ISO 14000 Environmental Management: Benefiting Companies, Saving the Environment

by James E. Haklik
Transformation Strategies

ISO 14000 is a set of international standards for improving the environmental performance of organizations. It includes the new standard for environmental management systems (EMS) called ISO 14001. This standard was published October1, 1996, so it is new on the international scene. Some countries and companies are quickly embracing it, while others, including the United States and most American companies, are waiting to see if it becomes a requirement for doing international business and if there are benefits to adopting it. Many American companies already have EMSs that may be different than ISO 14000, so their reluctance is understandable since they have invested in their existing systems. For those companies who have no system, their reluctance is also understandable, since they have no experience with the benefits such a system can provide.

This article presents some of the benefits of an EMS and ISO 14000. These are divided into five categories: increased profits, operations, marketing, regulatory compliance, and social. They are taken from the world wide web site www.trst.com/ which specializes is sharing information on the benefits of ISO 14000.

1) Increased profits is the most important of these benefits, and may be the most surprising for those unfamiliar with environmental management. Reducing the cost of goods sold is one way that EMSs contribute to increasing profits. Many companies are finding that an EMS can help reduce the quantities of materials and energy used to make products when the management system includes analyzing the raw materials, byproducts, and waste. Changes to product design, formulation, manufacturing processes, and packaging can reduce the quantity of material inputs, byproducts, wastes and, therefore, costs. For example, Wilton Armetale, a foundry in Pennsylvania, found that the quantities of some raw material inputs to the manufacturing process could be reduced or eliminated. Many companies recognize that pollution is also a cost since its components are purchased in raw materials. ISO 14000 improves the cost-saving function of existing EMSs in many ways. One is the requirement that everyone in the company be knowledgeable about pollution prevention and their individual contribution. This harnesses the efforts and creativity of everyone in the organization.

There are many ways that an ISO 14000 EMS can improve the 2) operations of a company, thus reducing costs. An EMS can identify instances of redundancy in day-to-day efforts for regulatory compliance. These can be eliminated, thus making the organization more efficient. ISO 14000 requires a common terminology which improves the communication of goals, procedures, environmental impacts, and solutions. Improved communications can mean greater efficiency in decision making. For example, the severity of an environmental impact can increase with time, so an efficient notification system can reduce the time it takes to respond, and thus the impact, risk and liability to the organization.

An ISO 14000 EMS can help a company 3) market to customers, investors, creditors, suppliers, employees, and the public. A 1990 Gallup poll found that 52% of those surveyed stopped buying products with a poor environmental image. Establishing a strong environmental image can help attract environmentally conscious customers and provide an advantage over competitors. Workers may be attracted to a company with a plan to protect the work environment and the surrounding community. Finally, community support for a facility could be increased by demonstrating concern for the local environment through an EMS. ISO 14000 adds to the credibility of an EMS because a company must be certified by an independent auditor.

In the United States, there are many laws and 4) regulations designed to protect the environment. They may carry financial and/or criminal penalties if not observed. ISO 14000 requires evidence of working processes to maintain compliance with existing laws. These processes can help companies identify where they are out of compliance and take action. Improved compliance with legislative and regulatory requirements could reduce penalties and remediation costs. Regulators may even favor companies with ISO 14000 EMSs.

Finally, 5) society in general benefits when companies reduce pollution with the help of ISO 14000. Natural resources last longer since less are being used. Landfills receive less waste so they last longer. Air, water and soil are cleaner. These benefits to society indirectly benefits the companies that are a part of it.

These are just a sample of the benefits available to companies, but they show that the effort to implement ISO 14000 can be worthwhile. Each company is different, with unique products, customers, and markets. So, the benefits will be different, too. One key to success with ISO 14000 is to identify and obtain as many benefits as possible by pursuing all those that relate to the unique attributes of the organization.