Environmental Management Strategies: The 21st Century Perspective Volume 5 (Environmental Management and Engineering Series)
Preface Environmental management, as seen from the eyes of a regulated organization's environmental manager and the regulator, has undergone a metamorphosis from its inception over twenty-five years ago with the creation of the U.S. Environmental Protection Agency (EPA). Since that time, environmental management, as we know it today, has matured into a viable business enterprise that bears little resemblance to what it used to be -- a compilation of engineers and scientists focused on developing reactionary compliance responses to comply with EPA and state regulatory agencies' regulatory programs and regulations.  In general, managers at many facilities during the early stages of environmental management viewed this area as a nuisance business function created to manage a company's wastes, discharges, and emissions, and hence, it was seen as a detraction in time, effort, and monies to a company's bottom line. In addition, company environmental managers and their support staff was not only burdened with managing all the regulatory requirements, but also had to contend with the fact that they did not have as much top management support within the organization as they have today in addressing these same environmental issues.  With the changing times, and in the evolutionary awareness process within many forward-thinking organizations, several new management venues were introduced into corporations to help champion a more proactive corporate approach. These venues include: the practice of developing and having an environmental policy in place that is usually signed by an organization's chief executive officer; the development of a similarly focused corporate mission statement; more and more emphasis on life-cycle analyses and design for the environmental considerations in research and development departments for launching new products; and the increasing issuance of environmental reports by publicly held corporations to share with the public their respective environmental standing. These are provided as examples of what some regulated organizations have accomplished over the past several years to highlight their environmentally progressive achievements.  Stepping back again to the early years of companies' environmental efforts, it was common to see top management at some regulated companies perceive maintaining environmental compliance as a low priority. For some, subsequent penalties imposed by EPA or state regulators on their facilities for noncompliance were viewed as part of the cost of doing business. Progressive initiatives such as environmental audit programs, regulatory compliance and worker awareness training and pollution prevention opportunities, and other "tools" in the environmental manager's toolbox, were not yet as commonplace in the regulated community as they are today.  Fast forward to the present, environmental management has matured to a level where it has been assimilated into an organization's mainstream as a recognized business entity. That status level has helped push environmental management issues and concerns to the forefront of companies' strategic planning, and has helped channel top-management's efforts at many organizations to champion environmental stewardship as a goal for which to strive. The evolution of environmental management has taken organizations from their initial goal to maintain compliance to a new set of goals where the exploring of innovative ways to manage raw materials, processes and waste streams in a way that is both environmentally sound and cost-effective, is the wave of the next generation of environmental management.  On the regulatory side, while organizations continue exploring such innovative ways to maintain and look beyond maintaining compliance, the EPA continues exploring innovative ways to increase the regulatory compliance levels of organizations by continuing its message to organizations regarding their environmental responsibilities in relation to their business operations. While this concept may still feel like "command-and-control" that many organizations equate to the "old" EPA, we need to keep in perspective the intent behind EPA's compliance and enforcement efforts. These efforts still reflect EPA's general tenet, which is the protection of human health and the environment, both within the boundaries of an organization, and the general populace and the environs as well.  As a point of reference to some of the regulatory milestones achieved in EPA's push to have organizations return to and maintain regulatory compliance, the following EPA documents are worth noting as pivotal instruments: the Clean Air Act Amendments (1990), the Pollution Prosecution Act (1990), EPA's Revised Civil Penalty Policy (1992), and EPA Office of Enforcement's Revised Enforcement Four-Year Strategic Plan (1992). Of these activities, the issuance of EPA's penalty policy and the setting in motion of the Four-Year Strategic Plan (a discussion of this enforcement vehicle is provided in Chapter 2) may have contributed to sending a strong message to some nonbelievers in regulated industries who still held the misconception that penalties for regulatory noncompliance were part of the cost of doing business. During that period, it was not unusual to see EPA issue enforcement actions against organizations with penalties in excess of $10 million for violations of various federal regulations, including the Resource Conservation and Recovery Act (RCRA), the Clean Water Act (CWA), the Clean Air Act (CAA) and the Toxic Substances Control Act (TSCA). If the message had not yet been clear to the regulated community that payments of enforcement action penalties in lieu of maintaining compliance would no longer be viewed by EPA as a viable course of action, each subsequent and larger EPA enforcement action and penalty helped bring the point home to more organizations that such activities would soon be a thing of the past.  