For almost four years, industries from 43 countries have been negotiating the language of more than 15 environmental standards. Last July, their efforts were rewarded with what some are calling a "revolutionary" environmental management system specification-ISO 14001-that is expected to be published by late 1996.
However, most people are missing the whole point of the standards, says Joseph Cascio, chairman of the U.S. Technical Advisory Group and the lead U.S. delegate to the International Organization for Standardization's Technical Committee 207, which works on the standards.
The consequences of ISO 14000 are incredible and will contribute significantly to improved sustainable development, says Cascio. "The biggest challenge [for companies] is getting all the employees-the whole structure-into this environmental mode," he says. This is unlike ISO 9000, he notes, because those quality management standards don't require companies to account for the impact of all their activities on their surroundings.
As program director for environmental affairs at IBM Corp., he says that his company is implementing the standard bit by bit, keeping a watchful eye on regulatory agencies and competitors to determine whether to seek certification.
The ISO 14000 standards aim at giving companies direction for managing, measuring, improving and communicating the environmental aspects of their operations. Experts predict that the standards will influence the design and manufacture of products, selection of raw materials, marketing, the type of environmental data gathered and the means by which data are exchanged internally and externally.
To help you understand what these experts are talking about, here are the top 10 things you should know about these standards.
What is ISO 14000?
The ISO 14000 standards are voluntary environmental management system standards being created under the auspices of the International Organization for Standardization. ISO has 111 member countries represented mainly by industry and government standards groups. The American National Standards Institute represents the United States.
The standards can be classified according to their focus:
Organization and process evaluation
standards-Environmental management system (ISO 14001, 14004), environmental
auditing (ISO 14010, 14011/1, 14012) and environmental performance evaluation
(ISO 14031). Product-oriented standards-Life-cycle
assessment (ISO 14040, 14041, 14042, 14043), environmental labeling (ISO
14021, 14024, 14025) and environmental aspects in product standards (ISO
14060). Definition standard - A terms-and-definitions
standard (ISO 14050) harmonizes the language among the others.ISO 14001, the environmental management system specification, is intended as the only standard establishing requirements against which companies will be audited for certification. It is the backbone of the series and was marked by heated debate over how prescriptive it should be.
The Europeans argued that in the absence of a regulatory watchdog such as the Environmental Protection Agency, the public will not have faith in a standard that leaves too much interpretation to industry. They fought in favor of a standard that clearly linked a management system with environmental performance, making both auditable. The United States, Canada and Japan, among others, disagreed, claiming that extensive laws and regulations already govern environmental practices. The link was made, but only indirectly, leaving it up to the company to determine in its policy statement whether environmental consequences themselves might be auditable.
Continuous improvement of a company's EMS-not of environmental effects-must be evaluated during the audit process. By setting achievable goals and targets, a company can satisfy this element of the standard.
Why should I care?
Worldwide interest in these standards among both countries and governments is burgeoning. Many countries, including the United Kingdom, South Africa and the Netherlands have indicated they will favor ISO 14001-certified companies in procurement contracts. Industry leaders are headed in that direction as well.
Dozens of companies such as Toyota, IBM, 3M, Texas Instruments and Georgia Pacific have already started implementing ISO 14001 with an eye toward certification. Standards bodies in Austria, Switzerland and Turkey have already adopted the draft standard as their national standard. ANSI is working on strategies to do the same in the United States by early 1996. More than 115 companies have become certified (registered) to the British national standard BS 7750, which is nearly identical to ISO 14001.
The list of reasons companies are now adopting an environmental management system, and ISO 14001 in particular, includes identifying areas for reduction in energy and other resource consumption, reducing liability and risk, and improving compliance with legislative and regulatory requirements.
What is it not?
ISO 14001 is not a requirement; it is voluntary. But it may end up being a requirement for conducting international trade.
It is not a performance-based standard that prescribes levels of emissions and releases. But you must commit to following the laws of the land and preventing pollution.
ISO 14001 is not a product standard. Rather, it is a systems-based standard that gives your company a blueprint for managing your environmental impacts. ISO 14001 can be implemented piecemeal, in any fashion, from the corporate level to the single-unit level.
