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  1. 1. Guidance On The Evaluation Of Pilot Projects Evaluating The Environmental, Economic, And Compliance Performance Of Organizations Implementing ISO 14001 Environmental Management Systems Table Of Contents I INTRODUCTION Background Purpose and Description of the Matrix EMS Project Evaluation Categories II. EMS PILOT PROJECT EVALUATION MATRIX Matrix 1: Environmental Performance Matrix 2: Management Process Matrix 3: Stakeholder Confidence III. REFERENCE INFORMATION for MATRICES 1, 2, AND 3 Needs Definitions Management Framework Pollution Prevention Cost/Benefit Stakeholder Confidence I 1
  2. 2. I. INTRODUCTION Background Just as the price of freedom is eternal vigilance, the cost of continual environmental improvement may be the constant need to balance regulation, resources and voluntary initiatives. State and Federal Agencies are testing ways to achieve environmental gains through more effective, less costly compliance and through promotion of pollution prevention methods and technologies. There are efforts in all sectors to address both resource and environmental performance issues which face the regulator and the regulated alike. The ISO 14000 Environmental Management Standards series, developed within the International Organization for Standardization, may prove to be a helpful tool for focusing resources and performance issues. The principal document of this series, ISO 14001, Environmental Management Systems (EMS), is a framework for implementing an organization’s environmental policy and meeting its EMS objectives. Compliance and prevention are specifically mentioned as two required policy elements which the 14001 system must address. Measuring the impact of a 14001 EMS on the actual environmental performance of an organization is the subject of pilot projects in Federal and state agencies. A number of states are interested in coordinating the implementation and data collection/analysis of their ISO 14001 pilot projects. The group’s goal is to share project performance information and results and thus substantially increase the value of the projects for itself and other stakeholders. This group, known by its participants as the Multi-State Work Group (MSWG) on Environmental Management Systems, includes California, Texas, Oregon, Arizona, Illinois, Minnesota, Wisconsin, Pennsylvania, Massachusetts, and North Carolina. The Work Group has prepared this voluntary project design document, including a Project Evaluation Matrix (Matrix), which can be used by and is consistent with the pilot project implementation schedules in the individual states. The Matrix is included on pages M1-1 to M3-2 of this draft document. Other key stakeholders were included in the discussions since the innovative approaches represented by ISO 14001 will require new partnerships and relationships with these stakeholders. As a result, two representatives of the U.S. Environmental Protection Agency (US EPA), two representatives of the environmental community, one from NIST, two from academia and one from the regulated community attended MSWG meetings and contributed to this draft. State regulatory agencies are experimenting with models for more effective and efficient ways to ensure compliance and meet environmental, enforcement, and performance goals. One model is to test the hypothesis that the use of an ISO 14001 environmental management system has a positive effect on environmental performance, with compliance as the starting point. The idea is to encourage a system 2
  3. 3. that will maintain not only compliance but enhance overall environmental performance, while making environmental protection more effective and efficient. Systematic management of environmental responsibilities can help an organization achieve improved compliance along with additional goals. The ISO 14001 standard is one framework for such a system, but not the only one. In and of itself ISO 14001 does not set specific levels of performance. At its core, ISO 14001 provides for a framework for establishing an environmental policy, setting performance objectives for the EMS and continually improving the elements of the system which is implemented in order to make the policy reality. Analysis of impacts, implementation plans, training auditing and management feedback are all elements within the system. The specific goals and tactical objectives are unique to each organization, just as the environmental policy uniquely reflects the character of the organization. The ISO 14001 systems tool can help any organization achieve multiple and mutually-reinforcing goals to benefit a wide range of stakeholders: management, employees, the community, citizen activists, customers, and government. The MSWG evaluation format can credibly and uniformly test the tool. As the state agencies evaluate performance of the ISO 14001 management systems, they also will need to assess the processes which provide for meaningful involvement of stakeholders in the process, as well as the quality and transparency of the information produced as a result of these projects. Confidence in the process and the performance data produced will be critical to future public policy decisions. The MSWG recognizes that ISO 14001 may not specify sufficient reporting or stakeholder involvement to satisfy legal and public policy needs, although we have heard