An environmental policy is a written statement that outlines a business' aims and principles for managing the environmental effects and aspects of its operations. Top management must be involved in producing the policy and must understand the principles and commitments in it. It's not compulsory to have an environmental policy but an increasing number of businesses are choosing to have one.

You will need an environmental policy if you want to implement an environmental management standard, such as the European Union Eco-Management and Audit Scheme (EMAS), BS 8555 or ISO 14001.

ISO 50001 is based on the same management model of continual improvement. It provides a framework of requirements for organisations to develop a policy for more efficient energy use.

It's also vital if you currently work or intend to work with large organisations, or if you need to demonstrate to customers and other stakeholders that you are committed to managing your environmental impacts in a responsible way.

This guide sets out the benefits of having an environmental policy. It makes suggestions for selecting the right format and content. It also gives useful tips on how to keep your environmental policy up to date, how to extend its scope to include corporate social responsibility and sustainable development, and how to integrate the policy into your business.

An environmental policy should form the foundation of environmental improvements made for your business. The environmental policy can provide significant benefits to your business.

Advantages of an environmental policy

Some of the business benefits of an environmental policy include:

• helping you to stay within the law
• keeping employees informed about their environmental roles and responsibilities
• improving cost control
• reducing incidents that result in liability
• conserving raw materials and energy
• improving your monitoring of environmental impacts
• improving the efficiency of your processes

The benefits are not restricted to internal operations. By demonstrating a commitment to environmental management, you can develop positive relations with external stakeholders, such as investors, insurers, customers, suppliers, regulators and the local community. This in turn can lead to an improved corporate image and financial benefits, such as increased investment, customer sales and market share.

Put your environmental policy into practice

It's important to bear in mind that these benefits are unlikely to be achieved simply by having an environmental policy in place.

You should make sure that you integrate your environmental policy into your business and put its content into practice. For example, you could set up an environmental management system (EMS) or a less formal programme of environmental improvements.

There is no standard format for writing an environmental policy, but to give it the best chance of success, it's important you plan carefully.

Ways to format an environmental policy

There are a few basic rules to follow when writing an environmental policy:

• keep the statement short - if it's longer than a sheet of A4, then it's probably too long
• the statement is meant for everyone to see, so make sure it's easy to read and understand
• the statement must be realistic, achievable and relevant to your business' activities and practices
• demonstrate commitment to making the policy work and get the statement signed, dated and endorsed by the owner, managing director or other senior manager
• make the policy available on your website
• ask new employees and suppliers to read a copy of the policy

It's important to tailor your environmental policy to reflect your business and its culture. A good starting point is to collect and review examples of policies written by other businesses and select the format and style most appropriate to your own business. However, avoid copying someone else's policy.

Management buy-in for an environmental policy

For your policy to be successful you need to get buy-in from management, by emphasising the key benefits such as cost reduction, improved risk management and increased marketing credentials.

Once you have secured this commitment, it's a good idea to assess where your business currently stands in terms of environmental management. This could include drawing up an environmental history of your business, its impact and the risks faced by it. You should also identify what pieces of environmental legislation apply to your business - see how to carry out an environmental review of your business.

There is no standard content for an environmental policy, although policies normally contain similar themes. Your policy should be personal to your business, so it should reflect the business' main activities, priorities and concerns.

What your environmental policy should contain

The content of your policy should be based on the results of your assessment, which should have identified the key environmental issues that apply to your business.

In addition, your environmental policy should contain brief statements on the following:

• The business mission and information about its operations. Bear in mind that if your business activities or operations change significantly, you may need to amend the policy.
• A commitment to continually improve your environmental performance.
• A commitment to prevent pollution and effectively manage your significant environmental impacts.
• The expectations that your business has in relation to external parties such as suppliers and contractors.
• Recognition that you will comply with relevant environmental legislation as a minimum level of performance.
• Education and training of employees in environmental issues and the environmental effects of their activities.
• Monitoring progress and reviewing environmental performance against targets and objectives on a regular basis (usually yearly or in the first six months initially).
• A commitment to communicate your business' environmental aims and objectives to all staff, as well as to customers, investors and other external stakeholders.

Additional issues relevant to your business that you may wish to address in your environmental policy could include:

• transport - for example the vehicles you own or use
• minimising waste - yours and from suppliers
• reusing packaging and other materials
• recycling
• efficient use of water and energy
• use of biodegradable chemicals
• minimising use of solvents and lead-based paints
• use of timber or wood products from sustainable (managed) forests
• procedures to minimise noise disturbance to neighbours
• phasing out of ozone-depleting substances

If your business is linked closely to key customers through the supply chain, obtain a copy of their environmental policy, so that your statements can reflect their requirements and needs.

Your policy should demonstrate commitment by senior management and is usually signed by the managing director, chairperson or chief executive.

You may want to integrate your environmental policy with other policies on health and safety, quality management, corporate social responsibility or sustainability.

Download an example environmental policy (DOC, 26K).

The checklist below should help you to draft an effective environmental policy.

