Proactive Environmental Management: Avoiding the Toxic Trap

A BANK. FORECLOSED on a loan and took control of a small piece of real estate. The .property was later found to be contaminated with hazardous wastes and, after a long-drawn-out court case, the bank was held liable for half a million dollars.

• The manager of a large manufacturing conglomerate’s subsidiary was notified by the head engineer that a hazardous waste containment system needed to be replaced. Faced with pressure from corporate headquarters to reduce operating costs, the manager postponed the investment. Subsequent monitoring by the local regulatory authority revealed serious releases of hazardous wastes. Fines, legal fees, and site cleanup cost the company much more than if the manager had invested in the containment system in the first place.
• A Fortune 500 corporation recently tested soil and groundwater around one of its overseas facilities and found high traces of toxic materials migrating from the site. Fortunately, the company was able to arrest the spread of the pollutants before a major drinking water source was seriously contaminated.

The newspapers are riddled with stories of environmental disasters like the Exxon oil spill, the gas leak in Bhopal, and the nuclear reactor meltdown at Three Mile Island. Yet, despite media attention and regulatory programs designed to curb environmental problems, literally hundreds of events like those listed above occur each day. To the companies facing such problems, the costs can be devastating. Environmental problems can ruin a firm’s public image, cost millions of dollars, and strain relationships with suppliers, vendors, and customers. These outcomes can significantly affect competitive advantage. In the case of the Exxon oil spill disaster, for example, cleanup costs, management distractions, and negative customer relations will undoubtedly hinder Exxon’s performance for years.

To avoid potentially debilitating problems, corporate managers must begin to consider environmental management a critical component for sustaining competitive advantage. Whereas many corporations approach environmental problems with band-aid solutions, sustaining long-term profitability often requires investing resources in preventive management programs. Failure to make such investments may leave a company at a distinct disadvantage relative to competitors with greater foresight.

Our analysis of environmental management programs at companies in a range of industries found five distinct stages of development. At the lower end of the developmental continuum .are companies that either have no environmental programs or have programs so constrained by budgets and reporting relationships that they are virtually impotent. These companies risk governmental fines, negative publicity, potentially huge liability costs and, of course, serious damage to the environment. At the other end of the spectrum are companies that proactively manage the environmental arena. They have preventive programs that extend throughout the corporation, train employees in awareness and responsiveness, monitor operations continuously, and work quickly to rectify problems as they occur. In short, they manage, rather than react to, environmental problems.

Few companies in the United States appear to have reached the highest stage of program development, despite large settlement costs for environmental claims, heightened media attention, and increased emphasis on environmental matters by companies in Western Europe and Japan. While some of the apparent corporate complacency may be attributed to laissez-faire regulatory policies and to unaggressive enforcement, recent court decisions and more assertive environmental legislation have greatly expanded corporations’ potential liability. Thus, the time is ripe for corporations to reconsider their environmental management efforts, and to determine if they are fully prepared and protected.

Who Needs an Environmental Management Program?

For some corporations, the old adage, “if it ain’t broke, don’t fix it” holds true until an accident occurs or a severe penalty is imposed. Indeed, investment in preventive measures is often extremely difficult to sell to corporate management, particularly as many shareholders are increasingly interested more in short-term profitability than in longer-term sustainability. Given sporadic government enforcement efforts, and the highly unpredictable nature of environmental accidents, corporate managers are often inclined to focus available resources on more tangible and immediately pressing issues. For many corporations, however, the need for, and usefulness of, a comprehensive environmental management program cannot be overstated.

