Data-Driven EHS: Benchmarking Success for Sustainable Practices

Hilary: Hello, listeners. You’re back for another episode of the Elevate EHS podcast. I’m your host. You know me by now, Hilary Framke I’m here with Doug Parker. Hi, Doug.

Doug: Hello, Hilary. Good to be with you. 

Hilary: Oh, I’m excited about this. So Doug, our listeners don’t know this yet, but you used to be in EPA enforcement. I just can’t wait to dig into this. Tell us about your experiences. How has that shaped your perspective on environmental protection? 

Doug: So it’s really formed it. It’s the basis of it. I was a special agent in EPA’s criminal investigation division for 24 years, which is how I got my start in this business. And a lot of people still don’t realize EPA has a small but mighty law enforcement component.

And I was part of that. As we say, we punched above our weight. And so I spent my time conducting criminal investigations, managing them and managing the overall program, including some pretty high profile ones and some important ones that no one’s ever heard of as well.

Hilary: Oh my gosh! Do you want to tell us about one or two? 

Doug: Yeah, I think I’ll just take one step back. What does it mean to be a special agent in the context of the federal government? It means you’re a sworn federal law enforcement conducting criminal investigations with certain legal powers that you have.

And of course, a whole structure of rules and regulations surrounding that. Special agents from EPA go through the same training that typical FBI agent would or Secret Service agent would at a basic level, and then they specialize in the environmental area as well. While Secret Service goes off to learn protection and all the important work we do, we learn the details of the environmental laws and hazardous waste and what it’s like to dress out in Level A Level B. So we’re doing the same sort of work, but in the environmental context. 

So I started out my career in Baltimore is what we call a street agent, which is essentially conducting investigations. I was placed in an FBI office, worked with some terrific agents from what those in the business called the Bureau. And we were following up on all sorts of leads, across Baltimore, which is a gritty industrial city.

I spent nine years in that area. Made some really important, what we thought were important cases and really at the core of these cases, a good case, an effective case, a meaningful one is of course, people are breaking the rules, but they’re breaking the rules, not just in an accidental way or a negligent way, but with criminal intent. 

To enrich themselves to put the other folks who are playing by the rules at a disadvantage. And oftentimes the most meaningful cases were those that you saw really negatively impact people. I worked one case called Sea Witch Salvage, which was in really short order, it was the dismantling of the former USS Coral Sea, this historic, noble aircraft carrier that served us in World War II and beyond.

And [00:03:00] basically what happens to an aircraft carrier when it’s beyond its useful life, you need to break it apart. And breaking apart an aircraft carrier is dealing with asbestos, PCBs, used oil. 

Everything, it needs to be done correctly. And the short summary of this case was that the individual who won the contract did everything wrong, including having workers from pretty poor backgrounds rip out asbestos without any protective covering, discharging massive amounts of oil and PCBs into Baltimore Harbor.

And he did so because he could make a lot of money. And he put people at risk. And so that was a long haul. It was a trial. It was a conviction of trial. But those are the kind of cases we worked. That was one of the first ones that I worked. And in those instances, they’re long hauls. But when you’re successful and the facts merit it, they could be really meaningful as well. 

Hilary: Oh my gosh. And it’s shocking to me to think that exists, but obviously it does. There’s the whole range of doing it on purpose, doing it in negligence, with intent to be negligent. What I don’t know can’t hurt me. And then there’s the whole misinterpretation. I didn’t understand.

I had no idea. But on the criminal side, this is not something I’ve set my mind to about people doing this with intent to make out with more profit. I bet that was shocking to experience and to meet and to investigate and to find out that people have that intent. 

Doug: Yeah, it’s rare, but more prevalent than you’d think. Now that’s coming from someone who worked in the space for, 20, almost 25 years. And we were not in the criminal side. We were not about mistakes or investigating mistakes. And generally, negligence has to be massive criminal negligence. So it’s really identifying those instances with criminal intent.

Ultimately, when we build a case, we have to convince a prosecutor that there are facts that merit a formal criminal investigation and ultimately charging, which goes in front of a grand jury of individuals. And then you’ve got to convince a jury of peers that this is actually criminal conduct.

