Expertise > Service Areas

Q & A: Environmental Management Systems and ISO 14000

1. What is an environmental management system (EMS)?

An EMS identifies policies, procedures, and resources for implementing and maintaining effective environmental management in an organization, and is characterized by routine assessment of environmental impacts, management commitment to compliance with applicable laws and regulations, and opportunities for the continued improvement of environmental performance. Departing from the narrow emphasis on regulatory compliance that characterized environmental planning before the 1990s, environmental management systems involve the voluntary adoption of more comprehensive, preventative, and long-range environmental plans and the establishment of corporate management structures to see that these plans are carried out.

back to top

2. What is ISO 14000?

ISO 14000 is a series of international standards for EMSs that has been under development since the late 1980s. The voluntary standards are designed to help private and government organizations establish and objectively evaluate environmental management systems or EMSs. ISO 14000 provides a standardized and internationally recognized blueprint for an effective EMS and how to establish such a system. Contrary to popular perception, the standards do not establish a set of quantitative targets for environmental performance or specific pollution discharge levels. Instead, ISO 14000 focuses on organization by providing a process-driven set of standards through which organizations can establish the kind of management framework necessary for good environmental performance. The standards also establish a process for third-party evaluation and certification of EMSs.

ISO 14000 is a series of several standards. In late 1996, the most important of the series, ISO 14001, was released. ISO 14001 is the standard that describes the necessary elements of an EMS and is designed for use in a system of third-party auditing. Under this system, an independent and certified third-party would audit a facility’s EMS based on ISO 14001 criteria. If the facility passed the audit, it would be registered as in compliance with ISO 14000. Organizations may also conduct internal evaluations of their facilities and declare themselves in compliance with ISO 14001. Other standards still under development are guidance standards to be used as internal tools by organizations seeking to build effective EMSs. They will provide information and techniques for establishing an EMS that meets the requirements of ISO 14001, guidelines for conducting environmental audits, recommended qualifications for auditors, and guidelines for environmental performance evaluation. In addition, later components of the series will establish guidelines for evaluating the life cycle of a product and for environmental labeling on products.

back to top

3. Who developed the standards and why?

The ISO 14000 standards have been developed by the International Organization for Standardization based in Geneva, Switzerland. This organization was founded in 1946 and is comprised of delegations from over 100 countries. Its mission is to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services and to developing cooperation in the spheres of intellectual, scientific, technical, and economic activity. In response to the growing number of environmental management standards being implemented worldwide, ISO began work in the early 1990s on the development of standards for environmental management systems. A series of committees comprised of environmental management experts from all over the world has contributed to their development. The standards are designed to provide an effective blueprint for EMSs that is based on the expertise and experiences of EMS specialists worldwide, facilitate trade and economic development by establishing a common language for environmental management (and thus eliminate the need for compliance with varying EMS requirements by different governments and customers), and promote strategic environmental management planning in industry and government.

back to top

4. What does an ISO 14000 EMS require organizations to do?

Under ISO 14000, organizations are required to define environmental policy, set goals for implementing environmental management improvements, and comply with environmental laws and regulations. A system of environmental record keeping and documented procedures to monitor environmental performance, communicate environmental needs, and audit environmental systems must be established. The standards also require organizations to identify the environmental aspects of operations, define roles and responsibilities for environmental improvement, develop procedures to make management and employees aware of environmental impacts, and set in place a documented procedure for evaluating compliance with laws and regulations must be set in place. Progress or deficiencies in environmental management must also be reviewed and evaluated frequently, and emergency preparedness and response procedures must be put into place. In all, while the ISO 14000 standards are short and flexibly written to allow for implementation in facilities of different sizes and functions, they do require the establishment of a multifaceted EMS.

back to top

5. Why should my firm be interested in ISO 14000?

There are a number of compelling reasons why an organization should look seriously at ISO 14000 auditing and implementation. ISO 14000 will help organizations to reduce risk and liability, operate more efficiently, maintain access to and competitiveness in the marketplace, and improve relations with regulatory agencies. How?

