Greg Lemke, CSP, CHMMGreg Lemke, CSP, CHMM

Introductions Old vs New (Compliance vs. EMS) Ideas for the future

30 000 f t i30,000 foot view

Command and Control◦ Regulatory compliance emphasis◦ Enforcement◦ Not always cost effective◦ Not always cost effective

◦ Reliance on: Environmental Policy Environmental Audits

Environmental Management Systems Approach◦ Continuous Improvement◦ Cost Saving Focused◦ Cost Saving Focused◦ Corporate Social Responsibility

1. The pace of the global economy◦ Competitiveness ◦ instantaneous knowledge

2 The sharp increase in energy costs2. The sharp increase in energy costs

3. The more recent and ramped-up attention of global climate change.

Are your operations, organizational structure, core products and/or services, and stakeholder engagements sustainable?

◦ Third-party verifiable sustainability◦ Corporate social responsibility reporting

I t ti l t d d f i t d h lth◦ International standards for environment and health and safety

In business, ROI is most often thought of as dollars made or saved in relation to dollars invested◦ baseline operations◦ implement programs with specific metrics◦ work to achieve those goalswork to achieve those goals

The return on investments need to well-documented, and sustainable operationsdocumented, and sustainable operations need to be beneficial to the traditional bottom line

95% of business executives report that workplace safety has a positive impact on a company‘s financial performance.

93% of executives surveyed see a relationship between:

◦ Direct costs, or payments to injured employees and their medical care providers, and

◦ Indirect costs, such as lost productivity, overtime costs

Source: The Executive Survey of Workplace Safety by the Liberty Mutual Group

Workers Compensation Premiums

$265,052.72$250,000.00

$300,000.00

$186,155.00$196,821.33

$186,155.00

$209,424.38

$235,602.42

$200,000.00

$144,509.00

$162,849.00$155,513.15

$174,952.29

$144,509.00

$162,849.00$150,000.00 Possible EMR .75

Current EMR 1.0

$50 000 00

$100,000.00

$0.00

$50,000.00

2005 06 2006 07 2007 08 2008 09 2009 10 2010 112005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Investment Return◦ Employee training ◦ More satisfied &

professional workers

◦ Improved management systems

◦ More efficient and repeatable business

Increased

practices

◦ Engage with the◦ Increased transparency and public relations

◦ Engage with the stakeholders of the organization

All of these investments will provide ◦ Strength, ◦ Stability, ◦ Sustainability to the organization◦ Sustainability to the organization, ◦ Increase the value of the company or the brand

Cost Savings Regulatory Compliance Minimize Environmental Liability Demonstrated ROI ◦ Increase Shareholder Value

Top Management SupportC i◦ Commitment◦ Demonstrated Action◦ Strategic Planning

Goals◦ Prioritize ◦ Available Technology◦ Available Technology

Celebrate Successes◦ Motivates stakeholders

Training◦ Integrate EMS Philosophy throughout organization

Generally accepted and understood that there is a significant and growing correlation between companies' investment in their environmental programs and their overallenvironmental programs and their overall competitiveness and financial performance.◦ Firms investing in environmental management g g

posted accumulated returns over 48.8% higher than environmental laggards over a 3-year period, and 6% higher returns over 1-year.6% higher returns over 1 year.

Source: Innovest Strategic Value Advisors, in an annual investment research report on the Global Auto Parts market

In the electric utility industry: portfolio h t i ithmanagers who screen out companies with

poor environmental records can outperform others by more than 7% annually.y y

The top environmental performers in the computer sector have outperformed theircomputer sector have outperformed their industry rivals financially by 25% since the beginning of 1998.

Source(s): Innovest Strategic Value Advisors and The Computer Industry -- Hidden Risks and Value Potential for Strategic Investors

Green to Gold, 2006 by Daniel Esty & Andrew Winston

Numerous benefits of a sound environmental policy: 1 B ti b d l l di t i d1. Boosting brand value leading to increased

customer loyalty and retention2. Increased staff morale leading to higher

productivity and lower employee turnover3. Greater creativity and4 An edge in recruiting talented staff4. An edge in recruiting talented staff.