This isn’t a mistake. This isn’t a regulatory violation. And so it’s a very high bar. But my former organization had a conviction rate of about 90%, 90%+ and when we brought a case, it was when the facts we believe were righteous and merited a criminal investigation and prosecution. 

Hilary: I saw a stat that last year, 100% of cases for criminal conviction went through for the EPA last year. 

Doug: Yeah, they did. And they had a very rigorous organization in a very rigorous criminal justice system at the federal level. I went from Baltimore to Detroit right after 9/11 and was a supervisor out there.

Detroit a lot of opportunity for mischief. In addition to being a very industrial city full of a lot of great people we have the biggest border crossing in the US. Historically, at least in terms of commercial activity. A lot goes back and forth between Windsor and Detroit.

So there again is opportunity for misconduct, cheating in terms of materials, regulated products that’s coming in and out. And then from there I went to Washington DC where I was in management and then later served as the deputy director and then director of the criminal division where I had responsibility for the program nationally.

Hilary: Oh my gosh, Doug. What a career. 

Doug: It was overwhelmingly gratifying. Worked with some great people. You were part of a team. You didn’t get it right all the time, but you generally felt you were on the right side. As I said, we had times where there were cases that we had to close because the facts didn’t merit it, and that’s the way it should be.

But in general, we felt like we did some really important work and a lot of it was about putting puzzles together. You get little strands of information, and your job as an investigator with your colleagues is to say, does this add up to a full picture of criminal misconduct in the environmental area?

Sometimes it doesn’t, and then you go to look for new puzzle pieces. 

Hilary: I’d love to double click on that a little bit, as organizations have figured out that sustainability is big enough that it’s requiring its own resources, right?

And I think at first it was haunched on the EHS leader or maybe the legal team. So at first it was merged. Now I’m seeing EHS and sustainability split and having totally separate departments sometimes reporting up into different organizational heads.

So now it’s not even the same leader who’s overseeing EHS and sustainability. Just with the increasing responsibilities and the difference in strategic direction needed. How crucial do you [00:08:00] think it is that EHS and sustainability functions work together? 

Doug: Oh, huge. I don’t think you can have a successful sustainability program, a credible sustainability program that doesn’t have a level of engagement integration with your EHS team.

One, I got a piece of advice from someone who had grown up in EHS and moved to sustainability. And they had a little level of, I don’t know, may call it cynicism, but they said, anytime I saw sustainability under the marketing team, I knew there was going to be a challenge there.

What’s really important is for the sustainability team to be integrated into the EHS. Now, integrated, are you doing the same job? No, but you need to understand those functions. You need to know that what the EHS program is doing and the information they’re providing the permitting, the data that they’re reporting is part of sustainability.

Sustainability is not just a report that you prepare after doing a bunch of metrics. It’s how’s your company actually doing? If you’re not paying attention to that, you’re missing it. And I think you’re just going to have a much less successful sustainability program, but you’re also putting your brand at risk because government, NGOs, the public increasingly are looking at that data and the information and the EHS track record of your company, not just what you’re putting in your sustainability report, and if the two don’t generally align, then you could face real headwinds and real scrutiny. And a loss of trust ultimately. 

Hilary: Absolutely. When I was in my EHS career, how I spoke to senior leadership about the two topics was environmental protection and sustainability are two sides of the same coin. So if we say that our coin is air emissions, there’s a side of air emissions that’s environmental protection in the air permits we have to go for, the reporting, sampling, stack testing, all those things that are requirements around air emissions. And then on the sustainability side of that same coin is tracking it and trying to figure out how to reduce it. 

Doug: Yes. Yeah. 

Hilary: So if we think of it this way, it’s all the same topics, but what we have to do is the environmental protection piece. And what we want to do is the sustainability piece.

And if those two things don’t understand each other, if they’re not aligned in one from a data, just like one version of the truth, let’s talk about that, what the EHS is saying our results are. And what sustainability is saying our results are and what’s come down. If two things don’t agree, we’ve got a huge issue in our organization in telling a story to shareholders and the world.

Doug: Absolutely. And that information is, the ability to check a company’s homework is going to be easier and easier moving forward. So it’s a real vulnerability if you’re not aligned there. Doesn’t mean perfection, every number has to be the same. There may be an example of emissions and offsets you’re doing and things like that, but it’s got to be understandable, credible and explainable.

