Category: Blog

April, 2018

By: Claudia Meléndez, Lawyer & Environmental Consultant of Zone

Before carrying out commercial operations such as mergers, acquisitions or financing, it is appropriate to carry out a prior review of the environmental management of the companies involved. This in order to have enough elements to ensure an adequate risk assessment, but mainly, the sustainability of the operation in its environment.

This investigation and analysis process is known as the Due Diligence process. The due diligence process in environmental matters aims to determine in a quantitative or qualitative way, the impact that the activities of a company may have on the environment. In fact, one of the main objectives of this study and analysis process is to determine possible environmental contingencies associated with both the company’s activities and the property in which it carries out its activities, helping to prevent environmental problems from reducing the value of your business or property, as well as avoiding possible contingencies or responsibilities for obligations acquired without prior knowledge.

An Environmental Due Diligence is a type of investigation that ideally should not be limited to documentary analysis and review; but accompanied by field visits to learn first-hand the real state of the company’s operations, circumstances that can hardly be evidenced by simply reviewing the possession of the permits issued by the regulatory institutions, these field visits help to qualify or value the amount of investment necessary to adapt a site to environmentally accepted criteria, which has a significant influence on the appraisal of the amount of the transaction.

Environmental Due Diligence studies are developed in different phases, the depth of each one will depend on the scope determined by the client. In general, the preliminary phase includes documentary review, verification of the existence of permits applicable to the company’s activity, a preliminary analysis of the site and verification of compliance with the applicable legal framework. In the second phase we can include specific studies and analyses, collect evidence of inadequate environmental management and environmental legal implications. Finally, the remediation phase, which includes taking actions to clean up the contamination and estimating the time and costs that these measures will require.

We can consider that including the environmental issue within the environmental due diligence process is extremely important since it allows:

1. determine and quantify the current and potential environmental responsibilities, as well as the risks that can be assumed as a result of this transaction,
2. establish an economic amount that covers environmental risks, of the current or future operation, which can significantly impact the establishment of the transaction price,
3. allows knowing the economic investment necessary to adapt the property or company in question to environmentally reasonable criteria
4. verify compliance with current and applicable regulations.

Therefore, omitting this essential matter in a due diligence process could imply enormous costs derived from the environmental damage that may occur from the company’s activity that was left without study and analysis, and in the future the stoppage and even possible closure of the operations of it.

What is Carbon Neutral and to whom does it apply?

Being Carbon Neutral means that the production of a good, the provision of a service or its consumption has not emitted more greenhouse gases into the atmosphere than those that have been captured or removed.

This is why Carbon Neutrality is applicable to any organization, regardless of its line of business or its size (ie office, university, hotels, restaurants, industry), since they generate carbon dioxide emissions (CO2), the most frequent being the consumption of electricity, fuels, refrigerants, fire extinguishers, lubricants, and the management of their waste.

Why be Carbon Neutral?

The greatest advantages it represents for an organization are the following:

1. Image and positioning.

It allows the organization to position itself with an advantage in the mind of the consumer and differentiate itself from the competition.

2. Sales promotion.

The new consumer is increasingly responsible with society and the environment, so they would be willing to use products or services with eco-friendly characteristics.

3. Cost reduction and control.

The conscious and voluntary implementation of carbon footprint mitigation measures leads to the discovery and elimination of inefficiencies in operating processes, an efficient and reasonable use of its resources, the result of which is considerable economic savings.

4. Greater ease in opening markets.

Obtaining a Carbon Neutrality Certification represents a competitive tool of great value for the company in a market that already demands or expects proof of environmental commitment.

5. Other benefits.

A positive impact on the company’s morale and culture, greater ease in hiring quality personnel, and increased credibility with customers, suppliers and society in general.

How to be Carbon Neutral and who can support me in this process?

Being Carbon Neutral does not mean avoiding the use of generation sources, but rather achieving a balance between generation and their reduction. Briefly, Carbon Neutrality is achieved in the following order.

1. Quantification.

It is achieved by identifying the generation sources and quantifying the emissions produced by them in a verifiable period.

2. Reduction.

Through the rational use of its resources, optimization and use of alternative energy sources, as well as the proper management of its waste (ie recycling campaigns).

3. Removal.

Through the establishment of specific projects that show the capture of CO2 through photosynthetic activity (ie development of forest plantations) or through the purchase of Carbon Certificates.

In addition to the above, and with the objective that the organization can really use the character of Neutral Carbon, it must have a certification issued by independent, local or international third parties, based on standards, protocols or procedures duly established and recognized internationally (ie ISO14064).

Due to the environmental and economic benefits that this entails, we believe that every organization should be certified as Carbon Neutral, so you can count on the support of ZONE for the implementation of the Carbon Neutral Management System until the company can have its Certification.

