Verde Environmental Consultants & Oil Leak Clean Up Specialists Large corporates don’t report enough on their environmental impact – research – Verde – Complete Environmental Solutions
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Large corporates don’t report enough on their environmental impact – research

Alliance for Corporate Transparency led by Frank Bold – an international consortium of lawyers from the Czech Republic – published a breakthrough analysis of the 1000 largest European companies on the quality of environmental, corruption and human rights disclosure.

So far, no one in the world has conducted a major in-depth analysis of the non-financial portion of the annual reports of large corporations.

The most important findings of the analysis are: 

  • 19 out of 20 large companies publish information on the environment, human rights and corruption.

In this respect, the implementation of the Non-Financial Reporting Directive can be considered successful. Since 2018, most companies have extended their annual reports on environmental issues, corruption, human rights. However, most companies avoid publicly declaring improvement targets and subsequently reporting on their achievement.

  • 82% of companies have a climate change policy, but only 35% of companies set targets in this area.
  • Only 28% of companies report on how they are meeting their targets of reducing the impact on global warming.

The most watched topic worldwide – global warming – has not prompted large companies to take the topic responsibly, clearly and set clear goals. This is a fundamental revelation of the analysis.

  • 84% of ICT companies (computer and communication technology) report that they have a privacy policy.
  • Only 8% of companies report whether they comply with their privacy policy and with what success.

Data analysis suggests that the GDPR Regulation is not taken very seriously and companies are most likely not systematically working to improve personal data protection. 

Environmental Reporting

Perhaps the biggest test of whether the EU Non-Financial Reporting Directive is able to embrace current challenges, is surely in relation to the step-change within the financial community, in seeing climate change as a financial stability issue, and one which is being driven by Central Banks. The leadership already given by the ambitions of Europe’s Green Deal, the European Commission’s sustainable finance action plan, the EU taxonomy for sustainable activities and in the already updated NFR Directive voluntary guidelines to reflect the recommendations of the Task Force for Climate related Financial Disclosure (TCFD), must now be reflected in revisions to the Directive itself.  The results show the marked gap between what companies say about climate change and support for the TCFD, and their actual reporting practice.  In addition to most companies’ failure to report on targets on climate change, even in the energy sector where climate-related reporting is understandably farthest advanced, the vast majority of companies fail to have specific risk mitigation strategies. Overall, less than 32 percent of all companies report on such a strategy, while only 23% address specific climate risks. Risks and metrics are both intrinsic to the TCFD recommendations.

The areas covered under Environment were:

  • Climate Change
  • Use of Natural Resources
  • Polluting Discharges
  • Waste
  • Biodiversity and Ecosystem Conservation

Commenting on the results, Filip Gregor, Head of Corporate Responsibility at Frank Bold said “Research results show that existing EU legislation is not meeting its objectives, and the only way to solve this problem seems to be to identify which companies should report.”

Investors call for environmental, corruption, and privacy goals. The market, not just the European Commission, calls for publicly traded companies to be transparent. Companies with quality policies and information in these areas will be more successful in raising capital,” Pavel Franc, Consortium Director Frank Bold commented.

Source – Frank Bold

Verde Environmental Consultants provide expert advisory, monitoring and assessment services from our offices in Wicklow, Cork, Mayo and Galway in soilairwaterwasteenergynoise and ecology disciplines

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