Environmental, Health & Safety Compliance | Page 12 of 32

Credible ESG Reporting

Climate change is about to upend the corporate world. Companies that fail to address their impacts on the environment are likely to face a backlash as their lack of effort will not sit well with the public, particularly as climatic changes become ever more severe and prominent. Firms need to react quickly if they want to be “on the right side of history.” The reinstatement and enforcement of canceled or ignored regulations and new standards in many countries will force more firms to report their emissions. But what reporting standards should they use? And how will they compile and aggregate their emissions data to provide credible and verifiable accounts of their activities?

Figure 1: Companies brace themselves for new ESG regulations

These are timely questions to address with the expected renewed focus on the Paris Agreement accords as the United States re-engages with the rest of the world. One place to start is with better carbon-emissions data. Today, few companies even know how much greenhouse gas they or their suppliers emit, making it difficult for them to assess their products or operations’ full environmental impact. Where data does exist, it is often self-reported, inconsistent, or too out of date to be useful. Efforts are underway to fix this, mostly coming from an unexpected source–the push to incorporate environmental, social, and governance (ESG) reporting in evaluating companies’ creditworthiness by financial institutions. Many shareholders and professional investors now believe that investors who are not considering possible impacts related to climate change could be exposing themselves to serious risk.

While climate-related issues are a key component of the E in ESG reporting, it encompasses much more and is measured by various means. Some examples are GHG emissions, water use, generated waste, land usage, and so forth, both in a firm’s direct operations and along its supply chain. In this paper, I intend to focus on the problems and issues associated with such measurements.

Post Covid-19 Economy

In the post-Covid economy, many investors will want to align their investment strategy with accepted science. Many companies, countries, cities, and politicians have pledged to have net zero emissions before 2050 or some other year in the distant future (when those making the proclamation most likely will not be alive). However, to better manage and account for climate change risk and help keep global warming from rising to dangerous levels, investors are increasingly asking whether their portfolios are climate-change friendly in the short term. Pledges where a company hopes to be in 2030, 2040, or 2050 mean little to them.

Far from turning investors away from ESG investing, the pandemic has heightened interest in sustainable portfolios. I expect ESG scores will become as important to investors as financial performance indicators in the coming decade. According to several research analysts, at least $3 trillion of institutional assets now track ESG scores, and the share is rising quickly.

To stay relevant and attractive to investors, companies will urgently need to step up their efforts to minimize their impacts on the climate. Climate change is already causing both severe physical damage and harmful effects on the biosphere. Pushed by mainly younger voters, governments around the world are introducing ever-tougher regulations. Many expect the U.S. to do the same now that Biden has taken office.

ESG Scores as Important as Financial Performance

In the developed economies of North America, Asia, and Europe, there is a movement among some politicians, corporate executives, and investors to shift away from measuring corporations based solely on their financial performance. They want to incorporate climate change as another catalyst — a shift that would involve assessing which firms are “dirtier” than others. This effort’s success will depend on firms providing accurate and verifiable data on their emissions and related discharges.

Data from Morningstar, a research investment firm, show that in the first nine months of 2020, climate-aware funds attracted almost 30 percent of all investments in sustainable fund inflows.

In 2019, this proportion was just 15 percent. Climate change has never been so prominent in the minds of the financial community. But while awareness of climate change issues is rising within financial institutions, interest and concern in the U.S. have been suppressed in recent years by the very regulatory agencies that are supposed to be managing it. But more on that subject later.

Figure 2: Climate change risks are real.

To attract capital, many companies will have to adjust their reporting to this new reality. Voluntary reporting of relevant key performance indicators (KPIs) will not be enough as governments develop more and better standards. “Markets need high-quality, comparable information from companies to enable informed capital-allocation decisions in the face of climate-related risk,” said Mary Schapiro, a former U.S. Securities and Exchange Commission (SEC) chairwoman. we can predict where we will be 20 or so years from now, we need to know where we are today. Only reliable, verifiable, and normalized data across industries can tell us that.

How To Measure Companies’ Sustainability Performance?

Measuring companies’ performance relative to climate change or sustainability is a challenge even with a set of agreed-upon standards. However, no such meaningful and accepted standards exist, let alone reporting rules or data interchange specifications. Some measures are slowly emerging, such as carbon emissions equivalents, energy consumption per something, water consumption, and type and quality of discharges. More effort is needed to standardize reporting and compare climate risk for companies in different industries. Besides the lack of standards, there is also a lack of unified enterprise software tools to make the reporting job easier.

Figure 3: Energy consumption reading, real-time upload and reporting to Locus Platform

In the absence of such standards and guidance, I expect some investors to place their bets on the least polluting steel manufacturing company or the traditional car manufacturer that has invested the most in electric vehicles. Or they may invest in companies that have set ambitious (future years) emissions targets, i.e., committing to become carbon neutral by some year in the distant future. While an improvement, all of these do not provide a clear picture of the risk associated with an investment. Who will be around 20 to 30 years from now to hold companies, individuals, or politicians accountable for “future-looking statements and predictions” that they are making today? Certainly not the people making those announcements. Moreover, at that time, a new generation will be focused on solving their own unimaginable or unpredictable problems today.

