Green benchmarking

July 12, 1999
London-based environmental consultant Sustainability Ltd. is about to publish a report on how the petroleum industry reports on environmental and social issues.

London-based environmental consultant Sustainability Ltd. is about to publish a report on how the petroleum industry reports on environmental and social issues.

The company began its "green" benchmarking project last year, predicting that some companies would be keen to compare data with competitors while others would prefer to hide their impact (OGJ, July 13, 1998, p. 34).

The reporting methods of 50 companies were surveyed, and other publicly available data such as press reports were included. All companies were invited to respond to the survey.

Shelly Fennell, director of Sustainability, said that 31 companies confirmed or added to the findings. Most of these were supportive of the project, while 19 ignored the survey completely.

"Environmental and social reporting is well-entrenched among the bigger companies," said Fennell. "Of the 50 chosen companies, 34 had published an environmental report.

"Surprisingly, some companies that we did not think were under great shareholder pressure fared particularly well. We found quite a lot of good work out there, but it needs to be pulled into a coherent whole."

Findings

The report makes interesting reading, reflecting an industry coming to terms with green reporting at differing rates-or not at all.

Larger companies were generally said to be adopting environmental and social reporting as standard practice, though small companies, exploration and production companies, state-owned firms, and project-based consortia often lagged behind.

Much of the disclosed data was quantitative, comprising inputs and outputs of products and pollutants, reports of accidents and spills, listings of environmental spending, and management policies.

"What we would have liked to have seen," said Fennell, "was an indication of the extent to which companies are moving towards making cleaner transport fuels.

"We would have liked to have been given an idea of what percentage of their output was renewables. Also, we would have liked to have seen some measure of the disturbance to land and biodiversity by company operations."

Recommendations

Fennell said the report was not intended to act as a league table but instead was a means to promote better reporting and performance.

Sustainability found two major problems with the industry`s environmental reporting: a lack of clarity within individual reports over what the data covered and a lack of comparability between company reports.

"We recommend strongly that the industry adopts a standard reporting method," said Fennell. "This needs to be done in two parallel ways: Companies should provide a full set of indicators of performance, and they should highlight a core set of 5-10 indicators for benchmarking across companies.

"We have recommended broad categories for a best-practice framework, but we are not best-placed to decide what the indicators should be. Some intercompany benchmarking is being developed, and we recommend that these models be incorporated into the framework. Importantly, the industry leaders should exert pressure on their peers."