Successful Practices       of Environmental Management Systems       in Small and Medium-Size Enterprises       A North Am...
ACKNOWLEDGMENTSThis report was prepared by Tim Whitehouse, Head of the Law and                               Peer reviewer...
CONTENTS                                          1. Introduction   2          2. Defining Small and Medium-Size Enterpris...
1. INTRODUCTION    his report examines the use of environmental             1. designed with a strong business case in min...
on environmental management systems.Appendix A lists some useful web sites in addi-tion to those found as reference to thi...
2. DEFINING SMALL AND MEDIUM-SIZE                                                   ENTERPRISES AND ENVIRONMENTAL MANAGEME...
study prepared for the Organization for Economic            with its "Pollution Prevention Pays" program,                 ...
policy commitments. Figure 2.1 depicts the                   certification by accredited certificate bodies.2             ...
objectives and targets for achieving and main-            ples tend to be those tailored to a specifictaining compliance w...
Papa Plating’s EMS contains elements ofISO 14001 and the CEC’s "10 elements." TheEMS provides a sample action plan on wate...
3.ARE ENVIRONMENTAL MANAGEMENT SYSTEMS                       EFFECTIVE?                           ecent studies indicate t...
vania, implemented a EMS that resulted in the       In this project, 11 large companies in Guadala-                       ...
these gains very quickly." The project’s prelimi-                       nary findings indicate the following:             ...
4. THE BENEFITS AND COMMON CHARACTERISTICS                                                      OF SUCCESSFUL ENVIRONMENTA...
the volume and toxicity of waste generation.        the United States, which was cited in the Nation-                     ...
such as local agencies, investors and communi-       of the EMS. A key element of any management                          ...
5. DRIVERS AND BARRIERS TO EMS ADOPTION BY                          SMALL AND MEDIUM-SIZE ENTERPRISES                     ...
Mexico’s National Association of the Chemical Industry (Asociación Nacional dela Industria Química—ANIQ) was the first ass...
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
5200 ems report-en
Upcoming SlideShare
Loading in …5

5200 ems report-en


Published on

1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

5200 ems report-en

  1. 1. Successful Practices of Environmental Management Systems in Small and Medium-Size Enterprises A North American Perspective Commission for Environmental Cooperation
  2. 2. ACKNOWLEDGMENTSThis report was prepared by Tim Whitehouse, Head of the Law and Peer reviewers also provided extremely valuable commentsPolicy Program of the Secretariat of the Commission for and ideas during the development of this report. They providedEnvironmental Cooperation (CEC). Morgan Rider, member of the many insights into the issues faced by small and medium-size busi-environmental consulting firm Ecology and Environment, Jerry nesses in implementing environmental management systems andSpeir, an attorney practicing in New Orleans, Louisiana, and Dixon into the types of resources available to help these businessesThompson, professor of environmental science at the University of improve their environmental performance. These reviewers wereCalgary’s School of Environmental Design assisted in the design, Leonardo J. Cárdenas, Principal Consultores en Calidad Ambientalresearch and writing of this report. SA de CV; Raymond P. Côté, professor, School for Resource and The Secretariat is grateful to Environment Canada, Mexico’s Environmental Studies, Dalhousie University; Margarita Ferat Toscano,Federal Attorney for Environmental Protection ( Procuraduría environmental corporate manager, DESC SA de CV; Louise Millette,Federal de Protección al Ambiente) and the US Environmental director, Department of Civil, Geological and Mining Engineering,Protection Agency for their comments on this report. The views École Polytechnique de Montréal; David Ronald, executive director,expressed in this report are not necessarily those of the govern- Multistate Working Group; and Richard P. Wells, president,ments of Canada, Mexico or the United States. Lexington Group.The Commission for Environmental Cooperation (CEC) was established under the Commission for Environmental CooperationNorth American Agreement on Environmental Cooperation (NAAEC) to address envi- 393, rue St-Jacques Ouest, Bureau 200ronmental issues in North America from a continental perspective, with a pa rt i c u- Montréal (Québec) Canada H2Y 1N9lar focus on those arising in the context of liberalized trade. E-mail: http://www.cec.orgThis publication was prepared by the Secretariat of the CEC. The views containedherein do not necessarily reflect the views of the CEC, or the governments of Canada,Mexico or the United States of America. ISBN: 2-923358-29-5Reproduction of this document in whole or in part and in any form for educational or © Commission for Environmental Cooperation, 2005nonprofit purposes may be made without special permission from the CECSecretariat, provided acknowledgement of the source is made. The CEC would Legal Deposit-Bibliothèque nationale du Québec, 2005appreciate receiving a copy of any publication or material that uses this document as Legal Deposit-Bibliothèque nationale du Canada, 2005a source. Disponible en español - Disponible en français Design: Associés libres, Montreal December 2005 Printed in Canada on paper containing 100% post- consumer waste fiber.
  3. 3. CONTENTS 1. Introduction 2 2. Defining Small and Medium-Size Enterprises 4 and Environmental Management Systems 3. Are Environmental Management Systems Effective? 94. The Benefits and Common Characteristics of Successful 12 Environmental Management Systems 5. Drivers and Barriers to EMS Adoption by Small 15 and Medium-Size Enterprises 6. Technical Assistance and Outreach 18 7. Incentive Programs and Policies 24 8. Future Directions 27 Appendix A. Useful Web Sites 29 Appendix B. 10 Elements of an Environmental 30 Management System References 31
  4. 4. 1. INTRODUCTION his report examines the use of environmental 1. designed with a strong business case in mindT management systems (EMSs) in small andmedium-size enterprises (SMEs) in Canada, 2. managerial support and commitment of resourcesMexico and the United States. In doing so, it pro- 3. engaged employeesvides a North American perspective on success- 4. integrated into businessful practices and some of the issues faced by 5. clearly defined objectives and targetsSMEs in developing and implementing these sys- 6. continual monitoring and measurement.tems. It also offers some suggestions for contin-ued cooperation between the governments of Not all EMSs, however, are effective inCanada, Mexico and the United States on promot- improving environmental performance. Mosting EMSs. SMEs face few incentives and many difficulties Over the past decade, the three govern- in implementing environmental managementments have promoted the use of EMSs to help systems. The owner of a business must believecompanies improve their environmental per- that an EMS will create real tangible value forformance and move beyond compliance with the business. Yet most SMEs do not know whatthe law. The Commission for Environmental an EMS is and, if they do, how it could benefitCooperation (CEC) has served as a forum in their business. Even if they are familiar with thewhich the three governments could share their concept of an EMS, many smaller businessesexperiences, practices, and successes on the use lack the technical expertise and resourcesof EMSs in North America. In June 2000, for needed to develop and implement one.example, the CEC published Improving Envi- Although business needs may ultimatelyronmental Performance and Compliance: 10 determine whether an SME implements an EMS,Elements of Effective Environmental Manage- government or private sector technical assistancement Systems, which described those elements and outreach efforts are often crucial to provid-that the three governments agreed were impor- ing the conditions under which businesses—par-tant to address in implementing EMSs (CEC ticularly small and micro-businesses—are likely to2000). The CEC has also encouraged a North implement a successful EMS. Continued cooper-American dialogue on the use of environmental ation among the governments of Canada, Mexicomanagement systems through its support of