Standard practice

Posted on 6 Jul 2010 by The Manufacturer

With the numbers of fines and the amounts being charged for non-compliance of environmental regulations increasing year on year, can manufacturers afford not to seek a recognised environmental standard? Mark Young explores.

In an age when there is arguably no bigger buzz word than ‘environment’, a recognised badge of honour in the form of an environmental standard is a fantastic way to fly your own kite and differentiate from competitors more inclined towards ‘greenwash’ than good practice. Moreover, many large companies are committed to only working with suppliers that have environmental accreditation.

More importantly, though, the repercussions for not meeting environmental regulations could be crippling — both from a reputational and fiscal perspective.

In February this year, the Environment Agency became one of the first regulators to be given civil powers to issue monetary fines, order firms to clean up any environmental damage they have done or cease operations that are harmful to the environment. It is also retained its power to bring criminal proceedings in more serious cases.

Costly mistakes

The Red Bull Company may assert that its energy drink gives you wings, but it was brought firmly back down to earth last year when issued with a record £271,800 fine for failing to meet its requirements to recover and recycle packaging waste and register its compliance with the Environment Agency between 1998 and 2006.

Companies with annual turnover of more than £2m and handle more than 50 tonnes of packaging a year must register with the Environment Agency or a compliance scheme. Each year, the company must also provide evidence of payment for recovery and recycling of a specified proportion of their wood, aluminium, steel, cardboard and plastic packaging.

In March this year, Young & Co Brewery Plc was ordered to pay £30,751 for committing the same offence in 2007 and 2008. The company had acted properly before, and said its failure to register had been an oversight but its requests to do so retrospectively in January 2009 were dismissed.

Earlier that month, Barnsley based cosmetics producer McCallum Manufacturing Limited was fined £15,000 for emptying face cream residue, washed out from 45-gallon mixing vessels, into a drain that led to a nearby pond. The pond water had turned a milky-grey colour and smelled of sulphur as a result.

Similarly, Devon-based chicken processing company Two Sisters was made to pay £62,000 in fines and costs after treated waste from the site’s effluent plant that was discharged into the Spratford Stream over an eight month period was found to have up to 24 times the legally permitted levels of ammonia.

Manufacturers might say due diligence can mean incidents like these are avoided, but Max Linnemann, environmental sector manager for NQA – an independent certification body accredited by the United Kingdom Accreditation Service (UKAS) – says an environmental standard is the best way to make sure. He says the incidents described above would have been very unlikely to have occurred had the organisations involved had an environmental accreditation.

“Part of implementing a standard properly is to make sure you’ve addressed all of the applicable legislation,” he says. “If you’re a manager or director and you have responsibility in this area, a standard is certainly going to put yours and your shareholders’ minds at rest.” NQA audits two major environmental standards: ISO14001 and the Eco-Management and Audit Scheme (EMAS). Linnemann says while the two are much of a muchness, the former is more popular in the UK while the latter is more widely adopted on the continent.

The standards are a checklist style guide to implementing an organisation-wide Environmental Management System (EMS), and involve monitoring and reducing the impact on the environment from any operations which a company can control and ‘over which it can be expected to have an influence’.

The ‘Legal and Other Requirements’ section of ISO14001 asks, among other things, ‘Has a procedure been established and implemented to identify and have access to applicable legal and other requirements… which your organisation subscribes to that are directly applicable to the identified environmental aspects?’ ‘How is this procedure maintained?’ it continues. In the Competence, training and awareness section, the question is posed: ‘How does your organisation ensure that all persons working for them…are competent to undertake the tasks that can cause significant environmental impacts?’ It all sounds simple, but simplicity is far removed from error proof.

If all of the 100 or so clauses along these lines are ticked off, a company can feel confident that it will pass an audit and hopefully therefore avoid a fate akin to the ones described earlier.

Linnemann says it is important to choose an auditor that is itself accredited by the United Kingdom Accreditation Service (UKAS) such as NQA or the British Standards Institute. UKAS enforces stringent objectives which an assessor must complete, including spending a minimum amount of time performing checks and obtaining a high level of documentary evidence to prove satisfactory standards are in place. Unaccredited companies are not bound by these same conditions and, though they might be cheaper, selecting such a company may not necessarily guarantee that things are indeed being done correctly and this means firms could still unwittingly be flouting laws.

In standards we Trust Environmental accreditation could also save you money — by selling recycled and waste materials for instance, or by reducing energy use. The Carbon Trust Standard could help to this end. Whereas many energy based standards only require management systems to be in place, the Carbon Trust’s involves demonstrating carbon emissions have actually been reduced and that the company is committed to reducing them year-on-year.

In the Carbon Trust’s words, the standard ‘provides pertinent management information for the continued development of a robust carbon strategy. The Standard quantifies a robust carbon footprint, benchmarks performance and identifies areas of improvement saving some organisations significant costs.’ What’s more, the Standard is recognised as an early action metric in the Carbon Reduction Commitment (CRC) and achieving it increases league table ranking, resulting in greater financial benefits in the introductory phase.

“Business leaders who have sound carbon management strategies in place stand to prosper both now and in the future,” says Carbon Trust Standard general manager, Harry Morrison. “They stand to sell more, forge better business relationships and attract more committed workers. The Carbon Trust Standard allows businesses that have achieved certification to talk with integrity about what they have been doing to reduce their carbon emissions. Achieving the Standard shows that they are taking serious and credible steps to manage their carbon footprint.” Manchester United Football Club calculates that the Standard has helped it save £235,000 in total energy use in seven months.

Obtaining the Carbon Trust Standard can be combined with other standards too. For instance having ISO14064 – the energy management module of the ISO14000 family – is sufficient to demonstrate effective measurement is taking place.

So not only could obtaining an environmental standard stop you losing your money, it could make you money too. Given the costs of getting it wrong and the rewards for getting it right, environmental standards could well be something manufacturers can ill afford to overlook.