It can be overwhelming to know where to start when considering the implementation of an environmental policy. So we’ve laid out the fundamentals involved in creating a strong environmental policy and the reasons why it’s not just an ethically sound decision, but a profitable one as well.
An environmental policy is simply a demonstration of a business’s commitment to managing, and where possible, reducing its environmental impact. Businesses adopt an environmental policy to show their understanding of the environmental challenges present in the world today; it allows them to illustrate the goals they’ve set to help reduce the negative environmental impact of their specific business and to show how they intend to monitor progress towards achieving these goals.
While there is currently no legal requirement for a business to set out an environmental policy, it is a useful tool in demonstrating its intent to comply with environmental legislation which may affect the business (The Environment Act 2021). Compliance is important both legally and ethically; ensuring the business is up to date with the current legislative framework in place, which requires businesses to be diligent and proactive to meet those requirements.
Not only is an environmental policy forward-looking in terms of environmental conscientiousness, but it can also be a cost-efficient way to manage a business. Consumers expect more from modern businesses and want to see environmental awareness met with action – such as initiatives set in place to safeguard against detrimental impact. Various household names such as Nike, H&M, IKEA, Walmart and Nestlé are setting trends and marking the well-established principle that businesses, if they want to remain viable, need to challenge themselves to reduce their negative environmental impact.
Startups and SMEs, in particular, should keep in mind that customers are seeking out sustainable products and businesses and the sooner these initiatives are invested in, the more they will be able to grow. These types of polices could well incentivise partnerships, custom and collaboration within companies which would only serve to increase the valuation and profitability of a business venture whilst giving a competitive edge (ESG programs will generate increased shareholder value according to over 83% of investment professionals surveyed in a recent McKinsey Global Survey).
An environmental policy should shape part of the business strategy which can be done by establishing an environmental management system to aid effective implementation of an environmental policy; but going further and gaining external certification can help demonstrate to customers, investors, regulators and other stakeholders that the environmental claims made in the policy are credible, reliable and have been independently checked. One example of this is that many customers now require suppliers to have strong green credentials in order to become part of their supply chain, more so, an environmental policy, especially one stamped with ISO 14001 certification, can allow for pre-qualification for certain contracts where environmental impact is a real concern.
An environmental policy is a business’ statement of commitment to reduce its negative environmental impact. Each environmental policy will be tailored to the issues particular to the business in question. Companies must consider the core ways they want to commit their business to the goal of reducing their environmental impact. It is essential to communicate this concisely so that anyone reading the policy can understand the challenges being tackled, how they’re being tackled, and how successful it is.
Clearly communicating targets and then publicising how they are being met demonstrates the transparency and accountability necessary to keep a company on track with its environmental ambitions.
The following is a rundown of the essentials to incorporate into an environmental policy:
The list above covers the essentials but there are additional considerations that could be included in a policy:
Environmental policies should see continued engagement – rather than being a set of statements that are rarely acknowledged. For targets to be met, regular review sessions should be held assessing performance indicators and then updating the policy where needed. These should include staff from a variety of departments, allowing all staff to genuinely feel like they play a positive part of the sustainability journey.