and the United States could help improve theand participation in numerous workshops and delivery of sector-specific information and techni-forums, including most recently those of the cal assistance and specific advice on EMSNorth American Pollution Prevention Partner- methodologies to SMEs.ship, Mexico’s Pollution Prevention Roundtable,the Auditing Roundtable and the Canadian Organization of This ReportEnvironmental Auditing Association. The chapters that follow describe a North In recent years, the private sector has devel- American perspective on the use of environ-oped various types of EMSs for identifying and mental management systems in small and medi-managing the impacts that commercial, industrial um-size enterprises. The definitions of an EMSand service operations have on the environment. and a SME in Chapter 2 are followed by a closerAlthough the use of EMSs is becoming more look in Chapter 3 at the effectiveness of envi-common among larger companies, their use by ronmental management systems in improvingsmall and medium-size enterprises is less com- environmental performance. Chapters 4 and 5mon. then look at the benefits and characteristics of a A successful EMS can enhance efficiency successful EMS and the drivers and barriers toand lower costs, reduce resource use and waste, EMS adoption by small and medium-size busi-help to ensure compliance with regulatory nesses. Chapters 6 and 7 review the technicalrequirements, encourage employee involvement assistance and outreach, and the incentive pro-in environmental performance and improve rela- grams and policies in the three countries. Chap-tions with customers. In examining a variety of ter 8 concludes by examining areas for futureexperiences in North America, this report identi- cooperation by the three governments on EMSfies six common characteristics of successful EMSs promotion in North America. The two appen-adopted by small and medium-size enterprises: dices to the report provide general information2 E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M S
  5. 5. on environmental management systems.Appendix A lists some useful web sites in addi-tion to those found as reference to this text, andAppendix B presents the CEC’s "10 Elements ofEffective Environmental Management Systems." With the growing integration of the NorthAmerican economy under the North AmericanFree Trade Agreement (NAFTA), the CEC is in aunique position to step back and examine thedevelopment of EMS policies and programs inall three countries. Such an examination can helpthose promoting environmental managementsystems in Canada, Mexico and the UnitedStates to learn from the experiences of the othercountries and can help to inform and stimulatediscussion and critical comment among thoseassisting small and medium-size enterprises withenvironmental issues.3 A NORTH AMERICAN PER SPECTIVE
  6. 6. 2. DEFINING SMALL AND MEDIUM-SIZE ENTERPRISES AND ENVIRONMENTAL MANAGEMENT SYSTEMS mall and medium-size enterprises in North percent of their gross domestic product (GDP) S America vary widely in their impacts on the environment. An environmental management and over half of their private sector employment. In the manufacturing sector, SMEs generate 55 system offers the methodology a company percent of manufacturing employment in Canada, needs to identify and implement ways in which 66 percent in Mexico and 41 percent in the to improve the environment both inside and out- United States (OECD 2002). side a plant or business, from mere good house- Although most SMEs serve local markets, keeping steps to strategies to prevent pollution. they are increasingly operating as part of a glob- This chapter examines the various defini- al marketplace, purchasing products produced tions of small and medium-size enterprises and abroad, supplying multinational companies and some of the different types of environmental selling directly to overseas buyers. In NorthSmall and Medium-Size Enterprises? management systems in the three countries. America, SMEs play an important role in theThe threshold of 500 employees guides the Although the definition of a small and medium- market-driven coordination of production acrossclassification of small and medium-size enter- size enterprise varies from country to country, it the US-Mexico and US-Canada borders, espe-prises (SMEs) in Canada, Mexico and theUnited States. Environment Canada typically is useful to examine SMEs as a general category. cially in sectors such as automobile, telecommu-classifies enterprises with less than C$50 mil - These kinds of enterprises generally have fewer nications equipment, computer, electroniclion in annual revenues that are not wholly resources to address their environmental impacts products and textiles and apparel.owned subsidiaries as follows: less than 5employees, microenterprise; 5–49 employ- and are thought to be less likely to implement SMEs face widely differing environmentalees, small enterprise; 50–499 employees, EMSs than larger companies. They also do not, issues based on the economic sector, employeemedium-size enterprise (Environment by most definitions, have a parent company on base and jurisdiction in which they operate. TheCanada 2003). The medium-size category is not com - which to rely for assistance. Despite these limi- requirements, demands, pressures and issuesmonly used in the United States, and the US tations, SMEs can use the basic methods of they face will more often resemble those facedEnvironmental Protection Agency considers a implementing an EMS as described in this chap- by companies in their own economic sector,small business for research grant programs to ter to integrate environmental planning into their regardless of size, than those in other a for-profit organization with no more than500 employees that is not dominant in the everyday business practices. In addition, within the SME category differ-field of operation. For Performance Track ences often exist in the technical capabilities ofPurposes (see Chapter 7), a small business is What are Small and Medium-Size small and medium-size businesses, with medi-defined as a facility with fewer than 50 employ-ees. These facilities may be part of larger Enterprises? um-size business much more likely to haveorganizations. The US Small Business SMEs are found in the largest and most dynamic engineering expertise than small enterprises,Administration has devised sector-specific defi- sectors of the North American economy, rang- especially related to energy efficiency and con-nitions with both employee and revenue limits.See < ing from those that are pollution-intensive and servation.2005SBIRfactsheet.pdf> and resource-intensive, such as manufacturing and SMEs, even those in the retail sector, can<>. natural resource extraction, to those that are have significant impacts on the environment, In Mexico, Profepa follows a classification(by number of employees) established by the more environmentally benign, such as retail. They including those from nonregulated activitiesSecretary of Economy in 1999: often face unique environmental challenges that such as resource consumption, packaging and Industrial CommercialService are related to their size and their place in the methods of hazardous and nonhazardous wasteMicro 0–30 0–5 0–20 economy. (See Table 2.1) disposal. According to Environment CanadaSmall 31–100 6–20 21–50 The economic importance of SMEs in (2003), of the 2 million Canadian SMEs, theMedium 101–500 21–100 51–100 North America is significant. Over 98 percent of 400,000 most pollution-intensive are in the agri- businesses in Canada, Mexico and the United culture, primary and manufacturing sectors.1 AMexico’s National Institute of Statistics,Geography and Informatics Instituto Nacional States are small and medium-size Estadística Geografía e Informática— SMEs are found in all the economic sectors of 1. The primary sector includes activities such as fisheries, mining,INEGI) has more specific classifications. the three countries, producing approximately 40 forestry and oil and gas extraction. Table 2.1 Distribution of Employment in Manufacturing by Size Class Country 0–9 10–49 50–99 100–499 500+ Total Canada 4.1 17.8 8.8 24.2 45.0 100 Mexico 18.9 12.0 7.5 27.6 34.0 100 United States 3.6 4.1 16.0 17.4 58.9 100 Source: OECD 2002. 4 E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M S
