As most small business owners realize, there are numerous regulations they must adhere to on a daily basis. And in today’s business world, no laws and regulations are at the forefront more so than environmental laws. While there is little doubt virtually all small business owners want to see the environment protected, today’s laws and regulations offer both positive and negative aspects. To gain a better understanding of the impact these laws have on small businesses, let’s examine some of the most important details.
For businesses that manufacture products, it’s inevitable that they will also have manufacturing waste of which they need to dispose of. This can lead to both positive and negative implications for the business and its customers. For example, EPA regulations often require that certain types of waste be recycled if possible, so businesses create recycling programs where they can sell the waste to other manufacturers who can use the waste as raw materials. However, these programs often add additional costs in labor, equipment, and storage, all of which ultimately lead to the costs being passed on to consumers.
Decreased Profit Margins
For any business to grow, it needs to expand its profit margins as much as possible. This is especially true with small businesses since they have a much smaller margin of error than do larger companies. Because of this, environmental protection laws regarding emissions of chemicals, smoke, and other particles have become very strict in recent years, forcing many businesses to take extraordinary steps to maintain compliance. Examples of this include lining retention ponds with clay and poly liners, retrofitting equipment with filtration screens, and using different types of raw materials. While the upside of these measures has been greater protection of the environment, the downside has been the additional expenses to businesses, leading to decreased profit margins.
Sustainable Raw Materials
Since raw materials are often the lifeblood of many small businesses, keeping their costs under control is vital to their success. With many new laws in place, businesses are becoming more innovative in obtaining and using raw materials. For example, businesses that rely on wood as one of their main raw materials often work with Christmas tree farmers, where they can buy unused trees that were not harvested at much cheaper prices. By doing so, this process not only saves a company money but also prevents the depletion of forests where naturally-occurring pine trees exist.
Because environmental laws are so complex, it’s almost inevitable that most small businesses will at some point be in violation of local, state, or federal rules and regulations. Whether the violation is done unknowingly or despite having knowledge of the law, the penalties are often the same. In general, enforcement of environmental laws is done by the federal Environmental Protection Agency, although some states do have their own environmental enforcement agencies. Penalties can vary depending on the offense and the damage done, among other things. For example, if a company is found to be responsible for a chemical spill that leaks into surrounding waterways, the EPA can enforce both civil and criminal penalties. Fines may be imposed on the company, and the EPA can order them to clean up the spill and reimburse any parties sustaining damage. And in situations where criminal wrongdoing is found, charges can be filed in court, and prison sentences handed down to those found to be negligent.
Because environmental issues are so diverse and complex, small businesses are constantly reviewing laws and regulations. By doing so, they are not only helping to protect the environment but their reputation and business itself.