considerable disagreement on this point. Excellent discussions on approaches to stakeholder involvement can be found in a recent publication from the Aspen Institute 1. The MSWG neither intends nor implies that the ISO 14001 standards be modified to meet the possible additional stakeholder involvement and/or reporting requirements. The MSWG does, however, recognize that organizations who chose voluntarily to pursue satisfying significant regulatory requirements using ISO 14001 management tools, should realize that there may be stakeholder and reporting requirements which go beyond those specified in the ISO standard. The MSWG anticipates that, at a minimum, evaluation of pilot projects will be based upon the environmental performance, environmental compliance, pollution prevention and stakeholder confidence categories. Information from these categories will be critical in the analysis of the pilot projects. 1 1 The Aternative Path, A Cleaner, Cheaper Way to Protect the Environment. The Aspen Institute, 1996. 3
  4. 4. Purpose and Description of Matrix Testing the impact of pilot projects on environmental and economic Who Benefits From The Matrix ? outcomes is key to determining This Project Evaluation Matrix is designed to public policies relative to ISO produce performance information of value to three 14001. It is important to distinguish stakeholder groups, helping them determine among measureables: what an whether an ISO 14000 system meets their organization using ISO 14001 individual and consensus needs better than the old considers important may differ from way of doing things did. what regulators or communities consider important. The Project • Business: All who are involved in or important Evaluation Matrix designed by the to the efficient and profitable production and MSWG identifies important sale of goods and services. This includes categories of measurables that are lenders, analysts, shareholders, insurers, likely to be of interest to various directors, managers, workers, suppliers, stakeholders, and provides the customers and consumers. opportunity for standardization of • Government: All elected, appointed and hired the measurables among at local, state or federal levels to enact and participating programs. The value implement laws, protect the environment, of the approach is to generate manage (defense and other) facilities and multiple data points across a variety balance competing needs with limited of state regulatory schemes and resources. geographic communities, thus • Public Interest: All who have an interest in allowing the evaluation of outcomes environmental protection, including neighbors, in range of pilot designs. the community, and activists at various levels. This Project Evaluation Matrix Pollution guides teams that are designing Costs/ Environmenta l Conditio n Compliance Indicators Prevention Benefits Stakeholder pilot projects to evaluate the use mental Environ ance Perform ators Indicator s Confidence of ISO 14001 EMS as a tool to Indic achieve high levels of environmental performance and regulatory compliance. As teams develop project plans, they must consider the specific measurable Figure 1 objectives data and results of the project. The Matrix lists of measurement indicators, Figure 1, to understand the key technical and policy questions arising out of the use of ISO 14001 and to address the wide range of needs the stakeholders identify (see Needs, pg. 19). A wide variety of organizations and facilities will participate in pilot projects, and each project will have unique design aspects including performance measurements. Thus, the matrix is neither intended as a totally comprehensive listing of all possible indicators relevant to ISO 14001 pilot projects nor as a mandatory listing of requirements for all projects. The MSWG evaluation matrix is designed to be flexible to meet a range of pilot project needs. This follows the adopted MSWG principle to create a centralized pilot data 4
  5. 5. collection system (using common reporting format) with decentralized pilot decisions (using the strength of state diversity). The matrix may be applied in numerous ways, among the categories that may be taken alone or combined: ♦ Applied to a facility: It can fit a single site, a process within a site or number of processes or environmental aspects within the site. ♦ Applied to a firm: It can fit a company whether it covers one facility or a number of facilities, including operations, land holdings and employee commuting. ♦ Applied to a business sector: It can fit a number of firms or interests (including professional interests) that are joined by common functions, interests, principles or goals that relate to the environment. ♦ Applied to a government: It can be used by a government, not-for-profit or public interest organization that has regulated or unregulated environmental aspects or wishes to address environmental indicator, cost, benefit, pollution prevention or stakeholder involvement goals. ♦ Applied to a statute: It can be used by an organization or organizations to reduce a particular pollutant or pollutants or achieve an environmental goal that requires mandatory and voluntary action for success. ♦ Applied to a substance: It can be used by a single organization or organizations or jurisdictions to address a particular substance such as volatile organics, lead, mercury, chemicals or