NEWS JOURNAL OF THE ASIA PACIFIC CENTRE FOR

ENVIRONMENTAL ACCOUNTABILITY

Volume 4, No. 4, December 1998

Contents Page No.

Editorial 2

Feature Articles The International Interdisciplinary Environmental Association (IEA) - A step 3in the right direction for improving environmental accountabilityGary O’Donovan

Integrated Environmental Management 5Bronwynn Adamson

Environmental Collaborations 7Terese McComiskey

Australia’s National Greenhouse Strategy 9Roger Martin

Regular FeaturesBusiness and the Environment Environmental Reporting: Perspectives from Denmark 14Dan Atkins - Environmental Services, Deloitte & Touche, Denmark

APCEA Branch Reports 16

Watching the Web 17

News and Issues 18

Environment Extra! 21

Published with the assistance of the Department of Accounting and Finance, Victoria University ofTechnology, Melbourne, Australia

Sponsored by the Tasmanian Division of the Australian Society of Certified PractisingAccountants

2

EDITORIALWelcome to the final edition of the APCEAnews journal for 1998. Seasons greetings areextended to all of our readers.

As is the policy of APCEA, the editorship ofthe news journal rotates on an annual basis.This is last journal under my editorship.Volume 5 will be compiled under the editorshipof Geoff Frost, associate lecturer inaccountancy at the University of Newcastle,New South Wales, Australia.

As editor, I believe the readers of the journalhave been fortunate this year to have had manyquality articles on environmental accountabilityto ponder. Thanks go to Kathy Gibson, RogerBurritt and Roger Martin for their regularcontributions. Articles from Dan Atkins(Deloitte & Touche in Denmark) have added acommercial focus in his regular Business andthe Environment column. Dan concludes hiscontributions with a personal reflection of theenvironmental initiatives he has been concernedwith while working in Denmark.

This edition also features an article on the needfor an interdisciplinary focus to improveenvironmental accountability. Improving theenvironmental accountability of governmentsand corporations is more likely to occur if theseinstitutions are receiving similar messages froma multiplicity of disciplines from a uniform base.The article features a short history of oneorganisation, the International InterdisciplinaryEnvironmental Association (IEA), whose aimsand ideals embrace this belief.

I would like to conclude the year with a requestfor your assistance. News journals of this typewill only prosper and develop with the help ofits readers. If you are a current subscriber,please subscribe again. If you are a readerplease subscribe ($20 is only equivalent to afew cups of coffee!). If you believe you cancontribute to the journal in any way, pleasecontact the editor. Finally spread the wordabout the journal. It is currently going out to

subscribers in over 20 countries with moresubscribers from various nationalities joiningeach month. We are also always looking forsponsorship or donations of a non partisannature.

If our readers wish to contribute articles ofinterest for consideration for the journal theycan send them to:

Mr. Geoff Frost,Department of CommerceUniversity of NewcastleUniversity DriveCallaghan NSW 2308AUSTRALIA

email: cmgrf@cc.newcastle.edu.au If possible could articles be sent via email.

Gary O’Donovan EditorPhone: 61-3-9248-1069Fax: 61-3-9248-1064email: garyod@dingo.vut.edu.au

EDITORIAL BOARD

Gary O’Donovan (editor) - Victoria University ofTechnology, AustraliaRoger L Burritt - Australian National University,AustraliaProfessor M.R. Mathews - Massey University, NewZealandKathy Gibson - University of Tasmania, Australia

This news journal is published by the VictoriaUniversity of Technology branch of APCEA. Copyright, December 1998

APCEA home page web site:http://www.efs.mq.edu.au/accg/apcea/index.html

Back issues of the news journal and its predecessorare available on line at the above address. 1998issues will be available on line in 1999.

3

THE INTERNATIONAL INTERDISCIPLINARY

ENVIRONMENTAL ASSOCIATION (IEA) - A STEP IN THE

RIGHT DIRECTION FOR IMPROVING ENVIRONMENTAL

ACCOUNTABILITYGary O’Donovan - Victoria University of Technology

IntroductionUniversities throughout the world house manyof the finest intellectualsand experts on varioustopics over a number ofdisciplines. In somew a y s h o w e v e r ,academics are anapprehensive breed, oftenresearching only withinthe safety of their owndiscipline. Interactionand research activityacross disciplines has tended to occur on airregular basis.

One is entitled to ask which discipline is bestequipped to serve the needs of the planet, inresearching matters about the degradation ofthe natural environment and who is and shouldbe held accountable. Do economists have allthe answers? Perhaps the more recentemphasis on environmental accounting holdsthe key? Then again, there is a abundance ofenvironmental research emanating from scienceand engineering disciplines. The answerappears obvious. The environment is no onediscipline’s speciality, rather it should be part ofevery discipline’s domain.

The birth of an idea In early 1994, two Assumption Collegeacademics from Worcester, Massachusetts,geography professor Kevin Hickey andeconomics professor, Demetri Kantarelis,found themselves borrowing each others textsto prepare for classes on environmental issues.The more they explored environmental issues,the more they found that they required eachother’s expertise and that of other disciplines as

well. From this familiar setting the seeds of anidea grew.

When they put out a notice onthe world wide web trying togauge whether there was anyinterest in forming aninterdisciplinary environmentalorganisation and conference,they received about 1,400responses from all parts of theworld within a few days and sot h e I n t e r n a t i o n a lInterdisciplinary Environmental

Association (IEA) was born.

With much hard work and no initial funding, the1s t IEA conference was held in June 1995 inBoston, USA. Over 100 people from 11countries attended this, now annual,conference. The numbers of people and thecountries and diverse disciplines they representhas grown steadily since, with successfulconferences being held in Newport, RhodeIsland in 1996, Cambridge, Massachusetts in1997 and Washington DC in 1998.

Past papers presented at the conference havecovered environmental topics in areas asdiverse as science, engineering, economics,accounting, education, health, management,public relations, public policy and consumerism.

Not only do the papers span disciplineboundaries, but given the broad number ofnationalities represented at the conference, theresearch covers environmental issues from atruly global perspective.

