One’s environmental standards should be high. There’s no other way out

In a country where there are too many laws, some in conflict with one another, it would be both confusing and frustrating for a small business to find out whether it is in tune with an environmental ethos that is forever evolving.

Therefore, let’s introduce this term “environmental audit”, which is defined in Wikipedia as:

a general term that can reflect various types of evaluations intended to identify environmental compliance and management system implementation gaps, along with related corrective actions. In this way they perform an analogous (similar) function to financial audits. There are generally two different types of environmental audits: compliance audits and management systems audits.

How to get started on this

There are quite a few environmental audit guidelines that are freely available, many of them quite credible. Some of these are:

• The Global Reporting Initiative is probably the best out there. Founded in 1997, GRI is a non-profit that helps businesses, governments and other organisations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others. The GRI has standards for sustainability reporting; also known as ecological footprint reporting, environmental social governance (ESG) reporting, triple bottom line (TBL) reporting, and corporate social responsibility (CSR) reporting. The current version is called G4. There’s a flipside here, discussed below. Broadly speaking, the GRI documents are a good starting point. Thereafter, one will need to expand one’s vision.
• AccountAbility, set up in 1995, too is an independent, global, not-for-profit organisation promoting accountability, sustainable business practices and corporate responsibility. Its AA1000 series are principles-based standards to help organisations become more accountable, responsible and sustainable. AccountAbility is fine if you are looking for a consultant.
• The Environmental Protection Agency of the US has protocols for conducting environmental compliance audits under federal regulations that cover a range of media, including water, toxic substances, hazardous waste, and used oil. These proptocols may be US-specific, but it does tell one of how to go about compliance. The agency’s Small Business Source Book on Environmental Auditing is an invaluable ready-reckoner on environmental auditing from a small-business perspective.
• This one is long-winding. The Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) of the United Nations Conference on Trade and Development UNCTAD) has an amazing toolkit. Its Guidance Manual Accounting and Financial Reporting for Environmental Costs and Liabilities provides an overview of accounting for environmental costs and liabilities and meaningful disclosure of environmental performance. If you were looking for real international standards, this is the manual to print out and keep handy.

Any search for “environment audit small business” will throw up innumerable guidelines and protocols, especially originating from the United States. India virtually throws up a blank. This, itself, shows how much India values environmental protection and corporate compliance. On the other hand, take a look at the comprehensive, well-detailed, website that tells business in Northern Ireland what they should do to improve their environmental performance and legal compliance. Says a lot, doesn’t it?

The question of standards

There is an intrinsic problem with the GRI guidelines since they hinge on more reporting, and not better reporting or more usable or actionable reporting. The Center for Sustainable Organizations (CSO), which follows what it calls a Context-Based Sustainability approach, has criticised GRI for encouraging a cut-paste doctrine that somehow dilutes long-term vision. The criticism of GRI is for failing to encourage companies to address their accountability for global problems.

In a globalised world where environmental impacts are probably more global in scale than local, the issue of the context (in which some happens) cannot be ignored. As CSO says on its website:

If you’re not using context-based metrics (CBMs) in your organization’s sustainability program, you’re not measuring sustainability performance, per se. Instead, you might be measuring eco-efficiency, citizenship, philanthropy or what have you, but not sustainability performance. In order to measure sustainability performance, impacts must be measured against norms, standards or thresholds that are context-based.

Their metrics can, of course, be downloaded.

The world is now moving beyond the GRI kind of guidelines. The Global Initiative for Sustainability Ratings (GISR) looks at sustainability context in its principles. GISR is different in that it does not rate companies; it accredits other sustainability ratings, rankings or indices to apply its standard for measuring excellence in sustainability performance. GISR took off as recently as in 2011.

Then there is Climate Counts, a non-profit third party rater of corporate climate performance. It is currently conducting a pilot project taking a context-based approach to assessing company carbon emissions. Its Executive Director, Mike Bellamente, elaborates:

At the heart of these metrics lies the connected goal of creating value at once for the organization and for the environment. The general idea is that if we can get enough of the brightest minds in business to turn the production/consumption paradigm on its ear, we may one day be able to harmonize society’s appetite for goods within the limits of the natural world, even as population continues to soar.

A brief history of environmental standards

The world’s first environmental management systems standard, BS 7750, was published by the BSI Group in 1992. Till this point, environmental management was looked at simply as Responsible Care. The template of the BS 7750 led to the development of the ISO 14000 series in 1996, by the International Organization for Standardization (ISO), which has representation from committees all over the world. The ISO 14000 series includes the ISO 14001, which is reckoned to be the core set of standards used by organisations for designing and implementing an effective Environmental Management System (EMS).

ISO 14001 is voluntary, with its main aim to assist companies in continually improving their environmental performance, while complying with any applicable legislation. Organizations are responsible for setting their own targets and performance measures with the standard serving to assist them in meeting objectives and goals and in the subsequent monitoring and measurement of these. The current version ISO 14001:2004 was last reviewed in 2012.

There are some problems here too. ISO 14000 adherence is based on the assumption that a quality process will lead to quality products and therefore, a clean environment. Since it focuses on management processes behind a particular product, critics believe that there is no guarantee that a quality process will yield a quality product or a better environment.

At the end of the day, it is a question of what high standards you set for yourself.