More businesses are taking note of their environmental responsibilities but bosses who break the law face large personal fines, according to a new report.

The Environment Agency said on Tuesday that there was "much good news" over the last year.

But the watchdog also vowed that it would continue to hold polluters to account.

The number of pollution incidents from industry was down 12 per cent on 2002 and by 43 per cent over the last two years, said the report.

And the Environment Agency's system of scoring site by site operational performance found that standards of environmental management are improving.

The study also highlighted a "growing trend" of personal liability for corporate environmental crime, with company directors finding themselves at increased risk of incurring personal fines.

In 2003 the report noted that 11 company directors were personally fined up to £20,000 for pollution.

"While the Environment Agency still contends that fines for environmental offences are too low, environmental responsibility does appear to be being brought close to home for an increasing number of individuals, with a harder line taken by the courts for deliberately ignoring risks to the environment and public health," warned chief executive Barbara Young.

"Company directors and sole traders who try to increase profits at the expense of the environment should take note that a personal fine or a criminal record could be on the cards."

Business response

Responding to the study, the CBI said the Environment Agency had now adopted a more balanced tone towards business than on previous occasions.

Michael Roberts, CBI director of business environment, said firms were not trying to avoid meeting their environmental obligations.

"Responsible companies view fair enforcement, backed by effective sanctions, as an important part of their operating environment," he said.

"But British business also invests £4 billion a year complying with environmental regulation and is already due to comply with additional requirements in future years.

"The Agency's focus should therefore be on more effective delivery of its risk-based approach to enforcement rather than adding yet more business regulations."