Integrated Reporting is a new but rapidly growing trend in business financial reporting.  More and more companies are realizing financial value from their non-financial activities.  They are finding ways to measure the value of their intangible assets and then integrating these values into one financial report.  

This is significant in that non-financial activities or intangible assets include things like Environmental, Health, Safety and Security, all of which contribute to a company's Corporate Sustainability Statement.  

As a world leader for nearly 20 years in Environmental, Health, Safety, and Security compliance management solutions, Citation Technologies is well positioned to assist a business engaged in the development of Corporate Sustainability statements and Integrated Reporting.

Introduction

Sustainability is a term that was introduced back in the 1980's, but recently has seen exponential growth as indicated by the term's use in periodicals. Charting a term's use in periodicals over time is a trustworthy indicator on the general direction of business trends. Over the past ten years, the use of the term Sustainability has doubled every two years.  Beginning at less than 20,000 noted citations in 2002, the use of the term has grown to over 200,000 citations in periodicals per year.  That equates to a doubling in its use every two years.

According to the Integrated Reporting Committee of South Africa, an integrated report tells the overall story of the organization. It is a report to stakeholders on the strategy, performance and activities of the organization in a manner that allows stakeholders to assess the ability of the business to create and sustain value, or the sustainability of the business.

An effective integrated report reflects an appreciation that the organization's ability to create and sustain value is based on financial, social, economic and yes, environmental, health, safety and security systems. Integrated reporting combines the most material elements of information currently reported in separate reporting strands in a coherent whole.

This series of articles over the next couple of months will identify some key concepts of integrated reporting. Other areas to explore will include how the data, content and tools available through Citation Technologies can be used to assist our clients with the non-financial components used in their sustainability statements and their one financial report.

Please feel free to engage in this discussion.

Citation's Software Compliance Tool Boasts New Functionality

 Citation built the original versions of ART from the ground up with the customer in mind, providing a simple and effective solution for complying with regulatory requirements.

"We are impressed by the intuitive nature of ART, and how its conditions-based questions will enable our customers to better manage their risk through a more comprehensive understanding of applicable regulations and laws," said Laura Mixon-Gould from CH2M HILL, a Citation partner. "ART is a good fit within our suites of services."

And it was with that mindset that Citation asked for feedback from customers. It was largely this feedback that eventually led to the improvements and new features within ART 3.0, which is being released to customers today.

By incorporating both Detailed Requirement screening and Tasking into ART 3.0, the software tool simplifies the compliance process into fewer steps for the user.

Clients can also add their own Detailed Requirements to address local plant requirements, and these supplemental requirements can now be defined at the company level.

Citation also took efforts to streamline the review process by implementing high-level applicability questions to significantly reduce the total number of questions that need to be answered. Additionally, users can more easily see how far along they are in the process and jump from step to step if needed.

Improvements to security include allowing companies to manage their own security and set-up, expanding role-based security functions, and improving password strength requirements for new users. And users now have the ability to use Internet Explorer 7, 8 and 9, along with Firefox, Chrome, or Safari.

How ART Notifications Work

 The US EPA warned in August of upcoming changes to the way it collects information from commercial chemical manufacturers, adding the Chemical Data Reporting (CDR) rule. Published in the Federal Register on August 16 as 40 CFR 711, the new rule went into effect on September 15.

The CDR rule, which replaced the Inventory Update Reporting rule, enables the EPA to collect and publish information on the manufacturing, processing and use of commercial chemicals on the Toxic Substances Control Act's (TSCA) Chemical Substance Inventory. The main points of the CDR include more frequent reporting, reduced reporting thresholds for specific chemicals, new exemptions, and new reporting requirements.

Under TSCA, failure to maintain required records or to report the required information can result in civil penalties of up to $25,000 a day as well as criminal fines and imprisonment. Users of Citation's CyberRegs could have found the new CFR material the day it was released, and might have even received email notification that 40 CFR 711 had changed. But unless they were following closely, they might have missed the specific changes pertaining to their practices and procedures.

ART users not only received an automatic email notification that relevant changes were made in the company's ART Review, but they were given specific changes in eight Detailed Requirements. They would have not only known that previously written compliance tasks for the replaced Inventory Update Reporting rule were outdated, but they would have realized immediately how they needed to alter their reporting thresholds or frequency, or if they received a new exemption.

