Gary Vegh, Co-Founder of ERA Environmental Management Solutions, Inc., shared his journey with CanadianSME Small Business Magazine from an initial environmental consulting firm to pioneering one of North America’s first Environmental Management Software solutions. Inspired by a deep-rooted family tradition of entrepreneurship and recognizing the burgeoning need for advanced environmental reporting mechanisms amidst stricter regulations, Gary, alongside Sarah Sajedi, ventured into developing a software solution aimed at simplifying environmental compliance for businesses. Their background in ecotoxicology and chemistry was instrumental in designing a software capable of addressing the intricate demands of environmental regulations and sustainability practices across various industries. ERA’s transition to a software-as-a-service model not only offered financial stability but also positioned the company as a significant player in environmental management, enabling businesses to navigate the complexities of compliance with unparalleled ease and efficiency. This journey reflects a commitment to leveraging technology for environmental sustainability, transforming how businesses interact with and report on their environmental impact.
Gary Vegh has over twenty-nine years of experience in the compliance and environmental sustainability fields, with expertise as a consultant, a software solution architect, and an entrepreneur. He is a recognized speaker advising on sustainability and supply chain issues and advanced compliance strategies. He works closely with environmental executives from the manufacturing industry and Fortune 500 companies to develop new tools and strategies to improve their environmental footprints, including cradle-to-cradle waste management, battery recycling, and parts provenance tracking. He also oversees partnership projects with major international OEMs, particularly in the automotive industry, to help design environmental management solutions for new facilities and operations.
Gary is currently a PhD candidate at Concordia University’s Department of Chemical and Materials Engineering, holds a Master’s Degree in Environmental Toxicology from the same university, and is an active member of the Society of Toxicology, the American Coatings Association, the Chemical Institute of Canada, and the Supplier’s Partnership for the Environment.
Gary, could you share the story behind the inception of ERA Environmental Management Solutions? What inspired you and Sarah Sajedi to transition from environmental consulting to developing one of North America’s first Environmental Management Software solutions, and how did your background in ecotoxicology and chemistry shape this vision?
Sarah and I started ERA Environmental Consulting, Inc. as a consulting firm working primarily with the wood furniture industry. We quickly realized the business potential of a software solution when we were tasked with helping clients adjust to the Clean Air Act amendments of 1990, which introduced industry-specific regulations and required manufacturers to obtain operating permits, keep detailed records, and produce environmental reports in regular fashion. We foresaw the difficulty EHS managers would have compiling large volumes of data (to satisfy these regulations) either manually or using Excel spreadsheets, so we began development on an environmental management system that could perform environmental accounting and reporting for them.
Part of the motivation to transition to software as a service was also financial. Due to the nature of consulting work, Sarah and I spent a lot of time chasing projects, even after wrapping up a successful collaboration with a satisfied client. The work was not continuous. With a software solution, we not only received an initial fee for the license, but we were also guaranteed a recurring, annual payment from returning clients, part of which we allocated to improving the system. We gained financial stability while clients benefitted from being able to carry over their data from previous years and from new capabilities and platform upgrades implemented free of charge, as we have never versioned our software. A win-win scenario.
My background was most pertinent to our vision for ERA as a software in that it helped us branch out of our industry niche. Chemistry, for the most part, builds up from the molecular level. We applied this concept to our software design by operating at the smallest increment, meaning we could service any manufacturer as long as they worked with chemicals, regardless of whether they were producing home furniture, ships, medicine tablets, etc. Moreover, my knowledge of ecotoxicology covered the methods that regulatory agencies, such as the EPA, were using to study wildlife interaction with pollutants and how these could affect human health and natural environments. This knowledge gave me a good understanding as to the motivation behind certain environmental regulations and the options available to manufacturers wishing to abide by them.
With decades of experience consulting for the automotive industry on environmental sustainability, how have you seen the industry’s approach to environmental management evolve?
I remember attending a Toxics Release Inventory (TRI) meeting in Mexico City back in 2014 where Steve Devito, the Chief of the TRI’s Data Quality and Analysis Branch, used the automotive sector as an example of sustainability done right. Production volumes had increased in the United States, Canada, and Mexico, but the industry’s net emissions had started to level off, and even decrease, as a result of the industry’s newly implemented sustainable practices—pollution prevention, waste minimization, chemical replacement, etc. This presentation was one of the many instances over the last 20 years where I have seen the industry evolve in the right direction. Automakers are increasingly proactive in reducing pollutant releases and managing waste, not only in their products, but also across processes in their production lines. They are finding new ways to recover solvents from their painting and coating operations, recouping excess metal parts for their suppliers to reprocess, and switching to more reusable containers (called totes), and these are just a few examples. Some manufacturers are also extending their commitment to sustainability and environmental management to their entire supply chains by passing on rigorous product and sourcing standards to their suppliers, sometimes willingly, rather than motivated by governmental regulation.
Now that the automotive sector is switching from internal combustion engines (ICE) to electric vehicles (EVs), that proactive outlook is targeting the critical minerals present in EV batteries. The industry’s biggest players, in conjunction with the US and Canadian governments, are prioritizing local (i.e. North American) and sustainable sourcing that diminishes the impact of mining these minerals on the environment and places stringent requirements on suppliers to, among other important objectives, completely avoid the use of conflict minerals.
