Environmental Protection and the Bottom Line

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She came to the U.S. Environmental Protection (EPA) a moderate Republican seemingly determined to strike a balance between environmental and business issues. She left the agency just over two years later, an allegedly disillusioned leader exhausted from too-frequent clashes with the Bush administration's pro-growth conservative forces.

Christine Todd Whitman, New Jersey's first woman governor and Carol Browner's successor as EPA administrator, announced her resignation in May, effective June 27. Although Whitman officially cited family as the motivator of her decision, most political observers view the move as a calculated pre-election departure.

Whitman's declaration comes on the heels of Air Fleisher's announcement that he would be stepping down from his post as White House spokesperson. According to The Wall Street Journal, Bush advisers said that senior administration figures wishing to leave their posts were "told to do so no later than this fall to avoid any appearance of disunity during the campaign."

The Bush administration has been under fire from environmental and other non-governmental organizations for its conservative "pro-business" approach to environmental protection. In fact, PERC, the Center for Free Market Environmentalism, gave the administration a "C-" for environmental and natural resources policy when it issued its mid-term report card in January of this year.

In response to Whitman's announcement, New York-based Environmental Defense urged the president "to appoint a strong and committed professional" as the new EPA administrator, "and to follow that person's advice." Despite Whitman's efforts, noted the organization, "over the last two years America has abandoned the fight against global warning and has significantly eased regulations governing emissions from industrial sources and power plants."

Divergence has been apparent even within EPA itself. Last year, Eric Schaeffer resigned from his post as director of the agency's Office of Regulatory Enforcement, citing "frustration about the fate of our enforcement actions against power companies that have violated the Clear Air Act" and personnel cuts within his office.

Under Whitman, EPA has been high on cooperative, voluntary approaches to environmental protection and averse to any major regulatory actions that would be viewed as bad for business.

For obvious reasons, industry groups have been quick to praise Whitman and the Bush administration's effort over the past few years. In a statement, American Chemistry Council President and CEO Greg Lebedev said: "Administrator Whitman changed the EPA by developing a more cooperative approach with the regulated community."

Cash in on changes

For better or for worse, Whitman's successor likely will not be eager to butt heads with the president on key environmental policy. Anticipate a further loosening of regulations aimed at industry, as well as a continued emphasis on voluntary EPA,"industry environmental partnerships such as the National Environmental Performance Track program.

Chemical companies should view the agency's shifting approach as an opportunity to further environmental progress, not to slack off. For too long, EPA's command-and-control structure has forced industry to think of environmental protection as an expense. Yet pollution prevention efforts above and beyond those required by regulations can go a long way toward boosting the bottom line.

A study performed by Michael Russo, a professor of management at the University of Oregon's Charles H. Lundquist College of Business, found that companies adopting higher environmental standards than mandated by existing regulations actually posted higher profits than the firms that simply met the requirements.

The concept is all about the interplay between social responsibility, economic performance and environmental responsibility ," doing the right thing and reaping the rewards.

Consider the Michigan Source Reduction Initiative, a two-year project that brought the National Resources Defense Council (NRDC), a group of local environmental activists and The Dow Chemical Co. together to prevent pollution at Dow's Midland, Mich., site. The project, which examined 13 of the plant's product lines, cost Dow $3.2 million for process-related alternations, but ended up cutting emissions by 43 percent and saving the company $5.3 million per year. Changes ran the gamut from lower-temperature chemical reactions to solvent reuse.

In DuPont's "Sustainable Growth 2002 Progress Report," Chairman and CEO Charles O. Holliday Jr. maintains that the company's goal for this century "is to become a sustainable growth company ," one that creates shareholder and societal value while decreasing our environment footprint along the value chains in which we operate." The company understands the potential value of feedstocks from renewable resources, alternative energy sources and re-engineered processes.

By rethinking existing processes, even the smallest of chemical companies can make positive impacts to the balance sheets. And EPA and the American Institute of Chemical Engineers (AIChE) want to help. EPA provides green engineering information and resources at www.epa.gov/opptintr/greenengineering, and AIChE offers sustainability, source reduction and waste management publications and tools at www.aiche.org/cwrt.

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