From a regulatory perspective, the number and variety of companies regulated by federal, state, or local government agencies is more extensive than most companies realize. Even companies that one would not intuitively expect to be regulated may fall under a myriad of requirements and liabilities resulting from complex legal and regulatory mechanisms, land use requirements, and so forth. At the federal level, companies may be required to answer to the Environmental Protection Agency, the Occupational, Safety and Health Administration, the Department of Transportation, and other authorities. Similar, and often equally potent, agencies exist at both the state and local levels, although the regulatory structures and nomenclature may differ. Failure to acknowledge and respond to regulatory authorities may create serious problems—the penalties and inconveniences resulting from noncompliance with regulatory programs can be substantial. Corporations therefore need to develop relationships with regulatory authorities, identify potential problem areas, and determine how best to react to regulatory developments.

On the legal side, statutory developments and recent court decisions have dramatically expanded the sphere of liability. Over the past decade, for example, courts have found suppliers responsible for pollution made from materials sold to customers, corporate managers responsible for activities of subsidiaries, and land owners responsible for activities on their property even when the land was not in their possession.1 To complicate matters even further, the relative newness of the law in this area, the complexity of the legal code, and the tremendous variation across states can make management of environmental legal affairs extremely complex and time consuming. Corporations must therefore have ready access to both legal and technical expertise.

Corporations must also answer to the public. As the media and consumers focus more attention on environmental problems, individual companies are increasingly susceptible to negative exposure from poor environmental practices. Consumer repudiation of Exxon credit cards following the Alaskan oil spill is one example of how public perception can directly affect a company’s performance. The nuclear power issue provides the most powerful reminder of the potential strength of grass roots efforts.

Finally, corporations must acknowledge a component of uncertainty. Government requirements represent minimum standards of environmental protection. Some corporations must assess their own risks and vulnerabilities and go beyond what is required or risk problems, even if fully compliant with the law. Although anticipating every possible event that might occur is difficult, fostering an organizational culture that supports questioning and whistle blowing can help companies manage the unexpected. A drunken ship captain may be prevented from driving an oil tanker, or cracks in a waste container may be examined rather than overlooked. As history has of course proven repeatedly, prevention is much cheaper than recovery.

The Five-Stage Environmental Developmental Continuum

Our survey of corporate environmental management programs suggests that there are five distinct stages of program development (see Table 1). The continuum extends from the “beginner,” which provides only minimal protection from environmental problems, to the “proactivist,” which is most aggressive in reducing risk. Each stage represents a generic characterization. The specific requirements for any particular company will vary according to the type of businesses involved, the range of potential environmental problems, the size of the organization, and the complexity of the corporate structure.

Some companies may face only limited environmental liabilities or may simply be too small to warrant implementation of a comprehensive stage five program. However, as the diversity of businesses and the emphasis on manufacturing and using hazardous materials increases, environmental management programs should generally become more active. Therefore, a program that may be considered “proactivist” for one industry may be only marginally adequate in another. For example, while a few policy or operating guidelines and periodic reviews from outside counsel may sufficiently protect a bank, a larger chemical or manufacturing concern may need to employ as many as 300 environmental professionals.

Moreover, it is not possible to categorize any given industry within one stage of development. Corporations within the chemicals industry, for example, vary substantially in their need for and approach to environmental management. A small chemical company producing only a single, relatively harmless product may be sufficiently protected by periodically soliciting the help of an outside consultant, whereas larger and more diverse companies may need in-house staffs that are deeply involved in actual production processes.

Stage One: The Beginner

“My company has never seriously considered implementing an environmental management program. Since we’ve never had an accident and the government isn’t putting pressure on us, it’s difficult to justify spending the money, particularly since we’re placing so much emphasis on cost reduction in other areas of the organization. Unless the government requires changes, or an accident occurs that hits close to home, we’ll probably just continue as we have in the past— tracking events as they occur in the newspapers and having a plant manager look into the matter periodically to see if we’re covered.”*

“Beginners” tend to cope with environmental concerns either by turning their back on the problem or by adding responsibility to existing positions. Many smaller manufacturing companies, for ex ample, give plant managers or senior engineers responsibility for environmental matters. There is no effort to define what the company’s environmental requirements are or what the repercussions of poor environmental management could be. Reporting occurs only casually, so top level managers and other employees are relatively uninformed about environmental problems.

