An environmental review is a way of assessing your business' environmental performance and establishing priorities for action. It is a three-stage process:

• establishing the current environmental situation
• setting targets for improvement
• implementing an action plan

As a minimum, the review should cover what legal requirements apply to your business and whether these are being complied with. Your review should also cover areas of good practice such as using resources efficiently and how environmental performance is already managed in your business.

There are a number of other techniques you can use to gather information about your environmental performance - see life cycle assessment, environmental risk assessment and corporate ecosystem services assessment.

Environmental management systems (EMSs)

An EMS has the same three elements as an environmental review. However, it also has a number of other requirements including an environmental policy and comprehensive documentation. This is particularly the case if you are looking to achieve ISO 14001 certification or Eco-management and Audit Scheme (EMAS) verification - see environmental management systems (EMS) - the basics.

Before you begin your environmental review you should decide who is going to carry it out, the exact scope of the review and what information is going to be gathered.

The review should cover key environmental information including:

• What legislation applies to your business and how well you are complying with it.
• Future legal requirements that pose risks and opportunities to your business.
• Past and present pollution incidents and potential pollution risks.
• Raw materials - including materials used in production processes and those used in the day-to-day running of the business, such as paper and plastic cups for vending machines. Consider the cost, type and quantity of materials you use.
• Packaging - including whether packaging is needed at all, how it is used, how it is made, how much it costs and how much disposal costs.
• Waste - including how much your business produces of different types of waste, size and number of containers, costs of waste removal and frequency of waste collections.
• Energy - types of energy used, how much is being used and at what cost.
• Water - look at where and how water is used, the cost involved (including effluent disposal), waste and potential for savings.
• Transport - including number of each type of vehicle, mileage per vehicle, type and amount of fuel used as well as the CO2 and other polluting emissions produced by your vehicles.

You should also record basic information about the site - size, type (office, factory, etc), number of staff and sales figures.

The information sources you need will depend on the type of your business and the scope of the review, but could include:

• documentation such as waste transfer notes and utility bills
• licences and permits
• monitoring information and data, such as meter readings
• policies, procedures and strategy documents
• walk-round surveys and site inspections
• interviews with key staff

You should record your information in a report or spreadsheet and include at least two years of data if possible. Make sure the information is considered by relevant people in the business because it will provide the benchmark for future performance.

Download a sample environmental review record form (XLS, 31K).

Raw data should only be the starting point of your environmental review. You may find that you get a much better understanding of your business' environmental performance by talking to key staff, such as senior management and those responsible for environmental management, finance, marketing, operations, facilities, etc. Their perceptions and thoughts about the operations and environmental impacts of the business can help make your review more effective.

Subjects covered by the interviews may include:

• Site information - the size, type, use, number of employees, layout, etc of the premises, and details of maintenance and refurbishment carried out. This should help you to compare your environmental performance against similar organisations.
• Corporate policy and strategy - the main drivers behind environmental improvement, stakeholder pressures, future growth plans, key environmental targets and indicators, and strategy for complying with legislation. This should help you to understand how environmental issues fit into your business' overall strategy.
• Environmental initiatives - current environmental policies, environmental and quality management systems, environmental reporting, stakeholder expectations, environmental aspirations of senior management and regulations affecting your business. This enables you to understand the key drivers behind improving environmental performance.
• Pollution control - measures put into place to prevent and control pollution, such as secondary containment systems, abatement equipment and staff training. This is essential to reduce the risk of pollution incidents and prosecution.
• Resource efficiency - main uses of energy, materials, water and transport, contracts for utilities and waste, and data analysis. This should help you to identify who is responsible for each resource and to set targets to cut their use.
• Communication - current staff engagement techniques, responsibilities for environmental matters, staff feedback and requirements, and any bonus schemes and incentives. Staff engagement is key to improving environmental performance.
• Marketing - strategy in relation to environmental issues, brand image, competitive advantage and external communication issues. This should help you to consider how your business can market its environmental credentials to external stakeholders.
• Investment and procurement - current procurement standards and their effectiveness, and investment criteria for internal projects. This should help you to understand what criteria and standards apply when making environmental improvements.