nutrients (e.g. to protect groundwater). ♦ Applied to a geographic area: It can be used by a group of urban or rural organizations (public or private) that need to effectively cooperate to accomplish goals such as clean air, biodiversity, ecologically managed watershed, brownfield neighborhood redevelopment or sustainable forestry. Some of the recommended objectives in the matrix may be inappropriate for some pilot projects. The evaluation of specific objectives and indicators may be the responsibility of the project design team. What Will Happen In The Future? Participating states will work with pilot project organizations and other stakeholders to achieve agreements that acknowledge the special efforts and risks taken as pilot subjects. The data from these organizations will provide focused insight into the decisions and actions of the organization and the community within which it operates. It also will contribute to a larger data pool kept on behalf of the states but available for learning. The states' matrix process uses the competency, credibility and independence of higher educational institutions. The University of North Carolina, in concert with other participating academic interests in the east, midwest and west, will maintain the consolidated data base as recommended by the Environmental Council of States. A strategy is being developed that will help government, business and public interest stakeholders use the accumulating data on their own or in collaboration with others. 5
  6. 6. This Is An ISO 14001 "Value Added" Matrix The matrix is designed to understand how ISO 14001 can be used as a tool to address several principles of particular interest to states and other stakeholders. • Pollution prevention: Evaluation of pollution prevention and long term environmental sustainability objectives is encouraged through question prompts and indicators about pollution prevention and through a menu of efficiency and supply-chain-driven business and management practices in the section on cost- benefit indicators. • Stakeholder involvement: Evaluation of the nature and extent of the involvement is encouraged by question prompts and performance measurement indicators contained in the pollution prevention, cost-benefit and stakeholder confidence indicator categories. • Information availability: Evaluation of information availability, with focused safeguards for competitively sensitive data, is encouraged through question prompts and indicators on cost-benefit priorities, performance levels and stakeholder confidence. • Ecosystem thinking: Focusing on environmental compliance unnecessarily confines results to a limited number of regulated aspects. The Matrix encourages evaluation of integrated, ecosystem thinking that accounts for environmental and socio-economic needs of government, the community and employees. This happens through the resource consumption portion of performance indicators, condition indicators, management framework choices, cost/benefit indications, and stakeholder confidence indicators. • Efficiency-driven/systems thinking: Evaluation of systems thinking using management tools is encouraged through question prompts on the management framework, systems, and tools (e.g. activity level accounting, full life cycle costing). Notwithstanding the particular needs of each pilot project, the value of the Matrix will result from the design of many projects with many common objectives and measureables. The Project Evaluation Matrix is a voluntary tool designed to help the organization designing and implementing its ISO 14000 EMS pilot project. As a body of pilot project data is independently compiled over time, all stakeholders, including the federal and state executive and legislative branches, will be able to evaluate the efficacy of this environmental system in helping the nation efficiently accomplish environmental, social and economic goals. 6
  7. 7. EMS Project Evaluation Categories The Matrix is organized to help users generate the information they need to evaluate how organizations set goals and track progress toward those goals. The Matrix uses benchmarking as a tool to find best practices that lead to superior performance. It has value in implementing the continuous improvement principle of ISO 14000. Pilot projects will use benchmarking to help answer the basic question: "Can we be better off using the ISO EMS than if we didn't use it?" For greatest benefit, benchmarking should use solid baseline data and track progress in specific, target areas. Stakeholders may be asked to select the data used in tracking progress; thus, they can see the value of what's being measured, especially if it involves costs and benefits they select as important. The MSWG matrix makes it easy to measure progress against benchmarks, especially in the cost-benefit and stakeholder confidence categories. Other categories also accommodate benchmarking. MATRIX 1: ENVIRONMENTAL PERFORMANCE This section seeks information about potential and actual impacts of the organization implementing ISO 14001 on air, water and land. Indicator data provide the means to understand whether environmental impacts are greater or lesser under management systems or prescriptive approaches. Environmental Performance Indicators This category includes measures of emissions, their risk factors, the use of energy and natural resources, accidents and other