ENDS Special Report: Sustainable Business 2012

Britain’s companies are improving their environmental performance despite the tough economic climate, but they appear to be letting social issues fall behind, according to a new report from ENDS and Forum for the Future, sponsored by environmental consultancy ERM.

Despite encouraging progress in many areas, Sustainable Business 2012: Progress in Tough Times finds that UK plc is not doing enough to improve the social standards of its employees and supply chain, or to tackle growing pay inequality.

Sustainable Business is the only independent indicator-based assessment of UK business sustainability. It’s now in its second year.

The report tracks 15 indicators, each representing an important aspect of environmental, social and economic sustainability.

Last year’s report found that business was falling behind in its efforts to reduce carbon emissions and lessen other environmental impacts. The 2012 report shows those trends have turned around.

Over the past year, there have been falls in carbon emissions from UK businesses, improvement in industry’s energy efficiency and a drop in greenhouse gas emissions from freight.

Waste production has also fallen substantially, and there has been a major drop in pollution incidents from industry in England and Wales.

However, UK plc is performing less well in other areas. Indicators tracking pay equality show the ratio of top-to-bottom pay is getting worse, despite the efforts of the High Pay Commission. An indicator tackling general social performance shows little improvement.

This suggests that business needs to do more to identify its social impacts and come up with ways to tackle them. But the report points out this a difficult task. Interviewed for the report, Mike Barry, head of sustainable business at Marks & Spencer, says: “Environmental issues are easier for a big business to understand and tackle, because there are obvious end points: you can cut your energy by X percent. But if we say ‘We’re looking to improve the lives of our customers’, it’s far more nebulous.”

The report also reveals a worrying trend in sustainability reporting. Growth in the number of companies issuing detailed environmental or CSR reports has stalled for the first time in a decade. This could be because firms do not want to take on the additional costs of writing them.

ENDS and Forum aim to publish the report annually to track progress on sustainability in UK business.

Download Sustainable Business 2012 for free here (site registration required).