Lower Liability and Greater Efficiency
With an internationally recognized ISO 14000 EMS in place, facilities will be able to more find and correct environmental problems more effectively. As explained above, ISO 14000 requires the establishment of management systems designed to facilitate the identification of environmental risks and the establishment of plans and procedures to mitigate such risks. By taking such action, facilities will significantly reduce the possibility of costly environmental accidents and in turn lower their liability exposure. Environmental auditing may also uncover inefficient and costly practices in such areas as production and waste management. Identifying and correcting such inefficient practices can result in considerable savings in the operating costs of a facility. A medium-sized manufacturer of precision fittings for the automotive and refrigeration industries, for example, identified inefficiencies in its oil recovery procedures in the course of EMS implementation. By addressing the problem, the firm expects to realize more than $20,000 per year in savings. Another manufacturer reported a 70% reduction in waste disposal costs as its ISO 14000 EMS was put into place. Savings from improved operational efficiency have been one of the major benefits to firms that have implemented ISO 9000, a set of ISO standards for product quality management that was released in 1987. As of 1995, the average annual cost savings reported by firms implementing ISO 9000 was $117,000 per year. Although the ISO 9000 standards do not deal with environmental management, the types of management systems and documentation systems these standards require are similar to those required by ISO 14000, and similar costs savings can be expected.

Market Drivers
Perhaps one of the most compelling reasons for ISO 14000 implementation is the marketplace demand for environmentally friendly products. As the controversies surrounding dolphin safe tuna production or McDonalds' use of Styrofoam containers have demonstrated in recent years, there is an increasing demand on the part of consumers and corporate buyers for "green" products and corporate environmental accountability in the 1990s. According to a recent report by a major American consultant, when price and quality are equal, 76% of Americans are willing to switch to a product associated with a good cause. Corporate environmental activism, the firm suggests, will act as one such market tie breaker. Similar trends are evident in Europe, where a study by one U.S. multinational found that consumer perceptions of corporate environmental responsibility to be the most important factor affecting purchasing decisions after price and quality. Companies certified under ISO 14000 may point to this certification as evidence of progressive environmental policy and thus gain a competitive edge in marketing their products.

Market access may be affected by ISO 14000 as well. Although ISO 14000 implementation is voluntary, certification under the standards may become a legal prerequisite to bid on contracts and maintain market shares in the European Union and other parts of the world. ISO 14000 certification may also satisfy the requirements of EMS regulations already in place in the European Union. In the United States, government agencies such as the Department of Energy are actively considering the establishment of ISO 14000 requirements for contractors. Such effects have occurred in the case of ISO 9000, the earlier set of ISO standards that dealt with product quality management. Although ISO 9000 standards were also designed to be voluntary, certification under the standards has become a de facto requirement for doing business in the European Union and other regions, where it has been made a condition for the award of contracts by private firms and public agencies and for entrance into some regulated markets.

Relations with Regulatory Agencies
ISO 14000 certification may relieve corporations of some regulatory burdens and ease liabilities in the event of an environmental accident and regulatory violations. Under Washington State Department of Ecology guidelines, for example, facilities required to prepare Pollution Prevention Plans or Five Year Plan Updates may fulfill these requirements by showing that they have an ISO 14000 EMS in place. State and federal agencies also have policies in place that allow organizations that uncover environmental violations during audits to avoid penalties if the violations are disclosed and corrected immediately. Certification under the standards may also encourage greater leniency in government enforcement actions following an environmental accident, as such certification could be held up as evidence of efforts to be environmentally responsible.

Intangible Benefits
Finally, judging from the experiences of several companies that have pursued ISO 14000 implementation, numerous intangible benefits accompany ISO 14000 implementation. According to the US EPA's Environmental Management Systems Implementation Guide for Small to Medium Sized Businesses, a small chemical company reports that "We view the establishment of an EMS as a process that forces us to better organize our priorities and projects and to identify problems and exposures before they occur." Another firm reported improved employee and public relations. In their words, "We found that an EMS could improve employee retention, new hire selection, working conditions, and the perceptions of our customers, suppliers, lenders, neighbors, and regulators." While these benefits may be difficult to quantify in dollar terms, they certainly should be considered by organizations looking at implementing an ISO 14000 EMS.

back to top

6. How is a facility recognized as being in compliance with ISO 14001? What is the difference between registration and self-auditing?

