A Business Case for an ISO 14001 Essay

Abstract The ISO 14000 series takes the international standards system to the field of environmental concerns. ISO 14001 focuses on the development and maintenance of an Environmental Management System, within the ISO 14000 series. The ISO 14000 series is of relatively recent origin, having been instituted in 1991. However, it has emerged as a significant force within a short time. The ISO 14000 series is relevant for the world of business, for governments and regulators, for organizations that work not-for-profit and for entities of all types and sizes, wherever they may be. Its universal nature makes it a unique and dominant system for all people who are concerned with pollution, waste and about the consumption of resources that are limited and which cannot be renewed. ISO 14000 promotes professional conduct. Training people and involving them in key processes lie at the heart of the ISO 14000 system. The rigors of certification serve to develop human resources. It can serve to motivate people at all levels of the hierarchy, and to foster team spirit. The ISO 14000 system is not limited to altruism and to noble intentions. It is worth hard cash. ISO 14001 puts great pressure to bear on achieving productivity improvements that translate to valuable cost savings. Major international corporations enjoy impressive profit growth through the ISO 14000 series. All ISO certifications carry the benefits of independent and international recognition. ISO extension in to the field of environmental concerns through the 14000 series brings desirable pressure on companies that produce hazardous substances and which generate enormous amounts of waste. Customers everywhere have the choice to insist on ISO 14000 certifications. Companies may find themselves excluded from significant market segments if they continue to ignore or to avoid ISO 14000. Some organizations may find themselves out of business if they do not secure ISO 14000 certification. Apple leads a galaxy of the world’s most respected enterprises in using ISO 14001 certification as a cornerstone of competitive strategy. Lithium ion battery technology is an example of innovation that a commitment to environmental conservation can present. Solutions inspired by ISO 14001 can have welcome economic benefits, apart from noble achievements in terms of environmental conservation. Reduction in energy consumption is an outstanding example, since power generation can be both expensive as well as polluting. ISO 14000 calls for abiding commitment on the part of all entities that seek certification. The system consumes major portions of employee time. ISO 14000 becomes a major element of cost, though it does produce handsome returns. The ISO 14000 series follows a highly structured implementation procedure. There is comprehensive documentation widely available that any organization can use to enter the system. Most organizations find it expedient to use consultants to guide them through the process. Independent auditors are inevitable. External auditors must be knowledgeable, experienced and accredited. ISO 14000 has important weaknesses. Loss of proprietary information is the most serious risk. Certified companies may find that their defenses have been compromised in the event of litigation. This arises from the documentation and management reviews that are integral to ISO 14000. ISO 14000 leaves organizations free to choose their own goals, priorities and standards. It therefore lends itself to potential abuse by organizations that may push important social concerns to the background, or to prevaricate about deleterious aspects of environmental degradation. Some organizations may not be able to fund the investments in time and money that ISO 14000 requires. The benefits may therefore evade small enterprises. ISO 14000 documentation needs can also duplicate documentation that other systems and some regulations require. Training and audit infrastructure is inadequate for widespread and global application of ISO 14000. Some organizations, especially in remote regions can find themselves excluded though they may wish to enlist. ISO 14000 confines itself to the environment. It does not consider issues of human wellness. There are many community concerns that ISO 14000 does not address. It is not a guarantee of ethical performance of an organization on all fronts. Business interests may be served best if companies were to use ISO 14000 for internal review, without going in for certification or even registration. It would then be an effective tool of risk management without opening the firm to unwelcome public scrutiny. Purpose of the Study There are a number of excellent consulting services and other resources available at a cost, to help companies through the process of achieving certification. The key is the element of cost. In order to receive funds for consulting services or any other resources, you may have to justify your endeavor financially prior receiving any funding. Even if your company is capable of going through the process without any outside resources there are still direct and indirect costs associated with the process, prior to hiring a certification company to conduct an audit. You will have to buy materials, pull people in full time and part time, audit and update records. Training will be required for employees and management. The purpose is to show that the costs associated with obtaining and maintaining an ISO 14000 certification as part of an Environmental Management System, can be exceeded by the benefits of doing so. The benefits are not just monetary, but also how the company is viewed in the public eye as well, which is