impacts, normalized to production. An excerpt of the environmental performance matrix is shown below. The complete Matrix 1, Environmental Performance, is in Section II. How to Use The Matrix Example: Facility XYZ has completed its aspects inventory and has determined through a ranking system that VOC emissions from a painting operation are significant. The VOC emissions are regulated by a state permit. As part of the ISO 14001 EMS, the facility has set an objective and target to reduce VOC emissions from the painting operation by 100% in two years. The facility has switched to a water based system. Prior to the EMS, the facility was emitting 50 tons of VOC per unit of production. In order to document the information for purposes of evaluating the EMS, the three parts of Matrix 1 would be filled out as follows. Note: since Facility XYZ experienced a reduction in emission, the Method of Reduction column should be filled out using the options in Table 1, pg. 22. In this case, Option 20 (material substitution) was selected. After the first time a pollution prevention option is chosen for method of reduction, the Pollution Prevention Section of Matrix 2 needs to be answered once. 7
  8. 8. OBJECTIVE MEDIA Significant Non-Subject Subject Normalized Method of as significant to to to Reduction Identified as Specific Other Production through Identified Legal Legal Levels Tech. # Poll. Organiza- through Environ- Environ- (Table 1 Prev? tional EMS Organiza- mental mental pg. 22) (Y/N) tional EMS Discharge Require- Limits ments ENVIRONMENTAL PERFORMANCE INDICATORS (ISO/CD 14031, SEC 4.1.2, ASPECTS, IMPACTS INVENTORY) 1. Specific pollutant Air X X Pre EMS: #20 Y discharges X 5 tons/unit VOC emission Water Post EMS: 0 tons/unit Land 2. Aggregated pollutant Air discharge (Aggregate using appropriate substance or risk categories) The basis for developing this information is assumed to be the significant aspects/impacts inventory required by ISO 14001. The project teams are encouraged to develop measures for regulated, as well as non-regulated significant environmental aspects. The team will take care to ensure that the organization has control over the aspects. The source of data on discharges is assumed to be a mix of existing monitoring programs, inventory management and documentation, and project specific measurements. Project teams are encouraged to explore opportunities for non- conventional performance measures such as continuous real time emission monitoring, feedstock-product-emission/discharge/waste mass balance, and multi-pathway risk model translated mass emissions. Project teams are strongly encouraged to develop risk based weighing schemes for these discharge performance indicators. Such weighing schemes will allow for assessment of changes in overall environmental and public health risks as a result of the pilot projects. Environmental Condition Indicators This environmental condition indicator section may be the most difficult measure of performance of an environmental management system. It includes measures of environmental quality in relation to the organization and its discharges or in a larger (ambient) sense. Measures substantiate the well being of air, land, water and living things (including humans) as part of a larger eco-system. They may indicate opportunities for pooling EMS objectives among organizations to achieve goals such as watershed protection, control of unregulated air emissions, protection of biodiversity, or transformation of a contaminated site to a beneficial use. An excerpt of the environmental condition indicator matrix is shown below. The complete Matrix 1, Environmental Performance, is in Section II. OBJECTIVE MEDIA Significant Non- Subject Subject NOT Performance as significant to to Subject Relative To Identified as Specific Other to Legal 8
  9. 9. through Identified Legal Legal Legal Environ- Organiza- through Environ- Environ- Environ- mental tional EMS Organiza- mental mental mental Requirements tional EMS Discharge Require- Require- Limits ments ments ENVIRONMENTAL CONDITION INDICATORS (ISO/CD 14031, SEC, ANNEX A) 1. Ambient air quality Air (near facility) [pollutant levels, odor, opacity, noise, temperature] 2. Ambient water quality Water (near facility) [contaminant levels, grd & surface, D.O., turbidity, temperature] 3. Land quality [ambient contaminant, nutrient, erosion] Difficulties arise both from the problems of attributing an environmental condition to specific facility operations or discharges as well as the problems of associating ambient environmental conditions to a given facility. Limited guidance on the selection and development of such indicators is found in ISO 14031, Guidance Standard on Environmental Performance Evaluation, which is currently under development. The conduct of ISO 14001 pilot projects should afford an excellent opportunity to gain an understanding of environmental condition and facility operations. As a result of the current limited tools for measuring and relating environmental conditions to specific facilities, it is anticipated that the first pilot projects to be conducted may have limited opportunity for such measures. Project teams are, however, encouraged to explore the feasibility of developing some simple, first order, environmental condition indicators. Such “first order” indicators may include sediment or water body contaminant levels, resident