Types and Costs of Environmental Audits

We have already encountered environmental audit as part of an Environmental management system. We saw how the audit is used to assess how well the EMS is conforming to the programme and how effective the EMS is in fulfilling the organization’s environmental policy.

In order for an organization to effectively manage or control it’s environment, it has to be able to assess whether the systems already in place are effective.

In order to do this, the aim is to compare the prevailing conditions with baseline conditions or with set criteria. As we have already seen audits can be internal, external or third party audits. Environmental audits were adapted from Accounting Audits and usually lead to the identification of risks or of cost saving activities.

Environmental Audit has been defined by the International Chamber of Commerce as A management tool comprising a systematic documented and periodic and objective evaluation of how well environmental organization, management and equipment are performing with aim of helping to safeguard the environment by:

Facilitating management control of environment practices

Assessing compliance with company policies, which would include meeting regulatory requirements

This definition means that audits can be used to

Verify compliance with environmental requirements

Evaluate the effectiveness of EMSs already in place

Assess risk from regulated or unregulated materials and practices

EMS management standards such as the ISO have definitions which refer specifically to the EMS thus the Environmental audit has been defined by ISO as a systematic, independent and documented process for obtaining audit evidence and evaluating its objectivity to determine the extent to which the EMS audit criteria set up by the organization are fulfilled.

Environmental auditing involves a series of activities set up by management to evaluate the environmental performance of organizations. Legislative compliance checks as well as an assessment of all aspects of the organization that may impact the environment are carried out.

Environmental audit is a vital management tool that works as part of a process of continuous improvement. Audit was first used in the context of the environment in the U.S.A and developed from the audit procedure used for financial reporting.

Types of Environmental Audits

EAs are divided into three broad classes based on how specific is to a particular task, issue or activity. This is to suit needs of different organizations as a result of the aspect those organizations would want to consider.

Liability Audits:Used to identify anything that may result in Liability include:

Compliance audits- checks extent to which present and future regulations are complied with

Environmental risk audits-to identify potential environmental risks as a result of processes and procedures

Due diligence audits-liability audit carried out before purchase of new plants or equipments

The frequency of Liability Audit is put at 3months Frequency, Compliance audits done Quarterly by In-house Auditors; Biannually by External Auditors

Managerial environment audits: focus on certain aspects of management

EMS audits

Policy audits

Corporate audits

Activity audits: specific areas or activities audited and includes technical and management issues associated with area/ activity such as product audits, waste audits, energy audits.

Read Also : Strategic Environmental Assessment

Costs of Environmental Audits

These costs may be direct costs or hidden costs:

Direct costs

Opportunity cost of management and staff time

Cost of training internal auditors

Cots of external auditors or verifiers

Disruption during audit

Cost of preparation and publishing of audit

Hidden costs

Costs of acting on the audit findings to correct breaches or irregularities.

Benefits of EA

Legal compliance: avoiding the cost of non-compliance such as remediation and fines

Reduced risk exposure, lower insurance premiums. Assured legal compliance, cheaper finance

Stakeholder appeasement: Stakeholders are well informed and companies benefit from good will

Improved community relations, improved media coverage, increased staff commitment

Environmental efficiency: leading to reduced waste and reduced operating costs

Improved materials efficiency, improved product quality

The Process of EAs

The Audit process consists of three phases

Audit Preparation-Planning and preparation

Facility visit -Audit proper

Assessment and report – Reporting and follow up

Each process is reviewed in the figure below.

n audit report should have the following features:

Important Elements of an Audit Report

Accuracy (findings of fact must be validated and must be free from errors)

Clarity (avoid jargons and technical terminologies)

Conciseness (brevity and straight to the point)

Timeliness (a draft should be prepared within a week of the audit being completed and the final report ready within 4-5 weeks of the closing meeting)

Tone (report should be written in simple English without embellishments

An audit report should contain the following information

Contents list

Executive summary

Purpose & Scope of the audit

Discussion & analysis of the findings

Reference to items for corrective action

A list of actions & recommendations

The distribution list

Records of the audit programme

List of participants

Ideally, a quality environmental audit report should not be more than 25 pages

In conclusion, although environmental audits evolved from Accounting, they have now become essential to all environmental programmes and projects.

Environmental audit is a management tool comprising a systematic documented and periodic and objective evaluation of how well environmental organization, management and equipment are performing.

Read Also : Top Wastewater Management Companies in the World

EAs are divided into three broad classes Liability Audits, Managerial environment audits and Activity Audits. Costs of Environmental Audits may be direct costs or hidden costs.

The Audit process consists of three phases: Audit Preparation – Planning and preparation, Facility visit – Audit proper and Assessment and report – Reporting and follow up.