increasingly important in today’s global economy. Importance of the study Several industries are trying very hard to change their public image as environmentally â€Å"unfriendly†. The oil industry with its need to seek more sources, often in wilderness areas, chemical companies which have in the past legally dumped toxic waste, the timber industries and the automotive industry which continues to produce large gas guzzling SUV’s and trucks are all very sensitive to public perception. Perception is very powerful and a company does not want to be perceived as harmful to the environment or not environmentally friendly. The ISO 14000 certification system can be used as a tool to not just say we are concerned about the environment, but to show what you have been doing, are doing and will be doing to improve your performance. In doing so you should be able to add to your bottom line, both direct and indirect. As more and more of these companies and seek and obtain the ISO 14000 certification they require suppliers to do so as well. It is very likely that both public and private demand for environmental responsibility will continue to fuel the shift towards certification as proof of doing so. In the global economy today an ISO 14000 certification could become as important, to show a company’s environmental responsibility, as ISO or QS 9000 is to show a commitment to quality. It may become a prerequisite to doing business with some companies and in more industries as it has in the automotive industry. This study seeks to contribute to the on-going debate within some sections of industry about the economics of ISO 14001. We know that large corporations invest in registrations, often under duress from social activists. But is there money to be gained by following the system? Can there be purely business reasons for seeking ISO 14001 certification? Can smaller enterprises participate? These are some of the questions that this study seeks to answer. Scope of the Study The majority of the top 100 companies in the United States have already achieved ISO 14000 certification. The same trend exists in the European Union. The research will look at what is driving the movement towards certification. It will also look at what is required to become certified and to maintain that certification. This will be done through case studies of companies that have already achieved certification, how it has affected their companies and in what ways. The main focus being that it makes good business sense, and the justification thereof. The study concentrates on the business and profit reasons for ISO 14000 registrations, with tertiary scans of ethical issues and applicability of not-for-profit organizations. The study includes brief descriptions of all phases of the ISO 14001 process, with outlines of the various sections of the manual that is an integral part of the process. Rationale of the Study While a lot companies have already achieved ISO 14000 certification many more have not. One of the biggest factors in failure to achieve or to get the company to attempt certification, especially in small and medium size companies, is that often the appointed SME (subject matter expert) has little knowledge as to what is required. It is a task that is added to their current â€Å"to do† list and they are not given the proper resources or time to conduct a thorough study as to what needs to be done, the resources it will require and what is most important in some cases, R.O. I. (Return On Investment). This study will help to explain what is required, where to look for information and through case studies show that a positive R. O. I. can be achieved through ISO 14000 certification and the maintenance of the certification. Overview of the Study The study will consider the attributes of ISO 14000 as an Environmental Management System. In this paper the main focus will be to define the quantitative as well as qualitative benefits for employing an EMS, in our case ISO 14000. While ISO 14000 will be the primary focus, other EMS systems will also be discusses as alternatives and for relative comparisons. The procedures for and the costs of implementation will also be looked at as part of the study. In the process case studies will be studied and discussed through the use of Internet searches, relevant case studies and publications as well as personal experience and interviews with others in the field. This study will attempt to provide methods for justification of perusing certification. We will also try to give an overview of the process for obtaining certification from the planning stage, through implementation, certification as well as the follow up and continuous improvement required to maintain certification. The Ethical Rationale for Environmental Management Standards Concern for the environment is one of the hallmarks of social concerns during our times. Awareness has been growing since the last quarter of the 20th century. It has snowballed in to a major force. There are signs that countries and people will become increasingly demanding of all organizations with which to deal, in this respect. Though the first world is more influenced by concern for the environment, developing economies are also dragged in to the vortex of global opinion, as electronic media and desire for market access drive even poorer people to conform to conservation standards. Pollution, use of hazardous substances, non-degradable waste and consumption of limited natural resources are the four principal corners of environmental concerns. Pollution of air and water are most perceptible for lay people, but the effects of land fills can be equally devastating. Pesticides and organic solvents