Citation's regulatory analysts would have done the leg work for them, providing them specific citations to the material that contained the necessary compliance actions. For example, the Detailed Requirement for 40 CFR 711.20 tells users they must "File reports during applicable submission periods" and 40 CFR 711.35 tells users to "Submit reports electronically pursuant to requirements."

The ART notifications contain the citation and full text of the rule that was changed. Users simply have to look up the citations and make the necessary changes within their compliance matrix. In this manner, the company will always be in compliance with the standards of the federal government.

I was surprised to see a news release from the Environmental Protection Agency (EPA) stating that a former EPA fugitive had been caught and sentenced to prison for running an asbestos training scam. 

First of all, I wasn’t aware that the EPA had a fugitive list.  Second of all, I was appalled at what this fugitive had done. 

Albania Deleon ran an asbestos abatement training school in Methuen, MA from 2001 through 2006.  During this time, the company offered training courses on proper asbestos abatement.  Upon successful completion of an asbestos training course, participants are considered certified in asbestos abatement and given a certificate stating so. 

Ms. Deleon skipped a few key steps in this process.  She was convicted of, among other things, selling certificates to thousands of illegal aliens who had not taken the required course.  The individuals then filed the certificates with the Massachusetts Division of Occupational Safety in order to be authorized to work in asbestos abatement.

Ms. Deleon then placed these uncertified workers in positions as certified abatement workers in public buildings throughout New England. 

The fact that someone cold knowingly do this blows my mind.  It’s similar to a story covered previously on this blog about a man in Iowa who knowingly allowed a building he owned that contained asbestos-laden materials to undergo extensive renovations without the proper equipment or certified workers. 

What Ms. Deleon did happened on a much larger scale and with the potential for much larger consequences.  It is estimated that certificates were issued to over 2,000 unqualified individuals.

Ms. Deleon was captured in the Dominican Republic in November of 2010, nineteen months after her federal conviction in 2008.  She was sentenced to 87 months in prison and ordered to pay $1.2 million to the IRS (she was also found guilty of tax fraud), and $369,015 to AIM Mutual Insurance Company. 

After her conviction in 2008, but before she fled back to her native Dominican Republic, Ms. Deleon wrote in a letter “I pray that God will forgive my soul and allow me to atone the rest of my life repaying and repairing the harm I have done.  This is my solemn promise…I commit myself to work ceacelessly [sic] to make restitution to the government and to the keeper of my soul until I draw my last breath life (sic).” 

The irony in that statement is obvious, as many of the workers that received “certification” under her watch will suffer long and painful deaths from asbestosis or other asbestos-related diseases. 

I am glad to see that the EPA is cracking down on environmental criminals like Ms. Deleon.  The EPA fugitive website was launched in December 2008 and has helped aid in the capture of five environmental criminals in that time.

This week's post was written by guest blogger Sarah Medearis; Sarah is a Senior Consultant with Antea Group’s Baltimore Office and is the company’s Operational Performance and Assurance Practice Leader.

Twenty-first century environmental regulations require more detailed pollutant accounting than their 20th century predecessors, and rely on increasing public demand for transparency and corporate social responsibility to green industrial operations. Ontario’s Ministry of Environment (MOE) is one of many agencies in North America requiring manufacturers to track and publicly account for toxic substances at their facilities under its new Toxics Reduction Act (TRA) regulations (O. Reg. 455/09). Finalized in December 2009, reporting requirements for some of the listed toxic substances were due for the first time on June 1 of this year.

These new and more rigorous regulations draw on each other, creating a complex diversity of similar requirements throughout North America. The MOE drew upon the Massachusetts Toxics Use Reduction Act (TURA) and New Jersey’s Pollution Prevention (P2) Act to develop the TRA requirements. Ontario’s TRA regulations focus on specific industrial operations at a facility that create or use toxic substances, not just those that result in pollutant emissions from the facility as a whole. Accounting for individual toxic substances is a more complex process than previous requirements. It starts by organizing facility operations into distinct “Stages” within which there are one or more processes using, creating or emitting toxic substances.

At the process level, measurements and calculations must be performed to quantify the amount of toxic substances used, created, transformed, destroyed, contained in the product, released or disposed of, or transferred to another process or medium. The data and quantification methods must be evaluated for accuracy with mass balance checks performed to identify any imbalances between input and output so that all quantities can be explained.