Since President Nixon’s 1974 State of the Union — where he made energy independence a national goal — a bipartisan procession of presidents has regularly made similar declaration calls to reduce America’s dependence on foreign oil. None of them was correct when or how the country would reach that noble goal, and nobody ever held them accountable for their failures. I expect the same will happen with today’s predictions on carbon neutrality by so many CEOs.

ESG Standards

One of the most problematic ESG reporting issues is that there are no globally enforced reporting and compliance standards for ESG and other sustainability information. For financial reporting, at least, there are standards in the form of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

Nowhere is corporate “book-cooking” more on show than in firms’ sustainability reports. Today, 58 percent of companies in America’s S&P 500 index publish one, up from 37 percent in 2011, according to Datamaran, a software provider. Among the photos of pollution-free blue skies, blooming red flowers, and smiling children of all races, firms sneak in such ESG data as their carbon footprint, waste generation, and water usage. As expected, all charts showing these data trend downwards, like an inverse hockey stick. But the information in the sustainability reports differs wildly from firm to firm, making it impossible to draw comparisons based on their ESG data. Unlike financial data that are audited and include the familiar balance sheet, income statements, and cash flows, there is nothing similar on the ESG side. This situation arises from the absence of widely adopted standards for ESG reporting. The most obvious sign of this mess is that, unlike financial statements, ESG scores assigned by different rating firms poorly correlate with each other, rendering their ratings useless for smart investors.

With the U.S. EPA missing in action over the last four years, five voluntary ESG standards have come to dominate the scene. The Global Reporting Initiative (GRI) focuses on metrics that show firms’ impact on society and the planet. The Dow Jones Sustainability Indices (DJSI), launched in 1999, are a family of indices evaluating the sustainability performance of thousands of companies trading publicly. By contrast, the Sustainability Accounting Standards Board (SASB) includes only ESG factors that have a material effect on a firm’s performance. The Task Force on Climate-related Financial Disclosures (TCFD) and the Carbon Disclosure Project (CDP) is chiefly concerned with climate change. They specifically focus on companies’ exposure to climate change’s physical effects and potential regulations to curb carbon emissions. There are still other regulatory standards worth mentioning: AB32, the California Global Warming Solutions Act of 2006, and the EU emissions trading system (EU ETS) that is a cornerstone of the EU’s policy to combat climate change and is its essential tool for cost-effectively reducing greenhouse gas emissions.

GRI is the most popular of the voluntary standards, in part because it is the oldest, founded in 1997. It has been embraced by about 6,000 firms worldwide. However, all these standards are based on voluntary reporting and have no teeth. Absent real climate change regulations and standards, many financial institutions promote one of these standards.

To further complicate matters, the number of ESG standards in the world has grown from around 700 in 2009 to more than 1,700 in 2019. That includes more than 360 different ESG accounting standards set primarily by various financial institutions or rating agencies. To say the situation is chaotic is an understatement. Last September, the World Economic Forum (WEF) announced a new set of ESG metrics for firms to report, making the current state of affairs even more confusing. These new metrics have received the backing of four large accounting firms. The Davos agenda for 2021 is: “How corporate leaders can apply ESG tools to help overcome global challenges.” Let’s hope they make some progress between their martinis and skiing.

The WEF stressed that this is not yet another new standard but a collection of useful measures picked from other standards. The intention, they claim, is to simplify ESG reporting, not to add to the confusion. But that is exactly what this mixture of standards does.

The IFRS Foundation, a global financial-accounting standard-setter, is considering its ESG standard. Moreover, the EU is planning rules that will force big companies to disclose more ESG information; as of the beginning of 2021, it is still thinking about which measures to use.

These efforts fuel demand for normalized ESG ratings and a uniform set of reporting standards. The goal is to create a single score from disparate non-financial indicators, such as a firm’s carbon emissions. The proliferation of standards hinders comparability. Simplification is needed. Many complain that voluntary reporting lets companies cherry-pick positive results by taking reporting numbers out of context.

Some have pushed for an ESG equivalent to the GAAP used in financial reporting. But these took years to agree on, and there are still sizable differences between the U.S. and the EU in applying them. Before regulators can establish any accounting-like standards, they must first base them on pure science and scientific calculations. Many such standards already exist in various U.S. EPA environmental compliance reporting requirements such as the Clean Water Act, Clean Air Act, or California AB32 for greenhouse gas emissions.

Instead of aggregating many voluntary reporting standards developed by non-scientists, lawmakers should aggregate the existing reporting requirements that have been developed by federal and state agencies under existing programs over the last 50+ years. A unified reporting schema and associated enterprise, cloud-based software to aggregate it should be the ultimate objective. We do not need to create yet more regulations to institute climate change regulations. What we need to do instead is synchronize, unify, and coordinate existing rules. Almost every current environmental law already has built-in components that relate to climate change. For example, many voluntary reporting programs like GRI or CDP require companies to track waste or water consumption and discharges or air emissions. And all of these are already regulated by EPA.