  7. 7. study prepared for the Organization for Economic with its "Pollution Prevention Pays" program, Co-operation and Development (OECD) found and Dow, with its "Waste Reduction Always that SMEs in the United States are significant Pays" (WRAP) program. In the 1980s, EMS pro- contributors of pollution in three branches of grams largely focused on due diligence and manufacturing: chemicals, primary metals and compliance with laws and regulations as well as building materials (e.g., stone, clay and glass). ways to cut costs in disposing of wastes and The largest impacts from these SMEs were on treating effluents. Also in the 1980s, trade asso- biological oxygen demand (BOD) in water and ciations began to develop codes of environ- suspended particulates in air, followed by the mental practices, which approximated the release of toxic chemicals (OECD 2002). But definitions of environmental management sys- those statistics for the United States were devel- tems (Pacific Institute for Studies in Develop- oped in a study done specifically for OECD; ment, Environment, and Security 2000). generally, "comprehensive pollution or resource consumption statistics for SMEs do not exist, EMS Models making it difficult to determine their contribution Today, EMSs can range in complexity from sim-Total Quality Management to environmental degradation" (OECD 2002). ple reminders of regulatory deadlines at a singleMost systematic approaches to addressing facility to an elaborate, Internet-based, enter-performance issues derive from the work of What Is an Environmental Management prise-wide performance management systemW. Edward Deming, the US statistician who System? that tracks regulatory requirements, assignsis credited with dramatically improving theperformance of Japanese industry after World An environmental management system is a tool tasks, controls documentation and records, pro-War II with a system that has come to be used by a company to identify measure and vides training, and shares information across mul-known as Total Quality Management (TQM). manage the effects of its activities on the envi- tiple operations and facilities around the world.Deming also popularized the plan–do–check–act cycle that is at the root of all such ronment. An EMS sets out the company’s goals EMSs are most effective when they aresystems: identify and analyze the problem for environmental performance and a plan for part of normal business activities rather than(plan), develop and implement solutions (do), achieving those goals. Ideally, company man- treated as separate programs or initiatives.evaluate and measure the results (check), and agers will set goals in areas such as compliance Although businesses typically have many ele-fix the problems identified and incorporatethe lessons learned into a feedback loop that with environmental laws, minimization of risks ments of an EMS already in place, the EMS pro-begins the process anew (act). The feedback to human health and the environment, use of vides a systematic way to integrate those effortsloop involves all personnel and elements of an natural resources, and prevention and reduction and direct them toward company-establishedorganization and runs counter to traditionaltop-down "management by objective" of pollution. goals. The significant range and variations ofapproaches. Environmental management sys- The evolution of EMSs in North America EMSs can be attributed to the differencestems turn the TQM process to a specific con- can be traced to the 1970s and the pollution among organizations in size, activities, impacts,cern for reducing environmental impacts. prevention programs of companies such as 3M, regulatory requirements, corporate culture andSource: Welch 1998. Figure 2.1 BC Hydro’s Environmental Management System Environmental Responsibility Policy Management Review Planning • Identifying aspects, impacts and operational controls EMS Checking and Corrective Action • Indentifying legal and other • Monitoring and measuring requirements • Process improvement • Meeting objectives, targets • Records and environmental programs • EMS compliance audits Implementing and Operation • Defining training needs • Implementing training • Internal communication and reporting • External communication Source: Industry Canada, • Document control < • Contractors and suppliers incsr-rse.nsf/en/rs00122e.html>. 5 A NOR TH AMERICAN PER SPECTIVE
  8. 8. policy commitments. Figure 2.1 depicts the certification by accredited certificate bodies.2 EMS of BC (British Columbia) Hydro and is rep- The European Office of Crafts, Trades and resentative of the structure of many EMSs. Small and Medium-Sized Enterprises for Stan- dardisation (Le Bureau Européen de l’Artisant, The International Organization for et des Petites et Moyennes Enterprises pour la Standardization (ISO) 14001 Normalisation), better known by its acronym The most widely recognized model for an EMS NORMAPME, has formally asked the ISO to is the International Organization for Standard- "explore alternative ways to use the environ- ization (ISO) 14001 standard. This standard, mental management system standard ISO 14001 which is applicable to organizations of all types that are in line with their members’ limitations." and sizes, is based on five components: NORMAPME seeks changes that might include allowing an incremental implementation of ISO 1. An environmental policy that commits the 14001 or allowing organizations to be certified organization to "prevention of pollution," "con- in batches, sharing procedures and administra- tinual improvement" and compliance with "rele- tive costs. The ongoing revisions of ISO 14004 vant environmental legislation and regulations." are intended to simplify EMS requirements for 2. Planning to implement the environmental SMEs in order to facilitate implementation. ISO, policy, which entails identifying all of an organi- through its Sub-Committee 1 of Technical Com- zation’s interactions (activities, products or serv- mittee 207, has formed an ad hoc group to study ices) with the environment (its "environmental EMS penetration among small businesses, and a aspects") and designating the "significant" report is expected in September 2005.3 aspects and setting quantifiable objectives and targets for addressing those significant aspects. The Eco-Management and Audit Scheme 3. Implementation and operation, which Many European countries require large manufac- requires an organization to ensure the availabili- turing facilities to implement the Eco-ManagementISO 14001 Trends in North America ty of resources, define roles and responsibilities, and Audit Scheme (EMAS). The components ofAs of December 2003, the breakdown of develop documented procedures, emergency EMAS are similar to those of ISO 14001. However,North American certifications for ISO 14001 preparedness plans and ensure employee com- EMAS has two significant additions: a baselinewas Canada, 1,274; Mexico, 406; and theUnited States, 3,553 By contrast, in 1998 the petency, training and awareness. environmental assessment and a public environ-breakdown was Canada, 104; Mexico, 39; 4. Checking and corrective action to measure mental performance report. Many companiesand the United States 291. See and track the performance of the system against outside Europe have also chosen to implement<>. No specific its own goals and to evaluate compliance with the EMAS system or variations.numbers exist for SMEs, which are more the relevant laws and regulations. The organi-likely to use third-party registrars and zation must also identify, investigate and correct The CEC’s "10 Elements of Effective Environ-therefore are less likely to be reported any nonconformities. The organization must mental Management Systems"in the ISO system. ensure that internal audits are conducted. In June 2000, the Commission for Environmen- 5. Review of the EMS by top management "to tal Cooperation published the "10 Elements of ensure its continuing suitability, adequacy, and Effective Environmental Management Systems" effectiveness." (CEC 2000). The "10 elements" were negotiated by Canada, Mexico and the United States just The ISO standard focuses on conformance after the ISO 14001 standards were published with established policies, plans and procedures, and served as the first general policy statement but it does not specify requirements for environ- by the three governments on what they mental performance beyond compliance with the believed were important features of an EMS. relevant legislation. Organizations are, however, The "10 elements" are generic in nature and not free to set goals that exceed compliance specifically geared toward small and medium- requirements. size enterprises. Notably, they place greater Companies implementing ISO 14001 may emphasis on compliance with environmental choose to have their EMS certified. They can seek regulations than the ISO 14001 standard. Like third party certification from either accredited the ISO standard, the "10 elements" state that a certificate bodies (those recognized by a national company’s environmental policy should include accreditation body) or no accredited bodies. Most a provision for compliance with environmental firms seeking certification employ accredited requirements. But the "10 elements" go beyond bodies; these may be perceived on the market as the ISO in stating that an EMS should establish having greater credibility, although a firm that implements ISO 14001 solely for internal man- 2. For more on ISO certification, see <http://www. agement purposes (without expectation of ben- iso9000-14000/basics/general/ basics_5.html>. efits from regulators, customers or public 3. See < perception) may choose not to seek third party CatalogueDetail?CSNUMBER=31808>. 6 E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M S
