Environmental ethics due diligence

Wednesday, 19th June 2019

With United Nations saying we could have just 11 years left to limit a climate change catastrophe, businesses operating in today’s complex world need to take care of the environment, carbon emissions and maintain good social and environmental responsibility.

There are already a number of global companies taking initiatives with respect to these issues today, many of which have instituted programs to reduce their environmental footprint and contribution to carbon emissions and global warming. Here are some examples:

Dell has a pilot program that pledges to use 25% of recycled plastic collected from beaches, waterways and coastal areas for its packaging.
Mango aims to have 50% of its cotton originating from sustainable sources by 2022.
Apple now runs all of its operations on 100% renewable energy and many of its suppliers have also committed to 100% clean energy production.

It’s apparent that ethical environmentalism is on trend and many global brands are embracing this with open arms.

Unfortunately, some aren’t. There are many companies that continue to ignore all social and environmental responsibility, driving profits with no regard for sustainability or consideration for the environment. Whether it’s their consumption of raw materials and resources or the inefficient transport of goods or services, there is a myriad of ways that businesses can impact the environment negatively, which is why an understanding of how your company or corporation can mitigate its footprint is so important.

While some emissions are unavoidable and may be part of a standard business process, the truth is, no one can afford to overlook their responsibilities anymore. Sooner or later, ethical practices will be scrutinised and when there is an investigation or public outcry, being under the microscope could place your business under intense pressure (and potentially cause it to buckle under said pressure if you don’t have the right measures in place).

It’s for these reasons that implementing a set of policies and guidelines with respect to social ethics, environmental protection and sustainability is important for not only the image of your company but also your duty as a responsible business. Implicit in these policies and guidelines is comprehensive due diligence.

What is environmental ethics due diligence?

In its essence, due diligence is the measure by which a company assesses risk, often with respect to financial contracts and agreements. While we have discussed extensively about due diligence and its various formats, environmental ethics due diligence is a more niche discipline that requires some further explanation.

Environmental ethics due diligence can encompass the measures by which a company or corporation institutes a set of guidelines for responsible action, as well as investigating how these guidelines may impact the operation of a business, its profitability and whether the business will actually be able to meet the guidelines that have been set.

In most cases, this is a self-reflective process and it involves analysing your own business from within and devising a plan that will suit your business model and structure. In some circumstances though, it refers to performing investigative due diligence to validate the legitimacy pertaining to one’s environmental responsibility. Regardless of your circumstances, our team of due diligence experts can help.

Examples of environmental ethics due diligence

As a leading corporate due diligence service provider in the UK, our team has assisted companies in a wide range of cases pertaining to environmental ethics due diligence, and here are two common ones.

Investigate

Many businesses in North America and Europe today have established themselves as benchmarks for corporate responsibility. However, their overseas operations (directly owned or otherwise) are usually weaker in following a set standard with respect to the local environment and social issues, even down to the health and safety of their local workforce. They may cut corners, dispose of waste illegally, or they may pack too many workers on a factory floor without any proper ventilation measures or fire planning requirements.

Our due diligence team can help to identify these weaker links so you can better understand the potential risks or problem areas in relation to a foreign operation and implement measures to address them. It’s critical to establish the right course of action before a potentially negative press spiral causes damage to your company.

Don’t cover up

Often ethically questionable issues have historical baggage; with companies that have operated for many years internationally being slowly brought to account for their earlier transgressions. While your PR team may prefer to keep the issues under wraps, owning up to your transgressions and establishing a due diligence process to institute changes may be a better course of action.

The reason is that the public is hyperaware of the ways in which companies act with respect to environmental ethics. Even if you prefer to keep issues out of public scrutiny, you can’t keep them from your partners or clients if they want to carry out due diligence on you before entering into agreements with you.

Blackhawk Intelligence can help with environmental ethics due diligence

Rather like the tiny source spring of a river, if you have a robust environmental policy trickling through the organisation, it can affect more and more people including your suppliers, partners and clients, until it becomes a major organisational force to be reckoned with, ultimately impacting the business and political environment the business flows into, transforming the company into a leading force in ethical environmentalism.

Underpinning this robust policy is a rigorous due diligence process. So call us on +44 (0)20 8108 9317 to start the conversation today.

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This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.