Every business, big and small, pays into many types of insurance: you've probably got insurance on your buildings to protect it from natural disasters, insurance to cover workplace accidents, auto insurance for your transport vehicles... but do you have environmental insurance?
The idea of Environmental Insurance is a new concept, especially since there's no insurance policy out there that will pay out if you make an EHS mistake and fall out of compliance. What we really mean by Environmental Insurance is a system for Assured Compliance - a system that ensures your EHS compliance is being handled for you and you don't need to worry about financial risks associated with noncompliance or late reporting.
In short, you should think of implementing an Environmental Management System (EMS) as purchasing Environmental Insurance for your business. It's not just a tool for getting compliance tasks done, it's a way to mitigate risk, keep your executives (and shareholders happy), and put your EHS department's success on autopilot so that you don't need to put in extra work.
Think of it this way: everything you invest in building your EMS can be considered an investment in your peace of mind and protection from noncompliance penalties. And those are the primary benefits of any insurance program.
But there's an added benefit: an EMS actually makes your compliance work more efficient as well. An EMS is all about automating the EHS data management that you typically have to do manually. That includes collecting data from vendors, organizing it into your database, and crunching those numbers to get regulatory compliance reports and EHS Key Performance Indicators.Your work will become focused on continual improvements in the workplace and approving generated reports before they are submitted.
In general, automating with an EMS can cut manual data management by 80% - and that translates into a lot of hours focused on more meaningful work.
Need more proof? Here are three important reasons why it's worth your time to start thinking of an EMS as Environmental Insurance:
Change Your Perspective & Grow Your Benefits
For many businesses, EH&S obligations like reports or daily record keeping seem like a burden. But switching your thinking might just be the solution that changes things for the better. With an EMS system, these tasks aren't a burden and instead become part of your defense against EHS issues.
The most successful EHS departments in the manufacturing industry are those that see themselves as providing a form of insurance and protection from regulatory uncertainty rather than an obligation they fulfill for their regulators. Thinking of compliance management as Environmental Insurance rather than work you do for someone else (regulators, the government, etc.) puts the power and benefits back into your hands.
If you've been thinking of improving the way your run your EHS department, but need executive support, incorporate the idea of Environmental Insurance and Assured Compliance into your pitch. That way you'll focus more on the benefits to their bottom line and brand value rather than how much faster and easier your workload would be. Just as they pay into insurance plans to buy the protection they offer, they can buy into an EMS for the same type of protection and benefits.
And a great EMS acting as a form of environmental insurance (and assurance) will definitely make their business run better, leaner, and more cost-efficiently.
Follow the Money to Change Your Thinking
The language that gets spoken and understood across a business differs from department to department. But the only language that gets heard across an entire business is money.
As an EHS Expert you're already fluent in emission factors, permit conditions, and compliance reports, but thinking of your work in terms of Environmental Insurance allows you to translate your skills into a language that executives, accountants, and stakeholders understand: bottom-line value.
Getting their work and value understood by the entire business is one of the top struggles of EHS Managers like yourself, and that can be solved by reframing the corporate culture to think of your environmental management as another form of insurance.
- How much time and money does your company spend on insurance on something like automobiles?
- How much more does it spend on workplace safety insurance and medical?
- How much did your company pay in noncompliance fines or consultant fees last year?
- How do those numbers stack up against the amount you invest in EH&S and environmental compliance?
For most businesses without Environmental Management Software, those numbers are heavily unbalanced - with more money getting paid out in fines and consulting fees than directly invested into the EHS department. It's a bit like refusing to pay auto insurance and absorbing the cost of accidents.
Instead, an EMS can eliminate those noncompliance fines and consulting fees so that you can put that money saved back into your business. It just makes more financial sense.
Shareholder Peace of Mind: Priceless
Insurance is all about achieving peace of mind and not having to worry if something out of your control happens. An EMS gives you that same peace of mind, knowing that your data collection and reporting is largely taken care of for you. There won't be any surprises waiting for your EHS team, and any regulatory changes can be adapted to quickly.
More importantly, it will give your shareholders peace of mind that their investments are secure. Most people think that you can't put a price tag on peace of mind, but we say that you can definitely measure how much more confident your shareholders because of Assured Compliance in dollars.
A business with Assured Compliance is more valued and profitable than one without, and today's investors know that. Smart executives, too, like that it mitigates EHS risk to their bottom line.
If your business is looking to grow, either in its market share or investors, selling them the idea that an EMS is in reality a form of insurance could be exactly what they need to hear in order to have faith in your company or purchase your products.
And once they start to invest in environmental insurance, your executive team will be surprised at how much better they sleep knowing their compliance is taken care of properly.