Environmental Auditing and Valuation

[see also carbon trading]

Environmental audit is a general term that can reflect various types or evaluations intended to identify environmental compliance and management system implementation gaps, along with related corrective actions. In this way they perform an analogous (similar) function to financial audits. 

There are generally two different types of environmental audits: 

• compliance audits and 

• management systems audits. 

Environmental compliance audits

As the name implies, these audits are intended to review the site's/company's legal compliance status in an operational context. Compliance audits generally begin with determining the applicable compliance requirements against which the operations will be assessed. This tends to include country's regulations, permits and local ordinances/codes. In some cases, it may also include requirements within legal settlements.

Compliance audits may be multimedia or programmatic. Multimedia audits involve identifying and auditing all environmental media (air, water, waste, etc.) that apply to the operation/company. Programmatic audits (which may also be called thematic or media-specific) are limited in scope to pre-identified regulatory areas, such as air.

Audits are also focused on operational aspects of a company/site, rather than the contamination status of the real property. Assessments, studies, etc. that involve property contamination/remediation are typically not considered an environmental audit.

Management System Audit

ISO 14001 is a voluntary international standard for environmental management systems ("EMS"). ISO 14001:2004 provides the requirements for an EMS and ISO 14004 gives general EMS guidelines.

An EMS meeting the requirements of ISO 14001:2004 is a management tool enabling an organization of any size or type to identify and control the environmental impact of its activities, products or services; Improve its environmental performance continually, and implement a systematic approach to setting environmental objectives and targets, to achieving these and to demonstrating that they have been achieved.

Environmental Auditing in India 

The Supreme Audit Institution (SAI) in India is headed by the Comptroller and Auditor General (CAG) of India who is a constitutional authority. The CAG of India derives his mandate from Articles 148 to 151 of the Indian Constitution. The CAG's (Duties, Powers and Conditions of Service) Act, 1971 prescribes functions, duties and powers of the CAG. While fulfilling his constitutional obligations, the CAG examines various aspects of government expenditure and revenues. The audit conducted by CAG is broadly classified into Financial, Compliance and Performance Audit. Environmental audit by SAI India is conducted within the broad framework of Compliance and Performance Audit. 

Environment protection in India 

The Ministry of Environment & Forests is the nodal agency in the administrative structure of the Central Government of India, for the planning, promotion, coordination and overseeing the implementation of environmental and forestry programmes. The Ministry is also the Nodal agency in the country for the United Nations Environment Programme (UNEP). In the states, the Department of Environment and Forest is the main agency for implementation of environment programmes.