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    BEING GREEN IS NOT JUST GOOD FOR THE SOUL, IT’S GOOD FOR PROFITS.

    Ensuring compliance with environmental laws and guidelines is not only a matter of good corporate citizenship; for many businesses it is vital for survival. Developing an environmental compliance strategy can help prevent the consequences of violating rules, reduce waste-related business costs and serve as a competitive advantage in today’s environmentally conscious markets.


    THE RISKS

    There are a huge and growing range of environmental laws, standards and guidelines, all of which have an impact on the way a business should operate. Failing to comply with development consents, planning and operating permits and environmental protection licences brings the threat of fines, criminal prosecution and, in the worst case, the possibility of a business operation being suspended or shut down until the particular situation is remedied.

    Mid-sized businesses are often more at risk of violating a rule than the big end of town. Large companies can more easily afford to offload compliance legwork to external consultants. Mid-sized companies also tend to be located in and around residential communities, often in light industrial zones, where complaints about noise or emissions are more likely.


    THE STRATEGY

    Like most business processes, an environmental compliance strategy is a continuous activity. At its heart should be a plan that classifies compliance activities (i.e. potential dust and gas emissions, water discharges, noise and industrial waste), identifies the rules and then sets out procedures to manage and monitor conduct. The environmental management system developed by the International Standards Organisation to ensure compliance with its ISO14001 standard is a useful template.

    The strategy should also be proactive. Many businesses neglect environmental compliance while they are growing, raising the risk that their first contact with environment agencies will be due to a complaint. Initiate contact with local councils and environment agencies to identify how the business can develop in a compliant way, and stay in regular communication. Identify what environmental information they have available for your business and if there are any grants, funding programs or business partnerships that apply to your business, for example ecoBiz in Queensland. An environmental compliance plan becomes an essential tool for dealing with regulators, who can point out holes and are more likely to be favourably disposed to businesses that show they are taking action.

    A variety of industry associations and organisations, such as Environment Business Australia and Australian Environment Business Network, can assist in developing an environment strategy and reduce compliance costs. These include best-practice management techniques, helping businesses form alliances to reduce waste management costs and sharing experiences in creating value through best practice in environmental performance improvement.

    BENEFITS OF ENVIRONMENTAL COMPLIANCE

    Although an environment strategy helps businesses cut compliance costs and risks, staying on the right side of the law need not only be about cost minimisation but can be turned around to yield business benefits.

    Adopting an environmental compliance strategy can be used as a competitive advantage to attract new customers through demonstrating environmental commitment, reduce operating margins and make companies eligible for future environmental credits.

    Being able to demonstrate that an enterprise is environmentally conscious is an advantage in winning business in many industries. Many consumers use environmental issues to help guide their purchase decisions, while large companies may prefer or require suppliers to comply with standards.

    Adopting eco-efficiency principles in the environmental compliance strategy can also help businesses reduce operating costs by identifying savings on inputs and outputs. Waste costs may be reduced through recycling and finding ways to minimise waste, either by processing or reuse or by turning it into a useful by-product (for example, producing fertiliser and power from sewage). At the same time, looking at ways to improve environmental practices can improve compliance as business practices are reviewed and any potential problems are identified.

    A sound environmental compliance strategy can also indicate that a company is a less risky investment and therefore lower borrowing rates and insurance premiums. It may also provide an advantage in hiring top-flight staff. Newer generations of employees are more environmentally conscious and many prefer to work for green businesses.

    Lastly, an environmental compliance strategy helps reduce the extent and frequency of future adjustment periods needed to come in line with new environmental regulations. It may also make companies eligible for environmental credits, as government regulation develops in the area of environmental credits. Companies that put environmental compliance plans in place now may be eligible for future credits as their environmental business practices place them in a position to take advantage of these new schemes.

    Clever Companies do not stand still. They are dynamic and constantly challenge the status quo. Our Private Client Service team is committed to helping these private businesses make the most of their opportunities. To learn more about the topic covered in this article please visit our website or call us.

    www.clevercompanies.com.au
    Karen Crawford: 1300 737 938

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