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Environmental Liability Exposure Calculator

All businesses need to assess their environmental liability risks and review how their activities could affect the surrounding environment—regardless of size or industry. Natural or man-made pollutants can be released through many different processes, and they take several different forms—including gases, powders and liquids. Businesses may not even be aware that they are gradually poisoning the surrounding environment by leaking pollutants.

Throughout the United Kingdom, environmental regulations have implemented a ‘polluter pays’ principle, meaning that businesses must take precautionary measures to prevent environmental damage and take remedial actions if damage occurs. Failure to comply with regulations and maintain proper standards can lead to significant consequences—including paying initial clean-up fees, remediation costs, fines and penalties, and even imprisonment. Fines are unlimited, and individuals such as directors and senior managers could be held personally liable for failing to prevent pollution incidents.

And as businesses face heightened public scrutiny and more stringent environmental regulations than ever before, the trend of growing environmental liability exposure shows no signs of stopping.

To help businesses better understand the level of environmental liability exposure they face, Sirelark Risk Services has developed this environmental liability exposure calculator.

Instructions: Please note that each section will have its own instructions relating to scoring. please review them carefully. After you have completed all the sections to the best of your ability add up your score and determine your level of environmental liability exposure by utilising the chart at the end of this article.

Carrying out Environmental Risk Assessment

For the following questions answer: Yes, No or Unsure.

(Yes: 0 points, No: 3 points, Unsure: 3 points)

  1. Does your organisations conduct an environmental risk assessment for each worksite?
  2. Does your organisation identify and consider the environmental risks for each site, as well as the sources of the risks?
  3. Does your organisation identify the receptors (people, animals, property and anything else that could be affected by the hazard) at risk from your site?
  4. Does your organisation identify the possible pathways from the sources of the risks to the receptors?
  5. Does your organisation assess the risks relevant to your specific activity and check that they’re acceptable and can be screened out?
  6. Does your organisation list each hazard and identify what measures you’ll take to reduce the risks?
  7. Does your organisation calculate the probability for each exposure for each hazard, for example, whether a risk is likely or unlikely?
  8. Does your organisation have a plan for controlling risks if they become too high?
  9. Does your organisation identify the consequences for each hazard, specifically what harm could be caused?
  10. Does your organisation assess the probability of site accidents of any type, and what their environmental impact could be?
  11. Does your organisation have the appropriate environmental permit(s)?
  12. Does your organisation update its environmental risk assessment every year or when your activities introduce new risks, or you begin work on a new site?

Assessing Strict Liability Activities

For the following questions answer: Yes, No or Unsure.

(Yes: 3 points, No: 0 points, Unsure: 3 points)

  1. Under the Environmental Damage Regulations, if your organisation carries out any ‘strict liability’ activities and subsequently causes environmental damage, you will be liable even if you weren’t at fault or negligent. Does your organisation carry out strict liability activities under the Environmental Damage Regulations?
  2. Does your organisation undertake waste management operations that need a permit or registration?
  3. Does your organisation operate landfill sites?
  4. Does your organisation manage extractive mining waste?
  5. Does your organisation make discharges to surface water and groundwater that require an authorisation?
  6. Does your organisation abstract and store water in a way that requires a licence?
  7. Does your organisation engage in activities involving dangerous substances, such as pesticides and biocides?
  8. Does your organisation transport dangerous and polluting goods?
  9. Does your organisation engage in activities involving genetically modified organisms?
  10. Does your organisation engage in activities requiring an environmental permit or a pollution prevention and control permit?

General Considerations for Preventing Pollution Incidents

For the following questions answer: Yes, No or Unsure.

(Yes: 0 points, No: 3 points, Unsure: 3 points)

  1. Does your organisation have a pollution incident response plan (PIRP) for each site?
  2. Does your organisation have an established code of conduct with all suppliers to establish minimum standards of environmental performance?
  3. Does your organisation educate stakeholders, directors and senior managers on the importance of pollution prevention?
  4. Does your organisation train staff on proper pollution prevention?
  5. Does your organisation check for any historical environmental exposures it could be liable for?
  6. Does your organisation undertake routine environmental compliance audits?
  7. Does your organisation review its internal reporting systems to ensure they satisfy environmental reporting regulations?
  8. Does your organisation regularly review its contingency plans to ensure they comply with the relevant environmental regulations?
  9. Does your organisation carry out the proper due diligence when purchasing land and engaging in merger and acquisition transactions to lessen its environmental liability exposure?
  10. Does your organisation have environmental liability insurance?
  11. Does your organisation review its environmental liability insurance regularly to ensure it is adequate?

Moderate Risk – 0-33 points

High Risk – 36-75 points

Escalated Risk – 78-99 points

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