Figure 4: Water discharge reporting. Under President Biden, companies may face new water discharges, carbon emissions, and other sustainability measures.

Voluntary standards reporting requirements lack the rigor and comprehensiveness of waste management requirements developed under the EPA RCRA program, water quality management under the EPA Clean Water Act, or air emissions management under the Clean Air Act. Why duplicate efforts if they do not bring added value? The EPA’s cradle-to-grave hazardous waste management system, for example, provides the critical foundation needed to keep America’s land and people safe from hazardous materials. Added reporting on waste under GRI or CDP brings no additional value. The Resource Conservation and Recovery Act (RCRA) passed in 1976 to set up a framework for properly managing hazardous waste is far superior to any voluntary reporting programs of recent years.

Likewise, Title V of the 1990 Clean Air Act Amendments requires all major sources and some minor air pollution sources to obtain an operating permit. A Title V permit grants a source permission to operate. The permit includes all air pollution requirements that apply to the source, including emissions limits and monitoring, record keeping, and reporting requirements. It also requires that the source report its compliance status concerning permit conditions to the permitting authority. None of the voluntary programs has similar requirements.

How are Firms Rated on their Climate Change by Financial Analysts?

Many would-be investors are confused because there is no standard terminology for describing and defining sustainability and other ESG reporting components. The resulting variability in the quality, quantity, and relevance of disclosures prevents investors and stakeholders from getting the information they need. Rating firms use teams of analysts, AI-driven software algorithms, and scattered data from companies to collect and massage ESG information. They then convert this information into a single score. And how is this score used? Some customers of these rating firms seek to gain an investment edge; others want their money to benefit society and themselves. But the ratings are not yet ready for the critical role they are being asked to play.

A recent report by the Governmental Accountability Office (GAO) in July 2020 emphasized that ESG disclosures and reporting are not always clear or helpful for decision making. If reported information is not useful for decision making, we must ask, what purpose does it serve in its current state?
As government regulations on heavy polluters and heavy emissions emitters get stricter and companies see their business models under threat, it only makes good financial sense to implement a system that aggregates all their emissions data (to air, water, or soil) and present it to regulators and investors in an organized, transparent, credible, and defensible way.

Just as the Sarbanes-Oxley (SOX) Act of 2002 provided unexpected drivers for reporting the environmental liability on the balance sheet of publicly traded companies, ESG reporting drivers may help standardize EHS reporting.

U.S. EPA: Missing in Action

The U.S. conversation about protecting the environment began in the 1960s. Rachel Carson had published her attack on the indiscriminate use of pesticides, Silent Spring, in 1962. Concern about air and water pollution had spread in the wake of disasters. An offshore oil rig in California fouled beaches with millions of gallons of spilled oil. Near Cleveland, Ohio, the Cuyahoga River, choking with chemical contaminants, had spontaneously burst into flames. Astronauts had begun photographing the Earth from space, heightening awareness that the Earth’s resources are finite.

In early 1970, due to heightened public concerns about deteriorating city air, natural areas littered with debris, and water supplies, and navigating bodies of water and beaches contaminated with dangerous chemicals, President Richard Nixon sent Congress a plan to consolidate many environmental responsibilities of the federal government under one agency. A new Environmental Protection Agency (EPA) was born. For most of its existence, the EPA fulfilled its mission to deal with environmental problems in a manner beyond the previous capability of government pollution control programs.

The EPA is best positioned to lead the development of reporting standards for climate change that financial institutions can incorporate in their reporting. The SEC regulates the securities markets and facilitates capital formation, helping entrepreneurs start businesses and companies grow. The EPA should do the same to activities that have harmful effects on the climate. The current trend of using voluntary reporting programs gets it all wrong, letting financial institutions determine how best to assess a firm’s environmental impacts. What does the financial sector know about the setting limits for the concentration of toxic chemicals in discharge water or the potential effects of specific air emissions?

Unfortunately, in the last several years, the U.S. EPA has drifted away from regulating climate change. Just last week (January 12, 2021), the agency set higher barriers for controlling the emissions that contribute to climate change, setting new rules that effectively block the federal government from imposing new restrictions on several heavy industries. The regulations establish new criteria for entities that are significant contributors to greenhouse gas emissions. The agency claimed that the law requires determination of who these entities are. With unmatched chutzpah and antipathy toward environmental controls, the agency declared that oil and gas producers, refiners, steelmakers, and other heavy industries don’t meet the criteria. As such, the hamstrung EPA is ostensibly prohibited from regulating these industries’ emissions under the Clean Air Act.

This abrogation of EPA’s role in protecting the environment has never been seen in any other administration. Programs and agencies elsewhere in the federal government have had their missions bent to serve polluters’ sole interests or had their scientific research halted, and their reporting suppressed. Please make no mistake about it. The Trump administration has been quite successful in some of its efforts. Fortunately, though there are anomalies, as is the case with Trump, the overall direction of our attitudes toward the environment in the last 60 years is one in which reduced emissions and sustainability have taken on ever greater importance. In future years, the EPA will hopefully once again assume its leadership role in promoting best practices and the promulgation of meaningful ESG reporting.

