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Key Practice Area - Global EHS - Global EHS Compliance
Key Practice Area: Global EHS

Highlights from the "Managing Global EHS Programs" Roundtables

April 2011

Learn how to monitor changes in global legal requirements and manage risk and with these discussion summaries from NAEM’s 2010 "Managing Global EHS Programs” roundtable events.

Overview

In 2010, NAEM held a series of roundtable discussions on managing global EHS programs. In this section you will find notes from the discussions on:

  • Global EHS Compliance
  • Understanding EHS Risk Management v.s. Compliance Assurance
  • Managing Global EHS Data Systems

Global Compliance

Discussion Notes: "Global EHS Compliance”

Key Topics:

  • Identifying and monitoring changes in legal requirements globally
  • Assuring and maintaining high levels of legal compliance

Challenges Raised:

  • Knowing EHS legal requirements in various countries (what are the requirements?)
    • Dealing with extensive supply chains
    • Trusting locals to be knowledgeable and honest on local regulations
  • How do legal requirements apply to a particular business?
  • Tracking changes in legal requirements
  • How do you handle legal requirements in an audit program?
  • How do you know when you have achieved compliance with a high degree of confidence?
  • Lack of proactive trending metrics
  • Interpretation of standards/regulations
  • Dealing with regional cultural differences
    • Example: disconnect between self-assessment and second- or third-party audit results
  • Varying degrees of regulatory enforcement in different countries
  • Complete and current access to legal requirements in any jurisdiction is usually very expensive
  • Who is responsible for tracking local legal requirements?
  • Lack of trending information

Solutions/Strategies Offered:

  • Monitor compliance in stages: "journey” concept
    • Meet local legal requirements
    • Meet corporate standards
    • Achieve full compliance
  • Make sure corporate standards are well-based: Why are the standards important from a business risk perspective?
  • Industry engagement is important in establishing standards
    • Drive industry standards
    • Consensus based standards
  • Customers sometimes drive business practices
  • Reputation (outside looking in) can drive standards: positive image
  • Engage stakeholders-even adversarial-gain new insights
  • Benchmarking roles and responsibilities: Who does what and has what responsibilities?
  • Advocacy can be a useful tool
  • EHS maturity matrix used based on 25 EHS aspects
  • Value of publishing metrics à establish standard metrics

Experiences & Lessons Learned:

  • Expensive to buy regulations and updates for all countries
  • The "Devil is in the details”: screening tools are general
  • Needs to be systems-driven: integrate into current business systems (avoid systems "silos”)
  • Cost may appear high for outside consultant auditing, but independence, objectivity, and third-party perspective are value-added
  • Would suggest outside audit address legal requirements only, and not corporate standards
  • Disconnect between corporate standards and operational knowledge

Summary of Learning:

  • Establish and broadly publish a set of standard metrics (EHS maturity matrix)
  • Monitor compliance in stages. View it as a journey with various levels of compliance.
  • Factors in determinable standards
    • Industry consensus driven
    • Reputation (outsiders view)
    • Customer requirements
    • Stakeholder input (consider adversarial)
    • Business risk based
  • Benchmark others to determine roles and responsibilities (who does what at what level – local vs. corporate)
  • Screening services can be used to monitor regulations, but beware of lack of details

Risk Management

Discussion Notes: Understanding Risk Management vs. Compliance Assurance

Key Topics:

  • Compliance
  • Risk Management

Challenges Raised:

  • Managing compliance globally vs. locally
  • Biggest challenges: understanding where to focus resources in complying with multiple regulatory standards
  • Knowing what the local rules are
  • How to set corporate standards that are risk based
  • How to define, value, and resource the risks appropriate in order to minimize it – implementing preventive measures
  • Implementing risk assessment measures: top-down or bottom-up approach?
  • Identify where focus is needed (risk assessment/management vs. compliance assurance)

General Lessons Learned:

  • Bringing in consensus from the larger base
  • Centralizing operations
  • Ensuring stores are using process (on site audit and paper trail)
  • Conducting risk assessment and to identify perceived and actual risks
  • Setting up enterprise risk assessment committees
  • Bottom up vs. top down approach to risk management:
    • Bottom up for smaller risks/implementation
    • Top down for bigger scale risk standards
  • Target: Corporate risk and responsibility pyramid (define actual vs. residual risk)

Solutions:

  • EMS: system implementation and uniform systems
  • BBY: Moving to metrics system to identify where to invest resources
  • 3M: implementing cross functional team to identify risk
  • Identify whether risk assessment vs. compliance program is most needed

Global Data Systems

Discussion Notes: Managing Global EHS Data Systems

Key Topics:

  • How to demonstrate business case for effective data systems
  • Data Quality Collection
  • Compelling Reports
  • Resources

Challenges Raised:

  • Perception of driving EPA and OSHA requirements globally (U.S.-centric perspective can be limiting)
  • Data accuracy – need right data and consistency in analysis and reporting
  • Key metrics to measure varies significantly across business unites and geographies – how to select?
  • Right mix of leading and lagging indicators
  • Effective systems to extend from U.S. only to international data collection
  • How to best report out the results of data collected in order to be compelling
  • Regulations can be very complex and subject to wide interpretation; key is how to track changes
  • Collection of "one off” unique data (e.g., state and local regulations)
  • Resources to keep data collection functional/accurate/current
  • Picking the right metrics to drive action
  • Redundancy of work in the various tools

Solutions/Strategies Offered:

  • Selection of right metrics to drive change
    • Key performance indicators vs. metrics
    • "Focus on the critical few”
  • Use of consultants to confirm key issues, then look at software most relevant to those issues
  • Data collection quality and effectiveness of tools
    • Issue – need to consider cost/value proposition as counter balance
    • Bring in your client base for input in defining and selecting tools/software
    • Maturity of software matters!
  • Compelling reports – info/trends vs. just data
    • Work with executives to confirm what they care about, how and what they want to see
    • EHS scorecards – RYG, some number ranking of all sites
  • Resources to maintain
    • Think about resources at design stage (e.g. pick/design software that has QA/QE checks and has useful and intuitive reports)
  • Business Case
    • Worker comp costs
    • Sustainability demands data (and quality data)
    • Compliance – fines/federal sentencing guidelines
    • Productivity
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