What is an environmental audit?

An environmental audit is a detailed review of a company’s operations, assessing its ecological impact and looking for ways to improve. The process can help businesses comply with environmental regulations while enhancing sustainability efforts. Environmental audits typically focus on:

• Regulatory compliance: Checking if your organization meets environmental laws and regulations.
• Resource efficiency: Reviewing how effectively your business uses energy, water and other resources.
• Waste management: Introducing ways to reduce, reuse, recover or recycle waste.
• Risk identification: Recognizing potential environmental risks and recommending actions to prevent harm.

Why environmental and energy efficiency audits matter

Environmental and energy efficiency audits empower businesses to see different aspects of their operations. While environmental audits focus on reducing waste, improving resource management, and ensuring regulatory compliance, energy efficiency audits can show how you consume and manage energy. These audits can help you locate inefficiencies, reduce costs and discover ways to improve environmental performance.

Step-by-step guide to conducting an environmental audit

The following steps will take you through each phase of the environmental audit process and offer insights on how to stay proactive in protecting the environment:

Define the scope of your audit

The scope outlines the business areas you must assess and the environmental factors to consider. A broad environmental audit might cover energy consumption, waste management, water usage and emissions. Know what you want to achieve from the audit—whether complying with regulations, improving sustainability or both. The audit’s scope typically reflects your company’s goals and focuses on areas with the most environmental impact. It might also involve determining if the audit will address specific processes or your entire operation, including office space, manufacturing, supply chain and distribution.

Assemble your audit team

While the audit team may include internal staff, hiring external auditors who specialize in environmental assessments can be beneficial. An external team brings an unbiased perspective, helping identify areas that your employees may overlook. Your audit team generally includes members from various departments, such as sustainability, operations, compliance and human resources. You might consider hiring an environmental consultant if your company lacks expertise in certain areas. The external team will typically collaborate closely with your employees as they can offer insights about day-to-day operations that others may not have captured in previous reports or data. 

Gather data and review documentation

Data collection typically means gathering relevant records to assess your company’s environmental practices. Primary documents might include previous ecological reports, resource usage logs, waste disposal and recycling records, and compliance certificates. Historical data on environmental impacts can help you spot trends. Reviewing these documents can create a baseline understanding of your company’s environmental performance. It can point the audit team toward areas where you might lack data or have outdated information. If there were certain metrics your company did not track, the audit can help start the reports for ongoing monitoring.

Conduct site inspections

Site inspections include visiting various parts of the facility, including production areas, storage spaces, office environments and warehouses. Inspecting these sites can show your company’s environmental practices in action. During the inspection, auditors can see if employees follow best practices for waste disposal, energy conservation, safety protocols, and sustainability, helping to identify physical issues, such as leaks and inefficient energy use, which may not be on previous reports. A walk-through also allows for direct staff engagement so you can ask questions about their daily practices, which can uncover additional insights.

Evaluate your current environmental impact

Assessing your company’s current environmental impact can involve reviewing your data and observations from previous inspections, such as energy consumption patterns, water usage, waste generation and carbon emissions. Auditors can then consider the environmental hazards or risks your business might pose, such as generating hazardous waste or releasing pollutants into the air or water. Understanding environmental impacts can help you prioritize areas for improvement. It can also be beneficial to compare your company’s practices against industry standards and regulations to ensure that it’s compliant and competitive in sustainability efforts.

Identify areas for improvement

Based on assessing your company’s environmental impact, the audit team can identify areas for improvement. For example, the audit might suggest implementing energy-saving practices, using more sustainable materials, improving waste segregation or reducing water consumption. Considering your company’s available resources, budget and timeline, these recommendations can be practical and achievable. The audit can also help you find ways to introduce innovative technologies or practices that offer environmental and financial benefits, such as energy-efficient lighting or waste-to-energy systems. Identifying cost-effective improvements can ensure that your sustainability efforts are achievable in the long term.

Develop an action plan

The action plan generally outlines the steps your company can take to address any issues found during the audit. It can include targets, such as reducing energy consumption by a certain percentage or switching to more sustainable materials. The action plan can assign responsibility for each task to a specific individual or department, set completion timelines and allocate necessary resources. If your company should invest in new technologies or training, these costs can be part of your plan.

Implement changes

This phase may call for updating operational procedures, purchasing new equipment, retrofitting buildings to improve energy efficiency or investing in renewable energy sources. Changes might require a cultural shift within your company, such as training staff on new sustainability practices or encouraging employees to adopt eco-friendly habits. Clear communication can help during this stage, so everyone understands their role in making these changes happen. It might be easier and less overwhelming to begin with the most straightforward and cost-effective changes before addressing larger, more complex issues. Gradually, these efforts can lead to significant improvements in environmental performance.

Monitor progress

Environmental audits do not end once you implement the required changes. Monitoring progress can help ensure that your new strategies achieve your desired results. Consider setting up systems to track key metrics such as energy usage, water consumption, waste levels, and carbon emissions. Regular monitoring can help determine if your business requires further adjustments or additional improvements. You might also perform follow-up audits to measure long-term progress and keep improving your practices.

Report findings and results

After implementing changes, report your audit results to stakeholders, including employees, customers, investors and regulatory bodies. Transparency is a primary part of any environmental audit, and reporting can help demonstrate your commitment to sustainability. The audit report can include a summary of the findings, how you addressed the issues and the outcomes of those actions. You can also showcase unexpected challenges and explain how your team resolved them. Reporting can have many forms, from internal presentations to detailed reports shared with external stakeholders. Transparency can build trust and show your dedication to reducing your organization’s environmental footprint.

Set future sustainability goals

Businesses can develop strategies to continually improve their environmental performance using insights from your audits. Goals might include reducing GHG (greenhouse gas) emissions, becoming carbon neutral, achieving zero waste or improving water conservation practices. Regular audits can help keep you in line to meet these goals and stay ahead of regulatory changes.

Environmental audits offer a structured way to address environmental challenges and embrace more sustainable operations. By uncovering inefficiencies, managing risks, optimizing resource usage and setting achievable goals, companies can help preserve the environment for future generations.