Top Management Story

Writen by John Oakland

The overriding goal of ISO-14000. (History 1995)

As ISO-9000 becomes a way of life for the global business community, ISO-14000 is almost ready to debut with its own set of standards for voluntary environmental compliance.

Much has been heard recently about the antiregulation sentiment sweeping across the country. Lawmakers in Washington have responded with talk of "regulatory reform" and programs aimed at "re-inventing government."

One of the targets of this regulatory backlash has been the ever-burgeoning flood of environmental laws and regulations continuing to impose burdens on corporate America. A common thread running throughout this rhetoric has been a perception that government is too big and that corporate self-policing and self-management can achieve far greater benefits at far less cost.

It is unlikely that meaningful relief from environmental regulations will come any time soon. However, a major step in the direction of voluntary corporate initiatives in this area is on the horizon.

Getting Ready for 14000

The Geneva-based International Standards Organization, with the assistance of representatives from over 40 countries, is in the final stages of developing ISO-14000, a set of voluntary international environmental quality standards designed to promote sound corporate management of environmental compliance matters.

When fully adopted in early 1996, the standards will allow companies to obtain ISO-14000 certification of their operations in recognition of the development of these comprehensive environmental quality standards.

ISO-14000 is the second major undertaking of the International Standards Organization in developing international quality management systems for business enterprises. In the mid-1980s the Organization adopted its ISO-9000 series of standards for corporate quality management. The ISO-9000 program provided a formal mechanism for certifying that a company had developed and integrated certain quality management principles into its business operations.

While initially slow to gain acceptance in the business community, ISO-9000 certification is fast becoming a necessary part of standard business practices, both in the US and abroad. It is estimated that by 1996, 12,000 US companies will be ISO-9000-certified, up from only 100 in 1990. Internationally, more than 50,000 companies have received ISO-9000 certification.

The idea behind extending the ISO quality management principles into the environmental arena arose out of the historic United Nations Conference on Environment and Development held in Rio de Janeiro in 1992.

Joe Cascio, IBM program director/environmental, health and safety standardization, and chairman of one of the ISO technical advisor groups, reports that the Rio conference discussions produced "a proliferation of national and regional environmental management, labeling and audit schemes that could have impacted international trade in a very severe way." The need to bring some standardization to these conflicting programs ultimately provided the impetus for the formation of ISO-14000.

What IS0-14000 is - and isn't - About

What, then, is ISO-14000 all about? The overriding goal of ISO-14000 is to develop a comprehensive system of universally accepted corporate standards to ensure that companies will be in a position to successfully manage their environmental compliance matters.

ISO-14000 is not about developing regulations to attain certain pollution standards. Instead, the focus is on the management of environmental issues or the development of internal corporate management programs ultimately leading to responsible and verifiable operating strategies that will result in the efficient use of natural resources and the protection of the environment.

ISO-14000 calls for the development of corporate Environmental Management Systems (EMSs) to guide not only the environmental performance of a company's industrial operations but also the potential environmental impact of the goods or services produced.

As envisioned by ISO-14000, an effective corporate EMS requires that a company review the environmental issues and challenges confronting the organization and ultimately develop policies, objectives, target strategies and production processes to meet and properly manage these challenges.

ISO-14000 spells out in detail the guiding principles for the development of effective EMS programs:

First and foremost, ISO-14000 acknowledges that environmental management must be among the highest corporate priorities. ISO-14000 also acknowledges that a company and its highest levels of management must demonstrate their commitment to the EMS process.

Additionally, for effective implementation of EMS programs, ISO-14000 recognizes the importance of adequate resources, including proper employee training, to the success of any EMS.

Finally, ISO-14000 recognizes that standardized and comprehensive procedures must be in place in order to correctly assess the effectiveness of these EMS programs and ensure the accountability of responsible corporate managers for the success or failure of these endeavors.

Moving beyond philosophical principles, ISO-14000 also details the critical elements of an effective EMS. It requires companies to perform an "Initial Environmental Review" of their operations. This review will include an identification of all regulatory obligations and potentially significant environmental impacts of a company's operations. This initial review must also include an honest assessment of the company's compliance status and the extent to which the company is meeting its regulatory obligations.

Once this review is completed and a company understands the status of its environmental compliance efforts, it can then move on to the EMS planning process. ISO-14000 states as one of its guiding principles that "an organization should focus on what needs to be done - it should have a purpose and a plan."

For the implementation of an EMS, the purpose and plan includes the development of overriding environmental policies, the establishment of environmental objectives and targets to meet these policy goals, and the preparation of a strategic plan and management program aimed at implementing these identified policies and objectives through scheduled action items.

The remaining critical component of an effective EMS, as recognized in ISO-14000, is the development of procedures to measure and monitor a company's success in carrying out its EMS and achieving its environmental policy and performance goals.

Critical components of ISO-14000 are the development of standardized performance evaluation and auditing procedures. Once completed, these procedures will be used as benchmarks to assess the true effectiveness of any EMS.

The EMS program outlined in ISO-14000 is by no means revolutionary. In fact, critics of ISO-14000 argue the program is nothing more than a paperwork exercise with few benefits and many burdens. Proponents offer that evaluating existing compliance, documenting findings and actively attempting to manage the environmental impact of one's operation is a challenge for even the most e nvironmentally responsible of corporate citizens.

The corresponding benefits to be gained from this process, say these proponents, include the fostering of good public relations and community and consumer support, the simplification of the compliance challenge through an understandable and orderly EMS implementation process, and the opportunity for cost savings and increased profits resulting from proactive management of environmental liabilities and the thoughtful development of pollution prevention and resource conservation strategies.

What Will the Impact Be?

At this early stage in the ISO-14000 development process, it is hard to predict the exact impact these new standards will have on the industrial community, including the converting industry. Many observers are predicting the impact to be significant and pervasive. In part, this view is bolstered by the dramatic integration of the ISO-9000 standards into the industrial community.

It is expected that companies with substantial international operations will be obligated to pursue ISO-14000 certification as this program continues to gain momentum abroad.

For US operations the impact is a little less certain. The Environmental Protection Agency (EPA) has adopted a "wait and see" attitude on ISO-14000. To date, the Agency has resisted programs that have strayed too far from traditional "command and control" regulatory schemes. Recently, though, with its Common Sense Initiatives and Environmental Leadership Program, EPA appears to be moving in the direction of affirming, if not promoting, ISO-14000-styled programs.

In order for ISO-14000 to truly catch on in the US, however, EPA must move beyond merely a tacit recognition of the program and provide tangible benefits to the regulated community for achieving ISO-14000 recognition.

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