Digitisation of environmental risk management in China

Digitization of Environmental
Risk Management
October 2019
Johnny Browaeys

保密文件，未经授权，严禁复制和传播
All rights reserved. 格林曼环境版权所有
2002
2007
2012
2017
Systematic Development with focus on
Urban and Industrial Transformation
“Eco-Civilization” – “Industrial Transformation”
Three Critical
Battles
by 2020
Preventing
Financial Risks
Tackling
Pollution
Reducing
Poverty

"source: National Ministry of Ecological Environment official website"
Types of Administrative penalties 2015 2016 2017
33,667 cases
2018
36,302 cases
Continued daily penalties
(number/billion yuan)
715 /
0.57
1,017/
0.81
*1,046/
1.08
*691/
0.985
Operational halts 4,191 9,976 *16,429 *19903
Production restrictions 3,106 5,673 *7,842 *6196
Administrative detentions 2,079 4,041 ~8,600 *7145
Environmental pollution crimes 1,685 2,023 ~2,700 *2367
Administrative penalty decision ~97,000 ~124,160 ~233,000 ~166,210
Total administrative fines (billion RMB) 4.25 6.63 11.58 13.6
NOTE: * means data from January to November only
Driving Implementation with New Enforcement Tools

Nearby Factories
Environmental Infrastructure
Sensitive Areas
Nearby Communities
Environmental Planning
Industrial Transformation
Industrial Capacity Planning
Urban Planning
• License & Operation
Compliance
Surrounding Policies
External
GAPS in Most Current Risk Management Systems

• Environmental Performance
• Environmental Capacity
• Industrial Capacity
• Industrial Planning
• Urban Planning
Wide Range of Relevant Data
• Enforcement Data
• Monitoring Data
• Permitting Information
Digitized Operational Data
• National
• 31 Provinces
• 338 Cities
Policies, Rectifications, Inspections
• Governmental Channels
• Professional/commercial Data source
• Official and Other Medias
• Public Channels
• Third Parties
Types of Data Sources
Publicly Available Digitized Environmental Data

START
AUDIT
REPORT
CORRECTIVE
ACTION
Continuous changes require
continuous risk management
External factors
not included
Challenge 1
Challenge 2
Industrial transformation leads to
non-mitigatable consequences
Challenge 3
Annual Auditing Running Behind the Facts and Failing to
Protect the Business
Annual
Audit
Cycle

Online Portal
Risk Profiling and push notifications in
case of alerts
Operations
& Suppliers
On-line Engagement
Disclosure / Verification
Corporate
Risk profiling and push notifications in
case of alerts
Resilience & Progress
Reporting
Request for Mitigation, Verification
Performance
Reporting
Questionnaire, Audit, Action Plan
Digitizing Environmental Risk Management

8
Click on tag to check
enterprise details
Click to view relevant
updated news
Click to view the
newest policies
enterprises with new
alerts are flashing
New alerts – click
for details
Click to show more
Example of Online Portal listing environmental
information about plants, suppliers, clients, competitors
Red color means: acute risk for restriction, reduction, or
suspension of production, shut-down, relocation, major
accident, serious penalty, negative media coverage or lawsuit,
as a result of environmental and safety issues.

Enterprise name, risk category, alerts (if any)
Display physical location and surroundings
(zoom in/out)
Key information sorted here (e.g. violation
records, production limitation/suspension,
complaints, governmental inspections,
accidents, etc.). Click title for detailed
documents. This section is designed to
facilitate users to check out original
information that supports risk analysis.
Click to get regional risk summary
Enterprise basic information Switch between satellite map and 2-D maps
Click to check “alert”, “news” or “policy”
sections to access relevant updated information
Different levels of interaction:
1. Evaluation based on data only
2. Customized questionnaire / audit
3. Documented mitigation tracking
Enterprise risk categorization
based on 5 dimensional analysis
1. Site Performance
2. Policy & Planning
3. Environmental Infrastructure
4. Regional Scrutiny
5. Environmental Quality
Why Operational Risk Mitigation Expertise is Needed
Mitigation: can the interruption risk be mitigated? If yes, how? If
not, what to expect by when and for how long? What solutions
are available to monitor and to manage when it happens?
Click on the figure for
executive report

Case Study: Jiangsu Explosion March 21 Triggers Wave of
Enforcements / Rectifications
2 hours Pictures and videos on the scenes started to spread on social medias
It started with a fire incident at about 14:00, which then led to a lethal
explosion at 14:50. The fire was put out by 19:00 next day.
24 hours DERA provides an insightful analysis of potential impacts on Client’s suppliers
1 day
National Environmental and Safety Authorities have done the first round of
thorough inspection and monitoring to evaluate post-incident impacts.
3 days
Jiangsu Government announced a province-wide environmental and safety
inspection on chemical parks/facilities
6 days
National campaign launched to conduct emergent risk screening and
assessment of chemical industrial parks
Following the national campaign, provinces (Sichuan, Shandong etc.) started to
announce local inspection plan
12 days Price jump for several chemical raw materials (e.g. MDI, TPU) due
to closure of thousands of chemical facilities in Jiangsu, Shandong,
Henan, Guangdong

Low
Slow
High
Intervention
Speed Fast
Information &
Resources
DataPeople
Low
High
Accuracy
Multi-factor
Predictive
Deep analysis
Fast
Cost-effective
Accurate
2020: Self-Accountability via Green Manufacturing System,
linked to Social Credit Scoring System
China leapfrogging with
“real-time policy adaptation”

Performing
Organization
Foundational
Leadership
Your advantage
Supplier Performance
Stable supply Chain
Prefer to work for you
More resilient
More business
More efficient
Supplier benefit
Business
Case
Intrinsic
Motivation
Industrial upgrade
Happy population
Stable growth
Government support
Company reputation
Community sympathy
China benefit
Your advantage Your advantage
Get workforce to
improve supplier
from within
Learn to better
contribute to better
business
Workforce benefit
Your advantage
Capable supplier
leadership to drive
improvement
Ability to drive
organizational
improvement
Supplier benefit
Supplier Shared Value Business Ecosystem
in China for China

Corporate Strategies: Executive Summary
New Opportunities
• Cost Saving
• Preventive Risk Mitigation
• Increased Responsiveness
• Value Chain Upgrade
• Suppliers, Clients, Competitors
New Challenges
• Manage External Factors
• Manage Dynamic Factors
New Approaches
• Digitization
• Dynamic Risk Management
• Data-enabled Proactive Mitigation
Outcomes
• Business Resilience
• Better Financial Projection
• Improved Transparency
Re-strategize on China, Increase Momentum

Thank You
• Contact:
• johnny.browaeys@greenment.net
• WECHAT: 13761894720

Digitisation of environmental risk management in China

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