Many manufacturers are focused on reducing costs and increasing sales. Typically, regulatory issues do neither. In fact, many believe that environmental, health and safety (EHS) issues come right out of the bottom line and do little to improve profit margins and generate revenue. This is incorrect.

Focused EHS management both saves money, enhances an operation’s chances of avoiding costly claims of liability and/or enforcement scrutiny, and enables manufacturers affirmatively to promote their commitment to sustainability and stewardship, thus increasing their prominence in the eyes of their employees and third parties.

Liability is Costly
Ask anyone who has become embroiled in any form of enforcement litigation, whether it is administrative, civil or criminal in nature, or whether brought by the government or a citizen. The legal and transactional costs of merely responding to allegations of non-compliance are steep. The costs of proving compliance are heart-stopping.

Cost cannot fairly be measured only in terms of the costs incurred in defending a claim. The real costs are much higher and more subtle. The cost of diminished public confidence, enhanced competitor standing, potential share value, compromised relations with federal and state regulators, public relations implications, insurance rates and damage to corporate image are but a few of the true “costs” incurred when a firm is alleged to be in a state of non-compliance.

Perhaps more now than ever, industry is facing tough times. People are being asked to do more with less, downsizing has achieved its goal and most EHS staffs are “lean and mean,” or pulled in many directions because the staff wears many hats. The tough economic time that prevails, and will remain for the foreseeable future, means there is no room for error.

Manufacturing Successfully
Manufacturers today need to work smartly and efficiently. As noted above, there is no room for error, as the consequences that flow from error are potentially devastating. Here are a few measures companies should take or improve upon, if already taken, to avoid trouble and unnecessary cost.

*Have Environmental Management Systems (EMS) in Place – EMS are structured approaches to the management of environmental issues, and provide the foundation for ensuring compliance and benchmarking performance. The U.S. Environmental Protection Agency (EPA) defines EMS as “a continual cycle of planning, implementing, reviewing and improving the processes and actions that an organization undertakes to meet its business and environmental goals.”  EPA maintains a site, http://www.epa.gov/ ems/index.htm, where background on its EMS initiative can be found, as well as various useful guidance documents, policy documents, frequently asked questions and related information. Summaries of the advantages of EMS development and implementation are also included.

There are four primary drivers for EMS development and implementation. First, Sarbanes-Oxley is the 2002 law that requires CEOs and CFOs to submit written certifications of their publicly traded companies’ quarterly and annual Security and Exchange Commission reports and procedures for preparing and disclosing the required information.

The utility of a comprehensive EMS is invaluable, and some would argue indispensable, for making these submissions. Even privately-held companies should be mindful of their obligations and look to the standards of performance set forth under Sarbanes-Oxley to manage their own privately-held companies’ affairs.

Second, the need for innovation fuels the development of EMSs. Companies are continually evolving and thinking of newer and better ways to achieve sustainable development. The design and implementation of a state-of-the-art EMS are part of the innovation process and are widely regarded as instrumental in saving corporate resources and maximizing pollution prevention.