Center for Environmental Innovation

Organizations in Transition

Environmental, health and safety (EHS) departments are in transition. Companies are "right-sizing" their EHS departments by cutbacks, consolidations through centralized or shared service groups, outsourcing, and the integration of EHS responsibilities into line organizations. But what is the ideal organization that not only improves a company's competitive position, but also assures proactive social responsibility? EHS organizations are typically restructured as the result of overall company restructurings, often in the wake of major divestments or mergers.

This project evaluates current approaches to sizing and organizing EHS departments within companies. The deliverable is a sourcebook of guidelines for restructuring companies to achieve maximum competitive advantage while acting socially responsible.

This project will provide commentaries on all significant alternative frameworks for corporate environmental disclosures. Since 1993, more than 30 different disclosure models have been promulgated. The proposed sourcebook provides guidance as to circumstances and procedures for appropriate application of each model. The sourcebook will assist first time producers in setting the scope and content of their report. The sourcebook will provide existing producers an explication of the key features of alternative reporting frameworks and choices to consider for future reporting.

This work does not duplicate current efforts to develop environmental disclosure or third party attestation standards such as the Global Reporting Initiative, and others. Instead, it directly complements and supports existing efforts by adding context and credibility to these approaches.

Companies have taken a variety of responses to increased public concern about environment and social issues, one of which is to modify their governance structure, specifically at the board of director level. Have these actions been successful in changing the way companies frame and act on environment and social issues? And if successful, what are the best practices and lessons learned that would form the basis of a set of guidelines for all boards of directors? This project will evaluate the current state of board of directors' actions relative to social responsibility and the environment, and produce a guidebook for successful governance strategies.

To provide additional credibility to their financial statements, companies have for decades utilized the "big six" accounting firms and well established accounting rules. Unfortunately, no similar institutional structure exists for environmental and social responsibility auditing. To improve credibility and acceptance of audit reports we are proposing a new approach which will leverage the institutional credibility that universities have with the public.

This project would pilot the concept of using independent faculty staff members from leading universities around the world to provide expert certification of the scope and conduct of audits performed by consultants. At first glance this approach appears to be independent checkers checking the independent checkers. However, in the absence of widely recognized environmental and social responsibility standards carrying the same credibility as, for example, FASB (Financial Accounting Standards Board), the approach may be advisable under some circumstances. The first phase of the research would be the development of a standard protocol that could be used to define the scope of and the techniques used for certification.

The protocols are well developed for managing both excess/obsolete products and production wastes in the developed world. These management and audit practices, however, do not address the unique technology and facility needs that exist in developing countries. This project would develop a set of standards and management strategy approaches for use by multinational corporations for improving the disposal, re-use or recycling of both excess/obsolete products and production wastes in developing countries. To obtain stakeholder buy-in a partnership would be formed between several company trade organizations and professional societies and the Center for Environmental Innovation, Inc.

The issue of "corporate transparency" on social responsibility is currently receiving attention in key environmental and legal journals; however, as a general matter, executive management and shareholders rarely track environment and sustainable development parameters. This project will encourage companies to voluntarily list several indicators of sustainability in their annual financial and 10K reports. This effort is important because it will place environment measures alongside financial measures, and thus will ensure top level attention. The program will be pilot tested by several leading companies.

For additional information about any of the above projects, including states and participants involved, please contact CEI's Executive Director, Richard MacLean.