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Environmental Compliance Audit

Environmental Compliance Audit: What Is It, and Why Does Your Business Need It?

What is an environmental compliance audit? It is defined by the Environmental Protection Agency (EPA) as an objective, systematic assessment of a facility’s environmental practices and operations that take place periodically and are documented. An audit will best serve its purpose if it is a thorough examination of facilities and management systems. An overview of an organization’s operations to carefully determine environmental performance also reveals environmental compliance training effectiveness. It looks at how the company is doing related to environmental requirements – in contrast to an environmental impact assessment (EIA), which studies the effects a proposed facility may have on the environment.

Why Have Environmental Audits Become Prevalent?

The early 1970s were the starting point of the environmental compliance audit. Often businesses within the chemical or oil industries were conducting these assessments due to the environmental risks of their products. The auditing process has become commonplace across various industries since then, along with methodologies to accompany and support the process.

The environmental compliance audit has become more prevalent in the United States and worldwide for four primary reasons, per the United Nations’ International Labour Organization (ILO):

  1. Public perception — Safety and environmental issues have become more important as public awareness has risen. Responsible management of environmental hazards has become mandatory to relationships with the public as this awareness has grown.
  2. Regulatory growth — It has become more challenging for organizations to understand whether they comply or not since a certain piece of legislation may apply to a facility in a certain locale but not in another. This difficulty has increased as the body of regulations has steadily expanded since the early 70s.
  3. Litigation – As new rules have been written into law related to the environment, workers have had grounds for liability claims, resulting in a deluge of lawsuits. There has been an especially high volume of litigation in the United States.
  4. Major accidents – Companies have had to rethink their approaches following high-profile disasters such as Exxon-Valdez, Chornobyl, and Bhopal. These incidents have prompted organizations to go beyond adopting environmental standards and policies to verify that they are put into place. Audits help firms avoid tragic surprises.

Why Does Your Company Need An Environmental Compliance Audit?

Auditing should be approached with an expectation of excellence rather than simply checking off a task. Here are the various benefits you can achieve by constructively auditing your company for compliance with environmental standards:

  • Confirm that you are compliant with national, state, and local laws
  • Protect the natural world
  • Display to regulators, your workforce, business partners, and the general public that you are dedicated to safeguarding the environment
  • Determine present and potential issues that you can resolve
  • Detects ways that you can minimize waste and otherwise reduce costs
  • Verify that your environmental compliance training program is effective
  • Informs you how your environmental performance is lacking, lets you know how you are succeeding, and allows you to expand on what you are doing right
  • It gives you insights that have broad use, allowing various facilities and affiliate firms to pass information back and forth.

5 Essential Steps Of An Environmental Compliance Audit

While auditing can certainly be complex, it should also be relatively straightforward once you have protocols to follow. These protocols serve as the foundation of an environmental compliance audit checklist. At the federal level, the EPA offers a number of different protocols to meet various laws’ requirements. While these protocols do not cover all the needs of local, state, or even federal regulations, they offer a strong basis.

While you want to take certain steps before and after an audit, these five standardized on-site steps indicate how a typical audit proceeds:

  1. Get a sense of the internal controls. What controls are currently implemented or believed to be implemented? What are the policies, physical controls, maintenance plans, and inspection programs? How is record-keeping conducted? Get information from detailed questionnaires of your employees and through direct observation.
  2. Evaluate the internal controls. Step 1 provides the basis for the rest of your audit. It lets you know what needs to be improved. How competent is the workforce? Are authorization systems and records appropriate? Are responsibilities established?
  3. Collect evidence. Are the controls effective? You need evidence to know the answer. It can be in the form of test results (verifying regulatory compliance through record-checking), observation (watching operations), and questions (asking personnel how they would respond in the event of an emergency).
  4. Make records. You need there to be written records of everything that occurs and is discovered during the audit. Initially, you will record everything on working papers and audit protocol documents.
  5. Assess what you discover. Records of the audit team then need to be integrated. Some observations may simply be fixed through discussion, while others should be included within the final report (as indicated by the ILO).

What Is An Environmental Compliance Audit That Suits Your Business?

The fact is that there is no environmental compliance audit checklist or approach that will work for every organization. At AOTC, we work with you to develop an assessment with a comprehensive scope that defines your project’s objectives, schedule, and constraints. Contact us today to schedule your environmental compliance audit.


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