The way forward

4

IEA co-founders, Demetri Kantarelis (left)and Kevin Hickey at the 4th IEA held inWashington DC, July 1998.

The continuing growth of the associationvindicates the belief of the co-founders that thechances of research into importantenvironmental issues such as sustainabledevelopment and greenhouse emissions, toname just two, having some impact onenvironmental practice, is maximised if theresearch is conducted in a collaborative manneracross many disciplines.

The IEA is motivated bythe increasing need tocombine ideas andresearch findings fromdifferent disciplines toenhance understanding ofthe interactions betweenthe natural environmentand human institutions.

During its short life the IEAhas won many admirers,including an endorsementfrom Vice President of the USA, Al Gore. Themission to improve our understanding andprotection of the natural environment from aninterdisciplinary base is being achieved by theIEA.

The 5th IEA Annual ConferencePlanning is well under way for the 5th IEAconference to be held in Baltimore, Maryland,USA, between 23-26 June 1999.

Conference presentations are aimed at theeducated layperson and it is intended that theyfocus on

• what all disciplines have to offer withrespect to understanding environmentaland resource problems,

• what solutions are available,• what are the implications of the

globalization of environmentalconcerns.

A new research journalThe success of the IEA has been partly

responsible for the development of a newresearch journal. The InterdisciplinaryEnvironmental Review (IER) is an internationaljournal to be published annually by the IEA. Itwill publish research and survey papers of thehighest possible quality, from all disciplines,concerning the natural environment. For furtherdetails about the IER refer to the journal’s

home page at:

http://champion.iupui.edu/~mreiter/ier.htm

Important contactsDetails of the upcoming5th IEA conference andcall for papers areavailable at:

http://champion.iupui.edu/~mreiter/iea.htm

or contact:

I N T E R D I S C I P L I N A R YENVIRONMENTAL ASSOCIATION c/o Kevin L. Hickey & Demetri Kantarelis Conference Co-Chairs Economics/Foreign Affairs Department Assumption College 500 Salisbury Street P.O.Box 15005 Worcester, MA 01615-0005 USA

5

You may also reach IEA by phone, fax, ore-mail:

K.L. Hickey Phone: (508) 767-7296,email: khickey@assumption.edu

D. Kantarelis Phone: (508) 767-7557email: dkantar@assumption.edu

Fax: (508) 767-7382

Selected papers presented at each of the fourconferences have been published asproceedings and are available from the IEA ata small cost. You may purchase copies of the1996, 1997 and/or 1998 Proceedings. Detailsfrom the IEA.

INTEGRATED ENVIRONMENTAL MANAGEMENTBronwynn Adamson - Australian National University

Introduction.Integrated Environmental Management (IEM)is increasingly being cited as a preferredapproach to addressing current environmentalproblems. IEM promotes a holistic approachthat considers the array of interconnectionsamong biophysical, social and economicsystems. It is goal-oriented and strategic, usingcollaboration among a wide range ofstakeholders and consultation with the public.

Despite the lack of a clearmodel, practitioners inmany localities are forgingahead with the concept. InAustralia, the concept hasbeen initiated statewide inNew South Wales,Victoria, Queensland andWestern Austral ia .However these efforts ares low. Th is papersummarises IEM use inAustralia and then definesthe concept of IEM andrelated principles.

Early in the history ofAustralia, finding reliable sources of water wasa major concern for many of the growingsettlements. Public development of waterresources began with the construction of thefirst large dam in 1857 to supply the city ofMelbourne. The Nepean system was dammedto supply water for the growing Sydneypopulation. Concern about the protection of the

Nepean system as the water source for theSydney area led to the first catchmentmanagement efforts through the control of landuse.

The 1950's and 1960's saw the creation ofregional river management organisations. NewSouth wales created the Hunter ValleyConservation Trust in 1950 to coordinate landand water resource management across theentire basin. The Trusts authority includedsweeping powers to control soil erosion and

other forms of landdegradation. Victoriaestablished a similarauthority for theDandenong Valley inthe 1960's. Althoughthese organisationshad wide rangingc a t c h m e n tm a n a g e m e n tauthority, they bothfunctioned primarilyas flood mitigationauthorities.

In 1973, the federalgovernment took one

of the first steps towards integrated planningwhen it issued a policy statement requiring thatfederal projects to use a multiple objectiveapproach. these official statements signalledsignificant changes in federal and statelegislation for environmental protection. Multi-objective management emerged at a catchmentscale among catchment management projects

6

developed by soil conservation agenciesthroughout Australia. In Victoria, the EppalockCatchment project undertook a comprehensiveapproach to soil and water management for anew reservoir.

Another important influence on resourcemanagement in Australia has been the Landcaremovement. In the 1970's, farmers aroundAustralia had formed voluntary groups toaddress problems such as wind erosion,salinity, pest animals and exotic plants.

In 1986, the Victorian government introduceda broader, community based program andprovided funds to support voluntary groupsunder the name Landcare. A partnershipbetween the National Farmers Federation andthe Australian Conservation Foundation led tothe launching of a National Landcare Program.This Commonwealth program provides fundsfor research, state governments, and initiativesin the Murray-Darling river basin.

Because environmental management is largelythe responsibility of the states, integratedapproaches have evolved differently acrossAustralia. However, states have often lookedto each other for reform and innovation.

In 1985, Victoria started an initiative called“Salt Action- Joint Action” to address salinity inrural areas. The program established severalregional salinity advisory councils to co-ordinate activities and allocated relativelysignificant levels of funding ($18 million in1987/88). The term “Total CatchmentManagement” (or integrated catchmentmanagement) first appeared as state policy inNew South Wales in 1984. In 1989, the statecreated the institutional structure to support thepolicy when it passed the CatchmentManagement Act. Victoria reformulated theirsalinity control groups into more broadly-focussed natural resource management boards.

THE CONCEPT OF IEMSubstantive Elements.There are four substantive elements thatdescribe IEM. Firstly, it requires a holistic

approach that considers the array ofenvironmental, social and economic factors.Secondly, IEM recognises the interconnectionsof environmental and socioeconomic systems.Thirdly, participants need to take a goal-oriented approach. And fourthly, IEM isstrategic.