  9. 9. objectives and targets for achieving and main- ples tend to be those tailored to a specifictaining compliance with environmental require- industry and designed with input from thements and a commitment to continuous industry itself. For example, the Texas Commis-improvement in environmental performance sion on Environmental Quality (TCEQ) developed(see Appendix B for the CEC’s "10 elements"). a sample EMS for small businesses in the metal finishing industry. (See Table 2.2) The EMS forA Sample EMS from the Metal Finishing the fictitious company, Papa Plating, covers allIndustry on-site operations, including metal finishing andVarious sample EMSs are available for small and processing activities, groundskeeping, officesmedium-size enterprises. The most useful sam- and waste disposal.Table 2.2 Selected Aspects of Sample EMS Addressing Water UsageForm 7: Environmental Management Action Plans Significant Environmental Aspects Water Use Goal Reduce the amount of water purchased by 50% Action Plan Analyze how water is used and what can be done to minimize water use Consider different potential rinsing methods Review Cycle Willie Scott will review every 6 monthsForm 8: EMS Work InstructionsSignificant Environmental Associated Job Work Instructions Aspects Functions Needed Responsible Person Yes – employees should Parts Rinsing monitor the drip time over Plating supervisor the various rinse tanks and withdraw the parts at the proper speed Water Use Yes – employees should rack parts to minimize Parts Racking solution dripping on other Plating supervisor partsForm 9: Alternatives Identification — Significant Environmental Aspect: Water Use Activity Current Practice Potential Alternatives Rinsing methods Dip rinsing Try spray rinses in the various processes to try to improve rinsing performance and decrease water consumption Water flow Rinse water is being Research the use of conductivity meters flowed at a high rate and/or flow restrictions during production Treatment Currently chemically treated Consider the use of reverse osmosis and/or ion and discharged to waste- exchange after the initial treatment and reuse water treatment facilities the treated effluent back in our process Rinse tank None Consider the use of air agitation in the rinse tanks to improve agitation the rinsing processSource: TCEQ7 A NOR TH AMERICAN PER SPECTIVE
  10. 10. Papa Plating’s EMS contains elements ofISO 14001 and the CEC’s "10 elements." TheEMS provides a sample action plan on wateruse, energy use, sludge generation and dispos-al, metal use and use of natural resources,organic emissions from a degreaser and humanexposure to toxic materials and chromium emis-sions. A look at the selected portions of an EMSregarding water aspects of the Papa PlatingsEMS usefully illustrates some of the specific ele-ments of an EMS. Papa Plating’s system is just one exampleof how to create an EMS. An environmentalmanagement system can be designed toaddress the needs of any size organization.Standards groups, trade associations and gov-ernments have all designed different types ofenvironmental management systems and pro-grams to help businesses improve environmen-tal performance by integrating environmentalplanning into everyday business processes.8 E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M S
  11. 11. 3.ARE ENVIRONMENTAL MANAGEMENT SYSTEMS EFFECTIVE? ecent studies indicate that not all environ- and assistance from their parent organizations, R mental management systems lead to improved environmental or business perform- but they occur in privately held and govern- ment facilities as well." The NDEMS study is ance. However, several projects and numerous inconclusive on the financial benefits of an case studies of successful EMS practices in EMS, but notes that benefits were "moderately small and medium-size enterprises support the impressive" for the facilities that realized them. proposition that an effectively designed EMS Thirty-two facilities reported quantified mone- can, under the right circumstances, significantly tary benefits from EMS adoption; the average help a company improve its environmental per- net benefit for those reporting a benefit through formance and bottom line. Because not all the first three years was $90,320. (NDEMS EMSs produce positive benefits, it is important 2003) to understand the potential benefits of an EMS, One study completed by the University of the common characteristics of successful EMSs, Sussex in July 2000 compared EMS use in EMAS the drivers and barriers to EMS implementation, and ISO systems in 280 European companies at and the programs available to help SMEs 430 production sites and found no statistically improve their performance. These subjects are significant relationship between the adoption of covered in the chapters that follow. a formal EMS and improved environmental per- formance. The companies included 9 computer Empirical Studies of EMSs companies, 58 electric power generators, 26 fer- Empirical studies of the performance of EMSs tilizer manufacturers, 90 pulp and paper produc- have only recently begun to emerge. One of the ers, 46 printers and 45 textile finishers.4 only studies in North America was conducted in Another study of electronic firms observedAn effectively the United States by the University of North that firms that adopted ISO 14001 were able to Carolina and the Environmental Law Institute catch up to industry best practices, especially ifdesigned EMS can, between 1997 and 2002. The National Database they produced significant toxic emissions on Environmental Management Systems (Russo 2000). A study conducted in the auto-under the right (NDEMS) study examined environmental per- motive supply sector before Ford and Generalcircumstances, formance data at 83 facilities over a five-year period. Ultimately, 30 facilities completed all five Motors required their suppliers to be ISO-certi- fied found minimal reductions after ISO 14001significantly help a years of the study. The participating facilities adoption. In terms of toxic releases and compli- ranged from large, publicly traded major manu- ance with regulatory requirements, environ-company to improve facturers and electric utilities to small businesses mental performance was about the same in such as auto parts suppliers and electroplaters facilities that had adopted EMSs under ISOits environmental and government organizations, including military 14001 and those that had not (Matthews 2001). bases and municipal water treatment plants.performance and Approximately 70 percent of the organizations Projects and Case Studies participating in the NDEMS study were part of a Although little empirical work exists on thebottom line larger business or government organization. impacts of EMS adoption, the literature and The final report of the study concluded case studies contain valuable information on that evidence from the pilot facilities "suggests how companies have used EMSs to improve that the introduction of an EMS can be expect- environmental and business performance. ed to be at least somewhat beneficial to the The US Environmental Protection environmental performance of most facilities, as Agency’s web site includes a case study index well as to their operating and management effi- with links to EMS success stories, several of ciencies, and in some cases to their regulatory them on SMEs.5 The EPA case studies generally compliance patterns. These results are more include an introduction to the facility, an likely for facilities that are subsidiaries of pub- overview of the planning and implementation of licly traded corporations, owing to their greater the EMS, a list of the benefits achieved, and a access to management capabilities, resources, description of the lessons learned. One case study, for example, explains how the Mott’s 4. See <>. Aspers plant, an apple juice and apple sauce 5. See <>. plant with 378 full-time employees in Pennsyl- 9 A NORTH AMERICAN PER SPECTIVE
