Yes SER! No CER! An evaluation of the inclusion of Corporate Environmental Reporting (CER) in New Zealand's State of the Environment Reporting (SER) System

Abstract

A fundamental step toward achieving sustainable development/sustainable management is finding the indicators to measure whether an economy is on, or off, a sustainable path of economic development. The Ministry for the Environment's Environmental Performance Indicators (EPI) Programme, in combination with the Environment 2010 Strategy, and the monitoring duties set out in Section 35 of the Resource Management Act, aims to provide a state of the environment reporting framework to gather the required measures and trigger the appropriate policy responses. However, these initiatives appear to address only part of the picture, especially concerning industry environmental performance.

This report is based on this premise, and seeks to explore the relationship between State of the Environment Reporting (SER) and the use of industry generated information through Corporate Environmental Reporting (CER). It is grounded upon the contention that CER has potentially much to offer a SER system, and the present lack of integration of CER and SER imposes serious limitations on New Zealand's environmental reporting system. This research has found that a comprehensive SER system can provide easy access to environmental information, expand citizen involvement, and give communities and organisations the tools to improve environmental performance. Similarly, it can provide the information for government to report on progress to the OECD, meet its commitments in Multilateral Environmental Agreements (MEAs), and guide local, regional and national policy making in an increasingly anticipatory manner.

The EPI programme, although recognised as a step towards SER, is lacking some of the fundamental aspects critical to a SER system: it has no quantified targets to give meaning to the indicators developed, or provide the threshold values to trigger action; and has used extensive consultation in an iterative process, but has lacked stakeholder participation, and excluded industry as a main contributor and user of the information. This has reduced the EPI Programme's ability to gain more detailed information regarding pressure indicators, and indicators of industry responses. This lack of comprehensive information raises doubts about the system's ability to "trigger the appropriate responses" to address environmental issues.

Corporate Environmental Reporting is one means of providing this information, which at present suffers from a lack of reporting and measurement standards, a lack of stakeholder input, and compliance. Consequently, reports vary from valid and meaningful environmental disclosures to tokenistic marketing and publicity vehicles.

Integrating CER into the SER system, using the core set of environmental performance indicators developed, will provide the reporting framework and measures lacking in present CER practice. If integration occurs as partnership between private sector and government, it may promote a more participatory development of the SER system, which may in turn lead to an 'ownership' of the system, and better compliance. The integration of SER and CER also has the ability to promote the integration of environmental concerns into social and economic decision-making within the private sector, an integration that is not at all transparent in Central Government policy decisions.

The integration of SER and CER fits well into the New Zealand context. Although imposing some additional costs on Industry, CER may be a least cost policy alternative from a government perspective. State of the Environment Reporting presents the opportunity for New Zealand, in particular New Zealand Industry, to further promote and enhance its ‘clean and green’ image on the international stage. With the drive towards international free trade and the removal of tariffs, this image may prove to be an important marketing tool in the future. Although issues have been identified that need addressing before an integrated SER system will be successful, these can be resolved if, what have been identified as four barriers to an integrated SER system are overcome. There is a lack of awareness of government and private sector initiatives amongst stakeholders, no partnership to develop and implement SER, and no legislative mandate to facilitate reporting and ensure compliance. These are the basic building blocks upon which a SER system should be built, and yet at present they are absent. The final and most critical barrier to overcome is a lack of political and financial commitment to the development and implementation of a SER system.

If New Zealand is to genuinely move towards environmental sustainability, CER should become part of industry sector reporting, against agreed targets, which in turn must become part of regional and national reporting, against regional and national goals. This reporting must also be integrated into policy analysis at all levels, with a continuous improvement 'feedback loop', adjusting and amending polices and targets, and not allowed to simply accumulate as endless libraries of CERs. The Government can maintain its faith in the use of the market to address environmental issues, and does not need to be involved in mechanisms designed to improve industry environmental performance. However, it must know that improvement is being made. Industry appears ready, but being the first to report presents risks of bad publicity that companies are reluctant to take. The Government needs to provide a 'level playing field' for reporting and the initial push to get it started.

As such, this report concludes that, a comprehensive SER system integrated with a standardised form of CER has large potential benefits for future environmental management in New Zealand.