5.23.2011

Publication of ISO 50001 – Energy Management System. Leverage for EHS/S Performance and Auditing

The May 2011 issue of ISO Focus+ announced that the much anticipated ISO management system for energy management will soon be published in 2011.

ISO reports that 50001 will specify requirements for establishing, implementing, maintaining, and improving an energy management system, whose purpose is to enable an organization to follow a systematic approach in achieving continual improvement of energy performance, including energy efficiency, energy use, and consumption. This standard will specify requirements applicable to energy use and consumption, including measurement, documentation, and reporting, design and procurement practices for equipment, systems, processes, and personnel that contribute to energy performance. ISO indicates that it applies to all variables affecting energy performance that can be monitored and influenced by the organization. Read More

3.2.2011

Sustainability Auditing – Are You Covering All of the Bases?

A challenge with sustainability auditing is first defining what should be audited. If sustainability practices are well-defined, the task is somewhat straightforward. When they are not, the internal risk management and audit function is challenged to define what “should” be done and then audit against it.

The December 2010 (pp. 49–52) issue of Internal Auditor contains a robust article that examines sustainability auditing issues and challenges.

“Equipped to Sustain” presents a set of traditional triple-bottom-line audit issues, along with a handful of others, including (1) supply chain reporting, (2) life cycle assessment, and (3) non-financial reporting. The article provides a bundle of questions, in 10 groups, to ask during a sustainability audit. It also offers recommendations as to how to provide internal assurance and testing, along with tips on educating management of the value of using external frameworks, guidelines, or standards, such as the GRI G3, AccountAbility’s AA1000, and even ISO 9000.

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2.28.2011

Getting Your EHS/S Risk Management Metrics Right: Taking a 360-Degree View

At its core, EHS/S (environmental, health, safety, and sustainability) management is a risk management endeavor and there are numerous ways these activities can be described and reported. Even though many companies have robust EHS/S risk management practices, it is sobering to hear risk professionals continue to report pessimism about their organization’s overall risk management efforts.

The February 2011 issue of Internal Auditor reports on three studies that indicate while there is continued focus on the importance of robust risk management, more times than not, it is not being done well. Research conducted by the Enterprise Risk Management (ERM) Institute at North Carolina State University found that only 28 percent of 460 ERM professionals surveyed described their current state of ERM implementation as “systematic, robust, and repeatable”; 42 percent described the process as immature; and 60 percent described the process as mostly informal and ad hoc.

Corporate board oversight of ERM is hit or miss. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) reports that while directors give their boards high marks for ERM, less than one-half of the boards have ERM accountability assigned to a board subcommittee. Further, a survey of directors, conducted by Protiviti Inc., showed that only 13 percent consider ERM robust and mature. Internal Auditor reports that both of these studies point to challenges with risk reporting to the board. Read More

2.28.2011

Strengthening the EHS/S Role in Mergers & Acquisitions, Looking Beyond the Basics

Mergers and acquisitions (M&A) are always an option when developing and executing corporate strategy. They provide the means to quickly increase market share or expand technology that could otherwise take years to develop internally.

As an EHS/S (environmental, health, safety, and sustainability) professional or executive, how well do you support M&A activities? More likely than not, you cover the basics of conducting phase I or II assessments, determining basic regulatory compliance, as well as characterizing the overall EHS/S risk profile of the entity under consideration.

But have you or your leadership examined whether the EHS/S information being collected is enough and whether a change in the M&A assessment practice could increase the chances of a successful M&A event? An article in the current issue of the Harvard Business Review (March 2011) suggests not.

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2.18.2011

Integrated Reporting – What’s Your EHS and Sustainability Department’s Role?

An evolving component of sustainability management is the use of integrated reports that capture an organization’s financial, environmental, social, and governance performance in one document. A seminal event on this was held last October (2010) at Harvard Business School (HBS).

The event, “A Workshop on Integrated Reporting: Framework and Action Plan,” was sponsored by HBS’s Business & Environment Initiative. After the event, HBS published an e-book of the proceedings, a beefy publication with 64 chapters that cover a wide range of integrated and sustainability reporting topics. Read More

11.12.2010

The New Intelligent Enterprise: What Are Your EHS/Sustainability/CSR Analytics?