  12. 12. vania, implemented a EMS that resulted in the In this project, 11 large companies in Guadala- production of less solid waste, reduced water jara, Mexico, signed a voluntary agreement with usage, increased recycling, savings on energy Mexico’s Ministry of Environment, Natural usage and wastewater treatment costs.6 Resources and Fisheries (Secretaría de Medio The Manual for Implementing EMS in Ambiente, Recursos Naturales y Pesca—Semar- SME, issued by the International Finance Cor- nap), now known as the Ministry of Environ- poration (IFC), also includes 15 case studies ment and Natural Resources (Secretaría de from facilities throughout the world, including Medio Ambiente y Recursos Naturales—Semar- the United States, on the actual benefits real- nat), to mentor small suppliers in implementing ized by small and medium-size businesses that EMSs. Within three months of completing the have implemented EMSs (IFC 2004). Some formal EMS training, over 80 percent of the 20 summaries of selected case studies from the IFC participating companies in the GEMP study had manual appear in Table 3.1. reduced their environmental releases, nearly 70 In Mexico, several projects have been percent had improved their work environment, undertaken to provide SMEs with technical and over 50 percent had improved their eco- assistance in implementing environmental man- nomic performance. agement systems. The Guadalajara Environ- Slightly less than 50 percent reported mental Management Pilot (GEMP), financed by improvements in waste handling, materials and the World Bank, studied the effects of EMS use energy efficiency, and compliance. The study in small and medium-size enterprises in Mexico. concludes that "gains from good housekeeping are potentially very large in the case of SMEs, 6. See <>. and … an EMS provides a means to captureTable 3.1 Selected EMS in SME Case Studies, WorldwideCompany Environmental Benefit Cost SavingsLeff-Marvins Cleaners Inc. Replaced its old equipment with new system to The company realized a net savings of recycle PERC (perchloroethylene). Eliminated US$1,400 per month with the new system. most VOC (volatile organic compound) emis - sions and also reduced purchase of PERC from 200 gallons per month to 40 gallons per month. Reduced hazardous waste stream from over 1,900 gallons of spent PERC per year to just 35 gallons of still residues per month.Company A Introduced more efficient ways of handling Waste elimination bills were cut by 55 percent. cardboard. Reduced its waste by 577 tons in Saved staff time. the first year.Mounstevens Ltd., a manufactur- Increased staff awareness and introduced care- Expected benefits include cutting waste bills ining and retail baker ful separation of waste. half and saving US$8,800 and 26 tons of waste.Company B Instituted a facility-wide municipal waste recy- Reduced disposal costs and gaenerated enough cling program, including metal, cardboard, revenue from marketing the recyclables to fund paper, wood, plastic and glass. More than 50 the program’s operating expenses, including wages percent of the municipal waste generated by and benefits, equipment operation and mainte - the company is now recycled. nance, utility costs and program improvements.Jamestown Paint Company Reduced its use of toluol by 95 percent and Information not available. xylol by 74 percent by developing water-based products to replace solvent-based coatings.A manufacturer of power steering Installed a green sand recycling system in its Reduction in the purchase of sand from 4 mil-gears, engine timing devices and foundry that puts recovered sand directly back lion pounds of sand per year to only 80,000power transmission boxes into the processing lines, recovering about 95 pounds per year, saving on sand purchase and percent of silica sand. disposal costs. 10 ENVIRONMENTAL M ANAGEMENT SYSTE MS
  13. 13. these gains very quickly." The project’s prelimi- nary findings indicate the following: s The ISO 14001 EMS model can be applied by SMEs without any modifications, with the exception of documentation. s Although the ISO 14001 EMS model is appro- priate for SMEs, most SMEs require substantial implementation support, particularly in the areas of simplified formats, discrete mile- stones, management systems thinking andWithin three months staff assistance.of completing the s The business culture of a firm is probably a more important factor than size in determin-formal EMS training, ing whether it can implement an EMS (World Bank 1998).over 80 percent of Because the GEMP study was undertaken in thethe 20 participating early stages of EMS implementation, the longer- term economic and environmental affects ofcompanies in the EMS implementation have not been analyzed. In another project, Proyecto AdministaciónGEMP study had Ambiental Monterrey (PAAM), undertaken inreduced their Monterrey, Nuevo Leon, large companies and the Multilateral Investment Fund of the Inter-environmental American Development Bank (IADB) supported an effort by the Instituto Protection Ambientalreleases, nearly 70 (IPA), a nongovernmental association of busi- nesses in Monterrey, to train 19 SMEs in the usepercent had improved and application of a modified environmental management system based on the ISO 14001their work environ- model. One of the project objectives was to determine whether EMSs were a useful tool inment, and over 50 improving SME environmental performance. Four companies could to point to specific envi-percent had ronmental and economic benefits of participating in the project. The project’s report noted that theimproved their eco- vast majority of the "root causes" of significant environmental problems identified by the firmsnomic performance. could to be addressed through changes in man- agement practices such as improved mainte- nance, improved procedures and better training. Relatively few of the solutions, according to the report, required significant capital expenditures (Lexington Group 2002). These studies and projects point the way to understanding the potential benefits of an EMS, while serving as a reminder that many obstacles and barriers to effective EMS imple- mentation exist. 11 A NORTH AM ERIC AN PERSPE CTIVE
  14. 14. 4. THE BENEFITS AND COMMON CHARACTERISTICS OF SUCCESSFUL ENVIRONMENTAL MANAGEMENT SYSTEMS esigning and implementing an EMS can longer generating hazardous waste (IFC 2004). D have tangible benefits for business enter- prises. A system can help a company to In another example, during the development of its EMS a company in Mexico, Químicos y enhance efficiency and minimize resource use Papeles del Norte, identified the use of exces- and waste, thereby reducing costs, help to sive rinse water as a significant environmentalLower Insurance Costs ensure compliance with regulatory require- aspect of its operations: the short productionThe most reliable financial quantification ofthe benefits of an environmental manage - ments, encourage employee involvement and runs of incompatible products required thement system is often lower insurance costs; improve relations with customers. Despite vari- equipment to be rinsed between products. Thecompanies that minimize risks may receive ation in the sophistication, scope and achieve- company implemented a more systematic pro-better insurance rates. The current case stud - ments of environmental management systems, duction programming to eliminate producties, however, provide only a few examples ofsmall and medium-size enterprises that real- successful EMSs share common characteristics changeovers and increased product storageized this benefit. In one example, DESC, a that are directly related to the benefits of an capacity. The results were more efficient utiliza-holding corporation in Mexico that owns sev - EMS. The benefits and the characteristics of tion of product and storage space, water savings,eral companies from different sectors, includ-ing the chemical sector, chose to expand its successful EMSs are described in this chapter. reduced product waste and improved labor