Environmental impact blast

By Dita De Boni

New Zealand companies will weaken their competitive edge in the world unless they start including their environmental impact in annual reports, says accountant, environmentalist and author Bruce Gilkison.

As authors of those reports, accountants have a unique and critical responsibility to show more than a bottom-line profit or loss, says Mr Gilkison, who makes the case for environmental reporting in his book Accounting for a Clean Green Environment.

Mr Gilkison and KPMG have written Accounting in the hope that accountants and companies will voluntarily disclose information about their relationship with the environment.

Only 2000 copies of the book have been printed but Mr Gilkison is pleased by the number of companies ordering it - more companies than accountants, he says.

Accounting will also be distributed to universities and polytechs, where today's accountancy students are far more familiar with the concept of environmental reporting.

The book has been written to spur accountants, companies, local and regional councils and national politicians into action, Mr Gilkison says.

Two years ago, the Government announced environmental reporting would be mandatory - the same time New Zealand was shown to have the lowest level of such reporting among 13 OECD countries.

Mandatory legislation has since been shelved and Mr Gilkison says the Government opted for voluntary measures instead.

An environmental report includes an organisational profile, an outline of key interactions with the physical environment, a company policy statement, performance and compliance with present environmental legislation, and independent verification.

Mr Gilkison says that as advisers to management, accountants have a key responsibility to provide a complete picture of a company's activities to the public.

"Under the name accountant, I would look at the word accountability - there is no suggestion that accountability is solely to do with money.

"Accountants are extremely well paid and have had many years of training to do something which is much more important than making sure two sides of a balance sheet balance."

Mr Gilkison says companies here have been "very slow" in adopting environmental reporting.

Only two corporate contenders qualified for the recent 1999 Environmental Reporting Awards.

Watercare New Zealand, winner of the award for five years in a row, is "unrivalled by other New Zealand companies for their reports," he says. ECNZ was the only other finalist.

By comparison, similar awards in Britain have attracted up to 50 finalists, including British Telecom and British Airways.

Many international companies in countries like Canada, the US, Australia and Norway are required by law to produce various degrees of environmental reportage, usually as a stand-alone document.

But Mr Gilkison says the cost of even one page of an annual report devoted to environmental impact would have huge pay-offs for Kiwi companies.

"Disclosure breeds trust."

He believes companies are doing even less than they would have done normally because the "pressure is off" New Zealand business to provide information.

"Our ability to market New Zealand as a clean, green environment will be compromised if we don't do something about accountability.

"Free trade is probably a good thing, but where there aren't ways of giving a local industry an advantage, countries will use their competitive environmental advantage as a barrier to countries that don't have the same standards.

"All signs from overseas show that in the world arena, environmental accounting will become much more important over the next decade," says Mr Gilkison.

"In New Zealand, there is still a big gap in the sort of corporate information we are producing and it is important that accountants move to address that criticism and do something positive for society at the same time."