ESM 210 Strategic Management Bren School of Env' Sci'

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ESM 210Strategic ManagementBren School of Env.
Sci. Mgt.

• Week 8
• Environmental Management System
• Magali Delmas

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What is an Environmental Management System?

• The organizational structure, responsibilities,
  practices, procedures, processes and resources
  for determining and implementing environmental
  policy British Standards Institute (1994)
• Planned and programmed change to support
  environmental management
• Common stages within an EMS that organization
  use, to try to ensure that the environment is
  considered in policy and processes

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Elements of an ESM Gilbert (1993)

• A policy statement indicating commitment to
  environmental improvement and conservation and
  protection of natural resources
• A set of plans and programs to implement policy
  within and outside the organization
• Integration of these plans into day to day
  activity and into the organizational culture
• Measurement, audit and review of the
  environmental management performance of the
  organization against the policy, plans and
  programs
• Provision of education and training to increase
  understanding of environmental issues within the
  organization
• the publication of information on the
  environmental performance of the organization

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Similarities between EMS Total Quality
Management (TQM)

• TQM have been developed to ensure that the
  activities, policies and processes of
  organizations conform to specified quality
  requirements
• TQM used mainly between purchaser and supplier in
  contractual situations
• EMS like TQM require effective commitment,
  planning, leadership, communications,
  organization, control and monitoring to succeed

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Total Quality Management loop
Thinking about how to achieve organizational goals
Planning to achieve goals, i.e. who, where, what,
when
Doing i.e. implementing the plan
Measuring the effectiveness of implementation
Thinking about how to improve effectiveness
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TQM zero negative impacts on the environment

• In the application of TQM to environmental issues
  the customer is replaced by the environment and
  quality by environmental quality
• TQMs ultimate aim for complete lack of defects
  can incorporate the concept of zero-negative
  impacts on the environment
• Close parallels between aiming for TQM and cradle
  to grave environmental management

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How to compare EMS implemented in different
organizations?

• Standard
• A document established by consensus and approved
  by a recognized body, that provides, for common
  and repeated use, rules, guidelines or
  characteristics for activities or their results,
  aimed at the achievement of the optimum degree of
  order in a given context
• Quality management systems such as ISO 9000
• widely used, compliance with these standards is
  independently assessed

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ISO 9000 Cycle (Welford Gouldson, 1993)
Write down what it does
Justify what it does
Do what it has written
Record what it has done
Review what it has done
Revise what it will do on the strength of its
findings
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Organizational commitment to environmental
management
Adoption of an environmental policy
Review/audit of environmental effects
Revision of environmental policy
Implementation of environmental training program
Allocation of environmental responsibility
Setting of environmental objectives and targets
Development of action plan to achieve
environmental objectives and targets
Operational control
Audit of performance in relation to targets
Audit of the effectiveness of the management
program
Review of the management system
Corrective action
Report environmental performance internally and
externally
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What is standardization?

• Standardization
• Activity of establishing, with regard to actual
  or potential problems, provisions for common and
  repeated use, aimed at the achievement of the
  optimum degree of order in a given context (ISO
  1996)
• In particular the activity consists of the
  process of formulating and implementing standards
• Benefits of standardization prevention of
  barriers to trade and facilitation of
  technological cooperation

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Standards and Regulations who produces them?

• National, regional and international standards
  bodies
• UK British Standards Institution (BSI)
• European Committee for Standardization (CEN)
• American National Standards Institute (ANSI)
• International Organization for Standardization
  (ISO)
• founded in 1947 and based in Geneva
• 130 standards bodies and published 11,000
  standards

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British Standards Institution (BSI)

• 1990 BSI asked to consider the question of third
  party assessment of environmental performance
• BSI had tackle the issue of quality using a
  system approach producing the quality system BS
  5750 (replaced by ISO 9000)
• Positive response from industry ask for Env
  standard to be compatible with TQ standard
• 1992 Publication of BS 7750, world first
  environmental management system standard
• 2-year pilot implementation program involving
  almost 500 participants
• 1994 publication of modified standard first EMS
  standard in the world

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EMAS -A regulation from the European Commission

• 1990 EC proposal for an eco-audit scheme
• Mandatory where companies from 50 industrials
  sectors would be required to undertake annual
  environmental audits and published a detailed
  environmental statement based on the audit
  results
• 1993 Eco-Management and Audit Scheme (EMAS ) open
  to participation in 1995
• Voluntary and at intervals no longer than 3 years
• Industrial sector
• Site -based registration system

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Rio Summit Uruguay round

• 1992 Rio Summit commitment to protection of the
  environment across the world
• 1994 WTO concentrates on the need to reduce
  non-tariff barriers to trade and the environment
• Growth of national and regional standards, BS
  7750, Canadian standards, EU...

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International Organization for Standardization
(ISO)

• 1990 ISO and Business Council for Sustainable
  Development (BCSD)
• discussion about need for standardization in the
  field of environmental management
• 1991 technical committees to deal with the ISO
  14000 series
• Environmental management systems environmental
  auditing Environmental labeling environmental
  performance evaluation life cycle assessment and
  terms and definitions

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1996 ISO 14001 ISO 14004

• ISO 14001 specification for registration
• Self declaration or certification with accredited
  certifier
• ISO 14004 general guidelines on principles,
  systems and supporting techniques. Not
  certifiable

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5 Principles of ISO 14000

• 1. Commitment/Policy
• A company should define environmental policy and
  ensure commitment to its EMS
• 2. Planning
• An organization should formulate a plan to
  fulfill its environmental policy
• 3. Implementation
• For effective implementation, an organization
  should develop its environment policy, objectives
  and targets

