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V s it enters its second decade, environmental auditing has come of age. Recognized today as a cornerstone of sound environmental management programs, environmental auditing was born in the wake of environmental regulations that proliferated in the 1970s and 1980s (see Figure 1).Companies seeking to monitor their compliance performance turned to environmental auditing as a pro-active management tool to identify, assess, and address environmental concerns. This paper reviews what environmental auditing is and its evolution into a distinctive professional discipline.
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What is environmental auditing? Because of the simultaneous development of environmental auditing programs in different organiza1706 Environ. Sci. Technol., Vol. 26, No. 9. 1992
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A PROFESSION COMES OF AGE B Y D O N A L D P. D U F F Y J U L I A N A E. POTTER tions, the practice of environmental auditing bas coalesced more rapidly than the names used for it. A variety of terms are often applied: “review,” “surveillance,” “survey,” “assessment,” “appraisal,” “evaluation,” and “audit” ( 1 ) . The term “audit” and the concepts of auditing come from financial management. As “an independent appraisal function established within an organization to examine and evaluate its activities” (21, environmental auditing
has much in common with internal financial auditing. In the environmental context, auditing entails a “systematic, documented, periodic, and objective evaluation” ( 3 ) of an organization’s compliance with governmental and company requirements. Among mature environmental auditing programs, audit objectives increasingly include an evaluation of the effectiveness of facility environmental management programs and an assessment of the potential risks associated with site operations. Environmental auditing should not be confused with environmental site assessments, which focus on identifying the liabilities associated with contamination of real estate. Compliance and operational management are not typically components of an environmental site assessment unless they affect site contamination.
0013-936X/92/0926-1706$03.00/0 0 1992 American Chemical Society
Components of auditing programs Differences in environmental auditing programs tend to reflect the differences in organizations’ cultures and objectives. The most common variations are in program scope, frequency, and staffing. Audit programs typically examine air and water quality, hazardous and solid wastes, and toxic substances. Many auditing programs also include workplace health and safety. Specific audits may cover all program areas or may be selectively targeted to a few areas. Some environmental auditing programs call for annual auditing, although it is more common to find a two- to five-year cycle. Staffing may come from facility, divisional, or corporate staff, consultants, or any combination of these.
costs that would “materially” affect the company. Settlement of three enforcement actions by the S E C U S Steel (19771, Allied Chemical (19791, and Occidental Petroleum (1980)provided an additional stimulus. Each settlement included agreements that the companies establish corporate-wide environmental audits to accurately determine the extent of their environmental liabilities (7-9). The experiences of these companies laid the groundwork for environmental auditing as a discipline and profession. Evolution of the profession The development of environmental auditing is closely tied to the experiences of early auditors and their interactions. Corporate environmental auditing started in the 1970 iendently, v “’ o their COUI
starting the establishment of technical and ethical standards for environmental auditing. Organizational development The EAR’S growth has paralleled the rapid development of the profession. The roundtable opened its meetings to all interested parties in 1984, and membership rose rapidly by word of mouth (Figure 2). Growth has led to increased organizational structure, but the informal interactions that have been a strength of the EAR have been maintained. Organizational principles were adopted in 1985, and work groups were established to focus on specific aspects of auditing, such as audit program design, practices and procedures, and auditor trainine and oualifications.
