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US follows Europe's green lead

More US companies are following the European trend for publishing lengthy environmental and social disclosures in addition to their increasingly voluminous financial reports.

United Technologies, a conglomerate that includes Black Hawk helicopters among its products, was the latest to launch a separate "responsibility" report last week detailing everything from water consumption to accident rates.

Ford announced a major expansion to its existing corporate citizenship report by promising a new climate change study with estimates of all greenhouse gas emissions, including those of its 6.8m vehicles sold annually.

Hewlett-Packard and Gap won top prize in the increasingly competitive industry awards for corporate responsibility reports with two entries totalling 118 pages.

Campaigners say the growing quantity and quality of these publications reflect the wider mood of accountability demanded following reforms such as Sarbanes-Oxley.

As asbestos and other environmental liabilities loom large in the minds of investors, more companies are choosing to err on the side of greater disclosure, not least as a way of improving their public image.

"But it is not just because they are under pressure," said Timothy Smith, director of socially responsive investing at Walden Asset Management. "A number of companies see themselves as telling their story and believe it is good business too."

George David, chief executive of United Technologies, argued there were relatively few conflicts of interest: "What is good for the environment is good for shareholders."

Ford said it was anticipating the "expectations of investors and customers for practices that deliver environmental and social as well as financial returns".

But one important difference between this trend and the increases in financial reporting required after Sarbanes-Oxley is the lack of independent audits or commonly agreed standards to prevent what critics have called "greenwash" reports with more soft-focus photographs than hard data.

Global Reporting Initiative, a Dutch-based group that tries to set common disclosure standards for companies, tracks just 68 US companies using its guidelines compared with 70 in the UK and 28 in the Netherlands.