Nicholas P. Cheremisinoff

Integrating EMS and P2 to manage environmental costs and liabilities

The necessarily similar structures of EMSs and P2 programmes make it possible to integrate the elements of a P2 program smoothly into an EMS. When this is done, P2 is raised from being a mere commitment within the EMS to being a major operational component of the EMS. Instead of looking just at the regulatory compliance status and environmental aspects of your companys operations and then at ways to improve on these, you would also be specifically and systematically looking for high-return P2 opportunities from the outset and doing so continuously. This article provides a fresh look at how an EMS and P2 should work and for the first time provides the basis of an integrated management model for companies.

Chapter 4 – EMS: FIRST STEPS

This chapter outlines the initial steps toward implementing an environmental management system (EMS). An enterprise that until now has paid little attention to environmental matters or has not paid attention in any organized way would want to carry out an initial environmental review (IER). The purpose of an IER is to bring together, the available information on the enterprises environmental interactions, its environmental performance, its regulatory compliance status, its environmental programs, and the overall way that it manages the environmental aspects of its operations. An IER also covers related subjects such as quality management and health and safety management, because another purpose of the IER is to identify existing systems or programs in the enterprise that the EMS could build on. An EMS gap analysis compares the system or program in place at the enterprise with the demands of ISO 14001, requirement by requirement. To develop the full range of information to support good EMS implementation planning, the EMS committee also conducts an IER or incorporate elements of an IER into the gap analysis.

Chapter 8 – FINANCIAL PLANNING TOOLS

This chapter focuses on the financial analysis factors for a pollution prevention (P2) project. There are four financial analysis factors—payback period, internal rate of return, benefit-to-cost (B/C) ratio, and present value of net benefit. The payback period of an investment is essentially a measure of how long it takes to break even on the cost of that investment. In essence, the importance of lifecycle costing is lost in using the minimum payback-time standard, because it only considers costs and benefits to the point where they balance, instead of considering them over the entire life of the project. The term return on investment (ROI) is defined as the interest rate that would result in a return on the invested capital equivalent to the projects return. The B/C ratio is a benchmark that is determined by taking the total present value of all of the financial benefits of a pollution prevention or P2 project and dividing it by the total present value of all the costs of the project. Finally, the present value of net benefits (PVNB) shows the worth of a P2 project in terms of a present-value sum.

Chapter 1 – EMS: PRINCIPLES AND CONCEPTS

This chapter focuses on the environmental management system (EMS), which is an approach, a tool, a set of procedures, or a planned and organized way of doing things. It refers to any planning and implementation system that an enterprise employs to manage the way it interacts with the natural environment. An EMS is built around the way an enterprise operates. It focuses on the enterprises production processes and general management system—not on its emissions, effluents, and solid waste as environmental regulations do. An EMS enables an enterprise to address major and costly aspects of its operations proactively, strategically, and comprehensively. EMS is like any other system of planning and implementing for continual improvement. The same basic steps apply to managing an enterprise, managing a production line, or managing economic development. The EMS generates environmental management programs, which, if well thought-out and well carried-out, result in improved environmental performance and regulatory compliance on the part of the enterprise. If the environmental management programs have been well thought-out and well carried-out, they result in reduced costs of production, reduced risk of environmental liability, and reduced regulatory penalties.

Chapter 5 – POLLUTION PREVENTION: PRINCIPLES & CONCEPTS

This chapter focuses on the elements, terminology, and objectives of pollution prevention (P2). P2 is part of a sound environmental management system. It is a cornerstone of the ISO 14001 standard. P2 refers to the act of eliminating or minimizing the production of pollution at its source. Because this production costs an enterprise money, there should be financial rewards. This is not to say that all P2 activities carry with them savings that pay for the re-engineering. P2 makes sense when it carries along with it cost benefits that are attractive enough for an enterprise to change the way it currently operates. A good P2 program is built around a set of well-planned activities that involves re-engineering the way an operation works, so that pollution does not occur or is at least kept to a minimum. By doing this, the enterprise saves money. The reengineering can take the form of process changes, technology changes, operational changes, and, in very simple cases, nothing more than good housekeeping practices. P2 programs can only be financially justified when they meet the criterion of win-win investments (WWI).