Hilary: I love that. So for our listeners who are struggling, let’s say they have EHS and sustainability, aren’t under the same leader. There’s a lot of silos. Sustainability won’t take any lead, or information from EHS or vice versa, right? What advice can you offer to our listeners about those struggling to break down those silos and foster collaboration?

Doug: So I think, one of the things that’s helpful is a sort of a cross pollination. And I think having your sustainability team shadow, engage, spend three days a month or a period of time in the engine room of EHS, if you will, what does it take to, manage an OSHA program?

What’s our EMS system look like? What is a continuous emissions monitoring system? What are all these things? And I think it’s much more important, frankly, for the sustainability side to get into that, to get into the quote unquote EHS engine room, if you will, than vice versa, because the EHS folks have grown up in these environmental metrics.

You can have a Chief Sustainability Officer and a Senior VP for EHS but the teams at least need to be, have a level of integration. And that starts by rolling up your sleeves, walking the shop floor with them, and really understanding what the EHS team does on a daily basis.

Live their experience for a bit. And I think you also have to look at there’s other nuances that folks on the sustainability side should focus on. One is you’ve got to widen your lens beyond climate and water usage. Things like that. Look at the communities that you operate in.

Look at the environmental justice. Look at the demographics. Look at understand emerging issues. What is PFAS? This issue that’s exploded in terms of regulatory challenges and financial obligations. What does that mean for us? So you really need to look not just at what are now become traditional metrics in the sustainability space, but look at what these environmental and health and safety issues are that are either coming around the corner or here right now that need to be integrated into the sustainability equation. 

Hilary: And really sustainability should be partnering with many more functions than just EHS to bring sustainability to a business.

There’s so many things inside the market intelligence side of things, where are we going to produce products? What are we going to use to make what? Our recipes and staying off of the ones that are highly dangerous poisonous that we know will be regulated at some point. Getting that group to understand those call outs, what processes do they have talking about that in your sustainability report about how we think about it at the beginning of the life cycle, then inside R&D. How are we choosing, how we make these, what that looks like, putting in those environmental practices and controls in the R&D phase, not afterwards, once we’re in manufacturing, but actually at design phase is a huge thing. Circular economy with sourcing. There’s so many topics that every single function can participate to drive sustainability in the organization. And I think I see businesses making this mistake, expecting EHS to deliver fully, a 100 percent on all of the sustainability targets. And that’s not a winning strategy. 

Doug: That’s a concern that I have for the broader EHS community is that, as I said earlier, they’re just getting rocks loaded into their backpack. They’ve got their primary job managing EHS in the organization, meeting permit requirements, ensuring the workforce is as safe as possible.

That’s when things can break in an organization. When that sector, that group, it has too much on its plate. That’s when things can, not go criminally bad, but mistakes happen. Operational incidents happen. And I think one thing I would add, just to go back a few sentences in what you mentioned is that you talked about sustainable sourcing, but really getting the sustainability folks working with your supply chain people, your Chief Procurement Officer, you may have a sustainable supply chain program. You may just have a procurement program. But beginning to understand what those second, third, fourth level impacts of your suppliers can be. And often it’s not that you can just like, oh, let’s get a new supplier. That’s not the way the supply chain or process works. If you’re in the auto sector and you’ve got a model that’s going for six or seven years, you can’t switch horses necessarily in the middle of that race.

But you need to understand how they’re performing because that impacts you, whether it be scope three emissions or reputational damage if a supplier screws up,but you need to be able to figure out how to also work with that supplier to improve their performance. But part of that is sustainability and the procurement team, having that same cross pollination as the sustainability in the EHS world does.

Hilary: And the thing is, everyone’s trying to chase this, so they will be thrilled to hear from you, to hear that you want to partner with them on a program to do, buybacks or recycling or, making this packaging smaller so that we can reduce that landfill or recycling on the back end or finding a way for sustaining engineering to make that process simpler and do it virtually rather than just throwing it away.

Doug: Right. 

Hilary: There’s all kinds of initiatives that can be done. And this is what the sustainability department should be spearheading. Just all of the, of course, the manufacturing side of things with how we use things and getting rid of ammonia and the carbon reduction and everything in our manufacturing cycle is so important.