A surprisingly large number of corporations fall into the beginner category. Beginners include older companies established before environmental regulations were developed, and small to mid-sized corporations that do not think they can justify a staff of environmental specialists. Businesses that are not obvious candidates for an environmental program also show up in this category—banks or real estate developers, for example, who don’t deal with environmentally sensitive materials, yet who may, in fact, be open to significant risk.

Stage Two: The Fire Fighter

“We’ve had some pollution problems in the past and have responded to them as we would any problem—we found out what we needed to do, got the necessary resources to solve the problem, tried to make sure it wouldn’t happen again, then moved on. My business is too competitive to waste time and resources worrying about chance events like accidents or spills. If we spent all our time worrying about environmental protection, we’d wind up with an obsolete company—clean, but obsolete.”

“Fire fighters” may have a few people who spend time on environmental matters, or they may have a small centralized environmental staff that helps individual plants respond to crises. Many corporate programs fall into this category because of inadequate funding. When environmental programs are short staffed, as many are, staff members have little choice but to respond to top priority items first, thereby leaving the company at risk from serious problems that have not yet surfaced.

A large number of small and medium sized firms that engage in dangerous or environmentally harmful activities are found at this stage of development. Most are in this stage because they have not expanded their focus sufficiently to realize the need for (and potential benefits of) a comprehensive environmental program. Some larger corporations also fit into this category, most often those whose top managers do not believe that environmental matters should be a top priority and who fail to provide sufficient funding and support.

Stage Three: The Concerned Citizen

“We realize that environmental problems are here to stay and that we have a responsibility to prevent accidents as best we can. In fact, we recently hired a number of environmental professionals to keep an eye on what we are doing and to help with regulatory compliance problems. I’m not sure exactly what they do—die science being comphcated and all that—but we’re happy to have done our part by bringing them on board.”

Despite their apparent good intentions, most “concerned citizens” only express a commitment to good environmental management. They have not yet implemented effective, far-reaching, proactive programs. Though environmental departments exist, they are often either too low in the corporate hierarchy to wield real power or too understaffed to mount any major initiatives. Moreover, many stage three programs are staffed exclusively by environmental specialists (e.g., geologists, chemists, and biologists) who, while technically proficient, are unable to offer expertise on the business, legal, and public relations elements of environmental management. So, while these programs are often technically competent, they lack the influence and authority to effect organizational change.

Several types of companies fit the concerned citizen profile. As media attention to environmental issues grew, many corporate leaders decided that the environmental function was worthwhile. Many companies therefore allocated funds for programs but let the programs run themselves, without much upper level support for integrating the program with the rest of the corporation. Many larger corporations fit this profile, as do many firms in declining and “sleepy” industries.

Stage Four: The Pragmatist

“After a series of costly pollution problems hit us and a few of our competitors, we realized that our failure to adequately address the environmental component of our business was repeatedly hurting our P&L statements. We got our lawyers and some consultants to assess our environmental risk and found that the problems that had surfaced were only the tip of the iceberg. A lot of our day-to-day practices were giving us a great deal of exposure, particularly with the changing laws and regulations. We’ve now got full staffs of environmental professionals at both the corporate and operating unit levels, working with all levels in the organization.”

“Pragmatist” companies are not fighting fires or reacting to long-neglected problems that “suddenly” surface. Rather, they take the time to manage their environmental problems actively. Their environmental departments (be they big or small) have sufficient expertise, funding, and authority. They review existing facilities and find better ways to limit releases of pollutants. They evaluate potential risks and lower risk levels where appropriate. Reporting relationships and management information flows are formalized, and the corporation has begun to develop education and training programs for key workers. Substantial time and money are spent on developing policy and guidance manuals to be used at individual operating facilities.

Even though the stage four program is relatively well developed and aggressive, however, environmental management has still not become a top priority item. Program funding may be tenuous, and the visibility and influence of the department within the organization may still be limited.

