ISO 14001: a key ingredient of competitive edge
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ISO 14001: A Key Ingredient of Competitive Edge ROGER ADAMS, Association of Chartered Certified Accountants The drive for competitive edge in the indus- trial and commercial world has never been keener. An array of techniques is now available to sophisticated businesses to pro- vide enhanced corporate performance. Some companies apply commonly accepted stand- ards of business practice to enhance and increase their productivity. Those who resist doing so risk isolation and loss of market share. In particular, a growing number of businesses are committed to improving their environmental performance and use bench- mark measures to compare the quality of their approach with those of other leading businesses. The need for consistency in approaches across market sectors has driven the develop- ment of an international standard for environ- mental management systems (EMS). The result is the International Standards Organ- isation’s (ISO) 14000 series, a framework of organisational and product standards for managing environmental issues and impacts. Requested by the business community in the run-up to the 1992 Rio Earth Summit, ISO’s 14000 series follows precedents set by its popular 9000 quality systems standard. It built directly on BS 7750, the world’s first standard for EMS pioneered by the British Standards Institution in the early 1990s. It also reflects many features of the EU’s voluntary Eco-management and Audit Scheme (EMAS) Regulation passed in 1993. The cornerstone for the entire series is ISO 14001, a standard for companies wanting to adopt, implement and develop a compre- hensive EMS. This defines five elements: an environmental policy; an assessment of a business’ environment aspects alongside legal and voluntary obligations; a manage- ment system; a series of internal audits and reports to top management; and a public declaration (verified by an independent cert- ification agent) that the system is being implemented. Like the ISO 9000 quality framework, ISO 14001 uses the Walter Stewart manage- ment cycle (plan, do, check, act) to promote the phased integration of environmental con- cerns into policy, strategy and everyday activities. It does not specify or guarantee optimal environmental outcomes but, by focusing attention on significant impacts, an EMS developed using ISO 14001 will rapidly help reduce risk exposure, generate substantial cost savings and give a business differential advantage over its competitors. ISO 14001 does not do this by setting any absolute requirements for environmental per- formance (beyond compliance with applicable legislation or regulations and whatever com- mitments a company chooses to make in its environmental policy). Nor does it require as much performance disclosure in relation to specified targets as does EMAS. However, it goes one significant step beyond quality systems by demanding clear commitment to continuous improvement. ISO 14001 complements and combines well with other standards, especially those cover- ing health and safety. For example, at GlaxoWellcome within the bespoke HELPS (Health, Environment, Loss Prevention and Safety) system, individual plants and businesses are encouraged to seek ISO 14001 certification. Mark Rhodes, group environmental officer for GlaxoWellcome, admits that it took more than two years to embed company-wide environmental management practices into everyday line management throughout the group, but he remains adamant that anything less would have been a waste of effort. ISO 14001 is widely seen as better suited than EMAS to the needs of large service organisations such as BT. Faced with more than 8,000 operational sites, ranging from an unmanned Scottish radio station to a major Copyright # 1999 John Wiley & Sons, Ltd. 103 Env. Law Mgmt., 11(3) May–June 1999 Article
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Transcript of ISO 14001: a key ingredient of competitive edge
ISO 14001: A Key Ingredient ofCompetitive EdgeROGER ADAMS, Association of Chartered Certified Accountants
The drive for competitive edge in the indus-trial and commercial world has never beenkeener. An array of techniques is nowavailable to sophisticated businesses to pro-vide enhanced corporate performance. Somecompanies apply commonly accepted stand-ards of business practice to enhance andincrease their productivity. Those who resistdoing so risk isolation and loss of marketshare. In particular, a growing number ofbusinesses are committed to improving theirenvironmental performance and use bench-mark measures to compare the quality of theirapproach with those of other leadingbusinesses.
The need for consistency in approachesacross market sectors has driven the develop-ment of an international standard for environ-mental management systems (EMS). Theresult is the International Standards Organ-isation's (ISO) 14000 series, a framework oforganisational and product standards formanaging environmental issues and impacts.
Requested by the business community inthe run-up to the 1992 Rio Earth Summit,ISO's 14000 series follows precedents set byits popular 9000 quality systems standard. Itbuilt directly on BS 7750, the world's firststandard for EMS pioneered by the BritishStandards Institution in the early 1990s. It alsoreflects many features of the EU's voluntaryEco-management and Audit Scheme (EMAS)Regulation passed in 1993.
The cornerstone for the entire series isISO 14001, a standard for companies wantingto adopt, implement and develop a compre-hensive EMS. This defines five elements: anenvironmental policy; an assessment of abusiness' environment aspects alongsidelegal and voluntary obligations; a manage-ment system; a series of internal audits andreports to top management; and a publicdeclaration (verified by an independent cert-ification agent) that the system is beingimplemented.
