Friday, February 21, 2014

environmental secrets

So there was a question regarding corporate secrets and the environment in a comment on the last post.

These days, environmental contamination is just another risk to be managed. The big firms that are likely to be publicly traded have all that stuff in their risk portfolio. GE is still in business even with some epic environmental liability. Dow's still arguing over how much responsibility it has for its subsidiary, which caused the worst industrial accident in the modern era. Regardless of how much liability it escapes in India, it still has other sites like this one. The sorts of firms that get bankrupted by environmental issues these days tend to be tiny and not terribly sophisticated (or they've been spun off to intentionally remove liability) and don't have public shareholders to worry about.

The other thing about the environmental biz is that unless there's some sort of disaster or emergency situation (in that case, you can't keep it out of the news anyway), information comes out slowly. Even if I find some pure product in a place we didn't anticipate, it takes time to get lab results, see how far contamination has spread, put in new sentinel wells, etc. If I or my subcontractors wanted to send out a press release that we found something exciting, we wouldn't have any solid information and we'd just piss off the client.

And that information will come out eventually - environmental results are subject to regulatory review (no matter how cursory) and if you want to get rid of your environmental liability, you're going to have to show someone that you've cleaned up your mess. So eventually, there are no real secrets in the environmental biz.

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