Benchmarking environmental audit programs: Best practices and biggest challenges

As Total Quality Management (TQM) has become an important concept in learning how to manage environmental, health, and safety audit programs more effectively, an especially useful. TQM tool has been competitive benchmarking. Companies are using benchmarking studies to identify “best practices” that could be incorporated into their programs. In conducting benchmarking studies, evaluators often also identify the biggest common challenges facing audit program managers. This article discusses these best practices and biggest challenges associated with environmental audit programs. The conclusions are based on a number of benchmarking studies and third-party evaluations of corporate audit programs. As the sources are necessarily limited to the author's own experiences, there are no doubt many other specific best practices that are not discussed in this article. These will surface over time.     

Environmental auditing: Theory and applications

The environmental audit has become a regular part of corporate environmental management in Canada and is also gaining recognition in the public sector. A 1991 survey of 75 private sector companies across Canada revealed that 76% (57/75) had established environmental auditing programs. A similar survey of 19 federal, provincial, and municipal government departments revealed that 11% (2/19) had established such programs. The information gained from environmental audits can be used to facilitate and enhance environmental management from the single facility level to the national and international levels. This paper is divided into two sections: section one examines environmental audits at the facility/company level and discusses environmental audit characteristics, trends, and driving forces not commonly found in the available literature. Important conclusions are: that wherever possible, an action plan to correct the identified problems should be an integral part of an audit, and therefore there should be a close working relationship between auditors, managers, and employees, and that the first audits will generally be more difficult, time consuming, and expensive than subsequent audits. Section two looks at environmental audits in the broader context and discusses the relationship between environmental audits and three other environmental information gathering/analysis tools: environmental impact assessments, state of the environment reports, and new systems of national accounts. The argument is made that the information collected by environmental audits and environmental impact assessments at the facility/company level can be used as the bases for regional and national state of the environment reports and new systems of national accounts.     

Case study: Browning-ferris industries' computerized system for managing audit and environment performance

While some companies have established scoring systems within their audit programs, few utilize the full potential for measurement of the information gathered and subsequently produced from audits. In this article, the use of a computerized tracking system developed and used by Browning-Ferris Industries is discussed, along with a data report that details the completion of audit items and helps assure that action plans resulting from environmental audits are completed. This and other summary reports from the computer tracking system have provided meaningful measures of individual facilities' and overall company performance.     

ISO 14001 registration: The process,the benefits,and the choice of registrar

This article introduces the concept of ISO 14001 registration, outlines related assessment processes, and reviews the drivers behind developing an ISO-14001-concordant environmental management system (EMS) and seeking third party registration of that EMS. It focuses on registration strategies for larger organizations and considerations in choosing a registrar, including: auditor qualifications, standards for the conduct of EMS audits, and some issues for audit and registration service providers. The authors conclude that it is beneficial to pursue an ISO-14001-concordant EMS and that the value of the system can be enhanced through registration. However, some thought should be given to choosing the appropriate registrar, in particular to their EMS and audit approaches and to the qualifications of their audit team. Service providers are also cautioned to remember that ISO 14001 is not the same as ISO 9000, and that the registrar's standard of care in the discharge of their work should reflect that. © 1998 John Wiley & Sons, Inc.     

Achieving quality environmental audits: Twenty tips for success

In 1995 the authors spent a considerable amount of time conducting audits and audit training classes all over the world. In rolling out Colgate-Palmolive's reengineered environmental audit program, they coupled a two-day training program with a three-day audit. Whether in Asia-Pacific, South America, Europe, or the United States, auditors, especially those newly trained, always seemed to fall into the same traps time and again. In order to facilitate the learning process, the authors prepared a list of 20 tips to use at the beginning and end of all training programs and audits. In this article, the authors share the 20 “golden rules” to help all auditors improve the quality of their audits.     

The potential effect of ISO 14000 standards on environmental audit training in the United States

Training has been an important component of the environmental audit profession since its outset some 15–20 years ago. Training and education have taken on a variety of forms—from audit texts and articles, to formal courses, to videotapes, to on-the-job training programs. These efforts have helped to advance the sophistication of environmental auditing over the past few years. Now, with the advent of the international ISO 14012 Environmental Auditor Qualification Guidelines,¹ the auditing profession in the United States and around the world likely will be transformed in the near future. In fact, many organizations are now reengineering their programs in anticipation of the emerging Guidelines. The expected transformation holds for training and education programs as well. This article suggests some of the ways in which environmental audit training is likely to be reshaped as a result of ISO 14012. Offerors of training courses and seminars would be wise to anticipate the changes and modify their programs accordingly. A quick response could provide a competitive advantage. Moreover, corporate audit program managers should conduct critical evaluations of commercial offerings to assure that the programs' contents are consistent with ISO 14012 “auditor certification” expectations.     