As of the writing of this paper, there is already some good news: A federal appeals court today, the last full day of Trump presidency, vacated the Trump administration’s rules that eased restrictions on greenhouse-gas emissions from power plants, potentially making it easier for the incoming Biden administration to reset the nation’s signature rules addressing climate change.

Until the EPA reenters the climate change business, expect that the SEC will follow the European lead and impose enhanced ESG disclosure requirements on public companies.

Software to Organize and Report ESG

To compare companies relative to their impacts on the climate, one must take a holistic approach that includes many factors. Among those to consider when assigning a score to a company are:

The magnitude of its overall and coupled emissions to natural media
The efficiency of its operations in water and energy usage
Its carbon footprint
Waste treatment operations
The transparency and impacts of members of its supply chains

This holistic approach requires new, integrated, and interactive software tools. Such ESG software, equivalent to the ERP (Enterprise Resource Planning) software that made its appearance in the early nineties, would provide complex tracking of all kinds of emissions linked to assets in real-time. We need an equivalent of the balance sheet, income statement, and cash flow (emissions flow) across all aspects of companies’ assets and activities.

Ironically, although the term ERP includes “Resource,” it has little to do with real natural resources being affected by its operation. Instead, ERP refers to companies’ software that is used to manage and integrate the critical parts of their businesses but mainly focuses on financial, human resources, and physical asset management to satisfy financial reporting, not asset emissions. ERP software applications integrate the processes needed to run a company with a single system: planning, purchasing inventory, sales, marketing, finance, and human resources. However, they do not typically integrate any technical information or activity related to emissions, waste, climate, environmental compliance, etc. Never mind that much of the ERP software in the market today is obsolete, running on the outdated technology of the seventies and eighties, and hard to integrate with anything.

Figure 5: Traditional ERP software is siloed and applications are pigeon-holed. ESG requires an all-new approach.

The traditional approach of bolting-on another application to an existing software infrastructure will not work to integrate emissions tracking, sustainability, and other environmental and sustainability-related verticals. Many ERP systems are caving in under their weight and are hugely and unnecessarily complicated. New, cloud-based Software as a Service (SaaS) technologies such as the Locus Platform are promising as they allow for the fast deployment and sharing of input, storage, and reporting tools among all key players: companies, investors, and regulators in a single system of record. One new software technology, Blockchain, is up-and-coming.

Blockchain for ESG

Though created as the digital ledger underpinning bitcoin, Blockchain has since been adopted by various industries for applications outside the realm of finance and cryptocurrency. But the potential for this technology far eclipses its current uses. Alongside the growing expectation for better ESG reporting, blockchain technology has the opportunity to enable ESG reporting to become more transparent, secure, consistent, standardized, and useful.

At first glance, the convergence of Blockchain with ESG reporting might seem to be contradictory, but a more in-depth analysis of trends shows its value. Blockchain has rapidly transformed into a financial reporting and attestation tool that has caught the attention of many key decision-makers and technology drivers. At the same time, the importance of ESG has never been more pronounced. Combining the two could be the key to making ESG reporting more straightforward and more meaningful. The broader trends of both are alike: each has been steadily making inroads into organizational management and the reporting landscape. The difference is that now, with accelerated digital transformation and automation, both broader trends have moved into a much sharper focus.

Blockchain technology is ideally suited for the complexities of tracking a global supply chain. Improving the traceability of supply chains is old news in terms of goods, but supply chains are much bigger than that. Securing the information that drives business decision making is where Blockchain can deliver significant value. Blockchain for ESG purposes is gaining traction already, with many pilot platforms being launched and tested in the last year. For example, two hospitals in the U.K. are actively using blockchain technology to help maintain the temperature of coronavirus vaccines before administering them to patients. Several off-the-shelf blockchain ledgers can provide authentication and corporate oversight systems. You can read more here: Blockchain Technology for Emissions Management.

Blockchain technology will allow companies to track resources from the first appearance in their supply chain, certifying their products’ compliance with regulations and their quality. Blockchain technology would enable government agencies to effectively aggregate emissions quantities and origins across geographies, industries, and other criteria. More importantly, all parties would need only one software system of record to avoid constant synchronization, submittals, and reporting requirements. The open question remains: Who will run it, and who will pay for it?

Though their data may be more transparent, corporations stand to benefit considerably from adopting a technology in which all their emissions and other data reside in a single system of record. Star performers, as well as laggards in their factories and supply chains, could more easily be identified.

Along the way, companies would undoubtedly lower their operating cost and, at the same time, reduce the dizzying number of unconnected, heavily supported, siloed software applications they currently operate to keep in compliance with existing environmental regulations.

Figure 6: Blockchain and ESG, a powerful combination to tackle climate change.

Contact us to learn more and get a quote on Locus ESG solutions

Top 10 Enhancements to Locus EHS Compliance Software in 2020

Let’s take a look back on the most exciting new features and changes made in Locus Platform during 2020!

