The Importance of an Environment Policy for Businesses

Creating an effective Environment Policy is essential for any business aiming to demonstrate its commitment to sustainability. This document not only outlines your environmental practices but also serves as a tool for communication with stakeholders.

Key Ingredients for an Effective Environment Policy

1. Name Your Policy an Environment, Energy and Climate Change Policy

   Some investors inquire specifically about a Climate Change Policy or an Energy Policy. However, these are primarily relevant for the highest emitting companies, where management approaches differ significantly from general environmental practices. To avoid missing out on important ESG questionnaire points, name your policy an Environment, Energy and Climate Change Policy. This ensures you cover all bases.

   
   

2. Include a Commitment Statement

   The core of any Environment Policy is a commitment to understanding and mitigating environmental harms. Best practice involves referencing a precautionary approach. This means that preventing environmental harm should not be delayed due to a lack of full scientific certainty. Including this aligns you with the UN Global Compact (Principle 7), which is a minimum standard of sustainability frequently requested by investors.

   
   

3. Explain Your Environmental Risks

   It’s crucial to clarify your environmental risks and what they are not. You cannot assume that the person (or bot!) reviewing your Environment Policy understands your business or industry. Clearly articulate what you do and how it impacts the environment. For instance, if you are a manufacturer that uses no water in production but consumes a lot of energy, state that. If you are a professional services company, explain that your overall environmental impact is low due to being office-based and providing digitally shared services. However, acknowledge that you still have minor impacts related to energy use, water use, and waste, all of which contribute to climate change.

   
   

   Additionally, investors often ask whether company operations are located in biodiversity-sensitive areas or regions of water stress. Use tools like the MAGIC tool and Aquaduct to check the postcodes of your premises and include this information in your policy.

   
   

4. Detail Your Management Approach

   Include specifics about how you manage your environmental impacts. Cover aspects such as legislative and regulatory compliance, data management, targets, reduction activities, reporting, leadership oversight, resources, and training. Even if you do not currently offer training, include a statement indicating that ‘environmental training is provided as needed.’ This shows your commitment to continuous improvement.

   
   

5. Specify ‘Continuous Improvement’

   Continuous improvement is a cornerstone of ISO 14001 (Environmental Management System). Referencing these specific words—ideally supported by the existence of environmental objectives or targets—demonstrates your awareness of best practices in this area, regardless of whether you have an EMS or an ISO 14001 certificate.

   
   

The Importance of Communication and Review

Finally, ensure that your policy receives Director sign-off and is communicated internally. An annual review is also essential to keep the policy relevant and effective.

By taking these steps, you will create a robust Environment Policy that you can confidently share both within and outside your business. If you find yourself short on time to implement these changes, remember that we can assist you in this process.

Conclusion

In conclusion, having a well-structured Environment Policy is not just a regulatory requirement; it’s a strategic asset. It showcases your commitment to sustainability and ethical practices. By following these guidelines, you can enhance your company’s reputation and build trust with stakeholders.

Authored by Caroline Johnstone (the person, not AI).