More companies talking, but few acting, on environment

Growing numbers of British firms are addressing environmental issues at board level, according to a survey by the Institute of Directors (IoD). But only a small minority have established environmental policies, carried out environmental audits or attempted to capitalise on the business opportunities presented by environmentalism, and few have made significant investments in environmental protection.

The survey was carried out for the IoD by the market research company Taylor Nelson. It was based on telephone interviews with directors from 325 companies which were broadly representative of the British corporate economy.

Among the main findings were:

  • Environmental issues featured on the board agendas of 65% of companies in 1992, compared with 53% in 1991. The figure was highest among mining and construction (89%) and manufacturing firms (80%). Only 12% of the interviewees said that their companies devoted more than 10% of board time to environmental issues in 1992.

  • Only 19% of the sample believe that no board time will be devoted to environmental issues over the next five years, compared to 29% in 1991. 22% expect their boards to spend 10% or more of their time on environmental matters over the next five years.

    However, the boards of 22% of distribution firms and 31% of companies in the business services sector are not expected to consider environmental issues at all in the next five years. Commenting on the former figure, the IoD says it is "surprising that directors of companies in a sector which is heavily involved in transport, refrigerants, large areas of land and so forth would be expecting to spend no time on environmental matters at board level."

  • Companies with an environmental policy are still in the minority. In 1991, 22% of firms had a policy. By 1992 the figure had risen to 28%.

  • Of the factors contributing most to companies' concern about environmental pressures, the need to comply with legislation was cited as the top priority by 36% of directors. In 1991 the figure was 29%. Next were social responsibility (26%) and market forces (22%).

    Internal business considerations were cited as a factor by only 7% of the sample, indicating, according to the IoD, that "the message on efficiency and waste reduction had yet to be fully absorbed."

    Overall, these responses suggest that businesses are "still reacting to environmental issues as a threat and not as an opportunity," the IoD believes.

  • Environmental audits have been carried out by only 12% of the sample, and the figure was low even in mining and construction (29%) and manufacturing (21%).

  • Only 25% of the sample have responded to environmental pressures by doing something innovative. Most of the innovations were either in processes (44%) or products (38%), with the remainder being marketing initiatives or employee education.

  • Environmental pressures appear not to be imposing significant costs on most companies. Only 42% have made capital investments to meet environmental obligations, and three-quarters of these have spent less than 10% of their capital budget in this area.

    Overall, while the trend in corporate awareness and some aspects of the business response to environmental pressures is broadly positive, it is evident that many companies have yet to introduce any formal environmental programmes. And many of those that have done so were driven by legislation, suggesting that the IoD's demands for a shift in Government policy towards self-regulation (ENDS Report 204, pp 3-4 ) are running some way ahead of business reality.

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