Examples abound of the efforts of small groups of EH&S leaders who reject conventional wisdom while saving tens of millions of taxpayer or corporate dollars. One such example deserves a spot in the cost-saving, good-for-the-environment, great-for-the-reputation hall of fame.
At about the time of the adoption of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, ARCO purchased a mining company that had a 100-year history of extracting copper, lead and other heavy metals. Millions of tons of mining waste had been deposited over hundreds of acres of barren land in Montana. With the demise of copper mining in the West and the accession of environmental concern, ARCO was faced with the obligation to remediate the environmental scars of the company that it had purchased. And government, at all levels, insisted the waste be removed from its location and placed elsewhere. To satisfy the demands of government and the people of the area would have required hundreds of millions of dollars.
Against overwhelming odds and with minimal involvement from management, a small group of EH&S experts developed a plan to avoid the requirement to move millions of tons of waste and to bring value to a small town by constructing a world class golf course over the mining waste.
Initially, EPA and local governments opposed the concept, fearing that the scheme would consist of no more than placing a couple of inches of topsoil and grass over the waste. The EH&S staff hired its own PR representative, employed Jack Nicklaus and some of the best environmental engineers in the state, and developed a plan to cap the waste and ensure that there would be zero water run off from the golf course. They placed models of the course in local libraries and shopping areas and held town meetings on a regular basis.
Four years and about $20 million later, the Old Works Golf Course opened, with the blessing of government at all levels and of the people of the area. Every golf magazine in the US ran feature articles on the course as Jack Nicklaus led the first foursome around the 7,600-yard, world-class facility. None of the planning and strategic thinking for the Old Works Course came from management. It was aware of the options being considered and approved the budgets.
But the creative thinking and the implementation rested totally with the EH&S staff and, to crown their achievement, they recommended to management and obtained their approval to give the course to the people of the area.
While the cost savings cannot be calculated exactly, as a site for disposition of the waste was never found, it was generally estimated that the staff saved at least 15 million shareholder dollars, and this did not attempt to include the value of the goodwill that was created. And, to this day, that good will inures to the benefit of the same staff that is presently engaged in the remediation of other sites in the area.
Corporations can learn from this experience. First, management must challenge its EH&S staff to be a profit center, with profits measured by losses avoided, lives saved, environment protected, and dividends paid. The EH&S staff must understand that it is not limited by obvious solutions and that its responsibilities reach well beyond compliance with law and regulations.
And finally, management must develop a policy that rewards employees in every segment of the company. Such rewards can be monetary, but equally rewarding will be the recognition of the importance of the function and its accomplishments. In the ARCO example, the Board of Directors flew to the site during the final stages of the construction of the course to honor the staff. Unfortunately, as they toured the course, they were soaked by a malfunctioning sprinkler system. But that’s another story.
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By Kenneth R. Dickerson, a senior associate of the AHC Group. For 10 years prior to his retirement in 1998, he was senior vice president of external affairs at Atlantic Richfield Company. Copyright 2001 the AHC Group, publisher of Corporate Strategy Today, a GreenBiz News Affiliate. This piece first ran in CST No. 2, June, 2001.