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Managing Risks for Environmental Liabilities

Anticipating and keeping pace with the ever-changing regulatory environment is one of the biggest challenges companies face while managing risks associated with their ongoing operations. The key to success: private industries, government organizations and the military must document their processes, fully understand what risks their activities pose on the environment and develop plans to mitigate operational issues.

The first environmental regulations in the United States were enacted in the late 1800s, beginning with the Rivers and Harbors Act, which over time has developed into the Clean Water Act (CWA). With the establishment of the CWA has come a better understanding of the relationship between human health and the environmental risks of the materials we use.

ISO 14001, an international standard that provides the framework for establishing an environmental management system (EMS). It helps organizations minimize how their processes/operations impact the natural environment, comply with ever-changing regulations and continually improve their overall performance. Studies have shown that organizations with an established EMS have a higher environmental performance and reduced non-compliance issues with governing regulatory programs. Active regulatory risk management processes support their success.

An EMS guides organizations in identifying the aspects (causes) and the impacts (effects) of the substances on the environment by systematically mapping and evaluating all activities within their operations. For example, facilities that understand their processes and actively manage materials used in the manufacturing process can reduce potential impacts on the environment and their liability by recycling materials rather than direct disposal. As regulations change, organizations can evaluate how the new regulations impact their activities. Lastly, if organizations practice continuous improvement, using a plan, do, check, act model within their EMS, they can systematically identify, control and monitor their environmental performance. Organizations that routinely audit their operations have proven to have a higher level of compliance — and are then capable of avoiding costly fines and penalties.

More stringent regulations, legal drivers, and emerging contaminants such as per- and polyfluoroalkyl substances (PFAS), 1,4-dioxane, perchlorate and dioxin present new operational challenges that, if not addressed, may result in liabilities to an organization. By their nature, many of these emerging contaminants are persistent once released into the environment. They do not readily degrade and can migrate great distances from their source. By implementing a robust EMS, organizations can identify appropriate operational changes to reduce or eliminate these liabilities and promote reliable responses to lurking disruptions to their operations. The EMS will play a particularly critical role when managing an operational fleet that spans multiple countries, states and jurisdictions, which may require various response protocols.

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Steve Nalefski
Written by Steve Nalefski
Steve Nalefski is a Burns & McDonnell vice president and general manager of the Environmental Services Group. He is a member of the board of directors for ACE Mentor Chicago.

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