It’s a race without a finish line really.
Many companies, and EHS leaders in particular, must run it often to stay in compliance and file their regulatory reports on time after weeks or months of data-intensive labor. They collapse across that “finish line”, exhausted and probably perspiring profusely just relieved to have survived another cycle of maintaining compliance. Yet, they know full-well that a new sprint will start soon. It’s often a thankless task as the process is predominately viewed as a necessary cost of doing the company’s “real” business.
Simply getting to compliance, which is strictly necessary to maintain a license to operate, can be a large effort. Yet when organizations stop there, they miss a significant opportunity. With minimal effort, companies can gain significantly more rewards. You’ve already gathered the data, now turn it into information and insights. Tools and software can do the data-to-information transition. Then your human capital can focus on higher value-added activities (like proactive compliance management or identifying sources of inefficiency and partnering with operations on waste-reduction efforts, process efficiencies or energy efficiency projects).
A confluence of macro trends is changing the executive mindset, markets and technology to bolster the case for moving from compliance to performance.
Your Highest Risk Is Your Greatest Opportunity
More and more often, I hear from customers that Environmental Compliance (or Environmental Performance) is the category of highest risk across their entire business—higher than personnel safety, geopolitics or any other category. Even for global companies with complex, asset-intensive operations, it turns out that Environmental Compliance is top of mind.
In Sphera’s analyses, there is substantial risk from these areas among many others, including:
Continuity of operations
You can be shut down because of spills/releases/incidents.
Fines and litigation costs
The figures routinely run into the tens of millions of dollars and potentially the billions for significant incidents. Those are just the one-time costs. The ongoing cost of increased scrutiny is on the same order of magnitude. Environmental mistakes can (and often have) bankrupted businesses.
Reputational risk from poor environmental record
Following an incident, companies often lose suppliers, partners and market access just from the bad press. It can also lead to turnover and difficulty attracting new talent.
The regulatory landscape is ever-shifting at the federal, state/province and local jurisdiction, and there are constant international pressures regarding companies’ carbon footprints, environmental product declarations and product life cycle management. In technology, the proliferation of mobile devices, internet connectivity, the Internet of Things, cloud computing, machine learning and artificial intelligence allow us to rethink and reimagine how we make and do nearly everything.
Moving to Performance
To take advantage of the opportunity and move your organization toward a performance mindset, set up your compliance processes for transparency, feedback loops and incentives. Simply making the data and information about compliance more available is a win itself. Technology can help pull together data from disparate systems and display it in user-friendly dashboards of information. Sphera is doing this via our Environmental Accounting project to present both quantitative and qualitative data about emissions management in a single, dynamic screen. It dramatically reduces the time and effort to create reports and informational views, which saves time and allows proactive mitigation of risks of noncompliance.
Once the information is readily available and shared, positive-feedback loops encourage good behavior. Negative feedback loops help stomp out undesirable behaviors. This can be as simple as displaying task status to teams and managers with scorecards and key performance indicators. Individuals and teams naturally want to move up the scoreboard if they are falling behind in the “race.”
Incentives matter, too. For example, one of our customers built a corporatewide compliance system that is tied directly to individual and group bonuses for on-time completion of compliance tasks and corrective actions. From the CEO to the front-line field workers, everyone has tasks to do and a nice incentive to get them done.
Finally, make sure to tie your projects and programs into broader corporate initiatives. Digitization, Sustainability, Industry 4.0, Efficiency, Workforce of the Future or what-ever terms your organization and executives use, find ways to align with them. Having a champion in the C-suite will help you access the money and resources you need, and political capital will help you clear the inevitable hurdles and challenges in your Environmental Performance program.
With your people, processes and technology aligned, your performance can help you cross that finish line again and again without breaking a sweat.