{"id":210,"date":"2007-07-10T11:51:13","date_gmt":"2007-07-10T15:51:13","guid":{"rendered":"http:\/\/www.environmentalriskmanagers.com\/erm\/development-and-execution-of-an-environmental-management-strategy-ems\/"},"modified":"2012-07-17T23:49:34","modified_gmt":"2012-07-17T23:49:34","slug":"development-and-execution-of-an-environmental-management-strategy-ems","status":"publish","type":"post","link":"https:\/\/estrategist.com\/members\/development-and-execution-of-an-environmental-management-strategy-ems\/","title":{"rendered":"Development And Execution Of An environmental Management Strategy (eMS)"},"content":{"rendered":"

Environmental liabilities via direct or indirect exposures impact virtually every business in existence. Businesses with direct environmental exposures are quite obvious like chemical manufactures, hazardous material transporters, environmental remediation contractors. <\/span><\/p>\n

Businesses with indirect environmental exposures are not quite so obvious, like a financial institution with a mortgage on an office building where historical environmental contamination has just been discovered. Even though the financial institution had nothing to do with the contamination, they hold the mortgage and are facing an indirect environmental exposure. Should the bank foreclose on the contaminated property if the owner defaults on payments? Are there monies to address the required cleanup? Government issued fines and penalties? Are third party bodily injury or property damage claims possible? Legal costs? (<\/span>Note: The worst environmental damage occurs slowly, seeping into the ground or water over time, and may go undetected for decades.<\/span>)<\/span><\/p>\n

We know a business is profitable if the value it creates exceeds the cost of performing their value activities. To date, the hundreds of billions of dollars spent by businesses for known environmental liabilities such as superfund, asbestos, lead, mold, underground storage tanks and the list goes on, has forced businesses to change the way they operate. <\/span><\/p>\n

Today’s globally transparent business environment, i.e. FIN 47, Sarbanes Oxley, ISO 14000, the SEC’s SAB 92 ruling, Brownfield redevelopment, terrorism\u00e2\u20ac\u00a6. has made environmental issues an everyday value activity. <\/span><\/p>\n

Through development and execution of an environmental Management Strategy (eMS), sustainable businesses create value by taking control of their environmental issues and moving beyond just meeting government compliance. An eMS is an evolving strategy, utilized by sustainable businesses to add value. <\/span><\/p>\n

An eMS has proven successful because it’s based upon a TEAM SPORT<\/strong> strategy. TEAM SPORT<\/strong> stands for (T<\/strong>ogether E<\/strong>veryone A<\/strong>ccomplishes M<\/strong>ore because S<\/strong>trategic P<\/strong>artners O<\/strong>ptimize R<\/strong>esources and T<\/strong>ime). A TEAM SPORT<\/strong> strategy assures a business gathers the competitive environmental intelligence necessary to execute an eMS. <\/span><\/p>\n

Who are your TEAM members? <\/strong><\/span><\/p>\n

To answer that, let’s take a look at what a typical reactive business does when they find out they have an environmental problem. Keep in mind, since the business is reactive they are managing the environmental problem after it occurs. <\/span><\/p>\n

 <\/p>\n

Probably the first person an environmentally reactive business will call is their attorney<\/strong>. After they call their attorney, they will contact their insurance agent<\/strong> to see if they have any environmental insurance coverage. When their insurance agent informs them they do not have any coverage, the reactive business generally will call their attorney back to sue the insurance agent. <\/span><\/p>\n

 <\/p>\n

Since the environmentally reactive business is unknowingly self insuring the liability they will need financial resources to correct the problem and pay legal fees so they need to involve their financial institution<\/strong>. However, most financial institutions, when they find out they have a client with an environmental problem, their strategy is to call all obligations due and sever the relationship. Since the reactive business has an environmental liability, they need to involve their accountant<\/strong> to accurately express the businesses financial position.<\/span><\/p>\n

If the business owns, buys, sells or manages property they will want an environmentally knowledgeable realtor<\/strong>. You include the businesses environmental services providers <\/strong> (environmental engineers, remediation contractors, waste haulers, etc.), and some of the businesses employees<\/strong>. This rounds out your typical eMS TEAM.<\/strong><\/span><\/p>\n

(Note:<\/span> As the environmental Strategist (eS), (For more on becoming a certified environmental Strategist go to www.estrategist.com<\/a>) you are the TEAM leader who all TEAM members report to.<\/strong><\/span>)<\/span><\/p>\n

 <\/p>\n

The eMS TEAM<\/strong> primarily interacts with upper management. The eMS will identify lower level organizational task to be performed and the appropriate TEAM<\/strong> member can coordinate. <\/span><\/p>\n

(Note: <\/span>Not developing and executing an eMS via a TEAM SPORT strategy can have some significant exposures as well, particularly where regulatory compliance and the bottom line are at stake. Research shows, 60% to 90% of a businesses in house activities are services that are neither performing at their best levels nor contributing significantly to their competitive edge. A TEAM SPORT strategy has proven to minimize risk, maximize value and optimize performance in such areas as internal productivity, product quality, innovation, compliance, customer service, outsourcing efficiency, public relations, lobbying, stock price\u00e2\u20ac\u00a6. An eMS creates horizontal and vertical benefits<\/strong><\/span>)<\/strong><\/span><\/p>\n

