Week 14

Environmental Management in Organizations

& Environmental Audit

Dr. Hoang Thanh Tung

Faculty of International Studies, HANU
[email protected]
 Environmental
Management in
Organizations

Gilbert M. (2014)
Input-output diagram
for a fruit juice
bottling plant

Whitelaw (2004)
 Environmental
Management Plan

An environmental audit is a type of evaluation

intended to identify environmental compliance and
management system implementation gaps, along
with related corrective actions

Tinsley (2006)
 A case study of
environmental audit:
Input–output table of
production step ‘fish
paste mashing’

Herzig, 2012
 Environmental
Management Plan

An environmental audit is a type of evaluation

intended to identify environmental compliance and
management system implementation gaps, along
with related corrective actions

An environmental management system (EMS) is a

framework designed to help organisations monitor,
control, and continuously improve their
environmental performance.

Tinsley (2006)
 Environmental Management System (EMS) as a voluntary
instruments

Regulatory Market-based Voluntary

instruments instruments instruments

Environmental Technology- Tax emission EMS:

Standards based Subsidy trading • ISO 14001
approaches • EMAS: Eco-
Management and
Audit Scheme
 ISO 14001
ISO 14001 is a set of standards put
forward by the International
Organization for Standardization
(ISO).
Its purpose is to clarify the best
practices for organizations that wish
to reduce their environmental
footprint by adopting an effective
environmental management system
(EMS).
 Benefits of ISO 14001

• Demonstrate compliance with current and future statutory and regulatory

requirements
• Increase leadership involvement and engagement of employees
• Improve company reputation and the confidence of stakeholders through
strategic communication
• Achieve strategic business aims by incorporating environmental issues into
business management
• Provide a competitive and financial advantage through improved efficiencies
and reduced costs
• Encourage better environmental performance of suppliers by integrating them
into the organization’s business systems
ESG: Environmental, Social, and Governance

ESG stands for environmental,

social, and governance, and is a
holistic framework that measures the
sustainable and ethical behaviour of
a business.
Environmental
Auditing
 Midterm-2 missions that relate to environmental audit

1. Title: "Assessment and Improvement of Waste Management Practices in the Local

Community"
2. Title: "Energy Efficiency Audit and Improvement Proposal for a Local Building or Facility“
3. Title: "Community Water Conservation Plan Development and Implementation“
9. Title: "Waste Reduction and Recycling Program Development for a Local Community“
11. Title: "Zero Waste Initiative for a Local Community or Institution“
14. Title: "Pollution Prevention and Control Plan for a Local Community“
16. Title: "Sustainable Practices for a Craft Village"
The audit cycle
Environmental audit as a performance audit
 Identifying environmental problems

Preliminary study:
During the preliminary study, an auditor may turn their attention to the following aspects:
• Is (monitoring) data on the condition of the environment available?
• Are there standards for good environmental status?
• Have any of the standards been exceeded? Which ones? If no standards exist, are there any
other indications of pollution?
• Is there any information about e.g. industrial or land development activity?
• Are there any strategic documents or laws regulating these activities? Are there any targets?
• Are the regulations being implemented?
 Identifying environmental problems

Several methods can be used to search for problems:

• the Internet, e.g. making searches with relevant keywords
• media review, e.g. making a search in media channels, continuous media monitoring
• studying documents from other institutions, e.g. sector reviews
• participating in seminars and workshops and collecting materials/presentations on relevant
topics
• meetings with NGOs, interest groups (e.g. sectoral associations)
• studying international experience, e.g. looking for materials of UN, WHO, OECD, etc. in
Europe – European Commission, European Environmental Agency, universities and think-
tanks
• interviews with auditees, stakeholders, etc., asking them for updated information, changes in
regulations, conducted projects
• area scanning and searching databases for papers and reports
• analysis of major expenditure, e.g. the biggest environmental programmes
• review of previously conducted (including financial) audits
• public surveys, e.g. public polls on citizens’ opinions towards environmental issues
 Stakeholder mapping

For example, while auditing the use of fertilisers and their impact on the aquatic environment
(groundwater or surface water), the following stakeholders might be involved:
• Ministry of the Environment – responsible for making regulations, setting environmental
objectives related to aquatic environment
• Environmental Agency – issuing environmental permits, responsible for protecting aquatic
environment
• Environmental Inspectorate – controlling activities
• Ministry of Agriculture – responsible for making regulations, supporting agricultural
production and sectoral development
• Farmers and their sectoral organisations – interested in agricultural production
• Universities – research on status of aquatic environment and impact of fertilisers
• Environmental NGOs/ local communities – interested in good environmental status and clean
living environment
 Selecting the audit topic

Relevance:
• the scale of the environmental problem (impact),
• public interest in the topic,
• the number of people and the scale of the area affected or endangered by the problem,
• the amount of money involved.
 Planning: designing the audit

Listed below are the key elements to consider when designing an audit:
•What is the objective of the audit?
• What do we want to find out?
•What questions must be answered in order to obtain the audit objective?
•How can we measure performance? What are the criteria?
• Are there relevant national standards/criteria supporting the audit objective?
• Can we find international good practices?
• Can we compare different entities with one another?
• What information do we need? What is the evidence?
•What methods can we use?
• Where are the data located and how will they be collected and analysed?
•What do we expect to find?
• What conclusions can we draw?
 Planning: Audit Design Matrix (ADM)

For practical reasons, it is useful to assemble these elements into one table, which is often
referred to as an Audit Design Matrix (ADM):
Audit objective
Audit questions
 Criteria
An audit criterion describes the desirable
situation used to weigh up the actual situation
Data collection methods
Expected findings
 Field work and analysing results

Field work:
• During a field study, auditors conduct a number of interviews, collect and analyse various
documents and receive information in other formats.
Documentation:
• Auditors should adequately document the audit evidence in working papers. Working papers
are the auditor’s principal record of the work performed and the conclusions reached on
significant matters.

