Assessing the EHS risks and implications of an owned or leased building is critical in assuring a safe work environment for all employees, contractors, visitors, and the public. And while EHS may not always have a seat at the table during the transaction itself, we certainly have a responsibility to understand and manage EHS risks that come with an acquisition, move, or expansion and a role to play in integrating the new property into the company’s EHS culture.
Particularly in low-risk environments, EHS can fly under the radar in all the busyness of a transition, emerging only when the organization is surprised with an unforeseen risk or problem. We’ve seen companies uncover hazardous materials used in a building’s original construction during renovation (leading to lost business when the facility had to temporarily halt operations), struggle to implement critical life safety systems in developing countries, and discover that the HVAC system spreads noxious fumes throughout the building every time the roof is re-tarred, quickly sending everyone home and stopping business for the day (or week).
As the saying goes, an ounce of prevention is worth a pound of cure, and being able to quickly identify and mitigate EHS risks can be the key to a successful, incident-free property transition or integration.
Check the Checklist
One highly effective approach our experts have created is to develop a mini-due diligence model that specifically addresses EHS risks for offices and other non-manufacturing facilities. A simple checklist, not so different from full-scale due diligence before an acquisition, can be very effective when built into the leasing process or used as soon as the EHS function is made aware of the upcoming change, pre-acquisition. By thoroughly evaluating new properties (whether leased or acquired), managers can proactively manage internal integration and expansion and avoid costly business interruptions down the line.
Your exact list is going to be dependent on your business priorities, culture, and geography, but here are some categories to get you started:
- Fire safety, potentially including sprinklers and fire compartments, alarms, up-to-code electrical work, and an emergency landline, depending on relevant regulations. (This can be a particular challenge when co-located within a building where other tenants have different expectations or requirements.)
- Ingress/egress, including the number and location of emergency exits
- Seismic standards compliance, if relevant
- Planning for natural disasters and emergencies (both safety and communications)
- Building security (including common areas and parking lots/garages)
- HVAC systems (indoor air quality)
- Noise levels
- Building materials (including lead paint, mold, and asbestos) and how they may affect employees or business continuity during future renovations or expansions
- Presence of hazardous materials
- Noxious or pungent odors
- Soil and groundwater contamination
- Vapor intrusion from subsurface contamination, including employee exposure protection
- Landlord and property owner liability risks, including indirect impacts such as potential operational interruptions
- Radon exposure and protection
Sustainability and Social Risks:
- Building certifications such as LEED, GRESB, or WELL BUILDING
- Energy identification and procurement of renewable sources
- Waste minimization programs
- Auditing and accountability of waste disposal facilities and haulers
Create a ranking system that quickly indicates the status, severity, and degree of risk for each line item, keeping detailed notes and including repair estimates when you can. It is virtually guaranteed that there will be risks and issues with any new acquisition or lease, but your compiled survey should present a thorough representation of the safety and environmental risks of the new location, as well as the beginning of a plan of action.
No Need to Learn the Hard Way
Ideally, EHS issues would be accounted for before a transaction is finalized or a move is planned, but even when that’s not the case, there is a lot that an EHS manager can do to map and manage the risks, ensuring a safe and smooth transition to the new space.
Learn more about Antea Group’s approach to mergers & acquisition support and our work with low-risk environments.
EHS and Compliance
Mergers and Acquisitions