I’m not saying it’s not, but it’s not the only part of the pie that we can go chase. I feel we so often put far too much emphasis on that part of the life cycle of the business. When there’s all these other functions and departments who can have sustainability initiatives and be a part of that. Tell us about some environmental megatrends, Doug.

Doug: So part of being at this for a while is you get a chance to step back and see themes that you’re seeing consistently. These are not necessarily unique to my perspective, but I think outside of, I don’t view kind of climate or PFAS as megatrends.

They’re phenomenons that we have to deal with and manage, issues that we have to be managed. But I think I like to put things in buckets, keep things simple. What I really have seen is there’s three things that come back to me time and again. One is we’re in this era of accelerating transparency. What goes on behind the fence line does not stay behind the fence line anymore. You better know that people are looking at you. And you better know they’re checking your homework, as I said earlier. That can be anything from your on your phone at night who was in this movie to, what are the emissions at XYZ facility?

That’s where we are and where we’re headed. So you need to really if you’re not aware of that, you need to be aware ASAP. And we’ll talk a little bit about how that is impacting the EHS community. The other one is innovation, which is great. We’re in this innovation economy. 

But we’re seeing that in a variety of areas. We’re seeing it all over. Innovation can save us from a lot of the harmful issues and things we’re facing. I was on the phone with or on the zoom, whatever the right term is with a large waste company.

They’re rolling out a fleet of their first EV crash haulers. They’re figuring out how to get more recycling out of a [00:19:00] plastic bottle in a can as well. So that innovation economy is super exciting. And you need to find the innovators in your organization as well. And then, the third, which I think is the primary, factor or megatrend in this is public expectations. Generationally, the public cares increasingly about how you perform as an organization related to the environment, the health of your workers and whether you’re truly a sustainable company.

They’re doing that with their wallet. And that really moves EHS more into the business operation and business differentiator world than the historic, we’re a cost center world. Yeah. That’s why we’re seeing a lot of this movement towards sustainability. That’s what the public investors. And even those inside companies are demanding.

Hilary: We’re seeing like disaster situations, like a rail car falling off the tracks and all that happened to the community.

Doug: Yeah, lots of  communities being impacted. And the reality is, to a large degree, it’s the more vulnerable population that are facing those risks unfortunately. If you’re a company, you need to look at it through these buckets, these lenses.

Okay people are going to be able to see and know what we do much more than they did five years ago, ten years ago, and way more than twenty years ago. So we better be credible in our performance and how we talk about it. And how we measure it. And then a lot of these companies, the exciting thing is we are seeing innovation.

We’re seeing things to do in emissions reduction. We’re seeing the refining sector produce more gas and lower emissions in many cases over five years that’s innovation, hard work and real progress. And then you better understand that the public is going to care with their wallet.

And your competitors or your buyers or your suppliers are going to care as well. So you really need to be credible and honestly improving all the time. 

Hilary: And we are very quickly approaching the first of the deadlines of where businesses have said we will be net zero by 2030, 2035, 2040, 2045, some of the most common chosen years for that. And businesses are freaking out. I can tell you because I’ve been a part of some, they had no idea what kind of commitment this was and they put it out to the public and they’re going to be held accountable. And if they haven’t gotten to work yet, it’s going to take a significant amount of investment to make that happen.

Doug: Yeah. It sounded great, 10 years ago. Yeah. It’s like saying I’m going to lose 10 pounds by the end of the year. Geez, it’s almost Thanksgiving and I got to get busy, like that deadline is fast approaching. You’re seeing some companies walk it back.

Because they’ve realized what they can or can’t do. It starts with really smart people being innovative, looking at the impact but if they aren’t credible in their assessments, that’s where they’ll pay a price in the marketplace.

Hilary: Absolutely, because back to your accelerating transparency, they put it out into the public market. Now it’s discoverable that sustainability report is on the internet. It’s search engine optimized. I can say, any company and sustainability report or net zero commitment, and it pulls up. And I can hold that organization accountable, just me, myself, little individual here in Minnesota, right?

Yeah. Shareholders are much more scrutinizing. It is. It’s one of those I love these megatrends, Doug. I think it’s very interesting to consider and to look at, like you said, look through this lens, how this is impacting the program governance and how we need to think of building this out. If there is accelerated transparency, we also need to get to our data really quickly. And I see a lot of organizations not capable of that.They’re still reading invoices that are 90 days, 120 days lagging. They don’t understand why their numbers have gone up from 60 days ago.