uti-company-wide EMS to include outsourced lization (Lexington Group 2002).carriers. As part of this effort, suppliers, cus- The Benefits of Environmental Reduced liability is another financial criteriontomers, carriers, terminals and all who werein the supply chain were evaluated. During Management Systems that can be used to measure the success of anthe first two years, the main focus was the Various books, articles and studies have identi- EMS. A court or the government may view acarriers, who were audited under a specific fied the benefits an environmental management company with an EMS in place more favorablyrisk reduction program. By developing toolsto evaluate the risks along its transportation system can have for a company. In this section, when determining sanctions. For example, inroutes, DESC was able to achieve a substan- these benefits are categorized into five main Nova Scotia a judge dismissed a case against atial reduction in insurance fees. In turn, the areas that are most relevant to SMEs. pulp and paper mill for a small oil spill becausecarriers, once they implemented these prac- the company had an EMS in place that addressedtices across their operations, were able tonegotiate a reduction in their own insurance. Enhanced Efficiency and Lower Costs spill issues. The judge cited the company’s dueAccidental index was reduced from six acci - EMS manuals and case studies point most fre- diligence, stating "the supervisor who found thedents in 2001 to zero in 2004. Part of the quently to the financial benefits of implementing leak . . . knew the equipment, what to do toevaluation tools used came from theResponsible Care System of Mexico’s an environmental management system. Cost sav- stop the leak and did so immediately. . . . He hadNational Association of the Chemical Industry ings are often linked with consuming fewer been instructed on what to do in the event of(Asociación Nacional de la Industria resources and producing less waste, but savings any oil spill and he did that." R. v. Stora ForestQuímica—ANIQ) can also accrue from operational efficiencies, a Industries Ltd., [1993] N.S.J. No. 330 (N.S. Prov.Source: Margarita Ferat Toscano, corporate environ- higher level of management efficiency, reduced Ct. Jun 23, 1993) Chapter 7 describes how gov-mental manager, DESC, SA de CV, e-mail messageto Ignacio González, CEC, 4 october 2004. liabilities and shorter permitting times because of ernment policies encouraging EMS usage may better relations with regulators and communities. also affect penalty calculations. Operational efficiency usually involves replacing or renovating equipment and facilities, Reductions in Resource Use, Waste and as well as improving the production process Emissions design and paying closer attention to all inputs Many SMEs rate the success of their EMSs by and outputs. Such changes can reduce inputs monitoring the resources used and the waste (energy, water, etc.) or make operations more minimized, both of which are closely related to efficient, so that production is higher, faster or cost savings. Implementing an EMS allows a cheaper than before. Costs are compared pre- company to identify opportunities for improve- and post-EMS implementation. ment and to plan expenses. Key performance Even small changes in operational efficiency indicators include: the volume of raw materials, can produce significant results. During its EMS water and energy consumption, recycling rate, identification process, one company highlighted hazardous and nonhazardous waste generation in the IFC case studies (Figure 3.1) noticed that and the number and volume of releases. Organi- one of its large machines had a serious oil leak. zations use self-generated records, bills or data The leak was quickly repaired with a $5 gasket. from various utilities to measure consumption This easy, inexpensive action cut the amount of and waste pre- and post-EMS implementation. oil consumed by the company by half, resulting Both large corporations and small and in significant cost savings. In addition, the local medium-size enterprises use EMSs to reduce municipal authority reclassified the plant as no resource and energy consumption, as well as 12 E N V I R O N M E N TA L M A N A G E M E N T S Y S T E M S
  15. 15. the volume and toxicity of waste generation. the United States, which was cited in the Nation- Fourteen of 15 International Finance Corpora- al Database on Environmental Management Sys- tion case studies claim reduced waste, con- tems study, designed its EMS without employee sumption or toxicity as companies main goals in involvement, but then engaged employees in a EMS design and implementation, as well as the series of classes and meetings to introduce and primary criteria for evaluating EMS usefulness. reinforce EMS concepts. It also trained a dozen Elsewhere, in a survey of 580 manufacturing employees from the company to act as internalFourteen of 15 plants with more than 50 employees, Florida auditors. By contrast, another company cited in and Davison (2001) found that facilities with the NDEMS study, a 350-person manufacturingInternational Finance EMSs resoundingly pointed to recycling and plant, selected a wide range of employees, from reductions in air emissions and solid waste and managers to engineers to line operators, toCorporation case electricity use as evidence of facility-level make up the team responsible for creating the improvement. EMS. The company considered employeestudies claim reduced engagement in the design process as importantwaste, consumption Regulatory Compliance Another frequent indicator of a successful EMS as engagement in implementation.or toxicity as com- is achieving the goal of regulatory compliance. Improved Relations with Customers The criteria an organization selects to measure An EMS can improve relations with customers.panies’ main goals improvement can vary widely and depends on For an SME, improved relations usually means the company’s compliance history and regulato- larger purchasers in a dominant market position,in EMS design and ry burden. Management can use an EMS to such as Ford and GM, which require their sup- monitor the legal requirements and thereby plan pliers to be ISO 14001-certified. Smaller compa-implementation, as expenses associated with permitting, reporting nies, however, may also find that an EMS means and monitoring to ensure compliance with the wider appeal in a more local market. For exam-well as the primary law. Ideally reducing the frequency and severity ple, Framboisière de lEstrie, a berry farm in of violations and the associated costs. Quebec, was one of the first two farms with ISOcriteria for evaluat- An EMS can also help a company to pre- 14001 certification in North America (see side- pare for a more stringent application of environ- bar). It markets its environmental improvementsing EMS usefulness. mental regulations by the government. For and the positive economic benefits it has reaped example, the IFC case studies include the from ISO certification. example of a manufacturer of office furniture that eliminated methyl chloroform from its The Benefits and Common Characteristics cleaning and fastening processes and reduced of Successful Environmental Management the volume of emissions of volatile organic The success of an organization’s EMS can be compounds (VOCs) by converting to a powder- evaluated by monitoring the organization’s based coating system. These pollution preven- progress toward meeting its environment-relat- tion alternatives saved the company more than ed objectives and targets. Understanding the $1.1 million a year and gave the company a common characteristics of a successful EMS will return on its $1 million investment in less than help to ensure that the conditions needed to one year. This effort helped the company to support successful EMS design and implementa- comply more easily with increasingly stringent tion are present. environmental regulations and eliminated incin- eration fees for solid and liquid hazardous Designed with a Strong Business Case in Mind. wastes (IFC 2004). A successful EMS is developed with a strong business case in mind. Its purpose is to improve Employee Involvement the value of the company through risk reduc- Many companies recognize that the success of tion, revenue enhancement and cost reduction. an EMS depends on the participation of the full spectrum of employees. Indeed, employee Supported by Management and Commitment of engagement is at the heart of the Total Quality Resources. Unless the owner and upper man- Management (TQM) process on which EMS agement are committed to and supportive of the principles depend. Different types of employees EMS, it is extremely difficult to obtain the have different insights into environmental per- resources and cooperation needed to success- formance and suggestions for improvements. fully develop and implement an effective sys- Proper implementation of an EMS requires tem. The environmental policy, as endorsed and employee involvement and, if successful, cre- supported by management, defines the strate- ates as a benefit a sense of responsibility and gy of the organization and specifies the scope accomplishment among the employees. and commitments of the EMS to employees, A 90-person metal finishing company in customers and those outside the company, 13 A NORTH AMERIC AN PERSPE CTIVE
