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Beyond Compliance

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Businesses must strategize to go "beyond compliance". Given the myriad of legislations, market forces, community expectations and demands from investors; mere regulatory compliance is not going to be enough. This presentation brings out the above perspective.

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Beyond Compliance

  1. 1. Moving Beyond Compliance………. Prasad Modak Executive President, Environmental Management Centre, Mumbai, IndiaPrasad Modak 1 Environmental Management Centre LLP
  2. 2. Structure of the Presentation Basic elements of Environmental Compliance Environmental Compliance and Business Risks Can Business risks become Opportunities? Global Trends on going Beyond Compliance Creating the ChangePrasad Modak 2 Environmental Management Centre LLP
  3. 3. Business, Government and Environmental Compliance Business Government Sets policies, standards and Implements procedures Reviews, inspects and monitors Operates Penalizes / provides incentives Reports Prasad Modak 3 Environmental Management Centre LLP
  4. 4. Meeting Environmental Compliance – Key Steps Be Aware of the Relevant Legislations Know Appropriate Standards and Procedures Invest in Meeting Compliance Conduct Self-Assessment Take Corrective Actions Do Required ReportingPrasad Modak 4 Environmental Management Centre LLP
  5. 5. Regulators of Environmental ComplianceEmpowered regulatory agencies e.g. Pollution ControlBoard enforces environmental legislation.Environmental Cells in Line Ministries, other relevantGovernment Departments and Local GovernmentInstitutions have additional Checks and DirectivesPrasad Modak 5 Environmental Management Centre LLP
  6. 6. Standards and Regulations Evolve Tightening of effluent standards - Case of a Chemical industry in Navi Mumbai. Phenol standard in effluent 100 mg/l to 1 mg/l Technology shifts – Chlor alkali industries from mercury cell to membrane technology Material restrictions – Ozone Depleting Substances, Azo dyes Limiting resource consumption – Water consumption per ton basisPrasad Modak 6 Environmental Management Centre LLP
  7. 7. Environmental Regulations are “invading” Product Life Cycle Packaging REJECTS WASTE BOD Sludges PRODUCTS ENVIRONMENTAL REGULATIONS RESIDUEFormaldehyde RESOURCES PROCESS Chlorine bleaching Water Modak Prasad consumption 7 Environmental Management Centre LLP
  8. 8. The New Form of RegulationMultiple Agents, Multiple Pressures, Multiple Incentives/Disincentives Government, International Agreements Business Labor Market Consumers Investors Neighborhood Prasad Modak Community8 Environmental Management Centre LLP
  9. 9. Compliance is dynamic ! Compliance can be complex !Business needs to plan for meeting Compliance Prasad Modak 9 Environmental Management Centre LLP
  10. 10. Risks of Environmental Non-Compliance?Principal risks are business interruption or .. even business closure - public backlash, leading to damaging of reputation, loss of the market and withdrawals by the investors!Prasad Modak 10 Environmental Management Centre LLP
  11. 11. Impact of Non Compliance Prasad Modak 11http://www.greensupplyline.com/showArticle.jhtml?printableArticle=true&articleId=192300815 Environmental Management Centre LLP
  12. 12. Typical Business Risks and Associated Factors Supply risk Availability, quality, timeliness of needed raw materialsTechnology risk Choice of technology and impact on Quality, Quantity and Price of products Market risk Company image, consumer preferences, new competitorsLabor induced risk Lack of skill, quick turnaround of laborPrasad Modak 12 Environmental Management Centre LLP
  13. 13. “Environment” pervades the business risks An Illustration Scenario: Water intensive industry; Quality, Quantity and Reliability of continuous and adequate water a major problem. Risks: A supply risk on water led to high processing costs as more pre-treatment of water was needed to meet the norms Labor induced risk due toPoor quality water and unreliable supply inadequate training and poor skillscompromised technology choice and of staff resulted in inefficient watertherefore process efficiency and product usage practices, low Right Firstquality was hampered – eco-labels were Time requiring reprocessing, morenot met - a technology risk ! generation of effluents Poor product quality, high production costs, lack of reliability in delivery led to fall in market Prasad Modak 13 position - aManagementrisk ! LLP Environmental market Centre
  14. 14. Can Risks become Opportunities?Connecting Environmental Compliance withCompetitiveness is the Key
  15. 15. Tool-box of Business initiatives EMS/IMS, Sustainable Consumption & Production, Codes of Conduct, Eco- lables/Product Sustainability, Design Beyond for Sustainability, Extended Producer Responsibility, Minimizing Carbon Compliance Footprint, Greening of Supply Chains, Sustainability Reporting, Practicing CSRCompliance Fiscal incentives / penalization Regulations, standards, procedures Prasad Modak 15 Environmental Management Centre LLP
  16. 16. A cost- effective way to meet Compliance is To go beyond COMPLIANCE
  17. 17. Taking the Leap from Risk to Opportunity Beyond ComplianceComplianceRisk Aversion Risk Aversion Business Profiting Initiatives Branding LeadingPrasad Modak 17 Environmental Management Centre LLP
  18. 18. Survey: Altered Imagesthe 2001 state of corporate responsibility in India pollMost important factor in forming opinion of a company Prasad Modak 18 Environmental Management Centre LLP
  19. 19. Illustrating the move from Risk to Opportunity Scenario: Water intensive industry; Quality, Quantity and Reliability of continuous and adequate water a major problem.Alleviating…. Reduction of water consumption in process; recycle and reuse Supply Risk through.. of water in the process.Labor Induced Training workers in good housekeeping practices ofRisk through.. water conservation. Water saving devices; water efficient technologies,Technology Risk through... chemical audit to replace objectionable substancees. Market risk alleviated by (a) above approach. (b) Decision to move towards a new range of products consuming less water and meeting eco-labelsPrasad Modak 19 Environmental Management Centre LLP
  20. 20. Going Beyond Compliance takes to Smart Sustainability Giving Advantage to ALL Environmental Performance Business development and beyond – to social frontiers Supporting Corporate Objectives compliance Economic PerformancePrasad Modak 20 Environmental Management Centre LLP
  21. 21. PROCTOR & GAMBLE“Sustainable development is not only becoming an important public policy issue, it is becoming a significant business opportunity.” George D. Carpenter Director Corporate Sustainable Development
  22. 22. Sir Mark Moody-Stuart, Shell  Make SD “come alive in hearts and minds”  Integration: 96,000 people, 51 languages, 135+ countries  Global Sullivan Principles, Global Compact  SDMF, business case  Renewables, fuel cells
  23. 23. Living With the BrandPrasad Modak 23 Environmental Management Centre LLP
  24. 24. The Big Squeeze is OnKey Learning: Compliance is not limited to National Laws and Regulations En viro nm et Eco-labels Water ent al Mark Climate Investor outlook Resources Supply-chains Biodiversity and traceability Social Legal Responsibility Trade Agreements Transparency Harmonization Accountability Tec Reporting ues chn al olo V gy Corporate Values Materials Leader’s Values Processes Prasad Modak Societal Values Health &Safety 24 Environmental Management Centre LLPClean energy
  25. 25. Creating the Change Integrating environment into business practices Resource efficiency being the route rather than only environmental compliance Integrating social accountability into business Looking at the Triple Bottom Line - Environment, Economics and SocialPrasad Modak 25 Environmental Management Centre LLP
  26. 26. Thank youReach me at prasad.modak@emcentre.com

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