Administrators working for the US EPA onintegrated projects summarise this philosophy:

In the past, and still in many parts of the [EPA],the questions were:

• what regulation applies, • what is being regulated, • at what level, and • who is out of compliance

The questions we are asking [in theseintegrated projects] are:

• what is the quality of the resource,• what is producing problems or

changing the quality of the resource, • what are the stresses.

then we are looking towards the array of toolsat our disposal- regulatory or non-

regulatory - to fashion site-specific responseskeyed to specific environmental

responses and objectives. It is a very differentway of doing business.Principles of IEM.To clarify the concept of IEM the followingprinciples can be offered:

1.IEM is not a quick fix; it requires a longterm view.

7

IEM is time consuming and lengthy process, ittakes time for stakeholders to come together,reach consensus, and begin implementation.

2.IEM must include many perspectives.Because an integrated approach identifies goalsfor managing an environmental system, it mustinvolve many different people with differentskills and knowledge and perspectives, andalso take into account different cultures andusers

3.IEM entails planned change. IEM is described as an approach to increasinginter-organisational communication or publicconsultation. It transforms decision-making andmanagement actions from being less integratedto more integrated. Ultimately this requiressharing power, which is why IEM can oftenlack support from some organisations andgovernment bodies.

4.Scale and degree of integration are

inversely proportional. Based on observations of integratedapproaches ranging from very small to verylarge (Murray-Darling) the larger the size of thesystem, the harder it is to integrate managementactions across the entire region. Stakeholdersinvolved in small scale efforts are often able toachieve a high level of integration.

5.IEM does not dictate a particular product.The concept does not imply a particularproduct, nor does it stipulate the content of thatproduct. The stakeholders produce a newmanagement approach, but the productdepends on the participants.

-----------------------------------------------Bronwynn can be contacted at the AustralianNational University, email to:

Bronwynn.Adamson@anu.edu.au

ENVIRONMENTAL COLLABORATIONSTerese McComiskey - University of Southern QueenslandA particular environmental strategy, which hasgained popularity during the 1990’s, is thecollaboration between conservation groups andindustry. Collaboration is defined by Gray(1989, p5) as “a process through which partieswho see different aspects of a problem canconstructively explore their differences andsearch for solutions that go beyond their ownlimited vision of what is possible.”Environmental collaborations are certainly achange from traditional “anti-industry, anti-profit, and anti-growth orientation of muchearly environmentalism” (Elkington, 1994, p91). It has become clear that conservationgroups and industry have an important role inachieving the goals of sustainable development.

Westley and Vredenburg (1991, p72) explainthat although there was a reconceptualisation ofthe environmental movement, which broughtconservation groups and industry into the sameproblem domain, initially various reasons

prevented collaboration of the two groups. There was a fear that conservation groups andindustry would become direct competitors, afear of a status change for conservation groupsand finally, the notion of sustainabledevelopment was “highly under organized”(Westley and Vredenburg (1991, p72).

However, despite these initial problems there isnow evidence that conservation groups andindustry are collaborating. In fact, it is notuncommon to find companies, regulators andconservation groups “working together topreserve sensitive areas to developprogrammes to reduce the releases and impactsof corporations.” (Cardskadden and Lober,1998, p184).

One Australian example of an environmentalcollaboration is that between the AustralianKoala Foundation (AKF), Rays DevelopmentCorporation Pty Ltd (RDC) and the Tweed

8

Heads Shire Council. The collaboration hasproduced a “koala friendly” residentialdevelopment called “Koala Beach” on thenorthern NSW coast, west of Cabarita Beach.From the 360 hectares owned by RDC, 200hectares have been dedicated to conservation,the remainder has been used for the koalafriendly development. The Australian KoalaFoundation (AKF, 1996, p11) reports that thecollaboration has been established as:

a model for humans and koalasco-existing. Every measure hasbeen taken to ensure the futuresurvival of the resident koala’spopulation. These measuresinclude retaining every food andhome range tree, plantingadditional trees, banning catsand dogs from the site, havingtraffic calming devices to slowtraffic down where koalas arelikely to cross, regulating fencedesign having a ranger on site tomonitor the wildlife andeducating the residents aboutthe koa las and the i rrequirements. With the firststage of the developmentcomplete, the koalas aresurviving and the signs are verypositive.

From preliminary discussions with all partiesinvolved in this collaboration it appears thatindividual goals have been achieved.

The AKF reports that the collaboration hasbeen a success with the key to this success the“constant vigilance, a willingness on the part ofthe developer and now, the landowners”(AKF, 1997, p1). RDC indicated that they feltthey had minimised future costs, whilelandowners express their satisfaction in living inharmony with nature. In particular AdeleCasson, who spoke at a AKF conference onthe status of the Koala in 1998 said:

We at Koala Beach have madevery few concessions in ourdaily lives when compared withtraditional suburbia yet we havefound the rewards bestowedupon us by Nature to be many.

Although these are just a few of the reportedbenefits from parties involved in environmentalcollaborations they serve as a motivation forresearch into such environmental strategieswhich at this stage are relatively undocumented.

Based on this motivation I am currentlyinvolved in studying several Australianexamples of environmental collaborations.Interestingly, a phenomenon, which has beendiscovered from the initial stages of myresearch, is the enthusiasm of the partiesinvolved in environmental collaborations toexpress the benefits that have been derived.However, outcomes of such collaborations arenot the only issue worthy of research.

According to Wood and Gray (1991, p5) thereare three main issues of collaborations whichare important for additional theorising:• preconditions (i.e. the motivations of

individual organisations orenvironmental stimulants)

• processes (e.g. what is a collaborationand how does it occur or how dostakeholders interact to achieve theirobjectives?)

• outcomes (what constitutes asuccessful collaboration or are therespecific outcomes associated with thesuccess or failure of a collaboration?)