animal or plant tissues levels, or population measures. Considerable research has been conducted on ecosystem health, and project teams are encouraged to avail themselves of the appropriate expertise. Environmental Compliance Indicators This category describes shortfalls in terms of unauthorized releases and less consequential government requirements, including administrative requirements. A compatible list of compliance indicators is available through the EPA Office of Enforcement and Compliance Assurance. An excerpt of the environmental compliance indicator matrix is shown below. The complete Matrix 1, Environmental Performance, is in Section II. How to Use The Matrix Example: As a result of the implementation of the EMS, the facility has uncovered a violation of a state air permit that is considered to be serious and a significant aspect. The facility has promptly corrected the situation and has placed a corrective action procedure in place. In order to document this information for purposes of evaluating the EMS, the compliance indicators section of Matrix 1 could be filled out as follows: OBJECTIVE MEDIA Significant Non- Subject Subject NOT Performance as significant to to Subject Relative To Identified as Specific Other to Legal 9
  10. 10. through Identified Legal Legal Legal Environ- Organiza- through Environ- Environ- Environ- mental tional EMS Organiza- mental mental mental Requirements tional EMS Discharge Require- Require- Limits ments ments ENVIRONMENTAL COMPLIANCE INDICATORS (ISO/CD 14031, SEC, ANNEX A) X Serious violations air X X Non-serious violations Prompt discovery of violations An environmental management system is structured to achieve an organization’s environmental policy. The environmental policy of an organization provides a framework for the setting of an organization’s environmental targets and objectives. The environmental targets and objectives set the organization’s detailed, quantified performance requirements. ISO 14001 requires a commitment to compliance as part of an organization’s policy statement, state and federal regulators are entrusted with the responsibility to ensure the honoring of the law. Accordingly, the organization will have, as a component of its EMS, a management program designed to achieve compliance through relevant objectives and targets. MATRIX 2: MANAGEMENT PROCESS This section provides information about the business systems and tools that help the organization implement the ISO 14001/EMS with a focus on obtaining insight into stakeholder involvement in pollution prevention and cost/benefit approaches and priorities. Management Framework Indicators This section seeks information about the organization’s business plan or management system and what specific practices and tools are applied to support the system. How to Use the Matrix Example: The facility belongs to Responsible Care, is ISO 9000 certified and incorporates materials accounting and TQM in its business decision making. The management framework section of Matrix 2 could be filled out as follows: NONE Primary Mgmt. System TQM Supporting Tools & ISO 9000 Materials Practices Accounting Voluntary Business Responsible Programs Care The Matrix collects information on the kind of management system and practices used by the organization. These business practices foster innovation, achieve efficiency, enhance productivity, promote quality and maintain profitability. In some cases, a business sector might use a voluntary system (such as Responsible Care). More 10
  11. 11. general examples include total quality management, strategic environmental management, process reengineering, life cycle analysis, supply chain management or advanced manufacturing systems. A list of management systems and practices is contained in Management Framework, pg. 21; space is provided in the matrix to insert the applicable words or describe the system used. Providing this information early helps individual businesses and business groups understand what systems and practices work best. It also helps government and stakeholders better understand the value of business systems in accomplishing environmental results, promoting innovation and encouraging continuos improvement. Pollution Prevention Indicators This section indicates what stakeholders believe are the priority pollution prevention actions and (practicing information sharing) invites reporting of pollution prevention performance information. These qualitative indicators give added detail to the pollution prevention methods and techniques cited in Section III. How to Use the Matrix Example: As a result of switching to a water based system, Facility XYZ experienced a reduction in air emissions. Since a pollution prevention alternative was chosen for the Method of Reduction column, the Pollution Prevention table in Matrix 2 was answered as follows. Stakeholders Input OBJECTIVE Employees Public Interest Government To what degree was emphasis in policy High x x statement on pollution prevention Pollution prevention plan developed. If yes, required Yes, not reqd by x x by state law? state law This section examines to what extent the implementation of an EMS results in an increase of the use pollution prevention methods and technologies within the facility. It will work in conjunction with the Performance Indicators in that any reduction or 11
