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Environmental Compliance: Selling Management on ISO 14001 Certification

Many companies have implemented fully developed environmental management systems (EMSs). And more and more companies are having their EMSs certified as compliant with ISO 14001, a standard for EMSs developed by the International Organization for Standardization. Advocates of ISO certification claim that an ISO-compliant EMS helps companies gain substantial operational, managerial and competitive benefits. But critics argue that ISO certification doesn’t ensure compliance with legal requirements or improve a company’s financial and environmental performance. They also claim that ISO certification is nothing more than window dressing and a public relations tool.

Getting the company’s EMS certified requires a significant commitment of time and money. So to convince senior management to invest in ISO 14001 certification, you’ll have to show that it offers real benefits that outweigh these costs. How do you prove the benefits of ISO 14001 certification? A study measuring the impact of ISO certification on a U.S. aluminum plant can help you make a compelling business case for certification. We’ll review the ISO 14001 standard and tell you what the study says about the benefits of obtaining ISO 14001 certification. We’ll also tell you how to use this study to persuade senior management to spend the money to get such certification for your own company’s EMS.

ISO 14001
ISO 14001 was first published in 1996. ISO issued an updated version of the standard in 2004. ISO 14001 certification demonstrates that a company has an acceptable EMS. To earn certification, a company must take steps to implement a new EMS or adapt an existing one to meet the standard’s requirements. ISO 14001 is based on a simple “plan-do-check” framework and has five major components:

  1. The development and adoption of an environmental policy to which senior management is committed;
  2. A planning process that identifies all of the environmental aspects of a facility’s operations, legal and other requirements, and establishes a set of clearly defined objectives and targets for environmental improvement as well as environmental management programs to achieve those objectives and targets;
  3. A system of implementation and operation that includes a clear structure of responsibility for environmental management; programs for training, awareness and competence among all employees of the facility; internal and external communication of the EMS; a system of environmental management documentation; a documentation control system; procedures for operational controls of environmental impacts; and emergency preparedness and response;
  4. Creation of a system of checking that includes monitoring and measurement, reporting of non-compliance, taking corrective and preventive action, recordkeeping with regard to environmental management and EMS audits; and
  5. A management review process through which senior management reassesses the suitability, effectiveness and adequacy of the EMS at appropriate intervals to assure continuous improvement.

Some companies have informally adopted the ISO 14001 principles without getting formal certification. Others have sought official certification of their EMS. According to the ISO, at least 129,199 ISO 14001:2004 certificates had been issued to companies in 140 countries through the end of December 2006.

Much has been written about the benefits of ISO certification. But few studies have been done that document the actual benefits companies realize from certification. That’s where the Alumax study comes in handy.

The Alumax Study
Researchers did an in-depth case study of the Alumax aluminum reduction plant in Mt. Holly, South Carolina, to analyze the impact of ISO 14001 certification. Before certification, the Alumax plant already had an extensive EMS and had never paid a fine for any environmental violations. Its quality management program had been registered under ISO 9002. Management saw ISO 14001 certification as an extension of its ISO 9002 registration. They also saw it as a way to improve the plant’s overall operations and publicly demonstrate its commitment to protecting the environment. So management created a team thar was led by the company’s environmental manager and included representatives from numerous departments, including warehouse, lab facilities, engineering and administrative services. This team shepherded the plant through the certification process, which took approximately a year and a half. It earned ISO 14001 certification in Nov. 1996.

In 1999, the researchers began their study. They visited the plant. They also gathered information from 10 members of the certification team as well as five managers through email and personal interviews. Among other tools, the researchers gave participants statements about the impact of ISO 14001 certification on the plant and asked them to rate the importance of those statements on a five-point scale (with 1=relatively unimportant and 5=extremely important).

Example: The single most significant impact of the ISO 14001 process was the improved environmental awareness that the preparation, registration and surveillance process brings to all employees. The management system that the standard requires drives awareness to all facets of the organization. It clarifies that environmental responsibility is everyone’s, not just the Environmental Department’s.

