News & Events
Environmental Compliance & Corporate Performance—Can You Have It All?
26 October 2016
Particularly in recent years with the industrialisation of more nations, the growing implications of globalisation and the expanding interconnectivity of business and communication, good corporate citizenship has become an important issue for all companies, particularly multinational ones. Corporate strategy and actions aimed at improved environmental performance and perception and the increasing use of environmental management software platforms are driven by both legislation and public opinion, with the public’s greater access to information playing a major role.
The interpretation of what it means for an organisation to be a good citizen has widened, and as more environmental regulatory compliance facts and statistics are available to people, it has become necessary for companies to show themselves making the right choices and setting the right priorities in the areas of human rights, labour, environment and anti-corruption.
Demonstrating environmental stewardship
So it’s important for companies to demonstrate a positive commitment to global citizenship and environmental compliance stewardship. National and international guidelines and reporting standards—many of which are voluntary—provide an opportunity for this, as do corporate attendance at high-profile events or the publication of policy statements that detail sustainability goals. The overall trend and expectation of sustainability commitments raises important questions: what are the environmental compliance management responsibilities of commercial organisations? How should they resolve ethical dilemmas that have environmental implications? When it comes to environmental compliance and efficiency gains, is it possible to achieve both?
Organisations worldwide are attempting to answer those questions to the satisfaction of customers, investors, regulators and employees—sometimes with impressive results. Here are some examples of evidence of this trend:
This month the Organisation for Economic Co-operation and Development (OECD) hosts its Global Forum on Environment, focused “towards quantifying the links between environment and economic growth.” This forum will bring together hundreds of policy experts, academics and government officials from both established and developing countries to discuss “how a well-managed natural environment can contribute to economic growth,” focusing on three key themes:
- How economic growth affects the environment,
- How environmental degradation affects economic growth,
- How environmental compliance management policies can help make the most out of environmental protection and economic growth.
Since the late 1990s, the independent international standards organisation the Global Reporting Initiative (GRI) has been helping businesses, governments and other organisations understand and communicate their impact on important sustainability issues, including the environment. Over the years, it has become more of a necessity for organisations to include the GRI guidelines in their environmental regulatory compliance reporting regimens as a means of demonstrating their concern about their environmental footprint and their efforts to lessen it.
Organisations are increasingly aware that as information about the environmental impact of their operations becomes public, it is noticed and read by a widening audience, which includes institutional investment groups. This helps operationalise environmental improvement, as it causes businesses to become self-aware and prioritise actions that produce both efficiencies and a positive image. At a government level, increased focus on environmental compliance management reporting helps shape policy and set targets, sometimes even with potential penalties serving to maintain focus on chosen parameters.
To institutionalise their efforts, many industrial companies choose to rely on the standards set by the International Organisation for Standardisation (ISO), particularly ISO 26000 in this area. Rather than a certification or regulation, the ISO provides guidance in a standard format that can be applied across multinational organisations. The focus is on clarifying what social responsibility is, best practices regarding environmental compliance and translating principles into effective actions.
Companies encounter a variety of ethical and moral dilemmas in their daily operations, as well as with suppliers and in cooperation with businesses in other countries. In such contexts, businesses are expected to exhibit a responsibility rooted in internationally shared attitudes, beliefs and rules, where human rights, labour rights and environmental compliance issues are properly safeguarded.
As an example, the massive international consumer food and consumables corporation Unilever quotes their CEO on their About Us webpage, asserting “There is no business case for enduring poverty and runaway climate change.”
Further, in their Purpose and Principles statement, they claim:
“We want to work with suppliers, agents, distributors and other business partners who have values similar to ours and uphold the same standards as we do. Our Responsible Sourcing Policy and Responsible Business Partner Policy, aligned to Unilever’s Code of Business Principles, seek to uphold twelve fundamental principles covering business integrity, including specific responsibilities relating to employees, consumers and the environment.”
Proving environmental performance
It’s not just important for companies to state their policies, beliefs and goals when it comes to environmental performance, it’s necessary that they prove it. Environmental regulatory compliance audits have become big business for the traditional audit companies, and for targeted companies, backing up policy claims with performance results is becoming an economic imperative as well as an ethical endeavour. The auditing leader Deloitte even pairs the two in one policy headline for their Irish operations: Code of Ethics and Environmental Policy.
Customers, business relations and corporate stakeholders demand high ethical standards of companies, and businesses are expected to be able to back up their claims with (their) environmental compliance software. All these initiatives, actions and reports do beg the question: are organisations truly concerned about ethics and the environment, or are they only measuring and reporting because they have to, or to protect their reputation in the marketplace?
The best response may be another question: does the motivation matter if the end result is positive for the environment?
Consumer awareness will continue to rise, and investor concern about reputation and sustainability will continue to influence where they invest their resources. It appears that socially responsible environmental compliance performance and the statistics to back it up are required—and the intention behind it doesn’t matter as much. What it comes down to, it seems, is the old truth: actions speak louder than words.
For more information about environmental compliance management or if you have any questions about our environmental compliance software, please get in touch with a member of our specialist team.Return to News & Events