Risk Analysis & Environmental Management
The issue of environmental citizenship can be a complicated one for many reasons. Not the least of these is the fact that our knowledge of the environmental system and our understanding of the impact of our actions on it is an emerging science. As a result, it is sometimes difficult to know what the environmental impact of an organization's activities is. Risk assessment defines the nature of the risk and the estimated probability of its occurrence. Once the risk has been assessed, its value is estimated. There are a number of ways to perform this task, each with concomitant advantages and disadvantages. However, organizations are not on their own when attempting to manage environmental risk. ISO 14000, developed by the International Standards Organization, provides a structured program to both measure and manage environmental risks.
One of the cornerstones of organizational behavior theory is systems theory, which assumes that the organization comprises multiple subsystems and that the functioning of each affects both the functioning of the others and the organization as a whole. However, it is not only the subsystems within the organization that are linked and affected by one another. The organization is also part of larger systems, including the supply chain, society as a whole, and even the environment in which it operates. Although the primary goal of an organization may be profitability, the organization also has a responsibility to all its stakeholders including society and the beings with whom it shares its habitat. To focus merely on profitability while ignoring greater issues is short-sighted at best and the local actions of an organization can have far reaching effects. An organization that is not viewed as a good environmental citizen can soon find itself awash in negative publicity and legally forced to clean up its act both literally and figuratively.
The issue of environmental citizenship can be a complicated one as is illustrated by the current contention over the reality of global warming and human contributions to it. There are successes, too, as illustrated by the recent removal of the bald eagle from the endangered species list. However, for every success story there are stories of problems, from the continuing destruction of the South American rainforest with it untold riches of natural resources, to the environmental impact of the Alaska pipeline, to the Exxon Valdez oil spill. Water, air, and land pollution can poison the environment and affect not only the local floral and fauna -- upsetting the balance in the local ecosystem -- but the human residents in the area, too. Environmental links to health problems such as heart disease, lung disease, and breast cancer have been scientifically demonstrated.
As humans have learned more about the potential links between some corporate activities and the environment, various agencies and concomitant regulations have been set in place. These agencies are concerned not only about the environment as a whole, but more particularly about the natural surroundings in which an organization operates. This includes air, water, land, natural resources, flora, fauna, human beings and the interaction between these elements. Organizations whose actions may affect the environment are typically required to develop environmental policies, plans of action or guiding principles regarding their environmental performance. Sometimes this is as simple as recycling materials used in the performance of day to day business. However, this may also require the development of complex environmental management systems responsible for the development, implementation, and maintenance of environmental policy. The environmental management system includes the organizational structure, strategic activities, responsibilities, practices, procedures, processes, and resources related to these activities. The environmental performance of the organization is based on the environmental policy of the organization and measured against its targets and objectives.
Understanding the Impact of Our Actions
However, our knowledge of the environmental system and our understanding of the impact of our actions on it is an emerging science. Sometimes it is difficult to know what the environmental impact (any positive or negative change to the organization's environment that result in part or in whole from the actions or inactions of an organization, including its activities, products, or services) of an organization is. As a result, an uneasy alliance often occurs between environmental concerns and corporate profitability. Various risks (both the quantifiable probabilities that a financial investment's actual return will be lower than expected as well as the quantifiable probabilities that the organization's actions will have environmental impact) need to be weighed against each other. Risk assessment is the process of determining the potential loss and probability of loss to the organization's objectives. Risk assessment is one step in risk management. Risk management is the process of analyzing the tasks and activities of the organization, planning ways to reduce the impact if the predicted normal course of events does not occur, and implementing reporting procedures so that projected problems are discovered earlier in the process rather than later.
Components to Environmental Risk Assessment
During risk assessment, the nature of the risk is defined and the probability of its occurrence is estimated. There are four components to environmental risk assessment: Hazard identification, dose-response estimation, exposure assessment, and risk characterization. The process of hazard identification comprises the collection, organization, and evaluation of the relevant biological and chemical information about the potential risk situation in order to determine whether or not the organization's actions are potentially hazardous to environmental or public health. The goal of this qualitative process is to determine whether or not the potential hazard reaches the level of risk that requires a full scale quantitative investigation. For example, if the collected data include evidence of cancer, genetic mutation, or childhood development problems, a more in-depth, quantitative investigation is warranted. The second component of risk analysis is dose-response estimation. This process quantifies how health is affected by different levels of exposure to the potential risk. This is a quantification of the effects of various exposure levels (dose) of the hazardous substance in terms of percentage of illnesses or deaths (response). Part of the dose-response estimation is the determination of threshold exposure. This is the level of exposure to the hazard below which only minimal health risks occur. The third aspect of risk assessment is exposure assessment, or the identification of the population with the greatest likelihood of exposure to the hazard, and at risk for negative impact. Finally, risk characterization summarizes the other three factors as a quantitative estimate of risk. It is this characterization that researchers use to determine threshold levels. For those hazards that are non-carcinogenic, threshold levels are bounded by the lowest observed...
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