Environmental due diligence: layman’s guide to passing acid tests

Compliance with regulation, product liability and contaminated land are complicated problems for businesses to solve.

The consequences of non-compliance are potentially far-reaching and may threaten an organization’s financial viability, the relationships with financial stakeholders and customers, and continuity in production.

Environmental due diligence and environmental assessment are important tools for use in economies where free movement of capital is encouraged and continually growing.

A business will usually appoint an environmental consultant (often through a solicitor) to undertake the due diligence required, assess the organization’s potential environmental liabilities and advise on the implementation of measures to address these.

It can be difficult for the client and intermediary to understand the intricacies of the risk assessments being undertaken. This can result in an unsatisfactory outcome for both the client and consultant. Failure to carry out the necessary and appropriate assessments can leave businesses wide open to the risk of financial or legal liability.

EDD promotes the identification of potential environmental liabilities and impacts, including contaminated land, associated with any corporate transaction, whether it’s a management buy-out, acquisition, merger, disposal, financing or refinancing.

These impacts may need to be managed as part of national regulatory requirements and possibly, in the context of any ISO 14001 policy requirements.

To de-mystify EDDs complexities, Nigel Carter and Larraine Wilde have written a book entitled Environmental Due Diligence – The Role of ISO 14015 in the Environmental Assessment of Sites and Organizations which has recently been published by BSI Business Information as a layman’s guide to the process behind environmental assessment and an insight into EDD.

Organizations seeking advice (mergers and acquisitions departments, commercial banking officials) and legal professionals providing advice will find this book
a useful, independent aid to understanding the environmental due diligence and the role of the environmental standard BS EN ISO 14015 in completing an environmental assessment. The reader will gain a deeper understanding of the processes, and be better informed to brief and engage an environmental
consultant or develop the business consequences on which the entire process may depend.

Nigel Carter is an environmental management consultant, providing advice on industrial waste management, environmental management and auditing, environmental assessment, corporate reporting and associated skills.

He is a member of the Council of Swindon Chamber of Commerce and Industry, and is also the Chairman of BSI Technical Committee SES/1/-/5, Greenhouse gas management, that develops standards for the preparation and reporting of
greenhouse gas inventories. He was part of the UK delegation to ISO TC 207 SC/2 WG4, responsible for drafting ISO 14015.

Larraine Wilde is principal environmental scientist with Sinclair Knight Merz (Europe). Larraine has undertaken environmental assessments, including due diligence audits, in more than 20 countries in Europe, Asia, South America and
Africa, predominantly in the mining and mineral processing sectors. More recently, Larraine led a team of scientists assessing claims of more than $83 bn brought against Iraq for environmental liabilities resulting from the invasion of Kuwait.

Larraine is the UK’s member for the BSI Technical Committee SES/1/2, Environmental auditing and related environmental investigations, and is also the UK’s lead representative on the ISO Technical Committee ISO/TC 207/SC2, Environmental auditing and related environmental investigations, which produced the environmental audit standards in the ISO 14000 series, including ISO 14015.