Developing & Executing Your environmental Management Strategy (eMS) to Drive Growth & Profits
Note: This Competitive environmental Intelligence (CeI) overviews the CeS step-by-step process for “how” to develop and execute your environmental Management Strategy (eMS) to drive growth and profits.
What Is Your Environmental Footprint?
You can’t be in business without being impacted by environmental issues, exposures, liabilities, investments, etc. In today’s transparent business environment, companies that understand this basic fact can use it to a competitive advantage.
In a transparent business environment, the way to minimize risk, maximize value and optimize performance while driving your growth and profits begins with discovering your environmental footprint.
“What is your environmental footprint?” Is government reporting required? Are you impacted by SOX, SAB 92 ruling, FIN 47, GASB 49? Do you generate a waste stream, air emissions, storm water runoff, etc.? Do you use TRI (Toxic Release Inventory) chemicals? Should you get ISO 14000 certified? Go carbon neutral? Do you have a neighbor contaminating your property? Underground or above ground storage tanks? Brownfields? LEEDS?
How Can an eMS Benefit Your Organization?
Through development and execution of an eMS, a business will discover their environmental footprint.
Besides providing you with your environmental footprint, an eMS also identifies your starting point from which to build a sustainable business. The better defined your starting point, the more control you will have. An eMS gives business the ability to measure and report your environmental progress to employees, government, stakeholders, neighbors, customers, etc.
An eMS is an evolving strategy based upon doing better today than yesterday and doing better tomorrow than today.
The eMS Team
An eMS utilizes a *TEAM SPORT strategy to assure you gather the necessary competitive environmental intelligence to execute your eMS. The makeup of your eMS TEAM can vary, but in general will be comprised of:
- key employee(s)
- legal counsel
- risk manager/insurance agent
- accountant
- financial institution representative
- realtor
- environmental service provider(s)
Obviously, as the CeS, you are the team captain. Your eMS TEAM primarily interacts with upper management. The eMS will identify lower-level organizational task to be performed and your appropriate TEAM member will coordinate.
Environmental Efficiency Evaluation
The foundation of your eMS is the environmental efficiency evaluation (eee). Completing the eS eee questionnaire gives you your environmental baseline by identifying direct and indirect environmental issues.
Developing & Executing Your EMS
Step #1: What’s coming in your front door?
Why are your customers doing business with you? What about raw materials, supplies, business vendors, salespeople, tenants, students, etc.? What’s your strategy if a vendor has an environmental loss that impedes their ability to deliver goods and services? Can a vendor have a negative environmental impact upon your business? Clients and vendors can create indirect environmental liabilities. It’s critical to know who you are doing business with. (Refer to “Environmental Loss Examples” for more information.)
Step #1: Environmental Claim Examples
- A transportation company was hired to long haul a liquid solvent used in making detergents and paints. The solvent was purchased freight on board (FOB) point of shipment, so when the shipment veered off the road and tumbled into the river below, it became a liability for the business that purchased the solvent FOB point of shipment. The tank ruptured upon impact, leaking its contents. Eighty thousand people in the neighboring towns were evacuated as a cloud of toxic vapor settled over the area. As a result of the accident, hundreds of gallons of the chemical traveled downstream, polluting a nearby lake and destroying thousands of fish and vegetation. Claims costs were $3 million. Poor vehicle maintenance was determined to be the cause of the accident. Who are you doing business with?
CeS Marketing Strategy
▪ Inspecting vendors of your clients allows you the opportunity to prospect for new business. Who better to inspect your client’s vendors than their professional environmental risk manager? While inspecting the vendor, share with them the services you perform for your clients as a certified eS.
Step #2: What’s going on inside your corporate walls?
How do you store, handle, and treat raw materials, supplies, and waste? Are you subject to any environmental laws or regulations? What vendor services are being performed inside your corporate walls?
Step #2: Environmental Claim Examples
- A general contractor performing renovation to a building had a negligence claim filed for creating unsafe air quality conditions in the ventilation and air filtration systems. Employees on the premises claimed to have suffered serious injuries from inhalation of, and exposure to toxic fumes and airborne contaminants. A $10 million claim was filed against the general contractor and building owner.
