An environmental policy is a common way to communicate the company’s commitment and statement on how it seeks to meet its responsibilities to reduce its impacts on the environment. All companies can contribute to reduce its environmental impact, and the OECD's guidelines for multinational enterprises promotes for example how companies can contribute to economic, environmental, and social progress. One part of the OECD guidelines are based on and reflects the principles and objectives found in the Rio Declaration on Environment and Development (Agenda 21), the Aarhus Convention, and the ISO Standard on Environmental Management Systems.
The policy is usually communicated internally within the company and externally to customers, suppliers, stakeholders such as investors/shareholders, service providers and civil society. One objective of having an environmental policy is that the whole company learns and understands what kind of environmental impacts the organization faces and contributes to. Please note that there is no set format for what an environmental policy should look like. Therefore, the policy can and should be specific to the organization and relevant to its activities. It may also be integrated with other policies depending on the company’s size.
A successful policy should be:
Realistic, achievable, and relevant to the company’s activities.
At most one or two sheets of A4.
Written in easily understandable language – Make complex issues into clear and understandable language when possible.
Publicly available and dated for transparency reasons.
Approved at the most senior level/top management, they should also be responsible for implementing the policy throughout the whole company, including ensuring everyone understands the requirements of and works along the policy.
Developed by engagement with environmental experts.
The organization's policy must include:
General information of the company's mission - which provide the necessary background for the overall policy.
Policy commitment - An explicit commitment, understood at a minimum as the OECD Guidelines for multinational enterprises, that the company, complies with the framework of laws in the countries in which they operate, and in consideration of relevant international agreements, principles, and standards, take due account of the need to protect the environment and public health and safety.
Requirements - The company's expectations on respect for the environment of the workforce, suppliers, and other stakeholders
Encouragement of stakeholders and suppliers – to implement the company’s environmental practices, standards, and targets.
Implementation processes - How the company implements the environmental policy within the company and through other business relations, e.g., communication and training.
Compliance – with all relevant environmental legislation
Remedy practices - Explain the company's remedy processes that applies when the company causes or contributes to adverse environmental impacts.
Continual improvements – The company must have processes in place to monitor its impact on the environment and document the steps to enable actions and possibilities to continuously improve. It should also be reviewed regularly to ensure legitimacy and relevance.
The organization's policy can be adopted to suit the particular business activities of the company. All companies have different environmental impacts depending on its operation and location. The company’s policy should be tailored to its activities. The following environmental areas are commonly used in a company’s environmental policy: transport, recycling processes, waste management, water management, energy management, use of chemicals, deforestation-related products, and pollution reduction processes.
Please note that a policy or any policy is not a 100% solution for avoiding or mitigating potential/actual negative impacts. But it is a good first step for communicating what is expected internally, for business relationships, and external stakeholders to understand the issues facing the company, and how to act on them.
Example of don’ts in an environmental policy
The policy does not outline what the company does, it’s too general and the reader can’t understand what context the company operates in and thereby can't understand the full picture of the environmental issues.
Suppose the language is too complex and can only be understood by an environmental specialist. This probably doesn’t improve the company’s environmental impact.
Unrealistic – “We will have zero emission by the year 2050” without any explanation of the transition plan on how the company will get there or what the yearly target should be.
Not specific enough – “We’ll set targets to reduce our water consumption” – must include an explanation of the target.
Signed by the wrong person.