Companies are increasingly taking a global approach to ensure that they manage their EHS regulatory compliance globally. We sat down with two industry experts, Bruce Adler, Senior EHS Counsel at General Electric and our very own Tjeerd Hendel-Blackford to discuss. Together they identified 10 reasons why going global on EHS is the trend of large multinationals. Let’s see what they had to say…
1.Consequences are global
“If your site in China has a major chemical spill, the chances are that your shareholders in New York or London will hear about it pretty quickly. Regulatory fines that are incurred at individual sites rapidly accumulate when you operate at more than 100 locations. The impacts of non-compliance can be local and direct, but the greater impact will be global.” – Tjeerd Hendel-Blackford, Enhesa
“Recent developments (Brexit, U.S. election) suggest an increase in skepticism about the beneficial effects of globalization, which could quickly translate into increased enforcement focus – and higher penalties – for multinationals.” – Bruce Adler, Senior EHS Counsel, General Electric
2.Local does not equal Consistent
“Many companies out there leave it to their sites to manage EHS legal compliance locally. “They will know the local laws best” is the common phrase. However, what we often see is that each site will have a completely different approach – ranging from very basic “legal registers” (no more than Excel files with titles of laws), to very comprehensive in-country solutions with on-site support. This means that when it comes to having a consistent global picture it is almost impossible to say, at any given moment “I am as confident as I can be that we are in substantial compliance across all jurisdictions”. – T.H.B.
“One of the elements regulators look at when deciding between seeking civil v. criminal sanctions is whether you have a consistent and effective compliance program.” – B.A.
“Knowledge is power. If you don’t have an adequate view on the compliance status of your locations; the recurring problematic issues, or the penalties being incurred, then it is not something that can be managed effectively…” – T.H.B.
“Bad things don’t usually happen in a vacuum – they are usually the result of long-term programmatic weaknesses. An effective program that looks for those weaknesses is as important as one that searches out day-to-day noncompliance.” – B.A.
4.EHS is a global issue
“Environmental issues and human health do not take account of borders. Similar issues often affect multiple jurisdictions due to their geography or the similar operations your company is carrying out there. As a result, the approach taking to managing EHS and laws that govern it should also be not confined within borders.” – T.H.B.
5.EHS increasingly informing business decisions
“The recent updates to ISO 14001 and soon-to-be-published 45001 have increased the focus of management systems to encourage EHS to be central to certified companies’ business strategy and core values. Environmental disasters, or major health & safety incidents of course elicit a reactionary response, but with EHS considerations also providing many opportunities for innovation and business sustainability, EHS is gradually climbing up the corporate strategic agenda. As policy concepts such as the circular economy and CSR reporting becomes more widespread, this will only increase.” – T.H.B.
“It is also fast becoming a competitive advantage. Most major customers in the B2B world demand that their vendors have effective EHS management programs, which includes compliance.” – B.A.
“Establishing a corporate-wide, global approach to EHS compliance sets the tone for everyone. All members of the EHS team (and on other departments) across the world can take greater pride in a team when they are involved in improving global results and that their corporate bosses care about EHS.”- T.H.B.
“Failure to establish a culture where people live compliance every day creates a slippery slope – see Volkswagen.” – B.A.
7.Regulatory and policy approaches spread around the globe
“Some jurisdictions (often in Europe and North America) often take the lead on new policy and regulatory initiatives, which are then “adopted” (or straight copied) in other countries and regions (although with their own particular nuances). As such laws and regulatory approaches also spread across the world, having a global view helps to tackle such issues head-on in a pro-active way. REACH-type regulations; GHS and WEEE are examples of this.” – T.H.B.
“Staying ahead of the curve is becoming crucial to effective business planning.” – B.A.
8.Shared Learning & Experience
“Knowledge and experience is vital information that can be shared as best-practice across a multinational organization. Positive compliance stories are a vital component of keeping local teams motivated and involved.” – T.H.B.
9. Other company departments are also increasingly global
“Large corporations are increasingly centralizing a number of their “support” services globally. This is often the case in finance, IT and HR where software applications can bring these areas together. This is also the way that Sustainability & EHS issues are going as they have close ties across other business functions.” -T.H.B.
“At GE we have completely re-organized our EHS program so that rather than being business-focused (with EHS staff embedded in our various businesses, like Aviation, Healthcare, Oil & Gas and Power), we consolidated and redeployed regionally – making our operations less U.S.-centric and putting people closer to where the issues are.” – B.A.
10.Today, companies CAN go global.
“Although there are trailblazers in industry in this regard, such as GE; for a long time, there were many companies who simply did not consider the possibility of a global EHS compliance system – the scale of the task of tracking EHS laws (which constantly change) all over the world is immense and would require a lot of resources. Not all are there yet, but corporate EHS teams have come to realize that where before the global approach to ensuring and managing compliance was almost too huge to even consider, today there are services and software tools out there that make this possible, and even do so in a simple and consolidated manner.” – T.H.B.