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Environmental compliance as a business improvement strategy

greenhouse gases
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Environmental protection, going green, and sustainability have become buzzwords in business. There’s virtually no industry that does not have compliance regulations. Most companies adhere to relevant regulations as a matter of due process. However, compliance can be seen as a bureaucratic hurdle that you have to overcome if you want to operate.

That need not be the case. Businesses can look at compliance through a new lens: business development and improvement. In other words, environmental compliance can help you achieve your business development goals. This article will explore why environmental compliance should be seen as a business improvement strategy.

How environmental infractions can hurt your business

If you want to see your business grow and hit all your goals, compliance is a must. For starters, as long as you’re on the wrong side of the law, you’ll face sanctions and penalties. Sanctions can range from fines through to jail time for personnel and even the forced closure of a business. The relevant regulatory body generally enacts enforcement proceedings.

A history of breaking environmental compliance can impact your business operations in other ways. For example, you might struggle to get the necessary building permits to expand your industrial site. Environmental issues can also damage relations with the communities surrounding your industrial facilities. All of these issues can be a headache for managers, executives, and business owners.

Given this situation, it’s easy to fall into the trap of viewing compliance as an expense and a hurdle to your business operations. Yet, compliance can be an important element of business development.

How compliance can help your business development

Environmental legislation should not come at the expense of your business operations. All companies operating within the same industry in a region need to abide by the same rules. Many companies that struggle with compliance issues have fundamental business problems they need to address—for example, the profitability of business operations.

Rather than seeing it as an obstacle, environmental compliance should be viewed as a key part of your business’s long-term success. There are many ways that an active environmental compliance strategy can benefit a business. For example:

  • Reduce Operating Costs: Companies that are breaking environmental regulations are often using older equipment. Investing in new equipment, while a large expense, can help reduce your business operations cost over the long term.
  • Build Stakeholder Relationships: Compliance helps with improved relationships between business owners and regulators. Adhering to environmental regulations, and showing the steps you are taking to improve your operations, can strengthen ties with communities surrounding your sites.
  • Avoid Expensive Disasters: Effective environmental compliance can help businesses mitigate the risk of a disaster and reduce insurance costs. For example, a well-run business can pay a lower premium for liability insurance.

Reducing your business operating costs and improving relationships with key business stakeholders should be a primary consideration for any business with plans to expand. These are clear positive drivers for change.

Common compliance mistakes businesses can avoid

The case for environmental compliance is straightforward. Unfortunately, many businesses ignore the issue. Let’s walk through some of the biggest mistakes businesses make regarding environmental compliance.

Waiting till it is too late

As a company, it is easy to fall into the trap of “business as usual.” You react to government and market forces as they arise rather than anticipating an issue or a trend. Unfortunately, the history of failed businesses is littered with examples of companies that didn’t react to market trends.

Sadly, many companies wait till they are faced with a compliance audit before reviewing their compliance policies. The best thing to do is to have a system in place for periodically reviewing issues related to compliance. This way, when it’s time for the annual check, there will be no cause for concern.

Utilizing outdated equipment

In many businesses, environmental compliance issues arise as a result of using outdated equipment. While utilizing old equipment might be cost effective, it can increase the risk of an incident and impact your business operations’ efficiency.

Take the example of the Kolva River oil spill in Russia. The spill was caused by a breach in a corroded oil pipeline. Inefficient monitoring and old equipment were responsible for this spill, which resulted in 84 million gallons of oil entering the Kolva River.

Investing in new equipment can reduce the risk of a disaster. Furthermore, modern equipment can help reduce the cost of your business operations over the long term.

Let me give you an example. Many manufacturing facilities have on-site power generation facilities. One way to monitor the efficiency of combustion at those facilities is by analyzing the gases and particulates released through a smokestack. A company can do this by updating its continuous emissions monitoring systems.

Hiding behind ignorance

Ignorance is no excuse, especially when it comes to compliance. When a non-compliance notice is issued, some companies claim it is not their fault because they were unaware of the issues.

That doesn’t change the fact that they went against compliance regulations. As a business owner or someone with managerial responsibilities, you must stay up to date with your sector’s relevant environmental legislation.

Lack of proper training

Most companies have some sort of compliance program. Some companies, in a bid to avoid extra expenses, completely ignore the importance of adequate training. Employees that are not trained should not be expected to know what the law requires.

Training should be organized periodically to educate employees on the importance of practicing effective compliance regulations. Emphasis should be placed on the disadvantages of not obeying compliance regulations.

Not properly vetting vendors

Your company might be doing everything right concerning compliance laws and regulations. While this is great, don’t assume your service providers or third-party vendors are doing the same.

Although vendors are separate from your company, their actions can have an impact on your firm. If they commit a violation because they work on your company’s behalf, you can get the blame.  Always do your due diligence to ensure that service providers and third-party vendors are doing their part.

Story by James Mason

augusta free press
augusta free press