  12. 12. increase of emissions within the Performance Indicators section will be examined to determine what specific technologies (Pollution Prevention or control techniques) were employed to achieve the reduction. Cost/Benefit Indicators This section tests the hypothesis that an ISO 14001 EMS can achieve greater benefits in a more cost-effective manner and produce reduced costs for all stakeholders, over time, than maintaining the status quo. Internalized Externalized Unit Bench Perf Yrs to (Yes/no) (yes/no) of mark Targets result A. Industry Msmt · EMS Design · EMS Implementation & Maintenance · ISO 14001 Certification or other form of verification This section attempts to measure the costs and benefits from or related to implementing an ISO 14001 EMS. This includes those costs and benefits that can be attributed to all stakeholder groups -- business management, employees, community, citizen activists, customers, and government. The indicators or objectives identified are both tangible and intangible or quantitative and qualitative in nature. A menu of these indicators is included in Section III. The cost/benefit section of the matrix, along the horizontal headings attempt to collect additional information related to: 1. Whether the costs/benefits are internalized or externalized 2. The unit of measurement for the cost/benefit indicator (e.g. time, money, jobs, volume, etc.) 3. The baseline or benchmark for the cost/benefit data (e.g. new versus existing or absolute versus normalized) 4. Cost/benefit associated with setting certain performance targets and priorities (e.g. zero discharge wastewater system, ISO certification by certain date) 5. Years to result (e.g. reflects costs/benefits expected over time allowing for short, intermediate, or long term perspective). 6. Self-declared value to stakeholders. This captures the relative value (high, medium, low) stakeholders place on various cost/benefit indicators. This can set the stage for a give and take process of setting priorities and assigning resources to get the job done. Stakeholders who may have an interest in this aspect of an ISO 14001 EMS are found in Table 2, pg. 23. One reason for this section is to document the cost of the status quo and compare that cost to the ISO 14001 EMS. By collecting cost/benefit data, the organization will identify the “hidden” costs/benefits that may not currently be attributed to environmental 12
  13. 13. management issues. For example, a reduction in health insurance costs for employees as a result of no longer being exposed to toxic chemicals or reduced workers’ compensation because of reduced accident rate due to EMS directed training are hidden benefits from a pollution prevention based EMS. MATRIX 3: STAKEHOLDER CONFIDENCE This section provides information about stakeholders and their level of confidence in the ISO 14000 EMS process, in the results produced by the process and in each other. It also provides descriptive information regarding the motivating factors for the ISO 14001 EMS. Text Reference Management’s Employees’ Community’s Advocacy Group Confidence Confidence Confidence Confidence PERFORMANCE INDICATOR SELECTED Regulated Env. See page 24 Aspects Unregulated Env. See page 24 25% Aspects 65% Socio-economic See page 24 Aspects Stakeholder Confidence Indicators The numbers input into this matrix describe the credibility various stakeholders feel at various stages of the ISO 14000 EMS compared to before ISO 14000. For example, if 25% of advocates feel confident about the unregulated environmental aspects, this would be reflected by inputting 25% into the appropriate location on the matrix. A follow up survey after a participative EMS that identified and addressed significant, unregulated aspects found confidence in the organization improved to 65%. The Matrix 13
  14. 14. qualitatively describes the motivating factors for participation, allowing comparison or contrast with performance indicators and tests the comparative credibility of first, second or third party ISO 14000 certification. Stakeholder confidence indicators measure the ability of an EMS to meet the predetermined needs of business, government and public interest stakeholders who took part in the EMS process. The indicators also invite stakeholders to share ownership in the goal and process of achieving greater environmental performance. Stakeholders may include parties inside and outside the organization who have an interest in the organization’s performance in its economic, social, community, and environmental aspects. Cost-saving, reporting, and administrative flexibility may be linked to the level of meaningful stakeholder involvement, keeping in the spirit of voluntary stakeholder involvement in the ISO 14000 EMS. Data may come from survey research, focus groups or feedback. Quantitative and qualitative data will be collected. Ideally, data will be benchmarked against pre-EMS attitudes. Vertical categories: Data will be organized to evaluate or explain confidence in three general categories 1. Performance Indicators 2. EMS Design & Implementation 3. Motivating Factors (qualitative) Horizontal categories: Data will be collected to determine confidence levels in the following six stakeholder categories: 1. Management of the organization adopting the EMS, to allow inclusion of those with an interest in the organization’s business performance. 