Category Archives: Health & Safety

You Are What Your Suppliers Do: Supplier Actions Make Headlines, Break Business

With companies facing increasing pressure for the actions of every part of their supply chain, demand for – and reliance on – supplier/corporate social responsibility (CSR) audits conducted by third parties has grown rapidly.

Shirts, Phones, Rocks and Shrimp

But there is concern about the quality, reliability and credibility of these audits.

CSR Auditing and Toilet Paper

Is Social Auditing Really Auditing?

Harvard Professor Identifies Factors for Meaningful CSR and Supply Chain Audits

You Don’t Know What Your Suppliers Are Hiding

Companies rely on their CSR audit firm to utilize qualified auditors, employ adequate QA/QC processes and expend adequate time to conduct a reasonable audit. Yet there are no generally-accepted professional CSR audit practitioner standards. Moreover, due to cost pressures, lowest cost audit providers are frequently selected that may not have appropriate auditing skills or training – the largest CSR audit firms conduct tens of thousands of these audits each year. Increasing audit time and costs to improve quality or credibility is typically not realistic – the business model is inherently high-volume, low margin.

Are these audits effective at findings supplier actions that create risks for you? Can a company gain confidence in their CSR audits without adding costs? Is a change in auditors necessary?

Improve Credibility for Disclosures, Media and Customers

Changing audit firms is not necessary, nor is another layer of auditing. Instead, a formalized auditor training program can be a low cost yet effective solution.

The Elm Consulting Group International is expanding our well-proven auditor training program to companies who use CSR/supply chain auditors. The intent of this program is for brands to provide detailed communication and training to their current CSR/supply chain auditors about the company’s requirements for auditor competence, audit quality and processes in order to enhance the credibility of audit information.

Our formalized training for existing CSR auditors builds their client’s confidence in the quality of the work provided. The program is not intended to provide training on specific audit topics such as child labor or worker rights. Instead, the focus is on proven audit techniques such as:

  • Understanding and applying professional skepticism
  • Interviewing and active listening
  • Identifying and responding to non-verbal cues within multi-cultural contexts
  • Evidence sampling methodologies
  • Using information from different sources
  • Verification and recomputation techniques
  • Judging audit evidence quality and limitations
  • Fraud detection
  • Using working papers and audit protocols
  • Writing effective and complete audit findings
  • Audit quality expectations, requirements and processes
  • Maintaining auditor independence, including auditor rotation

Our Qualifications as The Leader in Auditor Training

Our HSE auditor training experience began in the 1980s and we have successfully trained hundreds of external and internal auditors. Elm Principals hold auditor certifications from the US Board of Environmental, Health and Safety Auditor Certification (BEAC, now wholly merged into the Institute of Internal Auditors) and UK Institute of Environmental Management & Assessment, are approved trainers for the IIA EHS auditor certification program and are subject to annual continuing education requirements ourselves. Further, Elm Principals have served in various Board positions in The Auditing Roundtable (merged into the IIA in 2016) and BEAC, including the current BEAC Chair.  More information about our internal audit quality and auditor competence standards is available here.

Give us a call at 678-200-3424 or contact us via email to discuss how we can help you increase confidence in your CSR audits.

Apropos: Dia de los Muertos and the Billable Hour

Today is Halloween in the US and Dia de los Muertos in Mexico.  It is a time based on the idea of reflecting on death.  Now we aren’t being morbid here – instead we grinned at the amusing irony of the timing of this article on LinkedIn which is an obituary to the billable hour.

We absolutely agree with the downsides of billable hours.  All of us at Elm, in prior points in our careers, have had ourselves and clients held hostage by the almighty billable hour.  Over the past several years, we decreased our use of hourly rates and billings – instead working on a daily rate or, increasingly, on a fixed fee basis.

Given all that is right with eliminating hourly billing, a reasonable person might ask why doing so remains ubiquitous for consulting/auditing firms?  Yet another irony for those of us who help client organizations in changing their internal culture – because it’s the way it’s been done in the past. 

Hmmmmm.

Cyber Attack on Iron Furnace Controls Causes Physical Damage to Plant

A few years ago, we wrote about how the growth of cyber attacks should be considered when companies assess environmental risk of their operations.  As highlighted in that article, rogue code was discovered before harm was done.

But an iron foundry in Germany was not so lucky.  As reported in this  WSJ article,

The plant’s control systems were breached which “resulted in an incident where a furnace could not be shut down in the regular way and the furnace was in an undefined condition which resulted in massive damage to the whole system,”

This situation should cause concern to anyone responsible for HSE and sustainability matters.  Malicious control of production operations can result in all sorts of nightmare scenarios, especially where the manufacturing operation involves the use of chemicals.  In the most minor case, environmental permit violations and media coverage are probable.  The worst scenario could involve the intentional weaponization of manufacturing by hacking operational controls and intentionally creating another Bhopal or Chernobyl.