The elements of the working papers are:

• Question and criteria to be answered (related to ADM)
• What and how did we analyse?
• What are the findings and evidence?
• Conclusions
Analysing results
 Preparing a report

Requirements for audit report:

• The audit report must provide well-founded, objective and complete information, analysis
and assessments that add value for decision-makers and stakeholders.
• The report also needs to be convincing and persuasively presented, following the discovered
facts. In order to increase the impact of the audit report, it needs to be written clearly and in
an easy-to-read manner. The report also needs to be concise; no longer than necessary to
convey and support the message.
• An audit report must always be accurate, true, comprehensive and complete, containing all
of the relevant information and arguments to support the audit message.
Criterion-condition-cause-effect

To structure the paragraphs in an audit

report, it is useful to follow a criterion-
condition-cause-effect structure.
How to increase the impact of environmental performance audits
 Recommendations

• Recommendations should be linked to the audit objectives,

findings and conclusions.
• Besides being constructive and realistic, they should address
the problems identified by the audit.
• The likelihood of having an impact is greater if
recommendations are discussed with the auditee.

Example of the recommendation:

•Recommendation for the Environmental Agency

(responsible for implementing Water Management
Plans): More measures should be taken to improve the
status of X River. More attention should be paid to
control pollution from agriculture (both diffuse and
point sources) and municipal and industrial wastewater
treatment.
Publishing an audit report and communicating audit
results

https://sisu.ut.ee/env-intro/43-2/
 Follow-up activities

A few months/a year after completing the audit it is

good practice to gather feedback from the auditees.
This could be done, for instance, as a survey or a follow-
up meeting. In order to receive a comprehensive
response, it is advisable to gather feedback from as
many sources as possible.
Case studies for your reference

https://environmental-auditing.org/audit-database/audi
t-by-issue/
 Reference

• https://sisu.ut.ee/env-intro/study-materials/, MOOC: Introduction to environmental auditing in

the public sector
• https://sisu.ut.ee/water/study-materials/, MOOC: Auditing Water Management
• https://sisu.ut.ee/waste/study-materials/, MOOC: Auditing waste management
• https://sisu.ut.ee/env-infra/study-materials/, MOOC: Auditing the Sustainability of Infrastructure
• https://www.youtube.com/watch?v=gO5LZ_-hucI , Basics of Environmental Auditing
• https://www.environmental-auditing.org/publications/studies-guidelines/, Studies & Guidelines
• https://www.environmental-auditing.org/media/2943/2013_wgea_water_view.pdf, Auditing
Water Issues: An Examination of SAIs' Experiences and the Methodological Tools They Have
Successfully Used
• https://www.environmental-auditing.org/media/5375/wgea-waste-managemen_e.pdf, Auditing
Waste Management
 Possibly useful guidances and case studies for midterm-
• Solid waste management:
2
• https://sisu.ut.ee/waste/study-materials/, MOOC: Auditing waste management
• https://www.environmental-auditing.org/media/5375/wgea-waste-managemen_e.pdf, Auditing Waste
Management
• Energy effiency:
• https://sisu.ut.ee/env-infra/study-materials/, MOOC: Auditing the Sustainability of Infrastructure
• https://www.nku.cz/assets/publikace/auditing-sustainable-energy_guidance-for-supreme-audit-instituti
ons.pdf
, Auditing Sustainable Energy: Guidance for Supreme Audit Institutions
• Water:
• https://sisu.ut.ee/water/study-materials/, MOOC: Auditing Water Management
• https://www.environmental-auditing.org/media/2943/2013_wgea_water_view.pdf, Auditing Water
Issues: An Examination of SAIs' Experiences and the Methodological Tools They Have Successfully Used
• Air pollution:
• https://www.environmental-auditing.org/media/112912/21b-airquality_refurnished_1_phil_eca.pdf,
Research Project on Environmental Health (Focus on Air Pollution)
• Agriculture:
• https://www.environmental-auditing.org/media/2bue0zxq/21f-wgea_agriculture_18-sep-2019_rev.pdf,
Auditing Agriculture and Food Production: Guidance for Supreme Audit Institutions
• Transpotation:
• https://www.environmental-auditing.org/media/ctljw0zl/wgea-wp4_sustainabletransport_2022_rev.pdf,
Auditing Sustainable Transport
 Possibly useful guidances and case studies for midterm-
• Land use:
2
• https://www.environmental-auditing.org/media/2937/2013_wgea_land-use_view.pdf, Land Use and
Land Management Practices in Environmental Perspective
• Eco-tourism
• https://www.environmental-auditing.org/media/2939/2013_wgea_wild-life_view.pdf, Impact of Tourism
on Wildlife Conservation
• Fishery management:
• https://www.environmental-auditing.org/media/3220/2-f-fisheries_sc8.pdf, Auditing the sustainable
management of fisheries
• Environmental data, may be useful for all topics:
• https://www.environmental-auditing.org/media/113693/23g-wgea_environmental-data_2019-fin.pdf,
Training Tool on Environmental Data: Resources and Options for Supreme Audit Institutions
• https://www.environmental-auditing.org/media/2942/2013_wgea_environmental-data_view.pdf,
Environmental Data: Resources and Options for Supreme Audit Institutions
• And other topics can be found in here:
• https://www.environmental-auditing.org/publications/studies-guidelines/