They can’t account for it. When the numbers are way down, they’re celebrating, but they don’t have true reasoning for why the numbers might have gone down other than, we dropped this part of our business or we turned this site off not sustainable. If you’re for profit and you want to continue to grow. So there’s a lot of depending on the wrong levers to hit your results. That is going to be an issue as they move forward and try and hit these larger goals and metrics. And with that transparency on the hinge of that, with the public expectation, if businesses don’t hit that, how does that impact them?

Doug: Increasingly my expectation is that companies who do it well will reap benefits. Companies who don’t meet their goals and don’t do that with any level of transparency or feel not credible will pay an increasing price in it.

Hilary: Agreed. And I think the sooner the better to bite that bullet. We all forecast, so we all know we’ve done enough or we haven’t done enough. We’re willing to make this amount of investment or we aren’t and so if you can see in the forecast that you will not make it better to drop that sooner rather than later.

Doug: Yeah. I’ll give you a really short example about the Volkswagen case. The Volkswagen was about, we’re going to be the green diesel. We’re going to be the green diesel, and we’re going to do that in the US market. The reality was the engineers couldn’t get it to be as green as the top brass expected, and they essentially coerce them into falsifying data through a kind of a complex software scheme. But you know who found out about it? It was some smart engineers at a non governmental organization and who were partnering with an academic institution who took out three cars, and they did their own analysis. And they’re like, actually, this data isn’t correct. That led to a billions and billions of dollars impact to that company.

It really goes to the fact that other people are looking at your performance. Now, that’s an egregious example where there was cheating and criminal conduct. There is a watchdog out there and data transparency makes that increasingly easy for folks to do who are evaluating a company’s performance.

Hilary: And it’s more watchdogs than just enforcement agencies. Absolutely. It’s academic institutions, it’s journalists, it’s engineers who are just looking for something to dig into and to, either support or show as false. There’s lots of curious people out there today and you as in social media and the internet and people want to be disruptive and make a splash.

You can bet if you’re trying to lead in something and to make a claim about something, someone is going to try to prove it wrong. 

Doug: Yes. 

Hilary: So you better be sure You better have accurate, supportive, valid data to back that up. 

Doug: And yeah, and that’s, I move into the data space because that’s key to this. If you understand where you’re performing, where your peers are, that’s the first step, having a source of truth, because there’s a lot of questionable, sketchy data out there in the sustainability space.

If you go back to the EHS world, that’s the best source of data. The information that, an EHS team puts together to respond, to submit for their water discharge permits or the air emissions or their worker safety data is generally has a tremendous amount of rigor. And by the way, at the bottom of all those statements that go to the federal government, be it a monthly discharge report or something is a statement that says this information is true and accurate to the best of my knowledge.

And there are civil and criminal penalties for if it’s knowingly inaccurate. That’s a level of detail that is available and companies can use. But first you have to see how you perform and you have to benchmark how you perform against peers. 

Hilary: That’s super interesting. I want to dig into that benchmarking because I think as we look forward to the future of EHS, and particularly around this environmental, push pull. Doug, there aren’t environmental regulations for everything, right? So we can’t always as EHS people, I don’t get the benefit of being able to always say, we have to do it for compliance, there isn’t a rule for everything. So in lieu of not having rules how do I get a business to invest in environmental improvement? Where do I take that? And I think one of the big answers to that you already alluded to is benchmarking. 

Doug: Yeah. So first, there’s a lot of, we talk about when you get a permit, company has a permit for an air emissions or water discharge, it is a quote,  unquote, a permit to pollute.

It is regulating how much goes out the stack, the discharge. And what I would say is that you, first of all, when you’re having those conversations in the EHS world, you need to know exactly where you stand. Now, you might feel like you have a pretty good handle on your data, but you don’t know where you stand against here, the XYZ company, they have a set, obviously a separate reporting structure. So being able to pull that together and seeing how you compare is critically important. In the enforcement world not the criminal enforcement, but really the civil and administrative enforcement world. They look at the laggards.