As part of the drive towards transparency, and to ensure there are no hidden icebergs under the water, MOE requires firms to also report costs associated with these industrial operations in its P2 plan due at the end of the year. MOE is particularly interested in all the “indirect costs” that the agency believes really drive P2, including:

• Environmental, health and safety compliance
• Pollution liability
• Waste disposal
• Hazardous material storage & handling
• Worker protective equipment, ventilation
• Container labeling, packaging (CLP), material safety data sheets (MSDS)
• Administrative burdens
• Public relations
• Energy, operation and maintenance for pollution control equipment

As part of the expected corporate social responsibility, the P2 plan must identify at least one method for reducing toxic substances under each of seven P2 categories. Both feasible and non-feasible options must have a rough toxic substance reduction estimate. For those options that are considered technically feasible, the P2 plan must document the anticipated cost savings. The net present value and timelines for implementing feasible P2 options must be outlined, along with the anticipated cost savings of both direct and indirect (and co-benefits) including:

• Total Savings
• Return on Investment (ROI) and Payback Period
• Replaces Equipment Scheduled for Repair/Replacement
• Energy Efficiencies
• Reductions in Byproducts
• Reduced Worker Exposure (including reductions in claims, comp time, PPE costs)

The increased complexity of these newer pollutant regulations and the sharing of regulatory requirements across North America do have benefits. Despite the variations among regulations, environmental professionals experienced with, or certified under, TURA and the New Jersey P2 Act can support firms in meeting Ontario’s 2011 TRA accounting, planning and reporting requirements. As the reach of these regulations expands, so does the professional expertise to stream-line and more efficiently meet the regulatory requirements as well as reap the benefits of P2 plans. In addition, while annual pollutant reporting and compound-specific P2 plans are required, implementing P2 measures remains voluntary. But with increasing public pressure for corporate social responsibility, together with the effort spent preparing compound-specific P2 plans, companies can make both social and environmental gains by greening their operations.

By Randal Meske

Managing Environmental, Health, and Safety (EHS) compliance is not for the faint of heart. It is for intelligent, responsible, dedicated people who mean business.

Mismanagement of EHS compliance, or even just a little bad luck, can not only put whole companies at risk, it can destroy our precious environment and endanger or even kill the very workers that make employers successful.

As far as work is concerned, most people have to worry about sustaining revenue, managing and preventing customer satisfaction issues and keeping their bosses and coworkers happy. It is a very select few, such as soldiers, surgeons, law enforcement personnel, and EHS compliance officers, who bear the stress of 24/7/365 responsibility for people’s health and safety and environmental sustainability.

EHS compliance officers are special people. They aren’t really appreciated when things are running smoothly, yet they have targets on their backs when issues arise.

Compliance is a team effort, so the complexity of their roles is exacerbated given the decentralized nature of managing their functions on a global scale. Although more and more companies are funding their EHS compliance practices more aggressively, it is still often the case that these dire responsibilities lay on the backs of far too few people.

Technical knowledge is required to do the job well, yet people skills are paramount to success in order to solicit cooperation from dispersed and diverse personnel in varied disciplines who may or may not report to the EHS compliance person in charge.

So, these people manage complex operations amidst high risk with limited resources and challenging interpersonal dynamics. They are asked to do the impossible.

In short, EHS compliance officers are super heroes.

One would think that this complex set of circumstances would cause these people to be serious and lacking in humor. The pressure they bear is real, and I wouldn’t blame them one bit for being a little less fun than the rest of us.

That is why I was quite surprised to read the article entitled “If You Think Accountants Are Hilarious, Try These Guys – Search for America’s Funniest Compliance Officer Is Tough; a Whoop for Dodd-Frank” in the Wall Street Journal. Not only do these hyper-responsible people have senses of humor, some of them actually participate in competitions to determine which of them is the funniest. Go figure!

Perhaps good humor is the elixir that helps them survive their tension-filled days. Maybe as a result, they are actually more funny than the rest of us.

Whether your EHS compliance leaders are funny or not is quite irrelevant. What matters is if they are effective despite the vast challenges they face.

These are special people with critical responsibilities. If you haven’t done so lately, the next time you see your EHS compliance person, give them a great big hug and thank them profusely for what they do (If that person in your organization isn’t a hugger, I’m sure a hand shake will do).

Do you know any stellar EHS compliance professionals? Do you have any humorous stories about EHS compliance professionals, experiences, or incidents? Please respond with your stories in the comments below.