lead a series of chemicals with both acute and chronic effects. Mesothelioma is an example of a consequence of exposure to a hazardous substance, the fatal implications of which can surface after decades. Organochlorine pesticides persist in nature almost indefinitely. People at large have become very concerned about such residues and threats that surround them. Women and children are especially vulnerable. The concept of supply chains has spurred thoughts about life cycle analysis. Exhaustive labeling requirements have made people more generally aware that an innocuous finished product may involve the use of hazardous substances. Processed foods are common examples of convenience products that may contain harmful ingredients and sources of infection and contamination. This matter also leads to consideration of packaging materials that we have traditionally taken for granted. Consumers are now aware that products made from paper can involve the destruction of forest cover, while plastic has acquired a notorious image for its persistence. This applies to tin and other metals as well. Mercury and other heavy metals in batteries and electronic products are also causes of concern. Clean water has been in acute shortage in many parts of the third world for some time now, but even developed economies have begun to worry about large-scale use of this precious resource, Ground water contamination and depletion of the ozone layer are other matters that engage much popular attention. Large corporations that generate profits are prime targets for pressures to develop environmental management standards. Companies, whose operations transcend national boundaries, have to be especially careful of their environmental footprints. However, government, social service organizations and small business may all affect the environment in serious and indelible ways. Hence it is possible that environmental management programs may become increasingly universal with the passage of time. We may conclude that there is a strong ethical foundation for environmental concerns. All organizations regardless of their size, nature and location, will be subject to pressures to monitor their environmental impacts, and to find ways of reducing or even eliminating all harmful implications of their transactions. The ethical rationale has a firm linkage with business reasons for ISO 14000 certifications, as there are societal trends that it soon become a pre-requisite for continuing to be in business. The Sustainability Imperative for Environmental Management Mature sectors of national economies, and ones that grow rapidly, are in danger of extinction if they do not address environmental concerns. Electronic waste generated by computers and emissions from heavy industries are examples of enterprises and activities that may have a natural end if they do not address the irreversible effects that they can have on the environment. Depletion of the ozone layer is the sort of contentious issue that spreads across sectors and across countries as well. Closely held companies and ones whose stocks are actively traded on markets are most vulnerable to sustainability pressures. The effects of litigation on tobacco and pharmaceutical companies does influence market capitalization significantly, while major industrial accidents can cause companies to cease operations altogether. Government authorities responsible for solid waste disposal, drainage and water supply, may also face bottlenecks if they do not institute timely procedures for environmental management. Food safety is an issue that can affect even a small hot-dog stand. All entities are subject to irreversible degradation if they cause continuing pollution and wasteful consumption. Viral pandemics amongst poor communities are proof that the effects of a deteriorating environment are ultimately universal. We may conclude that there are survival compulsions for all sections of society, in terms of using environmental management systems. Damage and depletion have cumulative effects, some of which manifest themselves many years later. Changes in the macro-environment, such as ozone depletion have serious consequences for innocent communities. Stakeholders of all hues need the umbrella of environmental management systems for their own survival. There are indications that the only companies that will survive and prosper as the 21st century unfolds will be the ones with sound environmental management systems in place. The ones that consume too much of energy and that are relatively wasteful of materials, will be forced out of business by more efficient competitors. Companies that consume vast quantities of non-renewable resources will begin to reach deep in to irreversible crevasses. Society will become increasingly impatient with waste that cannot degrade, and even more so with air and water emissions that threaten human wellness. Companies may escape accountability for environmental degradation in the third world for awhile yet, but apocalypse for them is visible on the horizon! Recent concern for the environment in China marks a watershed, for industries and individuals in this enormous market have operated without such cares until now. The new trend in China spells a change for all corporations that sell their goods and services there, and also for those which source inputs from that vast land. India, being a democracy and a land of education, will follow suit in due course. The days for those without environmental management programs in place are numbered, and there is advantage in jumping on to the learning curve of ISO 14001 as soon as possible. The system has a business rationale, shorn of any altruistic motives.