Policy experience shows that environmental rating and disclosure is a proven strategy for strengthening environmental governance and regulatory compliance. It is an effective tool for cutting pollution in developing countries.
Indonesia was the first country to adopt an environmental rating and disclosure policy. In 1995, it launched the Program for Pollution Control, Evaluation and Rating —popularly known as the PROPER Program. Shakeb Afsah, (then working for the World Bank), the founder of Performeks LLC, was the resident adviser to the Minister of Environment and led a team of regulators to institute this program. The work included: conducting on-site inspections, organizing data, developing the rating methodology and generating the first set of ratings for nearly 200 companies which were publicly announced in 1995. This initiative has grown to more than 1,000 companies in 2012.
The data gathered by the Indonesian regulators show that this program reduced pollution significantly. Independent studies conducted by numerous academic researchers have confirmed that within the first eighteen months, this disclosure strategy reduced water pollution by more than 30%. And now, the compliance rate in Indonesia has increased from a meager 35% in 1995 to nearly 70% in 2012—all without a single case of legal enforcement! Analysis shows that the cost of achieving compliance through this environmental program is only a fraction of the cost of conventional enforcement through the court. In short, the most cost-effective pathway to environmental compliance is via public disclosure of environmental performance.
Given the various political and financial barriers to legal enforcement, many national and sub-national environmental agencies are now keen on adopting such environmental rating and disclosure programs. Recently, our staff at Performeks LLC helped the Environmental Protection Agency (EPA) of the Government of Ghana to launch their environmental rating and disclosure initiative, the AKOBEN Program—the first of its kind for the continent of Africa!
Performeks LLC is the only consulting firm with a proven record of successfully implementing environmental rating and disclosure programs in environmental agencies throughout the world. With more than fifteen years of experience in this practice area, we are capable of instituting a fully operational rating and disclosure program within a period of six to twelve months. Our services cover: (1) review of relevant laws and regulations, (2) rating methodology, (3) communications and disclosure strategy, (4) selection of companies, (5) data collection system, (6) baseline data compilation, (7) environmental information system, (8) computerized rating system, (9) inter-department coordination, (10) stakeholder participation, (11) site inspections and community monitoring, (12) dispute resolution, (14) organizational structure, (15) training and capacity building and (16) budget and financing strategies.
Our deliverables include the deployment of a state-of-the-art environmental data management system, online and desktop data collection apps and a computerized tool for evaluating the ratings of companies.
What are Ratings based on?
Our environmental performance rating methodology uses a multi-media approach including water and air pollution, ambient air and water quality, solid and hazardous waste management, compliance with legal requirements, environmental best practices, quality of monitoring system, energy management and water conservation and recycling. Some countries have also included corporate social responsibility, environmental complaints and community relations as requirements for the highest level of performance rating.
For a more detailed explanation download this presentation titled “Environmental Rating and Disclosure: Key Insights for Regulators” or visit the site for Ghana's AKOBEN disclosure program.