The “H” Factor
By Harvey Stone
“I’m too busy making products.”
My shareholders care about cash – not compliance.”
“We’ll get to it next quarter”
Over the years, I’ve heard many variations on the above themes in regard to compliance with RoHS, WEEE, ELV and other environmental laws. Typically, the executive or manager uttering them is stating what he or she believes. But today, nearly seven years since the European Union enacted REACH, these statements reflect what I call the “H Factor,” where “H” stands for “human” and where “human” refers to our universal ability to make errors in judgment.
Given REACH’s risks for AEM members, it’s worth identifying three errors in judgment.
It’s not difficult to grasp the statement: “REACH is 849 pages long, plus there are also hundreds of pages of guidance documents and is the world’s most comprehensive environmental regulation aimed at protecting human health and the environment.” Nevertheless, at a time when two substance registration periods have already passed and EU nations have beefed up their enforcement strategies, it seems that too many OEMs are under-estimating both REACH’s financial risks and also the complexity of implementing a REACH compliance management process.
Nobody likes to be forced into a whirlwind of activity – especially when there is no perceived business value. That said, the old expression “arguing against reality” applies. The reality is: REACH is here to stay. REACH-like laws are expected to spread to more than a hundred global jurisdictions. And compliance with REACH is part of today’s business paradigm. Furthermore, resisting REACH blocks out the very strong compliance value proposition: garnering competitive advantage vs. slower-moving competitors; developing deeper levels of supplier partnerships; and having in place the full material disclosure that will allow companies to comply with future requirements at a fraction of the time, cost and stress.
Some senior staff clearly grasp how big and complex REACH is. But, understandably consumed with running their businesses, they postpone freeing up the financial or human resources. Consequently, they run the non-compliance risk of products being blocked or recalled from the EU market.
Predicting the Future
Here’s a very safe prediction – no crystal ball needed. In the next five-to-ten years, some AEM members will lose customers and revenue because they under-estimated, resisted or procrastinated when it came to REACH compliance. Meanwhile, other AEM members will thrive in the new business landscape because they implemented REACH-compliance processes early and thoroughly.
What’s the difference between those two categories of companies? While there are many factors, one of the most important is the speed with which AEM members train their staff and supply chain about REACH. In that regard, AEM’s REACH training process is a solution with the breadth and depth to offset the H-Factor.
So, don’t under-estimate the power of this very unique, very affordable and very transparent training process. Don’t resist assigning resources for the training. And don’t procrastinate getting started.
Set in motion a REACH-compliance process and value proposition.