The ISO 14000 standards were designed so that organizations could pursue official third-party certification of their facilities or conduct self-audits of their EMS and declare themselves in compliance with the standards. In both cases, an organization would hire an outside ISO 14000 consultant to audit its existing EMS and develop and EMS that complies with ISO 14000. In the case of third-party certification, however, considerable extra expense would be incurred as a result of the costs of a official third party audit and periodic verifications of EMS compliance with ISO 14000. Suppliers and government contractors may require such official certification as proof of compliance with ISO 14000, however. Self auditing involves the development of an EMS, an evaluation of the EMS against ISO 14000, and a self declaration that a facility has been audited under the standards. Self-auditing would be pursued mainly for the purpose of improving efficiency, lowering liability, and demonstrating environmental consciousness to the public as opposed to meeting specific ISO 14000 certification requirements of buyers or regulatory agencies. Both official certification and self declaration of compliance with ISO 14000 could conceivably be advertised on product labels or company marketing materials.

back to top

7. What happens if an environmental violation is uncovered during auditing?

The confidentiality of audits is one of the major concerns associated with ISO 14000 auditing. Government agencies and the courts have ruled that information uncovered during audits is not confidential and may be used against a company in an environmental enforcement proceeding. The EPA realizes that environmental self-auditing at private facilities will improve environmental conditions, however, and wish to encourage such voluntary environmental management initiatives. As such, it has issued an amnesty policy that guarantees special consideration to companies with an ISO 14000 EMS in place. Under the policy, the EPA does not relinquish the right to prosecute serious offenses. Furthermore, in the case of violations that threaten life or health, or when companies gain a competitive advantage through a violation, the EPA does not guarantee leniency. The EPA will not recommend criminal prosecution or pursue civil penalties against, organizations uncovering minor environmental violations during audits, however, provided the violations are fully disclosed and corrected promptly. Many state agencies have similar policies.

back to top

8. How much will it cost?

The costs of ISO 14000 implementation and certification can vary greatly depending on the size of a facility and the nature of its operation. For a small to medium sized manufacturing facilities (i.e. 100-300 employees) the cost of developing and auditing an EMS will generally range from $20,000 - $50,000. A chemical manufacturer with 120 employees, for example, spent about $30,000 over 2 Ohm years to implement its EMS from scratch. A manufacturer of water quality measurement equipment with 300 employees estimated the cost of implementing an ISO 14000 EMS at their facility to be $20,000 - $30,000 over a two year period. Pursuing certification with official, third-party registration organizations adds additional expense, as registrars must be brought in to conduct audits and periodic follow-up audits must be undertaken to verify continued compliance. In general, small to medium sized businesses face lower expensed because lines of communication are shorter, access to management is simpler, and organizational structures are less complex than in large firms. In addition, employees often perform multiple functions, a condition that makes training and implementation easier.

Implementation at larger, heavy industrial facilities can be more costly. A major plastics producer with facilities in Texas, Delaware, and Louisiana for example, estimates the cost of implementing ISO 14000 and gaining official certification to be over $100,000 per facility. For companies with 500- 900 employees, cost may run even higher. Firms of this size that have put ISO 9000, an earlier set of ISO standards dealing with product quality management, into place reported costs of $150,000 to $200,000. Although ISO 14000 is a different set of standards, the management framework it requires is similar in structure to that of ISO 9000, and costs are estimated to be comparable.

