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Establishing an Environmental Policy - Benefits all round

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.

What is an environmental policy?

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.

Why should businesses have an environmental policy?

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.

What should an environmental policy include?

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 Absolutes

The following is a rundown of the essentials to incorporate into an environmental policy:

  • Provide a clear outline of the environmental challenges you want to tackle relating to your company;
  • Make it absolutely clear what your objectives are;
  • Give a summary of the work you are doing to meet the challenges you have set for the company to tackle
  • It is good practice to have a strong focus on how you will accomplish your goals;
  • Set out clear performance indicators demonstrating your commitment to continual improvement, stating how you intend to monitor, evaluate and manage how the company will meet its environmental objectives;
  • State the scope of your policy, for example does your policy apply to employees only, or does it apply to suppliers, partners, contractors, and visitors too?;
  • State your plans to encourage employees and suppliers in meeting environmental goals
  • What can the business do, for example, to help them meet their responsibilities?;
  • Communicate your commitment to continual improvement
  • For example, if you have one grand target, such as reducing emissions by a percentage, show your continual progress towards this goal.

Further Considerations

The list above covers the essentials but there are additional considerations that could be included in a policy:

  • Set a Net-Zero target:
  • Many companies have moved from measuring and managing their carbon emissions to committing to Net Zero by a specific date. This can help galvanise an array of objectives under one overall target for a company.
  • Designate an Environmental Management System and get certified:
  • Certification like ISO 14001 helps a business develop a management framework capable of ensuring the continuous improvements it will be aiming for.
  • Look for ways to bring environmental considerations into all business decisions, recognising that decisions made could have a knock-on effect on environmental targets.
  • One of the key ways to ensure an environmental policy is implemented, is to bring it into employee training, especially with new-starts, thereby establishing a culture in a business where sustainable considerations are at the forefront.

Using the environmental 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.

Short-term target suggestions:

  • Business travel initiatives – introduce a culture that promotes eco-friendly means of travel. The business could offer financial incentives to colleagues who switch to or opt for a green mode of travel.
  • Energy absorption – small measures such as installing energy efficient light bulbs or motion sensor lights, setting devices to sleep mode after a period of inactivity and encouraging employees to be more environmentally conscious about the way they use energy can, when collectively implemented, have a big impact.
  • Paperless initiatives.
  • Responsible waste disposal.
  • In-house management: compostable cups, coffee, food etc.
  • Consideration could be given to partnering with an NGO that is campaigning or promoting environment initiatives for example The United Nations (focusing on fighting climate change), WWF (a well-established and known champion for the environment) or Tearfund (campaigning for the UK Government to make best use of the remainder of its COP presidency, which runs until November 2022).

Get a free template to help kick start your business environmental policy.


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