Relatively few corporations have achieved stage four. Those that have tend to have faced an environmental disaster, be in an industry facing intense regulatory or public scrutiny, or have a management team committed to strong environmental principles and practices. Many of the larger, more successful chemical and manufacturing companies fit the stage four profile.

Stage Five: The Proactivist

“Environmental management is a top priority for our firm. Our environmental people are not only competent, they are dynamic individuals whose efforts are supported with a solid budget and a senior executive who champions the program. More important, though, we look beyond our corporation. Bad practices by our competitors ultimately hurt everyone because they result in stiffer regulation, negative publicity, and spoiled resources. We’ve therefore made a point of participating in industry roundtables, sharing information across companies, and helping regulators determine how our industry should be regulated. It’s not enough to just shield your company from the problem —you’ve got to aggressively pursue solutions.”

In a stage five firm, the environmental department is staffed with strong, motivating, high-profile individuals who take the concept of environmental management one step beyond policing and prevention. Employee training and awareness programs extend across all levels and are taken seriously by other divisions and business units. Requirements and goals are clear, and systems that facilitate reaching those goals are built into each area. There is a strong link between the environmental function and upper-level management, through direct reporting relationships, periodic meetings, or informal ties. Stage five firms are also active in Washington, D. C, in state capitols, and in local communities.

For many companies the demarcations between the five stages of program development may be blurred. Some companies may be better in some areas than in others, or may have programs that were once at a higher stage than they are now. Of greater importance than the actual stage, however, is the fact that any corporation not at stage five could do more to protect itself in the future. It is not imperative that every corporation commit substantial resources to environmental management programs. Appropriate levels of commitment depend on the circumstances each company faces. However, awareness and tracking are still critical to avoid unexpected difficulties.

Seven Keys to Protecting Your Company

Although each corporation faces unique circumstances, the seven elements below appear to be universal components of a proactivist stance.

Top Level Support and Commitment.

Top level managers who recognize the importance of environmental management practices and are willing to act on that stance are extremely important. Because environmental departments must interact with multiple divisions—which is often costly and burdensome—a mandate from the top can make a dramatic difference. Unfortunately, reluctance among top managers to change past practices is often the first obstacle to overcome.

For most companies, top management decides to revamp environmental policies only after a severe accident or penalty occurs. Major disasters should not be required to induce top level support. Management should learn from the misfortunes of other companies and spend less time questioning those who are pushing for increased environmental efforts. Documenting and quantifying potential vulnerabilities and related costs (as well as what environmental neglect has cost similar companies) often helps to make top management more receptive.

Corporate Policies that Integrate Environmental Issues.

A cohesive and far-reaching corporate policy statement should be the cornerstone for an environmental management program. Without a carefully worded directive, fostering a companywide commitment to better practices is extremely difficult.

The tone of the statement should be one of prevention, protection, premeditation, and immediate response to unexpected developments. Some policy statements are detailed, while others are brief and open ended. At the very least, policy statements should include the following basic goals: it is the corporations policy to comply with all applicable laws; it is each employee’s responsibility to see that this compliance occurs; and, where possible, operations and new products should be developed in an environmentally sound and safe manner so as to avoid potential legal actions. Some corporations go even further by detailing specific target pollution levels and by providing incentives for good environmental management.2. See Environmental Management Up-Gose

Corporate policy statements should be supported with cultural prerogatives designed to increase employees’ willingness to initiate environmental improvements and to blow the whistle on potentially threatening practices. Policy statements should be translated into actual policies, procedures, and activities. Goals should be stringent enough to provide for adequate protection, while sufficiently flexible to adapt to differing circumstances. For example, environmental management overseas can be particularly problematic if facilities are located in countries without well developed environmental regulatory programs. In such instances, facility managers may need to consult corporate policy statements when determining appropriate protection levels. Other programs, such as basing bonus incentives on environmental performance, also help translate policy goals into meaningful directives for front-line workers

Effective Interfaces between Corporate and Business Unit Staff.

