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Beyond Compliance

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Prasad Modak
Prasad Modak

Businesses must strategize to go "beyond compliance". Given the myriad of legislations, market forces, community expectations and demands from investors; mere regulatory compliance is not going to be enough. This presentation brings out the above perspective.

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Moving Beyond Compliance………. Prasad Modak Executive President, Environmental Management Centre, Mumbai, India Prasad Modak 1 Environmental Management Centre LLP
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 Prasad Modak 2 Environmental Management Centre LLP
Business, Government and Environmental Compliance Business Government Sets policies, standards and Implements procedures Reviews, inspects and monitors Operates Penalizes / provides incentives Reports Prasad Modak 3 Environmental Management Centre LLP
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 Prasad Modak 4 Environmental Management Centre LLP
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 Prasad Modak 5 Environmental Management Centre LLP
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 Prasad Modak 6 Environmental Management Centre LLP
Environmental Regulations are “invading” Product Life Cycle Packaging REJECTS WASTE BOD Sludges PRODUCTS ENVIRONMENTAL REGULATIONS RESIDUE Formaldehyde RESOURCES PROCESS Chlorine bleaching Water Modak Prasad consumption 7 Environmental Management Centre LLP
The New Form of Regulation Multiple Agents, Multiple Pressures, Multiple Incentives/Disincentives Government, International Agreements Business Labor Market Consumers Investors Neighborhood Prasad Modak Community8 Environmental Management Centre LLP
Compliance is dynamic ! Compliance can be complex ! Business needs to plan for meeting Compliance Prasad Modak 9 Environmental Management Centre LLP
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! Prasad Modak 10 Environmental Management Centre LLP
Impact of Non Compliance Prasad Modak 11 http://www.greensupplyline.com/showArticle.jhtml?printableArticle=true&articleId=192300815 Environmental Management Centre LLP
Typical Business Risks and Associated Factors Supply risk Availability, quality, timeliness of needed raw materials Technology risk Choice of technology and impact on Quality, Quantity and Price of products Market risk Company image, consumer preferences, new competitors Labor induced risk Lack of skill, quick turnaround of labor Prasad Modak 12 Environmental Management Centre LLP
“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 Poor quality water and unreliable supply inadequate training and poor skills compromised technology choice and of staff resulted in inefficient water therefore process efficiency and product usage practices, low Right First quality was hampered – eco-labels were Time requiring reprocessing, more not met - a technology risk ! generation of effluents Poor product quality, high production costs, lack of reliability in delivery led to fall in market Prasad Modak 13 position - aManagementrisk ! LLP Environmental market Centre
Can Risks become Opportunities? Connecting Environmental Compliance with Competitiveness is the Key
Tool-box of Business initiatives EMS/IMS, Sustainable Consumption & Production, Codes of Conduct, Eco- lables/Product Sustainability, Design Beyond for Sustainability, Extended Producer Responsibility, Minimizing Carbon Compliance Footprint, Greening of Supply Chains, Sustainability Reporting, Practicing CSR Compliance Fiscal incentives / penalization Regulations, standards, procedures Prasad Modak 15 Environmental Management Centre LLP
A cost- effective way to meet Compliance is To go beyond COMPLIANCE
Taking the Leap from Risk to Opportunity Beyond Compliance Compliance Risk Aversion Risk Aversion Business Profiting Initiatives Branding Leading Prasad Modak 17 Environmental Management Centre LLP
Survey: Altered Images the 2001 state of corporate responsibility in India poll Most important factor in forming opinion of a company Prasad Modak 18 Environmental Management Centre LLP
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 Supply Risk through.. of water in the process. Labor Induced Training workers in good housekeeping practices of Risk through.. water conservation. Water saving devices; water efficient technologies, Technology Risk through... chemical audit to replace objectionable substancees. Market risk alleviated by (a) above approach. (b) Decision to move towards a new range of products consuming less water and meeting eco-labels Prasad Modak 19 Environmental Management Centre LLP
Going Beyond Compliance takes to Smart Sustainability Giving Advantage to ALL Environmental Performance Business development and beyond – to social frontiers Supporting Corporate Objectives compliance Economic Performance Prasad Modak 20 Environmental Management Centre LLP
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
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
Living With the Brand Prasad Modak 23 Environmental Management Centre LLP
The Big Squeeze is On Key Learning: Compliance is not limited to National Laws and Regulations En viro nm et Eco-labels Water ent al Mark Climate Investor outlook Resources Supply-chains Biodiversity and traceability Social Legal Responsibility Trade Agreements Transparency Harmonization Accountability Tec Reporting ues chn al olo V gy Corporate Values Materials Leader’s Values Processes Prasad Modak Societal Values Health &Safety 24 Environmental Management Centre LLPClean energy
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 Prasad Modak 25 Environmental Management Centre LLP
Thank you Reach me at prasad.modak@emcentre.com

