In the last decade, many companies have developed corporate sustainability programs that focus on addressing challenges like energy and water use, greenhouse gas emissions, labor conditions and product sourcing. By their very nature, these issues also fall under the purview of EHS, yet the two programs often remain separate from each other and from core business operations – a separation that leads to missed opportunities.
Integrating EHS and sustainability management programs into one unified program and into the core business operations will lay the foundation for compliance, consistency and continuous improvement by creating a single source of operating instructions and procedures for all company processes across facilities, regions and the entire organization.
The first step in integrating a sustainability program into the existing EHS program and into the core business operations involves incorporating sustainability metrics into corporate reporting. According to a study from the Governance and Accountability Institute, the majority of S&P 500 and Fortune 500 companies already report this information in publicly available corporate sustainability reports.
The second step focuses on combining EHS and sustainability resources to drive cost savings and revenue opportunities. Finally, full integration into the core business strategy requires securing commitment from the board and making sustainability part of a company’s core business strategy.
Ultimately, the close collaboration of a company’s EHS and sustainability programs can benefit the company by helping it increase revenue, save money and manage risk more effectively. Recognizing this, in an Ernst & Young LLP study, we found that 65 percent of CFOs in leading corporations are involved in sustainability initiatives. Collaborating with other business units inside a company also can accelerate these efforts and bring additional resources to bear.
Let’s take a closer look at these three benefits:
Increasing Revenue – An integrated sustainability/EHS program positions a business to increase its revenue by enhancing its reputation with customers, the public and other key stakeholders. It also can open up new revenue streams. Consider the example of a solid waste transportation and disposal organization that identified nearly $5 million in new money derived from an improved process for drying biosolids that could be sold to farmers.
Saving Money – Leading EHS and sustainability programs help companies reduce their use of raw materials, decrease waste per unit of production and reduce energy use – all of which can bring significant savings. In addition, effective programs reduce the cost of compliance, including accident and attendant insurance costs. Finally, a well-designed sustainability and EHS management system that evinces a corporate culture committed to compliance may mitigate penalties in the event of an incident.
Managing Risk – Well-integrated EHS and sustainability programs do a better job of identifying and resolving EHS and sustainability issues, which helps improve regulatory compliance at a time of increasing scrutiny. It also helps prevent disruptions in the supply chain and minimizes reputational and regulatory fallout when problems do occur. Additionally, such programs help protect workers and can be instrumental in raising morale and improving employee relations. As costs of non-compliance have grown in a time of economic and regulatory uncertainty, leading organizations are realizing that the best EHS and sustainability management systems are those that are integrated into the business as a whole.
What can you do?
It is well worth the time it takes for an EHS manager to get involved in a company’s sustainability efforts. If no initiatives exist, take this opportunity to start your own initiative and lead a company into the future. The results will bring value to the bottom line and help make money, save money and manage risk.
Jim Haried is a senior manager in Ernst & Young’s Climate Change and Sustainability Services practice. He has more than 25 years of experience in EHS, specializing in manufacturing, energy, chemicals, pharmaceutical and utilities including nuclear. Haried has assisted numerous clients in achieving cost savings and EHS process improvements while reducing greenhouse gas emissions. He has been involved at more than 140 sites in the successful implementation of management systems for environment, safety, quality and Responsible Care, and he has assisted numerous corporate headquarters in implementing or updating their EHS and quality management systems as well as several Fortune 100 clients in proactively managing and assuring EHS regulatory compliance. Learn more at www.ey.com/climatechange.