Hopefully, with future research directed in thisarea, more environmental collaborations will beencouraged with the aim of achieving not onlyindividual goals but also the global goal ofsustainable development.ReferencesAustralian Koala Foundation, (1996), Our firstten years 1986-1996, John Garnsworthy andAssoc., Brisbane.

Australian Koala Foundation, (1997), “Arnieand friends doing well”, The Australian KoalaFoundation Newsletter, December, pp1-12

Cardskadden, H. and Lober, D.J., (1998),“Environmental stakeholder management asbusiness strategy: the case of the corporatewildlife habitat enhancement programme”,

9

Journal of Environmental Management, Vol.52,pp183-202.

Casson, A., (1998), A Conference on theStatus of the Koala in 1998, 19 – 21 August,1988, Brisbane.

Elkington, J., (1994), “Towards the sustainablecorporation: win-win-win business strategiesfor sustainable development”, CaliforniaManagement Review, Winter, pp90-100.

Gray, B., (1989), Collaborating: Finding

common ground for multiparty problems,Jossey-Bass, San Francisco.

Westley, F and Vredenburg, H., (1991),”Strategic bridging the collaboration betweenenvironmentalists and business in the marketingof green products”, Journal of AppliedBehavioural Science, Vol. 27, No.1, pp65-90.

Wood, D.J. and Gray, B., (1991), “Toward acomprehensive theory of collaboration”,Journal of Applied Behavioural Science,Vol.27, pp139-162

Terese is currently enrolled as a PhD student at the University of Southern Queensland and can becontacted by email at: mccomisk@usq.edu.au

AUSTRALIA'S NATIONAL GREENHOUSE STRATEGYRoger Martin

IntroductionThe final report of Australia's NationalGreenhouse Strategy (NGS) was releasedaround the beginning of December 1998 and isavailable from the Australian GreenhouseOffice or online as a PDF document (at theAustralian Greenhouse Office -AGO- sitewww.greenhouse.gov.au/pubs/ngs/). It theculmination of a public consultation process(public submissions in March 1997) and alsoinfluenced by the Kyoto protocol whichAustralia signed on 29 April 1998. The threestated goals of the NGS are:

1. To limit net greenhouse gas emissions,in particular to meet our internationalcommitments.

2. To foster knowledge andunderstanding of greenhouse issues.

3. To lay the foundations for adaptationto climate change (p3).

The report includes very little in the way ofdirect action to reduce the greenhouseemissions, being largely oriented to increasingknowledge through research; then encouraging

consumers to reduce their emissions byimproving access to this knowledge andthrough what it calls partnerships. Despite theassertion "Strategy should focus on outcomesnot processes and emphasise market basedsolutions, wherever possible, to the identifiedproblems." (p4) the NGS report suggests asunlikely any significant direct economicincentives for reducing greenhouseemissions/reducing subsidies for resourceconsumption (a 1994 report for the Departmentof Environment Sport and Territories calculateda 'low end' figure for these subsidies of $A13billion a year, Norman Myer's recent report"Perverse Subsidies" calculates environmentalexploitation subsidies at $US1.5 trillion peryear worldwide).

For accountants there may be opportunities orchallenges. The main focus of the research is toenable systemised accounting for and reportingof emissions with an annual NationalGreenhouse Gas Inventory, a national carbonaccounting system, plus public emissionreporting by government bodies andencouragement or requirements for privatebodies to further their emissions reporting.Quite strong support for an emissions trading

10

scheme is evident, the carbon accountingsystem is a necessary precursor.

The NGS report includes some generalisedpro-government statements ofdoubtful veracity (eg. "Todate, Australia has played akey role in responding to theenhanced greenhouse effect.")and some often unrelatedgovernment policies of the lastfew years are mentioned ashaving some supposedgreenhouse emission reductionbenefits (eg. "Accelerating andmonitoring energy marketreform (measure 4.1) willprovide for an expansion andi n v i g o r a t i o n o fmicro-economic reform of theenergy market to promote thedelivery of environmental aswell as economic benefits.")

The Kyoto ProtocolThe Intergovernmental Panel on ClimateChange (IPCC) 1st assessment report 1990served as basis for negotiating the UNs firstFramework Convention on Climate Change(FCCC), 2nd assessment report in 1995 wasused as a basis for July 1996, 2nd FCCC, andthe 3rd major assessment is due by 2001.

The first review of the adequacy of developedcountry commitments took place in 1995, andlead to negotiations on strengthenedcommitments resulting in the Kyoto Protocol.

The first Conference of Parties of the FCCC in1995 set in train negotiations to establish aprotocol (subsidiary treaty) which would:

- strengthen the commitments of developedcountries for the post-2000 period; and

- advance the implementation by all countriesof their commitments under the FCCC.

These negotiations were "successfullyconcluded" (though see next paragraph) at the

third Conference of Parties in December 1997,where agreement was reached on the text ofthe Kyoto Protocol. Australia signed theProtocol on 29 April 1998. The six greenhouse

gases to be coveredby the KyotoProtocol are carbondioxide, methane,nitrous oxide, hydrofluorocarbons, perfluorocarbons andsulphur hexafluoride.A u s t r a l i a ' scommitment is for an8% increase in netemissions versus anaverage 5% decrease.

The Kyoto Protocolwill enter in force 90days after at least 55Parties, representingat least 55 per cent of

total Annex I CO2 emissions for 1990, haveratified the Protocol. Ratification by Australiawill be considered by the Government onlyafter it has completed a national interestanalysis process that involves consultation withall key stakeholders. It appears unlikely that theProtocol will enter into force for several years.

Accounting/reportingPlanned assessments of the strategy includeperformance reports every two years, a'comprehensive' review by 2002. The annualnational greenhouse gas inventory (NGGI) iscontinued with data from 1988 available. Anational carbon accounting scheme will beimplemented to support these and also tosupport the proposed emission trading scheme.

Measure 1.5 is a national carbon accountingsystem for land based sources and sinks,particular activities will focus on:

- establishing the rate and location of clearing;

- determining the size of the above and belowground carbon pool, particularly in the intensiveland use zone;

11

- determining variation in the above and belowground carbon pool resulting from changes inmanagement activities and practices. (the leastunderstood area)

This scheme was originally announced inNovember 1997 and workshops held in June1998 (see AGO website for more information).The purpose is initially to provide baseline datafor meeting Australia's reporting obligations.