At some turning point, more companies began to see that it indeed paid to be in compliance, not only for the sake of compliance, but because it made good business sense as well. In order to sustain such efforts, 1 many organizations also saw that it made good business sense to have a dedicated group of professionals and support staff to stay on top of environmental compliance matters and to have clear lines of communication with top management to allow for strategic planning efforts.  Since then, considerations in which the next generation of environmental managers have been involved include bridging environmental management with other business enterprises within organizations to provide opportunities for growth and identifying areas for improvement and potential areas to decrease or eliminate waste streams altogether. In certain situations, the possibility exists for coordinated efforts between environmental professionals and their counterparts in research and development, purchasing, inventory/warehousing, human resources and MIS to achieve such waste reductions. The key, as in any new undertaking, lies in several elements: communication, coordination, and dedication. In addition, new information sectors that incorporate software innovations, such as environmental management information systems (EMISs) and enterprise document management (EDM), have emerged that can be very powerful MIS tools the environmental manager can tap into, in ways more effective than the traditional approach to information management used by environmental or MIS professionals. In having such information at their fingertips, environmental professionals can achieve specific goals to address any number of management concerns. The ability of the environmental professional to compile, assimilate, and synthesize key data for top management is, and will continue to be, a powerful management tool. Its potential has still to be tapped to its fullest.  What does this signal to the well-heeled environmental professional and the other business enterprise professionals? To the author, environmental management is no longer an isolated entity within a corporation in which its main focus is to maintain compliance. Rather, environmental management today overlaps with just about every other business enterprise within a company, and if, among other goals, a company wants to achieve environmental excellence and stewardship, it is almost mandatory that environmental professionals begin to look "out-of-the-box" to identify those areas that can help move a company forward. These individuals also need to be out in the forefront with top management to help champion environmental considerations that take a holistic view regarding environmental responsibilities while also keeping stakeholders' concerns in focus.  This paradigm shift in the mindset of many high-profile organizations has not gone without notice by the EPA, and in an attempt to initiate a radically different approach to the typical regulatory response of "command-and- control," EPA began exploring possibilities to work with organizations in a pro-business manner to achieve the agency's goal of increased regulatory compliance. Part of this strategy was outlined in a series of EPA documents and memoranda, beginning with the Five-Year Strategic Plan, issued in 1994 to outline EPA's grand scheme for the remainder of the twentieth century. 2 One of the major tenets of this plan focused on EPA's efforts to lead the nation in reorienting efforts to reduce and eliminate pollution at the source. Among the strategies identified as part of private sector and general public partnerships are increased emphasis on nontraditional programs, such as the 33/50 Program and the Common Sense Initiative, and expanding new approaches to build upon these programs.  As had been previously seen in EPA's first attempts to usher in a series of industry voluntary programs to promote greater voluntary compliance and a willingness to work with the agency's compliance programs, companies were willing to participate to show their sincerity to work with EPA. For example, the relative success with the participants of the Industrial Toxics Project, or the 33/50 Program, initiated by former EPA Administrator William K. Reilly, paved the way for a continuing series of E PA-led industry voluntary initiatives under present EPA Administrator Carol Browner. This new era began with the Federal Register notice launching the first Environmental Leadership Program (ELP) in 1993; followed by the subsequent Federal Register notice in 1994 launching the ELP Pilot Program, in its final stage at the time this book went to press; the Common Sense Initiative launched in 1994; and finally Project XL, launched in 1995, which is the latest of the EPA-led industry voluntary programs. As this book went to press, Project XL was in its early pilot phase.  