The Study’s Results
Based on the data the researchers gathered, they identified four key areas that ISO 14001 certification impacted:

Worker awareness. One of the strongest impacts was behavioural. After certification, everyone in the plant was more aware of environmental aspects, regulations and impact—not only at work, but also at home and in the community. For example, workers offered more ideas for materials recycling at the plant and increased their commitment to recycling at home. Workers began using colour-coded or marked containers for readily recyclable items, such as plastic bottles, cans, cardboard, batteries and used motor oil. Increased awareness also led to many workers volunteering for the plant’s “Adopt a Highway” program, in which volunteers pick up trash along a section of highway near the plant.

Operational efficiency. ISO certification also increased the plant’s efficiency by substantially increasing recycling and reducing waste. All departments increased their recycling efforts. After certification, the plant’s annual trash generation dropped by almost half by 1998. The amount of waste it sent to landfills was reduced from 7,608 tons in 1995 to 4,960 tons in 1998. As a result, its waste cost of production per ton of aluminum dropped from $8.33 in 1995 to $6.50 in 1998.

Operation efficiency was also improved in other ways. Departments started looking for new uses for materials that had previously been considered waste. For example, workers began chipping wood scrap for use as fuel outside of the plant. The maintenance department bought a purifier to expand the useful life of tube oil and hydraulic fluids. And managers worked with workers to reduce the number of chemicals in the lab’s inventory by 47% by 1999.

Managerial awareness. The process of refining the plant’s EMS for certification uncovered weaknesses and generated procedural improvements in existing practices. It made management more aware of the environmental impact of every aspect of the plant’s operations. For example, the certified EMS required more and better recordkeeping and forced managers to look at and list every item that went into the production process and consider the final disposition of these items. It also required them to set specific and measurable goals for improving the plant’s environmental performance and implement appropriate practices to attain them. ISO 14001 was also empowering because it gave senior management licence to demand better work practices and waste reduction efforts from everyone in the plant.

Supervisors were also positively affected by certification. They felt strong pressure to ensure compliance with the EMS because obtaining and maintaining certification was seen as a plant-wide and company-wide priority.

Operational effectiveness. Lastly, ISO 14001 certification improved the plant’s effectiveness by helping it achieve its environmental goals. And this benefit shouldn’t be understated. After all, the plant was already performing well environmentally before certification. So the fact that substantial improvements were still achieved by certification is impressive.

In short, the researchers concluded that the primary benefits to the Alumax plant from ISO 14001 certification were in:

  • Reinforcing and strengthening good environmental management practices;
  • Reviewing and improving management practices and raising management awareness;
  • Increasing operational effectiveness and efficiency; and
  • Enhancing workers’ awareness of the environmental impacts of their activities.

Obtaining ISO 14001 certification is voluntary. No environmental law requires your company’s EMS to be certified by ISO or any other standard association. However, having a certified EMS is likely to help ensure the company remains compliant with the environmental laws and prevent environmental violations and incidents. In addition, if a violation occurs anyway, ISO certification may help convince a court that the company exercised all reasonable efforts to prevent the violation and comply with the law and thus prove that it showed due diligence.

You’d think that these arguments would be enough to convince senior management of the benefits of investing in ISO 14001 certification. But senior managers tend to be bottom line people. The Alumax study shows that earning ISO 14001 certification has real financial benefits and does deliver a return on the company’s investment in time and money. No, certification isn’t a panacea for all of a company’s possible environmental problems. Nor does it guarantee improved environmental performance or compliance with environmental laws. But the study proves that certification isn’t just a meaningless label or PR ploy. Companies that pursue ISO 14001 certification will likely see attitudinal, managerial and operational changes that ultimately benefit the company’s bottom line. So as EHS coordinator, you should be able to use the Alumax study to demonstrate to management that spending the money to earn certification will pay off in the short- and long-term.

“Panacea, Common Sense, or Just a Label? The Value of ISO 14001 Environmental Management Systems,” Rondinelli and Vastag, European Management Journal, Oct. 2000.

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