Most businesses are driven by departmental functions: HR, IT, finance, sales and marketing, customer support, tech support, etc., etc. And most departmental functions are driven by processes. But are these processes “systematized”? Proactive? That is, do they provide access to more information more quickly, drive efficiency via automation, and lead to new levels of process improvement, innovation, and creativity? That’s the magic behind digital transformation, especially for environmental compliance. 

The digital transformation movement, which took hold around 2015, has changed how departmental functions work. And sectors such as retail, healthcare, and manufacturing have led the Digital Revolution ever since. These industries and others have realized the value of digital technologies for functional processes from tracking customer data and maintaining patient records to formulating production reports and financial statements. 

Yet in comparison, EHS professionals and their departments have often been late to the digital party — especially for data-intensive processes like EPCRA Tier II reporting for environmental compliance. What they’re missing, then, is the opportunity to create proactive processes within the functions of an EHS departmental operation: to make data easier to manage and processes more effective in the effort to avoid non-compliance violations.

But that’s the good thing about digital transformation and the technologies and practices that drive it: It’s never too late to embrace them. In fact, some EHS organizations have already turned to digital transformation to automate environmental compliance and reporting processes and make them more “intelligent.” They’ve reimagined the operational aspects.

Proactive environmental compliance, particularly with Tier II and other compliance activities commanding attention year-round, has become the norm instead of the exception for top-performing companies. And digital transformation is an opportunity for EHS teams everywhere to become proactive in the way they manage compliance… and avoid, minimize, and mitigate the risk of non-compliance events.

Proactive vs. reactive environmental compliance

The reality of environmental compliance is that not complying with federal and state environmental laws, like EPCRA, is not an option. For EPCRA compliance, it’s imperative that companies have a chemical management program in place. A company must be able to identify which chemicals they have onsite that are on the EPA’s List of Lists, and then be able to track when these chemicals exceed planning threshold quantities (TPQ).

As regulators and other stakeholders continue looking for ways to minimize and mitigate the risks from hazardous chemicals in use by industry, EPCRA Tier II requirements will likely continue to become more complex. Subsequently, the risk of non-compliance will increase as a result. Additionally, EPA announced in 2020 a new 3-year compliance initiative to identify ways to reduce risks from onsite hazardous chemicals and accidental releases.

Risk of non-compliance is still high in many companies

So why do many companies in the U.S. run the risk of being out of compliance with Tier II? Safe to say, a lack of sufficient staff and technology is often an issue. Some companies just don’t have the capacity or resources to accurately track and manage onsite chemicals on a regular basis. 

This inability leads to EHS staff scrambling in January and February to prepare their Tier II submissions, even though they know Tier II submissions are due every year on March 1. And instead of eliminating the risk of non-compliance, the company elevates it. 

Many companies scramble to prepare Tier II submissions
in January and February. Instead of eliminating
the risk of non-compliance, they elevate it. 

Are these companies reactive? Yes, they are, although not always by choice. For their EHS operations, this is where digital transformation can help them take a proactive approach to environmental compliance and EPCRA Tier II reporting. By transitioning from a manual system to one of digitized data and automation, an EHS operation can centralize critical facility level data and standardize the reporting process internally, and then externally to all respective state  and local agencies. 

Other issues to address proactively 

Labor intensive manual work. Collecting information from disjointed point systems and cutting & pasting data from spreadsheets for Tier II reports can require hundreds of dedicated people hours. It takes time away from other compliance programs and tasks.  

No central, standard, repeatable process. Many companies execute Tier II reporting at the facility level, leaving it up to someone in operations to collect data, review it, and submit it. From year to year, the process is uneven or started over, and regional or corporate environmental SMEs might or might not be part of it. What happens when the person who’s been doing the report leaves the company or changes roles? Without a single source of the truth, passing down institutional knowledge can be problematic.  

Inaccuracies in Tier II reports. Some companies submit Tier II forms just to check the environmental compliance box (sometimes even when they don’t have to). Unfortunately, this often leads to rushed submissions that are error prone, with no QA to fix inaccurate information before forms are submitted. 

