8th December 2005 - Only 9% of UK companies are aware that their environmental reporting obligations continue despite the OFR being abandoned

Despite the Government recently abandoning the OFR, many companies in the UK and throughout the EU will still need to meet broadly similar environmental reporting requirements under the EU Accounts Modernisation Directive (AMD). Very few companies are aware of the reporting requirement contained in this Directive.

Indeed Trucost conducted a survey to determine how many UK listed companies knew about their obligations to the AMD, during the week that the OFR was abolished, and the results were conclusive.

Simon Thomas, chief executive of Trucost, says: "Trucost has spoken to 161 listed UK companies and found that only 9% of those companies had heard of the EU Accounts Modernisation Directive. The comprehensive publicity and consultation surrounding the now abandoned OFR has led to a situation in the UK where few companies are aware of the underlying EU Directive that the OFR sought to implement. But the EU Directive hasn't gone away. We spoke to our contacts within companies who were dealing with the OFR (mostly Company Secretaries), so they are experts on reporting. A significant communications exercise needs to be undertaken to ensure that companies have sufficient understanding of current environmental reporting obligations."

The main difference between the OFR and the EU AMD is that the former required a discussion of future prospects and encouraged the inclusion of broad social and community issues. Simon Thomas, chief executive of Trucost, says: "I hope that the removal of the requirement to make forward-looking statements without 'safe harbour' provisions will make it easier for more companies to report openly and transparently on material environmental issues in line with the existing AMD requirements." The focus on environment and employee issues, rather than broader social and community issues, lends itself better to quantitative reporting based on KPIs.

Notes to Editors:

About Trucost (www.trucost.com)

Trucost Plc is an environmental research company established to help companies and investors understand the environmental impacts material to business activities, allowing them to measure and report on them in line with regulation such as the EU Accounts Modernisation Directive. Trucost provides data and analysis on company emissions and natural resource usage and presents these in financial as well as quantity terms, providing the basis for an improved dialogue between companies, investors and other stakeholders. Trucost analysis covers a wide variety of environmental issues, including climate change, hazardous emissions and natural resource use. This analysis is available for over 3,200 companies worldwide. Trucost has the support of an International Advisory Panel of leading academics in the fields of economics and the environment, who lend their considerable experience to the specialist research staff located in London.

The EU Accounts Modernisation Directive

This directive came out of an earlier EU study (2001/45 3/EC) which found that 'there is a justified need to facilitate further harmonisation on what to disclose in the annual accounts and annual reports of enterprises in the European Union as far as environmental matters are concerned. The quantity, transparency and comparability of environmental data flowing through annual accounts and annual reports of companies must also be increased.'

The AMD, which is effective for financial years beginning on or after 1st April 2005, requires a mandatory addition to the directors' report - an Enhanced Directors' Report (EDR). Large quoted and unquoted companies must produce an EDR with a 'fair review' of the business of the company and should report relevant environment and employee matters using key performance indicators (KPIs) 'to the extent necessary for an understanding of the development, performance or position of the business of the company.'

The enforcement structure for the AMD is similar to that for the now abandoned OFR, namely it is the ultimate responsibility of company directors to sign off the EDR, which will be enforced by the FRRP (Financial Reporting Review Panel). Company auditors are required to state whether the information given in the EDR is consistent with a company’s accounts.

Press Enquiries: To interview Simon Thomas, chief executive of Trucost, call Philippa Thomson on +44 (0)20 7321 3731.

Other Enquiries: To find out how Trucost can help your company meet the requirements of the EU Accounts Modernisation Directive click here for information about Trucost’s Workshops or call +44 (0)20 7321 3833

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