In all cases, you should have clear objectives for the interviews which are understood by both parties.

You can improve the environmental performance of your business by considering the impact your products or services have on the environment throughout their lifetime. You can use life cycle assessment (LCA) to assess the overall impact of your products or services.

What is a life cycle assessment?

An LCA is an environmental management tool that allows you to calculate the total environmental impact of a product or process, by collecting and evaluating data on the inputs and outputs of materials, energy and waste of a product over its entire life cycle.

For example, if your business manufactures washing machines, you should evaluate:

• the raw materials you need to make the machine - eg metal, plastic
• its design - eg whether it is energy and water efficient
• the resources you need and what waste is created during manufacturing and assembling
• how it is marketed - eg packaging
• how it is transported and sold - eg energy, fuel and vehicle emissions
• what resources are needed to use and maintain it - eg energy and materials
• what happens at the end of its life - eg reuse, recover, recycle or disposal

LCA allows you to consider these flows of energy and materials to and from the environment and so see what production stages have the most environmental impact. You can then identify ways to reduce the overall environmental impact of your product. For example, you may be able to:

• reduce the amount of raw materials needed
• use locally sourced, recyclable materials
• avoid using toxic materials
• use clean manufacturing technology to minimise emissions during manufacture
• improve the energy efficiency of the product
• use durable materials to increase product life
• reduce packaging
• reduce transportation

Benefits of a life cycle assessment

Assessing the impact of your products or services could help you to:

• increase your efficiency and productivity
• reduce your operating costs
• obtain business from government bodies and large businesses that require their business partners to manage their environmental impacts effectively
• enhance your reputation among staff, customers and the public
• increase the chance of securing funding to expand your business by demonstrating that your environmental impacts are well managed

It is not a legal requirement to use LCA in your business. However, the European Commission is encouraging the approach through its Integrated Product Policy (IPP). It is likely that LCA will be regulated in the future. Tax incentives could also be introduced to encourage you to apply LCA to your business activities.

How to assess the life cycle of products and services

You will need to collect, analyse and evaluate data on each phase of your product's life cycle.

You can choose to implement your own in-house assessment or you may prefer an externally certified assessment through ISO 14040 - which may be better recognised by other businesses and your customers. Find information about LCA tools based on ISO 14040 on the Europa website.

EcoSMEs provides information and tools to help you carry out a simplified LCA for your products and services. The website is a pilot project developed specifically for small businesses.

The pilot project includes the following business areas:

• electronic and electrical equipment
• metalworking
• urban furniture such as lampposts or letter boxes
• office use
• hotels
• wood products
• textiles

An environmental risk assessment allows you to assess the likelihood of your business causing harm to the environment. This includes describing potential hazards and impacts before taking precautions to reduce the risks.

It uses similar techniques to the health and safety risk assessment your business already has to perform.

How to carry out an environmental risk assessment

There are five key steps to carrying out an environmental risk assessment. You need to:

1. identify any hazards, ie possible sources of harm
2. describe the harm they might cause
3. evaluate the risk of occurance and identify precautions
4. record the results of the assessment and implement precautions
5. review the assessment at regular intervals

Things to include in your environmental risk assessment

When looking for environmental hazards in your business, you should consider:

• waste storage and disposal, eg making sure that proper containers are used, and are located away from drains and watercourses
• emissions, eg dust and other substances to the air
• hazardous substance storage, use and disposal
• liquid waste drainage and disposal
• environmental impact of raw materials, eg potentially toxic metals or other materials
• environmental impact of packaging

There are statutory minimum standards to maintain in some of these areas.

Environmental impact assessments

If your business is planning a development that's likely to have a significant effect on the environment, you will first have to carry out an Environmental Impact Assessment.

Get a free sustainability report

All Northern Ireland businesses with an annual energy and resource spend of more than £30k can get a free assessment of their environmental performance across areas such as raw materials, energy, carbon, packaging, biodiversity and waste - find out more about Invest NI Sustainability Reports.

All businesses both depend on and impact on natural resources and services. As legislation and investment mandates change and environmental expectations on businesses increase, you may need to actively manage your interactions with environmental systems (ecosystems) and the services they provide.

