Ms Deni Greene, Deni Greene Consulting Services
prepared for the 2006 Australian State of the Environment Committee, 2006
The private sector provides information to the general community, government and other businesses about their products, services and activities. The types and extent of the information made available today far surpass anything previously expected, and there is every indication that this will become an even greater responsibility in the future. Some companies go beyond the provision of company information to inform the public about environmental issues.
The media in Australia help to increase community awareness and responsibility for environmental issues. In recent years, stories on salinity, water conservation, energy efficiency, the greenhouse effect, recycling, transport and biodiversity have regularly appeared in the media.
Manufacturers of a range of energy-using appliances are required to display energy efficiency labels on their products. The label was introduced in 1986 in Victoria and New South Wales, and later expanded to national coverage. It was upgraded in 2000 to employ more stringent criteria for the ratings. It typically shows the star rating (efficiency) of the product and the annual energy consumption. Labels for some products carry additional information (DEH 2001). The energy label has been highly effective in increasing consumer awareness of energy efficiency. An Australian Bureau of Statistics’ survey in March 2005 found that energy efficiency and cost (price) were the two main factors considered by households across Australia in buying or replacing white-good appliances. Energy efficiency ranked first over cost in buying/replacing a dishwasher, washing machine and refrigerator (ABS 2005).
A water efficiency label was introduced on a voluntary basis in 2005 and is mandatory from July 2006 for showers, toilets, domestic washing machines and dishwashers, urinals and some types of taps. It is similar to the energy label, containing a star rating and water consumption information. The mandatory labelling scheme replaces a voluntary scheme conducted by the water industry before 2005. The industry strongly supported the introduction of the new scheme (Commonwealth of Australia 2005).
Environmental claims about products are regulated under the Trade Practices Act, and the Australian Competition and Consumer Commission (ACCC ) has taken action against manufacturers that made misleading claims about the environmental attributes of their products. The ACCC does not rule on the environmental merits of products, but does enforce requirements for the claims to be accurate, substantiated and verified, specific about the improvement or benefit claimed (for example, vague claims about a product being environmentally friendly are not permitted), and clear about the part of the product or its packaging to which the claim relates. Information must not be misleading; for example, the recycling logo may only be used on packaging that can be recycled using existing recovery schemes (Martin 2005).
There are calls from sectors of the community for expanded requirements for product labelling related to environmental claims. Consumer groups, for example, want products that are labelled ‘recycled’ to provide more information about the extent and source of the recycled content. The growing interest in environmental purchasing has made many buyers realise how difficult it can be to compare the environmental aspects of products.
Visy Industries provides an environmental label intended to reduce consumer confusion about recycling. According to the company, Roy Morgan Research consistently indicates that about 80% of people would recycle if it were made easier and that about 65% of people feel that ‘it is confusing trying to work out what can or can’t be recycled’. The Visy label says ‘I am Visy recyclable’ and is backed by a compliance program that ensures all labelled products are able to be recycled and collected, and are in fact recycled (Visy 2004).
Manufacturers of household laundry detergents participate in a voluntary labelling scheme administered by ACCORD Australasia (formerly the Australian Consumer & Specialty Products Association. Products with 5% or less phosphorus content are eligible to use a logo showing a P in a square; those with 0.5% or less phosphorus may use the NP logo (ACSPA 2003).
A worldwide concern about exposure to toxic chemicals led to the development of programs to provide detailed information on emissions by location. ‘Right-to-know’ encompasses a variety of programs meant to give the public access to information on the amount of chemicals in their neighbourhood. In Australia, the most significant program is the National Pollutant Inventory (NPI ), which provides people with free access to information on the types and amounts of chemical substances being emitted in their community.
NPI data is from industry and non-industry sources. Industrial facilities are required to annually report emissions to the NPI if they exceed NPI reporting thresholds for one or more NPI substances. These are substances with possible health and environmental effects. Nearly 4000 facilities and 90 substances are currently covered by the inventory. Non-industry (or diffuse) sources come from non-reporting facilities and household activities. State and territory governments estimate emissions from diffuse sources. An online database (www.npi.gov.au ) allows individuals and organisations to search for emissions by substance, location, facility or company (DEH 2005c).
Some seven hundred Australian companies (as at February 2006) participate in the voluntary Greenhouse Challenge Plus program, which aims to reduce emissions of greenhouse gases and accelerate the uptake of energy efficiency. Participating companies annually report to the Australian Greenhouse Office their emissions of greenhouse gases as well as their emissions intensity, that is, the amount of greenhouse gases emitted per unit of activity, such as per kilogram of product produced.
The Financial Services Reform Act, introduced in March 2002, established new requirements for disclosure by providers of investment products. If the product has an investment component, providers must include in their product disclosure statements ‘the extent to which environmental, social, ethical considerations or labour standards are taken into account in the selection, retention or realisation of an investment’ (ASIC 2003). Companies offering socially responsible managed funds generally have quite detailed statements on the methods they use for consideration of environmental, social and ethical considerations or labour standards; most others indicate that these factors are not considered or are considered on an ad hoc basis (Berger 2004).
Sustainability reporting is of considerable interest around the world, and is becoming one of the basic criteria for judging the social responsibility of organisations. The number of companies in Australia releasing a public sustainability report is continuing to grow every year, although the overall reporting rate of the top 100 publicly listed companies is still low by international standards (KPMG and the University of Amsterdam 2005). Companies in the manufacturing and mining sectors are the most likely to produce sustainability reports. The benefit most often perceived by companies from producing a sustainability report is reputation enhancement (CAER et al. 2005).
Increasing numbers of companies are producing reports using Global Reporting Initiative (GRI ) guidelines. The GRI is an independent organisation that develops and disseminates globally applicable sustainability reporting guidelines for voluntary use by companies or other organisations.
Two organisations in Australia present awards for sustainability reporting: the Association of Certified Chartered Accountants (ACCA ) and the Australasian Reporting Awards (ARA ). The winners of the 2005 ACCA awards for Australia and New Zealand were:
- mecu for Best Sustainability Report
- Watercare Services and Australian Ethical Investment for Continued High-Quality Sustainability Reporting
- BHP Billiton for Sustainability Communication Using the Internet (ACCA 2006)
The winner of the 2005 Sustainability Reporting Award of the ARA was Aurora Energy Pty Limited (ARA 2005).
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