Policy Framework for Environmental Performance Agreements: chapter 4

What Design Criteria Must Environmental Performance Agreements Meet?

Environment Canada will be guided by the following principles in negotiating Environmental Performance Agreements:

• Effectiveness: Environmental Performance Agreements must achieve measurable environmental results;
• Credibility: the public must have confidence in the approach and in the parties' capacity to deliver on their commitments;
• Transparency and accountability: all parties to an Environmental Performance Agreement must be publicly accountable for the commitments they make and for their performance against the commitments; and
• Efficiency: Environmental Performance Agreements should be no more expensive to the parties than alternatives for equivalent environmental results.

To ensure that these principles are embedded in agreements, Environment Canada will require that each Environmental Performance Agreement it signs addresses the following core design criteria:

• Senior-level commitment from participants. Voluntary action has been demonstrated to be most effective when the senior management of each participating company is clearly supportive of this approach to environmental protection. Environment Canada will ask for a signed commitment from senior management within companies participating in an agreement.
• Clear environmental objectives and measurable results. These are essential to establish performance expectations, monitor progress and develop public trust. Environmental Performance Agreements will include numerical performance standards and timelines wherever feasible. Where standards, guidelines or indicators are used, their relevance to the agreement's objectives will be periodically reviewed.
• Clearly defined roles and responsibilities. These are necessary to assign accountability, ensure the achievement of performance objectives and secure public confidence. Environmental Performance Agreements will stipulate the roles and responsibilities of all parties to an agreement, including Environment Canada.
• Consultation with affected and interested stakeholders. Stakeholder consultation will enhance the agreement's credibility. While the nature of the consultation will depend on the environmental issues to be covered, it must provide a meaningful opportunity for interested parties to influence decision-making.
• Public reporting. Public reporting on performance is necessary to make an Environmental Performance Agreement transparent and credible. Reporting will be required at least annually. Environment Canada will develop protocols with Environmental Performance Agreement signatories specifying what is to be measured, how often, and where it is to be reported. The Department will avoid a proliferation of different reporting formats and venues in order to minimize the administrative expense for reporting companies and simplify access by the public. In the case of performance agreements addressing pollutants, Environment Canada will rely as much as possible on the protocols developed under the National Pollutant Release Inventory (NPRI) and, to the extent practicable, will use the NPRI as a common reporting platform. Where it makes sense, Environment Canada will endeavour to integrate existing provincial reporting and monitoring mechanisms.
• Verification of results. This is essential for both credibility and accountability. Environment Canada will use different approaches to verification depending on the nature of the Environmental Performance Agreement, including internal audits and third-party verification.
• Incentives and Consequences. The nature of incentives and consequences will be related to the type of agreement and the performance expectations of participants.
• Continual improvement. Environment Canada will encourage continual improvement in performance through renewal of performance agreements where significant additional environmental progress can be achieved. This is consistent with the environmental policy and goals of high-achieving companies. Environment Canada also recognizes that companies will progress to the point where this type of tool may no longer be a factor in their successful pursuit of environmental results.

How these criteria are reflected in individual agreements will vary with the nature and objectives of the agreement. For example, Environmental Performance Agreements addressing issues that could be regulated may have stronger provisions for public reporting and verification than those dealing with matters that go beyond what can be regulated. Alternatively, performance agreements may be put in place to build capacity and therefore could have a stronger commitment to continual improvement.