This article examines the ISO 14000 environmental management standards. The background and history of the 14000 standards are reviewed along with the status of implementation of the standards. The benefits received by the adopters of the ISO 14000 standards are explained as well as the objectives which the adopters wish to achieve. The purpose and functions of an Environmental Management System (EMS) are examined as well as the challenges that an organization faces when implementing an EMS. The implementation of ISO 14000 standards in the financial sector are reviewed through a case study of a multinational financial corporation. The challenges faced by small and medium-sized enterprises when adopting ISO 14000 standards are also reviewed.
Keywords: Environmental Auditing; Environmental Labeling; Environmental Management Systems; Environmental Performance Evaluation; Environmental Performance Indicators; International Standards Organization (ISO); Life Cycle Assessment; Small and medium-sized enterprises (SMEs)
During the last thirty years environmental regulation in much of the industrialized world has improved. This has helped to reduce the impact of human activity but there are still challenges ahead for regulators as well as polluting industries. One challenge is to reach a balance between the often high costs of controlling pollution and the need for the economical viability of businesses that create badly needed jobs and services. Another is to actually achieve the goals set down in policies and regulations that are in place. In many cases existing levels of pollution still far exceed the levels allowed in regulations or policies (Coglianese & Nash, 2002).
In late 1996, the long awaited international environmental management standard, the International Standards Organization (ISO) 14000 series was published, with the intention of crossing all trade and political borders, as well as being applicable to any kind of organization. The focus of the standard was initially on technical/scientific standards but in the 1980s, technical committee (TC) 176 developed a quality management standard in order to standardize one aspect of organizational management. The result was the ISO 9000 series of international, generic quality management standards adopted in 1987. In 1993, TC 207 was created to develop a number of environmental standards in different areas including standardization in the field of environmental management, tools, and systems.
The scope of the ISO 14000 environmental series of standards was similar to the ISO 9000 standards in that the environmental standards were process quality standards and as such would not specify final product quality objectives. ISO 14000 is therefore a series of environmental standards aimed at providing organizations with a structured framework to manage their environmental impacts and responsibilities; however, the emphasis is on the management process which aims to be consistent and which in turn should generate products of consistent quality (Elefsiniotis & Wareham, 2005).
Twenty years after ISO 9001 went into effect and 11 years after the release of ISO 14001, which have been continuously updated taking into consideration the experience of organizations around the world, the use of ISO's management system standard formula is being used by more and more organizations. ISO 14001:2004, which states requirements for environmental management systems has been firmly established and followed by those organizations that wish to operate in an environmentally sustainable manner. By the end of December 2006, over 100,000 ISO 14001:2004 certificates had been issued to organizations in 140 countries. The 2006 total was about a sixteen percent increase over 2005. Remarkably, service organizations received about 27 % of all ISO 14001:2004 certificates issued up to the end of 2006 (ISO, 2007).
The primary benefit of an organization becoming ISO 14001 certified is that it gets to claim the status of certification which many believe will contribute to the brand identity of the certification as well as to the reputation of the certified organization. This is true because ISO 14001 is the widely recognized around the world as the premier voluntary environmental program in the world. Many feel that the growth of ISO 14001 is very impressive consider hold few years the standard has been in place. Certified organizations can use ISO 14001 as a marketing and public relations tool. Virtually all the largest auto manufacturers in the United States are quickly trying to get certifications for all of their facilities. Honda claims that all of its major plants worldwide have already met the ISO 14001 standard. Ford Motor Company, like many other manufacturers that rely on parts from other companies has started requiring supplies to get certified (Potoski & Prakash, 2005). Subaru television commercials boast of environmentally safe auto plants that are game reserves and send zero material to landfills.
