In recent years, it has been observed that companies tend to adopt several procedures that use the environment to enhance their competitiveness. If the environment was initially considered to be a cost taken on by companies, they nowadays use instruments that, while protecting the environment, improve their efficiency. One of the main tools used in economic policy has been the implementation of an EMS.
We can define an EMS as “the part of the overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes and resources for developing, implementing, achieving, reviewing, and maintaining the environmental policy” (UNE-EN ISO 14001, 1996, article 3). That is to say, its purpose consists of putting into practice the environmental policies of the respective organization. Therefore, this system should know and value both the environmental effects of the activities, products and services of the organization, and those effects which would take place due to incidents, accidents and emergency situations.
In the scientific literature, we can find several studies describing the costs and benefits of EMS, both regarding companies and very specific cases (Bell, 1997; Sheldon, 1997; Dowie et al., 1998; Steger, 2000; Ammenberg et al., 2001; Brio and Junquera, 2001; Fryxell and Szeto, 2002; Hillary, 2002; Khanna and Anton, 2002; Kwon et al., 2002; Reith and Guidry, 2003; Hillary, 2004; Zobel and Burman, 2004; Peng, 2005) and the system itself (Johnson, 1997; Lamprecht, 1997; Roberts and Robinson, 1998; Baron, 1999; Jonquières, 1999; González, 1999; Seoánez and Angulo, 1999; Block and Marash, 2000; Woodside and Aurrichio, 2000).
On the basis of the positive experience that EMS has provided companies, its application has been extended to other similar organizations, just as quality management systems were in the past. That is, although they arose as tools of economic policy, they are presently used by public administrations with the aim of improving their efficiency and their relationships with citizens (clients).
This is the reason why EMS has been moved from the private sector to the public administration, becoming an economic policy instrument that allows one to achieve environmental objectives. In the case of a local administration, and since the City Council represents the combined actions of its inhabitants, the use of a tool of this nature would imply some additional environmental respect within the economic relationships of this area.
Yet, it should be remarked that the EMS does not necessarily, in itself, guarantee environmental protection or enhancement. It is a tool that allows the continual improvement of the environmental behavior and performance. It is not a static process but dynamic: it is a process of continuous improvement in which the environmental impacts are studied in any situation (normal, abnormal and emergency conditions).
When an EMS is implemented by a private company, financial institution, a City Council or whatever, some advantages are obtained from both the economic and environmental points of view. Nevertheless, differences exist between industrial schemes or companies and local authorities. We want to emphasize five aspects in which the implementation of an EMS is different in a company and a local administration. Firstly, in the case of firms, the economic advantages can be very easily perceived, since competitiveness is increased as a consequence of the lower consumption of raw materials, the elimination of sanctions, the improvement of their own image, etc.
However, when an EMS is implemented by a City Council, benefits do not seem to be so clear (Lozano, 2003). Short and medium-term expenses increase since it is necessary to follow certain stages (environmental revisions, impacts corrections, environmental certifications, etc.) to put a sustainable development model into practice. As to the revenues or benefits obtained when acquiring this commitment of continuous improvement of the environment, the results appear to be long-term and sometimes rather of a social nature than of economic profitability. In this case, and contrary to what happens in the private sector, there is no market competition for a certain product. We could indirectly observe a sort of parallelism with the benefits provided by services.
Secondly, we found a reason that would explain this difference in the type of effects generated in the environment. The companies are especially concerned about the control of production activities (contaminating emissions, solid waste, energy consumption, etc.) with direct effects on the environment. Even though the local authorities also have this type of effect, most are indirect because they come from the providing of services (Sheldon, 1997).
Thirdly, in a local administration, the decision to implement an EMS is taken by the ruling political group, moved or not by the citizen pressure. In the case of companies it is the market, or rather the clients with their purchase decisions, which is in charge of awarding environment-friendly companies (an EMS is a proof of this) and of penalizing polluting firms.
On the other hand, when a firm implements an EMS, the benefits extend to its clients and in some cases to the suppliers. Nevertheless, the implementation of the EMS in the activities that the City Council manages has economic (employment opportunities), environmental (sustainable resource use) and social (a better quality of life) consequences that go beyond the City Council: spillover effects take place in the totality of the municipality.
Lastly, it can be seen that the clients can influence in the short-term the environmental behavior of companies: from a great variety of products they can choose the most environment-friendly. This way, the companies are forced to improve their environmental behavior in the short-term if they want to avoid the risk of being expelled from the market. Nonetheless, if the citizens are not in agreement with the environmental policy of the City Council they have just two options: to vote for another political party in the following elections or to leave the municipality. In both cases their capacity of choice is much smaller and in the mid-term (Lozano, 2003).
Within a competitive economic framework, such as we have nowadays, where qualitative features are becoming more relevant (Townroe, 1972; Richardson, 1986; Chapman and Walker, 1988; Porter, 1991; Maccormack et al., 1995; Galán et al., 1998), the implementation and maintenance of an EMS by a City Council implies a potential intangible asset provided by the local economy for the companies to take advantage of. Therefore, environmental protection becomes a business opportunity that favors ecological agriculture, the attraction of industries that respect the environment, the growth of rural tourism and all kinds of activities which combine economic and environmental components.
Hence, if a City Council not only looks for economic development but also for sustainable development, with a maximum respect of the environment when providing its own services, it is likely that both residents will stay longer due to the forthcoming new work possibilities and new residents will arrive and new sustainable economic activities from the surroundings will arise, e.g., rural tourism. Everything will turn into a source of new revenues (Lozano, 2003).
Although there already exist some interesting studies on the application of audits to municipalities (HMSO, 1993; Barton and Bruder, 1995; Sheldon, 1997; Aall, 1999; Hillary, 2002), we studied the first European corporation to adopt an EMS for its municipal activities, according to the ISO 14001 Standard and certified by the Spanish Association of Normalization and Certification (Asociación Española de Normalización y Certificación, AENOR)1: the City Council of Ohanes. We began to study the process of implementation and maintenance of the EMS 1 year after obtaining the certification.
The authors have analyzed the contributions of the EMS to the City Council and the municipality, carrying out a strengths, weaknesses, opportunities and threats (SWOT) analysis and a study of the costs and benefits derived from the EMS. As a result, our analysis studies the “market innovator” in the terminology of Schumpeter (Schumpeter, 1934), so that public administration “followers” can learn from this case. A proof of the local administration's interest in implementing EMS in Spain is the publishing of the norm UNE-150009 EX (UNE-150009 EX, 2000) adapting the ISO 14001 Standard to local entities.
This paper is divided into five sections. The characteristics of the EMS implemented by the Ohanes City Council and certified by AENOR are described in Section 2. Section 3 presents the SWOT analysis of the municipality of Ohanes done by the authors. In Section 4, we have investigated the contributions of the EMS to the municipality comparing the costs and benefits of implementing the EMS. Finally, the Conclusion is in Section 5.