Sustainability is More Important Now Than Ever

The global economy is currently being tested on a magnitude that we have never witnessed before. The effects of COVID-19 have pushed the limits of individuals, and the organizations that they run. As we collectively face short-term problems related to the pandemic, long-term effects of climate change have, in some ways, been magnified. When the dust settles, and we tackle COVID-19, we will still be facing the consequences of climate change. It is now, however, not after COVID-19 is controlled, that organizations must make steps towards tackling environmental issues. On a positive note, there is a return on investment in sustainability, and there are pragmatic ways of achieving sustainable goals.

The connection between saving money and resources and investing in sustainability is well known. Year after year, sustainable projects result in billions of dollars in savings for the companies investing in them. By 2030, return on investment in sustainability will be $26 trillion. And while those companies investing in sustainability have better numbers, they’re continuing to push for higher sustainability goals, as are government agencies. Companies not making these investments are not only missing out financially, but they are falling behind when it comes to long-term preparedness. Without a doubt, the organizations who are acting first have the leg up. When it comes to sustainability, two proverbs attributed to Benjamin Franklin are as true as when he first said them. “An ounce of prevention is worth a pound of cure”, and “a penny saved is a penny earned.” Pair those variables with the ever-growing awareness and importance of sustainability by the green investor and the green consumer and you have a powerful combination.

Nearly 80,000 emission-reducing projects by 190 Fortune 500 companies reporting data showed nearly $3.7 billion in savings in 2016 alone. – WWF | worldwildlife.org

With climate-related issues comprising the top five long-term risks in terms of likelihood, the need for investing in sustainability becomes all the more apparent. This sentiment is mirrored in a recent Bloomberg article, where Bill Gates suggests that the most difficult long-term problem facing the world today is climate change, and the effect it has on the environment. While outlining several difficulties, he points to one shining light in the fight to sustain a healthy climate: the acceleration and innovation of technology over the past two decades created to tackle the problem. Not many understand more than Locus the fight to maintain, and reduce, and use resources wisely. Locus has, for over two decades, provided advanced tools to improve sustainability on a grand scale.

Several organizations have taken advantage of the sustainability software solutions Locus provides. One example is Del Monte Foods, one of the largest producers of food in the world. They partnered with Locus for sustainability data management, eliminating errors in old data and better monitoring resource usage and cost. They also use Locus’ sustainability app to visualize and report data on the fly. They are tackling sustainability from a practical standpoint, addressing real data, not a nebulous idea. And they have been better off for acting early instead of waiting.

In the end, we must address the problems that face us. We need to tackle COVID-19 and how it affects our organizations, but be mindful that every quarter and every year that sustainability goals are pushed back, there are dollars being lost seeking out attainable improvements to our environment. Not only that, but every step that isn’t taken towards sustainable goals is a step behind other organizations making practical investments in their future and the wellbeing of everyone.

[sc_button link=”https://www.locustec.com/applications/sustainability/” text=”See the Sustainability App” link_target=”_self” centered=”1″]

Then and Now: Locus Platform for EHS&S

Ahead of its time in 2002, Locus Platform (formerly ePortal) has seen a huge change over time from a simple portal at the beginning of the SaaS movement, to a fully configurable multi-tenant platform. Locus Platform (LP) houses any number of off-the-shelf and custom applications to meet EHS customer needs.

Unified EHS Platform: Enter Once, Report to Many

Is your organization still using multiple software systems for EHS&S when you can (and should) be using one robust and unified platform? Unify your compliance, sustainability, water, air, and environmental data with Locus’ cloud platform for EHS&S. It’s easier, cheaper, and more efficient.

With Locus Platform, you can easily and securely feed all of your different EHS data sources to the cloud via a wide array of import options. You will then be able to analyze and report to virtually any regulatory agency, meeting any specific requirements they may have. We believe in making EHS compliance simpler.

Contact us to see Locus’ Unified EHS Platform in action

Indirect Impacts of COVID-19 on EHS Industry

For the better part of 2020, it’s safe to say that predominant changes to our daily lives have been brought on by COVID-19 and the associated response measures. This is certainly true for those of us working in the EHS field. EHS workers have an active role on the front lines, preparing our workplaces with new safety measures, including social distancing signage, training, and personal protective equipment (PPE).

Beyond those direct response actions, the realities of the ‘new normal’ have already impacted how other compliance and sustainability programs are implemented. And for good reason… many of the routine activities like inspections and onsite data collections now have a new safety issue to consider. Even with all the new protective measures we’ve implemented to address this pandemic, there remains some unavoidable added health risk caused simply by staff presence and interaction. For activities that are not mandated by a permit or regulatory requirement, the benefit of continuing those activities must now be weighed against the added health risk. For example, a daily waste inventory walkthrough may have been a standard routine for many EHS managers to collect data on waste generation as a key performance indicator. The value of that data collection effort may now be called into question, since it may increase travel and contact between staff. Depending on the value of those optional activities, some may be temporarily suspended simply because they are not worth the additional risk to health and safety.