Government bodies are required to report ontheir performance and one aspect of this is thatheads of departments and agencies are heldresponsible to their Ministers for energyperformance. New energy intensity targets anda simplified monitoring and reportingmechanism have been introduced. This doesn'textend to adopting renewable energytechnologies except "where relevant and costeffective" but does require public reporting andindependent verification of performance.

The oil industry will report on greenhouse gasemissions from venting, flaring and processingin production and refining; and transportation,transfer and storage. The coal industry willreport on methane emissions from coal mining,processing, storage and transport to point ofsale. The electricity and gas distributors andretailers will report on programs directed atdemand management and energy efficiencyincluding types of programs and expenditure;assessment of the success of programs; andtotal and average consumption figures bycustomer class (residential, commercial,industrial, public lighting). Greenhouseperformance indicators will be required for allurban centres of > 40000 people.

Life cycle analysis (LCA) of energy issues willbe pursued as governments, in consultationwith industry, will develop a database and"nationally accepted methodology for life cycleenergy analysis". Life cycle analyses will beconducted initially of materials and productsidentified as contributing to high energy useover whole product life cycles, or significant lifecycle stages, including sourcing of materials,manufacture or construction, product use and

product disposal (p50). This adoption of LCA,intended as a way of determining possibleproduct alternatives could also be used as abasis for greenhouse emissions tax equivalent -eg. for a possible 'greenhouse compliancecharge' on imported goods. Life cycle analysisis proposed in several areas, notably for timberand paper products.

Improving emissions performance.Direct actions to improve emissionsperformance are few and far between andgenerally modest in nature. This approach (asdoes much of the report) contradicts that of the1991 Senate Standing Committee on Industry,Science and Technology (SSCIST) report onthe greenhouse effect that emphasised "'Theelement that is missing is not information butaction" (though recommending dramaticincreases in research to improve information,p7). The NGS approach is much more cautiousand based almost solely on so-called 'noregrets' measures..

Proposed actions include:- Energy performance codes or standards fornew or substantially renovated residential andcommercial buildings and for appliances.

- Benchmarking - the energy characteristics ofa range of industry sectors will be identified andthe data collected will be used to establish aprofile of energy performance and tobenchmark best practice.

Otherwise most proposed actions are subjectto conditions or limitations, such as:

- "will consider and implement as appropriate";

- Some consideration will be given to'congestion pricing' for traffic and parking incongested urban areas (though a Bureau ofTransport Economics paper (1996) listed moreoptions with "urban road user charges, acarbon tax on petrol, reduced urban publictransport fares, and urban commuter parkingcharges [being] the most effective 'no regrets'measures available." );

12

- negotiation with the automotive industry andcompanies to secure a 15% improvement inaverage fuel consumption for new passengervehicles by 2010.

Promotion, Research and EducationPerhaps the main focus of the NGS is to'encourage' consumers/emitters to reduce theirgreenhouse gas emissions, by distributinginformation. This is despite the SSCIST reportasserting that these methods alone are likely tobe ineffective. There are host of generalisedstatements ('support efforts to promote') andsome specified activities such as partnerships toincrease knowledge of greenhouse issues andthe impacts of different activities. Muchinformation will be available on the internet (seethe AGO site for what is there already!)

Many research projects are identified with timeframes attributed over the next couple of yearsalthough some of them seem to require muchlonger than this, notably the backgroundresearch for LCA. There also does not appearto be a sufficient commitment of funding,especially for this time period.

Research into adaptation required for achanged climate is also prominent in the NGSalthough as the SSCIST (among others) haspointed out, 'it is likely to be easier to plan fora long term shift in energy mix than to respondto regional climate variations if they occur. Anadaptive strategy is open-ended; if atmosphericconcentrations of greenhouse gases are notstabilised, then climate changes will be acontinuing phenomenon requiring indefiniteprograms of adaptation' (1991, p5).

Land management - carbon sinksThis section includes some fine stated ideals:"The Australian and New Zealand Environmentand Conservation Council (ANZECC) hasresolved that there is a 'need for acceleratedaction on native vegetation retention'. Thesustainable management of remnant nativevegetation on private and leasehold land is aprerequisite for pursuing such action." (p72)The MCFFA (Ministerial Council on Forestry,Fisheries and Aquaculture) and ANZECC

have endorsed 'A framework of regional(sub-national) level criteria and indicators ofsustainable forest management in Australia',based on the internationally agreed nationallevel Montreal Process criteria and indicators.

However, the proposed actions seem unlikelyto come close to satisfying the ideals ofsustainability despite programs like Bushcarethat aim to reverse decline in native vegetation.Rather than reducing subsidies to native forestlogging, the strategy proposes removeimpediments to Australian commercialplantations, boosting the availability of suitableland, getting the commercial incentives right andimproving information flows (ie subsidise). DrDragun's 1995 paper calculated the financialcosts to the government from logging Victoria'spublic native forests (sales $41 million) at$ A 1 6 0 m i l p l u sconservation/amenity/productivity losses of afurther $170mil. Myers (1998) notes thatsubsidisation of logging is a worldwidephenomena, and on the US forestry service(p226) 'During the shorter period 1992-94,when the agency claimed to make a $1.1 billionprofit, the Government Accounting Officeshowed a loss of nearly $1.0 billion.'

t h e G o v A t m o s p 2 9 e : I m p 2 7 b o o s t e n h o g l o b - 3 9 . 7 5 - 2 - - 0 . 3 8 2 8 T 4 6 1 T w ( i m p r o v i s e c h e t y - 3 0 3 6 7 - 0 . 2 5 1 6 T c e r c 4 7 2 2 T 2 6 1 9 9 5 p a l ) T e d ' I n a l a p i s o c T j - l d h a t t 1 . 1 n d h a w 4 . 5 - 1 5 6 T D - T c 4 t i 6 T w ( p ) T j 6 b 5 0 . 7 5 0 1 T D - 0 . 2 9 3 4 T 3 0 . 3 7 1 8 l i o 1 4 t h e G o v e r n m g O f f r i

13

difficult to reverse and more costly to address'(quoted in Boyle and Ardill, 1989). AlthoughAustralia being small can directly affect only asmall change to global output (1.4% of globalemissions but 3rd highest per person), its failureto 'pull its weight', to dramatically improve itsemission levels will set a very poor example toits neighbours and trading partners and excuseother resource economies from adoptingchanges.