- A millwright dropped a piece of heavy equipment from a crane onto a pipe leading to a hydrofluoric acid tank at a manufacturing plant. Acid was emitted into the surrounding atmosphere, creating a vast vapor cloud. Approximately 3,000 residents were evacuated and 1,000 were treated for respiratory injuries. Over 4,500 claims were filed in excess of $23,000,000. The claims included bodily injury, property damage, lost profits, and emergency response costs.
Step #3: What’s going out your back door?
Consider your waste stream, from finished products, equipment or services, recyclables, waste materials, vendor services, etc. The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as Superfund, is based upon joint, strict and several liability. CERCLA states you own your waste from cradle to grave. If you reduce your waste stream, you will reduce your potential future liabilities. When is the last time you had your waste stream characterized?
Step #3: Environmental Claim Examples
- A golf course sent all its waste golf cart batteries to an off-site battery recycling facility for disposal. Over a period of several years, the battery recycling facility did not adhere to applicable federal and state environmental regulations, and it was turned into a Superfund site. The golf cart batteries were a waste and the golf course was found jointly liable for pollution conditions caused by the battery disposal facility. The golf course’s settlement for cleanup exceeded $175,000.
- A service station had a waste hauler that was transporting its used motor oil overturn and spill its load into a nearby stream. Under CERCLA, the service station must contribute for their apportionment of the load for cleanup cost since federal law states that you own your waste from cradle to grave. Cost to settle the claim for the service station was $600,000.
Step #4: Who are your neighbors?
You can be executing your eMS but you can still experience an indirect environmental impact from one of your neighbors. Who are your neighbors and what potential environmental liabilities can they create?
Step #4: Environmental Claim Examples
- Chlorine release at a wastewater treatment plant resulted in toxic air emissions. Area residents and businesses were evacuated and several people were hospitalized for inhalation of fumes. A total of 12 businesses were forced to shut down for the better part of a day. Bodily injury claims amounted to $70,000 and business interruption claims totaled $120,000.
- Authorities evacuated a small farming town after a noxious cloud drifted in from a cotton gin with a leaking fertilizer tank. The cloud came from a 30,000-gallon tank of anhydrous ammonia, which is used as a fertilizer. Police said the open valve on the tank made them suspicious somebody might have tried to steal some of the fertilizer and left the valve open. Anhydrous Ammonia can also be used to make the drug methamphetamine.
- In the chemistry lab of a small university, experiments were being conducted under an old hood. The hood filters failed and released toxic fumes into the community. Several residents had to be evacuated and others rushed to the hospital. The college was sued for several third party claims, along with a $215,000 property damage claim for contingent business loss.
Step #5: Compile eee and distribute to TEAM members
Your eS is the TEAM leader and will compile the information gathered from the environmental efficiency evaluation (eee) questionnaire into a categorized format that assures all TEAM members will be on the same page.
Step #6: eMS TEAM Members add their CeI to the eee
TEAM members will add their professional competitive intelligence to the eee compilation, so you can prioritize and budget for the strategy laid out by your eMS TEAM and seamlessly blend it into your business operations.
Environmental efficiency strategies may be new to some of your TEAM members. I suggest you offer a conference call time so you can assist your TEAM members to understand how they can best serve you in developing and executing your eMS. If any TEAM members want to charge you for their time on the conference call, I suggest you point out the purpose of the meeting is for them to learn how they can better serve you.
Step #7: Execute eMS
The eMS is a customized evolving, continual improvement strategy that has moved you past government compliance. You are environmentally transparent and in control of your destiny.
Recap – Developing & Executing Your eMS
You need competitive environmental intelligence in order to succeed in today’s green business environment. An eMS will minimize risk, maximize value, and optimize performance via a TEAM SPORT strategy. Your eS is your TEAM leader. An eee is the foundation to the eMS and gives you your environmental footprint so you have a defined stating point. An eMS offers horizontal and vertical benefits to drive growth and profits to today’s business environment.