Building and managing new compliance delivery systems

Companies today are continuously improving their efforts to incorporate an environmental management system (EMS) in their everyday operations and work practices, with an emphasis on identifying and reducing risks. Risks may include the cost of enforcement penalties, potential workplace dangers to employees, or cleanup liabilities due to past or present practices. Environmental auditing is an effective tool commonly used to enhance an EMS. Typically, there are two levels of auditing: (1) a review of management systems and (2) a review of compliance with regulatory requirements. There is yet another intermediate level of auditing that is more focused than management systems or compliance audits—compliance delivery systems (CDS) audits. This article examines the elements making up these systems for improving compliance performance and provides a ?ready to use”? checklist of items for managers to begin implementation.     

Benchmarking: Survey profiles the who and what of environmental auditing practice

In late 1990, the Environmental Auditing Roundtable's Auditor Training and Qualification Work Group determined that it needed reliable information about those in industry currently doing health, safety, and environmental audits. The work group would use this information to develop appropriate standards for auditors. It was also felt that such information would be helpful to others establishing internal audit programs. The work group, under the leadership of Donald P. Duffy, developed and refined a survey questionnaire during 1991. This article details the results of this survey and provides companies with timely information to benchmark their TQEM auditing efforts.     

Environmental Auditing and the Role of the Accountancy Profession: A Literature Review

This review of the literature on environmental auditing and the potential role of accountants distinguishes between compliance audits and audits of the environmental management system. After an extensive introduction to the concept, this review focuses on the similarities and differences between an environmental audit and a financial statement audit. The general approach to both types of audits is similar, except that environmental audits are largely unregulated. Both audits place an emphasis on the evaluation of control systems, which is an argument in favor of external auditors playing a role in environmental audits. Another argument for including external accountants is their code of ethics. However, these professionals seem to be reluctant to enter the field of environmental auditing. It is argued that this reluctance is because of a lack of generally accepted principles for conducting environmental audits. If external accountants are engaged in environmental auditing, they should be part of multidisciplinary teams that also include scientists and engineers to avoid a too strong focus on procedures. Rather than treating these audits as totally different, it is proposed that there be a move towards integrated, or even universal, audits.     

Business-oriented environmental performance metrics: Building consensus for environmental management systems

Today, environmental managers are learning new ways of adding value to their organizations. Before, the environmental department was an overhead expense—an indirect support group required for complying with burdensome regulations. Now, such departments add insights and value during strategic planning sessions, identify efficiency improvement opportunities, provide a superior return on investment, and—bottom line—improve profits. The primary approach to meeting the challenge is a new environmental management system (EMS) that identifies, measures, and manages a diverse set of internal and external customer needs. These needs include environmental cleanups, regulatory compliance, pollution prevention, and design for the environment—and each represents a potential improvement opportunity. Unfortunately, most organizations have so many such needs that all cannot be addressed at once, given the resource constraints of a competitive business climate. Thus, priority is a key concept of an effective EMS. This article describes an innovative application of consensus-building tools that quickly identify and set priorities for diverse environmental programs. The article also shows how appropriate performance measures will align these programs with corporate goals and objectives.     

The value of “EHS auditing” in the United States: Making sense out of the current chaos

Conventional wisdom has advocated environmental auditing as a prudent part of an internal control program and one of the key tools in driving proactive efforts. As a part of risk management activities, it is often employed to protect an organization, its employees, and officers from liability. Conscientious use of such audits has undoubtedly protected human health and the environment. Ironically, those who make the most consistent efforts to audit compliance and management systems, according to advocates of audit protection, may be the most vulnerable to enforcement actions and lawsuits. This article places the escalating calls for audit protection in a proper context.     

Where Did the Agricultural Nonpoint Source Trades Go? Lessons from Virginia Water Quality Trading Programs

Governmental agencies, nongovernmental organizations, and agricultural organizations promote water quality trading programs as an innovative policy to engage agricultural producers in conservation activities. Cost analyses suggest regulated sources can reduce compliance costs by purchasing agricultural nonpoint source credits. Yet, such “point‐nonpoint” trades are rare. This article assesses the demand for agricultural nonpoint sources in well‐developed nutrient trading programs in Virginia for industrial and municipal wastewater treatment plants, municipal stormwater programs, and land developers. Evidence suggests nutrient trading programs in Virginia will not stimulate investments in pollutant reduction practices on working agricultural lands. The lack of demand for agricultural nonpoint source credits can be attributed to a substantial degree to the design features and incentives present in multiple overlapping regulatory programs. The legal setting that dampens regulated source demand for nonpoint source credits in Virginia is broadly representative of conditions found elsewhere in the United States.     