Chapter 2 – EMS: APPLIED MODELS

This chapter focuses on the ISO 14001 environmental management system (EMS) standard model. The ISO drafters aimed to produce an international standard on which the broadest range of applied EMS models could be based. Therefore, the general approach of the standard is not to state how something should be done, and usually not even entirely what should be done. It is important to remember that the ISO 14001 EMS standard must be followed to the letter only by enterprises seeking certification for the first time in the near term or wanting to maintain certification once they have received it. Enterprises, for the time being, just want the benefits of a productive EMS and do not want to spend unnecessary amounts of money. The enterprises that want to move slowly toward certification, learning as they go, are free to select from the elements of ISO 14001 and modify their selections as they see fit. Top managements seeking ISO14001 certification usually hire an accredited certification firm, or registrar to conduct a certification audit. Many enterprises choose to employ a consultant or consulting firm to help implement ISO 14001. It is important that the enterprise consists of staff that is reasonably well educated in ISO 14001 before calling in a consultant.

Chapter 6 – INDUSTRY-SPECIFIC POLLUTION PREVENTION PRACTICES

This chapter focuses on industry-specific pollution management practices involving several strategies for dealing with wastes or pollution. Strategies that reduce or eliminate wastes before they are created are preferable to those that deal with treating or disposing wastes that are already generated. Prevention is the best waste reduction strategy that keeps waste, or pollution, from being formed in the first place. Waste prevention may require significant changes to processes. Recycling strategies minimize the waste to the greatest extent possible. When wastes cannot be prevented or minimized through reuse or recycling, enterprises should pursue strategies to reduce their volume of toxicity through treatment. Proper waste disposal is an essential component of an overall environmental management program; however, it is the least effective technique. In reality, pollution prevention (P2) does not necessarily pay in all situations. The audit process helps enterprises identify and quantify a P2 opportunity. When an enterprise combines the results from an audit with the financial tools for project assessment, sometimes including life-cycle analysis (LCA) tools, then it can make a critical judgment as to whether or not project opportunities are justified from a business standpoint.

Chapter 3 – EMS: TOOLS AND TECHNIQUES

This chapter discusses tools and techniques for implementing ISO 14001, using the requirements of ISO 14001 as the basis. The two elements of ISO 14001 are environmental policy and ernvironmental aspects. Environmental policy must be the first EMS implementation step. It is better to extend the policy development process so that it overlaps with the environmental management program planning process: that way, the initial environmental policy statement and the first set of environmental management programs could be finalized at roughly the same time. This enables the programs to get up and running just after the policy is announced, providing immediate visible evidence that the enterprises environmental policy is reflected in action. In developing environmental policy, the top management needs inputs from all departments and levels of the enterprise, so that the people closest to where environmental impacts take place, and those who supervise them, can bring their practical knowledge to the policy. As far as environmental aspects are concerned, the most straightforward way of approaching the task of identifying the environmental aspects of enterprise operations and products is to begin by listing all the basic operations of the enterprise and then breaking down those operations into individual activities in a way that makes sense as the basic units for analysis. The enterprise could handle the use and disposal of its products in a similar way.

Chapter 7 – THE POLLUTION PREVENTION AUDIT

This chapter discusses the pollution prevention (P2) audit, which comprises corrective actions based upon cost-sensitivity considerations. P2 program only makes sense when it is financially attractive or, at a minimum, is break-even from a cost standpoint. P2 audit differs from most other types of audits because it makes use of a dual benchmarking approach; namely, it uses both technical environmental performance and financial performance as its basis for making corrective actions. The status quo most often serves as the benchmark, though other standards certainly can be devised. P2 audit is a subset of the environmental audit. Though environmental audits and their subsets have different objectives, their overall intent is to develop corrective actions that largely focus on lowest achievable emission rate (LAER) technologies and only sometimes on best available control technologies (BACT). The vast majority of environmental audits and subsets are driven by regulations, which may be designed for the purpose of site clean-up or for compliance purposes for operating facilities.