Who is implementing it?
Companies implementing the standard range from Fortune 500 companies such as AT&T and Eastman Kodak to NIBCO Inc. and Fluke Corp., two medium-sized U.S. companies. The U.S. Department of Energy has warned major contractors that by 1997 it will be in their best interest to have in place an EMS modeled after ISO 14001 in order to retain contracts. Several contractors have begun doing so.
Dozens of companies are engaged in pilot programs using ISO 14001 as a basis for testing regulatory incentives or to work out the pros and cons of the standard and its implementation.
What are the major requirements?
The standard's first requirement is that your company have a publicly available environmental policy articulated by top management. It should be appropriate to the nature of the organization and include commitments toward pollution prevention and continual improvement of the EMS.
Along with the policy, you shall establish and maintain procedures to identify significant environmental aspects and their associated impacts. Procedures to ensure compliance should be consistent with the environmental policy and include legal and other requirements. Objectives and targets will also be documented and must be consistent with the goals of the environmental policy, including continual improvement and pollution prevention.
Each employee's role and position must be clearly defined, and all employees must be aware of the impact of their work on the environment. Your company is responsible for ensuring that all employees are adequately trained.
The EMS should be set up to facilitate internal communication. To that end, all relevant documentation should be easily available and usable, in either print or electronic form.
Organizations must continually monitor and document their environmental effects and periodically review them to ensure continual improvement and the effectiveness of the EMS. Management is responsible for an internal review of the EMS on a regular basis.
How does ISO 14001 relate to other environmental standards?
ISO 14001 is the heart of the series while the other standards provide guidance on specific aspects of environmental management. The ISO 14004 EMS guidance document explains how to implement ISO 14001. You will find auditing guidance for both internal and external audits in the ISO 14010 standard on auditing principles, ISO 14011/1 on procedures and ISO 14012 on auditor qualifications.
Experts speculate that companies will look to the ISO 14031 environmental performance evaluation standard to help them measure the environmental impacts of their processes and performance improvement. Environmental labeling (ISO 14020) covers everything from labeling principles and practices to standards for practitioner programs. These are the standards most likely to affect your corporate presence in the retail market because they deal with product marks and their meanings, and attempt to harmonize the 25 existing labeling standards. ISO 14020 doesn't relate directly to the other standards.
Life-cycle assessment standards (ISO 14040) will help you evaluate the make-up of products themselves and the totality of their individual effects on the environment, from cradle to grave.
ISO requires that every family of standards include a dictionary of common terms and phrases, and ISO 14050 fulfills this need. TC 207 delegates are seeking to ensure that as much language as possible coincides with that in the ISO 9000 quality standards.
Delegates also decided to create a guide for other ISO standards writers called environmental aspects of product standards (ISO 14060).
The European Union has developed the Eco-Management and Audit Scheme, which explicitly ties the concept of performance directly to environment management, unlike ISO 14001. The EU probably will adopt ISO 14001 as meeting EMAS requirements, along with a document bridging the few remaining gaps.
The Chemical Manufacturers Association and the American Petroleum Institute are both looking at revising their management system standards, such as Responsible Care, to be more in step with ISO 14001.
How does ISO 14001 relate to ISO 9000?
The ISO 9000 quality management system standards are like the ISO 14000 series because they apply to all sizes and types of companies and operations. They both require companies to state what they do, do what they state and then evaluate their system.
TC 207 delegates worked to see that parts of the ISO 14001 specification and the ISO 14004 guidance documents mirror the ISO 9001 and 9004 standards. For example, both require a policy statement, top-down commitment, document control, training, corrective action, management review and continual improvement.
Tentative plans for the ISO 14000 and ISO 9000 series call for integrating the two series into one management standard that will also include health and safety. To spare the expense of a separate audit, several companies have expressed interest in having joint audits performed for both ISO 14001 and ISO 9001.
