Understanding 'In Accordance' Statements

Understanding 'In Accordance' Statements

Also this month:

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What is meant by an "In Accordance" statement and what is required to be able to submit one?

Steve:
An "In Accordance" statement is the means by which a company increases the credibility of its Global Reporting Initiative (GRI) report. It's sort of an affirmation (and self-certification) that someone of a significant level has put his or her name on it, thereby authenticating the content and accuracy of the report. Organizations that wish to identify their reports as prepared 'in accordance' with the 2002 GRI Guidelines must:
  1. Report on the numbered elements in Part C, Sections 1 to 3
  2. Include a GRI Context Index as specified in Part C, Section 4
  3. Respond to each core indicator in Part C, Section 5 by either a) reporting on the indicator or b) explaining the reasons for the omission of each indicator
  4. Ensure that the report is consistent with the principles in Part B of the Guidelines
  5. Include the following statement signed by the board or the CEO: “This report has been prepared in accordance with the 2002 GRI Guidelines. It represents a balanced and reasonable presentation of our organisation’s economic, environmental and social performance.”
Of course, there is no requirement that your GRI report has to have the statement, but GRI reports with signed 'In Accordance’ statements have much higher credibility than GRI reports that do not. If you’ve spent all the time, resources and cost to prepare one, why release one that has weak (if any) credibility?

It’s important to note that Condition 3b states that not all elements required by a GRI report must be in place and reported on to be able to produce an ‘In Accordance’ report. As a recent clarification points out, there are certain acceptable (and unacceptable) reasons for such non-reporting, and they must be clearly stated. The clarification document provides examples.

That clarification also specifies a) that the specific wording “balanced and reasonable” must be used in the “In Accordance” statement despite that phrase’s lack of specificity and b) that the “In Accordance” statement must be placed immediately above the board or CEO’s signature, whether as a part of the CEO statement or elsewhere.

PS: We presume that it’s acceptable to spell “organization” organization and still meet Condition #5.


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How can we benchmark our niche business unit’s environmental performance metrics with the other units in our company that have totally different process and emission/release dynamics?

Steve:
That’s an interesting twist to a rather common question on how to conduct benchmarking. The short answer is, “you can’t” -- it’s an incomparable situation, e.g. “apples and oranges.” Thus, you will need to seek out comparable peer companies and business units, and benchmark measures and performance with them. Then, set your goals, monitor your performance, and revisit your measures/goals to ensure their appropriateness (e.g. PDCA). If performance measures are significantly out of line with your company’s other business units (positively or negatively), insert footnotes explaining why.

In speaking with the reader, the business is highly competitive and their peer businesses are either small, regional independent firms or specialty units within larger, integrated companies. Therefore, while many benchmarking efforts are conducted by telephone or email surveys, those methods don’t seem appropriate as they’re unlikely to provide useful, accurate data in this situation.

There are two other approaches:
  1. If the issue is sensitive and you don't want the other companies to know about the effort, then it’s truly “competitive intelligence” and would have to be done by reviewing each site's public environmental files -- either comparable stand-alone facilities (integrated or independent) or portions within larger facilities. Difficult, relatively expensive, and maybe not precise, but doable.

  2. If the issue isn't sensitive and other companies might even want to participate, then it’s more akin to benchmarking. The best and most accurate way to do this is to convene a 1-day benchmarking event (facilitated by an independent, third-party at a ‘neutral’ site) with invitees that would share a common purpose, known in advance so that they could prepare and bring their contributions to the table and be participants, not merely “takers.” It would be important to a) have an antitrust statement/notice distributed ahead of time and repeated at the beginning of the meeting and b) present/discuss normalized data, but with a few key associated parameters to help put the results into perspective. Results would be provided as “company A,” “company B,” etc., with only each company knowing their respective company’s designation.
The second technique has the clear advantages of more meaningful data and quicker results at less cost (particularly if all participants share in both the results and the costs) -- unless secrecy is tantamount.

A question back to our readers -- Do any of you have suggestions on how to handle the situation where the submitter’s company lawyers, due to the nature of the specific marketplace and companies involved, are expected to be reluctant to engage in peer-to-peer benchmarking discussions, despite an antitrust statement? Let us know! Readers’ helpful suggestions will be listed in next month’s column!




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Has the rapid rise in oil prices increased market opportunities for alternate energy sources such as wind, solar or geothermal energy?

Steve:
A full response would take at least a very long article, and perhaps a book (or two). Not having the luxury of that time or space, here’s my 30-second assessment from where I sit. I see some improvement in wind energy technology and systems, which were nearly competitive in cost anyway, and more interest in an expanding and more timely market for hybrid-powered vehicles, but little beyond that.

