GN 1.2: An environmental compliance register

Guidance Note purpose 

The purpose of this Guidance Note is to provide asset managers, property managers and facilities managers with information about the preparation of an environmental compliance register in relation to real estate. 

Context 

An environmental compliance register is a collation of legal and other obligations which relate to an organisation, usually accompanied by a brief description of the associated requirements to which the company must adhere. 

The legal and other obligations contained within an environmental compliance register should relate to the direct and indirect environmental impacts associated with the activities of the organisation. For a real estate company, the scope of these impacts is likely to be wide ranging.  

An environmental compliance register is a central pillar of how an organisation manages environmental risk.  A compliance register can be set at any level of the organisation.  Whether this is at the company level, the portfolio level of the property level, it is most helpful when the compliance register is aligned to the boundary of an environmental management system, or wider risk management system. 

The compliance register should include: 

  • Legal and regulatory requirements. 
  • Guidance and codes of practice to which the asset manager and/or real estate sector subscribes. 
  • Voluntary commitments made by the asset manager and/or or a specific property. 
  • Expectation placed on the asset manager or property by important stakeholders. 

Importance 

The fundamental importance of an environmental compliance register is to contribute to the overall management of environmental risks associated with a portfolio or property.  The very nature of an environmental compliance register is to collate the requirements that an organisation is obliged to meet because they are of critical importance in relation to the protection of the environment. 

A compliance register provides a critical role in collating these requirements in a single location, and summarising the obligation they place on the company.  A failure to identify and understand these obligations is likely to result in lack of appropriate action and, potentially, a compliance failure. 

There are a number of potential consequences of a failure to comply with environmental legal and other obligations.  These include: 

Penalties relating to prosecution for a breach of the law. 

In severe cases, such as in relation to the Environment Act (1995), penalties can include up to two years imprisonment and an unlimited fine, depending on the environmental consequences of the breach. 

Reputation 

The record of legal non-compliance remains accessible by stakeholders, including potential commercial partners, investors, regulators and the general public.  The impact from a loss of reputation can be detrimental to an organisation in a number of ways, including loss of business, fall in share price or failure to secure support for new developments, for example. 

An environmental compliance register is a requirement for environmental management certification schemes, such as ISO 14001.  Without an up to date register achieving, or maintaining, certification to such schemes will not be possible. 

Responsibilities & Interests

The table below summarises the key activities associated with preparing and maintaining an environmental compliance register, and highlights where asset managers, property managers and facilities managers are likely to have a responsibility or specific interest. 

  • AM - Asset Manager
  • PM - Property Manager
  • FM - Facilities Manager

Step 1: Understand environmental interactions and impacts 

Stakeholder:

Step 2: Identify and map regulatory requirements  

Stakeholder:

Step 3: Identify and map voluntary commitments 

Stakeholder:

Step 4: Identify and map stakeholder expectations 

Stakeholder:

Step 5: Develop and maintain an  environmental compliance register 

Stakeholder:

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How to

Intro

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Usually, a property or portfolio’s environmental compliance framework will be specified by an asset manager, in alignment to a wider corporate risk framework.  The process of collating and evaluating environmental legal and other obligations is often co-ordinated by a property manager, with input from a facilities manager where required. 

Preparing an environmental compliance register generally considers the following steps: 

Step 1: Understand environmental interactions and impacts

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Before beginning the process of collating environmental legal and other obligations, it is important to establish a clear understanding of how business activities interact with, and impact on, the environment.  This will help to filter a potentially long list of requirements to those that are relevant to the portfolio or property. 

The scope of business activities should: 

  1. Align with the scope at which environmental risks are being managed, for example, either at the portfolio or property level. 
  2. Include activities both directly managed by a property manager and, also, that are contracted for management by a third-party supplier. 

Step 2: Identify and map regulatory requirements

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Identifying and mapping regulatory requirements involves an iterative process, undertaken alongside the process of understanding environmental interactions and impacts. 

