Application of Environmental Audits in Industrial Property Management in Kenya: a Case Study of Industrial Properties in Nairobi County

Abstract

This study examines the application of Environmental Auditing (EA) in industrial property management in Kenya. EA is undertaken to assess compliance with mitigation measures proposed in Environmental Impact Assessment (EIA) reports prepared during project planning. EA also aims to identify new impacts emanating from a project that had not been anticipated during the EIA study, and proposals for their mitigation. Environmental Auditing in real estate development in Kenya is a requirement of the Kenya Constitution, and various other laws and policies on environmental conservation and management. The study evaluates the impacts of Environmental Audits (EAs) on industrial real estate, and identifies strengths and weaknesses, as well as challenges that property managers do experience in enforcing compliance with environmental auditing in industrial property management in Kenya. A descriptive survey research approach was utilized to accomplish the goals of the study. The target population comprised of all property managers in Nairobi City who are members of the Institution of Surveyors of Kenya, and National Environment Management (NEMA) County directors across the 47 counties in the country. Data was gathered from primary and secondary sources. The primary data was acquired through a questionnaire survey administered on a sample of 211 respondents (188 property managers and 23 NEMA county directors) selected through simple random sampling. The secondary data were obtained from review of relevant literature in texts, journal articles, legislations and published documents. The data were analysed using descriptive statistics including frequencies, percentages and means with the help of statistical software SPSS and Excel. The analysed data was presented in tables and charts. The study findings revealed that there is improved performance of the industries when environmental auditing is implemented. According to the study results, environmental audits xiv enhances effectiveness and efficiency of the organization by identifying defects or problems, facilitates compliance to the regulatory framework, boosts competitive advantage, creates awareness of the existing environmental impacts, improves company reputation and image as a corporate citizen, and facilitates provision of data to investors and sponsors of industrial real estate. However, the situation is that there is low implementation of the same with the few who are implementing are driven by meeting the legal requirements and perceived benefits to stakeholders. The key challenges that were evident include corruption and biasness of the regulator and high costs of audits. The study recommends that property managers should strategically formulate and efficiently implement environmental management and audit system for their organizations. This is because it allows organizations not only to be clean to the regulator but also improves the ethical and business performance. Against the popular belief that environmental auditing is costly, on other hand the expenses used could be lower than the costs of probable damage occurring as a result of payments of fines and penalties upon certain environmental impacts. Therefore, it is advisable for property managers to initiate a corporate culture where environmental auditing is applied in operation of industrial real estate and make adequate financial provision for the same to ensure smooth running of their organizations. Eventually this will immensely contribute towards achievement of sustainable development goals on ecological and societal endurance in industrial real estate development