My personal experience suggests at least two reasons for this assessment:
  1. The energy industry, particularly coal and oil, got burned pretty badly in the late 1970s when I was working on the environmental issues with shale oil, tar sands and coal gasification. Oil at $20 a barrel and heading toward $30 was projected to reach $50 even back then. $50 oil was the approximate break-even point for many of those projects and technologies. Today, that might be closer to $100. Until there is a sustained period of high, e.g. close to $100/barrel, oil prices, I’d be surprised to see much of a significant rise in investment in those or any other types of alternate non-oil based energy technologies.

  2. The fact that oil prices keep fluctuating seems, to me, to confirm that much of the recent turmoil is due to market speculation more than technical supply and demand considerations. There is plenty of oil available -- its just that a) much of it is sour (high sulfur) and still selling for much less than the more desirable sweet (low sulfur) oil used to make gasoline and b) a lot of the ‘spare’ production capability has now been put into service, leaving little room to accommodate minor supply disruptions.
One firm, Arizona Clean Energy, LLC, has announced plans to build the first ‘grass roots’ refinery, outside Yuma, Arizona, using low cost, sour Mayan crude oil. While I’ve not yet heard what they plan to do with the mountain of extracted sulfur they’ll pull out of the oil, I bet that a host of industrial hygiene monitoring companies are lining up waiting to see if the firm gets the investor funding they’re seeking!

Presuming that those much closer to the issue can see it even more clearly than I can, one can understand their predicament of risking a huge long-term investment only to see prices plunge to $30 or less near term, wiping out the economic driver for their innovation and investment, just like in the late 1970s. Crude realities, as they say.

Other viewpoints are expressed in two new books, The End of Oil: On the Edge of a Perilous New World, by Paul Roberts and Out of Gas -- The End of the Age of Oil, by David Goodstein.


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As an independent, contract management systems auditor, am I prevented from providing other EHS consulting services to companies and sites for whom I conduct RCMS or RC14001 audits through an Audit Service Provider (ASP)?

Steve:
Contrary to popular belief, Specification RC204.03, requirement 4.1.4, does not prevent ASPs from providing consulting or training services, only that such services must be independent and that the ASP shall a) ensure no clients are given the impression that use of those services would bring advantages to the client, b) say nothing to suggest audits would be simpler, easier or less expensive, and c) not market such services together with the audit. From a practical standpoint, ASPs avoid any potential problems by simply not providing management system consulting or training services.

There are no such requirements in RC205.03, Auditor Qualifications. BEAC’s certification (and I presume RABQSA) incorporates the organization’s Performance Practice on independence (I.B.2.E) that requires “persons… should not be assigned to those audit activities they previously performed until a reasonable period of time has elapsed.” You should be okay so long as you, as an independent auditor, draw the line at auditing those companies or sites to whom you have provided RCMS or management system consulting/training. Be aware, though, that individual ASPs may have their own, much stricter requirements.

To restrict yourself from providing any consulting services to companies for which you conduct Responsible Care audits could severely limit your future business opportunities, especially if you primarily focus on providing service to the chemical industry.


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Postscripts: The Death of Environmentalism? Much has been written both pro and con about the essay, “The Death of Environmentalism” by Michael Shellenberger and Ted Nordhaus, wherein the authors opine that environmental activism in the U.S. (and the organizations that spearhead that activism) is not equipped to handle today’s more complex, global environmental issues, lacks an expansive, value-based vision and other reasons. The authors then go on to offer their ideas for a solution. Joel Makower’s blog provides a good summary and his thoughts on the matter.

In the months since the essay’s publication, I’ve been reading various commentaries, blogs and op-ed pieces about it so as to develop my own thoughts. Overall, I think that the authors have it right, but not for the reasons most others except Joel have offered.

First, the essay dares to say 1) “It’s not working as well as it did, or can.” 2) “Here’s the evidence we offer to support that opinion.” and 3) “Here’s our concept of a solution.” It’s one of the first major (or at least well publicized) treatises that calls for challenging the norm through the balanced discussion and global-oriented participation that the March “Postscripts’” and our other commentaries have called for in the past.

Second, it dares to open honest dialogue about the main underlying issue -- that times and issues have changed. They’ve become more complex by becoming less local and episodic (e.g. think Kanawha Valley, Love Canal, Chemical Control, etc.) and more global and chronic (e.g. think ozone layer, water availability, climate change, etc.). They’ve also become less personal and immediate, e.g. transformed from ‘that’s affecting me now’ to ‘that could affect someone like me, somewhere, sometime in the future’. Therefore, just like any government, business, product or advertising campaign, the approaches and tactics used in the past are no longer effective.

While we can’t say for sure that environmentalism is dead, its current methodology has aged and is in need of at least an extreme makeover if not a total reinvention.


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Steve Rice is president of Environmental Opportunities, Inc., a strategic EH&S management and project support services company in Florham Park, New Jersey. He has 30 years of executive EH&S leadership experience, including 25 years with both Exxon and BASF, and is an ACC-authorized Responsible Care Management Systems (RCMS) auditor.

Copyright 2005, Environmental Opportunities, Inc.