The Green to Gold authors argue that the i l i f littl i iblreason companies complain of little visible

ROI from environmental policies is because they don’t count the right things:y g g

Cost of retaining an existing client vs. obtaining a new one.

(customer loyalty)

Benefit of obtaining new clients primarily due to your g p y ycorporate responsibility position

(usually not measured)

(for energy usage)

(for global climate change)

(Used for raw material metrics or Chemical Emissions Metrics)(Used for raw material metrics or Chemical Emissions Metrics)

Tracking of chemical releases to the air, land, and water are common as part of SARA Title III requirements.◦ Use this data to develop metrics for calculating◦ Use this data to develop metrics for calculating

chemical emissions reductions.

(for chemical release metrics)

Electricity Conservation◦ Electricity conversation or reduced use of energy◦ Electricity conversation or reduced use of energy

Green Energy◦ Switching to greener or renewable energy sources

Fuel Substitution Fuel Substitution◦ Reduced fuel use, substitution to greener fuels

Greening Chemistry◦ Reduced use of or substitutions of high global warming◦ Reduced use of or substitutions of high global-warming-

potential (GWP) chemicals Water Conservation◦ Reduced water useReduced water use

Materials Management◦ Reductions from life-cycle analysis and extending the life of

secondary materialsy

Work to increase awareness of sustainability among staff and management. ◦ This will provide a common language and keep everyone thinking

about the impact you have during the course of our daily tasks.p y g y

Take an inventory of current efforts that make progress toward sustainability and be frank about areas that need toward sustainability and be frank about areas that need improvement. ◦ Enhance your current efforts and identify additional improvements.

Formulate vision of what sustainability means to you◦ Identify long-term goals necessary to achieve that vision.

Incorporate the awareness and terminology of sustainability into your budget decisions, program administration and project development.

Does this help move us toward sustainability

Even if incrementally?

Will elements of this project serve as a potential stepping stone toward other changes or initiatives?

Will increased implementation costs yield savings in the long-run or provide a social or environmental return on g pinvestment?

In a corporate climate that embraces the adage that "what matters gets measured"

The ability to measure and evaluate The ability to measure and evaluate environmental performance allows environmental staff to demonstrate the value f fof its programs and gain equal footing with

other business objectives

Goals stated:

"Execute this process well" vs.

"Don't perform this process badly."

Goals should be precise and measurable so that progress toward them can be tracked and evaluated to determine the relative success of environmental performancesuccess of environmental performance.

◦ “Maintain regulatory compliance and identify cost saving opportunities ”opportunities…

vs

◦ Reduce hazardous waste by 25% by 2011Reduce hazardous waste by 25% by 2011◦ Reduce SARA reportable releases by 35% by 2010◦ Recycle 50% of alcohol solvent in 2010

Renewables NaturalMiljömålen

Renewables

Ecoliteracy

NaturalCapitalism

Cleaner Production RMAFactor 10

Comparing environmental performance against its return on investment (ROI) is a bottom line-oriented approach.

Illustrate that environmental, healthy, and safety (EH&S) programs have a positive effectsafety (EH&S) programs have a positive effect on company financials.

1. Recognition and commitment from senior leadership;

2. Build a business case based on benchmarking against sector standards and trends, and baseline your existing programs, activities, and services;

3. Defining sustainability, based on sector-type, culture, brand, existence of programs, and longer-term goals;

4. Implement sustainability initiatives including specific actions, roles/responsibilities, and implementation schedule; and

5. Measure and report processes to measure progress against specific metrics and use this data to report to management, shareholders, customers, employees, and/or other stakeholders.

Thank You

QUESTIONS?

Greg Lemke, CSP, CHMMDi t L P tiDirector, Loss Prevention

glemke@occutec.com

OCCU TEC IOCCU-TEC, Inc.Kansas City, Missouri