Legal news and trends for Canadian in-house counsel and c-suite executives
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FEATURE Law School, and the co-author of Green to Gold. "There's no quicker way to destroy a corporate reputa- tion than to have a major environmental violation chalked up against a company," says Esty. "So ensuring that the baseline of compliance with the law is in place is a critical starting point for every company." The path to a greener company may begin with compliance, but smart companies recognize it shouldn't end there, says Esty. "Companies that simply keep their heads down and try to focus on compliance are at risk of being left behind," he says. "There's an increasing logic to paying attention to how envi- ronmental costs and risks are managed. And companies that do better than their competitors are likely to step out in front of the pack," he says. "A smart company is always asking its lawyers to do more than simply ensure compliance, but to be part of a team that is really working sustainability into the fabric of a company and into its approach to the marketplace." Greener and richer? A growing number of executives recognize that making the environment part of an overall business strategy makes good business sense, says Esty. Becoming more eco-efficient boosts a company's bottom line by reducing costs, and putting more effort into risk reduction also gives companies a competitive advantage. "To the extent that a company is able to manage environmen- tal risk, and reduce exposure to carbon charges, or the liability for hazardous waste, its position in the market will be strength- ened, its bottom line will be improved," he says. Concern about the environment is now a broadly held soci- etal value, and brand and image that is connected to the envi- ronment can be very powerful, says Esty. Wise companies see opportunities to drive revenue by bring- ing goods or services to the marketplace that respond to the customers' desire for an improved environmental result. And opportunities also exist to appeal to segments of the population that are even more green-focused, like young people, women, and those with enough disposable income to put their values to work as they buy things, he says. Of course, some companies are further ahead of this curve than others. Corporate social responsibility and sustainability were part of the core philosophy at Husky Injection Molding Systems Ltd. long before many of the legal and regulatory requirements ar- rived on the scene, says Michael McKendry, Husky's vice presi- dent, legal and general counsel. A deep concern for the environment is woven into all facets of the company's business, and Husky is widely recognized as a leading environmental company. But McKendry says Husky's green ways are not driven by a desire for recognition. They sim- ply make good business sense. To make his point, McKendry points to Husky's bottom-line- boosting waste-diversion programs at all its facilities. "Our Bol- ton campus, for example, has a waste diversion program that not only diverts 94 per cent of waste from the landfill, it also generates approximately $1 million through the sale of recy- clable material, revenue that flows straight to Husky's bottom line," he says. Environmental Management Systems Environmental law lawyers say most large corporations of sub- stance now have environmental management systems in place to proactively identify and manage environmental risks. The minimum goal of an EMS is compliance with the law, but a growing minority also use these systems to set targets that are more stringent than basic legal requirements, says environ- mental law lawyer Dianne Saxe of Saxe Law Office in Toronto. "Many companies go beyond compliance and they do it for different reasons," she says. "Sometimes they do it because of genuine conviction. Sometimes they do it because they live in the area. Sometimes they do it because they are worried about future regulations." Research shows that those with management systems are less likely to have accidents, she says. In fact, Ontario provides a fi- increasing logic to paying attention to how environmental costs and risks are managed. And companies that do better than their competitors are likely to step out in front of the pack." — DANIEL ESTY, YALE LAW SCHOOL 26 FEBRU AR Y 2008 C ANADIAN Lawyer INHOUSE "Companies that simply keep their heads down and try to focus on compliance are at risk of being left behind. There's an