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Recycling is essential to achieve the global objective of responsible consumption, and even constitutes a legal duty in many countries, including Costa Rica. Through the consensus of countries, the UN included recycling as one of the activities necessary to meet the sustainable development goals, which seek to end poverty, protect the planet and guarantee peace and prosperity for all people.

Part of what we understand by responsible consumption is the maximum use of the goods and services that are produced; Looking at it another way, it implies minimizing the waste of precious resources that can be used by others.

Therefore, to achieve the global goal of responsible consumption, RECYCLING is essential, which means:

* The transformation of waste.

* To restore its economic and energy value.

* Avoiding its final disposal.

* Provided that the restitution results in savings in energy and raw materials, and the recycled material does not pose a danger to health and the environment.

According to this formal definition, recycling is not considered to be the simple reuse of materials when greater energy and material costs are incurred to do so than would be necessary to produce a product with new raw material.

In many of the countries of the world, recycling is not an option, but rather an obligation imposed by the authorities. From Costa Rica, the law clearly states that all persons who generate or possess waste must:

* Reduce waste generation as much as possible.

* Separate the waste from the source, classify it and deliver it to an authorized manager or municipal system.

* Manage the waste you have in a way that does not endanger the environment or health, or cause visual disturbances or bad odors.

Waste must be separated and classified into the following categories:

* Ordinary: those of a domestic nature, such as paper, plastic, glass, etc.

* Hazardous Waste: that have toxic, radioactive, explosive, flammable and bio-infectious characteristics that can cause damage. Among this type of waste we find: rags impregnated with fuels, used syringes and containers of corrosive material.

* Special Management Waste: those that, due to their composition, transportation needs, storage and use, imply a risk to health or the environment. Examples of them are tires, car batteries and refrigerants.

The regulations on waste impose that the separation and classification of waste must be done from the generating source, this to facilitate the use of recoverable materials, but also to avoid that the mixture of waste of different categories can contaminate others. Thus, it is understood that if a hazardous waste comes into contact with an ordinary waste, the latter acquires dangerous characteristics.

The way to dispose of waste will vary depending on the type of waste. In the case of ordinary type waste, these must be delivered already separated and classified to the Municipality. However, the delivery of these to authorized managers or buyers of used raw material can also be agreed.

Hazardous waste must be delivered to managers specifically authorized to handle the waste in question. The generator that transfers its waste must make sure to record the delivery through delivery-transport-reception manifests, otherwise, it may be responsible for any damage that may be caused by possible waste management.

As for special handling waste, each type of waste has its disposal form that can be found in the product instructions or should be consulted at the time of purchase. An example is the case of car tires, which are usually left in the establishments that change them.

It is not surprising that the United Nations Development Program has included among its 17 immediate objectives, the responsible management of waste, since the positive effects that this activity generates for the prevention of diseases and conservation of the environment are undoubted.

However, with the application of responsible consumption measures, other objectives related to economic well-being can also be achieved. A case of success in this matter was achieved in our own organization, which through the reuse of stationery, we have managed to reduce our paper consumption and the accompanying expenses by 80%.

On May 22, the Forest Stewardship Council (FSC) presented the new ecosystem services procedure, a global initiative that seeks to create incentives for the preservation of the valuable services that forests provide to the planet.

The FSC is a non-governmental organization dedicated to the accreditation and certification of public and private entities that provide environmentally appropriate, socially beneficial and economically viable management of the world’s forests. Their work is of great value to achieve the global goal of preserving life and terrestrial ecosystems set by the United Nations Organization.

The new procedure will be available for implementation as of August 21, 2018, and plans to provide additional economic aid to forest owners, small owners and communities to implement the necessary tools to monitor and verify the positive impacts that their conservation efforts generate on the ecosystem.

Among the benefits generated by forests to the ecosystem, we can list the main ones:

• Transformation of carbon dioxide (CO2) in air. Thus avoiding greenhouse gas emissions and mitigating the danger of global warming.
• Controlled infiltration of water into the subsoil. Through the roots and foliage, rainwater slowly penetrates the soil, supplying the underground basins with water, while preventing erosion and earth movements.
• Provide home and food to much of the terrestrial biodiversity.
• Serve as a biological corridor for a large number of species.
• It serves as a platform to generate other essential services for life on the planet, such as soil enrichment and pollination of plants that provide food for all life on Earth, including humans.

The economic value that can be assigned to forests far transcends the value of their standing timber. The ecosystem provides multiple services and positive externalities that have not been properly valued. This initiative addresses this reality and will be of great benefit to promote recovery and conservation efforts in these areas.