December 10, 2007

Industry's environmental efforts can expect closer scrutiny by regulators, public

By: Colin Isaacs

The environment continues to ride high as a Canadian, indeed global, public policy issue, though there is some evidence that it may be a false high arising from prompted pollster questions. There seems to be little public support for the kind of major change that would be necessary to truly address environmental issues. With the possible exception of Australia, none of the many election campaigns during 2007 focused on environmental issues.

Public concern for the environment is setting some traps for business. Canada's Competition Bureau, charged with administering misleading advertising regulations, is gearing up to get tough with companies that misuse environmental claims. Regulators are once again considering aspects of corporate environmental reporting, including minimum requirements and reporting standards. Those companies that make environmental performance claims, like BP, which was recently fined $373 million by the U.S. Department of Justice for environmental crimes and committing fraud, are under increased scrutiny and are finding it increasingly difficult to maintain the environmental performance standards they have set for themselves.

Companies are between a rock and a hard place. Those that ignore public expectations for improved environmental performance and sustainable development within operations risk being blackballed as incorrigible polluters. Those that try to meet public expectations risk being found wanting. Yet almost every indication is that those failing to respond to the kind of social expectations now being placed upon business will sooner or later be found wanting by customers and regulators.

In 2008, the environment is likely to become an even more important aspect of business in almost all sectors. The following are some key elements for a business wanting to become "greener.".

1) Consult with experts. Environmental and social responsibility are extremely complex aspects of business. What you think you know is almost certainly at least partially incorrect. Seek out advice from those who have many years of experience in the field.

2) The public is increasingly aware of the problems but is not well informed about the solutions. You get what you pay for. Scientific advice is likely to be more helpful, in the medium to long term, than advice from a community environmental or media relations group, although obtaining an understanding of stakeholder expectations is also an important component of social responsibility.

3) Done well, corporate green programs can help improve the bottom line. Done badly, corporate green programs have the potential to put an end to the bottom line.

4) Announcements should follow, not precede, actions. Many environmental initiatives are found to be more complex than they at first appear. Organizations that announce green plans and subsequently find themselves unable to deliver almost always attract strong criticism.

5) Most industry associations are held back by the needs of their least progressive members. Environment, like product design and operational efficiency, is an opportunity for competitive advantage. Waiting for the rest of your industry sector destroys the competitive advantages that are available to innovative companies.

Most environmental observers expect that in 2008 society will begin to see the difference between the environmental leaders and the environmental ne'er-do-wells. Best wishes for positioning your company for environmental success in the New Year.

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