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ppropriate ega review and oversight. Origins The impetus for the development of environmental auditing was the increasing web of government requirements adopted throughout the 1970s and 1980s. The passage of the Clean Air Act (1970), the Clean Water Act (1972), the Toxic Substances Control Act (1976), and the Resource Conservation and Recovery Act (1976) created extensive compliance obligations. The earliest environmental auditing programs, such as General Motors’ program which started in 1972 (J. Barzotti, personal communication, Feb. 1991), were established to assess company compliance with these new laws and regulations. Meanwhile, the Securities and Exchange Commission (SEC) had adopted and refined its requirements for publicly held companies to disclose environmental compliance
ivironmer table (EAR) u..u quarterly. Its obje( information on en diting policies, procedures, practices, and techniques. However, participants also benefited from contact with colleagues having common interests and experiences. Early in its history, the EAR influenced government policy. When EPA was developing policy options on auditing in the early 198Os, the agency’s project manager for environmental auditing was invited to join the EAR. These interactions were m u t u a l l y beneficial a n d helped shape the subsequent EPA Policy on Environmental Auditing (3; K. Blumenfeld, personal communication, Feb. 1991). The dialogue and sharing of information by these early practitioners of environmental auditing spurred development of the profession by bringing together environmental professionals with a common interest in auditing, clarifying the specialized knowledge needed to conduct environmental audits, and
mental auditor professionalism. The IEA publishes a newsletter, offers training courses, and is developing standards leading toward a professional certification program. The EAF, IEA, and EAR have affiliated to share communications, and they hold joint meetings annually. In addition, the Edison Electric Institute’s Environmental Auditing Task Force has been active since 1983 in developing auditing tools and providing an information forum and training for the utility industry. Future trends Further development within the profession can be expected in the 199Os,due to the demonstrated benefits of auditing programs and the embracing of environmental auditing by practitioners of Total Quality Management (12,13).Specific challenges facing the profession include developing recognized standards, establishing formal training proEnviron. Sci. Technol.. VoI. 26, No. 9, 1992 1707
(2) The Institute of Internal Auditors.
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Standards for the Professional Pmctice of Internal Auditing; IIA: Altamonte Springs,FL, 1978. (3) U . S . Environmental Protection Agency. “EPA Policy on Environmental Auditing”: 51 Fed. Reg. 25004, July 6,1986. (4) International Chamber of Commerce. ICC Position Paper on Environmental Auditing: ICC. Paris. France, 1988; Document No. 210/285Rev.2. ( 5 ) Cahill, L. E., Ed.; Environmental Audits: Government Institutes, Inc.: Rockville, MD. 1989. (6) Environmental Auditing Roundtable. “Guidelines far Written Environmental Audit Program Procedures”; EAR Washington, DC, March 1990. (7) SEC v. Allied Chemical Corp., No. 770373 (D.D.C., March 4,19771. (8) SEC Y. United States Steel Corp. (1979-1980Transfer Binder), Fed. Sec. L. Rep. (CCH) 82,319(19791. (9) SEC v. Occidental Petroleum Corp. (1980 Transfer Binder). Fed. Sec. L. Rep. (CCH) 82,622 (1980). (10)“A Discussion Paper on the History and Operating Principles of the Environmental Auditing Roundtable”; Roy F. Weston. Inc.: West Chester, PA, 1986. (11) Environmental Auditing Roundtable. “Code of Ethics”; EAR: Washington,
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Dc,1991. Smith, A. C. Total Quality Environmental Management 1881,1,3-9. (13)MacKensie, J. C. ”Environmental Leadership Through Quality”; In Proceedings Corporate Quality/Environmental Management: The First Conference; Global Environmental Management Initiative: Washington, DC,January 1991. (12)
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grams, and implementing meaningful certification programs. Additionally, industry, government, and the public will need to resolve whether environmental auditing should be mandated or voluntary, whether a company or a third party should conduct the audit, a n d whether audit findings should be kept confidential or be disclosed. These issues are shaping the direction of environmental auditing in the United States and internationally. Increased interest i n ‘‘green’’products and environmental stewardship transcends national boundaries. The European Community’s proposed market incentives for companies who audit promise to create a demand for environmental auditing services in Europe. Envi1708 Emiron. Sci. Technol.. Vol. 26,No. 9,1992
ronmental auditing organizations are currently forming in Europe and Canada in response to the increasing need for professional auditors. Clearly, the environmental auditing profession will go through significant growth and challenges during the decade to come.
Donald P. Duffy, P. E., is a n office manager with SEC Donohue Inc. [Minneapolis. MN), an environmental engineering consulting firm. He has a M.S.degree in envir o n m e n t a l engineering from Stanford University and a B.S. degree in civil engineeringfrom the University of Illinois.
Acknowledgments The authors t h d Ann Smith of AlliedSignal, Inc., for suggesting that this article be written. Additional thanks to J. Ladd Greeno of Arthur D. Little, Inc., for his comments. and Robert Cutler of Olin Corporation for sharing his files on the origins of the EAR.
References (I)
Grwno, J. L. et al. Enviranmental Auditing; Arthur D. Little: Cambridge, MA, 1987.
has an M.S.degree in water resources management from the University of Wisconsin-Madison and an A.B. degree in