For compliance requirements, this situation is more complex, due to the involvement and oversight of the applicable regulatory agency. The ultimate decision about whether a compliance activity must proceed generally lies with the regulator. The majority of EHS managers initially proceeded with meeting all their obligations without any changes. Although there are many applicable state and local ordinances and shelter-in-place orders related to COVID-19 that prohibited normal business operations, most of them include exceptions for activities that are ‘essential’ or required to maintain compliance with other regulatory programs. Public agencies have made very few blanket decisions to waive requirements for regulatory programs, even when they conflict with those local ordinances.

Despite the lack of a uniform response from agencies about whether or how compliance programs should be modified to accommodate COVID-19 precautions, I’ve observed several cases where regulatory staff have been given some level of authority and discretion to suspend or modify requirements. This is happening at federal, state, and local levels for various regulatory programs ranging from Superfund to GHG programs to land use covenants. I’ve experienced required deadlines delayed on remediation projects, modified approaches accepted for health risk mitigation, and on-site inspections postponed or drastically modified to accommodate social distancing. Any of these changes would have been unthinkable just a few months earlier. But now the regulators are seriously considering whether the continued enforcement of these requirements would create a potential health risk, and how their agency would defend their decision if the implementation of their requirements impacted someone’s health.

This ad hoc approach to compliance modifications brings its own new challenges for EHS managers, most of whom have detailed programs to track their efforts and ensure they stay on top of all the applicable compliance programs. Most of the regulatory programs that we work in have been in place for many years or decades, so the systems we’ve built up for those programs have been operating with minimal deviation for a long time. But now, in addition to the original set of requirements we’ve been implementing, we have new modified versions to track. In all the cases I’ve observed, the original requirements aren’t officially edited by the agency. Rather, the agency staff have issued temporary amendments in the form of a letter, memo, or email. So EHS managers will need to maintain the original requirements as well as the approved modifications in these various formats. Regulators are still planning that eventually these COVID-19 precautions will be lifted, so they can get back to the ‘old normal’ with the previous requirements we’ve implemented for years. This means that we can’t just overwrite the requirements in our compliance program, so we stay prepared to revert to the original official requirements if/when that happens.

The long-term impact of these compliance modifications is yet to be seen. The COVID-19 pandemic has forced more thought to be put into the cost/benefit of routine EHS activities. This is true not just for EHS managers but for regulators as well.

Since many EHS compliance programs have been largely unchanged for years, this is a rare opportunity to rethink or update those requirements. Technology has advanced significantly since many EHS requirements were written. This technology offers better and safer methods to achieve the same objectives. For example, I’ve attended several remote EHS inspections over the past few months, which were previously conducted in person. And after those inspections were completed, I can’t think of anything that was reduced or lost in terms of oversight. For some facilities, I’ve also seen remote automated monitoring used in place of manual field measurements, where it was previously only considered supplemental to the required manual data collection. Although the regulations technically required this work to be done in person, the remote versions were just as effective, and completely avoided the added health risks associated with physical gathering and travel.

So instead of wondering ‘When can we go back to the old normal?’ we might ask ‘Should we go back to the old normal?’ The regulatory programs we work with were designed to be protective of human health and the environment, but they were also mostly developed when things like handheld phones with live video were present only in science fiction. Obviously, these technologies are not new anymore, but this situation has provided an unprecedented opportunity to implement these alternatives, and ultimately confirm that they can be just as protective as the former methods they replaced. In addition to the cost savings that these options provide, there is a very real safety concern that they circumvent. And while cost-effectiveness is usually a difficult point on which to drive regulatory change, a safety issue is harder to dismiss.

While it still may be a while before we reach the end of this pandemic, there’s a lot we have already learned about how resilient EHS programs can accommodate this kind of major event. If we use this opportunity to engage with regulators, and closely review and update our programs, there’s no doubt they will only become stronger and better suited to the modern workplace and way of life.

[sc_button link=”https://www.locustec.com/applications/ehs-compliance/” text=”See How Locus EHS Software Helps” link_target=”_self” centered=”1″]

Technology Outlook for the Environmental Industry

Neno Duplan is founder and CEO of Locus Technologies, a Silicon Valley-based environmental software company founded in 1997. Locus evolved from his work as a research associate at Carnegie Mellon in the 1980s, where he developed the first prototype system for environmental information management. This early work led to the development of numerous databases at some of the nation’s largest environmental sites, and ultimately, to the formation of Locus in 1997.

Mr. Duplan recently sat down with Environmental Business Journal to discuss a myriad of topics relating to technology in the environmental industry such as Artificial Intelligence, Blockchain, Multi-tenancy, IoT, and much more.

Download a preview

Click here to learn more and purchase the full EBJ Vol XXXIII No 5&6: Environmental Industry Outlook 2020-2021

5 Keys to Simpler Air Quality Monitoring

Time management is an ever-present struggle. With expanding air quality monitoring and regulatory programs, more is expected from air quality professionals without compromising work quality. Locus Technologies offers the tools to ease your workload. Here’s how Locus transforms your air quality data and reporting management:

Integration

Integration can save you a great deal of time and stress with the most cumbersome air quality data management duties. Our air quality software has a unique point and click integration application enabling connection with major databases and third-party systems that have open API (access privileges). Some integration, database, and communication standards and methods that are supported include OLE compliance, SOAP, COM, Java, XML, web services, DBC/ODMA/SQL/Oracle, AWS, VIM, and MAPI.