Costs of implementation may be mitigated by several factors. For organizations that already have an EMS in place, the cost of adjusting their system to meet ISO 14000 requirements may be minimal. In fact, many industries, such as the chemical and petroleum industries, already have their own set of EMS standards. In many cases, these EMS standards already meet or exceed most of the requirements of ISO 14000. In addition, facilities that have an ISO 9000 product quality management system in place will face lower costs in implementing ISO 14000. Although ISO 9000 does not deal with environmental management systems, the general management and documentation procedures required by this set of standards is similar to those required by ISO 14000; firms with ISO 9000 systems in place will save money by simply adapting their existing management systems to ISO 14000 instead of developing ISO 14000 systems from scratch.

back to top

9. Do the benefits outweigh the costs?

For businesses that export to regions or clients that require proof of ISO 14000 implementation, certification or auditing under the standards may be a matter of survival. To these organizations, the benefits of maintaining market shares certainly outweigh the costs. Outside of such direct market drivers, identifiable savings resulting from ISO 14000 implementation are unlikely to cover costs in the short-term. In the long-term, however, the accumulated savings realized as a result of greater operating efficiency and fewer environmental accidents are substantial and in most cases will exceed the costs of implementation. Furthermore, although difficult to quantify, improvements in competitiveness in an environmentally conscious consumer marketplace and more cooperative relationships with environmental regulatory agencies will likely translate into benefits for the bottom line. In all, the long-term financial benefits of ISO 14000 implementation are likely to exceed costs. Because many of the benefits are difficult to measure and the costs and benefits of ISO 14000 implementation vary greatly according to the size and nature of a facility's operation and the target market for its products, a generalized and definitive answer to this question is difficult to make.

back to top

10. What has been the response of industry and government to ISO 14000?

Government regulators have generally taken a positive but cautious approach to ISO 14000 and view the development of EMSs under the standards as a complement to and not a substitute for command and control structures. Both the EPA and state agencies believe ISO 14000 will bring positive and determinable benefits to the environment but are waiting to see how these results are realized in practice. Industry has responded positively to the release of the standards. Some industries, such as chemical and oil, have developed their own EMS standards and are committed to the development and benefits of environmental management. Although they already have EMSs in place, they have actively investigated and begun to adapt their systems to meet ISO 14000 requirements. Other industries such as the pulp and paper industry and the electronics industry are actively pursuing implementation of the standards. In general, industry’s push towards official ISO 14000 certification is being fueled by market drivers; as customers and regulatory agencies around the world require certification, many firms realize that ISO 14000 certification will soon become a prerequisite for international trade and global competitiveness. As the development of EMSs in many industries shows, however, the positive environmental effects of such systems is recognized, and such benefits are the main drivers for firms waiting on certification but still pursuing ISO 14000 implementation.

back to top

11. Why should I look into ISO 14000 auditing now?

ISO 14000, as explained above, has many potential benefits for an organizations bottom line in terms of increased efficiency and lower liability and should be looked at based on these merits alone. ISO 14000 implementation, however, may simply be necessary to maintain competitiveness. The ISO 14000 movement is quickly gaining momentum around the world. The number of facilities attaining certification is growing rapidly and more and more buyers will be requiring certification in the future. By auditing existing EMSs and beginning the develop the necessary elements of an ISO 14000 EMS, a process which can take one to two years, firms will put themselves in a good position to be certified when ISO 14000 becomes a marketplace necessity.

back to top

12. We already have an EMS in place - why should we look at ISO 14000?

Because ISO 14000 has been identified as the worldwide standard for EMSs, some buyers and/or regulatory agencies may specifically require ISO 14000 certification or, at a minimum, an EMS audited under ISO 14000, as a condition for doing business. In these cases, an EMS based on some other standard would not be considered sufficient. Furthermore, because ISO 14000 is the product of five years of work and the cumulative experiences and expertise of EMS and environmental engineering specialists from around the world, it is perhaps the most comprehensive and well structured EMS standard in existence. Organizations with an EMS in place may thus benefit from auditing their existing systems against ISO 14000.

back to top

13. How can Environment International Ltd. (EI) help us with ISO 14000?

EI offers comprehensive consulting, auditing, and training services to facilitate industry compliance with ISO 14000. EI personnel are certified ISO 14000 auditors with years of experience developing environmental management systems. EI has the experts and capacity to review existing EMS systems against ISO 14000, conduct gap analysis, develop a facility specific ISO 14000 EMS from scratch, and conduct the training for management and employees that is necessary for ISO 14000 implementation. EI does not provide third-party certification services. *top

If you would like to discuss how EI can assist you with EMS services, please contact us at (206) 525-3362, or email us at staff@eiltd.net.