The foundation of an eMS is the environmental Risk Assessment (eRA). An eRA identifies the various direct and indirect environmental issues impacting a business. An eRA does not attempt to meet any specific governmental standards or follow any specific models that have been developed such as All Appropriate Inquiry (AAI), ASTM Phase I & II reports, ISO 14000\u00e2\u20ac\u00a6. The eRA can be characterized as an environmental Dunn & Bradstreet. <\/span><\/p>\n

The four footings of an eRA:<\/strong><\/span><\/p>\n

eRA Part One:<\/strong><\/span>What’s coming in a businesses front door<\/span>, i.e. raw materials, supplies, business vendors, sales\u00e2\u20ac\u00a6.? What if a vendor had an environmental loss that impeded their ability to deliver goods and services? If this were to occur what’s your strategy? Can a vendor have a negative environmental impact upon your business? It’s critical to know, who you are doing business with.<\/span><\/p>\n

Example:<\/span> A transportation company was hired to long haul a liquid solvent used in making detergents and paints. The solvent was purchased 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?<\/span><\/p>\n

Example:<\/span> While constructing a new sports stadium at a university, a contractor ruptured two abandoned 10,000-gallon underground storage tanks full of gasoline and diesel fuels. Since a private company donated the land to the university and the contractor did not have pollution insurance, the university was charged $200,000 for the environmental cleanup. <\/span><\/p>\n

Who are you doing business with? This is the first question a business needs to answer in development of their eMS. Client’s and vendors can create direct and indirect environmental liabilities. <\/span><\/p>\n

eRA Part Two<\/strong><\/span>: What’s going on, inside a businesses corporate walls<\/span>? How do they store, handle and treat, raw materials, supplies, waste? Are they subject to any environmental laws or regulations? What vendor services are being performed inside the businesses corporate walls? <\/span><\/p>\n

Example:<\/span> 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.<\/span><\/p>\n

Example:<\/span> A manufacturer stored bag house dust containing heavy metals in an uncovered dumpster behind their facility. Whenever it rained, storm water mixed with the dusts, forming a slurry, which ran off-site. Soil testing of a nearby stream bank showed high levels of lead, cadmium and mercury. The contaminant source was determined to be the dumpster run-off. The manufacturer was responsible for cleanup costs exceeding $250,000. <\/span><\/p>\n

Example:<\/span> 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. <\/span><\/p>\n

Example:<\/span> A maintenance department used solvents for parts washing. They performed the washing over a drain leading to an on-site septic system. Over time, the septic system leach field migrated into the surrounding soils and groundwater. At the time of the septic system closure and conversion to a public sewer system, the contamination was discovered. Site remediation exceeded $720,000. <\/span><\/p>\n

eRA Part Three:<\/strong><\/span> What’s going out a businesses back door<\/span>? From finished products or services, recyclables, waste materials, vendor services, etc? <\/span><\/p>\n

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. So, if you reduce your waste stream you will reduce your potential future liabilities. When is the last time you had your waste stream characterized? <\/span><\/p>\n

Example:<\/span> A golf course sent all of 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 courses settlement for cleanup exceeded $175,000.<\/span><\/p>\n

Example:<\/span> 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.<\/span><\/p>\n

eRA Part Four:<\/strong><\/span>Who are your neighbors<\/span>? A business may be executing their eMS but they can still experience an indirect environmental impact from one of their neighbors. Who are your neighbors and what potential environmental liabilities can they create?<\/span><\/p>\n

Example:<\/span> 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. <\/span><\/p>\n

Example:<\/span> 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. <\/span><\/p>\n

Example:<\/span> 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. <\/span><\/p>\n

The environmental Strategist (eS) will compile the four parts of the ERA and distribute it to TEAM <\/strong>members via the <\/span>www.estrategist<\/span><\/span><\/a>.com<\/span> eRAM Tool. TEAM<\/strong> members will add their professional competitive intelligence so the user can prioritize and budget for the strategy laid out by their eMS TEAM. <\/strong> The eMS has moved the business past government compliance and they are now in control of their destiny and are environmentally transparent.<\/span><\/p>\n

To recap, businesses need competitive environmental intelligence in order to succeed in today’s transparent business environment. An eMS will minimize risk, maximize value and optimize performance via a TEAM SPORT<\/strong> strategy. The environmental Strategist is the TEAM<\/strong> leader. An eRA is the foundation to the eMS. An eMS offers horizontal and vertical benefits. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Environmental liabilities via direct or indirect exposures impact virtually every business in existence. Businesses with direct environmental exposures are quite obvious like chemical manufactures, hazardous material transporters, environmental remediation contractors.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-210","post","type-post","status-publish","format-standard","hentry","category-resources","category-featured","entry"],"_links":{"self":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/comments?post=210"}],"version-history":[{"count":1,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/210\/revisions"}],"predecessor-version":[{"id":1126,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/posts\/210\/revisions\/1126"}],"wp:attachment":[{"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/media?parent=210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/categories?post=210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/estrategist.com\/members\/wp-json\/wp\/v2\/tags?post=210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}