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The Wheel
The Ecobusiness Consultants Newsletter
Vol. 3 No. 1
CONTENTS
Coming Clean has become a Business Imperative
Marketing is the Key for Local Government
Environmental Businesses Need Advisers Who Share Their Philosophies
Coming Clean Has Become a Business Imperative
Corporations - especially public companies - which ignore the imperatives of environmental reporting are simply burying their collective heads in the sand, according to the chief executive of Ecobusiness Consultants, Lou de Leeuw
"Australian companies have been alarmingly slow to understand - or at least to demonstrate they understand - how the world has changed with regard to environmental attitudes," he said.
"Concern about ecological matters is no longer simply the preserve of lobby groups or what used to be known as greenie' fringe.
"A recent survey of the investment community by the Institute of Chartered Accountants showed that 63 per cent regarded the auditing of environmental disclosures by public companies as important to highly important, and 68 per cent saw this as an area of opportunity.
"More than 65 percent of users of annual reports want more environmental disclosure (but only 24 per cent of the companies surveyed produce annual environmental reports).
"Another survey of the general population showed close to 75 per cent of adult Australians cite damage to the environment as their major concern for the future, and more than 60 per cent want to use more environmentally goods and services," added Mr de Leeuw.
"Combine those facts with increasing levels of Government regulation - and likelihood of even stricter controls in the future - and you have a compelling case for companies to take pro-active attitude to environmental reporting."
However, too many companies tend to maintain a minimalist approach to environmental approach to environmental practise - or, even worse, place the emphasis on planning for damage control' in the in the event of an environmental crisis.
"Companies which do not take a pro-active stance now are placing their entire futures in jeopardy," said Mr de Leeuw.
"They risk erosion of their market share, reductions in share prices and increasing levels of government attention. Directors and managers are exposed to penalties and legal sanctions if they do not carry out environmental due diligence."
It was not only obvious targets such as mining companies and factories with high emission levels which needed to demonstrate a positive attitude to the environment.
"It is becoming obvious that investors and consumers are beginning to attach increasing significance to every company's environmental record.
"This applies even if there is only an direct connection between the company and any environmental impacts," he said.
"The companies which can demonstrate the best and most open attitudes will be the ones which will thrive in this new era of environmental awareness."
While Australian companies have generally been slow to embrace environmental reporting, unlike their European counterparts, there have been some notable exceptions. WMC Limited, one of Australia's largest and at times most controversial miners, has been one such exception, said Mr de Leeuw.
"WMC published their first Environmental Progress Reports two years ago. It is a summary of their impacts - both actual and potential - on the environment and their environmental management policies and programs.
"It is published in a size and format similar to an annual report. I would say it's a useful model for companies wanting to make genuine progress in environmental reporting, particularly to shareholders and politicians.
"We also have a number of reports published by overseas companies such as British Telecom and British Airways, which give a fuller perspective on environmental reporting,"added Mr de Leeuw.
Ecobusiness Consultants provides full environmental reporting services for companies, including the development of criteria and reporting procedures, information gathering and analysis, bench marking, management planning, report preparation and presentation.
Marketing Is The Key For Local Government
The key to improving the performance of local government in developing new environmental initiatives often lies in improving the marketing of existing services, according to chief executive of Ecobusiness Consultants, Lou de Leeuw.
"In order for the community to support progress, it must understand how past achievements are providing direct benefits," said Mr de Leeuw.
"If they see local authority with a high environmental profile, and they become aware of the positive results being achieved, then they are going to be more receptive to innovation and new developments.
"Recently I attended a conference in the UK on Business and the Environment, and through that I became aware of the progress on environmental improvement being made in the city of Bradford.
"In 1994 the Bradford council established a program called BEST - The Business and Environment Support Team - to bring together all its environmental support services and market them effectively to business.
"The high profile that has been achieved has rubbed off on the business community, with the result that there has been an accelerating level of direct action by business to clean up its act.
"At the same time the general community - Bradford has a population of 300,000 - has developed an increasing level of pride in their city's profile as an environmental leader," added Mr de Leeuw.
"Now, the really interesting thing about the BEST program is that when you examine the details of the services it provides, you find that they're not too different from the services already being provided by South Australian councils.
" The difference was largely one of perception. Attempts by government to educate or persuade business to change its attitudes are perceived as meddling or imposition. But a pro-active approach to packaging programs and creating community pride and support can be far more effective in encouraging business to want to participate.
"In my discussions with the Bradford people, I learned that the higher the profile the BEST program achieved, more business wanted to become involved," said Mr de Leeuw.