More Related Content

Beyond Compliance

  • 1. Moving Beyond Compliance………. Prasad Modak Executive President, Environmental Management Centre, Mumbai, India Prasad Modak 1 Environmental Management Centre LLP
  • 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 Prasad Modak 2 Environmental Management Centre LLP
  • 3. Business, Government and Environmental Compliance Business Government Sets policies, standards and Implements procedures Reviews, inspects and monitors Operates Penalizes / provides incentives Reports Prasad Modak 3 Environmental Management Centre LLP
  • 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 Prasad Modak 4 Environmental Management Centre LLP
  • 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 Prasad Modak 5 Environmental Management Centre LLP
  • 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 Prasad Modak 6 Environmental Management Centre LLP
  • 7. Environmental Regulations are “invading” Product Life Cycle Packaging REJECTS WASTE BOD Sludges PRODUCTS ENVIRONMENTAL REGULATIONS RESIDUE Formaldehyde RESOURCES PROCESS Chlorine bleaching Water Modak Prasad consumption 7 Environmental Management Centre LLP
  • 8. The New Form of Regulation Multiple Agents, Multiple Pressures, Multiple Incentives/Disincentives Government, International Agreements Business Labor Market Consumers Investors Neighborhood Prasad Modak Community8 Environmental Management Centre LLP
  • 9. Compliance is dynamic ! Compliance can be complex ! Business needs to plan for meeting Compliance Prasad Modak 9 Environmental Management Centre LLP
  • 10. 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! Prasad Modak 10 Environmental Management Centre LLP
  • 11. Impact of Non Compliance Prasad Modak 11 http://www.greensupplyline.com/showArticle.jhtml?printableArticle=true&articleId=192300815 Environmental Management Centre LLP
  • 12. Typical Business Risks and Associated Factors Supply risk Availability, quality, timeliness of needed raw materials Technology risk Choice of technology and impact on Quality, Quantity and Price of products Market risk Company image, consumer preferences, new competitors Labor induced risk Lack of skill, quick turnaround of labor Prasad Modak 12 Environmental Management Centre LLP
  • 13. “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 Poor quality water and unreliable supply inadequate training and poor skills compromised technology choice and of staff resulted in inefficient water therefore process efficiency and product usage practices, low Right First quality was hampered – eco-labels were Time requiring reprocessing, more not met - a technology risk ! generation of effluents Poor product quality, high production costs, lack of reliability in delivery led to fall in market Prasad Modak 13 position - aManagementrisk ! LLP Environmental market Centre
  • 14. Can Risks become Opportunities? Connecting Environmental Compliance with Competitiveness is the Key
  • 15. Tool-box of Business initiatives EMS/IMS, Sustainable Consumption & Production, Codes of Conduct, Eco- lables/Product Sustainability, Design Beyond for Sustainability, Extended Producer Responsibility, Minimizing Carbon Compliance Footprint, Greening of Supply Chains, Sustainability Reporting, Practicing CSR Compliance Fiscal incentives / penalization Regulations, standards, procedures Prasad Modak 15 Environmental Management Centre LLP
  • 16. A cost- effective way to meet Compliance is To go beyond COMPLIANCE
  • 17. Taking the Leap from Risk to Opportunity Beyond Compliance Compliance Risk Aversion Risk Aversion Business Profiting Initiatives Branding Leading Prasad Modak 17 Environmental Management Centre LLP
  • 18. Survey: Altered Images the 2001 state of corporate responsibility in India poll Most important factor in forming opinion of a company Prasad Modak 18 Environmental Management Centre LLP
  • 19. 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 Supply Risk through.. of water in the process. Labor Induced Training workers in good housekeeping practices of Risk through.. water conservation. Water saving devices; water efficient technologies, Technology Risk through... chemical audit to replace objectionable substancees. Market risk alleviated by (a) above approach. (b) Decision to move towards a new range of products consuming less water and meeting eco-labels Prasad Modak 19 Environmental Management Centre LLP
  • 20. Going Beyond Compliance takes to Smart Sustainability Giving Advantage to ALL Environmental Performance Business development and beyond – to social frontiers Supporting Corporate Objectives compliance Economic Performance Prasad Modak 20 Environmental Management Centre LLP
  • 21. 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
  • 22. 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
  • 23. Living With the Brand Prasad Modak 23 Environmental Management Centre LLP
  • 24. The Big Squeeze is On Key Learning: Compliance is not limited to National Laws and Regulations En viro nm et Eco-labels Water ent al Mark Climate Investor outlook Resources Supply-chains Biodiversity and traceability Social Legal Responsibility Trade Agreements Transparency Harmonization Accountability Tec Reporting ues chn al olo V gy Corporate Values Materials Leader’s Values Processes Prasad Modak Societal Values Health &Safety 24 Environmental Management Centre LLPClean energy
  • 25. 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 Prasad Modak 25 Environmental Management Centre LLP
  • 26. Thank you Reach me at prasad.modak@emcentre.com

Editor's Notes

  1. 7 PRDEI, December 18, 1996
  2. SPEAKER’S NOTES: P&G is very committed to a Triple Bottom Line management style. Like a growing number of companies, P&G also sees environmental issues as a significant business opportunity. It’s an opportunity for them to introduce new products that not only save the environment (like concentrated detergents-sold in smaller boxes), but also to save on raw material costs and processing costs. An important part of P&G global strategy is a strong social involvement. It believes that social equity issues – and its leadership role throughout the world- will build a strong and loyal customer base. P&G is building customers not just for today, but for a lifetime.
  3. Editor: Don S. Doering Source: Don S. Doering Created: 11/07/00 Slide Mod: 01/12/01 Notes Mod: 11/07/00