September/October 1999
Drafting a corporate environmental policy—a CEP—can help your company achieve its compliance and business goals.
By Tracy Mattson
Tracy Mattson is director of environmental compliance for ISRI.
So you want to do the right environmental thing.
You want to comply with environmental regulations, protect the natural resources where your family lives and plays, and not be viewed as a bad actor by your industry or community.
But how do you communicate your desire to be “green” to your community, customers, and employees?
You can start by developing a corporate environmental policy—a CEP—which can be an effective tool to demonstrate your commitment to operate in an environmentally sound manner.
The Changing Culture of Compliance
To understand why creating a CEP is such a wise business decision, it’s helpful to examine the larger picture of environmental compliance and industry.
In the past, industry generally viewed environmental compliance as a choice between economy or the environment. Industries, however, are realizing that a strategy of merely complying with regulations and containing liability always adds costs. Today, many corporations view the environment as a strategic issue—one that must be integrated with moneymaking strategies.
Bruce Piasecki, author of Corporate Environmental Strategy: The Avalanche of Change Since Bhopal, documents the actions of four multinational companies—AT&T, ARCO, Warner-Lambert, and Union Carbide—in their effort to focus on strategic management rather than regulatory firefighting when it comes to environmental compliance. The only sensible response, he says, is a three-pronged managerial approach: the insistent integration of liability containment, regulatory compliance functions, and the strenuous task of moneymaking. In the end, the book shows how the companies reattached their environmental efforts to their core strategic business concerns—and came out ahead.
While the scrap recycling industry is no telecommunications behemoth, it can learn from the experiences of these larger companies. Times have changed. To survive in a changing culture of compliance, all industries have to retool their view on environmental performance.
For one, companies are realizing that their environmental compliance efforts can give them a competitive advantage.
Also, customers are beginning to demand practices that lead to a cleaner environment, in part to reduce their own potential environmental liability. Already, the pressure on smaller companies is increasing as customers, especially those doing substantial business overseas, become ISO 14001-certified to remain competitive. These companies will begin—and some have already started—to evaluate the environmental stewardship of companies they do business with in order to comply with the standard.
Likewise, with the boundless information available via the Internet, community activists and citizen groups have greater access to environmental information and are more empowered to question the environmental commitment of their industrial neighbors.
In the scrap industry, another factor is feeding this environmental culture change—the entry of younger generations into the business. These new industry leaders grew up in the era of environmental awareness that began in the 1960s, and they bring their heightened environmental sense to their work in their respective companies.
Making the Environmental Commitment
To make the most of a regulatory system that’s not going away, scrap recycling facilities are using their commitment to environmental protection to demonstrate quality, responsibility, and stewardship. They’re finding that many scrap suppliers and consumers would rather work with processors who have reduced their environmental risks.
One scrap processor invites its customers to tour its facility so they can see for themselves that they’re dealing with an environmentally responsible company. These customers quickly realize that working with a facility that has a commitment to comply with environmental regulations is a company that plans to be around for a while, the processor found.
Another recycler states, “We back up our policy with actions and aren’t afraid to let our suppliers know it. We aren’t in the business of taking material that increases our environmental liability.” If the firm accepts a PCB-laden transformer, he notes, not only does it risk exposing its employees to a hazard, but it would also be increasing its potential for contamination. “Yes, we will lose a small amount of business in the short run, but we’re looking at the big picture—and that is to be in business for the long run,” he says.
According to this facility, it can’t afford to operate without thinking of its CEP every day. “If we let something slide one day, how can we expect our customers to abide by our policy the next day?” the recycler asks.
Processors are finding that committing to environmental compliance has other benefits as well, such as improving operating efficiencies and boosting employee morale. “Our commitment to the environment is predicated on our commitment to our employees,” says the recycler. “By protecting the environment, we’re protecting our employees by making sure we don’t expose them to hazardous materials or environmental risks.”
A commitment to environmental compliance can also help improve your bottom line. If, for example, a scrap facility takes steps to exclude PCB capacitors from its infeed material, it could spend $103,500 a month on disposal, labor, and operations costs, says Fred Cornell, director of environmental health and safety for Camden Iron & Metal Inc. (Camden, N.J.).
On the other hand, if the facility doesn’t take such steps and shreds PCB capacitors, its shredded product could end up contaminated with PCBs, exposing the company to potential fines, site contamination issues, and disposal costs of more than $165,000 a month, he says. In short, commitment to environmental compliance and prevention saves money—in this case, $60,000 a month.
Creating Your Policy
Developing a CEP is the first step toward defining your commitment to environmental compliance.
To create an effective policy, your company must first decide what message it wants to communicate. Also, you need to remember that the vision for the policy must be clear and easy to communicate. Ask yourself: Will the company be able to do what it says? Will employees understand and be able to comply with the
policy?
Most companies find it best to keep the policy flexible and simple. Consult your employees for feedback and suggestions on the policy. After all, they’ll be the ones charged with implementing it. Plus, enlisting their help in the development stage can engender commitment and ownership of the policy.
It’s also a good idea to consult your attorney on how to properly word your policy from a liability perspective. In particular, you must be careful not to establish an artificial standard of due care. Defining quantifiable or specific environmental goals in a written policy could subject your company to charges by outside parties that it hasn’t adhered to its policy and has, thus, created a breach of duty. Such action could enable outside parties to seek damages for the alleged violation. Have your environmental attorney review your policy prior to distribution to make sure your intentions can’t be misconstrued.