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5 Principles of ISO 14000

• 4. Measurement and evaluation
• An organization should measure, monitor and
  evaluate its environmental performance
• 5. Continuous improvement
• An organization should review and continually
  improve its environmental management system, with
  the objective of improving its overall
  environmental performance

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Components of an ISO 140001 EMS
Environmental Policy (Section 4.2)
CONTINUAL IMPROVEMENT
Management Review (Section 4.6)
Planning (Section 4.3)
Implementation Operation (Section 4.4)
Checking Corrective Action (Section 4.5)
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Components of an ISO 14001 EMS
Environmental Policy
Define policy and ensure commitment to EMS
Management Review
Planning
Formulation of a plan to fulfill environmental
policy
Continual improvement of EMS and Env Perf
Checking Corrective Action
Implementation Operation
Measurement and evaluation of environmental
performance
Objective and targets
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1996 ISO 14001

• Growth of national and regional standards, BS
  7750 (1992) and EMAS (1993)
• Such national or regional standards could become
  a barrier to trade
• ISO 14001 developed on the model of the ISO 9000
  total quality management standard (issued in
  1987)

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2000
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Environmental performance requirements?

• ISO 14000 does not establish requirements for
  environmental performance beyond commitment in
  the policy to compliance with applicable
  legislation and regulation and to continual
  improvement

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The ISO 14000 series

• 14001 EMS that can be certified
• 14004 EMS guidelines
• 14010 Environmental auditing general principles
  guidelines
• 14011 Environmental auditing auditing procedures
  guidelines
• 14012 Environmental auditing qualification
  criteria for environmental auditors
• 14024 Environmental labeling guiding principles
• 14030 Environmental performance standard
• 1404043 Life cycle assessment general principles
• 14060 Guide for the inclusion of Environmental
  aspects in product standards

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Number of ISO 14001 certification in 2000 (March)
3500
3000
2500
2000
Number of certifications
1500
1000
500
0
UK
Italy
New
USA
India
Israel
Japan
Spain
Egypt
Korea
France
Poland
Brazil
Ireland
Turkey
Taiwan
Finland
Canada
Austria
Mexico
Sweden
Norway
Belgium
Hungary
Slovenia
Thailand
Malaysia
Germany
Denmark
Australia
Indonesia
Singapore
Argentina
Philippines
Czech Rep.
Switzerland
ChinaHon
Netherlands
Slovak Rep.
South Africa
Countries
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Number of ISO 14001 certifications / GDP 2000
(March)
6,000
5,000
4,000
ISO 14001 certifications / GDP
3,000
2,000
1,000
0
UK
Italy
New
USA
India
Israel
Japan
Spain
South
Korea
Egypt
France
Ireland
Turkey
Poland
Austria
Brazil
Finland
Taiwan
Canada
Mexico
Sweden
Norway
Hungary
Belgium
Slovenia
Thailand
Denmark
Germany
Australia
Malaysia
Indonesia
Singapore
Argentina
Philippines
Czech Rep.
ChinaHon
Switzerland
Netherlands
Slovak Rep.
Country
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Types of US Companies Registered to ISO14001 (As
of April 1999)
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Rate of Registration to ISO14001 in U.S.(Shown
by Calendar Year Quarter)
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Critics of ISO 14000

• Does not go far enough in environmental terms
• Defensive
• Bureaucratic
• Does not provide an adequate framework to tackle
  urgent environmental issues and work towards
  sustainable management practices

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Why would firms seek certification?

• Transaction costs
• Opportunistic behavior
• Administrative costs

• Competitive advantage
• Market demand
• improved relations with regulatory agencies

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Regulatory credible commitment

• Review of EMAS after 5 years
• will EMAS become mandatory?
• Choice of competence body close to regulator
• Promotion of EMAS
• conferences, brochures, training
• ECU 35.1 M for promotion of EMAS with SMEs
• regulatory flexibility

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Establishment of a certification system

• Competent body
• 2 Member States only have not established
  competent body
• Verifiers / certification bodies
• 1997 254 verifiers accredited in 10 Member States

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Survey of EMAS ISO 14001 certified facilities

• Assessment of implementation of EMAS in 1997
• 140 registered EMAS sites in 12 Member States
  interviewed by phone
• 9 1995, 44 1996, 47 1997

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Environmental statement and stakeholders
involvement

• Unlike ISO 14001 EMAS requests firms to publish
  an Environmental Statement
• Environmental statement widely distributed
• 88 of interviewed sites distribute gt 100 copies
  of their env. Statement
• 45 had gt 100 statements that were specifically
  requested

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Main audiences for Environmental statement
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Benefits of EMAS
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Bridging EMAS and ISO 14001

• European Commission recognition of ISO 14001 in
  1997
• possible to avoid duplication of effort between
  certifiers and verifiers in the certification
  process
• 1997 of 140 EMAS sites, 47 were ISO 14001
  certified
• ISO 14001 an easy way to get to EMAS?

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Survey of US companies

• 152 corporate questionnaires mailed
• Total of 55 responses
• response rate 36
• Sample 30 of the 200 U.S. ISO 14000 certified
  firms as of November 1998

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Stakeholder involvement in design of ISO 14001
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Constraints to the adoption of ISO 14001
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Incentives to ISO certification (1)
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Incentives to ISO certification (2)
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Conclusions

• Importance of Institutional Environment for
  implementation of ISO
• European context more favorable than US context
• Importance of standard design
• Difficulties to assess results of ISO 14001 i.e.
  environmental performance
• Suitable institutional environment better
  design will favor international diffusion of
  ISO14001