Drafting an environmental policy is a valuable way for a company to clarify its commitment to managing its environmental impact. It can also serve as a valuable component of your ESG toolbox.   

An environmental policy can help provide a vision for employees to understand their roles and responsibilities. It can also help improve company decisions, reduce costs, and improve efficiency across the organisation. 

Promoting an environmental policy can also help improve relationships with customers and suppliers that want to see a commitment to sustainability. 

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What should an environmental policy look like?  

There is no single standard format for crafting an environmental policy, but there are several best practices to follow: 

  • The document should be short, ideally no longer than a single page.
  • The policy should clearly state the organisation’s objectives, as well as the benefits of the policy to the company’s 
  • The policy needs to make sense in terms of the wider objectives of the business. There is no point in creating targets for waste reduction or new behaviours if these are going to detract from the overall function and performance of the business. Key factors to consider include cost and risk reduction and PR and sales benefits.
  • It should be displayed publicly and online, and should be easy for everyone to read and understand. 
  • It should be realistic, achievable and relevant to the company’s activities. 
  • It should include the signatures of the company’s leadership to show their personal buy-in of the plan. 

In order to create an effective environmental policy, you should first assess where your business currently stands in terms of its environmental activities. It may be worth outlining the company’s history of environmental decisions, its current carbon footprint, and the main challenges the company faces. 

It may also be worthwhile to conduct a benchmarking exercise to establish how your company compares against similar businesses.

What should an environmental policy do?

A good environmental policy should contain brief statements on the company’s plans to: 

  • Continually improve environmental performance
  • Manage its environmental impact
  • Manage expectations regarding suppliers and other value chain links
  • Comply with relevant environmental legislation
  • Educate employees regarding the environmental effects of their activities
  • Continue monitoring and review of its environmental performance on a regular basis 

Specific challenges you may want to address could include:

  • Transportation
  • Efficient use of energy and water
  • Recycling packaging materials
  • Minimising waste
  • Use of environmentally-friendly materials
  • Industry-specific legislation and standards
  • And other company-specific topics

You should make sure to keep your environmental policy updated with regular policy reviews and reports on the progress of key performance indicators. You should also make sure that the policy is adapted as consensus positions in the scientific and business communities evolve. 

Creating and maintaining a well-crafted environmental policy can be an invaluable tool for a company to convey its sustainability objectives to employees, investors, suppliers, and customers. As more and more companies seek to improve their ESG performance, formulating an environmental policy is an important early step.