Identifying the motivations of environmental volunteers

The natural environment benefits greatly from the work of volunteers. However, little is known as to why people are willing to volunteer their time to such programs. The study participants were 401 volunteers from six natural resource organizations. The study identified and assessed motivations of volunteers within the conservation and natural resources arena. The results suggest that there are many volunteer motivations, although ‘helping the environment’ clearly emerged as most important. Second-tier motivations included ‘improving areas that volunteers use for their own recreation’, ‘expressing their values’, ‘learning about the natural environment’ and ‘socializing with people with similar interests’. Managers need to consider these motivations, developing programs in order to provide volunteers with an experience that meets their motivations. By developing programs with volunteer motivations in mind, managers will better be able to recruit and retain volunteers within their organizations.     

The value of EHS auditing in the United States: Solutions for audit protection

Conventional wisdom has advocated environmental auditing as a prudent part of an internal control program and one of the key tools in driving proactive efforts. As a part of risk management activities, it is often employed to protect an organization and its employees and officers from liability. Conscientious use of such audits has undoubtedly protected human health and the environment. Ironically, those who make the most consistent efforts to audit compliance and management systems, according to advocates of audit protection, may be the most vulnerable to enforcement actions and lawsuits. In this, the second part of a two-part article, we turn our attention to the likely solutions for audit protection in the current context.     

Applying outcome evaluation and measures to environmental management programs

Environmental program and audit procedures primarily focus on solving perceived immediate problems and do not provide a context within which to evaluate the work and its importance for the decision maker. Outcome evaluation offers a theory-based model for designing long-term solutions based on stakeholder expectation and, ultimately, ownership of the performance changes. Problem identification as well as the development of actions and their measurement are done with the full participation of those responsible for the implementation of the changes. Ownership of the results is reinforced and, significantly, the decision maker and other interested parties can measure the value or the importance of the work. This article describes how outcome evaluation can be an important tool for federal environmental managers who must respond to the Government Performance and Results Act (1993) and privatesector companies. Used in combination with traditional environmental practices, outcome evaluation can contribute to both the design and the implementation of a successful environmental management program.     

Measuring an Organization's Performance: The Road to Defining Sustainability Indicators

This article proposes an integrated procedure to assess sustainability indicators that organizations can use to satisfy international requirements for sustainability. The indicators are related to key aspects of organizations, and their development includes comparing them to the results and policies of various other organizations that are seeking to achieve sustainability. The methodology we used is based on a bibliographic review, and it is intended to:

• Diagnose the state of the art of organizational sustainability,
• Provide organizations with tools to perform benchmarking based on the results, and
• Provide processes to identify best sustainability practices.

After benchmarking, organization managers will be able to adjust the methodology to quantify the sustainability indicators that are most suited to their organization's profile in regard to the activities, products, and services that it offers. Critical factors for organizational sustainability are identified and integrated into the systematic approach proposed in this article to assess indicators, communicate results, and make recommendations for corrective action and continual improvement considering the organization's baseline condition (the starting condition of the organization).     

Preparing for ISO 14000: An assessment guide

With ISO 14000 expected to roll out in 1996, have you begun to evaluate how well your current environmental management policy, programs, procedures, and objectives conform to published national and evolving global Environmental Management System (EMS) standards?. The ISO expects to adopt a final standard by mid-1996 which specifies requirements for an EMS (e.g., ISO 14001). In addition, national EMS standards have already been developed and published by organizations such as The British Standards Institute and, in the United States, NSF International, for example, BS 7750 and NSF 110–1995, respectively. This article shows how managers can begin assessing their operations to prepare for these new standards and improve overall environmental performance.     

The audit orientation tour: Ten steps for improving productivity

It seems like a simple enough exercise. After the opening meeting, the audit team embarks on an orientation tour to familiarize itself with the layout of the facility. A simple ?walk about”? as the Australians would say. If the site is bigenough, maybe the team climbs into a vehicle for the tour. Although the orientation tour typically represents only one hour, this hour is as important as any other for the audit team. This article discusses ten steps audit teams can take to maximize the effectiveness of the tour. The ten steps came about as a result of observing audit teams during many training audits and seeing persistent problems arise.     

Toward effective environmental auditing at the TVA: Management audits versus compliance audits

Companies that incorporate Total Quality Management into their operations are placing increased emphasis on identifying the root causes of deficiencies and problems. This is in keeping with the TQM principles identified by Deming in Out of the Crisis. Deming states that quality comes not from inspection or from management by objectives or results, but from improvements made in the process and products in order to meet customer needs. Deming's approach demands a shift in focus from addressing symptoms to addressing causes. In this article, environmental management audits are presented as the best means to assure that adequate management controls are in place to protect the company, its managers and its employees from penalties associated with civil and criminal enforcement actions.