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ViewPoint Espresso How are companies tackling enterprise risks? # 1, June 2020 – Environmental Management snapshot

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SAFER, SMARTER, GREENER


Enterprise Risk Management Pulse Check, 2020 The Espresso Survey is turning its focus to Enterprise Risk Management. What are companies struggling with these days and has the picture changed due to the “new normal”? Throughout this series of surveys, we will check the pulse of companies on the following five topics: Environmental Management (June) Business Continuity

Occupational Health and Safety Information Security Energy Management The topics selected are both new and returning ViewPoint survey topics. Where possible, we will compare data to see what changes may have occurred over time. Our objective is to provide insight on each topic as to what is top of mind for companies around the world when it comes to Enterprise Risk Management. 2

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Setting the Scene

Topic in focus The first snapshot is of environmental management. The short survey was launched in May and results released in July 2020.

Where are they now? Organizations that manage their environmental impact and put systems in place to address their footprint benefit everyone.

What did we ask?

What did we find?

▪ Which initiatives are used to manage and mitigate environmental risks and their effectiveness?

In 2017, Environmental Management was the subject of our ViewPoint Survey. Comparisons between the two are made where relevant.

It improves a company’s ability to meet legal requirements and reduce cost. With consumers increasingly demanding sustainable products and services, environmentally credible companies gain a competitive edge.

▪ What benefits are achieved from certification of an environmental management system?

▪ Legal compliance and customer demands are the biggest drivers and where companies see the highest potential for digital technologies.

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▪ What is the impact of new digital technologies?

▪ What is the pandemic’s impact on environmental management and improvement actions?

▪ The focus seems more corporate than product specific. ▪ Priorities and focus have not shifted from 2017. ▪ The pandemic will impact priorities and efforts short-term.


Question 1 – Sustainability Development Goals (SDGs) The United Nations released in 2015 the 17 Sustainability Development Goals (SDGs). Please select the top three SDGs, which have the most material impact on your company’s environmental strategic direction and goals: 45,2 %

GOAL 12: Responsible Consumptionand andProduction Production Goal 12: Responsible Consumption

26,2 %

GOAL Affordableand andClean Clean Energy Energy Goal 7: 7: Affordable

34,3 % 37,0 %

GOAL 9: Industry, Innovation andinfrastructure Infrastructure Goal 9: Industry, Innovation and

30,1 % 39,1 %

GOAL 3: Good Health andWell-being Well-being Goal 3: Good Health and

GOAL 13:Climate ClimateAction Action Goal 13:

GOAL 8: Decent Work and EconomicGrowth Growth Goal 8: Decent Work and Economic

GOAL 6: Clean Water and Sanitation

GOAL 4: Quality Education

GOAL 17: Partnerships to achieve the Goal

GOAL 2: Zero Hunger

▪ SDG Goals 12 and 7 are particularly important for companies certified to ISO 14001. Targeting responsible consumption and production and Affordable and clean energy are aspects handled through an environmental management system. This is probably also why ISO 14001 certified companies rate Goal 13 on Climate action higher than others.

34,7 % 25,5 %

▪ Goal 3 on Good health and well-being is rated high by all companies probably influenced by the COVID-19 pandemic.

25,2 % 10,8 % 22,3 % 31,5 % 19,4 % 16,8 %

ISO 14001 certified Not ISO 14001 certified

▪ Goal 9 is unexpectedly high probably because it is not directly related to environmental management. ▪ Goal 8 rates higher among companies not certified to ISO 14001, which is probably because it is more quality related.

12,1 % 15,6 % 10,8 % 12,4 % 9,7 % 8,7 %

Note:

▪ Not 14001 certified includes largely ISO 9001 certified companies.

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Question 2 – Mitigate environmental risks (certified vs not certified) Which of the below initiatives have your company undertaken so far in order to manage and/or mitigate the environmental risks and evaluate their effectiveness? Highly effective + Effective 83,0 % 67,0 %

A monitoring process to evaluate compliance with legal and other applicable requirements

77,8 %

Assessment of all impacts to the environment

49,5 %

Regular maintenance of infrastructure, facilities and machinery/equipment to minimize environmental impacts

76,9 % 64,0 % 72,8 %

Emergency measures in case of environmental accidents

51,6 %

A management system or a prevention program that covers all the organization’s technical and production requirements and aims to achieve continuous… Monitoring trends of particular environmental indicators Information and training for employees about environmental issues A design process aimed at minimizing the environmental impact of your product/service External communication about your company’s environmental performance

A supplier environmental management programme

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72,3 % 49,1 % 67,3 % 38,7 % 64,7 % 42,1 % 60,3 % 45,5 % 51,7 % 31,4 % 43,2 % 28,7 %

ISO 14001 certified Not ISO 14001 certified

▪ Results show the strength of an implemented environmental management system. The ISO 14001 certified companies rate mitigating initiatives as being far more effective than companies not certified to ISO 14001. ▪ The top 3 most effective initiatives for ISO 14001 certified companies are: Monitoring the process for checking compliance with legal requirements (83%), Assessment of all environmental impacts (78%) and Regular maintenance of infrastructure and assets to minimize environmental impacts (77%). ▪ The overall ranking has not changed from 3 years ago (2017). The actions most often implemented are still the same for ISO 14001 certified companies, underscoring their effectiveness in managing/mitigating environmental risks. ▪ Emergency measures for environmental accidents and A management system or a prevention program covering technical and production requirements are also considered effective by more than 72% of the ISO 14001 certified respondents.


Question 3 – Communication with stakeholders When communicating your environmental performance, who are your most important stakeholder(s)?

