"It was a massive pain. It threw up an enormous number of queries. It generated a huge volume of work, and kept pretty well everyone in the environmental function burning the midnight oil for weeks on end. And it is now provoking a good deal of corporate soul searching."
"It", as described by one environment manager within ICI, was the process of compiling the group's first annual environmental report and its aftermath. "It" is also tangible evidence of the drive initiated by ICI to improve both its environmental performance and its communications on environmental matters after a decade in which it was outshone on both counts by quite a few of its competitors.
ICI, it should be recalled, entered 1989 with environmental management arrangements little changed since the early 1980s. It possessed a group environmental policy sketching out its objectives in broad terms, but - in a company historically run on highly devolved lines - the practical implementation of these was left very much in the hands of individual businesses.
Cultural change1989 saw the first break with this tradition. Each business was told to submit regular reports on its environmental performance to group headquarters. And each site was asked to prepare a formal environmental improvement programme (ENDS Report 170, pp 10-12).
These innovations were hardly earth-shattering. At a time when US chemical companies were agonising over having the intimate details of their "toxics releases" disclosed by law to anyone who wanted to know, ICI's new reporting system merely required its sites to pass up the line information on pollution incidents, public complaints, and breaches of environmental permits.
What these simple arrangements did achieve, however, was to introduce the idea that a site's environmental performance was open to measurement and something for which its management could be held to account. And in doing so they paved the way for a bigger initiative in November 1990, when ICI's Chairman, Sir Denys Henderson, announced a new set of group environmental objectives (ENDS Report 190, p 3).The most specific and important of these was a pledge to cut ICI's generation of gaseous, solid and liquid wastes by 50% by 1995.
It requires little sophistication to predict that environmentalists are bound to greet a target of that kind by demanding to see both the full baseline data and a continuing stream of evidence to demonstrate steady progress towards it. At the time, however, there appeared to be little recognition within ICI of the need to take this next step on the environmental treadmill. It was not until some way into 1991, in fact, that the company confirmed that it would publish an annual progress report. The first was issued on 18 March, alongside the group's annual report and accounts for 1991.
Corporate environmental reports are still few and far between, providing few landmarks for comparing reporting styles. In broad terms, however, ICI's approach falls somewhere between that of BP and Monsanto.
BP's recent first environmental report was issued before it had got very far in assembling quantitative information on its environmental performance, and largely for this reason the end-product was a rather superficial and self-congratulatory affair containing few data and no targets (ENDS Report 204, pp 17-19 ). BP has promised to do better next time.
On the other hand, the first annual environmental review published last summer by the US chemical company Monsanto contained both site-by-site and aggregated quantitative information on "toxics releases" to air, water and land from all its manufacturing facilities world-wide (ENDS Report 200, pp 8-9). And interested parties were invited to apply to the group's headquarters for more detailed information.
ICI has taken a different tack. Its report contains highly aggregated data on releases to air, water and land from the group's operations across the globe for the baseline year 1990 and for 1991. Each of its sites is to issue a separate environmental report. The first two of these also provide data in a fairly aggregated form (see box). Anyone seeking more specific information will have to test ICI's attitude to disclosure on a site-by-site basis rather than by applying to its headquarters.
ICI considered but rejected the Monsanto approach. "We decided not to make a total inventory-style statement of our environmental performance," says John Coleman (Group Environmental Affairs Manager). "We took a conscious decision to make our report a slim volume and to keep it simple, largely because we didn't want to confuse people. Its aim is to demonstrate progress towards our objectives at a corporate level. Local impacts will be addressed in the site reports."
The group report is based on returns from some 400 ICI facilities across the world. According to John Coleman, ensuring that these reported their releases to the environment on a reasonably consistent basis was an immensely challenging exercise, raising a host of definitional questions which will confront any company drawing up an inventory of its releases for external reporting or some other purpose.
Monsanto's approach was to include in its inventory the 322 chemicals which are notifiable by law in the USA, while allowing its non-US operations to add chemicals of "local concern" to this list.
ICI's inventory is more broadly based. It includes, for example, releases of sulphur and nitrogen oxides to air, which are not classified as "hazardous" in national lists but are the principal causes of environmental acidification. At the opposite end of the spectrum, it embraces some innocuous non-process materials, such as earth surplus to landscaping requirements at Teesside which was deposited in landfill sites. The effect of including most wastes in this way, John Coleman points out, is to make the totals in ICI's inventory look very large by comparison with other firms' inventories.
Not all the wastes arising at ICI plants feature in the inventory. Those entering on-site treatment facilities such as incinerators or effluent treatment plants were excluded, with only the final residues generated being reported. Residues going for recycling were also excluded, although if the same materials were subsequently to be landfilled or disposed of by other means they would be treated as waste and added to the inventory - the purpose of this rule being to encourage recycling.
Likewise, a differentiation was made between water contained in liquid effluents discharged to the aquatic environment and wastes consigned to landfill. The former was excluded from the inventory, the latter included.
One area where inconsistencies may have crept in was the definition of "hazardous" waste which sites were told to adopt when reporting their releases to land and water. The principal consideration here was the local legal definition of what is "hazardous". However, John Coleman maintains that since most of ICI's hazardous waste is generated within OECD countries with not dissimilar legal definitions in this area, the potential for inconsistency is more apparent than real.
