Environmental Management ....

                                    .....Good Business ‘Cents’

David Hanson, Principal, Taxis Group, LLC

INTRODUCTION

The emerging global economy, together with the rising expectations by the consuming public, and an increased awareness about our impact on our world,  has created a dynamic in which environmental management is no longer an optional business consideration.  Businesses are being challenged to employ the same level of responsible management toward the environmental aspects of their business as the quality of their products and services.  This includes the workplace environment and the environment beyond property lines.  Giving consideration to developing and implementing an Environmental Management System (EMS) can benefit the long-term competitiveness of your business.

WHAT IS AN ENVIRONMENTAL MANAGEMENT SYSTEM?

The International Organization for Standardization (ISO) defines an environmental management system as….

“…that part of the overall management system which includes organizational structure, planning activities, responsibilities, practices, procedures, processes and resources for developing, implementing, achieving, reviewing and maintaining the environmental policy..." 

As such, a viable Environmental Management System (EMS) focuses on environmental management practices and processes, rather than the specific activities themselves (e.g. waste handling, outfall monitoring, etc.).

An EMS provides the operating system by which a company’s business activities can be assessed and evaluated as to their environmental impacts, and then executed in a manner which is:

1) consistent with key organizational/ business goals and,   2) provides for protection of the environment. 

An EMS usually does not specify levels of performance, but will ensure that proper management systems and procedures are in place with the goal of minimizing environmental impact, while affording the flexibility to adapt the individual company’s need, priorities, and culture.

HOW CAN An EMS BENEFIT MY COMPANY?

The following describes a few of the opportunities that exist for companies maintaining effective Environmental Management Systems.

Marketing Opportunities and Sustainability  A healthy business is sustainable – can grow and adapt to the changing business climate and market conditions.  Consumers are becoming more conscious of the impact that business and industry have on the environment and are looking toward those manufactures whose products and processes do not degrade the environment. 

Cost Savings can be realized by evaluating total resource and energy utilization and implementing energy conservation, waste minimization, and disposal alternatives. Also, when process waste (whether manufacturing, or managerial waste) is minimized, the system functions more efficiently and economically.

Customer preference for companies demonstrating good environmental performance is creating an opportunity to increase or retain market share.

Corporate Image is enhanced by projecting a responsible environmental ethic to the company’s stakeholders including employees, shareholders, the local community, regulatory agencies, lenders, etc.

Legislation  An effective EMS that ensures recognition and compliance with all applicable requirements will minimize environmental liability and enforcement actions, streamline permit processing, and offer financing opportunities for capital projects related to environmental improvement.

Investment  Investors are increasingly moving to green portfolios.  Analysis of these investments demonstrate that the financial performance of the green portfolios has in many cases out performed more traditional investments

Insurance  Companies with an effective environmental management system can demonstrate that they pose less risk and may give the insured a negotiating tool to lower insurance premiums.

IDENTIFYING & QUANTIFYING the COSTS & GAINS

Various diagnostic tools are available and currently used to determine the cost of non-compliance, the cost of compliance and beyond, as well as predicting what economic benefits an EMS can provide.

Once the environmental aspects of your business have been identified, an economic analysis needs to be conducted to allow for planning and decision-making. Two available tools are Life Cycle Analysis (LCA), which has a product focus, and Total Environmental Cost Accounting (TCA), which provides the process focus.

Life Cycle Analysis generally focuses on the environmental aspects of a specific product (although it could be applied to processes or services) over its lifetime.  LCA looks at each stage from raw material through production, use, and disposal. Inputs to the analysis include energy use, waste generation, emissions, and releases from each stage.

Total Environmental Cost Accounting focuses on the economics related to activities containing environmental aspects. For example, TECA might compare the cost of retrofitting to address increased emissions with the cost of additional waste treatment and disposal for two alternatives.   TECA is primarily used internally by management and provides the definition required to allocate costs for the environmental aspects of the many activities performed; costs which are hidden by traditional cost accounting methods.

By allocating environmental costs to the products or processes that generate them, a company can motivate affected managers and employees to find creative alternatives that minimize the waste and maximize the resource - lowering those costs and enhancing profitability.  Better management of environmental costs can result in improved environmental performance and significant benefits to human healthas well as business success.

A thorough accounting system, which incorporates all of a company’s activities including environmental, is a necessary foundation for the creation and implementation of an effective and efficient overall Environmental Management System and can enhance the long-term health of the company itself.

 About the Author:

David Hanson is principal and senior consultant for Taxis Group, LLC.  Taxis Group offers consulting and contract services for environmental, safety & health and quality systems risk management and the built environment.  He holds a graduate degree  from Michigan Technological University

Mr. Hanson has over30 years experience in environmental practice, regulatory compliance and research,  process innovation, and quality management.  He has also advanced development of innovative process technologies and polymer composite recycling systems during his career in both government, and private-sector manufacturing.  He has participated on numerous community task forces and committees as an industry stakeholder representative and technical/scientific resource in projects involving process innovation/ improvement, sustainable building design, environmental remediation, emergency response planning, and solid waste planning.

He is also presently is active in sustainable development efforts including providing green homes for the affordable housing market through Sanctuary Development LLC, a Taxis Group LLC partner.

 Recently, he has partnered with an emerging  technology firm  to  bring economical biofuels and energy technologies to market while assisting companies achieve low cost compliance with waste water, residuals, oil and grease, and biological contaminants in process streams, solid waste, and biomass.

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