Although still in its infancy, the ISO 14000 series of environmental management standards has affected thousands of companies around the world. In December 1997, after 14 months in final publication, a reported 2,400 organizations internationally had registered to the ISO 14001 environmental management system standard.
Industry powerhouses such as Ford, Lockheed Martin, Lucent Technologies and Matsushita continue to lead the United States in sheer numbers of single ISO 14000 registrations. Recently, IBM's corporate headquarters and 11 of the company's 28 manufacturing facilities achieved registration under a single certificate. IBM intends to bring the other 17 facilities under the single registration before the end of 1998.
ISO 14000 also has captured the attention of at least one public official. Last October, New York State Attorney General Dennis Vacco called on Brookhaven National Laboratories, one of the Department of Energy's key nuclear facilities, to implement an ISO 14001-type environmental management system before he would recommend reopening the site for business. After a 15-month investigation following Brookhaven's release of tritium-contaminated water from the lab's sewage treatment plant into the Peconic River, Vacco's office determined that the laboratory needs a structured environmental management program in place to reduce the possibility of future releases.
Perhaps the broadest exposure, albeit negative, that ISO 14000 received in 1997 was through the nationally syndicated cartoon "Dilbert." In successive strips, Dilbert creator Scott Adams portrays ISO 14000 as an expensive, resource-intensive endeavor that amounts to nothing more than a rubber stamp of approval. When Dilbert asks his pointy-headed boss the difference between ISO 14000 and ISO 9000 quality management system standards, Dilbert's boss responds with laughter, "Oh, about $6,000." Unfortunately, this attitude, gained primarily through negative experiences with ISO 9000, continues to prevail throughout several U.S. industry segments.
A November 1997 United States-Asia Environmental Partnership report seems to reinforce this attitude. Organizations seeking to improve their customized EMSs are finding value in certain aspects of ISO 14001, ranging from audit criteria to documentation control, according to the report. However, several well-known Fortune 500 companies, including Monsanto, Compaq, John Deere, Georgia Pacific and General Motors, see no business benefit for third-party registration for their U.S. facilities, concludes the report. Each will continue to implement the standard's value-added elements without committing the company to registration, according to the report's executive summary.
With a few notable exceptions, interest and acceptance of ISO 14001 appears to be growing very rapidly in both the public and private sectors. The drivers to implement and/or register an EMS system may come from commercial/trade pressures; regulatory incentives; or a desire to reduce environmental risks, improve community relations or lower operating costs. In many cases, a number of these factors are at play and can vary by country or world region.
In the United States, representatives from several federal agencies and more than 15 states are working through various initiatives to determine if and how ISO 14001 could be integrated into the regulatory enforcement structure. While it may be years before the U.S. Environmental Protection Agency formally allows states to use ISO 14001 in creative approaches, several states, including New Hampshire, Pennsylvania, California, Wisconsin and North Carolina, are working closely with industry to foster a new relationship through ISO 14001 implementation and registration.
Government bodies at the federal, state and local levels are sponsoring a variety of projects to ascertain the overall benefits of EMSs. Some of these efforts include:
ISO 14000 Multistate Working Group -- This group includes 10 state regulatory bodies that are testing the benefits of an EMS. They are trying to develop a coherent and uniform approach for state agencies to integrate ISO 14001 into state programs. They plan to develop a publicly available database to store EMS performance information gained through pilot project initiatives.
Federal Inter-agency Working Group -- This group, comprised of 15 federal agencies, is developing a uniform policy and approach to ISO 14001 across all federal agencies. Many of them have formed internal working groups and are conducting pilot projects.
U.S. EPA ISO 14001 Policy Group -- This internal EPA group is developing proposals to promote ISO 14001's role in furthering compliance and enforcement programs.
U.S. EPA sponsorship of state and municipal implementation of ISO 14001 -- The EPA has allocated funds for state and municipal pilot programs to test the applicability of ISO 14001 to state and local governments' environmental activities and challenges.
Active implementation of ISO 14000 by various U.S. Department of Energy facilities -- All levels of the DOE are evaluating ISO 14000 standards. A policy statement supporting the standards currently is circulating at headquarters for review. Several sites are conforming to ISO 14001, and three DOE laboratories achieved formal registration in 1997. Several other laboratories are expected to apply for registration during the next two years.
U.S. Department of Defense activities. The ISO 14000 series is also being evaluated at all levels and by all services within the DoD. Pilot projects conducted by the Navy, Air Force, Marines and Army are in various stages of implementation. Working groups are evaluating the standard's use and potential impact and are setting guidelines for pilot project analysis.
Prosecutorial and sentencing discretion -- Under existing U.S. Department of Justice and EPA guidelines, organizations can negotiate for both prosecutorial and sentencing flexibility if they have implemented ISO 14001.
The private sector
Formal recognition of ISO 14001 in the private sector may be lagging when compared to the immense activity taking place in the public sector, but that probably will change by the end of 1998. As of December 19, 1997, there were 85 ISO 14001-registered facilities in the United States. However, an estimated 2,500 actually are implementing the standard. Registration numbers in the United States are low compared with Asia and Europe but higher than some experts originally expected. The number of registered U.S. companies is expected to increase rapidly during the next five years, when the standard's benefits become more apparent. Experts predict that more than 20,000 domestic facilities will become registered to ISO 14001 by the end of 2001.
