Establishing and Tracking Effective Environmental Performance Metrics

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1 Establishing and Tracking Effective Environmental Performance Metrics

2 Introduction Brad Waldron, QEP BS in Environmental Science MS in Environmental Management Vice President of NGE, LLC Over 13 years of experience Developed management tools and programs for numerous industrial clients.

3 Overview Why metrics are important Starting the development process Best use of indicators Examples of effective goals Data collection and tracking Communicating progress Other elements to consider

4 Why are Metrics Important? Achievable goals are the first step to self improvement. - J. K. Rowling, Harvard Commencement Address, 2008 Track environmental performance Demonstrate continuous improvement Foster opportunity Motivate employees Detect and address weaknesses

5 Getting Started The Meeting Invite the right team Involve a qualified third party Review the operation Review the management system Discuss aspects and impacts Consider strategic opportunities

6 Defining Goals Goals need to be more than just smart, they need to be

7 Defining Goals Goals need to be more than just smart, they need to be

8 Use of Indicators Pieces of data relevant to the metrics Look for things already available Consider process and operational data Data should be on a relevant schedule Stay focused on simplicity

9 Keys to Successful Metrics Stay SMART Collect Useful Data Use Normalized Goals Look to Double-Dip Operations, then Regulatory Use Surrogates Cautiously

10 Stay SMART Goals need to be more than just smart, they need to be

11 Collect Useful Data Objective versus subjective Well defined measurements Discrete values where possible Avoid collection just in case Be able to explain how its used

12 Use Normalized Goals Level the field by tying together Common factors are production and revenue Be certain to define the parameters Production raw production or first quality? Revenue which currency or product line?

13 Look to Double-Dip Resource conservation = reduced cost Waste minimization = lower disposal fees On site recycling = substituted raw material Selling co-product = additional revenue stream

14 Operations, Then Regulatory Plan ahead to compare facilities Across borders, look for operational similarity Same process in a different location Resource and materials use are comparable Regulations aren t, so compliance metrics aren t Production normalization is a strong option

15 Use Surrogate Indicators Cautiously Avoid production equivalents and factors If factors exist, revisit their development Use direct data where possible If using surrogates, ensure consistency

16 Examples of Goals that Worked Reduce natural gas consumption by 5% over three years without a reduction in production. Increase recycling rate of waste materials generated to over 90% in under two years. Reduce total Toxic Release Inventory reported releases by 10% in less than five years. Stop discharging process wastewater to the environment in the next ten years. Change electricity consumption to at least 20% from alternative sources over the next five years.

17 SPECIFIC Examples of Goals that Worked Reduce natural gas consumption by 5% over three years without a reduction in production. Increase recycling rate of waste materials generated to over 90% in under two years. Reduce total Toxic Release Inventory reported releases by 10% in less than five years. Stop discharging process wastewater to the environment in the next ten years. Change electricity consumption to at least 20% from alternative sources over the next five years.

18 MEASURABLE Examples of Goals that Worked Reduce natural gas consumption by 5% over three years without a reduction in production. Increase recycling rate of waste materials generated to over 90% in under two years. Reduce total Toxic Release Inventory reported releases by 10% in less than five years. Stop discharging process wastewater to the environment in the next ten years. Change electricity consumption to at least 20% from alternative sources over the next five years.

19 ACTIONABLE Examples of Goals & that REALISTIC Worked Reduce natural gas consumption by 5% over three years without a reduction in production. Increase recycling rate of waste materials generated to over 90% in under two years. Reduce total Toxic Release Inventory reported releases by 10% in less than five years. Stop discharging process wastewater to the environment in the next ten years. Change electricity consumption to at least 20% from alternative sources over the next five years.

20 TIME CONSTRAINED Examples of Goals that Worked Reduce natural gas consumption by 5% over three years without a reduction in production. Increase recycling rate of waste materials generated to over 90% in under two years. Reduce total Toxic Release Inventory reported releases by 10% in less than five years. Stop discharging process wastewater to the environment in the next ten years. Change electricity consumption to at least 20% from alternative sources over the next five years.

21 Data Collection Avoid handling more than once Avoid handling at all, but Depends on availability Paper copy? Microsoft Excel? Proprietary production system? SAP?

22 Progress Tracking and Communication Constant is best Electronic basis and availability Tables of data aren t immediately useful Utilize simple and colorful visuals Develop a dashboard

23 Sample Dashboard

24 Other Considerations How is progress reviewed? How are progress and results communicated? What is being done to ensure success? What will be done to learn from failure? How to incentivize within the organization? How is achievement rewarded?

25 Potential Rewards Fresh motivation for workforce Complete review of operations and impacts Focused on performance and improvement Deeper understanding of programs Cost savings Decreased liability Improved public image

26 In Summary Involve management and relevant operations Overall approach look at everything SMART goals Proper indicators Strong visual communication of status Allow the system to evolve and grow

27 Management Systems as a Solution

28 Problems with verifying Performance Metrics Time Are we on time? Who has the time?! Measurement & Metrics How do we grade performance? Are we making progress? Validity What is missing? How accurate is what we have? Communication Dissemination of information Giving measures meaning for Management Stakeholders

29 Data Benefits - Integration of Content and Metrics Content Metrics Human Rights Due Diligence of Vendors and Suppliers Labor Practices Injury Rates The Environment Fair Operating Practices Consumer Issues Community Involvement Greenhouse Gas Emissions Monitoring Training Rates Customer Complaint Resolution Man-Hours Donated to Community Projects

30 Workflow Benefits - Integration of People & Process Standardization of Business Processes Automation Consistency Accuracy Accountability Auditable Work Trails Security Reduced Burden for Data Entry and Reporting Operational structure and language

31 The Management System Solution Data Metrics Process People

32 SAI Global EHS Solution Business Processes Health & Safety Environmental Risk Business Behavior-Based Observations Emergency Preparedness & Response Incident / Event Management -Investigation -Root cause analysis Industrial hygiene - Exposure assessment - Sampling data Injury Case Management / Return to Work Occupational Medicine & Medical Surveillance Work Permit Air & Water Discharge Monitoring Greenhouse Gas & Emissions Tracking Hazardous Substance Management Permit / Obligation Management Rehabilitation Planning Stakeholder Management Waste Management Business planning Hazard analyses - Hazard Register - Job Hazard Analysis Management of Compliance Risk Risk Management - Risk review - Risk Assessment - Risk Treatment Action management 3rd Party / Contractor Management Competency, Training & Awareness Key Performance Indicators Knowledge Management / Lessons Learned / Corporate Communications Management of Change Meeting Management Procedural checklists Quality Management Self-Assessments / Inspections / Audits

33 Sample Metric Dashboards

34 Sample Metric Dashboards

35 Sample Metric Dashboards

36 Sample Metrics Dashboard

37 Contact Information Brad Waldron, QEP, Vice President NGE (412) Neil Eddy, Sr Vice President SAI Global Compliance EHS Solutions (713)

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