Non Hazardous Waste (tonnes) - this KPI probably affects you!   Our mission in this column is to help finance professionals identify and cope with the reporting of significant environmental issues involving their businesses. These may need to be reported as KPIs in an expanded Directors' Report or as part of the mandatory Operating and Financial Review (OFR). A popular misconception is that unless a business is involved in the energy or manufacturing sectors then it cannot possibly cause much pollution. Yet the reality is that all businesses ranging from financial services to real estate directly or indirectly cause pollution, for example, simply by consuming fuel or electricity. Defra, (The Department for Environment, Food and Rural Affairs) identifies over 700 different types of environmental impacts that are caused by business. Many of these result in significant degradation of the environment yet the cost of this is borne by society as a whole and not the businesses that use the resource or emit the pollutants. Placing a financial value on environmental impacts allows companies, shareholders and regulatory authorities to determine the potential relevance of their interactions with the environment in a clear and transparent way and to shoulder responsibility for their share of pollution. Accounting for non hazardous waste Last week we looked at Greenhouse Gases (GHGs) which are produced directly or indirectly by most businesses, often as a result of using fuel and electricity. In fact, it is the most significant environmental matter for over 70 percent of the 56 business sectors used by Defra to describe the economy. The next most significant cause of pollution is waste. This week's article deals with non-hazardous office waste such as paper, cardboard, plastic & metal packaging and organic materials. Therefore, it is not difficult to see that most businesses are capable of generating significant quantities of non-hazardous waste through day to day activities. But just because it is classified as non-hazardous does not signal that it harmless to the environment. Non-hazardous waste can be disposed of in one of three main ways. It can be placed in landfill sites where organic based matter such as paper slowly decomposes, it can be combusted in industrial incinerators or it can be sent to a recycling facility and reused. Unfortunately, each of these has an environmental impact. Landfill sites, for example, generate methane gas which is released to the atmosphere and is a potent greenhouse gas. Also, pollutants can leach out of landfill sites into local water systems. Incineration generates large amounts of carbon dioxide, and other emissions such as nitrogen oxide, sulphur dioxide and ash. The latter comprises concentrated amounts of heavy metals which can be difficult to dispose of. A quick guide to calculating and reporting non-hazardous waste Waste can be measured by estimating the number and weight of rubbish bags that leave the business over a set period of time. If the waste is sorted prior to disposal, then Defra says that more detailed measurement of specific waste, such as tonnes of glass can be made, but waste can be treated as a general category. Waste should be reported in metric tonnes per annum. In the UK , many companies already record this information as the UK landfill tax is charged per tonne. Defra guidelines say that where possible, waste should be broken down into separate categories, such as paper, glass, aluminium and the final route of disposal, for example, 50% to landfill, 30% incinerated and 20% recycled reported. If an estimation method has been used then this should also be reported. However, if you are a listed company, and have to comply with Reporting Standard 1, The Operating and Financial Review, then there are a whole range of additional matters to be reported for each KPI, for example, the source of the underlying data, commentary on future targets, where available, corresponding amount for the financial year immediately preceding the current year and any changes to the calculation method used compared to previous financial years.
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