  16. 16. such as local agencies, investors and communi- of the EMS. A key element of any management ty groups. system is the opportunity it provides for learning from experience. Given the size, resources, and Engaged Employees. When employees at all variety of structures, as well as the obstacles levels of an organization are engaged in an faced by small and medium-size enterprises in EMS, it is more likely to succeed. Under a well- implementing environmental management sys-Improving the Value of the Raspberry designed EMS supported by management, indi- tems, it is important that those systems be flexi-Business vidual employees understand their roles and ble. Whenever possible, the goals andSituated at Johnville, near Lennoxville, responsibilities, receive adequate training and complexity of an EMS should be set by the com-Quebec, the Framboisière de l’Estrie stretches information, and are aware of the potential envi- pany itself. Those goals will necessarily be limit-over 11 hectares. Each year the farm growsand sells 43,000 kilograms of fruit and mar- ronmental impacts of their jobs. Typically, when ed by financial and economic considerations,kets associated products such as syrup. As a employees are engaged in such a program they including the profitability requirements of theresult of going through the ISO process, the enjoy a sense of ownership and possess the did away with all pesticide use andreplaced fertilizers with compost, maintained motivation to make a positive contribution towater consumption while increasing produc- the success of the program. * * *tion surface by 50 percent and reduced thecardboard content of its boxes by 50 percent, Integrated into Business. The most successful With these potential benefits, why aren’t morewhich reduced its purchase, transportationand storage costs. Overall, its production EMSs are not stand-alone projects or initiatives; SMEs designing and implementing successfulcosts decreased while yield increased. they are part of the standard decision-making EMSs? One reason is that, in most cases, the process of a business. They also are integrated driving forces are not strong enough to over- into all aspects of a company’s activities, prod- come the barriers. It is essential that those pro- ucts and services. In the NDEMS study, all com- moting an EMS to such enterprises understand panies that had adopted EMSs asserted that they the drivers and barriers faced by an SME. The saw a business value in improving their environ- driving forces or barriers that are most impor- mental performance. tant depend on the type of industry, the size of the business and its customers. Clearly Defined Objectives and Targets. Success-The Case of Salsa de La Laguna ful EMSs tend to set both abstract/overarchingIn adopting an environmental management and specific/measurable goals. An abstract/system, employee engagement and buy-in overarching goal may be "transparency," where-can be particularly important when a compa - as a specific/measurable goal may be "Haveny has a recognized brand name. TheGuadalajara Environmental Management Pilot Michael document the EMS design and imple-(GEMP) study recounts the case of Salsa de mentation process" or "Reduce air emissions byLa Laguna (SLL), a 30-person Mexican com - 35 percent by 2006." Abstract/overarchingpany that makes hot sauce and supplies oneof the largest tequila manufacturers in Jalisco goals allow for creativity and problem solving,with sangrita. because managers and employees are not The company faced environmental issues bound to follow certain codes. Specific andassociated with excessive noise, the dis -charge of raw materials, generation of exces - measurable goals ensure that the abstract issive waste, effluent discharges to a lake and translated into the feasible and achievable. Thisan excessive risk of fire. SLL developed a duality also places smaller objectives in the con-comprehensive EMS by mobilizing work text of larger goals.teams to analyze and respond to problems inindustrial hygiene, raw material use and con -trol of wastes, effluent discharges and noise. Continual Monitoring and Measurement. Moni-Among the ideas that they, together with toring and measurement are always cited inmanagement and a university consultant, hadwere sorting solid waste into reusable and EMS success stories, but companies go to wide-recyclable bins, cleaning up work spaces, ly different lengths to monitor and measureimproving the maintenance of company vehi- their progress.cles, reducing effluent discharges throughwater conservation, reducing the use of sani - After setting objectives and targets, a com-tizing chemicals, requiring suppliers to use pany should devise a means of monitoring andstrong containers in order to reduce waste measurement, preferably in quantifiable terms.and loss, and rinsing out drums of orangejuice to salvage concentrate. Some of these Are changes being implemented? Are the cor-measures resulted in savings of over rect policies being pursued? Is the amount ofUS$10,000 a year. This new environmental waste being reduced, and, if so, by how much?consciousness went beyond the factory. How much money is being saved through wasteAccording to the report on the project, someworkers "began wearing T-Shirts describing reduction? Are targets being met? Are moretheir new environmental concerns, to speak effective means of reducing waste available?at local schools, and to participate in environ- Should objectives and targets be revised? Ques-mental cleanup activities in the community"(World Bank 1998). tions like these should be asked daily by any company and not limited to the start-up period 14 ENVIRONMENTAL M ANAGE MENT SYSTE MS
  17. 17. 5. DRIVERS AND BARRIERS TO EMS ADOPTION BY SMALL AND MEDIUM-SIZE ENTERPRISES riving forces are factors that create or in an environmentally responsible way. The D change an organization’s environmental performance by pushing it to utilize environ- Canadian Federation of Independent Business (CFIB) survey of SMEs revealed that respon- mental management tools, including environ- dents in the most regulated industries—that is, mental management systems. The drivers are those in the primary and agricultural sectors— usually directly related to the benefits articulat- were more likely to adopt a formal environmen- ed in the case studies in Chapter 4: enhanced tal management system. Businesses in these efficiency and lower costs; reduced resource sectors were also subject to higher levels of cus- use, waste and emissions; regulatory compli- tomer requests for EMSs (CFIB 2001). ance; employee involvement and improved relationships with customers. Other drivers Driver - Customer Requirements might be motivators such as building relation- For a small and medium-size business, one tan- ships with government agencies, achieving gible value in creating and implementing an faster approval of projects, seeking fewer EMS is that such a step will meet the require- inspections and less scrutiny, creating a good ments of larger customers, or dominant buyers. public image and responding to pressures from Large multinational companies are increasingly internal stakeholders within a company. requiring their suppliers to adopt environmental Unlike large companies with a recognized management systems—a development that brand name and large public exposure, smaller directly affects SMEs. By choosing not to do businesses, especially suppliers to larger com- business with firms that do not adhere to theirThe owner of the panies, are unlikely to implement an EMS as a environmental policies, large multinational com- way enhance their reputation with the public. panies are able to greatly influence the environ-business must