Strong top level support and corporate policies are useful only if there are workable interfaces between corporate and business unit staff. Such interfaces are the result of an appropriate organizational structure, a high level of trust and respect among corporate and business unit professionals, and strong reporting relationships throughout the organization.

There is no boiler-plate organizational design that works best for all environmental programs. Some corporations have highly decentralized programs in which the business units perform virtually all the work. Others maintain large, centralized environmental staffs. Functional structures also vary. Some corporations develop media-specific programs (e.g., separate divisions or individuals for air or water pollution), whereas others base their structures on regulatory programs (e.g., RCRA, CERCLA) or on technical expertise (e.g., engineering, legal). The key is to select a form that matches both the needs and the culture of the organization. If a company is highly diversified and has business units that tend to operate autonomously, a decentralized approach may be optimal. Similarly, if a company has a wide diversity of environmental problems, centralizing environmental operations might lead to fragmented coverage.

Mutual trust and respect between corporate and business unit staff are important for the coordination and efficacy of efforts by each department. Where that respect is not developed, corporate staff may expend substantial time and money developing guidebooks and training manuals, for example, that the business units regard as useless. The corporations surveyed have tried several methods to build this respect. One particularly effective method is to have the business units serve as counsel to the corporate staff. Periodic meetings and task forces that involve the business units in the “corporate process” reportedly help to increase trust.

Finally, organizational structures must foster strong vertical and horizontal reporting relationships. An environmental department will not be fully effective unless it has a close reporting relationship with multiple levels of staff in manufacturing, general counsel, public relations, government relations, R&D, finance, and other departments. If environmental problems are particularly serious, a direct reporting relationship to either the board of directors or to a special committee of the board can be critical.

High Degree of Employee Awareness and Training.

The most successful corporations develop an environmental ethic (or culture), at all levels of the organization. This ethic is best conveyed through comprehensive employee training and awareness programs.

Some firms fly corporate staff to individual facilities to conduct training, while others rely on the business units or hire outside consultants. The backbone of such programs should be conveying a commitment to sound environmental practices, as well as training in a range of responses to specific situations. Those conducting the programs should target the most common environmental problems, work with employees to detect prevalent causes of problems, and drill employees on response measures. Communicating a general commitment to good environmental judgment is equally important, so that employees know when to react and whom to contact should an accident occur.

Strong Auditing Program.

An environmental management program also needs a comprehenive, consistent, and fair auditing program that applies to all organizations under the corporate umbrella. In fact, many corporate environmental departments spend most of their budgets on auditing activities. Such auditing programs typically take three forms: “top down audits,” in which corporate environmental staff police the operations of individual business units and facilities; “self-assessment audits,” in which each business unit or facility audits itself and works with the corporate staff to remedy problems; and “third-party audits,” in which outside professionals perform audits and report their results to corporate environmental staff.

Each approach offers distinct advantages and disadvantages. Top-down and third-party auditing help corporate staff ensure consistent compliance across facilities and allow for greater expertise in the auditing function. Opponents of this approach argue that the policing relationships can create negative interactions and that many auditors are not sufficiently familiar with each facility to conduct a comprehensive study. Self-assessment audits can be seen as a solution to this problem because those who work in the facilities are most likely to identify primary problems. Critics of self-assessment audits, however, argue that individuals may not have sufficient incentive to identify problems because they may implicate themselves and draw attention to burdensome problems. They may also be too close to their operations to be completely objective. Finally, self-assessment and third-party audits are criticized on the grounds that they do not help corporate staff become more familiar with field operations. Using a combined auditing approach may be optimal (i.e., periodic self-assessments with follow-ups by top management and occasional third-party evaluations). Such hybrid approaches create the largest information flow from the plants to upper level management.