How to assess your dependence on ecosystem services

Your environmental processes may already account for ecosystem services - eg as part of an environmental management system (EMS). Quickly analysing how effective those processes are in capturing ecosystem-related risks and opportunities is a good starting point. It could also highlight gaps in existing processes and expertise and help you decide on next steps.

An ecosystem services review (ESR) provides a structured way to assess your business' dependence on ecosystems, if existing processes don't do so. An ESR is a framework for assessing the impacts and reliance of your business on ecosystem services and identifying associated opportunities and risks and actions needed to account for them in decision-making. It consists of five steps:

• selecting the scope of your assessment
• identifying priority ecosystem services
• analysing trends in priority services
• identifying business risks and opportunities
• developing strategies

You can find ESR guidance and tools on the World Resources Institute (WRI) website.

Assign a value on business costs and benefits

A qualitative valuation of ecosystem-related risks and opportunities that are more important to your business might be enough to inform your business decisions if:

• interaction between your business activities and ecosystem health is not significant
• risks and opportunities that your business' dependence on ecosystems creates are low

If this isn't the case, you may need a quantitative valuation. This can link costs and benefits of ecosystem services more directly to your bottom line and make it easier to compare the outcomes of alternative business scenarios.

You can also find out about valuing ecosystems on the GOV.UK website.

Act on your findings

Once you have identified the key issues for your business and changes that might be needed, you should decide how to implement those actions or business improvements.

Consider whether you will act as an individual business or take a more co-ordinated approach to address certain environmental challenges. For example, you could reduce the pressure your business puts on water supplies on your own but you may need to work with other businesses to address challenges such as deforestation caused by rising demand for agricultural land. Co-ordinated action might also provide the most cost-effective way to implement the changes.

The steps you should follow in order to incorporate new actions into your business plan and monitor your business performance are very similar to putting an EMS into practice. You can read about how to use internal and external communication, training, indicators, and other approaches in our guide on how to operate your environmental management system (EMS).

Once you have established and verified the environmental baseline, you should develop a series of broad objectives and more specific targets to improve the environmental performance of your business.

Your choice of objectives and targets should depend on the most significant issues you identified in the baseline review. You can assess the significance of environmental issues using criteria such as the:

• amount and type of regulatory controls that apply, and how well the business is performing in relation to these
• potential to comply with future legislation before it comes into force
• social acceptability - the perception of your business' environmental standards among stakeholders such as customers, employees, local communities and the press
• potential for cost savings from improved performance
• importance of environmental performance in relation to the business' strategic objectives

However the targets are defined, they should include key environmental performance indicators (KEPIs). You can use these to measure the achievement of the objectives. The precise KEPIs will depend on the baseline data, but could include:

• water use
• material use
• waste generation
• carbon emissions
• energy use

You should make sure that KEPIs are finite and measurable, so that you can make definitive assessments of how far the targets have been met. For more information on KEPIs, see how to set environmental performance targets.

Having completed the environmental review and established targets for improvements, you need an action plan which will address the issues and enable you to meet the targets.

Your action plan should highlight:

• specific tasks
• the person responsible for each task
• the deadline for completing each task

The plan should be signed off by senior managers, so that the decision-makers in the business buy into the objectives, and accept both the possible costs and benefits.

However, the action plan will probably affect everyone in your business. As environmental initiatives often involve changes in behaviour, it is important you engage with all areas of the business and at all levels. As well as having buy-in from senior managers, the involvement and support of all employees is crucial to the success of the plan.

It can be easier to actively engage employees in your action plan by demonstrating the benefits of implementing environmental measures. One way of doing this is by providing them with advice that can help them reduce their waste, water and energy consumption at home.

You may also want to appoint an environmental champion to make sure that the action plan is being put into practice effectively. Larger businesses may want to appoint an environmental champion for each site or department and an environmental working group of these champions under a senior manager. This group should meet to update on progress, discuss problems and new ideas and support the environmental champions.

In smaller businesses, this working group might be composed of the regular senior management team or the board of directors, in which case the progress of the plan can form part of regular management or board meetings.

For more information on influencing staff and senior management, see making the case for environmental improvements.