Acquisitions and sales
One issue which appears not to have been resolved is how to deal with the wastes generated by plants which are acquired or sold, or which feature in the baseline inventory for 1990 but are subsequently closed.
"This is an area of major debate," says John Coleman. "We are tending to the view that, within a site, if a plant is shut, we will call it waste reduction. But if we sell it as a going concern, we will need to make some adjustment in the inventory. With a company as big as ICI, there is always some movement in and out, and the danger is that we could end up altering the baseline every year - so we will probably 'footnote' changes in the inventory arising from acquisitions or divestments."
Decisions on where to draw the boundaries round an inventory of releases are often likely to be arbitrary, but by and large ICI's approach seems to be defensible. "The important thing," John Coleman insists, "is to keep the inventory consistent so as to provide a sound basis for comparison from year to year."
Drawing definitive conclusions about ICI's progress towards cutting its waste generation by half by 1995 would be unwise after just one year. However, some comments may be made on the 1991 figures (see table ).
The success highlighted by ICI's Chairman in his introduction to the environmental report is the 30% reduction in hazardous waste generation in 1991. Some of this was fortuitous, arising from the demolition of buildings classified as "hazardous" during 1990. But ICI insists that the reduction was "quite substantial" even when this factor is taken out of the equation.
At first sight, the figures for ICI's total waste generation also appear to be moving in the right direction, with a 3.7% reduction in 1991. However, these need to be set against the group's output for the year. ICI's turnover was, at £12.49 billion, down by 3.3% in 1991. By volume, however, its sales appear to have fallen by around 10%.
Impacts of recession
The implication is that waste generation actually increased per unit of output in 1991. With demand depressed, ICI's manufacturing facilities doubtless operated less efficiently during the year. Expressed against the financial value of its output, the group generated about 0.66 kilograms of waste per £1 of sales in 1990 - and again in 1991.
The picture for energy is very similar. One of the four environmental objectives announced by ICI in November 1990 was to mount a "more ambitious energy and resource conservation programme". No firm targets were set, but the environmental report claims that the group's energy consumption and carbon dioxide emissions - which were cut by 15% between 1971-90 while its output doubled - were reduced by a further 6% in 1991. Set against the decline in activity, however, the reduction appears to turn into an increase per unit output.
Attempting to extract further conclusions from the data would not yield many meaningful results. But it has been noted within ICI that, while disposal of hazardous waste to land on-site plummeted in 1991, off-site disposal barely changed - which is not the direction in which the trend should be moving if the group is to fulfil its pledge to "try to eliminate all off-site disposal of environmentally harmful waste".
Two questions about ICI's ability to meet its 1995 target need to be posed quietly at this stage. One is the impact of the recession on its investment capabilities. In 1991, the group slashed its capital expenditure budget by 12% to £887 million, but spending on environmental protection increased by some 50% to reach about £120 million in 1991. Whether the group will be prepared to sustain that level of investment if the economic downturn is prolonged remains to be seen.
Secondly, it is apparent that some of the waste management options envisaged by the group will produce substantial volumes of secondary residues - a notable example being the gypsum by-products of neutralising the acidic effluents discharged by its titanium dioxide plants at Grimsby and Calais.
The effects of these secondary materials on the waste inventory will be "quite interesting", muses John Coleman. Although he remains "fairly confident" that the 50% reduction target will be met, the larger the amount of secondary waste produced, he points out, the greater will be the need for waste reduction elsewhere in the group. ICI Paints' recent achievements suggest there is plenty of scope for cost-effective programmes in this area in at least some of its businesses (see box).
Elsewhere, the report passes a frankness test by revealing that ICI was prosecuted for environmental offences on 36 occasions world-wide in 1990, and another 26 in 1991. Ten of last year's prosecutions were in North America, and eight in the UK.
The report has little to say about another of the four objectives announced in 1991, when Sir Denys Henderson said that the company would look to establish "many more" recycling schemes for its products where there were clear environmental benefits. Three examples of recycling of catalysts, paints and agrochemical containers are given in the report, but these hardly amount to the "clear policy and practice" which were pledged for 1991.
Part of the explanation for the slow progress on this front may be found in the report's concluding comment that "it is very difficult to quantify the full environmental effects of recycling activity." ICI has only just begun to apply the techniques of life-cycle analysis to its products, and it looks like being some time before this yields new recycling projects.
ICI's progress against its environmental objectives may appear unremarkable, but in its defence the company points out that it will take time to plan and complete the investments needed to make substantial inroads into its waste generation.
Likewise, the effects of simply measuring and reporting waste production should not be underestimated. "Within the environmental function," says John Coleman, "both processes are highlighting issues for people, encouraging comparisons of sites' performance and prompting questions about why one site is doing better than another. Particularly within businesses, they also aid the spread of good practice quite considerably."
The ready availability of performance data is also likely to be helpful to the group environmental function in planning its new programme of audits of the environmental management systems operated by ICI businesses.
The environmental revolution within ICI still has a long way to run. To have got a performance measurement, reporting and targeting system up and running within three years is not a bad start. But more tangible evidence that it is on course towards its objectives will be sought from next year's environmental report.