The NGS is trying to satisfy the Kyotoprotocol at minimum cost rather than make anyconcerted effort to alter the economy. Itappears unlikely to significantly reduceAustralia's emissions in the near to mediumterm and may well not even meet our modestshort term target. The proposed research, andcarbon accounting system should help enlightenus as to our performance however.

ReferencesAustralian Greenhouse Office web site:www.greenhouse.gov.au

Bebbington, J & Thompson, I. (1996)“Business Conceptions of Sustainability and theImplications for Accountancy”, ACCAResearch report 48.

Boyle S., and Ardill, J. (1989) “TheGreenhouse Effect: A Practical Guide to theworld's changing climate” Hodder &Stoughton, England.

Bureau of Transport Economics, (1996)“Transport and Greenhouse: Costs andOptions for Reducing Emissions”, Report 94

Myers, N. (1998) “Perverse Subsidies: Tax $sUndercutting Our Economies andEnvironments Alike”, The International Institutefor Sustainable Development, Canada -Worldbank web site

Senate Standing Committee on Industry,Science and Technology (1991) “Rescue theFuture: Reducing the Impact of the greenhouseeffect”, AGPS, Canberra___________________________________

Roger can be contacted via email at:

rmartin@vision.net.au

BUSINESS AND THEENVIRONMENT

ENVIRONMENTAL REPORTING:PERSPECTIVES FROM DENMARKDAN ATKINS - ENVIRONMENTAL SERVICES,DELOITTE & TOUCHE, DENMARK

My past year in Denmark has certainly hasbeen an unique and rewarding experience, notthe least of it trying to learn Danish which Imust admit is not an easy thing to do. I havewitnessed significant activity throughout Europeas businesses are increasingly recognizing andestablishing their role in managing environmentaland social issues. My primary focus has beenthe verification and advice of corporateenvironmental reports, the financial implicationsof environmental aspects, and assisting financialinstitutions' design environmental assessmentcriteria as component of their investmentprocedures.

I thought it might be of benefit to offer an insightto some of the initiatives that I have beenfollowing during my time here.

The World Business Council forSustainable Development (WBCSD)The WBCSD is a coalition of 125 MNCs from30 countries and representing about 20 majorindustry sectors united by a shared commitmentto the environment and to the principles ofeconomic growth and sustainable development.WBCSD’s mission is to provide businessleadership as a catalyst towards sustainabledevelopment and promote the attainment ofeco-efficiency through high standards ofenvironmental and resource management inbusiness.

WBCSD have established various workinggroups and initiatives which provide membercompanies the opportunity to participate increating solutions for emerging business issues.

14

The following commentary on eco-efficiency,corporate social responsibility and financialindicators project has been extracted from theWBCSD Presidents Report 1997/98 whichwas released at the Council Meeting in NewYork, 6 November 1998.

Eco-Efficiency WorkingGroupThe working group intends todevelop a framework of metricsand their reporting for eco-efficiency that is accepted andused by the world businesscommunity and its stakeholders.They have developed a listing ofcategories and aspects ofenvironmental and businessrelated performance ofoperations and products, andselected thereof those indicators,which are universally measurableand comparable across allbusinesses. With these, eco-efficiency can be expressed asthe relationship between theeconomic performance orfunctional value and theenvironmental performance.

Corporate Social Responsibility (CSR)Working GroupThe work attempts to provide guidance forcompanies on how to manage the issue ofcorporate social responsibility. In the beginningof this year the working group met with outsideexperts to help scope and define the keyelements of CSR. From this work, threesubgroups were formed: ”Scoping” andmapping the boundaries, Practice (casestudies), and Measuring, Assessing andReporting. These groups performed preliminaryresearch and analysis which was thenincorporated into a background paper for theSeptember Stakeholder Dialogue onCorporate Social Responsibility held in theNetherlands.

This initiative is receiving a high priority fromWBCSD members and increasingly the

investment community is also beginning to focuson this area. To this end we (Deloitte &Touche) have formed an alliance withSchierbeck & Thorsen (human rights experts)and developed a Corporate Human Rightsapproach that I intend to work closely with

over the forthcoming year.

Financial Indicators ProjectThe Foundation co-sponsored withthe UNEP Insurance Initiative, acampaign to s t andard izeenvironmental assessments in thefinancial sector, and launched a jointreport at the Cologne Annual meetingof the UNEP Insurance Initiative. TheWBCSD Metrics working group isthe main partner for continuing thisinitiative. Various educational projectsin the financial sector are beingevaluated.

The UNEP Insurance & FinancialInstitutions InitiativeBoth these initiatives are relativelysimilar in focus and their meetings inCologne, Germany and Cambridge,U.K. drew similar conclusions. Myobservation was that leading financialinstitutions recognize that there is a

financial implication associated with acompany’s level of environmental performance.In particular, various investment funds haveestablished specific funds with screeningtechniques focusing on environmental criteriaand the majority of these funds have found theirreturns have exceeded the MCI World Index.A major stated challenge for these investmentfunds is obtaining reliable and consistentinformation to base their decisions on.

Global Reporting Initiative (GRI)A powerful new initiative launched by theCoalition for Environmental ResponsibleEconomics (CERES) & WBCSD commencedin the summer of 1998. The GRI’s mission is toestablish through global, voluntary, and multi-stakeholder process, the foundation for uniformcorporate sustainability reporting worldwide.They seek to advance the practice of reporting

15

to serve the three linked goals of sustainablebusiness practice - environmental protection,economic well being and social equity.