An environmental review is a way of assessing your business' environmental performance and establishing priorities for action. It is a three-stage process:

• establishing the current environmental situation
• setting targets for improvement
• implementing an action plan

As a minimum, the review should cover what legal requirements apply to your business and whether these are being complied with. Your review should also cover areas of good practice such as using resources efficiently and how environmental performance is already managed in your business.

There are a number of other techniques you can use to gather information about your environmental performance - see life cycle assessment, environmental risk assessment and corporate ecosystem services assessment.

Environmental management systems (EMSs)

An EMS has the same three elements as an environmental review. However, it also has a number of other requirements including an environmental policy and comprehensive documentation. This is particularly the case if you are looking to achieve ISO 14001 certification or Eco-management and Audit Scheme (EMAS) verification - see environmental management systems (EMS) - the basics.

Before you begin your environmental review you should decide who is going to carry it out, the exact scope of the review and what information is going to be gathered.

The review should cover key environmental information including:

• What legislation applies to your business and how well you are complying with it.
• Future legal requirements that pose risks and opportunities to your business.
• Past and present pollution incidents and potential pollution risks.
• Raw materials - including materials used in production processes and those used in the day-to-day running of the business, such as paper and plastic cups for vending machines. Consider the cost, type and quantity of materials you use.
• Packaging - including whether packaging is needed at all, how it is used, how it is made, how much it costs and how much disposal costs.
• Waste - including how much your business produces of different types of waste, size and number of containers, costs of waste removal and frequency of waste collections.
• Energy - types of energy used, how much is being used and at what cost.
• Water - look at where and how water is used, the cost involved (including effluent disposal), waste and potential for savings.
• Transport - including number of each type of vehicle, mileage per vehicle, type and amount of fuel used as well as the CO2 and other polluting emissions produced by your vehicles.

You should also record basic information about the site - size, type (office, factory, etc), number of staff and sales figures.

The information sources you need will depend on the type of your business and the scope of the review, but could include:

• documentation such as waste transfer notes and utility bills
• licences and permits
• monitoring information and data, such as meter readings
• policies, procedures and strategy documents
• walk-round surveys and site inspections
• interviews with key staff

You should record your information in a report or spreadsheet and include at least two years of data if possible. Make sure the information is considered by relevant people in the business because it will provide the benchmark for future performance.

Download a sample environmental review record form (XLS, 31K).

Raw data should only be the starting point of your environmental review. You may find that you get a much better understanding of your business' environmental performance by talking to key staff, such as senior management and those responsible for environmental management, finance, marketing, operations, facilities, etc. Their perceptions and thoughts about the operations and environmental impacts of the business can help make your review more effective.

Subjects covered by the interviews may include:

• Site information - the size, type, use, number of employees, layout, etc of the premises, and details of maintenance and refurbishment carried out. This should help you to compare your environmental performance against similar organisations.
• Corporate policy and strategy - the main drivers behind environmental improvement, stakeholder pressures, future growth plans, key environmental targets and indicators, and strategy for complying with legislation. This should help you to understand how environmental issues fit into your business' overall strategy.
• Environmental initiatives - current environmental policies, environmental and quality management systems, environmental reporting, stakeholder expectations, environmental aspirations of senior management and regulations affecting your business. This enables you to understand the key drivers behind improving environmental performance.
• Pollution control - measures put into place to prevent and control pollution, such as secondary containment systems, abatement equipment and staff training. This is essential to reduce the risk of pollution incidents and prosecution.
• Resource efficiency - main uses of energy, materials, water and transport, contracts for utilities and waste, and data analysis. This should help you to identify who is responsible for each resource and to set targets to cut their use.
• Communication - current staff engagement techniques, responsibilities for environmental matters, staff feedback and requirements, and any bonus schemes and incentives. Staff engagement is key to improving environmental performance.
• Marketing - strategy in relation to environmental issues, brand image, competitive advantage and external communication issues. This should help you to consider how your business can market its environmental credentials to external stakeholders.
• Investment and procurement - current procurement standards and their effectiveness, and investment criteria for internal projects. This should help you to understand what criteria and standards apply when making environmental improvements.

