Risking EHS non-compliance may have you paying a heavy price

There’s a price to be paid by organizations that don’t comply with Environmental, Health and Safety (EHS) laws and regulations. The big question is: how much?

It’s not just the obvious things like fines and financial penalties imposed by regulators. That’s the easier-to-calculate cost. There are the indirect cost implications, such as loss of production or loss of share price. And the non-quantifiable costs, such as damage to brand reputation.

But, how much does compliance with EHS laws and regulations specifically cost your organization annually and globally? For most companies who pro-actively manage EHS, an answer is likely readily available since there is often a defined budget and the costs element is quantifiable.

But what does the cost of compliance actually mean for your business and how can it be measured? And, is your organization confident that it is as compliant as possible?

A report, authored by Tjeerd Hendel-Blackford, head of thought leadership for global EHS consultants Enhesa, highlights results of a benchmarking survey of EHS executives in 2017, provides an analysis of what these results mean, and looks to answer these previous questions. Titled: The Regulatory (Costs) Challenge for Global Multinationals, Enhesa research shows:

  • 74 percent of those surveyed said they had an enforcement action in the last five years (more than half of which were in 2016 or 2017)
  • Two-thirds of the respondents had regulatory fines up to $100k resulting from their recent non-compliance. An additional 10 percent experienced fines in the range of $100k to $500k.

Of course, these numbers represent only the instances where the companies have been found to be non-compliant. The cost would likely rise exponentially if all internally identified non-compliances were discovered by the enforcing authorities. Taking this one step further, there are the non-compliances that haven’t been identified internally, due to an organization’s lack of knowledge about the law or lack of a program for discovering them.

Clearly what you don’t know can hurt you, in the form of penalties or injuries.

The Enhesa report provides insight into:

  • The definable and less-definable costs of non-compliance,
  • Other consequences of non-compliance,
  • The cost of compliance, and,
  • A comparison of costs of compliance vs. non-compliance

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