Approaching your EHS program implementation

The ideal EHS management system to meet EHS initiatives, risk management, environmental regulations, occupational health standards, and safety management requirements requires more than just achieving regulatory compliance. As regulations evolve, so too does your EHS program. 

If your business is branching out into more countries and operations, or inheriting a legacy EHS program, now is the best time to review your current EHS management system to ensure you continue to meet EHS best practices. 

But how can you choose between centralized and decentralized approaches? In this article, Senior Expert Services Manager, Elaine Ye, outlines the pros and cons of each type of approach to an efficient EHS program.

Considering your EHS program development

Firstly, there are many factors to consider to decide which approach to an effective EHS program will work best for your business and any existing management system.

These include:

• Your company’s compliance culture
• Allocated resources at corporate and site levels
• Compliance goals and EHS initiatives
• Any business merger and acquisition activity

It’s important to note that neither a centralized nor decentralized approach is fundamentally ‘better’. In Enhesa’s work with multi-national organizations, we’ve seen businesses succeed with both centralized and decentralized models for EHS management software as well as a hybrid approach.  

The key to success isn’t to revamp your entire EHS software. Instead, once you’ve identified which approach works best for continuous improvement, you need to understand the strengths of each management structure and leverage the resources available to overcome challenges and the potential shortcomings of either a centralized EHS program or a decentralized one.

Centralized EHS management programs

A centralized EHS management program has the advantage of maintaining consistent rollout and EHS program implementation across the board. This provides better corporate visibility of sites’ EHS performance. It also provides a clear scope of responsibilities and performance expectations for internal EHS professionals.  

The set-up 

This approach is most suitable for light manufacturing and office-based organizations. These businesses often have a small team of corporate EHS experts overseeing the rollout, implementation, and progress of the sites’ EHS standards. This may be supplemented by local external consultancy or the sites’ HR department.  

The opportunities 

Overseeing EHS regulation in this manner ensures consistent information exchange and management, even when EHS expertise and resources are limited at the local or site level. This is quite different from heavy manufacturing, which often has a full team of experts to deal with the broad scope of EHS risks.

Corporate reporting highlights the importance of gathering metrics on EHS performance. A centralized reporting structure therefore assures standardized performance measurement and provides consistent data points to track sites’ compliance progress. For instance, you might mandate tracking of EHS metrics to oversee the entire organization’s compliance without jurisdictional variances and language barriers. This will allow you to better identify risks and focus on particular EHS topics for future consideration.

For local EHS professionals, a centralized EHS management team alleviates stress resulting from conflicting roles and expectations from the various business areas. This “center of excellence” model helps the management team to dedicate people and resources to EHS requirements. It also supports effective scrutiny of continuous improvement.

The challenges

However, a centralized management structure also has some disadvantages. The decision-making process can sometimes be prolonged because the EHS team at the regional or business level may be unable to make the final call on specific EHS issues. This could delay the execution of improvement or adjustment programs, or obtaining the necessary resources to support the sites.  

If you decide to centralize, make sure to develop communication or management procedures to overcome this prolonged decision-making process. For example, give regional or local sites more flexibility to determine their implementation strategies or additional authority to retain external support to facilitate program rollout. 

Decentralized EHS management programs

On the other end of the spectrum, a decentralized management strategy also has its advantages. It tends to give sites more autonomy and a stronger sense of ownership of EHS issues. This in turn motivates them to act quickly to deliver improvements.

Having the authority to make important decisions at the mid-management level also increases the agility of the program. It encourages faster reaction times and less bureaucracy in getting changes approved.  

The set-up 

In a decentralized organization, the compliance goal is integrated into each facility’s operation. Each facility can therefore be held accountable for failing to comply and rewarded for success. This type of organizational structure is often seen in global conglomerates. 

The opportunities 

Business units and local facilities have a stronger sense of ownership and empowerment over EHS compliance. The operational team directly oversees performance and is tasked with its prioritization. This means that local teams tend to be more motivated to achieve the compliance goals. These usually have multiple and distinctive lines of business that each require a tailored approach.  

With greater management autonomy, EHS program implementation and improvement can also be more agile. Decisions can be made at the unit and facility level.

Another advantage of decentralized management is smooth rollout. The unit and sites can participate in the decision-making process, which saves a significant amount of time bringing frontline managers and workers onboard.  

The challenges

However, there are also disadvantages. EHS professionals may face conflicting responsibilities and expectations within the organization. An EHS expert would typically report to the head of the business unit or regional operation but would also carry out work for the corporate EHS department. These departments may have very different expectations, which could make it hard for the EHS experts to identify their scope of responsibilities.  

To resolve this dilemma in your decentralized program, explore how the head of the business unit or regional operation can give extra support to these EHS experts (for example, support from the EHS professional community) and review their work based on EHS priorities.  

Can both approaches co-exist in your company?

In short, yes, but it depends.

Centralization and decentralization aren’t necessarily mutually exclusive. It’s not uncommon to develop a hybrid strategy that balances the interests of consistency and transparency, with preserving local autonomy and agility.  

A hybrid EHS management program may be particularly suitable for an organization with relatively mature EHS programs and existing management systems, or recently acquired businesses or facilities. This will give the new facilities more flexibility and time to adapt to the new company culture. The new units may continue to use their existing EHS support, so that they’re not overwhelmed by new programs and information.  

This approach avoids forcing sites to adopt a standardized compliance tool. Instead, sites can be encouraged to take smaller steps to learn and apply corporate assessment metrics to keep tracking their compliance progress.  

Align your EHS management program

To determine the best approach for your EHS management program, you need to look at your organization’s compliance culture and priorities, current practices, and available resources.

Ultimately, there’s no ‘right’ answer. Whether you opt for a centralized or decentralized EHS program, it should help your company build better resilience, transparency, and agility into your EHS system.

You can leverage either or both of these management styles to achieve success. The most important factor is to retain a positive compliance culture and keep providing support to your EHS professionals. This will enable you to overcome the challenges of the journey — and keep EHS compliance at the forefront of your strategy as your company evolves.