In all cases, you should have clear objectives for the interviews which are understood by both parties.

You can improve the environmental performance of your business by considering the impact your products or services have on the environment throughout their lifetime. You can use life cycle assessment (LCA) to assess the overall impact of your products or services.

What is a life cycle assessment?

An LCA is an environmental management tool that allows you to calculate the total environmental impact of a product or process, by collecting and evaluating data on the inputs and outputs of materials, energy and waste of a product over its entire life cycle.

For example, if your business manufactures washing machines, you should evaluate:

• the raw materials you need to make the machine - eg metal, plastic
• its design - eg whether it is energy and water efficient
• the resources you need and what waste is created during manufacturing and assembling
• how it is marketed - eg packaging
• how it is transported and sold - eg energy, fuel and vehicle emissions
• what resources are needed to use and maintain it - eg energy and materials
• what happens at the end of its life - eg reuse, recover, recycle or disposal

LCA allows you to consider these flows of energy and materials to and from the environment and so see what production stages have the most environmental impact. You can then identify ways to reduce the overall environmental impact of your product. For example, you may be able to:

• reduce the amount of raw materials needed
• use locally sourced, recyclable materials
• avoid using toxic materials
• use clean manufacturing technology to minimise emissions during manufacture
• improve the energy efficiency of the product
• use durable materials to increase product life
• reduce packaging
• reduce transportation

Benefits of a life cycle assessment

Assessing the impact of your products or services could help you to:

• increase your efficiency and productivity
• reduce your operating costs
• obtain business from government bodies and large businesses that require their business partners to manage their environmental impacts effectively
• enhance your reputation among staff, customers and the public
• increase the chance of securing funding to expand your business by demonstrating that your environmental impacts are well managed

It is not a legal requirement to use LCA in your business. However, the European Commission is encouraging the approach through its Integrated Product Policy (IPP). It is likely that LCA will be regulated in the future. Tax incentives could also be introduced to encourage you to apply LCA to your business activities.

How to assess the life cycle of products and services

You will need to collect, analyse and evaluate data on each phase of your product's life cycle.

You can choose to implement your own in-house assessment or you may prefer an externally certified assessment through ISO 14040 - which may be better recognised by other businesses and your customers. Find information about LCA tools based on ISO 14040 on the Europa website.

EcoSMEs provides information and tools to help you carry out a simplified LCA for your products and services. The website is a pilot project developed specifically for small businesses.

The pilot project includes the following business areas:

• electronic and electrical equipment
• metalworking
• urban furniture such as lampposts or letter boxes
• office use
• hotels
• wood products
• textiles

An environmental risk assessment allows you to assess the likelihood of your business causing harm to the environment. This includes describing potential hazards and impacts before taking precautions to reduce the risks.

It uses similar techniques to the health and safety risk assessment your business already has to perform.

How to carry out an environmental risk assessment

There are five key steps to carrying out an environmental risk assessment. You need to:

1. identify any hazards, ie possible sources of harm
2. describe the harm they might cause
3. evaluate the risk of occurance and identify precautions
4. record the results of the assessment and implement precautions
5. review the assessment at regular intervals

Things to include in your environmental risk assessment

When looking for environmental hazards in your business, you should consider:

• waste storage and disposal, eg making sure that proper containers are used, and are located away from drains and watercourses
• emissions, eg dust and other substances to the air
• hazardous substance storage, use and disposal
• liquid waste drainage and disposal
• environmental impact of raw materials, eg potentially toxic metals or other materials
• environmental impact of packaging

There are statutory minimum standards to maintain in some of these areas.

Environmental impact assessments

If your business is planning a development that's likely to have a significant effect on the environment, you will first have to carry out an Environmental Impact Assessment.

Get a free sustainability report

All Northern Ireland businesses with an annual energy and resource spend of more than £30k can get a free assessment of their environmental performance across areas such as raw materials, energy, carbon, packaging, biodiversity and waste - find out more about Invest NI Sustainability Reports.

All businesses both depend on and impact on natural resources and services. As legislation and investment mandates change and environmental expectations on businesses increase, you may need to actively manage your interactions with environmental systems (ecosystems) and the services they provide.