Meanwhile, in regulatory enforcement relief, EPA continued its efforts to make its audit disclosure policy more "user-friendly," and first issued a draft policy in 1995, and a final policy in 1996 to address industry concerns regarding the use of environmental audits by regulated industries and possible issues related to audit disclosures. This topic has been the subject of much discussion on both sides, and while full disclosure to EPA may bring regulatory enforcement relief to organizations, there may still be a considerable way to go before full audit disclosure by EPA-regulated organizations becomes a de facto way of doing business for them.  Given this dynamic state of regulatory and voluntary flux in which we currently find ourselves, one may wonder where EPA sees the regulated community at this juncture-will EPA continue to move in the direction of industry-friendly programs, or will EPA reverse direction and revert to the old "command-and-control" enforcement focus? Time will tell whether we are at a crossroads in enforcement and compliance, or whether regulated industries can continue to expect a pro-business EPA with increased opportunities for regulatory relief. Some of the answers for the regulated community may lie in how EPA interprets the regulated community's response to a series of initiatives currently on the negotiating table, such as EPA's Audit Policy and self-disclosure; where regulatory compliance benefits may be seen by EPA with respect to organizations' conforming to the environmental management standards of the International Organization for Standardization (ISO), more commonly referred to as ISO 14001; and whether more organizations will commit to any one of EPA's voluntary programs and implement innovative solutions to address a regulatory concern or issue; 3 and other considerations that EPA may be currently tracking.  Again, one needs to keep in perspective EPA's main goal for being in business: seeing the regulated community return to compliance and then staying in compliance to ensure the protection of human health and the environment. Whatever innovative solutions organizations may want to explore to achieve EPA's primary goal is their prerogative -- whether through quality management methodologies, such as TQM and ISO 9000; or through more comprehensive environmental management systems linked to ISO 14001, or EPA-led voluntary initiatives -- provided that EPA feels confident the regulated community is maintaining and sustaining environmental regulatory compliance to ensure EPA's objectives. The extent that the regulated community can sustain this compliance vision of EPA to some degree of satisfaction may be reflected in the path, whether enforcement driven or not, that EPA decides to take in the future.  Taking this perception one step further, the intent of our book is to identify opportunities, management practices, methodologies, and innovative strategies that organizations can implement to improve upon their existing environmental management programs and other business enterprises from a holistic business overview. The logic is that such progressive undertakings by regulated organizations can also help diffuse any possible return to the old "command- and-control" approach by EPA and the states' enforcement programs, especially if the intent seems sincere and a strong sense of commitment is portrayed by organizations.  By way of positive example, several of the chapters in the book were written by senior environmental managers from Fortune 500 companies, who graciously shared some of their day-to-day experiences to provide added insight into the environmental workings at their companies from a real-world perspective. The case studies they provide exemplify, in both a quantitative and qualitative manner, the points expressed in each of their respective chapters, from a discussion of environmental audit strategies, the effectiveness of certification to ISO 14001, the use of sophisticated software programs and insight into a few actual EMIS and EDM programs in place, and other similar considerations; to the anecdotal insight from dealing with EPA's environmental enforcement, health and safety requirements, risk management, the Internet, and what to consider from various innovative environmental strategies that can be put in practice.  The key to the examples provided is that regulatory compliance is not the only driving force -- while it is prominent, related forces are also noted. These include: market forces, stakeholders, and public perceptions, among others, that are all interwoven into the fabric of the regulated community, interacting with each other in a dynamic and ever-changing setting.  