Like the ISO 9000 quality framework,ISO 14001 uses the Walter Stewart manage-ment cycle (plan, do, check, act) to promotethe phased integration of environmental con-cerns into policy, strategy and everydayactivities.
It does not specify or guarantee optimalenvironmental outcomes but, by focusingattention on significant impacts, an EMSdeveloped using ISO 14001 will rapidly helpreduce risk exposure, generate substantial costsavings and give a business differentialadvantage over its competitors.
ISO 14001 does not do this by setting anyabsolute requirements for environmental per-formance (beyond compliance with applicablelegislation or regulations and whatever com-mitments a company chooses to make in itsenvironmental policy). Nor does it require asmuch performance disclosure in relation tospecified targets as does EMAS. However, itgoes one significant step beyond qualitysystems by demanding clear commitment tocontinuous improvement.
ISO 14001 complements and combines wellwith other standards, especially those cover-ing health and safety. For example, atGlaxoWellcome within the bespoke HELPS(Health, Environment, Loss Prevention andSafety) system, individual plants andbusinesses are encouraged to seek ISO 14001certification.
Mark Rhodes, group environmental officerfor GlaxoWellcome, admits that it took morethan two years to embed company-wideenvironmental management practices intoeveryday line management throughout thegroup, but he remains adamant that anythingless would have been a waste of effort.
ISO 14001 is widely seen as better suitedthan EMAS to the needs of large serviceorganisations such as BT. Faced with morethan 8,000 operational sites, ranging from anunmanned Scottish radio station to a major
Copyright # 1999 John Wiley & Sons, Ltd. 103
Env. Law Mgmt., 11(3) May±June 1999 Article
London office block, BT's EMS manager,Tony Brook, and his colleagues soughtcertification against ISO 14001 late last yearto improve an existing EMS. Mr Brook states:
``By grouping activity into 10 areas ±such as transport or emissions to air ±we now have a strategy that's bothmore comprehensive and systematicacross the entire business. It has alsohelped identify priorities for somesignificantly large projects during thenext few years.''
However, a company must beware thenotion that it is enough just to implement anEMS if it wants certification to ISO 14001. DrVernon Jennings is the director of Sustain-ability, the leading UK think-tank and con-sultancy. He states: ``Once you start, then thestandard takes your organisation into an openended processes of incremental but relentlesschange that demands you keep movingforward year-on-year''.
Inevitably, such change eats resourcesalthough costs do vary, depending on thenature and size of particular businesses. But itis rare for any organisation to achievecertification to ISO 14001 without paying forassistance from external specialists. NiallSmiddy, of EMS consultants EAG Environ,suggests that initial implementation will costan average of £100 to £250 per employee, andmaintenance a further £30±50 per employeeper annum.
To win the ISO 14001 kite mark a companywill also have to pay a registered certificationagent to undertake an initial audit andcomplete five surveillance visits during thethree-year validity of the certificate. This cancost upwards of £35,000 over a three-yearperiod, and up to four times this much forlarge companies with multiple sites.
But costs should not discourage a company.A well-designed EMS can more than pay foritself by saving energy, reducing waste andcutting the consumption of raw materials. It
will also improve the company's competitive-ness, environmental awareness and moraleamong its workforce.
ISO 14001 may mean little to the generalpublic but it does affect companies throughtheir customers and investors. Remember, it isstill less than a decade since customers begandemanding that suppliers submit to a qualitystandard.
In less than three years, ISO 14001 hasbecome essential throughout particular sec-tors, and where major companies implementsupply chain initiatives to improve their ownenvironmental performance.
Business depends on the needs and theexpectations of society at large. In the age ofthe stakeholder, the most productive, com-petitive companies seek to minimise theirenvironmental impacts beyond regulatorycompliance.
As Vernon Jennings states: ``ISO 14001 isnow the starting point for any companywanting to participate in the shift towards amore sustainable society. This has to includemost of the business community, if we wantto stay in business''. Or, as Mike Ford, groupHS & E manager at roller-and-ball-bearingmanufacturer, NSK RHP, states: ``an effectiveEMS integrated into the heart of yourbusiness is simply the best line managementpractice for companies that want to stayahead''.
Peter Jones and Martin Bennett, EnvironmentUnder the Spotlight ± current practice and futuretrends in environment related performancemeasurement for business (ACCA ResearchReport 55) is available from ACCA Publi-cations Glasgow (tel 0141 309 3999), price £15.ISBN 1-859098-161-4.
For further press information, contact:Roger Adams, Head of Research and TechnicalServices: tel 0171 396 5971; Niamh Greene,Press Officer: tel 0171 396 5729.
104 Copyright # 1999 John Wiley & Sons, Ltd.
Article Env. Law Mgmt., 11(3) May±June 1999
