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IMA Energy & Environment Blog

Cost-Conscious Environmental Compliance: Part One

by Philip Thomas

BBJ Group is an IMA B2B Partner

On a daily basis, business executives experience the pressure of needing to maintain high levels of regulatory compliance within their organization while adhering to firm (and in some cases, tightening) expense budgets. For these decision-makers, the reality is that fulfilling both of these potentially competing mandates is vitally important to business prosperity (or even solvency) and there is very little room for error at either end.  In states like California with harsher regulatory atmospheres, the crunch can be felt even more intensely. The result is management being forced into perpetual pursuit of that delicate balance between compliance and cost that allows for neither to be shortchanged or overplayed. What a pickle!

The good news is that it is possible to run a clean and compliant business, even in the most onerous of regulatory jurisdictions, and at the same time stick to reasonable, conservative budgets established with the overall financial goals and necessities of the business in mind. Here, in Part One of a two-part blog post (with the second part coming next week), are several tips that center on one aspect of regulatory compliance—environmental. While these solutions largely have California in mind, they can be applied in other states as well. And for purposes of this blog post, environmental compliance is defined as a business taking actions and maintaining conditions that promote the health and safety of its hazmat-handling employees while protecting its surrounding environment and avoiding governmental agency enforcement and other adverse legal consequences, including “bad press.”

We all know about the high cost of environmental non-compliance. We have heard plenty of stories about cringe-worthy employee exposures and accidents. We have read about tremendously expensive clean-ups of impacted soil or water around a business facility. We have seen the dreadful newspaper headlines about multimillion dollar settlements and judgements imposed on corporate violators. Some of us have probably been “lucky” enough to have been at ground zero for one or more of these compliance calamities in the past and can speak with first-hand experience to their detrimental effects. The business case for spending good money to prevent all of the above is an easy one and needs no further justification. The challenge comes with making sure those precious allotted dollars are spent only on things that will best accomplish the mission while not throwing cash away on inefficiencies and matters of de minimis consequence.

A Little Goes a Long Way

A fantastic and inexpensive place to start is culture. In recent decades, a lot has been said about the importance of corporate culture and taking a look at the values and behaviors that exist within an organization that define its culture, for better or for worse. By now, after having witnessed the tangible benefits from proactive culture-building efforts, most company executives are strong believers in nurturing a type of organizational culture that keeps employees happy and productive. They know that it assuredly leads to improved operational and financial performance. Experts in workplace safety (think OSHA) have known about this trick for decades as well, striving to establish robust safety cultures in their work sites in an attempt to reduce the frequency and severity of employee injuries and accidents. 

Likewise, a business looking to advance in the area of environmental compliance without spending in excess of its means must also look internally and evaluate the culture that surrounds and supports their environmental programs and practices. This is something currently not done nearly as much compared to its “strictly safety” sibling, despite having the potential to be executed fairly painlessly and using a very small amount of capital.

When it comes to cultivating a workplace culture capable of upholding sustained environmental compliance, work should begin on Day One. What does your new-hire handbook or employee manual have to say about your company’s commitment to environmental matters? When was the last time that section, if it indeed exists, was updated? Does the current content seem to demonstrate a company simply going through the motions out of legal obligation (“Employees are expected to follow all local, state and federal environmental regulations”)? Or, is it indicative of a company passionate about doing the right thing as a corporate citizen and providing its workers with the actual know-how, tools and support to get the job done right? Have all major environmental compliance objectives been addressed in the material provided to newcomers? Or, is the size and scope of the environmental section dwarfed by the section that governs their use of personal cell phones or their hygiene and appearance? Because your workforce is the first line of defense against environmental non-compliance, the tone that you set and the marching orders that you deliver to these individuals as they enter your association are critical to long-term victory in this area.

Even more important than new-hire orientation is the actual environmental training and day-to-day reinforcement (e.g., information presented at company gatherings) provided to company workers, both at time of hire and on a regular basis thereafter. Have you, as an executive responsible for operational processes and/or P&L report expense line items, recently taken the environmental training courses provided to your employees and hazmat handlers? Do they adequately address the issues that mean the most for your operation’s present-day environmental liabilities? Considering that legislative sessions in California (and many other states) are progressive and close out annually, reviewing company policies to ensure that they align with new state law at least once per year is strongly advised. When was the last time this was done? The status-quo conditions of yesteryear, acceptable to your position’s predecessor, may no longer be acceptable to you and your present administration.  It may be time to respond and act, and be able to do so on the cheap.

Moving Forward

Now that you have a workforce that is appropriately orientated and trained, it is time to consider what other in-purview, in-budget moves you can make to maximize your company’s levels of environmental compliance. Part Two of this post explores some ways that you can effectively analyze past environmental compliance expenditures, learn to focus on what really matters, scrutinize permit requirements (potentially appealing their costs), evaluate current vendor and consultant relationships and eliminate the practice of putting off major expenditures until they are absolutely due, causing the need for big, budget-busting spending all at once. Stay tuned.

To view the original article, click here.