Last update: Sept. 30, 1999- Jump here to see what's new.

Environmental Auditing as a Tool for Responsible Businesses

The Voluntary Regulations

In April 1995 a new regulation drawn up by the European Union went into effect on a voluntary basis, known officially as the Environmental Management and Auditing System, EMAS. It was designed to increase the credibility of companies' claims to be "environmentally friendly." External auditors set up shop to verify or negate such claims, and they in turn were trained for expertise and certified for objectivity. Certification bodies to ensure this were formed on the national level by EU member states.

At the same time the International Standards Organization has its Technical Committee TC 207 working on its Environmental Management System, ISO-EMS.

It is easy to see that acceptance of these voluntaryinstruments by companies will be the critical factor. Industry's own initiative at ISO has gained acceptance among companies, and has been meshed with EMAS.

Making corporate environmental reports more easily understandable

Corporate environmental reports (CER) are intended for "stakeholders" in companies' affairs such as the public. But they don't read quite like novels do. In fact, although they're terribly informative, they're rather boring to read. Who can understand all that insider stuff except someone from the industry being audited?

Early in 1997, the Coalition for Environmentally Responsible Economies, CERES, in Boston announced a new strategy to make environmental reporting more easily understandable for stakeholders such as the public (reported originally in the GreenMoney Journal and in July/August issue of Business Ethics). CERES Executive Director Robert Massie was asked: "What lies ahead?" He replied, "Standardized environmental reports, so meaningful comparisons can be made within and among industries. CERES coalition members intend to continue leading the way in this. Some day -- probably within the next decade -- investors will be able to log onto the Internet and pull up a detailed standardized report on the environmental performance of every company listed on American stock exchanges. ...Banks will respond favorably to those firms with excellent records, driving down their cost of capital."

"That's where we want to go. And developments are well underway. CERES has already created the leading standard report format in the world. And we're working to globalize our reporting format and to make it fully consistent with ISO 14000 standards. The overall goal is increased dialogue and disclosure -- to move companies away from a focus on compliance, and toward a focus on the opportunities of sustainability."

In 1999 this has become the Global Reporting Initiative, holding a conference in London from 4-5th March 1999 to introduce its model sustainability report. The GRI model compares well with existing corporate reporting systems.

Further Reading

• New regularly updated list that can be downloaded from EPA entitled Resources for Promoting Global Business Principles and Best Practices: A Directory of People, Organizations and Web Sites

• Book on global warming and the insurance industry Jeremy Leggett, Director of Greenpeace International's Solar Initiative, seems to feel that the pressure critical for the success of EMAS should come from stakeholders other than the public such as banks, insurance companies or government. He has succeeded in getting insurance companies to take global warming seriously and to sign a United Nations Environmental Programme UNEP declaration. Many insurance executives even contributed to a new book on the topic. This is described by several media sources:
  • Greenpeace's Website,
  • Business Week International magazine (May 6th, 1996, page 54-55), and
  • the Financial Times

  The publisher of the English-language book Climate Change and the Financial Sector: the Emerging Threat, the Solar Solution, 212 p., paperback, is Gerling Akademie Verlag, Munich, a subsidiary of the leading German insurance company of the same name in Cologne with a Website describing the book. The book costs US$ 26 or Sterling 15.95 or DM 36 postpaid, and can be ordered from fax +49-89-2107684. (A review copy was provided for the Pagemaster by the publisher.)

• Another possibility is exerting more on pressure from investors, especially socially responsible investors, SRI. Critical Shareholders is an organization for this.

Go back to the Socially/ Environmentally Responsible Organizations page.

This page was once part of the "Ethical Business" Directory.