Alongside the emerging outputs from an environmental aspect and impact assessment, a property manager should consult sources of environmental regulations, guidance and codes of practice to identify relevant compliance obligations.  These may include, for example: 

  • The UK Government Legislation Site. 
  • A number of databases of environmental regulations are commercially available, for example, ENDS and BARBOUR.   

A property manager should co-ordinate the process of mapping regulatory requirements and guidance against business activities to determine relevance and understand the associated compliance requirements.  This process will evolve over time, so that the list of regulatory requirements and codes of practice becomes more refined and comprehensive. 

List of environment related legislation (UK) 

  • The Air Quality (Domestic Solid Fuels Standards) (England) Regulations 2020 
  • The Environmental Protection (Plastic Straws, Cotton Buds and Stirrers) (England) Regulations 2020 
  • REACH Regulations 
  • CE Marking/UKCA 
  • Working Time Regulations 1998 
  • Equality Act 2010 - Welfare 
  • The Environmental Protection (Disposal of Polychlorinated Biphenyls and other Dangerous Substances) (England and Wales) (Amendment) Regulations 2020 (SI 2020/489) 
  • Waste Batteries and Accumulators Regulations 2009 
  • Hazardous Waste (England and Wales) Regulations 2016 
  • The Packaging (Essential Requirements) Regulations 2015 (with amendments) (SI 2015/1640) 
  • The Producer Responsibility Obligations (Packaging Waste) Regulations 2007 
  • Scrap Metal Dealers Act 2013 
  • European Waste Framework Directive (2008/98/EC) 
  • The Waste Electrical and Electronic Equipment Regulations 2013 (with amendments) 
  • The Controlled Waste (England and Wales) Regulations 2012 (with amendments) 
  • The Waste (England and Wales) Regulations 2011 (with amendments) 
  • Standard Industrial Classification of Economic Activities (SIC) (2008) 
  • Environmental Protection Act 1990 Part IV – Litter Etc (with amendments) 
  • Environmental Protection Act 1990 Part II – Waste on Land (with amendments) 
  • Ionising Radiations Regulations 2017 
  • The Eco-design for Energy-Related Products and Energy Information (Amendment) Regulations 2019 (SI 2019/1253) 
  • REGULATION (EU) 2019/1021 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 June 2019 on persistent organic pollutants (POPs) 
  • RoHS 3 (EU Directive 2015/863) 
  • Streamlined Energy and Carbon Reporting (SECR); Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 1155/2018) 
  • Noise and Statutory Nuisance Act 1993 
  • Road Traffic Regulations 1988 
  • Supply of Machinery (Safety) Regulations 2008 
  • Provision and Use of Work Equipment Regulations 1998 (PUWER) 
  • Manual Handling Operations Regulations 1992 
  • Health and Safety (Display Screen Equipment) Regulations 1992 (with amendments) 
  • Wildlife & Countryside Act 1981 (Amended 1985 and 1991) 
  • Town & Country Planning Act 1990 
  • Countryside and Rights of Way Act 2000 
  • Protection of Badgers Act 1992 
  • Conservation of Habitats and Species Regulations 2010 SI No. 490 
  • The Control of Asbestos Regulations 2012 
  • Clean Neighbourhoods and Environment Act 2005 
  • The Highly Flammable Liquids and Liquefied Petroleum Gases Regulations 1972 
  • Hazardous Waste (England & Wales) (Amendment) Regulations 2016. 
  • The Environmental Permitting (England and Wales) Regulations 2007 (with amendments) 
  • The Environmental Damage (Prevention and Remediation) (England) Regulations 2015 (with amendments) 
  • Environmental Protection Act 1990 Part IX - General (with amendments) 
  • Environmental Protection Act Part VIII - Miscellaneous (with amendments) 
  • Environmental Protection Act 1990 Part VII - Nature Conservation in Great Britain and Countryside Matters in Wales (with amendments) 
  • Environmental Protection Act 1990 Part VI - Genetically Modified Organisms (with amendments) 
  • Environmental Protection Act 1990 Part III - Statutory Nuisances and Clean Air (with amendments) 
  • Environmental Protection Act 1990 Part IIA - Contaminated Land (with amendments) 