They’re going to identify those who are performing less well and dramatically less well. And that’s where they’re going to focus their attention. So at a minimum you need to know where do you stand in that continuum within your sector? If you’re a large utility, you’re not really going to be compared to CVS or, a chain like that.

But where do you stand within your sector? From an emission standpoint, from a compliance standpoint, from a worker safety standpoint, the government and those outside of the government are evaluating where you are. The old saying goes, if you’re being chased by a bear in the woods, you don’t need to be the fastest guy.

You need to be faster than the slowest guy. You need to know from a benchmarking standpoint. Are you the slowest guy or one of the slowest? And it starts with great data and being able to compare yourself to others as a source of truth moving forward. That’s an area that I think every EHS Manager, Director, VP, practitioner needs to really understand how are we doing against the rest?

Hilary: Oh, I couldn’t agree more because it was such a frustration of mine when I was an EHS leader. When other non EHS senior leaders would look at our performance and they would just look at the sheer numbers without context and say that’s really bad. That’s a really big number. That needs to be reduced.

And I said, compared to who? This is a part of doing business. This is our industry. This is how much water it takes to do this process. Capacity versus load. If you look at how much we actually need in order to run process, we’re not inefficient here and asking us to reduce would be asking us not to produce.

Doug: Yeah.

Hilary: And that was such a frustration of mine, but they were missing that context of that benchmarking what you just mentioned to say all of the players in our industry are using water to this amount. Are we inefficient in comparison to our competitors is the question on the table. Like you said, who’s lagging, who’s in that bottom quartile for using very inefficiently, either because their equipment is old or they don’t have good control processes or, negligence in understanding the data, whatever it may be.

And if we’re in the bottom quartile, yeah, we need to do something. We need to have a big message here. We need to make some significant investment. We need to target our inefficiencies and go make an improvement plan. But without context, through benchmarking, it’s very difficult to influence and to make that opinion.

Doug: Yeah, it is. I think, what I’ve seen is if you do that and then you can begin to look at trends and you can go if you are in the bottom quartile, then you can go down to the process level and say how do we move the needle to get better here? Then that becomes part of your authentic sustainability story, in terms of improvements, what you’ve done. But you’re right. Someone might look at a number and go wow that’s a big number.

Okay, let’s look at it on a per unit basis. If you’re a refiner or utilities per barrel per kilowatt hours you might see that you’re much more efficient at your production than a company that shows less, but at a per barrel or per kilowatt hour is emitting much more. So when you dig into the data and the data is good you can begin to identify areas where you can improve, but you can identify, sometimes you can give yourself a pat on the back and say, look how efficiently we’re doing this.

That’s part of the story of some of the refining sector who’ve gotten more reduced emissions and produced more product at the same time. 

Hilary: Data can’t tell a story without context. Exactly. That’s where I think you’re really onto something with benchmarking and EHS people, listeners, better pay attention. I can speak for myself. I did not do this. I did not do this enough. I sat there and toiled by myself and thought, oh, I just need to be better and I need to be more influential and I need to get a team around me and I need to make a better elevator pitch and it was such a losing battle, to get some help. 

Doug: In the EHS context of resources and support, having great data supports a credible story. And it doesn’t have to be spreadsheet after spreadsheet.

It can be here’s what we’ve seen. Here’s the data to back it up. Here’s the improvements we can make as a result. It supports a great story. And in my old law enforcement days, we said, the best cases have the best stories. The kind of the human. But when you can boil down credible data into those, three, four, five bullet points that you can help develop your story in your case for more resources for improvement for operational efficiencies. Then I think that’s a great use of great data. 

Hilary: Oh, I love it, Doug. It has been an absolute pleasure to have you on the podcast. Thank you for all of your insights. We talked about so much : EPA trends, we talked about your background and enforcement, how you think environmental has been shaped over the years.

Getting into some of the biggest challenges that organizations are seeing, EHS versus sustainability. Gosh, I just got so much out of this. So thank you for all that you shared today. 

Doug: It was great to be with you and a shout out to all those in the EHS space. Give yourself a pat on the back. You’re doing a really important work not always as appreciated as you should be. Keep it up and good luck to everyone out there. 

Hilary: Couldn’t agree more. Bye bye, listeners. See you again soon. 

Doug: Thanks, Hilary.