1. ENVIRONMENTAL AUDIT

2. ARTICLE :
A company has reportedly
established a soft-drink manufacturing unit in Kerala.
By 2002, the unit has not only begun dumping foul smelling
waste slurry on the nearby land, but also succeeded in
contaminating the water to the extent that it turns white on boiling and
is unfit for drinking, washing or even bathing. Over 1000 families have
been affected in the surrounding villages within a radius of 5 kms., of
which a quarter are adivasis.
• It is also reported that the tribals in that area protesting peacefully
demanding that the factory from which over 39 lakh ml of beverages
are crated out daily, be closed down. The slurry was earlier sold as
fertilizer to ill-informed farmers. Later, as buyers turned wiser, it was
given off free. Now, it is dumped forcibly.
Source :Hindustan Times

3. INTRODUCTION :
Organizational response to the environment and the role of the
accounting profession for the environmental protection are fairly
recent developments.
Environmental issues are business issues and have considerable
implications for 'audit' in all its semblance leading to a separate
specialized area viz., 'environmental auditing'.
It is seen as an essential element in any organization's
environmental response. In view of their core competencies in the
field of auditing, chartered accountants can play a significant role
in the 'environmental protection' - which is one of the essential
objectives of the environmental auditing. .

4. Definition & Meaning
The Confederation of British Industry has defined environmental
auditing as
“the systematic examination of the interactions between any
business operation and its surroundings.”
This includes all emissions to air, land and water; legal constraints;
the effects on the neighboring community, landscape and ecology;
the public‟s perception of the operating company in the local area -
Environmental audit does not stop all compliance with legislation.
Nor is it a „green-washing‟ public relations exercise…. Rather it is a
total strategic approach to the organization's activities.

5. Industry and environment relationship

6. Definition & Meaning
Article 2(f) of the European Union Eco Management And Audit
Scheme defines EA as
• “A management tool comprising a systematic, documented,
periodic and objective evaluation of how well environmental
organization, management and equipment are performing in the
aim of helping to safeguard the environment by :
• Facilitating management and control of environmental practices,
• Assessing compliance with company policies, which would include
meeting regulatory requirements”.

7. Why Environmental Audit
• Business can assess the environmental impact of their operations
• Corporate decisions are spoiling company‟s market for its
products, destroying the source of essential supply, damaging or
polluting the very infrastructure that makes usage and demand of
the product grow
• EA can highlight areas of inefficiencies in process
• e.g. where the amount of resources used are out of proportion to
the amount of saleable items/services produced.
• It can highlight excessive wastes
• Can provide opportunity for business to decrease its wastes
output and reduce the cost of waste treatment or waste disposal

8. EIA goals
• Environmental Impact Assessment is a tool designed to identify and predict
the impact of a project on the bio-geophysical environment and on man's
health and well-being, to interpret and communicate information about the
impact, to analyze site and process alternatives and provide solutions to sift
out, or abate/mitigate the negative consequences on man and the environment.
• The EIA is a means of avoiding environmental disturbances that are always
much more expensive to correct after their occurrence than before. It is also
important to underline that very few projects have been deemed not viable
merely because of the cost of pollution control and that modern environmental
control, in a new plant, is less than 3% of the initial investment.
• The environmental issues must be addressed as soon as possible during project
planning. There should not be any hesitation in abandoning a project or a
process at an early stage, or in proposing alternatives to any project which
would have very detrimental impact on the environment. In the same way as
economic, financial, institutional, or technical analyses, EIA is an integral part
of the project.

9. EA GOALS
“EA should provide answers to the following questions raised by company
managers :
• What are we doing? In particular, are we in compliance with government
regulations, guidelines, codes of practice, permits conditions ?
• Can we do it better? In particular, are there non regulated areas where
operations can be improved to minimize the impact on the
environment?
• Can we do it more cheaply ?
• What more should we do ?”
• It is also important to note that an EA cannot stand alone and must be
integrated in an overall management system and must include dialogue
between the plant manager and people living in the vicinity.

10. EIA and EA Process

11. Steps for EA Audit
• The International Chamber of Commerce presents the different steps of an EA as
follows:
• Pre-audit activities: which include:
– Selection and scheduling of facility to audit,
– Selection of audit team,
– Contact with facility and planning of the audit.
• Site activities: which are divided into 5 steps:
– First understanding of internal controls,
– Assessment of internal controls,
– Gathering of audit evidence,
– Evaluation of audit findings,
– Report of findings to facility.
• Post audit activities: which include:
– Production of a draft report,
– Production of a final report,
– Preparation and implementation of an action plan,
– Monitoring of action plan.

12. Scope of EA
1. Material Audit : The thrust areas of material audit is the effective utilization of
materials, conservation of materials and minimizing wastages in different processes.
2. Energy Audit : It deals with overall energy consumption, minimizing pollution etc.
3. Water Audit : Evaluation of raw water intake facilities and evaluation of water treatment
facilities.
4. Health and Safety Audit : Health and safety measures are examined e.g. occupational
diseases, compliance with labour laws, adequacy of safety measures etc.
5. Environmental Quality Audit : It examines noise level, status of existing air quality,
review of greening program undertaken by the enterprise, Installation and functioning
of anti pollutant equipment.
6. Water Disposal Audit : Review of waste disposal measures relating to solid and hazardous
wastes, recycling etc.
7. Engineering Audit : It analyses the aspect relating to efficiency of plant and machinery,
engineering designs, cost effective methods of production etc.