  • Environmental Protection Act 1990 Part I - Integrated Pollution Control and Air Pollution Control by Local Authorities 
  • ISO 14001 Environmental Management 
  • Regulation (EU) 2019/1021 of the European Parliament and of the Council of 20 June 2019 on persistent organic pollutants (with amendments) 
  • The Control of Major Accident Hazards (Amendment) Regulations 2015 (COMAH) 
  • Merchant Shipping (Dangerous Goods and Marine Pollutants) Regulations 1997 
  • Guidance Note on HCDG 
  • Guidance Note on fire extinguishers 
  • Carriage of dangerous goods and Use of Transportable Pressure Equipment(Amendment)(EU Exit) Regulations 2020 
  • Dangerous Substances (Notification and Marking of Sites) Regulations 1990 (NAMOS) 
  • Dangerous Substances and Explosive Atmospheres Regulations 2002 (DSEAR) 
  • Control of Substances Hazardous to Health Regulations 2002 (COSHH) 
  • Classification, Labelling and Packaging of Chemicals Regulations 2015 (CLP) 
  • The Health Protection (Coronavirus, Restrictions) (No. 2) (England) Regulations 2020 
  • The Working Time (Coronavirus) (Amendment) Regulations 2020 
  • The Health Protection (Coronavirus, Public Health Information for Passengers Travelling to England) Regulations 2020 
  • Health Protection (Coronavirus, Wearing of Face Coverings on Public Transport) (England) Regulations 2020 
  • Health Protection (Coronavirus, Restrictions) (England) (Amendment) Regulations 2020 
  • Public Health (Control of Disease) Act 1984 
  • Coronavirus Act 2020 
  • Control of Lead at Work Regulations 2002 
  • L8 Legionnaires' Disease Approved Code of Practice 
  • Pressure Systems Safety Regulations 2000 (PSSR) 
  • Workplace (Health, Safety and Welfare) Regulations 1992 
  • Restriction of Certain Hazardous Substances in electrical and Electronic Equipment Regulations 2012 (RoHS) 
  • Personal Protective Equipment at Work Regulations 1992 (PPE) 
  • Explosives Regulations 2014 
  • Regulatory Reform (Fire Safety) Order 2005 
  • Acetylene Safety (England and Wales and Scotland) Regulations 2014 (ASR) 
  • The Energy Efficiency (Private Rented Property) Regulations 2015 (with amendments) 
  • Building regulations - part L 
  • The Gas Safety (Installation and Use) (Amendment) Regulations 2018 
  • Climate Change Act 2008 (with amendments) 
  • The Heat Network (Metering and Billing) Regulations 2014 (with amendments) 
  • Energy Efficiency Directive (2012) 
  • Energy Saving Opportunity Scheme (ESOS Regulations 2014) 
  • The Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2018 | Energy and Resource Use 
  • The Climate Change Levy (General) Regulations 2001 (with amendments) 
  • The Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2018 | Employment 
  • Modern Slavery Act 2015 
  • H2 Pollution Incident Response Planning (using multiple pieces of legislation previously listed) 
  • H1 The Regulatory Reform (Fire Safety) Order 2005 
  • Water Resources Act 1991 (with amendments) 
  • Water Industry Act 1991 (with amendments) 
  • The 'Water Supply (Water Fittings) Regulations 1999' (with amendments) 
  • Control of Pollution (Oil Storage) (England) Regulations 2001 SI 2954 
  • Companies Act 2006 (with amendments) 
  • Data Protection Act 2018 / GDPR Regulations (with amendments) 
  • London Ultra Low Emission Zone (ULEZ) 
  • Greater London Low Emission Zone Charging Order 2006 (LEZ) 
  • Ozone-Depleting Substances Regulations 2015 
  • The Fluorinated Greenhouse Gases Regulations 2018 

Step 3: Identify and map voluntary commitments

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Voluntary commitments include a range of obligations that are not legally required, but which a company has chosen to adopt and publicly commit to.  These may include, for example: 

  • Industry guidance and codes of practice that set out agreed ways of working. 
  • Sector specific commitments, such as the Better Building Partnership Climate Commitment. 
  • Obligations that have been imposed on, or agreed by, a company in relation to, for example, planning conditions associated with a new development. 
  • Individual commitments that a company or property has signed up to with a local community. 

