Business in the Community’s Environment Index (formerly the BiE Index) celebrates its tenth anniversary this year.
This voluntary public index enables companies to benchmark their environmental performance against their peers. As well as addressing management fundamentals – for example, establishing policy, setting objectives and targets, training and communication and so on – the index helps to gauge the extent to which a company is reducing its impact in key areas such as climate change, waste and resource management.
Over 300 companies participated in the latest 2004 index – 168 at national level, and a further 145 in the Yorkshire and Humber regional index. The index is open to FTSE350 companies (excluding investment trusts), the larger Business in the Community members and sector leaders from the Dow Jones Sustainability Index.
Leadership from the top to address environmental issues continues to feature strongly for all companies participating in the index. For many, this seems to be internally focussed (for example, by setting corporate environmental objectives and realistic targets to achieve these).
A growing challenge for business is now to turn its attention to leading and influencing the wider debate on key environmental issues, such as climate change and natural resource management, to ensure there is a sensible policy structure which encourages and supports business in tackling these issues.
The index highlights greater public reporting by companies of their environmental performance. This is encouraging – greater transparency and public scrutiny has to ultimately lead to greater trust and enhanced reputation – an intangible value which is difficult to establish but so easy to lose.
Trust must also be established with employees. The index highlights a significant increase (50% improvement over the decade) in the way employees and other key stakeholders are engaged and involved with environmental issues facing the company.
This possibly reflects the growing general awareness of environmental issues and expectation on companies to take their responsibility seriously. But leading companies need to do more than just engage – they need to demonstrate positive action.
Environmental supply chain management remains a challenge for many companies and is the weakest area in the index by some margin. Managing the risks and opportunities associated with the environmental and social impact of the supply chain can be a complex business, especially as many issues lie beyond the boundaries of the company and supplier networks often operate on a global scale. All companies need to take this seriously as a strategic issue.
It is now time to build on the sound foundation of environmental management processes established over the past decade to deliver improved performance on key global issues. Saving energy and cutting waste has short-term impact on the bottom line – there is already an enormous weight of evidence and associated advice from organisations like Envirowise, WRAP, the Energy Savings Trust and the Carbon Trust.
There is also evidence that managing the company’s overall carbon impact from energy, transport and processes coupled with wise use of non-sustainable resources in product design, manufacture, use and disposal also impacts the longer-term viability of the business.
These are ultimately issues which affect long-term sustainability for society as a whole – business continues to have a key role to play
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