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Environmental Risk Advisor:
Environmental Questionnaires

Charlotte, North Carolina - An environmental questionnaire is often the first instrument used to evaluate the environmental risk associated with a specific property.   Many bank environmental risk policies require the borrower to complete an environmental questionnaire for all new loans and subsequent transactions, unless a Phase I Environmental Site Assessment has already been determined to be the proper level of due diligence.  While the format of environmental questionnaires vary from bank to bank, the information requested is the same.  

•   What are the current and former business activities conducted on the subject      property?

•   Have hazardous materials ever been stored, used or disposed on the subject or      adjacent properties? 

•   Has contamination been identified on the subject or adjacent properties?

•   Have hazardous building materials such as asbestos or
     lead-based paint been identified on the subject property?

Environmental Questionnaires are generally considered valid for one year from the date of completion. 

Important information, which should be included on an Environmental Questionnaire, but often overlooked, is the North American Industry Classification System (NAICS) code.  NAICS codes can identify business activities that have a high probability of hazardous material use, generation or disposal.  Thus, NAICS codes can be used to determine if a business is an “Environmentally Sensitive Industry,” having a “High Risk” for environmental issues.  The Small Business Administration identifies fifty-three NAICS businesses that are considered environmentally sensitive.  As a result, if any industries associated with these NAICS codes have been present on the property, SBA will require a Phase I Environmental Site Assessment

If you would like a free copy of the NAICS business codes classified as environmentally sensitive by the SBA, along with the SBA Environmental Investigation Flow Chart, please e-mail ERI and request our laminated guide, which we have prepared as a quick reference for our clients! Since the Office of the Comptroller of the Currency (OCC) recommends that the environmental conditions of the property be monitored for the life of the loan, an environmental questionnaire can also be used as an efficient and affordable tool to assist in compliance with this requirement.

About Environmental Risk Innovations
ERI is the nation’s largest environmental risk consulting firm, specializing in the management of environmental risk for commercial lenders.  ERI’s clients include a broad base of commercial lenders, from small regional banks to large banks with national footprints.  ERI develops internal environmental risk policy for commercial lenders, provides third-party review of environmental assessment reports, and conducts Records Search with Risk Assessments (RSRAs)/“desktop reviews” on commercial properties.  ERI is not a traditional environmental consulting firm that performs Phase I or Phase II Environmental Site Assessments.  As a result, ERI’s recommendations represent a truly independent, third-party opinion that conforms to the client bank’s specific risk tolerance. 

For more information on ERI's environmental consulting expertise, please contact Karen Nelson at knelson@eRiskInnovations.com or 704.548.9333.

© 2015 Environmental Risk Innovations, LLC