Audit, Compliance and Risk Blog

Environment, Health & Safety (EHS) functions are too often viewed as cost centers, and, as a result, are among the first areas scrutinized when organizations seek to reduce expenses. In today’s climate of economic uncertainty, many EHS leaders are being asked to re-examine already lean budgets and identify potential cuts. It is a difficult mandate.

Increasingly, EHS regulatory compliance content is among the first items considered for reduction. Before making that decision, however, it is critical to examine the forces driving this impulse and the broader implications for the organization. What appears to be a short-term saving can ultimately generate far greater costs in reputation, risk exposure, and financial performance.

A common misconception is that EHS compliance content is simply reference material, static information that can be consulted when needed. Assumptions such as “we already know the requirements” or “regulations don’t change that often” create a false sense of stability.

Regulatory requirements are in constant motion. During periods of economic uncertainty, the pace often accelerates. Governments may reduce regulatory burdens to stimulate growth, while state, provincial, or regional authorities introduce new or more stringent requirements to address emerging risks. The result is not simplification, it is complexity and variability.

Treating compliance content as static underestimates this volatility and shifts the burden onto already stretched EHS teams to manually monitor and interpret changes across jurisdictions. This approach is inefficient, inconsistent, and inherently risky. Missed updates or misinterpretations can expose both senior leaders and the organization to enforcement actions, operational disruption, and reputational harm.

When budgets tighten, leaders often rely on assurances such as, “Our EHS team knows the regulations,” or “We’ve passed inspections before.” Yet that confidence may stem from having access to structured, up-to-date compliance content in the first place.

Remove that infrastructure, and the responsibility to continuously track, interpret, and operationalize evolving EHS compliance requirements falls entirely on individuals whose core roles are already demanding. In multinational environments where regulatory obligations differ across jurisdictions and change frequently, this reliance can create a false sense of security. Institutional knowledge is valuable, but without reliable regulatory content behind it, confidence can quickly become exposure.

The primary value of EHS compliance content lies in enabling a proactive approach: identifying regulatory changes early, aligning programs proactively, and avoiding citations, fines, injuries, shutdowns, and reputational damage.

The challenge is that prevention is difficult to quantify. When compliance systems work well, adverse events do not occur and their absence is rarely attributed to the infrastructure that helped prevent them. Organizations tend to measure what goes wrong, not what consistently goes right. As a result, the return on investment remains largely invisible until the safeguards are removed and consequences surface.

From a budget optics perspective, compliance content can appear discretionary, especially when compared to visible necessities such as personal protective equipment, staffing, or emergency response readiness. It may seem like the least disruptive line item to reduce.

However, what is politically easier in the short term may introduce disproportionate risk over time. Weakening compliance infrastructure reduces regulatory visibility and increases the likelihood of non-compliance. The costs that follow such as enforcement actions, production delays, legal fees, and reputational damage can far exceed the initial savings.

The risks associated with cutting compliance content rarely materialize immediately. This delay can create a false sense of prudence.

Impacts often surface months or years later during audits, incident investigations, regulatory inspections, or litigation when gaps in regulatory awareness become evident. By then, the organization is no longer managing cost efficiency; it is managing exposure. What seemed like a responsible short-term decision can quickly escalate into significant financial and operational consequences. 

EHS compliance content should be treated as risk infrastructure, not discretionary overhead, and managed with the same discipline as other critical operational controls.

• Right-size, don’t remove capability. If reductions are unavoidable, prioritize high-risk jurisdictions, core regulatory domains, and areas tied to permits or high enforcement exposure.
• Position compliance as license-to-operate protection. Connect regulatory intelligence directly to enterprise risk management, governance, audit performance, and executive accountability.
• Protect team capacity. Maintain structured, reliable compliance intelligence tools and processes to prevent reactive, manual regulatory tracking that drains resources and increases inconsistency.
• Translate prevention into executive metrics. Demonstrate value through reduced audit findings, faster regulatory change implementation, time savings, and decreased reliance on external counsel. Frame compliance content in terms of risk avoidance and operational efficiency.

Short-term optics should never override long-term exposure. In a volatile and fragmented regulatory environment, proactive regulatory intelligence is a strategic control, not a discretionary expense. Top management bears the responsibility to demonstrate leadership and commitment by ensuring the resources necessary to manage environmental, health, and safety are in place, including access to accurate, current regulatory content and the capability to interpret and operationalize it effectively. The most resilient organizations do not reduce visibility into risk when budgets tighten. They strengthen it.

About the Author

Prior to joining STP as the Director of Partnerships in 2021, Shannon spent 14 years as an EHS consultant performing EHS compliance and management system audits, as well as implementing ISO 14001 and 45001 conforming management systems for organizations within the construction, manufacturing, health care and commercial retail industries. 

She is a trained ISO 14001 and 45001 Lead Auditor and a certified environmental auditor with ECO Canada.  She lives in Ontario, Canada with her family, where she loves to play any sport especially soccer.