Back-reporting on missing Tier II filings. According to EPA, facilities discovering they were supposed to file Tier II reports in prior years are obligated to do so in accordance with their state program requirements. Remember, backlogs pile up, and a lack of EHS staff and efficient technology can amplify the problem. If an EHS organization doesn’t have the resources for upcoming Tier II filings, how can it ever plan to address back-reporting? 

Zero effective technology innovation for reporting. State and federal reporting portals remain non-standardized and hard to navigate. (Not surprisingly, many state agencies are behind the digital transformation curve.) Being proactive is a necessity to overcome the technology complexities at the state level, especially for companies with operations across multiple states.

Executive visibility, budgeting, and time allocation. Some companies try to manage chemical inventories to avoid Tier II filing requirements. This might be considered a proactive practice, but more often than not, it’s a reactive one due to lack of visibility into onsite chemical inventory data. This can leave companies either late in their reporting or simply out of compliance. 

When environmental compliance meets digital transformation

As some companies and their EHS teams have already discovered, the digital revolution has given them whole new ways to manage environmental compliance. Digital transformation technologies and practices further help them drive continuous improvement, particularly for EPCRA Tier II reporting and the other compliance-related issues we just noted.

In the move to proactive environmental compliance, here’s what else happens when compliance and Tier II reporting meets digital transformation.

Collaboration, transparency, and compliance confidence improve

A digital platform (such as the end-to-end Encamp platform) can give EHS directors and teams — as well as corporate leaders — a single view of all facilities and compliance activities. This 360°view is critical to transparency and year-round proactive compliance alike. 

EHS operations are able to track and manage chemical thresholds in near real-time. They standardize, streamline, and continually improve reporting processes and tasks across locations, with submissions coming down to a single application. And with constant, real-time progress and completion statuses, confidence that your business is in complete compliance is visible from the facility level to the C-suite and all points in between. 

Data is more visible, automation eliminates mistakes, and users are happier 

In replacing spreadsheets and point systems, a digital platform lets EHS employees locate and access the right data quickly. Automating critical processes for data compilation and reporting also enhances the user experience and productivity, and minimizes new employee training and turnover. 

More importantly, such automation minimizes human error and the risk of potential non-compliance as transparency takes over. Other risks from spreadsheets, people hours lost, lack of visibility, resourcing issues, and costly consultant manpower are also minimized or eliminated. Every company is striving to achieve these goals to improve EHS workforce output and the bottom-line.

You weigh outcomes, not just results

According to a February 2020 ASK EHS blog, “Outcomes are derived from planned exercise and execution, whereas results can simply be produced with a hack job. The key distinction between them is measurability.” Or translated, the difference between proactive and reactive.

As the ASK EHS blog further noted, proactive environmental compliance and adoption of a digital platform lets EHS leaders “encompass and navigate the course of compliance and statutory requirements with strategic process mapping and goal setting throughout the year.” 

This in turn helps an EHS organization gain a holistic understanding of what’s happening across the business. Importantly, instead of analyzing lagging indicators after the fact, EHS operations are able to measure leading indicators that enable them to implement countermeasures proactively. At all times, then, the business knows its actual compliance status.

Non-compliance risks are real

We’ll reiterate, non-compliance risks are real. Under EPCRA, the EPA is permitted to fine businesses more than $50,000 per day, per violation, until a non-compliance issue is resolved to the agency’s satisfaction — including late reports, missed reporting, or inaccurate data. 

This makes the executive focus on efficiency and investment in sustainability and technology equally important to proactive compliance management. Digital transformation is one way to make this happen.

Encamp to proactively manage risk

Encamp is an environmental compliance platform that lets companies proactively manage risk. EHS teams aggregate and centralize data, streamline workflows, and automate the submissions of filings and payments, and comply each year with complete confidence. 

In one end-to-end solution, the Encamp platform is digital transformation and proactive environmental compliance at its best. 

Associated blogs 

EHS Digital Transformation: SaaS is a Good Thing

EHS Digital Transformation: The Need for New Mindsets

EHS Digital Transformation: The Tech Vendor Partnership

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