Commercial Investment Real Estate March/April 2018 | Page 12

MARKET
FOR ECAST
Reversing Direction
Four ways globalism affects environmental compliance.
by Andy Bajorat
D
Changing Regulations
In emerging economies, a new government or new political leader
may abandon previous environmental or safety regulations for
new, sometimes arbitrary standards. This means that to be one
step ahead of potential changes, environmental compliance offi-
cers need to be aware of local elections and political movements
in the areas in which they operate.
In the U.S. or European countries, administrators are accus-
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March | April 2018
tomed to periods of regulatory rollout. They build in transition
times for changing regulations that emerging economies may
not allow and may even perceive benefit from catching busi-
nesses unawares.
Embracing Stakeholders
In previous decades, the philosophy behind doing business in
emerging markets was to set up and start making money as
quickly as possible. With the ever-increasing availability of infor-
mation, local populations expect greater engagement in manu-
facturing development and use of natural resources in their area.
Lack of appropriate engagement of stakeholders early in the
planning process can lead to a distrust of the business and result
in obstacles, such as class-action lawsuits or rejection of oper-
ating permits and access to resources by government agencies.
Where previously the local population and government would
have welcomed a new factory simply because of job creation,
COMMERCIAL INVESTMENT REAL ESTATE
ifferences among global marketplaces are shrinking.
The result is a global economy in which expectations
of acceptable environmental and safety practices for
manufacturers are becoming more universal.
While the world likely has more years of disparate approaches
before it establishes an international standard for business prac-
tices, the future will arrive shortly. How will business most be
affected by compliance issues in the global economy?