How to assess your dependence on ecosystem services

Your environmental processes may already account for ecosystem services - eg as part of an environmental management system (EMS). Quickly analysing how effective those processes are in capturing ecosystem-related risks and opportunities is a good starting point. It could also highlight gaps in existing processes and expertise and help you decide on next steps.

An ecosystem services review (ESR) provides a structured way to assess your business' dependence on ecosystems, if existing processes don't do so. An ESR is a framework for assessing the impacts and reliance of your business on ecosystem services and identifying associated opportunities and risks and actions needed to account for them in decision-making. It consists of five steps:

• selecting the scope of your assessment
• identifying priority ecosystem services
• analysing trends in priority services
• identifying business risks and opportunities
• developing strategies

You can find ESR guidance and tools on the World Resources Institute (WRI) website.

Assign a value on business costs and benefits

A qualitative valuation of ecosystem-related risks and opportunities that are more important to your business might be enough to inform your business decisions if:

• interaction between your business activities and ecosystem health is not significant
• risks and opportunities that your business' dependence on ecosystems creates are low

If this isn't the case, you may need a quantitative valuation. This can link costs and benefits of ecosystem services more directly to your bottom line and make it easier to compare the outcomes of alternative business scenarios.

You can also find out about valuing ecosystems on the GOV.UK website.

Act on your findings

Once you have identified the key issues for your business and changes that might be needed, you should decide how to implement those actions or business improvements.

Consider whether you will act as an individual business or take a more co-ordinated approach to address certain environmental challenges. For example, you could reduce the pressure your business puts on water supplies on your own but you may need to work with other businesses to address challenges such as deforestation caused by rising demand for agricultural land. Co-ordinated action might also provide the most cost-effective way to implement the changes.

The steps you should follow in order to incorporate new actions into your business plan and monitor your business performance are very similar to putting an EMS into practice. You can read about how to use internal and external communication, training, indicators, and other approaches in our guide on how to operate your environmental management system (EMS).

Once you have established and verified the environmental baseline, you should develop a series of broad objectives and more specific targets to improve the environmental performance of your business.

Your choice of objectives and targets should depend on the most significant issues you identified in the baseline review. You can assess the significance of environmental issues using criteria such as the:

• amount and type of regulatory controls that apply, and how well the business is performing in relation to these
• potential to comply with future legislation before it comes into force
• social acceptability - the perception of your business' environmental standards among stakeholders such as customers, employees, local communities and the press
• potential for cost savings from improved performance
• importance of environmental performance in relation to the business' strategic objectives

However the targets are defined, they should include key environmental performance indicators (KEPIs). You can use these to measure the achievement of the objectives. The precise KEPIs will depend on the baseline data, but could include:

• water use
• material use
• waste generation
• carbon emissions
• energy use

You should make sure that KEPIs are finite and measurable, so that you can make definitive assessments of how far the targets have been met. For more information on KEPIs, see how to set environmental performance targets.

Having completed the environmental review and established targets for improvements, you need an action plan which will address the issues and enable you to meet the targets.

Your action plan should highlight:

• specific tasks
• the person responsible for each task
• the deadline for completing each task

The plan should be signed off by senior managers, so that the decision-makers in the business buy into the objectives, and accept both the possible costs and benefits.

However, the action plan will probably affect everyone in your business. As environmental initiatives often involve changes in behaviour, it is important you engage with all areas of the business and at all levels. As well as having buy-in from senior managers, the involvement and support of all employees is crucial to the success of the plan.

It can be easier to actively engage employees in your action plan by demonstrating the benefits of implementing environmental measures. One way of doing this is by providing them with advice that can help them reduce their waste, water and energy consumption at home.

You may also want to appoint an environmental champion to make sure that the action plan is being put into practice effectively. Larger businesses may want to appoint an environmental champion for each site or department and an environmental working group of these champions under a senior manager. This group should meet to update on progress, discuss problems and new ideas and support the environmental champions.

In smaller businesses, this working group might be composed of the regular senior management team or the board of directors, in which case the progress of the plan can form part of regular management or board meetings.

For more information on influencing staff and senior management, see making the case for environmental improvements.