Being awarded the Shining Star Award by the Suppliers Partnership for the Environment in 2021 highlights your significant contributions to advancing environmental sustainability. Can you discuss some of the initiatives you’ve led or supported that you’re most proud of, and how they’ve impacted the industry?
The recognition I received from the Suppliers Partnership (SP) was partly motivated by my constant presence and participation in quarterly meetings and thematic discussion groups. One of these was the “Responsible Battery Work Group”, which promotes information exchange on EV batteries, end of life (EOL) management, and the electrification of the automotive industry. I brought ERA’s knowledge of EV battery chemistry and traceability to the table, which I believe contributed to SP members’ positive reception to a circular economy discussion. Given the volume of chemicals and minerals required to produce the tens of millions of EVs automakers plan to produce in the coming years, a circular economy system is crucial to the reuse of chemicals in new batteries and the reduction of chemical contamination in the surrounding environment. Such a system would only be possible through the implementation of a battery passport that documents the movement of the battery and its components along the supply chain. This is where ERA’s expertise shone and where I find myself doing a lot of important work, both in the creation of a traceability software solution at work and in the development of a local and sustainable battery production framework at school (PhD at Concordia University’s Department of Chemical and Materials Engineering).
I am also proud of the good work Sarah Sajedi, John Bradburn, the ERA team, and I have done to further the reuse of waste materials, particularly in packaging. We have devoted an ample amount of time to creating case studies aimed at finding waste another home, guided by the tenet that “waste is just another form of material that is out of place”. Our hope is suppliers refer to these waste minimization documents prior to shipping products to automotive companies; while the shift to reusable containers is a great step in the right direction, there is still a lot of work to be done in mitigating packaging waste.
Since ERA began servicing the automotive industry and expanding into other sectors, how has the company’s software evolved to meet the growing and changing needs of environmental sustainability and compliance?
At ERA, we have been hard at work improving our sustainability module and compliance reports. Originally, clients approached sustainability as a sort of black box, not knowing where to start or where to draw the line. They were overwhelmed by the fact that sustainability touches so many facets of their businesses and, depending on the manufacturer, carries over to their suppliers and employees, over which they exert little control. Their approach entailed compiling any data they had immediate access to (usually Scope 1 emissions) and preparing data-backed Environmental, Social, Governance (ESG) reports for shareholders and regulators. Now, sustainability has evolved to encompass a far greater quantity and variety of requirements, from third-party audits to supporting documentation (for example, certification attesting to a critical mineral’s responsible sourcing). We designed our new model to align with this trend, emphasizing environmental accounting, collecting data on various sustainability metrics (Scope 1, 2, and 3 emissions, utilities, renewable energy credits, etc.), and building reporting functionalities for external organizations, such as the CDP. We give our users a clear starting point while allowing for the flexibility to adapt to their specific requirements.
This way, we have assisted automakers in the pursuit of their high-level sustainability goals (such as reaching net zero emissions and waste) for some time, and working with them has actually brought us into other sectors implementing sustainability initiatives, such as aviation. Our aim is to create a sustainability model that applies across the board to other industries, which have their own compliance needs.
Looking to the future, how do you envision the role of technology and software like ERA’s in advancing environmental management and sustainability practices?
The sustainability management of the future will require software that can be used in conjunction with Big Data and Artificial Intelligence (to manage that data). Moving the boundary line beyond the factory to include suppliers transforms what has traditionally been considered a “supply chain” into a “supply web”, drastically increasing the quantity of data and the need for accountability. Manufacturers will likely turn to software providers who can collect data across the entire web as fast and accurately as possible, maybe even in real time (at the factory level). Producing reports that point to sustainability issues with certainty, from a leak skewing overall water consumption to a lack of clarity about a mineral’s source, will also be a priority.
As automakers become more and more proactive, client and supplier buy-in spreads along the supply web, and the demand for advanced software tools grows over time, it is my hope that ERA will have a more important role to play in the software technology industry.
Gary, drawing from your vast experience in environmental sustainability and entrepreneurship, what advice would you offer to aspiring entrepreneurs who are looking to make a significant impact in the environmental sector?
I believe the first step for entrepreneurs looking to become active members of the environmental and sustainability industry should be to learn about the specific area or field they are interested in working in (for example, the EHS software one). Beyond knowing how the sector operates, this preliminary research provides better insight into the challenges it is faced with, the roadblocks that can happen along the way, and, therefore, the opportunities for improvement. Study what has been done before and talk to industry experts about what is being
now, on a day-to-day basis; this exercise will give you plenty of ideas as to what is possible in the future… in some cases, the answer is right there! One case in point is how some of the first vehicles (stagecoaches) were battery powered or hybrids, but the infrastructure was not there to support them, unlike with oil and gas; we are coming full-circle in the 21st century, electrifying the auto sector and thinking of ways to distribute this development throughout the entire supply web, doing our best to avoid the “chicken and egg” problem electric vehicles encountered in the past. The same can be said for single use plastic water bottles, considering the big push to replace them with reusable and glass containers, which actually predate plastic by centuries.
Another piece of advice I would give young entrepreneurs is to remember that sometimes the “solution” to a personal or industry problem can be quite simple, and that straightforward changes can also have a huge environmental impact. Don’t shy away from pursuing an idea you worry might be “too small”.
