Helping Industry and the Environment Prosper

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Helping Industry and the Environment Prosper
Pollution Prevention Saves Money By
Reducing Operational Risk
Robert B. Pojasek, Ph.D.
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Pollution Prevention

• The Pollution Prevention Act defines "source
  reduction" to mean any practice which
• reduces the amount of any hazardous substance,
  pollutant, or contaminant entering any waste
  stream or otherwise released into the environment
  (including fugitive emissions) prior to
  recycling, treatment, or disposal
• reduced the hazards to public health and the
  environment associated with the release of such
  substances, pollutants, or contaminants
• The term includes equipment or technology
  modifications, process or procedure
  modifications, reformulation or redesign of
  products, substitution of raw materials, and
  improvements in housekeeping, maintenance,
  training, or inventory control.

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Making the Business Case

• How does a business make the financial case for
  P2?
• Using the general ledger
• Activity-based costing
• Real options more intangible items
• Operational risk management

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EMFACT Software

• Energy and Materials Flow and Cost Tracker
• Used within companies for systematically tracking
  materials and energy use, releases, discharges
  and wastes along with associated costs
• Seeking ways that can create value for company
• Resource use and its relation to production and
  planning that can help improve both business and
  environmental performance

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Show Me the Money Principle

• Many companies maintain an interest in a green
  program
• However, investing in lower risk is important to
  sustain the management interest and grow your
  brand strength
• Look at your entire value chain suppliers can
  often provide great ideas for P2 projects
• Maintain a high level of employee involvement in
  these programs facilitation v dictation!

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Types of Risk

• Financial Market Risk
• Interest rates, currency, commodities, equities
• Socially Responsible Investment
• Business Risk
• Operational Risk

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Business Risk

• Business Continuity or disruption
• Competition
• Public Image
• Liquidity Risk
• Disruptive Innovation
• High costs
• MA
• Unrealized or lost revenue
• Inappropriate management policy and or decision
  making process

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Operational Risk

• The risk resulting from uncertainties related to
  internal processes, people and systems, or from
  external events

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Framework for the Analysis of Risk
The culture, processes and structures that are
directed towards realising potential
opportunities whilst managing adverse
effects ISO 36000

• Risk Management
• Develop options for controlling risks
• Select appropriate strategy

• Risk Assessment
• Identify hazard and determine levels of exposure
• 2. Estimate risk

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Managing the Risks

• Use proven tools and methods
• Integrate risk management into the approach
• Integrate the methods
• Drive into the core business
• Make the program part of what every employee does
  every day
• Make the program part of every management
  decision

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ISO 31000 Risk Management
ISO/TMB WG on Risk management N 047Date
2007-06-15ISO CD 31000Risk management
Guidelines on principles and implementation of
risk management Can integrate with ISO 14001
Environmental Management System
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Risk Appetite

• Risk Appetite
• .at the organizational level, is the amount of
  risk exposure, or potential adverse impact from
  an event, that the organization is willing to
  accept.
• http//www.continuitycentral.com/feature0170.htm
• What is the Risk Appetite of your organization?

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Risk Management Process
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Risk Register
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Probability/Impact Matrix
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Risk Map
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Risk Response Plan
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Risk Management
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Organization Risk Management Program
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Preventive Action Items

• Preventive action 1
• Develop Documented Risk Appetite Statement
• Include Reference to P2 Program
• Train all staff to develop preventive approach to
  risk
• Preventive Action 2
• New Management Review Element RM
• Changes that could Affect the EMS
• Ongoing Preventive Actions 3 - 8
• Assess Risk Source Reduction with Appropriate
  Controls (P2)

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Risk Management and

• Risk Identification methods include
• Scenario Analysis
• Stress Testing
• Real Options
• Risk Analysis/Evaluation
• If possible, assign a value for expected impact
  (such as profit reduction, revenue loss etc) of
  each risk event/scenario
• Conduct Sensitivity Analysis
• See the impact of these risks on financial
  strategy of the company

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Take Away Points

• Top management understands risk
• All employees and stakeholders understand risk
• Risk can be expressed in financial terms
• P2 opportunities are designed to avoid risk
  positive risk
• EMS Policy includes a commitment to P2
• EMS has a requirement for preventive actions
• Risk has a management system ISO 31000
• Integrating your EMS with ISO 31001 can set the
  stage for an enhanced P2 program that is part of
  the way the organization is operated day-in and
  day-out!

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Robert B. (Bob) Pojasek, Ph.D. 508-970-0033 Ext.
137 rpojasek_at_capaccio.com www.capaccio.com www.iso
14000.com