A first stage of GRI report is scheduled forrelease in march of 1999 at a majorinternational symposium to be co-organizedwith the UNEP, ACCA, WBCSD and otherorganizations. After this initial release forcomment and testing by the business andstakeholder communities, GRI has devised anambitious timeline for completion of its work toshare the results of this effort through the year2000.

European Eco-Efficiency Initiative (EEEI)This project is being led by the WBCSD andEuropean Partners for the Environment (EPE),and supported by the European Commission’sDirectorate General III (Industry). The EEEIcommenced on 28 October 1998 with thekick-off meeting held at Deloitte & Touche inCopenhagen.

The EEEI is intending to develop aconvergence process of economical andindustrial policies towards eco-efficiency in thecountries via an agreement between thestakeholders on a limited number of suggestedaction points:

• Common process of report andperiodical review on a set of indicatorsto be agreed during the WBCSD/EPEWorkshop on Indicators - June 99.Such agreed indicators would be usedin the Companies and PublicAuthorities environmental annualreports participating in the EEEI andhaving signed the joint agreement.

• Joint Green purchasing initiative to bedeveloped, in relation to and in theframework of the European GreenPurchasing Network Initiatives.

• Report and joint review process tomonitor progress in relation to ”eco-efficiency and the framework of

environmental management systems.”

If APCEA news journal readers would likeinformation on any of the above mentioneditems I would be happy to assist where I can. Ican also recommend the following Internetsites:

http://www.wbcsd.chand http://www.tomorrow-web.com

Dan Atkins Manager - Deloitte & ToucheEnvironmental Services, Denmark.

16

17

environmental cost/benefit analysis of theintroduction of eel farming into the Tasmanianaquaculture industry, and are actively involvedin responding to specific project assessmentsarising from the Regional Forest Agreement.

Kathy Gibson is presenting a paper at the 7thInternational Conference of the Greening ofIndustry Network in Rome. Co-authored withDallas Hanson and Ruth Kile, it is a preliminarystudy of the sustainability of mining activity indeveloping countries, using case materials fromthe BHP Ok Tediexperience. Copies of the paper are availableon Kathy's web page, and any feedback orsuggestions from other APCEA memberswould be much appreciated.

Kathy’s home page is located at:http://www.comlaw.utas.edu.au/accounting/staff/Kgibson.htm

or email: Kathy.Gibson@utas.edu.au

WATCHING THE WEB

http://ens.lycos.com

This free daily email environment news servicecontains daily updates on environmental newsheadlines with links to the complete stories,from around the globe. It also contains anenvironment news message board, links toenvironmental web sites, a news web guide,science news with an environmental flavour,environmental press releases as well as acomprehensive news index. As is the case withmany news sites these days, you can alsopersonalise the news page to suit your ownneeds.

http://www.worldbank.org/nipr/

This New Ideas in Pollution Regulation (NIPR)site from the World Bank would be of interestand use to researchers in understanding allaspects of industrial pollution, especially indeveloping countries. It has research andworking papers available for downloading. Itcontains a list of topic briefings, NIPRresources, contacts with the NIPR communityand special country briefings.

The NIPR also has a list of environmental siteson the net located at:

http://www.worldbank.org/nipr/onthenet.htm

This is a useful site for academic research intopollution control, prevention and regulation.

http://www.peg.apc.org/~psutton/green-innovations.html

Green innovations is a non-profit environmentalthink tank and environmental servicesorganisation. It is a Melbourne basedorganisation, which aims to be a catalyst for theachievement of global and local sustainability.The organisation works in the areasenvironmental management systems forsustainability-promoting organisations, greeneconomic strategies / greening the market forsustainability, biodiversity life-cycle assessmentand mobilising for sustainability.

The site contains a list of papers on these issuesrelated to research conducted by Green

18

Innovations.

Philip Sutton is theDirector of Policy andStra tegy of theorganisation and can becontacted at:

Green Innovations Inc.195 Wingrove StreetFairfield (Melbourne)VIC 3078Australia

e m a i l :psutton@pegasus.com.au Tel & fax: +61 3 9486-4799 News and Issues

ASIC/ICAA Provide Guidance onEnvironmental Reporting in Australia Roger Burritt - Australian NationalUniversity

As reported in the previous edition of theAPCEA News Journal (Vol.4, No.3, p.18),pursuant to s.299(1)(f) of the Company LawReview Act 1998, the directors' report of acompany, registered scheme or disclosing entityfor financial years ending on or after 1 July1998 must give:

"if the entity's operations are subject to anyparticular and significant environmentalregulation under a law of the Commonwealth orof a State or Territory - details of the entity'sperformance in relation to environmentalregulation".

Clarification about this requirement has nowbeen provided by The Australian Securities andInvestments Commission (ASIC) and theInstitute of Chartered Accountants in Australia(ICAA).

As the responsibility for complying with thenew environmental reporting requirements fallson directors, ASIC felt it was important toprovide some general guidelines to assistdirectors in complying with these new

requirements. ASIC has released guidelines inits Practice Note # 68 entitled "New Financial

Reporting and ProceduralGuidelines".

The guidelines are:

(a) that the requirements willnormally apply where anentity is licensed or subject toc o n d i t i o n s u n d e renvironmental legislation orregulation;

(b) that the requirements arenot related specifically to

financial disclosures (eg contingent liabilities andcapital commitments) and accounting conceptsof materiality in financial statements are notapplicable;

(c) that the information provided cannot bereduced or eliminated because information hasbeen provided to a regulatory authorityfor the purposes of any environmentallegislation; and

(d) that the information will generally be lesstechnical than information provided inany compliance reports to an environmentalregulator.

ASIC explains that the circumstances of eachentity will be different and many entitiesaffected by the new s.299(1)(f) are still tocome to terms with the new reportingrequirements. ASIC anticipates that reportingpractices will evolve, especially during the nexttwelve months, and will be monitoring reportsto assess whether further guidance is necessary.ASIC is looking for "full compliance with thespirit as well as the terms of the law."

In this context, the ICAA has alreadysuggested that, to indicate compliance with thelegislation, companies should also report thatno environmental legislation applies to theiroperations. If companies take this action allcompanies will, in future, be making anenvironmental statement in their annual

19

directors' report.

