Ecocion, Inc.

The Business of Environmental Performance

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Courtesy of Courtesy of Ecocion, Inc.

Everyone is in the business of the environment, from small coffee shops to large oil and gas companies. The capital and social markets are scrutinizing the environmental performance of companies, often using obscure and inconsistent measures, resulting in impacts to reputation and shareholder value. Increasingly, the efficacy of non-governmental organizations, environmental advocacy, investor groups, and public awareness of a company’s lack of performance can create negative impacts. For example, United States shareholder proxy suits are being used by investors at an alarming rate to advocate on a range of issues, such as climate change.1 Therefore, it is crucial for companies to establish clear business measures to assess and drive internal performance and to effectively communicate those performances externally.

Environmental performance is vital to the interests of an organization. The business values from environmental performance include efficiency improvements, cost reduction, and risk management, among others. On a fundamental level, environmental spills and wastes represent inefficiencies to the business resulting from lost products. Moreover, the associated remedial expenditures from spills and releases can represent a significant amount and are escalating, directly impacting the corporate bottom-line. According to a study by the American Petroleum Institute, total environmental capital expenditures within the United States grew at an average of 25% per annum (from $1.87B to $4.67B USD) for the five years prior to 2003.2

This paper explores the assessment and communication of environmental performance in the following areas:

  • Business Integration of environmental activities into commercial and asset planning
  • Risk Management of operational activities by ensuring regulatory compliance and minimizing environmental footprint
  • Stakeholder Engagement with key stakeholders, both internal and external, to facilitate transparency and trust
  • Regulatory Development to advocate appropriate and realistic strategies in relation to emerging regulatory policies

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