Since the beginning of the 1990s the number of companies producing environmental reports has increased considerably, a rise that now has reached a plateau. Some critics claim environmental reports are merely an exercise in public relations. This study describes the ascent of and the motives behind corporate environmental reporting and examines the extent to which the messages communicated in environmental reports correlate with the messages contained in corresponding annual reports and actual corporate behaviour. The indicated praxis of steering attention away from environmental problems—a by-pass solution—can involve providing contradictory information to various stakeholders. This article looks into third-party verification impacts on the credibility of environmental reports and calls for stricter reporting rules. The paper also discusses how eco-efficiency and sustainability demands placed on the scope of environmental reporting could enhance the sustainability of this reporting phenomenon, by for example doing away with merely limiting reports to company-judicial borders. Copyright © 2002 John Wiley & Sons, Ltd and ERP Environment