Also, as part of the maturing process of environmental management, this sector's increasing interaction with other business areas (enterprises) has created new opportunities for environmental management that may not have been previously possible. Such opportunities have been generated from increased internal cooperation and teamwork between business units leading to more- effective compliance and opportunities for preventing pollution. Without the gradual paradigm shift toward a more proactive position regarding an organization's environmental responsibilities, and understanding that such positions can also be good for the corporate "bottom line," such strides by many organizations may not have been achieved so quickly.  By way of example, the 1990s business upheaval forces that began with the emergence of re-engineering, and continued with downsizing, outsourcing, and other management-driven initiatives to cut costs from an employee-based standpoint, also may have helped environmental management to move forward into its next generation. With the advent of environmental management as a recognized business entity, with its own accountability system for cost, profit and loss, and its increased interaction with other company business enterprise units, this new openness between unit managers and environmental managers may have prompted a new work ethic allowing these groups to collaborate more often. The relative success of environmental managers learning to converse in "business-speak" rather than "enviro-speak" with other business managers to convey the results of environmental expenditures related to permitting, auditing, pollution prevention, ISO 14000, etc., has had some far-reaching effects. To highlight this further, contributing authors in several chapters describe the benefits achieved within their companies by maintaining a more comprehensive and effective environmental management system that incorporates other business units considerations into the management of their environmental responsibilities.  Furthermore, with more and more emphasis being placed on computer software systems and the Internet to help manage this deluge of environmental data being synthesized for top management's review, what used to be a difficult, if not impossible task, is being reduced to the click of a computer mouse and a few keystrokes of a PC in order to have this information in the hands of the environmental manager, who sees this data as a valuable management tool. Three chapters of the book are devoted in various degrees to this topic and provide in-depth information regarding the use of software as one of the tools at the environmental manager's disposal.  The contributing authors' experiences and case studies provide a certain amount of insight into the environmental activities within their respective organizations that can offer some answers or solutions to the readers to issues they may face in their day-to-day work activities.  The author wishes to thank the following people, without whom this book would not be possible: Dan Rush, who championed the material to Bernard Goodwin, who had faith in me and in publishing the book; Diane Spina, Bernard's assistant; and of course, all my contributors who gave of their time and energies, despite their own heavy work loads, and who believed in me from the get-go: Bill Parker, Janet Peargin, Ed Spaulding, Joe Hess, Maria Kaouris, Paul Dadak, Pat Davies, Margie Aleo, Stu Nicholson , Bob Ruczek, Mike Hill, and Ted Firetog, and a very special thanks to Roland Schumann, a former Acquisitions Editor for Government Institutes, who holds a special place: He saw my writing potential and offered me my first book opportunity -- The Greening of American Business. Without Roland to steer me in this direction, who knows if I would have come this far. Thanks, Roland. You are a true friend. Of course, a special thanks goes out to Marie, my very patient wife and new mom, who gave me the courage to go on despite the overwhelming odds; my parents, Cleto and Adelia, who instilled in me a drive to achieve to the best of my ability and never give up; to my sister, Francine, for being there for me, and to the newest addition of the Crognale clan, little "Doey," who has given me new meaning to looking at life from a holistic perspective. To all of you I say "Thank You."  Most of all, this book is dedicated to my mom, Adelia, who instilled in me a drive to seek answers where sometimes there are only questions. I admire her courage.  Endnotes 1. In response to environmental regulatory changes at the time, the oil industry initiated a study that projected a minimum expenditure of $166 billion over a twenty-year period to comply with existing and anticipated environmental regulations, according to an article written by A. Sullivan, "Oil Industry Projects a Surge in Outlays to Meet US Environmental Standards" that appeared in The Wall Street Journal, August 31, 1993, p. A2.  2. EPA document, The New Generation of Environmental Protection: EPA's Five- Year Strategic Plan, July 1994.  3. Of EPA's voluntary programs, the Common Sense Initiative recently lost two industry-sector participants-the automotive and petroleum refining industries- due to a number of considerations specific to these industry sectors. The remaining four industry-sector participants, including metal finishing, computers and electronics, and iron and steel are still active participants. For further information, see V. Leclair, "Common Sense reform initiative falters," Environmental Science & Technology, May 1997, p. 222 A.