A look at some legacy liability management techniques you can use to keep your sites and facilities in the clear.
Is your company haunted by legacy environmental liabilities? Much like hidden phantoms, these concerns can lurk unnoticed in a variety of settings and industries, but that doesn’t mean they should be overlooked. Actively accounting for these spectres of the past will help prevent you from dealing with something strange in your neighborhood.
So who you gonna call? Taking a cue from Ghostbusters, with the film franchise cued up for another upcoming installment, here are some ways to approach legacy environmental liability management and keep these entities at bay.
Environmental Legacy Liability Management Tips from the Ghostbusters
Teamwork makes the Proton Beam work
Managing environmental liabilities is a multi-faceted, shifting challenge. Some liabilities can be inherited, lurking beneath an acquired piece of land for decades. Others can be stubborn relics of your company’s past activities. Legacy liabilities inhabit a vast range of sizes, scopes, lifecycles, stakeholder groups, cost uncertainty, and contaminants. So, how do you best address something shapeshifting and persistent?
First things first, you’ll want to be sure your entire team is aligned, including your controller, CFO, auditors and environmental team. This can be a complicated process so it might help to put together a simplified primer on what legacy liability management means, and how everyone can play a role. Help stakeholders understand what to keep an eye on, and which actions to take.
The next step? You call in the experts, of course.
At Antea Group, we use the combined wisdom of our experienced team of geologists, engineers and scientists to deliver actionable strategies that can help you manage long-standing liabilities effectively, and ultimately close sites. Plus, multi-disciplinary guidance and expertise can help you get the right organizational buy-in, enabling you to get things moving quicker.
So what’s another key to finally putting your liabilities to rest?
Avoid reserve forecasting issues
As you surely know, sometimes financial projections can seem like apparitions. The most common causes of reserve forecasting challenges lie with quantifying the uncertainty surrounding your project. Though nobody can guarantee predictive perfection, we certainly aim for it.
Our recommended approach to reserve setting is built around the “Three P’s”: Philosophy, Program Framework, Process Workflow. Structure and consistency in estimating and reserving for environmental remediation liabilities will help your organization mitigate the inherent uncertainties involved.
Should you enlist our help, Antea Group can help you develop your own “Three P’s” and align your stakeholder group. This may include modeling your site to evaluate the best course of action in uncertain situations. We use thorough decision analysis combined with Monte Carlo simulation and other innovative tools to use every bit of available data in bolstering your forecasting ability before we validate the process with industry experts. This is a rare case where you actually want to cross the streams. (Sorry, Egon.)
Don’t be too spooked to re-evaluate old assumptions
In an ironic twist, the EPA actually had a profound presence in the Ghostbusters universe. In the original 1984 movie, EPA inspector Walter Peck became concerned about the environmental effects of ghostbusting. He wondered about the long-term chemical or radioactive fallout from the Ghostbusters’ activities. Of course, he ended up becoming a major antagonist and he subsequently unleashed thousands of captive ghosts upon New York City -- but hey, that’s beside the point. He was investigating environmental liabilities. Some murmurs around the watercooler even suggest he was the true hero.
Taking the time to deeply re-evaluate a contaminated site can feel like opening Pandora’s box. Depending on how old it is, there may have been generations of your predecessors tasked with managing the associated reserve, remediation activity, and field data.
While taking a closer look at these legacy projects may seem like a daunting task, you can approach them with confidence. You’re in an era where modern technology allows for the greatest visibility of data insight so you’re able to make evidenced-based decisions that your predecessors couldn’t. Viewing old projects through a new lens can reveal significant liability reduction opportunities. Your most stubborn legacy sites may even end up becoming an opportunity to shine professionally.
Legacy Liability Management Isn’t Supernatural
Truthfully, managing environmental liabilities isn’t so different from ghostbusting. Both initiatives require science, technology and downright grit. But, as the Ghostbusters have shown us (more than once), it can be done.
By consulting with a multi-disciplinary team of experts, shoring up your forecasting quality and taking a new perspective on old problems, you can take control of your legacy environmental liability portfolio and keep those ghosts where they belong.
No proton packs needed--blast your liabilities away with an environmental remediation consulting firm suited for the job.
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