Recently, more companies have focused their attention on analytics and the role that they play in reinventing company management practices. Participants at MIT’s CIO Symposium on “Emerging Stronger from the Downturn” reported an increased use of data analysis and analytics applications to “understand customers, parse trends, distribute decision making, and manage risk.”

To help managers capitalize on the ways in which information and analytics are changing the competitive landscape, MIT Sloan School of Management and the IBM Institute for Business Value have initiated a research program entitled “The New Intelligent Enterprise,” which addresses the following: Read More

10.19.2010

Auditing Your Supply Chain for Sustainability and CSR

Understanding and crafting your supply chain is an integral part of a meaningful sustainability/CSR strategy. The inputs to your products and services play a huge role in defining them in this sustainability/CSR era. For instance, the amount of water used in producing a liter of soda, or the labor practices in harvesting cotton used in making a T-shirt have become significant issues for manufacturers of these products.

Measuring and auditing supply-chain performance is challenging. A short piece in the current issue of the Harvard Business Review (Oct, 2010) reports on an HBR Advisory Council survey that indicates companies are hampered in efforts to impact supply-chain performance because of costs, complexity, and lack of information.

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4.23.2010

EHS Auditing – A Key to Breakthrough Performance and EHS Integration

“What gets measured, gets done” is a popular saying in performance improvement circles. There is more though. Yes, true as this is, measurement—and I’ll go a step further here and say auditing—is just part of the “gets done” piece. When crafted within a context of breakthrough performance, EHS auditing and the audit function in an EHS department can be a catalyst for accelerated performance improvement and EHS integration. EHS auditing is commonly viewed as a necessary evil or burden to satisfy regulatory and legal requirements. Within this context, the results are predictable. There is little if any enthusiasm; there is a struggle; and there can be challenges with inter-rater reliability.

When EHS auditing is formulated through an organizational learning and systems thinking lens—supported by an integrated EHS management system structure—the function shifts from being summative to formative, as program evaluation professionals would say. There is a shift toward action research that fosters partnership in solving EHS challenges. Audits are viewed as opportunities to see things not previously apparent. Casual links and patterns are distinguished in a way that people can see their roles in the “organizational systems” and see possibilities to alter the system and their roles.

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4.8.2010

OSHA Program Standard Activity

There is increased activity on occupational health and safety (OHS) programs in OSHA under its new administration. The agency’s new director is addressing and improving the safety culture in companies. One vehicle to do this is addressing comprehensive OHS programs. There was activity in the mid- to late 1990s in this area with attempts to codify the highly regarded Voluntary Protection Program and elevate the status of OSHA’s 1989 Program Guidelines. These efforts morphed into attempts in federal OSHA to adopt a national Illness and Injury Prevention Program (IIPP) found in a handful of states, including California.

In a March 25, 2010 speech to a joint meeting of local sections of the ASSE and AIHA, David Michaels, assistant secretary of labor for occupational safety and health, discussed how OSHA inspectors are increasingly looking at how companies “are taking steps to improve the overall [OHS] performance, reduce risk, and make prevention a daily part operations.” He said that there is a more “intense look at whether there is in place a comprehensive safety and health management system, and asking ‘is it being implemented, and are management and workers working together toward continuous improvement.’”

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3.26.2010

Is Your EHS Audit Program Hitting The Mark?

Auditing is a difficult subject—the term rarely conjures pleasant thoughts, and it’s often a dreaded event for the auditee. For the EHS department, it is a complex endeavor, one that EHS professionals often don’t feel they fully have a handle on as they’re presented with issues of program validity and reliability. For internal audit programs in large companies, scheduling can be a nightmare, with auditors swamped by primary-non-audit duties. While EHS departments do complete their audits and generate reports for the C-Suite, Board of Directors, and External Third Parties, the EHS audit programs I’ve observed often miss the mark.

Some of the recent EHS audit program challenges I’ve observed include: (1) integrating EHS management system audits with existing compliance audits; (2) developing procedures to close the gap between EHS program/system upgrades and the audit tools measuring them; (3) training auditors how to audit the EHS management system; (4) identifying leading indicators that can shorten the audit process or be used in site/plant self-assessment activities. Read More

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