054
0,044
0,761
-0,151
0,148
-0,071
0,200
-0,013
0,091
0,134
0,168
-0,047
-0,123
-0,044
-0,070
0,037
-0,141
0,217
0,099
0,131
0,792
0,165
0,247
factor
13
0,390
0,042
0,836
0,343
0,161
0,305
-0,103
0,171
0,072
0,145
0,135
-0,282
0,101
0,000
-0,127
0,302
0,098
0,105
0,130
-0,005
-0,106
0,114
-0,059
-0,092
0,017
-0,003
0,049
0,100
-0,023
-0,383
-0,001
-0,003
0,180
Table 4: Principal component analysis summary
Significant ERD elements10
Suggested component
descriptor
Trend of component over time
(1997 to 2001)

















Product stewardship
Transportation impacts
Supplier issues
Details of EMS/ISO
Legal compliance
Internal audit details
Environmental inputs data
Trend analysis of data
Key impacts
Stakeholder feedback
Named person on report
Land contamination
Normalised data (-ve)
Outputs data
Absolute data
Financial data (-ve)
Scope of report
Going beyond the
boundaries
Rise to peak in 1999 then falls
Audit and
compliance systems
Declined every year from 1997
to 2001
Environmental data
Declined every year from 1997
to 2001
Openness
(normalised data may
hide actual impacts)
Declining since 1998
Roller coaster trend over time
7

Contingency & risk
Impacts of
organisation
Scope clear (but not
articulating in
financial terms)
Risk management
8














Full cost accounting
Board member named
CF sector data
Verification statement
Performance indicators
Reporting guidelines
CF targets data
Legal compliance (-ve)
Context (-ve)
Policies re data (-ve)
Targets
Methods re stakeholders
Report audience
Policy
Compo
nent
(from
Table 3)
1
2
3
4
5
6
9
10
11
12
13
10
Roller coasting but rise in 2001
Outward looking
Falling to 1999 then roller
coasting
Roller coasting (note small
number of observations form this
component)
Fall to 1998 then a rising trend
Own rules not others
Falling trend
Trust us on our rules
Gentle roller coasting
Stakeholder focus
Rising to peak in 2000 then
falling
Falling to 1999 then roller
coasting
Responsibility
Policy
Elements are listed from the most strong to the least strong association. Those items in bold in Table
3 have been included in this section. The direction of associations between components are all positive
unless indicated otherwise.
Table 5: Comparison of financially orientated information by medium
Year end (with percentage of companies
disclosing in each category)11
1997
1998
1999
2000
2001
(n=10)
(n=10)
(n=10)
(n=9)
(n=12)
Financial statement disclosures (FSD)
1. Accounting policy on the recognition and
valuation of environmental expenses and assets
2. Accounting policy for recognition and
valuation of environmental liabilities
3. Current expenditure on activities related to
energy savings and efficiency projects
4. Nature, purpose and accounting value of
environmental assets
5. Current environmental expenses distinguishing
between ordinary and extraordinary items and
describing the purpose of the expenditure
6. Environmental provisions
7. Environmental contingent liabilities
Annual Report disclosures (ARD)
1. Policy & programmes adopted for
environmental protection measures
2. Improvements which have been made in key
areas of environmental protection
3. Implementation of environmental protection
measures as a result of legislation
4. Information on environmental performance of
the organisation such as energy use, materials use,
emissions and waste disposal
5. Cross reference to a separate environmental
report
CSRR disclosure scores (ERD)
1. Policy
2. Absolute data on impacts
3. Outputs data
4. Conventional financial accounting information
11
9%
20%
20%
22%
17%
27%
30%
30%
67%
42%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
27%
0%
30%
10%
60%
20%
56%
22%
42%
17%
64%
60%
80%
89%
58%
46%
40%
40%
44%
50%
0%
0%
20%
56%
25%
27%
30%
20%
22%
42%
73%
70%
80%
67%
58%
(n=10)
100%
100%
90%
80%
(n=11)
91%
100%
91%
64%
(n=12)
83%
92%
92%
67%
(n=9)
89%
100%
100%
56%
(n=12)
83%
92%
92%
33%
As far as possible this data set comprises matched pairs of companies Annual Report and Accounts
and CSRR disclosure. In 1998 and 1999 some Annual Report and Accounts were not able to be
obtained because reporters were part of a larger group and hence their own reports were not in the
public domain.
19