“One company compliance” and incorporation of sustainability into environmental compliance management
17 July 2014
By Yasmeen Sultana, Kevin Madry, and Braulio Pikman
As the upstream oil and gas industry continues to comply with rapidly developing federal and local regulations, several issues emerge as barriers to the development of a robust and sustainable “One company compliance” program. One company compliance begins with right people who can develop and implement a sustainable compliance strategy, incorporates strategic implementation of integrated processes and systems for overall company compliance, and establishes processes for improving compliance efficiency and performance. An analysis of these issues shows that they are mostly related to a company’s approach to compliance program development.
With rapid technological advancement, regulators are able to collect, analyze, and make publicly available massive amounts of data from across several compliance programs. Stakeholders have increasing access to this publicly available information that directly or indirectly reveals a company’s environmental issues, risks, and approach to overall compliance management and performance.
Observations made during the recent development of compliance programs (such as greenhouse gas compliance program) reveal several of these issues and opportunities for improvement. Involving the right people and decision makers is the first key to developing efficient and sustainable programs. Incorrect people may delay or compromise efficiency of compliance programs. It may also lead to a cascading effect beginning with improper understanding or even discounting the magnitude of compliance risks and reputational risks. The next important step is the development of company-wide proactive compliance strategy that is clearly communicated company wide. This eliminates wide gaps in communication usually observed between management and operators regarding compliance priorities.
Companies seeking one company compliance can mitigate risks associated with “siloed” (one program at a time) approach to compliance through development of an integrated holistic approach to compliance management. Such an approach involves strategic implementation of processes and systems for overall company compliance. This improves the efficiency by eliminating duplicate efforts and often unsustainable processes across various compliance programs. Assessing reliability and maturity of business processes and planned integration of appropriate controls is necessary to eliminate continued use of any existing inadequate processes (for example, change management that does not identify what change to manage). Obtaining third party verification/assurance of overall compliance demonstrates strong commitment towards “one company compliance.” Furthermore, companies can incorporate sustainability into their compliance management systems by adopting efficiency and performance targets into their systems.
“One company compliance” program improves management of compliance risks, reputational risks, and financial risks. It allows companies to minimize variability in processes and systems through standardization, which in turn reduces risk of non-compliance and associated costs. Companies will be able to direct resources towards improving performance and gaining eco-advantage.