Environmental and Social Management System (ESMS)

From every household, organization, and factory, people are bound to follow an unsaid Environmental and Social responsibility. To sustain natural resources and maintain the essence of the environment. Encouraging the implementation of Social and Environmental Codes in the world will enable a rather stable global economy. These codes lay down the rules each individual as well as the company can follow to achieve the standards of the environment set by the world. However, one of the major challenges of ESMS is its vast implementation. The policy will assist in extending an organization's current quality or health and safety management systems to incorporate environmental and social performance.

What is ESMS?

An Environment and Social Management System is a collection of procedures and techniques used to consistently carry out an organization's policies to achieve its business goals. The objective is to ensure that you have the necessary policies and procedures in place and that they are faithfully followed by everyone. The management system is the secret to long-lasting progress and aids in risk assessment and control. The concept of continual improvement, which refers to an ongoing process of reviewing, modifying, and upgrading your system, is a crucial component. The most common method is the Plan-Do-Check-Act cycle (PDCA). 
  
The PDCA cycle is an iterative approach to enhancing goods, people, and services continuously. It evolved into a crucial component of modern-day lean management. The Plan-Do-Check-Act methodology includes testing solutions, evaluating outcomes, and streamlining the procedure.

• Plan

One shall map out what needs to be done at this point. Depending on the scope of the project, planning may consume a considerable portion of your team's time. Smaller steps are typically included so that one may develop a suitable plan with fewer chances of failure.

• Do

At this stage, one must carefully apply the plan that has been formed. An action to the scheduled plans must be implemented at this step.

• Check

This phase of the PDCA cycle is arguably the most crucial. The relevant person must give the Check phase considerable consideration to achieve continuous improvement, explain the plan, and prevent recurrent errors.

• Act

If everything seems good and your team has accomplished the initial objectives, you can move on and implement the original strategy. If goals are achieved, it may be suitable to implement the entire plan. The PDCA model will thereafter replace the current baseline standard. However, each time a step is repeated, a typical procedure, urges the business team to go through each step once more and make careful improvements.

Companies today face a variety of important environmental and social concerns. None of the difficulties is unmanageable, but if they are not correctly identified and handled, they will harm business profitability, status, and commercial opportunities. These difficulties include rising energy and raw material costs, the expansion of the authority and influence of labour and environmental regulatory bodies, and the quick growth of consumer awareness concerning environmental and social issues. A management system will give a company the ability to regularly anticipate and deal with problems it is facing, preventing prospective hazards from materializing into actual concerns. A social and environmental management system (ESMS) can have immediate business advantages. increasing energy and material conservation and use efficiently lowers the cost of production. cutting back on waste and discharges, recycling can reduce the continuously rising expenses of trash disposal rising over time. A management system can assist you in creating procedures to compare your spending to industry norms and find opportunities to reduce production and operating costs.

Although an ESMS need not be complicated, it must be documented and then put into use. A management system isn't always thought of as being only records by some. However, that is only a portion of it. Implementation and ongoing development are key components of management systems.

ESMS primarily consists of 9 elements that enable it to assess, improve and control a business’ performance towards Environmental and Social aspects. An effective ESMS requires involvement between a company, its employees, local communities directly impacted by the company's operations, and, if appropriate, other stakeholders. It is a dynamic and continuous process that is initiated and supported by management. Following are the elements of ESMS-

• Policy

A set of policies is the foundation of an ESMS. The company's commitment to controlling Environmental and Social risks and impacts is summed up in its policies. They set the standards for behaviour in all pertinent areas of any firm. Simply put, the policies establish the guidelines. When it comes to social and environmental concerns like labour and working conditions, resource efficiency and pollution control, as well as community health, safety, and security, they tell everyone what is allowed and what is not allowed. A policy statement is a useful tool for outlining the rules and explaining their meaning.

