Companies Plan to Manage EHS Needs with Outsourcing

Companies Plan to Manage EHS Needs with Outsourcing

Environmental compliance is the most pressing environmental, health and safety (EHS) challenge companies face in the near future, according to a recent survey of managers, executives, and specialists in corporate environmental health and safety positions. Seventy-four percent of all respondents listed environmental compliance as an EHS challenge to address in the next 1 to 3 years, followed by safety auditing (71%) and safety compliance (69%).  Considering the suite of current and upcoming air quality and waste regulations that affect the corporate EHS industry paired with increased water quality concerns throughout the U.S., it’s not surprising that environmental compliance is the most pressing issue.

As EHS programs become more costly and time-consuming due to new requirements, staff turnover, or a particularly time-intensive project, sub-contracting these services has grown in popularity, across all industries. Currently, the vast majority (85%) of respondents outsource some, i.e., less than 50 percent, of their EHS services and only a small group is addressing all their services completely in-house (6%).

Looking forward, one-third (29%) of respondents are actively looking for alternatives for addressing their EHS challenges, and 14 percent are assessing their current approaches due to increased concern.

As these challenges continue to grow, companies are increasing their EHS budgets to ensure appropriate resources are applied to these programs.  According to Verdantix’s global survey of EHS professionals, among all significant industry sectors, 34 percent of U.S. respondents expect budgets to increase by 5 percent or more over the next year.

Environmental compliance the most pressing challenge

Over the last several years, there has been an increased focus on environmental legislation and enforcement – from stricter air emissions requirements to new chemical management practices under the revamped Toxic Substances Control Act (TSCA).  In 2015 alone, the EPA conducted 15,400 inspections and evaluations, resulting in $404 million in combined federal administrative, civil judicial penalties, and criminal fines. In February, the U.S. Environmental Protection Agency (EPA) announced its seven National Enforcement Initiatives for fiscal years 2017-2019. Two new initiatives focus on the industrial and chemical industries, highlighting the EPA’s intentions to increase risk management procedures and water quality compliance.

Within the last year alone the EPA has proposed or finalized rules that will impact a number of industries and their compliance efforts, including oil & gas facilities, power plants, refineries and chemical plants, and healthcare facilities. With the ever changing regulatory landscape, it is both critical and time-consuming to keep facilities and employees up to date on the current EHS compliance needs and policies.  Companies need to employ measures to avoid regulatory fines and costs associated with incidents and, at the same time, they can save money by implementing conservation and disposal efforts. 

Methods to address EHS issues vary by company size

The decision to tackle EHS services in-house or through outside help depends upon a company’s resources, which is driven by their size.  Currently, more small firms (revenues less than $100 million) handle all their EHS issues in-house (12.5%), as opposed to only 5 percent of large firms (revenues greater than $1 billion) tackling these issues in-house.  No medium-sized firms (revenues between $100 and $500 million) reported addressing all their EHS issues in-house. Future plans for utilizing an on-call EHS vendor also differ by company size. The percentage of firms expecting to do so is higher as firm size grows, indicating that the need for outsourcing some of these services is more prevalent for larger businesses.  

The benefits of on-call EHS services

Moving forward, the majority (55%) of companies plan to have an on-call EHS vendor for when the need arises.  Notably, 100 percent of C-Suite respondents plan to have an on-call vendor, highlighting the increased importance of EHS compliance at the executive level. Outsourcing these programs as on-call services can provide more compliance assurance with all local, state, and federal regulations. An on-call EHS vendor will always be up to date on regulatory changes, enabling them to anticipate compliance issues before they occur and keep companies on track.  From routine site visits to providing 24/7 emergency advising services, having an on-call EHS vendor can be a reliable and cost-effective alternative or addition to an in-house program. 

Check out our past post on what to take into consideration when evaluating EHS providers and click the button below to reach out to me personally for a conversation about your EHS needs.

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Environment & Remediation

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