Environmental audits

Scope of environmental audit

An environmental audit is a comprehensive process that helps investors understand the potential risks associated with a property. At Geotest, we perform a detailed, multi-step analysis to provide our clients with complete and reliable information. The steps we take as part of an environmental audit include the following:

1. Collection of historical and current data

• We collect detailed information about the history, current condition and purpose of the property.
• We analyze potential sources of contamination at the location.

2. Field inspection and sampling

• We carry out a detailed field inspection.
• We collect soil and water samples for laboratory analysis.

3. Laboratory tests

• We analyze samples of soil, groundwater, surface water and other materials to determine the level of contamination.
• Testing includes identification of heavy metals, petroleum-based substances and other hazardous compounds.

4. Land suitability assessment

• We assess whether the land is suitable for construction purposes.

5. Investment risk analysis

• We determine the potential risks associated with the planned investment.

6. Preparation of an audit report

• We create a detailed report containing the methodology, analysis results, risk assessment and recommendations for further actions.

Each stage is tailored to the client's individual needs and provides the precise information needed to make an informed decision. Our approach provides a comprehensive assessment of business risk, which is critical when purchasing land.

Benefits of a professional environmental audit

A professional environmental audit shows how local water and soil conditions will affect a given investment, allowing the design to be adapted to the area and appropriate preventative measures to be taken to minimize expenditures. The benefits of an audit include:

• Financial risk reduction — Audit helps to avoid unexpected costs related to remediation and site adaptation, providing better control over the budget to invest.
• Identification of contaminated areas — Accurate identification of areas with contaminated soil allows for earlier planning of necessary remediation steps.
• Remediation planning (timelines and costs) — Based on the audit results, an effective remediation plan, a schedule of work and an estimate of expected costs can be determined.
• Indication of areas of soil with low bearing capacity — Audit identifies areas with low soil bearing capacity, which is critical for structural design and avoiding problems during construction.
• Minimizing negative consequences of poor investment decisions — Audit helps investors avoid legal and financial problems associated with the purchase of problematic land
• Ensuring compliance with environmental protection regulations during investment implementation — Audit ensures that the planned investment complies with environmental protection regulations, minimizing the risk of legal sanctions.

A professional environmental audit is an investment in the peace of mind and financial stability of a project. Audits help avoid many problems and optimize an investment process, resulting in real savings and increased chances of success.

Environmental audit phases

The environmental assessment process consists of several stages that provide important information needed to fully understand the condition of the property being assessed. A detailed description of each phase of the process is provided below.

Phase I

Phase I of the environmental audit is a key stage that provides an initial assessment of the environmental condition of the property. It includes:

• Review of available materials — Analysis of available documents related to the property, including its history and current use, as well as data on the surrounding area.
• Site visit — An inspection to assess site conditions, identify potential sources of contamination, wetlands, surface and subsurface structures, and locations where hazardous materials are or have been stored.
• Environmental assessment — a detailed description of the geological structure, hydrogeological and hydrological conditions, as well as an assessment of potential natural hazards or the presence of protected objects.
• Phase I Report — Preparation of a report in accordance with ASTM E1527-13 that includes the results of the analysis, a description of potential hazards, and recommendations for further action.

Phase I allows for early identification of factors that may affect project schedule and costs, including the need for remediation or environmental mitigation agreements. As a result, investors can make informed decisions to minimize the risk of delays and unexpected costs in later phases of the project.

Phase II 

Phase I, which identifies potential threats, is followed by Phase II, which is designed to conduct a more thorough analysis and confirm the presence of contaminants in the assessed area. Here are the main objectives of this phase:

It focuses on the hazards identified in the Phase I report. It is primarily aimed at locating or ruling out the presence of contaminants in the assessed area through field testing (sampling for laboratory testing) and analysis of the laboratory test results. At this stage, preliminary assumptions can be made about the extent and magnitude of the contamination. The analysis is performed using assumptions described in ASTM E1903-19 Standard Practice for Environmental Site Assessments: Phase II Environmental Site Assessment Procedure.

The report of the second phase contains information on the current state of the environment on the analyzed land plot, confirmed by accredited tests. It allows for the preliminary design of solutions aimed at rationalization and optimization of costs, as well as the assessment of the profitability of buying (or selling) the land.

Phase III 

It includes activities aimed at developing detailed action strategies, estimating the costs associated with improving the current state or bringing the area to a state where it meets legal requirements in the field of environmental protection. In practice, in Poland, this stage consists of development and approval of a draft remediation plan with the Regional Directorate for Environmental Protection and its implementation.

Thanks to due diligence environmental audits, the client gains hard-to-find knowledge and learns about the real risks associated with the purchase of real estate, or, in the opposite situation, the seller gains irrefutable arguments preventing the lowering of the value of the plot being sold.

Reducing risk through environmental audit

Performing an environmental audit is a key element of the due diligence process before purchasing a property. Here are the main benefits of this service:

• Risk minimization — An audit helps identify and assess potential environmental risks associated with a property, which helps avoid costly surprises and legal problems in the future.
• Full property assessment — The audit reveals both the strengths and potential weaknesses of the property, providing a comprehensive analysis of its condition.
• Detailed information — The audit provides valuable data regarding the history of the area, underground infrastructure, the presence of potentially dangerous objects and the assessment of the possibility of gas emissions.
• Identification of "Red Flags" — If any alarming signals, known as "Red Flags", are detected, the audit team provides a set of recommendations to guide further action.
• Decision-making support — The audit reveals any issues that may influence the decision to purchase a property, allowing the investor to make a conscious choice with a full understanding of the potential risks and benefits.

Thanks to an environmental audit, investors can make conscious decisions, minimizing risk and maximizing the value of their investments.