What is a business environmental audit?
A business environmental audit is an assessment of how your company affects the environment and the measures you are taking to mitigate its impact. Depending on the scope of your planned audit, this may include evaluating areas such as energy consumption, waste management, carbon emissions and water use, among others. Compliance with existing environmental regulations is typically also a key focus of most audits. When conducted effectively, the process can help you to identify areas of non-compliance, inefficiencies and potential opportunities for improvement. Assessing what your business is doing well can increase motivation among your employees and even boost your company’s reputation, if you choose to share your achievements publicly.
Why are environmental audits important?
Conducting a business environmental audit can offer significant benefits to your company. These may include:
- Helps you verify compliance with the Environment Act 2021 reducing the risk of penalties or reputational damage. It can also help you see how well you align with national targets, like the commitment to achieving net zero by 2050.
- Shows you where more training or communication with your employees on environmental issues is required.
- Highlights existing inefficiencies, particularly regarding energy use, which can assist you with reducing costs over time.
- Helps you identify new risks to the environment in your business practices. This may be especially important if your business has recently expanded or undergone significant changes.
- Can improve risk management by spotting potential risks like hazardous waste mishandling or employee exposure to pollutants or other harmful substances.
- May improve your corporate image among environmentally conscious consumers or potential employees and even give you an advantage over your competitors.
Related: Compliance training for employees: objectives and strategies
How to conduct a business environmental audit
The type of environmental audit you could conduct depends on your objectives. One of the most comprehensive types is the Environmental Management System (EMS) audit. An EMS encapsulates the policies and processes your company uses to manage its environmental impact and the ways in which you drive continuous improvement. To conduct a thorough EMS audit, consider the following steps:
- Plan and set objectives: Begin by defining the scope of your audit and highlighting the outcomes you aim to achieve. You can also use this time to put together an audit team of employees from across the business to bring a diverse range of opinions and ideas to the project.
- Conduct research: The research phase typically involves preparing checklists and collecting relevant data and key documents that can provide insights into areas like energy and water usage, waste management, emissions and your supply chain practices. This may include utility bills, equipment logs, records of regulatory compliance and more.
- Assess compliance and evaluate performance: Focus on two main areas: regulatory compliance and performance metrics. Assess how well your company adheres to environmental regulations and evaluate performance in areas like carbon footprint, energy efficiency, and waste management.
- Highlight areas for improvement and create an action plan: This involves flagging any instances of non-compliance, identifying where efficiency and sustainability can be improved and exploring opportunities for future growth. Once you have defined your areas for improvement, consider the changes to be implemented and how they will be executed. Involving employees from relevant departments at this stage can assist with your action plan and offer fresh perspectives.
Preparing an environmental audit report
After completing your audit, it is a good idea to compile your findings and action plan into a report that can be shared with your entire workforce, partners and other relevant parties such as your suppliers or logistics personnel in your supply chain. You may even decide to share your audit report with your customers or trusted media partners to demonstrate your commitment to environmental transparency. Your report can be as summarised or detailed as you feel necessary. For example, you might prepare a detailed version for employees or partners and a concise summary of your findings for customers. A typical environmental audit report may include the following:
- A summary of your key findings: A concise overview of your main conclusions, placed at the top of the report for quick reference
- Methodology: Details about the scope of your audit, the data you used and how you collected and analysed it
- Detailed findings: In-depth information on existing compliance issues, inefficiencies and a breakdown of your environmental KPIs
- Recommendations: Suggestions for addressing compliance issues, improving efficiency and exploring opportunities for growth or innovation
- Action plan: A clear outline of the steps to be taken, including timelines, goals, team members, budget and your expected outcomes
Tips and best practices
Below are a few ideas to keep in mind when preparing for and conducting your business environmental audit.
- Focus on identifying and addressing any non-compliance issues, as managing these risks is often the primary reason for conducting an audit.
- Aim to involve a diverse selection of employees from various departments and skill levels to bring different perspectives to the audit process.
- Consider utilising relevant software to assist your audit process and help you collect data more efficiently.
- Consider bringing in an external consultant, such as an environmental expert in a specific area to provide specialised insights on areas like carbon emissions or waste management.
- Keep in mind that the objective of an audit is to identify problems and brainstorm solutions rather than to assign blame.
- When addressing issues of non-compliance, it is important to make changes designed to prevent the problem from reoccurring.
- Schedule future dates to follow up on your action plan or changes you proposed during the audit.
Related: Compliance and risk management: how they differ
Conducting a business environmental audit can help you review compliance with environmental regulations, reduce costs, identify inefficiencies, suggest changes, innovate and align with the UK’s sustainability goals. When performed well, it can help reduce your environmental impact and build greater trust between your company and its employees, partners and customers.
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