There are a number of sources of voluntary environmental commitments, including, for example: 

  • Internal subject matter experts, such as ESG and HSE specialists, legal or architectural professionals, regulatory affairs departments. 
  • Industry organisation, such as the Better Building Partnership, the UK Green Building Council and the Royal Institute of Chartered Surveyors. 
  • Local property and facilities management teams with knowledge and records of local agreements. 

A property manager should co-ordinate the process of mapping voluntary commitments against business activities to determine relevance and understand the associated compliance requirements.  This process will evolve over time, so that the list of regulatory requirements and codes of practice becomes more refined and comprehensive. 

Step 4: Identify and map stakeholder expectations

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There are a range of interested parties, or stakeholders, whose environmental expectations matter due to their influence on either an asset manager or property.  It is important to identify these expectations, and, where necessary, include these within the compliance register. 

There are a wide range of stakeholders whose expectations may be important to an asset manager, portfolio or property. These include, for example, occupiers, employees, local communities, investors, local authorities and building users. 

Prioritising stakeholders often involves a focus group ranking stakeholders’ importance in relation to their ‘interest in’ and ‘influence on’ an organisation.  For those stakeholders who rank as ‘high’ importance, further insight into potential environmental expectations on the organisation should be undertaken.  This may be in the form of desk-based research or direct engagement. 

Stakeholder expectations that may be of sufficient importance to include in a compliance obligation register may include, for example: 

  • Local community expectations on noise outside of normal business hours 
  • The management of litter in the areas surrounding a take-away restaurant. 
  • The maintenance of pathways surrounding an office building, for example. 

A property manager should co-ordinate the process of mapping stakeholder expectations against business activities to determine relevance and understand the associated obligation.  This process will evolve over time, so that the list of regulatory requirements and codes of practice becomes more refined and comprehensive. 

Step 5: Develop and maintain an environmental compliance register

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In collaboration with a facilities manager, a property manager should design and populate a compliance register with the regulatory, voluntary and stakeholder obligations. 

The register should be designed in the form of a simple table, with a list of obligations categorised by source, and a brief one- or two-line summary of the way in which the obligation applies to the organisation and the associated requirement. 

Under the co-ordination of a property manager, the obligations register should be formally reviewed on an annual basis.  This should involve presenting the register to a senior governance group for awareness and, where necessary, endorsement. 

The register should be maintained on an ongoing basis and updated to reflect new obligations as and when they emerge. 

Related Guidance Notes

The following Guidance Notes contain related information: 

Additional Resources

Solutions Scrapbook

CLS Holdings De-risks Entire UK Portfolio for MEES

CLS Holdings has fully mitigated its UK portfolio against the Government’s upcoming Minimum Energy Efficiency Standards (MEES), which come into force from 2018. The CLS Holdings Sustainability team worked in partnership with EPC assessors to review properties at risk, providing assessors with complete information, giving them full access to properties and upgrading equipment where needed. All UK properties now have Energy Performance Certificate (EPC) ratings of D or above. Read the case study here.

 

Aviva Investors – Proactive Engagement with Investors on ESG

In 2016, Aviva Investors introduced quarterly reports on environmental, social and governance (ESG) matters for all funds. Alongside GRESB ratings, these communicate to investors the ESG performance of each fund, and demonstrate Aviva Investors’ proactive and forward-looking approach to ESG risks and opportunities. The whole process has also increased collaboration throughout the business on ESG. Read the case study here.

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