Of equal importance to the actual audit is the management of the information received. The information must be translated into effective programs to resolve problems in a timely manner. Also, corporations must be savvy about the handling and maintenance of auditing records. Records that fall into the wrong hands can be extremely damaging evidence in lawsuits or regulatory proceedings.

Strong Legal Base.

Although most environmental issues require attention from engineers and scientists, a large portion of costs and liabilities result from inadequate handling of legal issues. Only a close association with legal counsel will ensure that environmental efforts are not undermined by lapses in legal coverage. If handled inappropriately, data that’s uncovered (or not discovered) can haunt a corporation for years. Appropriate preventive legal measures may help corporations steer clear of potentially turbulent problems.

The exact form of the relationship between environmental staff and legal counsel varies across organizations. In all cases, however, it is critical that attorneys have a say in how information is conveyed and how transactions are completed. Some environmental departments have attorneys on staff, while others rely on environmental specialists within their corporate general counsel’s office. A few corporations rely exclusively on outside counsel (although this is generally not the case for medium-and larger-sized corporations). Still others apply hybrid approaches, such as establishing an environmental division within the general counsel’s department.

Having legal counsel within the environmental department is generally unnecessary unless environmental problems are particularly severe. For most corporations, it is more practical to establish and maintain a strong alliance and reporting relationship with the company’s general counsel. Such a structure allows greater flexibility, reduces the operating budget for the environmental department, and keeps the environmental counsel in a legal setting, thereby increasing information flows among attorneys.

Established Ownership of Environmental Problems.

Because the precise cause of environmental accidents is often difficult to determine, a “pass the buck” mentality exists in many corporations. Managers and employees intent either on moving quickly up die corporate ladder, or on moving to different companies, have little incentive to address environmental problems. Ignoring problems or leaving them for others to handle is an easy alternative unless ownership of problems is firmly established.

Some corporations attempt to establish “ownership” by basing performance appraisals and bonuses, in part, on the attention an employee pays to environmental problems. While only a few such formalized reward programs exist in the environmental area per se, incentive programs have been successfully applied in quality improvement programs and product innovation efforts.

Unlocking Past Practices: Six Steps for Implementation

Once the decision has been made either to introduce an environmental management program or to further the development of an existing program, numerous steps must be taken. Each of the keys discussed above constitute implementation goals. Six processes that are critical to that implementation (see Table 2) are discussed below.

Assess the Full Range of Environmental Risks.

Because regulatory and liability issues are so far reaching, corporations must identify the departments, personnel, and operating units with which the environmental management program must be concerned. Many corporations find that the extent of their potential exposure is far more significant than anticipated, and that it involves a wider range of activities. For example, under joint and several liability laws, corporations may be held liable for pollution claims even if they are not directly responsible for the pollution. Thus a trucking company that unknowingly transports toxic chemicals, or a company that locates on property that was once a hazardous waste dump site, could be held liable for damages. Knowing both the degree and scope of potential exposure can help firms design efficient, effective programs and determine appropriate levels of investment.

The most common way of determining risk is to conduct an environmental assessment or audit at all facilities. These audits should do the following: describe the nature of the operations, including production processes and chemicals used; identify the full scope of regulatory requirements that apply to the facility; identify the persons/positions responsible for ensuring compliance and the organizational structures in place for executing environmental programs; assess the current level of compliance with regulatory programs; identify other potential sources of risk beyond regulatory considerations; and rank each facility according to the relative degrees of risk and compliance.3 Such reports should be designed to encapsulate all relevant information so that key strategic and policy decisions can be made.

• Calculate the Costs of Poor Environmental Management, Then Sell the Need for Good Practices throughout the Corporation. Implementing an environmental program can be expensive, time consuming, and burdensome. Consequendy, upper level management and individuals in other departments may not support implementation unless they are fully educated about the potential costs of poor practices. For many corporations, a simple cost/benefit analysis will provide overwhelming evidence in support of a strong program. Costs can best be identified through the auditing procedure discussed above. Once the range of risks is known, forecasts of potential liability can be made using engineering and legal estimations, as well as analyses of payments made by companies facing similar problems.