• Identification of Risks and Impacts

To establish the right solutions to handle the risks and their potential repercussions, the main goal of a risk assessment is to identify the potential negative Environmental and Social risks. Those risks include- Environmental Risks, Occupation related health and safety risks, Labour related issues, risks to community health, safety and security, 

• Management Programs

Action Plans and enhanced practices to avoid, reduce, or make up for the risks and impacts are identified at the heart of management programs. Procedures act as step-by-step guides for employees, managers, and supervisors. They enable everyone to share a common notion of appropriate conduct. Even when there is employee turnover, they make it possible for the rules to be observed. Your social and environmental policies can be incorporated into your daily operations with the support of clear, thorough procedures.

• Organizational Capacity and Competency

The key to a successful ESMS implementation is having a competent, and dedicated staff. For effective engagement with your peers and colleagues, you need a balanced ESMS Team. Experts from the fields of the environment, health and safety, operations or manufacturing, contracts and purchasing, and human resources should be included. The departments that have historically been regarded as being outside the purview of environmental and social issues, such as human resources, production, procurement, and maintenance, are crucial to the success of a management system.

• Emergency Preparedness and Response

Accidents and emergency circumstances might occur even after you have taken into account all the risks and implemented the necessary management programs. By removing or replacing the equipment, substance, or work activity that is generating the hazard, your management program should initially attempt to minimize any negative effects from each hazard. If eliminating the risk is not an option, you should try to lessen its effects by implementing engineering controls.

• Stakeholder Engagement

Numerous people's and organizations' lives could be impacted by our business. These are all of the parties that are involved in your business. They are interested in how well your business performs financially, environmentally, and socially. Identification is the first stage in establishing a relationship with your stakeholders. Start by reviewing your risk assessment, the potential negative impact regions, and the people who would be either directly or indirectly affected.

• External Communications and Grievance Mechanism

Inquiries, concerns, and complaints are certain to come up if your business has an impact on the community's social and environmental conditions. The way you handle these problems will have a big impact on how others view your company and maybe even whether or not it succeeds.

• Reporting to affected communities

Affected communities will be curious about the steps the organization has taken to address the problems discovered when engaging with them. A crucial component of creating and preserving a successful connection is keeping affected communities informed of what you are doing. People are more likely to trust you if you let them know when they'll get an update. Additionally, it might cut down on the time you spend answering inquiries.

• Monitoring and Review

The PDCA cycle's check phase is known as monitoring. Review is the PDCA cycle's Actstep.

An organization can predict the environmental and social risks created by its economic activities and take steps to avoid, reduce, and make up for those risks with the aid of an environmental and social management system (ESMS). Without an ESMS, the organization or corporation may present hazards while having potential. 

Failure to implement a robust ESMS could lead to several risks including: 

• Penalties and fines.
• Loss of the operating permit.
• Environmental risks.
• Excessive spending on E&S risk and impact management.
• A decline in product quality and production efficiency.
• Increased product turnover.
• Damage to reputation.
• Limited access to clients, investors, and marketplaces.

Which Company Needs an Environmental and Social Management System (ESMS)?

No matter the industry, all businesses should implement an effective Environmental and Social Management System (ESMS). Companies should be able to prove at the very least compliance with local rules and regulations through good ESMS deployment.

The benefits realised by adopting good ESMS include-

Avoiding the expenses connected with ESG incidents and any potential corrective actions they might call for is part of risk reduction and impact avoidance/mitigation.

• Increased operational effectiveness.
• Increased productivity and employee retention.
• Better public perception and external relations.
• Greater accessibility to investors and markets that demand effective E&S management.

Corpseed will follow the below-mentioned steps to prepare an ESMS report. 