"There is a clear message to Local Government - environmental programs can be more effective, can lift community pride and can actually enhance the standing of the council. But effective marketing is the real key."
Ecobusiness, Consultants provides advice and services for Federal, State and Local Government bodies in the development, management and marketing of environmental programs.
"With councils mergers very much in the air, now is the perfect opportunity for one of the partners in a prospective merger to take a lead in this important area, to establish policy leadership in the expanded council," added Mr de Leeuw.
Environmental Businesses Need Advisers Who Share Their Philosophies
Environment-related small businesses often have more difficulty than most in establishing effective business networks.That's the view of chief executive of Ecobusiness Consultants, Lou de Leeuw.
"It's actually quite ironic, because within their own community, environmental businesses are very good networkers and often have very good connections.
"But it's in their links with the larger business community that the networks often break down. It's the network of ancillary and advisory services that the environmental business often does not have access to.
"This is partly because many environmental businesses are still seen as fringe' concerns, despite the increasing penetration of mainstream thinking by environmental concerns," added Mr de Leeuw.
"And it's also because many environmental businesses have special concerns which they feel are not catered to by mainstream business services.
"While there are many accountants, management and marketing consultants and so on who say they have "environment' departments, there are very few of these kinds of specialists who genuinely concentrate on the environmental sector.
"And even fewer apply environmental principles to their own operations - with the result that there is often a basic philosophical gulf between the environmental business and its advisers."
A Chartered Accountant, Mr Lou de Leeuw commenced Ecobusiness Consultants to provide a range of services at the interface between business and the environment.
The services include environmental auditing and reporting for large and medium-sized corporations, economic analysis and environmental accounting, public sector environmental programs and environmental investment services.
"Another of out core functions is to provide special small business consultancy service to environment-related companies. Because we are committed to the environmental sector, we understand the unique challenges involved in making an environmental business work effectively," said Mr de Leeuw.
"We provide management advise and accounting services and we also have specialists available in marketing, law and other related business services."
What Are Wetlands Worth?
The MFP's Barker Wetlands project is an excellent example of a government body drawing together a broad range of expertise to create a broad range of expertise to create an environmental regeneration.
But, in strict economic terms, is it worth the expense?
A lot of environmentalists might say that's an irrelevant question, according to Lou de Leeuw of Ecobusiness Consultants.
"But it is a question that needs to be asked in today's economic climate. And if the answer is yes', then it instantly defuses the critics of increased environmental spending."
Ecobusiness Consultants was commissioned by MFP Australia to undertake a full economic analysis of the Wetlands Project, and the report produced will be used to help evaluate future projects.
"This is the way all tiers of government must go. Consultancies such as ours, with the practical skills and specialised knowledge to evaluate the economic consequences of environmental decisions, will become important for objective assessment and future decision-making," said Lou de Leeuw.
Due Diligence - Understanding The Obligations
By Fraser BellThe principles of due diligence in the environmental context essentially involve the establishment and maintenance of a legally orientated quality management system.
The legal component of the due diligence system is essential for those with the responsibility for making decisions about the risks facing a business, because these people must have an understanding, in general terms, of the legal risks facing the business.
If the management system is to operate effectively, the system must ensure that the relevant information is obtained by those who are best placed to obtain it, and at the appropriate decisions are made by those with the responsibility to take them.
Like any management system, a due diligence management system relies largely on good line management supervision and training together with effective operating procedures.
There are two key features a successful environmental due diligence system. First, there must be an emphasis on the prevention of pollution rather than simply reporting pollution.
The pollution prevention system should be the responsibility of the directors (in the case of a company).
The design and implementation of a pollution prevention system requires an understanding of the existing management structure of the organisation. This system must be checked regularly to ensure it is operating properly.
The second key element of a due diligence system is the recognition of the primary role that those with ultimate responsibility in the company have for failure of the due diligence system.
In this regard, the people with ultimate responsibility must receive reports from line management concerning the environmental performance of their organisation.
In order to make sense of these reports and to make the most sensible decisions following on from these reports, these people must a general awareness of environmental standards and environmental laws. Without this level of awareness, the significance of matters reported to the top management would be lost.
There is no standard due diligence system that will suit all organisations. At the end of the day, it is vital that the existing management framework work in conjunction with the environmental due diligence system.
If an environmental due diligence system does not fit neatly within the existing management system, it will be doomed to failure.
For more information,
Telephone Ecobusiness Consultants Pty Ltd on (08) 8211-8171 or Fax (08) 8212-6170
or E-mail :ecobiz@ecobusiness.com.au
