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Moving Beyond Compliance………. Prasad Modak

Moving Beyond Compliance………. Prasad Modak Executive President, Environmental Management Centre, Mumbai, India. Structure of the Presentation. Basic elements of Environmental Compliance Environmental Compliance and Business Risks Can Business risks become Opportunities?

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Moving Beyond Compliance………. Prasad Modak

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  1. Moving Beyond Compliance………. Prasad Modak Executive President, Environmental Management Centre, Mumbai, India

  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 Change

  3. Business, Government and Environmental Compliance Business Government Sets policies, standards and procedures Implements Reviews, inspects and monitors Operates Penalizes / provides incentives Reports

  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 Reporting

  5. Regulators of Environmental Compliance Empowered regulatory agencies e.g. Pollution Control Board enforces environmental legislation. Environmental Cells in Line Ministries, other relevant Government Departments and Local Government Institutions have additional Checks and Directives

  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 basis

  7. Environmental Regulations are “invading” Product Life Cycle Packaging WASTE BOD REJECTS ENVIRONMENTAL REGULATIONS Sludges PRODUCTS RESIDUE Formaldehyde PROCESS RESOURCES Chlorine bleaching Water consumption

  8. The New Form of RegulationMultiple Agents, Multiple Pressures, Multiple Incentives/Disincentives Government, International Agreements Labor Consumers Neighborhood Community Business Market Investors

  9. The Equator Principles are today adopted by over seventy financial institutions An updating process took place in 2006 leading to a newly revised set of Equator Principles that were released in July 2006 Now in 2012 a further revision is being made

  10. International funds of worth 8 trillion are now under signatory institutions

  11. Compliance is dynamic ! Compliance can be complex ! Business needs to plan for meeting Compliance

  12. 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!

  13. Impact of Non Compliance http://www.greensupplyline.com/showArticle.jhtml?printableArticle=true&articleId=192300815

  14. Typical Business Risksand Associated Factors Supply risk Technology risk Market risk Labor induced risk Availability, quality, timeliness of needed raw materials Choice of technology and impact on Quality, Quantity and Price of products Company image, consumer preferences, new competitors Lack of skill, quick turnaround of labor

  15. “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 to inadequate training and poor skills of staff resulted in inefficient water usage practices, low Right First Time requiring reprocessing, more generation of effluents Poor quality water and unreliable supply compromised technology choice and therefore process efficiency and product quality was hampered – eco-labels not met - a technology risk ! Poor product quality, high production costs, lack of reliability in delivery led to fall in market position - a market risk ! Environmental Management Centre

  16. Can Risks become Opportunities? Connecting Environmental Compliance with Competitiveness is the Key

  17. Tool-box of Business initiatives EMS/IMS, Sustainable Consumption & Production, Codes of Conduct, Eco-lables/Product Sustainability, Design for Sustainability, Extended Producer Responsibility, Carbon Footprint Minimization, Greening of Supply Chains,, Sustainability Reporting, CSR Beyond Compliance Fiscal incentives / penalization Compliance Regulations, standards, procedures

  18. A cost- effective way to meet Compliance is To go beyond C O M P L I A N C E

  19. Taking the Leap from Risk to Opportunity Beyond Compliance Compliance Risk Aversion Risk Aversion Profiting Branding Leading Business Initiatives

  20. Survey: Altered Images the 2001 state of corporate responsibility in India poll Most important factor in forming opinion of a company

  21. 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 of water in the process. Supply Risk through.. Training workers in good housekeeping practices of water conservation. Labor Induced Risk through.. Water saving devices; water efficient technologies, chemical audit to replace objectionable substancees. Technology Risk through... Market risk alleviated by (a) above approach. (b) Decision to move towards a new range of products consuming less water and meeting eco-labels

  22. Going Beyond Compliance takes to Smart Sustainability Giving Advantage to ALL Business development and beyond – extending to social frontiers Environmental Performance Supporting Corporate Objectives compliance Economic Performance

  23. 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

  24. 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

  25. Living With the Brand

  26. Environmental Market Water Climate Resources Biodiversity Eco-labels Investor outlook Supply-chains and traceability Business Social Legal Responsibility Transparency Accountability Trade Agreements Harmonization Reporting Values Technology Corporate Values Leader’s Values Societal Values Materials Processes Health &Safety Clean energy The Big Squeeze is On Key Learning: Compliance is not limited to Pollution Control Boards..

  27. 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 Social

  28. Thank you Reach me at prasad.modak@emcentre.com

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