SO 14001 is an international standard for environmental management systems that was introduced in September 1996. It has gained wide recognition among businesses, much like its sister standard on quality management systems, ISO 9000. As a result, managers in almost every organization will evaluate whether the organization should become ISO 14001 certified. However, most analyses of ISO 14001 that are intended to guide managers in their evaluation have focused on the merits of ISO 14001, such as improved competitiveness, management control, and regulatory compliance. Very few articles provide a balanced picture of the costs and benefits of ISO 14001—including the conditions under which adoption will be most effective. This article redresses this gap by providing an analysis of not only why firms may choose to certify based on economic and institutional considerations, but also, when certification might be appropriate based on the firm’s context.
The International Organization for Standardization (ISO) developed the ISO 14000 series of standards based on the need expressed at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro in 1992 for improved environmental quality. The Geneva-based ISO had achieved considerable success in motivating organizations to systematically address and improve product and service quality with the ISO 9000 series of standards. The UNCED envisioned a similar set of voluntary standards to encourage the systematic improvement of environmental quality. In September 1996, the first of the ISO 14000 series of standards, ISO 14001, was issued.
ISO 14001 sets the criteria for an environmental management system (EMS). An EMS dictates requirements for the organization’s structure, responsibilities, practices, procedures, processes and resources, so that responsible corporate environmental management is institutionalized in the organization. Currently there are several certifiable EMSs, including a British standard (BS 7750), European standard (EMAS), a worldwide standard (ISO 14001), and several industry specific standards such as Responsible Care designed by the American Chemistry Council. ISO 14001 has the widest geographical and industry coverage of any EMS certification system. Generally, the wider the application of the standard, the more flexible and less stringent its requirements. For example, EMAS requires that the environmental policy and programs be made public, whereas ISO 14001 only requires disclosure of the firm’s environmental policy.
A firm has a number of choices as it approaches the ISO 14001 decision: it may choose to certify its EMS through an independent agent; it may choose to self declare its adherence to ISO 14001; or, it may pick and choose only certain elements of an ISO 14001 EMS. In this paper, we focus on firms that have been ISO 14001 certified by an accredited registrar. Like many ISO standards, ISO 14001 is voluntary; there are no legal requirements to certify. Also, ISO 14001 does not set performance standards. Instead, ISO 14001 focuses on management processes rather than specific environmental outcomes. If the firm meets the management system requirements dictated by the standard, then it can register its conformance with a third party. Either the entire organization or specific facilities, such as manufacturing plants or operating facilities, can be certified.
An ISO 14001 certification is based on the principles of continual improvement: scope, plan, implement, check, and correct. The first step in setting up such a system requires that a firm identify all its “environmental aspects,” which are defined as interactions between the firm and the environment, and the pertinent environmental regulations. The firm must inventory all the products and processes that interface with the natural environment. In the second major step, the firm develops a plan to mitigate its “environmental impacts,” which are defined as changes that occur because of the environmental aspects. This requires that the firm develop an environmental policy, set goals and targets, delegate responsibility for handling the environmental management system, set up documentation processes, and change its organizational structures and systems so that the policy can be enforced and the goals and targets met. The third step requires that the firm implement its policy and work towards its goals and objectives. That means that the EMS must be communicated, employees trained and empowered, and procedures documented. Once completed, the firm’s actual environmental impacts must be identified and any nonconformance with the goals must be addressed. The fifth and final step requires that the firm assess the EMS through a management review process and make any changes deemed necessary. The firm now has an opportunity to re-evaluate its systems and structures, as well as its goals, objectives, and policy, thereby permitting continual improvement.