Review of the Documents

The study of documents, websites, etc., serves as the process's starting point. The expert team will share the List of Requirements (LOR) for the report's development, which includes the company's office or manufacturing units' policies, legal compliances, plans, etc.  The LOR will include the following points but not be limited to 

Environmental Factors

• Environmental laws and regulations 
• Resource utilization efficiency (energy, water, important input materials, etc.) 
• Greenhouse gas (GHG) emissions 
• Release of pollutants into air, water, and land 
• Use of DG sets, monitoring etc.
• Handling, storage, and disposal of hazardous chemicals 
• Hazardous and non-hazardous wastes management
• Plastic waste management 
• Biomedical waste management
• STP/ETP availability
• Recover, reuse, treatment, and proper disposal of waste 
• Consideration of non-chemical means to control economically significant pests and vectors 
• Conversion of forest lands or wetlands, if any

Social Factor

• Labour and Working Conditions t Human resources policies and Procedures 

1. Documented labour policies and procedures 
2. Clear communications throughout the company 
3. HR policies

• Working Conditions and Terms of Employment 

1. Respect for collective bargaining agreement, if applicable 
2. Reasonable working conditions and terms of employment (e.g. compensation, benefits) 
3. Protection for migrant, contract or temporary workers 
4. Clean and appropriate accommodations, if applicable 

• Workers’ organizations 

1. Workers’ rights to form and to join workers’ organizations 
2. No discrimination against those who organize  Non-discrimination and equal opportunity 

• Non-discrimination in hiring, promotion and compensation practices 

1. Training, tools and opportunities for advancement 
2. Freedom from harassment by management or other workers 
3. Remedy for past discrimination

• Grievance mechanism 

1. A Transparent process for receiving and resolving worker complaints 
2. No retaliation or discrimination 

• Child labour 

1. Minimum age for employment 
2. Conditions for Engagement of young workers 

• Forced labour 

1. Freedom of movement, freedom to resign 
2. No retention of identification papers or money to detain workers 

• Occupational health and safety 

1. Safe work environment and dormitories, if applicable 
2. Emergency prevention and response system 
3. Personal protective equipment and appropriate training 
4. Documentation and reporting of accidents, near misses, and illnesses 
5. Appropriate use of potentially hazardous chemicals by Material Safety Data Sheets (MSDS) and International Chemical Safety Cards (ICSC). 

• Workers engaged by third parties 

1. Extension of labour policies to labour contractors, recruiting agencies and other third parties 
2. Grievance mechanism for contracted workers 

• Supply chain 

1. Extension of policies and monitoring of the supply chain concerning labour, forced labour and worker safety in the supply chain

• Community Health and Safety 

1. Consumer product safety 
2. Health and safety of the public related to company activities 
3. Health and safety of the public related to the construction, operation, and decommissioning of equipment and infrastructure 
4. Downstream impacts related to wastewater disposal 
5. Potential community exposure to hazardous materials and substances
6. Transportation and disposal of hazardous wastes 
7. Impact on land ownership through acquisition and resettlement 
8. Community exposure to water-borne, vector-borne and communicable diseases associated with company activities 
9. Communicable diseases associated with the influx of temporary or permanent project labour 
10. EmergeEmergenciesd by company activities, equipment and infrastructure 
11. Excessive or unregulated vehicle traffic near the facility and through communities

• Security personnel 

1. Appropriate screening, training, equipping and monitoring of direct or contracted workers providing security services 
2. Grievance mechanism for workers and the community to express concerns about the security system and personnel 
3. Investigation of allegations of past abuse

• Organizational Capacity and Competency
• Emergency Preparedness and Response
• Stakeholder Engagement Plan
• External Communications and Grievance Mechanisms
• Reporting system

Field Inspections: 

After the review of the available documents, the expert team will visit the site for a day or two depending upon the situation. This observation may include a discussion with the managers, labour force, site inspection and others as per the requirement of the study. 

Draft Report Preparation

The expert team will prepare the draft report based on the review of documents from the client and websites, and field inspection following IFC guidelines for the ESMS. The report will be presented in Nine (09) chapters with annexures. 

Finalization of the Report 

After receiving and incorporating the feedback from the client, the report will be finalized and shared with the client in both hard and electronic copies.