Locus also provides a powerful two-way synchronization with MS Excel, allowing users to download to Excel, then work, edit, verify, or append data on their local copy of Excel. Any revisions they perform to the downloaded data can be automatically synchronized back to the Locus Platform application. During the process, a complete audit trail will be preserved. This is a great time saver, especially if you are sending large volumes of valid values in a database or if you are migrating any historical data.

Dashboards Tailored to Your Needs

Your air quality data management software should have built-in dashboards to meet your needs. With other software providers, when you need a new report, chart, or other visualization of your air quality data, it usually incurs a custom software development charge. Locus allows you to assemble the information you want in your chosen format (bar or line charts, maps, tables, treemaps, diagrams, etc.) and share your custom dashboards and real-time information/data with your team or regulators without the fees. In addition, the views and dashboards export to Excel, so you can easily integrate with commonly used tools and further mine the data.

With Locus, powerful dashboards will help you understand the status of single of multiple facilities in an air quality program based on a matrix you design. With the the flexibility of Locus, facility information can be automatically populated based on the user credentials, saving you and your team time and frustration.

Simplified Reporting

Locus Platform’s air quality application and calculation engine supports simultaneous calculations using multiple methods for various reporting programs including EPA, State, or Local, CDP, TCR, DJSI, Title V, e, and others. Our software also assists in streamlining your emissions tracking and reporting requirements for programs such as GHG, Fenceline, Title V, and LCFS. Locus air quality software is fully integrated with our compliance/asset management and remote sensing systems, making digital transformation more efficient. In addition, Locus’ vapor intrusion and indoor air management application will easily organize, manage, and report indoor air and vapor intrusion data.

This allows users to input data only once and utilize it to report to multiple federal, state, and voluntary reporting programs, according to your required format. The application will also support direct electronic reporting formats for many reporting programs, so that additional manual transcription and submittal of data are no longer necessary. This is a very powerful tool and a huge advantage to customers in terms of improving efficiency, while reducing costs.

Mobile

Locus’ Mobile application allows you to sync with your server to create in-field data collection profiles on a mobile device, whether it’s your phone or a tablet. It will allow you to click through and enter field inspection data on the device even when you are offline. Air quality field operations data validation is performed in real-time and is stored locally on the device when you are out of service range, with data will automatically being updated in Locus’ cloud when you have connection.

Locus gives the benefits of data entry directly on the mobile device, with immediate data availability on the cloud when you reach an internet signal. Other advantages of using Locus Mobile includes location metadata and mapping integration, bar-code/OR code scanning, voice recognition, and form customization.

Easy to Use Calculation Library

To alleviate the effort in researching complex air emissions calculations ranging from GHG to Tank emissions, Locus has designed a Java Library, Curta, for complicated scientific computing on our software. Curta contains a collection of built-in functionality, unit conversions, periodic and hierarchical calculations that can be used to solve mathematical models of problems in Science and Engineering.

Curta can be used directly as API (Application Program Interface) in the UI (User Interface) design, or implicitly combined with the Locus Platform Sustainability application with clear break down into calculation indicators and sources. It offers an integrated solution to work with different data types, continuously changing inputs and large set of unknown variables.

Curta features include:

Calculation engine suite Independent code base for Curta only, safe and stable for any applications and platform.
Sequential calculation steps Curta can construct multi-step calculation structure where formulas can build on each other without knowing the exact values at the initiation of the calculation.
Conditional calculation logics Calculation steps can be set with conditions and logic for example effective date, input units, tank type etc.
Hierarchical calculation results Calculations can be designated to sources with hierarchy with Curta able to acknowledge the parent-child relations of the sources and present it as a calculation tree.
Execute parallel calculations for periodic data Curta can repeatedly conduct complicated calculation structure on a periodic base.
Execute parallel calculations for multiple sources Curta can repeatedly conduct complicated calculation structure for multiple linked sources for example facilities, tanks etc.

Contact us to see Locus’ Air Quality App in action

5 Common Compliance Issues for EHS Managers

At Locus, we understand the unique requirements of EHS managers. More than many, EHS managers are dealing with a wide range of duties instead of a few pointed ones. With so many responsibilities, it can be hard at times to stay on top of your organization’s EHS needs. In this blog we highlight a few common compliance-related issues that should resonate with most EHS managers and the steps we’ve taken to help you with them.

The worry of missing a regulatory change

They say it takes a village to raise a child, but it also takes a village to keep up with your organization’s regulations. If you are dealing with compliance, then chances are you’ve not been the first to know about a regulatory change, or you’ve found out about one later than you would have liked.

When you’re getting notifications from OSHA and the DOT and you’re checking specific permits and getting letters and emails about changes, sometimes it can all be too much. With Locus, you have the added benefit of an extra set of eyes, well… multiple sets of eyes. Our team keeps up with every rule and regulation used in our applications to further assist you with the breadth of information you have to manage. Locus EHS software is also integrated with RegScan, giving users seamless real-time access to current EHS regulations. This will allow Locus users to customize a watchlist in RegScan to quickly and readily view EHS regulations relevant to them.

