Study: U.S. Energy Firms Lagging in Environmental Reporting
CLAREMONT, California U.S. utilities lag behind their European and Asian counterparts in environmental reporting, according to a new study.
Of the 45 energy and utilities companies whose environmental and sustainability reporting were analyzed late this year by the Roberts Environmental Center, National Grid Transco (Britain) had the highest overall score with the top six other scores going to European and Japanese companies. The highest scoring American company was Public Service Enterprise Group (PSEG) which was ranked 8th, tied with Électricité de France (France). Seven of the ten lowest scores went to American companies.
There was a small positive relationship between company size and quality of reporting, largely resulting from the low scores of the smallest American companies in our sample. But almost the full range of scores was seen in firms with revenues between $10 billion and $20 billion. Of the firms with revenues above $50 billion, RWE (Germany) and Électricité de France (France) had relatively high scores, Suez (France) a middling score, and State Grid (China) the lowest score.
The two overall lowest scores went to State Grid (China) and Korea Electric Power (South Korea) neither of which posted environmental or social information on their English language web sites. Gazprom (Russia) did produce an environmental report in 2002, but the poorly translated English version which we scored came in 6th from last.
All materials were scored using the Center's Pacific Sustainability Index which also provides scores for six subcategories of reporting. The highest scores for these went to RWE (Germany) for expressed environmental intent, Iberdrola (Spain) for environmental reporting transparency, Kansai Electric Power (Japan) for quantitative environmental performance, Gaz de France (France) for expressed social intent, Iberdrola (Spain) for social reporting transparency, and National Grid Transco (Britain) for quantitative social performance.
Not surprising for this sector whose main business is burning fossil fuels to produce electricity, the most reported environmental variables were air emissions, protection of the natural environment, and environmental costs. The most reported social information was protection of the human environment in and nearby generation facilities.
These findings are based on the information available on the web sites of all companies in the energy and utilities sectors of the 2004 Fortune Global 500 and all companies in the energy sector of the 2004 Fortune 1000 as of June 15, 2005. The Fortune 1000 includes only American firms, so all of the smallest firms in this sample are American.