A good environmental management system can help a company maintain a positive public image and make savings, environmental lawyer Lisa Wilder has claimed.
Wilder, who lectured on the topic for nine years at the London School of Economics before joining Slaughter & May, was addressing blue chip companies invited to an AIG seminar at the Millennium Hotel on January 24 to 25.
New contaminated land regulations came into effect in April 2000 as part of the Environmental Protection Act, ruling that those who contaminate the land must clean it up. But if the contaminators can't be found, responsibility may pass to the landowner or occupier.
Wilder said the two environmental management systems favoured by most companies were the European Commission's eco-management and audit scheme and the ISO 14001.
Both systems champion the formulation of a policy that takes into account regulatory requirements and the environmental effects of the company's activities under normal, abnormal and emergency conditions.
Both systems also look at the setting of environmental objectives that are consistent with the environmental policy and reflect a commitment to improvement over a defined timescale.
Wilder said a good environmental management system could also result in less regulatory oversight by authorities and provide useful evidence should an environmental prosecution occur.
She said insurance against these risks was important but could not wholly cover a company against liability.
"An underwiter may refuse to insure a company with a poor track record, or make its offer of insurance dependent upon an improvement in environmental performance," Wilder said.
"Higher premiums and deductibles can always be imposed by underwriters on companies who've proved they can't or are unlikely to be able to manage risk effectively."
Wilder said the advantage of insurance was that it increased the prospect of compensation, assisted in wealth creation by discouraging defensive behaviour and encouraged companies to take commercially justifiable risks.
"Some insurers are also offering packages to deal with liabilities arising from the new contaminated land regime," she said.
This insurance will cover third-party damage claims from off-site migration of contamination, statutory clean-up costs, business interruption and other economic losses.