The How and Why of Environmental Compliance Audits

An environmental compliance audit is a powerful tool used to determine whether a company follows applicable regulations and to gain an understanding on how to sustain and improve environmental performance going forward. Major benefits of conducting an environmental compliance audit include mitigating your company’s legal and reputation risks, reducing operational inefficiencies, and achieving certification requirements.

Risk Mitigation: Environmental audits are an effective risk management tool for avoiding operational disruptions and potential fines arising from non-compliance.

Reduction in Operational Inefficiencies: Environmental audits highlight areas of inefficiency in processes where the amount of resources used are out-of-proportion to the amount of items or services produced and sold. A company can reduce costs by identifying operational inefficiencies.

Achieving Certification Requirements: Environmental audits are an important step toward gaining and retaining certifications like ISO 14001.

The scope of a compliance audit depends on regulatory applicability for a particular facility. An audit can incorporate many compliance areas or can be focused on a specific regulatory area. Common areas of analysis in a compliance audit include:

• Air emissions: including permits, record keeping and reporting;

• Hazardous and non-hazardous waste: generation, management, disposal and reporting;

• Wastewater: effluents, including storm water and other discharges to surface waters and discharges to POTWs;

• Spill prevention and response: including PIPP, SPCC and OPA90 Plans; and

• Community Right-to-know requirements: including EHS, Tier II Chemical Inventory and TRI reporting.

An environmental audit typically includes three phases: pre-audit, the audit, and post-audit. The objectives and activities associated with an environmental compliance audit’s three phases include:

Pre-Audit:

• Select and authorize an audit team;

• Determine the scope of the audit;

• Gain management support;

• Identify metrics and benchmarks; and

• Establish a “no blame” policy.

Audit:

• Review relevant company policies and procedures;

• Review environmental permits;

• Review relevant environmental record keeping and reports;

• Observe conditions during normal business hours; and

• Interview employees.

Post-Audit:

• Summarize and document findings;

• Create an action plan based on results for going forward;

• Inform relevant internal and external stakeholders of the results; and

• Make plans for repeating the audit process.

It is recommended that you should contract with an environmental compliance expert or firm to lead the audit team. An outside firm will provide specialized environmental compliance knowledge that a company typically does not possess internally. Hiring an outside firm will also add credibility to your audit findings in the eyes of external stakeholders such as state regulators.

CFR has been conducting environmental compliance audits for nearly 25 years. Contact us to learn more about the power of compliance auditing for improving environmental performance.