We continue to recommend that companies consider these issues when conducting environmental risk assessments of their operations.

Our Pick for the Super Bowl 2014 Ad Winners

Ok, we admit it – this post will be completely gratuitous and self serving.

You may have heard about the Super Bowl ad give-away contest sponsored by a well-known small business accounting software company.  CNN recently posted a story on it.

We thought it would be fun to give it a try, so we posted our entry.

Your vote and support would be greatly appreciated.  And we promise to post pictures from the Big Game if you help get us there.

 

We Haven’t Forgotten What We Do

Although Elm has invested much time and effort into our conflict minerals services over the past three years, we continue to provide our core services of HSE auditing and program development.

We gain new clients and engagements each year with much of that growth outside the US.

Those who have come to know us in the conflict minerals arena, we would be pleased to talk with you about how Elm can assist you with HSE audit program support.

Please do not hesitate to contact us with questions. We look forward to talking with you.

Elm Featured in iPhoneLife Magazine for iPad Use

The new issue of iPhoneLife magazine highlights Elm’s use of iPads for environmental, health and safety audits in a short feature.

Unfortunately, the article indicates we use them for energy audits, which is not the case.  We have contacted the editor to inform them of their error.

Interestingly enough, the current issue also reviews various notetaking apps for anyone interested in reading up on the subject.

Japan Tragedy Tests Ethical/Environmental Procurement Standards

As the world grapples with the immense impact of the disaster in Japan, attention is turning to the global economic impact of the country’s lost production.  Japan has long been a critical link in the supply chain of many industries – perhaps most notably in the automotive and electronics sectors.

The Financial Times ran a piece today on this which touches on contingency plans to help replace lost production stemming from unforeseen major disruptive events.

In this context, a question arises:  Will companies enforce their procurement requirements for vendor EHS performance during this period?

Elm has long discussed EHS risks in the context of supply chain disruption contingency planning.  In past years, the risks have been more focused on matters related to how production redistribution could cause violations of various environmental permit limits tied to production levels.  However, the rise of ethical purchasing standards – as voluntary and highly publicized corporate commitments – has altered the definition of EHS risks in supply chains.

It may be months or years before some of the Japanese plants are in production mode again.  In the interim, companies impacted by the disruption face a conundrum:

  • Do they attempt a rapid production recovery by quickly engaging second-tier alternative suppliers that may not meet EHS procurement standards (i.e., relaxing their supplier requirements)?
  • Or do they stick to the EHS standards for suppliers, thereby risking potentially extended production downtime while either (a) searching for a supplier who meets the standards, or (b) bringing a supplier up to speed?

Certainly, it is easy to say there is a third option – implementing an existing contingency plan with an existing alternate supplier that already meets the EHS procurement standards.

But few manufacturers have that third option available, as EHS concerns tend to be overlooked in supply chain disruption planning.

Elm’s iPad Auditing Featured in One of the World’s Most Visited Websites

Elm is featured in today’s issue of the on-line news source Mashable for our innovative use of the iPad for HSE auditing.  The article can be read here.

With a reported 30+ million monthly pageviews and an Alexa ranking under 250, Mashable ranks as one of the world’s largest websites. The website has a large following on many social networks.  As of February 2011, it has over 2 million Twitter followers and over 425,000 fans on Facebook.

Elm Hosts Webinar on Using the iPad in HSE Auditing

Join us for an upcoming webinar Friday, February 25 about using the iPad in HSE audits.  We will present an overview of our experiences in using the device on actual audits over the past 6 months.

Included in the presentation will be a discussion of

  • evaluating its potential use and fit within organizations/existing audit processes;
  • benefits and limitations; and
  • a detailed step-by-step simulation of an audit using Elm’s selected application (smartNotes), including actual screen shots.

The hour-long presentation will be followed by an open question and answer period.

Click here for a full description.  There will be a morning session and an afternoon session.  Click here for the afternoon session.

We hope you can participate.

Now Available – Summary Review/Comparison of Conflict Mineral Supply Chain Traceability Audit Programs

Elm has developed a short summary review of conflict minerals audit programs based on our industry-leading first-hand experience conducting these audits, and leveraging our extensive international senior-level health, safety and environmental (HSE) auditing expertise.

If you are interested in receiving our summary document, please send us an email (lheim@elmgroup.com) or feel free to call us.  We look forward to hearing from you soon.