Ideally, the essence of your CEP should encompass three components: compliance, improvement, and prevention.
To help processors create their own CEP, ReMA included the two following examples in its Environmental Operating Guidelines manual:
Example 1
“XYZ Corp. is dedicated to responsible and environmentally safe operating procedures and practices through compliance with all applicable local, state, and federal environmental laws and regulations. XYZ Corp.’s commitment to maintaining an environmentally sound workplace is demonstrated by our adoption of industry-developed comprehensive environmental operating guidelines. XYZ Corp. supports Design for RecyclingTM—a national policy to promote the design and manufacture of goods that, at the end of their useful life, can be recycled safely and efficiently.”
Example 2
“XYZ Corp. is dedicated to responsible and environmentally safe operating procedures and practices. XYZ Corp.’s commitment to maintaining an environmentally sound workplace is demonstrated by our adoption of industry-developed comprehensive environmentally operating guidelines.” The policy can be a stand-alone document or integrated with other health, safety, quality, or facility policies.
Camden Iron & Metal, for one, decided to incorporate all of its policies into the following single statement: “Camden Iron & Metal Inc. strives to be a leader in the scrap metal recycling industry and improve its profitability by: enhancing and developing techniques that result in continuous improvement in recycling/processing efficiencies, producing quality products in a safe and environmentally responsible manner, and working closely with our customers to meet or exceed their specifications for scrap metal chemistry, preparation, delivery, and service.”
Commitment and Implementation
Of course, a written CEP is only as good as the commitment and implementation behind it. In particular, management must lead by example and commit to abide by the letter and spirit of the written policy. Management must also create systems to implement the policy—after all, without implementation, the CEP is nothing more than words on paper.
The first step toward successful implementation is to make sure employees understand the CEP. This is easiest when employees have assisted in developing the policy. Copies of the CEP should be printed and displayed prominently, including at the scale and in the office so everyone sees it every day. In addition to giving each employee a copy of the policy, you can spread the word about it by using paycheck stuffers and discussing it at staff meetings and in training classes.
The key to an effective CEP is to make it the responsibility of every employee to ensure compliance with the policy. To make this work, all must have the awareness and skills necessary to implement the policy. Toward that end, you can offer a training program to raise your staff’s level of environmental awareness. Also, you may want to establish protocols to ensure that employees have adequate empowerment to perform a job correctly from the environmental protection point of view. For example, employees should know where spill kits are located and be required to use them when spills occur. Also, they should be rewarded for using the kits, not punished for using them and requesting fresh supplies.
Rewarding employees for responding to and preventing environmental risks is an approach that many companies have found successful. One scrap processor uses a “bounty” system to reward employees for recognizing and separating materials inconsistent with its environmental policy. The firm recognizes its employees at its regular staff meeting and gives a small cash reward. “Employees have to care to make our corporate environmental policy work,” says the owner. “We’ve found that between the peer pressure created at the staff meetings and the incentive program, our employees are committed to our environmental compliance program.”
Periodic refresher courses and inspections should be conducted to make sure the policy is being followed. This also provides an opportunity to improve environmental performance over time by investigating situations or processing areas that could benefit from alternative environmental controls. Commitment to environmental compliance can’t be stagnant—to be effective the commitment must evolve with changing technologies and knowledge.
In addition to your employees, your customers need to know about your CEP for two reasons: First, it warns them that you refuse to handle materials that violate your commitment to environmental compliance. And second, it lets them know you operate a facility committed to operating in a responsible, environmentally sound manner.
You can inform your customers about your CEP by sending them letters outlining the policy, enclosing it in payment envelopes, and even printing it on invoices.
Beyond the CEP
Your path to operating an environmentally sound facility doesn’t stop with the creation and implementation of your CEP, of course. To support the policy, your facility also needs environmental operating guidelines. ISRI’s Environmental Operating Guidelines manual is a useful resource to begin this initiative (see Chapter 4 of the publication). The manual, for instance, includes recommendations for a source control program, supplier notification letters, and sample indemnification statements.
Operating in an environmentally sound manner doesn’t have to come at the expense of operating efficiencies and costly upgrades. Integrating your commitment to environmental compliance into your daily operations will provide the necessary edge to compete in the future.
With your CEP implemented, you’re one step closer to creating an environmental management system (EMS), which is a continual cycle of planning, implementing, reviewing, and improving your environmental actions to meet your compliance obligations and business goals.
An EMS enables a facility to systematically identify and correct deficiencies to create better environmental and overall business performance. It’s the next step for you to demonstrate commitment to environmental performance.
But that discussion is for another day and a future article. In the meantime, stay tuned and stay green. •
Why Have A CEP?
A corporate environmental policy can yield many benefits to your company. In case you need some convincing, here’s a list of some potential paybacks:
- Improved environmental performance
- Reduced liability
- Competitive advantage
- Improved compliance
- Reduced costs
- Fewer accidents
- Higher employee involvement and morale
- Improved public image
- Enhanced customer trust
- Better access to capital •
Drafting a corporate environmental policy (CEP) can help your company achieve its compliance and business goals.