13. Benefits
• Facilitating comparison and interchange of information between
operation or plants,
• Increasing employee awareness of environmental policies and
responsibilities,
• Identifying cost-savings including those resulting from waste
minimization,
• Evaluating training programmes and providing data to assist in training
personnel,
• Providing an information base for use in emergency response
arrangements,
• Assuring an adequate, up-to-date environmental database for internal
management awareness and decision making in relation to plant
modifications, new plans, etc.,
• Helping to assist relations with authorities by convincing them that
complete and effective audits are being undertaken, by informing them
of the type of procedure adopted.

14. What is EMS
• EMS Stands for Environmental
Management System. It is a system
that enables any organisation
irrespective of its size, type &
setting to
• Manage environmental impacts
arising out of its activities, product
& services
• Ensures compliance to regulations
• Brings continual improvements
• Demonstrate high environmental
performance to others by
conforming to policy, objectives &
targets.

15. Why EMS?
• The reasons why many companies are now adopting an
Environmental Management System includes the following:
• Improve compliance with legislative and regulatory requirements;
• Facilitate access to overseas markets;
• Reduce liability/risk;
• Helps in attracting a high-quality work force;
• Prevent pollution and reduce waste;
• Generate a desire to profit in the market for "green" products;
• Improve the internal management methods
• Create community goodwill

16. What Is ISO 14001
• ISO 14001 is an Environment Management
System (EMS) standard published by
International Organization for
Standardisation in year 1996 and later updated in the
year 2005. It provides a highly effective, globally
accepted framework for establishing and continually
improving the effectiveness of environmental
management. Implementation of ISO 14000 may bring
with it both reductions in environmental risk and
environmental costs.

17. How does the ISO 14001 Certification process
work?
• Pre-assessment Visit: Following documentation review, a pre-assessment visit
is performed visit provides the Lead Auditor with a brief overview of the
clients Environmental Management System.
• For ISO 14001:2004 certification, the assessment consists of two stage
assessment. Both the assessments are conducted at site.
• Stage I: In the first stage, in addition to the system document assessment
the following issues are assessed:
• 1. Identification of Environmental Aspects
2. Environmental regulations and laws are observed
3. Internal Environmental Audit and Management Review
• Stage II: On recommendation of the assessment team, the assessment
moves to the state II of the audit. All Non - conformities raised at stage I
should be closed before going for Stage II Audit. The aspects assessed in
State II are:
• 1 Operation
2 Implementation
3 Effectiveness of the Environmental Management System in the
Organisation.

18. How does the ISO 14001 Certification process work?
• Corrective action requests: The applicant will be required to take
corrective action within the committed time for any non-conformances
found before certification can be granted.
• Certification: STQC Certification Services will issue a certificate of
registration to the applicant once the corrective action has been
accepted and/or implemented. The certificate carries a validity of
three years from the date of issue.
• Surveillance: During the certificate validity period, surveillance
assessments are carried out at an interval of 12 months (max) in the
first and second year of the certificate validity.
• Renewal: The client's quality system is re-assessment for the renewal
of certificate. The re-assessment is carried out before at the end of
the validity period of certificate.

19. Environmental Audit : Indian Status
• In India there is no Statutory requirement for EA in Corporate sector
or in the Government sector.
• Few private sector companies like TISCO,ITC are periodically
conducting EA.
• In India a procedure for EA was first notified under the Environment
Protection Act in 1986 by the Ministry of Environment of Forests.
• This notification requires submission of an “ Environmental Audit
Report” or statement to the concerned state Pollution Board.
• As per the Indian Companies Act, 1956, details relating to energy
consumption/energy conservation are presented in the Director‟s
Report as annexure and it highlights the environment related
policies/problems.

20. How green is the Material Girl?

21. • As London gears up for Saturday's Live Earth concert at Wembley to tackle
climate change, we examine the carbon footprint of headline act Madonna...
• But how green are the Material Girl's own credentials? In the run-up to Live
Earth, an environmental consultant has calculated Madonna's carbon output to
be over 1,000 tons a year.
• Although the environmental audit was offered to Madonna for free, her
management decided not to co-operate.
• Instead messages were posted on her fan site and 'Madonna experts' were
asked to draw up a full itinerary for the singer since May 2006.
• Environmental consultant John Buckley's assessment of Madonna : The lion's
share of the performer's carbon output was generated during the Confessions
Tour, one of the biggest pop tours ever staged.
• Madonna clocked up 56 concerts across the world. At least 100 people, including
crew, dancers and support staff, travelled with her.
• Based on these calculations it's estimated that the tour generated over 651
tons of carbon.
• "Madonna produces the same amount of carbon as 102 average Britons," said Mr.
Buckley. "Even though she runs a global business she's also set herself up as
some sort of ambassador for the environment.
• "Therefore she needs to be seen to be walking the walk as well as singing the
song."

22. THANK YOU