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Environmental standards offer waste management businesses an opportunity to provide new services focused on making compliance easier for other businesses.

Setting a Fiscal Baseline for Regulatory Compliance

November 5, 2018
By Comerica Bank

Environmental regulatory compliance is both a challenge and opportunity for environmental services businesses. On one hand, organizations in the various segments of the waste management industry must be especially cautious about following best practices in how they handle and dispose of materials at all times or be at risk of significant negative attention. On the other hand, environmental standards also offer waste management businesses an opportunity to provide new services focused on making compliance easier for other businesses.

For example, a waste management organization operating in a region with many data centers may want to open a specialized e-waste management service to take advantage of the market opportunity. Similarly, a business in an industrial region may want to offer specialized solutions for chemical and industrial waste removal. These services can be invaluable, especially as the cost of non-compliance with environmental laws can be high.

Considering the costs of failure to maintain environmental compliance

Non-compliance with environmental standards can be personally costly, not just impactful at the business level. The Environmental Protection Agency has the power to enforce regulatory standards by punishing offenders in the form of civil and/or criminal trials. In major breach incidents, a business may be fined heavily for the incident, and leaders could be either fined or face criminal charges. These aren't just nominal charges either. The EPA recently released the results of its enforcement activities for the fiscal year 2017. During that period, the agency required environmental criminals to pay out $2.98 billion. This came in the form of fines, restitution, and mitigation. Total criminal sentencing during the year amounted to more than 150 years in jail.

Investing in the equipment, staff or technology you need to maintain compliance may seem expensive, but this move may pay off. The EPA isn't just interested in recouping funds based on damages and using criminal punishment as a deterrent. Instead, the agency is also committed to creating a level fiscal playing field as businesses strive for compliance. As such, the EPA searches for situations in which organizations may be failing to comply in order to gain a financial advantage and levy penalties accordingly.

Environmental services businesses can't afford to cut regulatory corners. They can capitalize on the scrutiny facing businesses across just about every sector to offer services that solve specific pain points. For example, proper disposal of hazardous waste materials represents a growing challenge as the EPA works to monitor safe handling across a material's entire lifecycle.

Looking at hazardous waste as an example of regulatory challenges

The Resource Conservation and Recovery Act covers the majority of hazardous waste issues, and any compliance audits will usually be performed by either the EPA or a state authority that works with the EPA. Inspections can involve anything from asking for material manifests to visiting a work site and evaluating the environment for signs of contamination or malpractice. For environmental services firms, it's important to recognize that the EPA inspects processes regarding handling, transportation, storage and disposal of hazardous materials.

Preparing to ramp up regulatory compliance

Building stronger environmental regulatory compliance practices can require significant financial investments. An environmental services firm could enact a variety of strategies, including:

  • Investing in state-of-the-art trucks and waste management equipment.
  • Purchasing real estate, constructing new facilities or renovating outdated buildings to support modernized operations.
  • Deploying modern information technology systems, including internet-of-things devices, to track materials and improve documentation.

These types of investments can dramatically improve compliance, but they come with costs. Comerica Bank can help. We're the Leading Bank for Business1 and will work closely with you to help you identify the best strategies and financing opportunities for your organization.


1Comerica ranks first nationally among the top 25 U.S. financial holding companies, based on commercial and industrial loans outstanding as a percentage of assets, as of June 30, 2018. Data provided by S&P Global Market Intelligence.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.