43,5 %

Our Board/Owners

41,7 %

Employees

34,9 % 40,2 %

Customers (B2B in your supply chain)

36,4 % 38,2 %

Governmental (regulatory) officials

Media (traditional or social)

Other

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▪ The strong focus on governmental stakeholders is consistent with results from question 2, where actions to address legal compliance is rated highest.

31,2 % 18,6 %

Consumers

Investors

▪ Communication toward external stakeholders is driven more by customers and governmental bodies than consumers. A likely reason for this could be that a large share of the survey respondents operate in the B2B and not B2C market. Another reason why consumers are scored lower in this survey could be that the environmental footprint of specific products may not be the primary focus and systems fully adopted to address this aspect yet.

42,4 %

▪ Not surprisingly internal stakeholders, such as the board/owners and employees, rate high. This is very positive since internal buy in is critical for environmental management implementation and efforts to be effective.

24,1 % 7,8 % 5,2 % 2,9 % 2,7 % 2,1 % 2,5 %

ISO 14001 certified Not ISO 14001 certified


Question 4 – Benefits from certification Based on your experience and perception, please rate the relevance of benefits achieved from certification of your company’s environmental management system.

93,6 %

90,9 %

88,4 % 89,7 %

85,0 %

85,0 %

78,9 % 77,5 %

▪ The ranking of benefits is the same when comparing with the results of the 2017 survey.

81,0 % 69,6 %

67,9 %

62,6 % 63,8 %

67,5 %

▪ Ability to meet legal requirements tops the benefit list with almost 68% of the respondent agreeing that it is highly relevant.

57,1 % 55,3 % 53,3 % 41,9 % 40,0 % 40,0 % 39,8 %

36,6 %

34,0 %

38,9 % 38,1 % 30,2 %

28,1 %

23,4 % 11,9 % 11,6 %

Highly + Somewhat relevant Highly relevant

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▪ Support in meeting stakeholders requirement, commitment from top management and performance improvement closely follow with more than half indicating that this is highly relevant.


Question 5 – Digital technologies In which areas do you see that new digital technologies (e.g. blockchain, sensors, IoT) may have the most significant positive environmental impact?

43,5 %

▪ Reducing carbon (CO2) emissions tops the ranking for ISO 14001 certified companies. For these respondents, a higher focus on this focus is expected, as this may be an area of substantial impact. Exploring advanced and technological means for improvements could create significant reductions related to production, the supply chain management and product life cycle, for example.

42,4 % 36,3 %

32,7 % 25,6 % 18,8 %

Reducing carbon (CO2) emissions

Reducing waste

Improved product lifecycle design

25,2 % 19,7 %

Enhanced recycling

ISO 14001 certified

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18,2 % 15,2 %

Consumer engagement on sustainability

16,6 % 12,7 %

Enabler for circular economy

Not ISO 14001 certified

16,5 % 10,9 %

Improved water management

▪ Reducing waste is rated high as well. Not surprisingly, it tops the list for companies not certified to 14001. It is relevant to most companies and relatively easy to implement. Waste is also an issue prominent in the media and high on the agenda of consumers and nations across the globe. ▪ Improved product life-cycle design, Improved water management and Enabler for circular economy are rated higher for ISO 14001 certified companies than those not certified to ISO 14001.


Question 6 – Pandemic impact on environmental management To what extent will the COVID-19 pandemic have negative consequences for your company’s focus on environmental management and improvement actions in the short/medium term (next 1-2 years)?

▪ The pandemic put companies worldwide in an unprecedented situation. Business continuity became and still is a challenge for many. Moreover, consumer priorities quickly shifted back to the basics of safety and security.

46,8 % 44,5 % 36,4 % 30,7 %

32,3 %

▪ Close to 50% of the companies say that the current situation will impact their environmental management focus and efforts negatively to a large or some extent. While environmental management is by no means less important, circumstances may force a shift of priorities in the next 1-2 years.

30,0 %

19,3 % 15,9 %

13,9 % 10,4 %

5,0 % 6,1 %

Large + Some Large extent extent

Some extent

ISO 14001 certified

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Little extent

Not at all

Not ISO 14001 certified

I don't know


Benefits from the Management Systems in managing risks, overall view The chart below shows the contribution of each of the areas in focus to the list of identified benefits. The chart will be progressively updated when a new requirement is analysed. When all areas will be investigated, the chart will be complete

◼ Relevant benefit (≥3)

Environmental management

Benefits Improved financial results (e.g. reduced costs)

Advantages with tax/banks/insurance Achievement of strategic objectives Creation of new market opportunities Providing a competitive advantage Improving public image Ability to meet legal requirements

◼ ◼ ◼ ◼ ◼

Customer satisfaction/meet customer needs Better relations with authorities

Improve identification/management of risks Top management commitment & engagement

Enhanced employee engagement

◼ ◼

Improved communication with stakeholders Improvement in management of suppliers Environmental performance improvement Safeguard property

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Methodology and Sample

May

2020

This Espresso survey was conducted in May 2020.

1,148

It involved 1,148 professionals in companies across different industries in Europe, North America, Central & South America, and Asia. Most companies are certified to a quality or environmental management systems standard.

▪ The sample consists of customers of DNV GL – Business Assurance and does not claim to be statistically representative of companies worldwide. ▪ The questionnaire was administered using the CAWI (Computer Assisted Web Interviewing) methodology.

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Thank you!

Want to access the results from other ViewPoint surveys? Read more here Not yet a Viewpoint member and want to join? Click here Interested in benchmarking the performance of your company Management System? Learn more here

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SAFER, SMARTER, GREENER

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2020 ViewPoint Espresso report on Environmental Management  

2020 ViewPoint Espresso report on Environmental Management  

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