Environmental policy checklist

Choose examples of the statements that apply to your business and make them as specific as possible for your operations:

• comply with environmental legislation and other requirements, such as approved codes of practice
• importance of environmental issues to your business, including a description of your business' guiding principles
• assess the environmental impact of all historic, current and likely future operations
• continually seek to improve environmental performance, eg by doing a regular walk-round survey of your business to see if you are using energy and water efficiently and whether measures to reduce waste and pollution are effective
• reduce pollution, emissions and waste, eg emissions from transport, oil leaks and spills, excessive noise, heat or vibration generated by the activities of your business
• reduce the use of all raw materials, energy and supplies
• raise awareness, encourage participation and train employees in environmental matters
• encourage suppliers and contractors to uphold similar environmental standards - see supply chain efficiency
• encourage customers to use products and services in an environmentally sensitive way
• communicate environmental aims and objectives to employees and external stakeholders

Once your environmental policy is in place, it's a good idea to carry out regular reviews. These help ensure your business activities comply with your policy, and also provide an opportunity to set more specific targets.

When to review your environmental policy

You could review your policy after its first six months, and then annually after that. Bear in mind that if your business activities or operations change significantly, the policy may need to be amended.

It's a good idea to involve employees in the reviewing process. If employees are expected to deliver on environmental policy commitments, they may be a good source of ideas for improvements. You should ensure that your environmental policy is available for all new staff to read. If your policy changes significantly, make sure existing staff read the latest version.

Problems with an out of date environmental policy

If your policy is not kept up to date, and it is not backed up with some way of implementing the environmental improvements (such as an environmental management system or less formal programme of improvements), other organisations may think that you're not taking your environmental responsibilities seriously. Consequently, they may decide to take their business elsewhere.

Similarly, if your policy says that you are taking your environmental responsibilities seriously but you fail to back this up, you may face questions over the quality of operations in other parts of your business. This could harm your reputation with customers and suppliers.

Your environmental policy doesn't have to exist in isolation. If you have other policies in place, such as for quality and health and safety, it makes sense to integrate it with them.

Ways to extend the scope of your environmental policy

You can show that you take sustainable development seriously by:

• considering the life cycle of your products and services and designing them to be as sustainable as possible
• buying materials and resources that come from renewable sources
• modifying your processes to reduce the amount of waste generated
• reusing or recycling your waste, or passing it on to other businesses to use as a resource
• going beyond your legal obligations and anticipating changes so that you can make adjustments before legislation comes into force
• involving employees and other stakeholders in sustainable development - by involving them in training and offering incentives to encourage buy-in to your strategy

See how to make your business more sustainable.

Environmental policies and corporate social responsibility

You could extend the scope of your environmental policy to cover your business' social responsibility.

By developing a corporate social responsibility (CSR) policy, you show that you are:

• Dealing with suppliers and employees in a responsible way - for example by being open and honest about your products and services and avoiding pressure selling. It also means going beyond the legal minimum when dealing with employees and promoting best practice.
• Building up a good relationship with the local community - for example by supporting a local charity or sponsoring a local event.
• Minimising your impact on the environment and cutting pollution and waste - by using energy efficiency measures, eg switching off lights, reducing the use of water. You could also consider minimising waste and reducing the environmental impact of your business generally, eg buying locally to cut fuel costs.

See corporate social responsibility.

Developing an effective environmental policy is the first step towards integrating environmental management into your business. You should be able to make your environmental policy work for your business, while also giving cost savings and other benefits.

How to successfully integrate an environmental policy

You can integrate an environmental policy into your business by:

• including progress and developments in environmental management in your management meetings
• considering environment-related investments - such as capital expenditure or training - in business planning
• integrating environmental performance into key performance indicators as well as traditional indicators such as turnover, profit margin, etc
• featuring your environmental policy and progress with objectives and targets in your marketing materials and other customer communications
• including environmental responsibilities in employees' job descriptions and recognising people's responsibilities in their professional development
• working with your suppliers to reduce the costs and environmental impacts of both organisations

Enhancing supplier and customer relationships

You should also consider assessing whether your suppliers are taking action to reduce their impact on the environment - for example, can they alter the way they package goods for delivery to you? Using different materials or packaging methods could reduce the supplier's packaging and transportation costs while reducing the amount of waste you have to deal with.

Ask suppliers for details of their environmental policy or environmental management system (EMS). Some businesses now insist on suppliers having a certified EMS in place.

Implementing your environmental policy

The most cost-effective way of implementing your environmental policy is to use a systematic approach, rather than a series of one-off measures. The most thorough method is to use a formal environmental standard such as ISO 14001 and the European Union Eco-Management and Auditing Scheme (EMAS). These both require an environmental policy to be in place. EMAS also requires environmental reports to be made available - see environmental management systems (EMS) - the basics.

If you don't have the time or resources to set up a formal EMS, you could produce an action plan that details how your environmental policy will be put into practice. Your action plan could contain information on what actions will be carried out to help your business meet its environmental objectives and targets, when this will be done and what the responsibilities are of those involved.