Roger can be contacted at:

Telephone: 02 6249 3670Fax: 02 6249 5005Email: Roger.Burritt@anu.edu.au

EDITOR’S NOTE:

It is interesting to note that legislation formandatory environmental reporting in theNetherlands was published on 27 November1998. About 300 companies have to reportyearly to the government and the public. 1999will be the first reporting year.

Mandatory environmental reporting is alsounder consideration in New Zealand, withsubmissions being considered for itsintroduction at the moment.

Centre for Social and EnvironmentalAccounting (CSEAR) NewsletterVolume 18, No.2 of this newsletter is nowavailable. This 46 page issue includes researchreports on social reporting in Nigeria andUganda. Also included is a review of a reportcommissioned by the International Federationof accountants (IFAC) Financial andManagement Accounting Committee on therole of the management accounting inenvironmental management in organisations.

The regular article and book reviews makenecessary reading for any student or researcherin social and environmental accounting issues.

For subscription details or further information,please contact CSEAR on:

Phone: 44-1382-344789Fax: 44-1382-224419email: csear@acc.dundee.ac.ukhome page: http:www.dundee.ac.uk/Accountancy/CSEAR

The Accountability Network NewsletterWhile not solely concerned with environmentalissues or environmental accountability, this

Virginia USA based newsletter, contains manyarticles which may be of interest to our readers.

The Fall 1998 issue is the 12th edition of thenewsletter. The Accountability Network wasestablished in 1993 by graduate students of theVirginia Tech MBA program.

The contact details for the network andnewsletter are:

Professor Ernest J. PavlockNorthern Virginia Graduate CenterVirginia Tech7054 Haycock RoadFalls Church, VA 22043Phone: 703-538-8413Fax: 703-538-8415email: ejpak1012@aol.com

New Book: Global Warning! DebatingInternational Developments in New PublicFinancial Management

Edited by: Olov Olson, James Guthrie andChristopher Humphrey

Cappelen Akademisk Forlag (a NorwegianPublisher) has recently published a new andhighly challenging book on the rise of NewPublic Financial Management (NPFM)reforms.

Edited by Olov Olson, James Guthrie andChristopher Humphrey, the book is theoutcome of a unique two year collaborativeproject involving 24 senior accountingacademics from eleven different countries,including Australia, France, Germany, Japan,New Zealand, Norway, Spain, Sweden,Switzerland, United Kingdom and UnitedStates of America.

Some of the publisher’s comments follow.

This book puts NPFM on trial in a waywhich it has never been in the past. Itreplaces caricatured, broad brush depictionsof different national developments with a

20

much needed detailed, comparative analysisof experiences with NPFM. It questionswhat so often has gone unquestioned;exploring the wide range of financialmanagement techniques which lie at theheart for so many new public managementinitiatives, yet which have been repeatedlyglossed over by leading publicadministration writers.

It challenges prior theories and assumptionsconcerning the global spread and claimedirresistibility of NPFM.

It shows how public financial managementis a live debating subject, bursting withcritical policy implications for theprovision of public services.

Overall, the book seeks to encourage moreinternational debate on what is special,valuable and undeniable about publicservices and less willingness in somecountries to let such services be defined inresidual terms - as `necessary evils' whichhave to be provided efficiently andeffectively!

The book is intended for a wide audienceand has been written in a style which isreadily accessible to people from manydifferent disciplines.

ISBN 82 456 0567 0Price: NOK390, (Approx. $AUD80, USD52or GBP32)

Ordering information:

1.The book can be ordered through any goodbookshop. 2.You may find it more convenient to orderdirect from Cappelen Akademisk Forlag by accessing Cappelen's Website address:http://www.cappelen.no/caf/

21

ENVIRONMENT EXTRA!UN proposes a halt to Australian uraniummine

Source: www.ens.lycos.com, 25/11/98

The Jabiluka uranium mine exposes tropicalKakadu National Park to serious threats andshould be stopped, a special United NationsEducational Scientific and Cultural Organisation(UNESCO) mission has determined.

The UNESCO report, condemned by theAustralian government after it was announcedmeans a significant win in a long campaign tohalt the big underground mine.

The report was submitted to UNESCO'sWorld Heritage Committee at a meeting inKyoto, Japan. At the December meeting adecision has given the Australian governmentuntil June 1999 to prove that the mine shouldgo ahead and that the area should not be addedto the World Heritage danger list. In the meantime UNESCO have decreed that no miningshould take place at Jabiluka.

The miner, Energy Resources of Australia,began building Jabiluka in June. The mine isbeing constructed so that 19.5 million tonnes ofore can be removed to yield around 90,000tonnes of uranium yellowcake.

The mine is going ahead against someopposition of Aboriginal traditional owners,whose ancestors are believed to have lived inthe region for tens of thousands of years.

The head of the UNESCO inspection mission,Francesco Francioni, has described the "indanger" listing as a most important sanctionwhich "very unattractively" exposes a nationinvolved.

The minister for the environment, Senator Hillsaid the Australian government was greatlydisappointed by a "superficial assessment" inthe 32 page report. He described the report as

"biassed, unbalanced and totally lacking inobjectivity" and said as far as the governmentwas concerned, the mine would go ahead.

The Australian Conservation Foundation'spresident, Peter Garrett, described the problemfor the government was that the firstindependent scrutiny of the Jabiluka projectrecommended it did not proceed.

Local residents win battle against toxicwaste dumpLocal residents of Werribee, a suburb ofMelbourne, have won a two year battle withlarge multinational company CSR Limited, whoplanned to use a section of the municipality fora toxic waste dump.

The dump will not go ahead after the localcouncil and the company came to an agreementabout the use of the land.

This represents a significant victory for localcommunities as the State government was mostsupportive of CSR in its intention to locate thedump in Werribee.

Seasons Greetings!On behalf of the editorial board, I would like towish all our readers a happy festive seasonover the Christmas and New Year. I hope youwill all continue the environmental journey withus in the future.

Gary O’Donovan - EDITOR