• Find a Good Manager. As trite as this sounds, a good manager is critical to the success of any environmental program. The diversity of issues and the difficulties of promoting sound practices dictate that a remarkably talented individual be chosen. The manager’s functional expertise (e.g., lawyer, general manager, or engineer) is not critical, provided that he or she is respected within the organization and has managerial skills, internal and external networks, and rapport with top management. Some corporations have effectively used individuals who had no prior knowledge of environmental matters, but who did have outstanding managerial capabilities. It is important to note, however, that the environmental department should not be a depository for individual managers with nowhere else to go.
• Organize for Visibility, Accessibility, and Effectiveness. Many corporations try to fit an environmental program into an existing organizational structure wherever it is least disruptive. While this approach may be successful in some cases, most programs require more concerted organizational efforts. In some corporations, it is necessary to establish separate divisions that deal specifically with environmental matters and that report directly to the CEO. Other corporations may need to restructure entire departments to ensure a formal and effective reporting relationship with their environmental management department. Corporations must not be reluctant to make these changes. Failure to develop appropriate organizational structures and sufficient reporting relationships may doom a program to failure.
• Manage and Use Information Flow. Finding and responding to environmental problems requires the analysis of a wide variety of information. Unfortunately, the multidisciplinary nature of environmental management often results in an unmanageable information overflow. For any given problem, an environmental manager may be presented with piles of scientific data, lengthy legal briefs, volumes of regulatory requirements, and various figures from finance or accounting departments. Digesting and synthesizing this data can be extremely time consuming and, in some cases, virtually impossible. Although there is often a handful of individuals who can interpret the nuances of necessary data, corporations should not become dependent upon single individuals. Rather, they should focus on developing systems for disseminating useful, understandable data that can be used throughout the organization.

Managing the flow of information means deciding exactly what information is needed, who needs it, when it needs to be known, and in what form it needs to be conveyed. Ideally, synthesis and analysis should be completed as close to the source of information as possible. While many environmental professionals tend to submit exhaustively complete reports that meet the credibility standards of their profession, what’s often needed most is a professional judgment in usable form. Corporations must establish guidelines about these communications and assign responsibility for their development and dissemination. Managers should then solicit feedback from the front-line workers regarding the systems’ effectiveness.

Large organizations with complex environmental problems should consider investing in a management information system. While the system’s complexity may vary according to specific needs, it should be kept as simple as possible. The primary goal should be to disseminate information throughout the organization and to upper level management. Information must therefore be both accessible and understandable—in succinct, comprehensible language, wherever possible.4

Re-evaluate and Reform Existing Programs.

Just as products and technology-based programs become obsolete, so too do environmental programs. Both the legal and regulatory forces affecting environmental management are constantly developing and can be changed significantly by new legislation, court decisions, or changing government priorities. Unfortunately, it is often difficult for environmental personnel to stay abreast of developments and adapt to changes as they occur. In order to avoid antiquation, top level managers must periodically reevaluate the needs and effectiveness of their programs. Corporations with an environmental program in place should not assume that the program is still fully effective and should periodically check for changes in regulatory requirements and plant procedures. Programs must also be checked for slippage in effort resulting from either succession of management or from over-confidence because of a low frequency of accidents.

Setting Priorities and Meeting Obligations

Today’s fiercely competitive marketplace and emphasis on cost-cutting measures are leading companies to place a priority on programs that best support their competitive advantage. Often overlooked in these prioritization schemes is environmental management. Because its short-run effect on the bottom line is usually negative, many managers fail to see its benefits. But environmental management is not about the short term, it’s about the long haul. If neglected, it can seriously jeopardize a company’s balance sheets and public image for years. While investment in proactive environmental management requires time, effort, and money, the rewards go beyond short-term financial statements. Proactive environmental management means responsively addressing business, moral, and social obligations to protect both a company and the environment.