believe The owner of the business must believe that the mental impacts of their smaller suppliers and EMS will create real tangible value for the busi- distributors. DaimlerChrysler, Ford, Generalthat the EMS will ness. When a strong business case exists, the Motors and Sony, for example, now require ISO business owner’s active support for the design 14001 certification of their primary and second-create real tangible and implementation of the EMS is critical to ary suppliers. Large companies impose thesevalue for the business. help ensure its success. requirements for a variety of reasons. Among them are reduced risk, new European Union Driver - Economic Factors regulations restricting substances in consumer An EMS can, in many instances, create real tan- products, direct financial savings, improved gible value for a business in risk reduction, rev- relations with their customers or regulators and enue enhancement and cost reduction. A small recognition of responsibility for their environ- background survey conducted by the National mental impacts. Environmental Education and Training Founda- An example of the effect large corpora- tion (NEETF) in the preparation of its 2001 tions can have on their supply chain is illustrat- report "Standardizing Excellence: Working with ed by the Environmental Performance Smaller Businesses to Implement Environmental Agreement between the Canadian Automotive Management Systems" found that the top five Parts Manufacturers’ Association (APMA), Envi- factors likely to drive EMS adoption in smaller ronment Canada Ontario Region and Industry enterprises were Canada. The agreement, entered into in 2002, committed participating APMA member compa- 1. business benefits of an EMS nies to be ISO 14001–registered by December 2. tax breaks for EMS implementation 2003 and to take action to reduce emissions of 3. customer EMS purchasing requirements volatile organic compounds, carbon dioxide and for suppliers other substances. APMA members collectively 4. insurance benefits of an EMS account for over 90 percent of the $35 billion 5. a performance-based regulatory system. automotive parts industry production in Canada. This agreement was a response to the supply chain In heavily regulated sectors, an EMS may requirements of DaimlerChrysler, Ford Motor be a way to demonstrate to regulators, lenders, Company and General Motors. Specific targets insurers and buyers that a company is managed and timelines for this initiative are an aggregate 15 A NORTH AMERIC AN PERSPE CTIV E
  18. 18. Mexico’s National Association of the Chemical Industry (Asociación Nacional dela Industria Química—ANIQ) was the first association to design its ResponsibleCare program as an environmental health and safety management system(Sistema de Administración de Responsabilidad Integral—SARI). reduction of 20 percent in VOCs and 3 percent for becoming a member of ANIQ. Members must in carbon dioxide and CEPA toxic substance commit themselves is to actively participating in substances (where applicable) by 2007.7 assistance activities designed to support the A recent pilot project by the World Envi- Responsible Care program in member SMEs. ronment Center (WEC) illustrates this trend. The Responsible Care had a strong impact on WEC is a not-for-profit organization composed the decision by the National Association of of many large multinational corporations. The Chemical Distributors (NACD) to develop an Center’s Supply Chain Management Partnership environmental code of its own (the NACD has promotes the adoption of improved environ- members in Canada and the United States, and mental management techiniques and cleaner many of its members are small businesses). The production programs among companies that NACD code is based on Responsible Care, but supply WEC member companies. The WEC is is stronger in several respects; it requires third- implementing pilot projects with multinationals party verification of members’ performance, as and a select number of their suppliers in Mexico, well as health, safety, and security, and has a Brazil and China (where the project is in the history of suspending and terminating members planning stage). In Mexico, the project involves for noncompliance (Nash 2000). Janssen-Cilag, an operating subsidiary of John- The Environmental Commitment and son & Johnson that produces drugs for clients Responsibility program of the Canadian Electric- around the world, and Alcoa Fujikur, whose ity Association (CEA), which counts small and lines of business include automotive and elec- medium-size businesses among its members, tronic distribution systems and fiber-optic cable. stipulates that adoption of an ISO 14001–con- sistent EMS is a condition of membership. Driver - Trade Association Requirements Under the Environmental Commitment and Some trade associations require their members Responsibility program, a verification team visits to have an environmental management system a selected number of utilities each year to deter-The Importance of the Business Owner in place or to adhere to environmental codes of mine whether the EMS implemented satisfiesFor small and medium-size enterprises, a cen- conduct. For example, national chemical associ- the program’s requirements.tral factor in the implementation of an envi-ronmental management system is the ations in 52 countries run Responsible Care® For SMEs, market forces are particularlyleadership of the top manager in pushing for programs. Under Responsible Care, member important. This is especially true in Mexico,continual improvement. Observers have companies must commit to adopting a set of which has a large, informal economy and whosenoted that a commitment to achieving envi-ronmental improvements is a far bigger factor guiding principles, codes, guidelines and check- smaller businesses may be subject to fewer reg-in achieving environment results than merely lists on health, safety and environmental matters, ulatory pressures. A recent Inter-Americanhaving an EMS in place; an EMS just makes a and to developing indicators and verification Development Bank study of ISO 9000, and to acompany be able to achieve these improve-ments. In fact, a Canadian Federation of Inde- procedures. They must communicate their "good lesser degree ISO 14001, in certain areas ofpendent Business (CFIB) survey found that faith efforts" to implement the codes to employ- Latin America, including Nuevo León in Mexico,for 87 percent of respondents the personal ees and stakeholders.8 found that a key determinant of the quality ofviews of owners were the primary motivation Mexico’s National Association of the the environmental management system was thefor improved environmental performance(CFIB 2001). Chemical Industry (Asociacion Nacional de la extent to which management demanded the The Guadalajara Environmental Manage- Industria Quimica—ANIQ) was the first associa- system (IADB 2004). However, despite thesement Pilot (GEMP) and Proyecto Adminis- tion to design its Responsible Care program as market forces, for most SMEs the barriers totración Ambiental Monterrey (PAAM) studieshighlight the importance of manager support an environmental health and safety management EMS adoption outweigh the drivers.for employee involvement in the EMS process. system (Sistema de Administracion de Respons-Those managers who enthusiastically adopted abilidad Integral—SARI). It incorporates elements Barriers to EMS AdoptionEMS concepts and who worked with theiremployees achieved successful EMS imple- of ISO 14001 and fulfills other requirements of Barriers are factors that hamper and can evenmentation during the study time period, different known management systems related to bring to an end the design, implementation andwhereas those managers who did not with environmental, health and safety issues. Adoption operation of an environmental management sys-their employees failed. A manager who seesan economic benefit in EMS implementation of the Responsible Care program is a condition tem. Even when driving forces exist, SMEs mayand actively supports its design and develop- face imposing barriers when designing and 7. B. Brad Cummings, manager, Pollution Prevention andment is a critical factor in EMS implementation Innovative Technologies, Environment Canada Ontario Region, implementing an EMS that larger companies are(Lexington Group 2002). e-mail message to Tim Whitehouse, CEC, January 28, 2005. less likely to face. A Lack of knowledge about 8. See <>. and awareness of environmental management 16 ENVIRONMENTAL MANAGE MENT SYSTEMS