CERES is a non-profit organization that advocates for sustainability leadership and tracks shareholder resolutions filed by their investor network participants. According to their website, 2014 was a record breaking year for the number of shareholder resolutions that were filed by companies, committing to activities that would increase their sustainability efforts, set sustainability standards for their suppliers, and even incorporate sustainability performance into their executive compensations.
This would have been unimaginable years ago when the environmental movement started as a grassroots effort which was often at odds with corporations. This has not happened in one big leap, but has been a very slow progression through the years – with grassroots efforts leading the charge; to regulators focusing on ensuring that corporations are compliant with environmental regulations; to corporations realizing the benefits of participating in the environmental stewardship movement.
Although there had been numerous efforts in the early 1900’s to protect the environment and reduce the depletion of animal life, the environmental movement started to gain traction as a result of the writings of various publications, such as Rachel Carson’s “Silent Spring” which highlighted the effects of pesticides and their effect on the environment. Around the same time, emerging technical research and the creation of Earth day in 1970 and Greenpeace in 1971 created more public awareness of the adverse effects that many industrial activities had on the environment.
As these grassroots voices grew stronger and louder, the Environmental Protection Agency (EPA) was established in 1970. The initial focus of the EPA was to regulate and make sure that companies were in compliance with regulations that they set forth. Compliance monitoring was established in a “siloed” approach, meaning that each department was focused on their own media, be it soil, water, wastewater discharge, hazardous materials, etc. This created conflicts with corporations, particularly the larger ones, because they were often required to submit duplicate (and a large amount) of information to various silos. This siloed approach has been changing and many of the regulatory agencies are looking at environmental information for each entity from a “holistic” standpoint which has created some reporting (and fines) relief for many companies that found it difficult to comply with the various requirements that they had to work under.
Today, the goal for most companies is to become stewards of the environment. In some circumstances regulators are allowing entities (such as healthcare facilities, for example) to self-report their environmental efforts. Because of enhanced public awareness among their clients and their own employees, more companies are understanding the benefits of being good environmental stewards, which create not only healthier, more productive work environments, but also often enhance their bottom lines.
These entities are implementing environmental management programs that are designed to incorporate sustainability measures and prevent or minimize the release of hazardous materials into the environment. Many of these entities have incorporated environmental insurance as part of their environmental management programs because it offers the resources to quickly respond to an environmental event, even if one occurs in spite of a companies’ best efforts.
For more information about environmental insurance programs and how they can help your company manage their environmental exposures, contact us.