Most large companies are implementing ISO 14001 but aren't pursuing third-party registration until regulators determine how the standard will be used in the regulatory context. While evidence of commercial advantage is growing, it isn't yet obvious that meeting ISO 14001 requirements will ever become a necessity for trade. Also, U.S. firms already have well-established regulatory compliance systems and are unsure what benefits they will get from an additional layer of environmental responsibility. Finally, some companies hesitate to invest resources for what they perceive as a bureaucratic exercise requiring more paperwork and red tape without demonstrated payback.
Despite these obvious hurdles and doubts, multinational companies such as IBM, Lockheed Martin, United Technologies, 3M, Ford and Digital Equipment Corp. have declared their intentions to continue to register facilities in the United States. While it's too early to determine any financial benefits directly related to implementing ISO 14001, these organizations see several reasons for implementing and registering to the standard, including:
Recognition -- Some organizations simply want to be recognized for their leadership in environmental protection, either for commercial or regulatory reasons. In some cases, organizations want to mend fences with neighbors, community groups and other stakeholders.
Bottom-line benefits -- There is increasing understanding that EMSs address organizational inefficiencies and waste. These systems' greatest benefits come from savings and increased operational productivity.
Trade -- ISO 14001 is emerging as an additional requirement for trade and commerce. Many overseas organizations, particularly in Asia, are obtaining registration status. While there is more skepticism on this point in the United States, many organizations also aren't taking chances and have begun implementing the standard.
Regulatory -- While current U.S. environmental regulations remain inflexible, many organizations are betting that the environmental benefits from implementing the standard will create a compelling case for such flexibility. Many believe it is advantageous to get ahead of that curve now.
Financial sector -- Several insurance firms and financial institutions are considering ISO 14001 registration in the context of reduced insurance premiums and access to capital. Already, a few European banks are providing lower-cost loans to those organizations with a recognized, registered EMS in place.
The strongest industrial advocacy for ISO 14001 comes from the automotive and electronics sectors, followed closely by chemical, pharmaceutical, aerospace, food and beverage, and petroleum. This is a worldwide phenomenon and may be linked to trade considerations or other dynamics within those industries.
Initial data from companies show that it takes between 12 and 14 months to fully implement ISO 14001's 62 elements. Companies with an ISO 9000 program in place apparently require less implementation time than those without a formal quality management system. Available data has revealed one rule of thumb: Total implementation time can usually be estimated as one workday per employee.
A recent European survey conducted by the Austrian government found that companies typically see a complete payback for implementing an EMS in only 14 months. Most of the payback is ascribed to reduced operating costs, including savings in materials, pollution abatement and waste disposal. Implementation costs depend on an organization's size and can range from $20,000 for a firm with 20 or fewer employees to $250,000 or higher for a firm with more than 500 employees. About half of these costs are attributable to internal employee time allocated to training, writing procedures and otherwise participating in defining and setting parameters for the EMS.
In some companies, internal costs can represent as much as 90 percent of the total implementation expense. External costs normally are allocated to training, consultants and registration. Typically, consultant costs are three to five times that of registration. All these figures are preliminary because they are based on the first round of implementations. As time passes, there will be more test cases and experiences upon which to base averages.
Most ISO 14000 activities and reports focus on the ISO 14001 EMS specification standard, but that could change later this year when the first of the ISO 14020 series of labeling standards are published. Already, companies are using the ISO 14010 series of auditing guidelines to develop or enhance their internal environmental auditing programs.
Before the end of 1998 and into 1999, the environmental performance evaluation and life-cycle assessment standards will play key roles in organizations' environmental programs.
The ISO 14031 environmental performance evaluation standard should be a valuable tool for organizations to measure and analyze their internal environmental performance. The ISO 14040 series life cycle assessment standards will help companies incorporate environmental product-related considerations into manufacturing and disposal processes. Additionally, ISO 14000 guidance standards are being developed for site assessments and for standards writers to incorporate environmental considerations into future product- oriented standards.
ISO 14001 acceptance in the global market is proceeding as well as anyone could reasonably have expected. As the results of various pilots and case studies become available, new developments in the regulatory and public policy areas will occur. Until then, many organizations will continue to implement ISO 14000 for bottom-line and commercial advantages.
There have been no efforts to make ISO 14001 a regulatory requirement, and none is expected in the coming years. Regulatory bodies have understood that the best results from ISO 14000 will occur only if it remains a voluntary program. At this time, no legislative initiatives are warranted because there is insufficient knowledge and documentation on ISO 14001's expected benefits.
The environmental community generally is still skeptical of voluntary initiatives and are waiting for results that warrant changes to existing regulatory schemes. Meanwhile, U.S. industry is helping to marshal the data that can provide the basis for sound public policy initiatives.
The ISO 14000 series of standards has caught the interest and imagination of business people, regulators and interested citizens the world over -- yet another indicator of the continuing concern and commitment to protect and improve the natural environment in which we all live.
About the authors
Joe Cascio is vice president for Environmental Management Systems for the Global Environment & Technology Foundation and chairman of the U.S. Technical Advisory Group to ISO Technical Committee 207, which is developing international management standards. His e-mail address is email@example.com.
Gregory J. Hale is program manager for the Global Environment & Technology Foundation's daily-updated ISO 14000 virtual community Web site located at www.iso14000.net. GETF is a not-for-profit corporation dedicated to fostering innovation by uniting environment, technology and enterprise to encourage sustainable practices.
Interested readers may contact Hale at GETF, 7010 Little River Turnpike, Suite 300, Annandale, VA 22003; telephone (703) 750-6401; fax (703) 750-5438; e-mail: firstname.lastname@example.org