Managing maintenance costs

When you have to worry about ever-changing costs that touch several parts of your business, the last thing you need is a gated product update from your EHS software vendor. With Locus’ SaaS model, you see reduced implementation costs and no costly upgrades – everyone is on the same version. And since everything is in one place, you have a reduced amount of wasted time finding information and making it actionable.

Being cognizant of your data security

EHS managers deal with sensitive data, ranging from social security numbers to workman’s comp issues. Not taking proper care of this information can be anything from a PR debacle to a legal battle. With Locus, you have the peace of mind in knowing that your data is stored in entirety on the most secure cloud, Amazon Web Services (AWS). Not only that, but you have extensive security and admin access options, so you can have the relief in knowing only those with privileges can see certain information.

Quick access to stored information

Whether you’re looking for purchase documentation of PPEs or you need to reference yesterday’s GHG numbers, you need access to that data without having to wade through multiple applications. And with all of your data stored in one secure repository, not only can it be accessed quickly, but it can be incorporated with other tools like automated reporting.

Consolidation of compliance data

Are you still dealing with a different filing cabinet or file folder for each type of compliance? Not having your compliance data consolidated into one application means wasted time and time spent re-entering information (possibly incorrectly). Locus combines water, air, hazardous waste, DOT, PPE, workman’s comp, incidents, and more into one streamlined application to help with your organization and efficiency.

We are determined to support the needs of the user, you, first. By focusing on product development and customer service first, we feel that we have created a software as a service model that is both flexible and time-saving. If you are experiencing any of these issues with your current provider, we ask that you speak with a Locus representative today for a consultation or in-depth demo of what we can offer.

Contact us to see our Compliance app in action

AI for EHS&S: Three Essential Steps to Get Started

Regardless of the size of your organization or the industry you’re in, chances are that right now artificial intelligence can benefit your EHS&S initiatives in one way or another. And whether you are ready for it or not, the age of artificial intelligence is coming. Forward-thinking and adaptive businesses are already using artificial intelligence in EHS&S as a competitive advantage in the marketplace to great success.

With modern EHS&S software, immense amounts of computing power, and seemingly endless cloud storage, you now have the tools to achieve fully-realized AI for your EHS&S program. And while you may not be ready to take the plunge into AI just yet, there are some steps you can take to implement artificial intelligence into your EHS&S program in the future.

Perhaps the best aspect of preparing for AI implementation is that all of the steps you take to properly bring about an AI system will benefit your program even before the deployment phase. Accurate sources, validated data, and one system of record are all important factors for any EHS&S team.

Accurate Sources

Used alongside big data, AI can quickly draw inferences and conclusions about many aspects of life more efficiently than with human analysis, but only if your sources pull accurate data. Accurate sources data will help your organization regardless of your current AI usage level. That’s why the first step to implementing artificial intelligence is auditing your data sources.

Sources pulling accurate data can be achieved with some common best practices. First, separate your data repository from the process that analyzes the data. This allows you to repeat the same analysis on different sets of data without the fear of not being able to replicate the process of analysis. AI requires taking a step away from an Excel-based or in-house software, and moving to a modern EHS&S software, like Locus Platform that will audit your data as it is entered. This means that anything from SCADA to historical outputs, samples, and calculations can be entered and vetted. Further, consider checking your data against other sources and doing exploratory analysis to greater legitimize your data.

Validated Data

AI requires data, and a lot of it—aggregated from multiple sources. But no amount of predictive analysis or machine learning is going to be worth anything without proper data validation processes.

Collected data must be relevant to the problem you are trying to solve. Therefore, you need validated data, which is a truly difficult ask with Excel, in-house platforms, and other EHS&S software. Appropriate inputs, appropriate ranges, data consistency, range checks (to name a few)—are all aspects of data that is validated in a modern EHS&S software like Locus Platform. Without these checks inherent to a platform, you cannot be sure that your data, or your analyses are producing useful or accurate results.

Possibly the best reason to get started with AI is the waterfall effect. As your data uncovers hidden insights and starts to learn on its own, the more accurate your new data will be and the better your predictions will become.

One System of Record

A unified system of record and a central repository for all data means that you see an immediate increase in data quality. Starting with AI means the end of disconnected EHS&S systems. No more transferring data from one platform to another or from pen and paper, just fully-digitized and mobile-enabled data in one platform backed up in the cloud. You also gain the added benefit of being able to access your data in real-time, incorporate compliance/reporting on the fly, and save time and resources using a scalable solution instead of a web of spreadsheets and ad-hoc databases.

Whether you are ready for AI or not, investing in these otherwise useful steps are necessary for any program looking to harness the power of artificial intelligence. When you are ready to take that next step, you will be well on the path to AI implementation, with a solid data infrastructure in place for your efforts.

Contact us to get prepared for AI

To learn more about artificial intelligence, view this NAEM-hosted webinar led by Locus experts, or read our study on predicting water quality using machine learning.