Most agree that the ISO 14000 series will impact companies more than ISO 9000 will. Unlike ISO 9000, the ISO 14000 standards will have significant legal implications and a broader stakeholder base. According to David J. Freeman, a lawyer with Battle Fowler and co-leader of a U.S. TAG legal forum, issues that arise include:
Confidentiality of audits and application
under audit privilege laws. The possibility that ISO 14001
and other standards will become the new "standards of care." The practical and legal effects
of ISO 14000 use in government regulatory, enforcement and purchasing activities.
The possibility that the standards
will pose barriers to trade. The way that environmental claims
and labeling work with the Federal Trade Commission's guidelines.How will I know whether to get certification?
Your company must make this determination based on its needs. Chances are that implementing the standard will not be enough if you trade in Europe, for example. If history repeats itself, European companies will begin asking their suppliers and contractors to have ISO 14001 certification much the way they ask for ISO 9000 certification.
You should monitor the expectations of regulatory agencies such as the EPA and the Occupational Safety and Health Administration. The EPA has indicated it may ease reporting requirements for companies with ISO 14001 or similar certification. In addition, the EPA is testing whether a certified EMS such as ISO 14001 could mitigate enforcement penalties.
An educated public-along with the company you supply to-may clamor for more proof that you are handling your environmental responsibilities well. One sure-fire sign it may be time to consider certification will be when your chief competitor becomes certified.
Who offers certification?
The Swiss Office of Metrology (EAM) has just begun to accredit registrars for ISO 14001. So far, SGS International Certification Services and Schweiz Vereinigung für Qualitäts und Management Systeme are the only two registrars accredited by EAM. In Austria, Österreichisches Normungsinstitut also offers ISO 14001 certification.
The United Kingdom Accreditation Service and Raad voor de Certificatie, the Dutch accreditation body, offer BS 7750 accreditations and have already accredited 12 and six registrars, respectively.
Many of these certification bodies are also ISO 9000 registrars, including Det Norske Veritas (accredited by RvC), Bureau Veritas Quality International (UKAS and RvC), KPMG (RvC) and the British Standards Institution (UKAS). Intertek is the only U.S.-based registrar for BS 7750. Several other firms have announced that they will seek accreditation when a U.S. national standard is approved. When ISO 14001 becomes final, the number of registrars will proliferate.
The Environmental Auditing Roundtable has announced plans to issue accreditation criteria, and the American National Standards Institute plans to remain involved in the accreditation process at an executive level. The upshot here is that any sort of universally accepted accreditation body in the United States is still a ways off.
How much does certification cost?
While the market price is still not fully clear, some idea of costs associated with ISO 14001 certification are emerging. The costs could run about $12,000 to $15,000 for a company with 100 to 200 employees, estimates Samantha Munn, manager of the EMS program at Inchcape Testing Services. The cost runs slightly higher than an ISO 9000 audit for a similarly sized company due to the complexity of environmental records, explains Munn.
The cost of the whole ISO 14001 certification process, beginning with gap analysis and culminating with certification, could run from $40,000 to more than $100,000, estimates Edward Pinero, director of environmental services at Miller-Rettew Associates. The costs depend on a range of factors, including the amount of outside help used vs. inside help, the costs for consulting services and the size of the facility. "At this point, the costs are still not well-defined," warns Pinero.
It is worthwhile to note that 3M Corp. has saved $1 billion since 1975 through an EMS approach, according to Robert Ferrone, vice president of environmental management systems for Excel Partnership Inc. IBM realized energy savings of $32 million in 1990p;1991, and Sealtest Ice Cream saved $3 million in 1994 using an EMS, says Ferrone.
There are many sources for information on ISO 14001. To order a copy of the standards themselves, telephone ANSI at (212) 642-4900 or fax (212) 642-4969. You may also telephone the American Society for Quality Control at (800) 248-1946, fax (414) 272-1734 or via worldwide web at http://www.ansi.org.
About the author
Caroline G. Hemenway is publisher of CEEM Information Services in Fairfax, Virginia, and senior editor of "International Environmental Systems Update." IESU is a monthly newsletter on ISO 14000 developments and implications for industry. Gregory J. Hale, IESU associate editor, and Sachin Shah, editorial assistant, contributed to this article. For more information, telephone CEEM at (800) 754-5565 or fax (703) 250-4117.
