Sustainable and Organic Market Analysis & News

Environmental Management

Overview

The idea of corporate environmental management systems (EMS) began to emerge in the late 1980s as a natural progression of moving beyond simple compliance with relevant environmental laws. That an EMS could be beneficial to a company took hold particularly within EU based companies. It was felt that an EMS could help prevent environmental non-compliances and provide additional benefits like increased efficiency and reputation enhancement. The trend towards creation of a uniform standard for a corporate EMS began to emerge in the early 1990s on national levels in the UK (BS7570) and in Germany. They developed at the EU level with the adoption of the EMAS standard in 1991 and at the international level with the creation of what is now essentially the only EMS standard of concern in the marketplace – the ISO 14000 series of standards. The key standard within this is the one relating to environmental management systems ISO 14001. There was very rapid uptake of this standard in the marketplace among suppliers to the top global corporations as it was feared that the standard would become a necessity for doing business, somewhat like the ISO 9001 standard for quality.

Role of standards within the market

The key purpose of third party certified EMS standards is to allow buyers to have some assurance that their suppliers are in compliance with environmental laws and not taking on excessive environmental risks. Many leading buyers require their key suppliers to attain ISO 14001 for their manufacturing plants as pre-selection step. They may also conduct their own audits of the manufacturing sites of their most important suppliers. ISO 14001 has been criticised as being merely a documentation system and while a company’s standard is audited by a certified third party, the focus is on assessing documentation. As such many buyers have additional requirements, sometimes sector specific EMS standards or their own requirements such as Walmart’s environmental guide to suppliers. A secondary role of certification is to enhance the reputation of the company and act as a promotional tool. This is somewhat effective in selling the company to new buyers in the B2B supply chain, but this and other EMS standards have almost no recognition with individual consumers. Further, ISO 14001, due to its ubiquitous nature, is eyed with suspicion by many leading environmental NGOs when companies use it for promotional purposes.

Leading standards

The ISO series of environmental standards are the defacto, must-have standards in the global marketplace. As with other ISO standards they tend to be more important to global trade than to US domestic trade, where compliance standards are much stricter. As of 2007 there were at least 950,000 ISO 14001 certificates (and growing) issued in 175 countries around the world. Other EMS standards tend to be limited to specific sectors or product areas (e.g. Green Office) or very limited geographic regions (e.g. Hong Kong). A list of some of these on ekobai.com’s database is provided.

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