ISO 14000 can be divided into two separate areas. The first deals with organizations' management and evaluation systems and the second with environmental tools for product evaluation. The Environmental Management System-ISO 14001, Environmental Auditing-ISO 14010, and Environmental Performance Evaluation-ISO 14031 are the standards used for organization evaluation. The Environmental Aspects in Product Standards-ISO 14060, Environmental Labeling-ISO 14020, and Life Cycle Assessment-ISO 14040 focus on product evaluation
ISO 14000 standard series can be considered as a double-edged tool providing tangible and intangible benefits to the government and regulatory agencies — such as the Environmental Protection Agency — and the adopting organizations themselves. The standard aim of ISO 14000 is to assist organizations in achieving objectives such as the following:
- Reduce their impact on the environment.
- Improve product design to reduce environmental impact over the life-cycle of a product.
- Reduce environmental damage in the process of raw material sourcing.
- Create a means for companies to show they are committed to protecting the environment (Korul, 2005).
The Environmental Management System as a Tool
Unlike regulatory standards established by government agencies, an Environmental Management System (EMS) holds organization managers responsible making their own decisions about how to reduce the negative impact caused by their organizations processes. When managers and company professionals develop their own EMS it is possible to have a positive environmental impact at far less cost than merely complying with government standards. For these reasons ISO 14001 is now widely recognized as a standard for EMS design (Coglianese & Nash, 2002).
EMSs can do more than just help organization managers. They may also be helpful to government agencies responsible for environmental protection. As resources become more difficult to get, government agencies will need ways to better enforce compliance with laws, policies, and regulations. Through the use of third-party auditors that help to determine that a company has achieved ISO 14000 standards, government agencies may need to perform fewer audits (Coglianese & Nash, 2002).
Fortunately the private sector is moving rather quickly to adopt EMSs. In the automotive industry, for example, many companies are requiring their suppliers to become ISO 14000 certified. If suppliers fail to achieve the certification they will risk losing their purchase agreements and could even end up being blacklisted (Coglianese & Nash, 2002).
Principles of ISO 14001
A properly established EMS empowers the organization and its personnel to address environmental issues. ISO 14000 truly empowers a firm to address complex concerns. Along with empowerment, all involved must understand that goals must be established and finite resources allocated to address a potentially long list of environmental priorities. The ISO 14001 Environmental Management System Specification is built on five key principles:
- Commitment and Policy: Top management must make a commitment to the program.
- Planning: To be successful, the environmental program must be organized. This includes establishing an organizational structure, promoting internal and external communications, and identifying environmental impacts.
- Implementation: The implementation program must include written process descriptions, establishment of prevention programs and employee training.
- Measurement and Evaluation: A mechanism for assessing performance and progress towards goals must be established.
- Review and Improvement: The program must be routinely reviewed and appropriate actions taken to maintain ongoing improvement (Hersey, 1998).
Maintaining a leadership role in any area requires passion. Rarely, however, is a firm passionate about a subject due to external influences. Thus, if management is interested in the environmental impacts of its operations and products, it must become totally involved. Environmental issues cannot (usually) be resolved by designating an individual as the company environmental representative and bringing them out whenever the regulators arrive. Thus, dedication and teamwork are paramount to improving environmental performance.
ISO defines an environmental aspect as "an element of any organization's activities, products or services that can interact with the environment. A significant environmental aspect is one that has (or can have) a significant environmental impact" (Elefsiniotis & Wareham, 2005, p. 210). The process of identifying these aspects may reveal several issues that require resolution. Once impacts and/or previously unknown regulatory obligations are identified, a mechanism to address them must be implemented. If regulatory non-compliance is involved, failure to properly address identified impacts may have legal implications.
The ISO 14000 process is not easy. It requires a strong commitment — all involved should be proud of their efforts. Once the program has been developed and appropriate environmental principles have been embraced by all employees the process becomes ongoing. The final step is to obtain registration. In addition to certification by an independent registrar, the standard provides a self-declaration option. However, although self-certification may have internal value, it lacks the external marketing value of an independent evaluation.
Environmental issues are rarely easy to discuss or understand. If these issues have been neglected or...
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