Concrete action

Maintaining standards throughout a business operating in many countries – with different norms of industry operation – is fraught with difficulties as BP has found in Turkey, where it is now assailed on all sides by NGOs.

“Any company that works internationally inevitably runs the risk of being seen to operate to double or multiple standards,” says Morrin. “You are only as strong as your weakest link and policies can be bent, embroidered or broken. To keep a handle on this at RMC, we try to keep things simple.”

The cement company is a very decentralised organisation. It operates 2,500 sites in 24 countries, most of which are small and in remote places. “It is very easy for someone not to know, or not want to know, what is going on,” Morrin observes.

Benchmarking and auditing

He has responded to this challenge by devising a simple management policy with clear standards and a feedback function, which he believes is the only way of ensuring compliance with RMC’s own standards.

Every year, each business is benchmarked using a process based on the Business in the Environment (BiE) index. “It’s easy to use and identifies whether the businesses are bearing up and have the appropriate management systems in place,” Morrin says.

This process has been carried out for the past four years, but now RMC wants to make it more rigorous. Roll-out has begun on what Morrin calls “cross-border auditing” – a “cascade analysis” at a national level that gives a concrete idea of how the implementation of environmental standards has progressed.

“We have a pool of people inside the businesses who we believe are competent to audit and they audit their peers, rather than the company using external consultants,” Morrin says. “It’s a good way of transferring skills in both directions; it appears less threatening; you keep the knowledge in-house; and it’s a hell of a lot cheaper.”

For Morrin, this next stage will act as an assurance to the board that the environmental policies they have signed off have been actioned and implemented by RMC businesses around the world.

“We do all this in as transparent a way as possible,” Morrin says. “And we publish the results internally, so that all the countries know where they stand. Once a year it is presented to the main board, including the non-executives and chairman.

“The benchmarking and auditing process makes us fairly confident that we are doing what we say we do. That doesn’t mean we won’t get it wrong, but it is an assurance process that will hopefully make things tighter all the time.”

Communicating risk

Morrin has also adopted the BiE Index as a tool to communicate the nature and level of environmental risk to the RMC board. While the benchmarking procedure provides basic information on performance levels within each company, it fails to take into account external factors like a country’s regulatory regime.

Morrin commissioned a small law firm to look at a range of environmental drivers in all the countries and each of the US states where RMC owns businesses. “We came up with what we call the aggressiveness quotient, which tells you how much pressure the external factors create.”

RMC examined seven factors: legislation; the effectiveness of the regulator (important because of countries with high levels of legislation but no enforcement bodies); community interest; NGO interest; media interest; fiscal incentives; and eco-taxes. Morrin then developed a simple scoring system, based on the previous 12 months’ evidence.

Identifying problem areas

This gives a basic measure of the pressures businesses in each country are under, alongside the benchmark data showing how effective each company’s environmental management is.

Businesses were then ranked in terms of size and turnover. “We ended up with a triangulation system that shows the management, the external pressures and the size of the business,” Morrin says. “You can very quickly work out where your hotspots are. It’s rough but it serves its purpose.

“In the first year, two large businesses were in hotspots – they had a bad BiE score and their aggressiveness quotient was high.” That data was presented to the board and action was swiftly taken.

Morrin uses a traffic light system to present the

environmental risk data. “Each year I take all the companies that fall into each category and work out what percentage of RMC’s total turnover they represent.” For the board, this means they can very quickly work out in gross terms whether each set of businesses has its act together.

“It then becomes a very easy thing to communicate to shareholders – this much of the turnover is well managed in a high-risk environment.”

Morrin has found his approach much more effective than producing a glossy corporate environmental report – something he considers unproductive for a company that operates small sites and creates localised concerns.

“I haven’t produced a corporate report. This is a deliberate policy and one that I have encouraged,” he says. “A lot of companies spend a lot of money, make a lot of mistakes and cut down an awful lot of trees to produce reports that 99% of the time end up in the bin and don’t achieve their objectives.”

Instead, businesses have been encouraged to report locally, to overcome language problems and to communicate country-specific information effectively. RMC has also put a lot of work into providing information on the internet – which Morrin describes as “dynamic and multidimensional, easy to update and very cost-effective”.

Access to information

The policy has also allowed RMC to communicate data effectively on areas of real public concern, such as biodiversity, which, along with climate change and energy use was ranked as the most important in a perception mapping exercise which quizzed green analysts, NGOs and other interested parties.

Country-specific reports, web-based content and a search engine allow stakeholders easy access to information on environmental information. “I’m happy that what I’m doing for RMC is covering most angles,” Morrin says. “I have enough support from – and access to – the board and am allowed to speak my mind, although on occasions it makes people uncomfortable.”