2. Employees and employee families of the organization who are non- management. 3. Community members who may be neighbors of or beneficiaries of the organization’s well being. 4. Activists who share a concern for the organization’s performance in its social or environmental aspects. 5. Customers who purchase, receive or use products or services from the organization 6. Government representatives who regulate, serve or provide technical assistance to the organization If the Matrix is completed, data will be organized to allow the showing of confidence each stakeholder has in each of the three performance categories and each of the six stakeholder categories. Thus, you will be able to see if different groups of stakeholders agree on the same facts or organization performance levels. For example, it will be possible to evaluate the different views within the organization and between the organization and the outside world. By relating the data to the EMS steps, it will be possible to learn where misunderstandings originated and take corrective action. Through analysis, insight will also be possible into the comparative (EMS and non- EMS) aspects of the data collected, the process used to collect the data, the institutions 14
  15. 15. involved with the data, the degree to which stakeholder needs are met, the relationship among stakeholder groups and the degree of stakeholder “ownership” in the EMS process and outcomes. 15
  16. 16. II. EMS PILOT PROJECT EVALUATION MATRIX Matrix 1: Environmental Performance Matrix 2: Management Process Matrix 3: Stakeholder Confidence 16
  17. 17. 17
  18. 18. III. REFERENCE INFORMATION for MATRICES 1, 2, AND 3 Needs Definitions Management Framework Pollution Prevention Cost/Benefit Stakeholder Confidence 18
  19. 19. III. REFERENCE INFORMATION for MATRICES 1, 2, and 3 NEEDS In October, 1996, representatives of business, government regulators and public interest groups met in Madison, Wisconsin as part of an ISO 14000 Roundtable process sponsored by the states of Wisconsin, Pennsylvania and the University of Pennsylvania's Wharton School of Business and University of Wisconsin-Madison's La Follette Institute of Public Affairs. The stakeholders were asked to identify their "needs" from ISO 14000 pilot projects planned in both states. It was stated that all the goals may not be met but that the pilots should be selected and designed to meet as many goals and needs as possible. This is their unedited list that is offered for prompt thinking: Government Regulators Enhanced environmental performance, objectively demonstrated; reduced transaction costs for government; increased community involvement; transferability to other groups; high level of credibility and acceptability of the pilot process and its results; identification of areas of regulatory flexibility needed to achieve beyond compliance; market driven. Public Interests Meaningful public involvement to include not only the neighbors but customers (process and outcome); test the quality, accuracy and nature of the information disseminated; test the quality of the discussion that occurs based on the input and the information; development of a set of environmental indicators that are measurable and can be tested as a part of the pilot; credibility; clear articulation of the limits of the pilot results; defining very clearly the parameters and the boundaries of the pilot; to learn from the experience and to act on what we have learned, e.g. take enforcement action if major violations are found that meet EPA criteria for enforcement under the audit policy; a mechanism to aid in conflict resolution. Business Credibility, mechanism to resolve conflict clearly defined set or parameters when go into the pilot; complementary to existing regulatory system, one does not supplant the other; allows of self declaration of certification; positive environmental outcomes; positive economic outcomes; reduce transaction costs for business; creation of a forum composed of all interest groups to discuss issues of regulatory flexibility within the pilot study; sound credible scientific information; company EMS information system that is accept by the regulators -- one set of books and data; look at the low cost third party certification; no certification; provide a test of the benefits of ISO to businesses of all sizes. Definitions 19
  20. 20. Significant as Identified through Organizational EMS: Significant is defined as any non-administrative or administrative legal requirement and/or any aspect, regulated or unregulated, agreed upon as significant by stakeholders in the EMS process. Non-significant as Identified through Organizational EMS: Non-significant is defined as any regulated or unregulated aspect, non-administrative or administrative, not required by law and/or agreed upon as non-significant by stakeholders in the EMS process. Subject to Specific Legal Environmental Discharge Limits This refers to pollutants or other substances the amount of discharge or emission of which is specifically limited through permits or other similar mechanisms. Subject to Other Legal Environmental Requirements Other activities that are subject to any other environmental legal requirement. Examples could include best management practices required through general permits or permit by rule. Not Subject to Legal Environmental Requirements Activities not subject to any environmental legal requirements or other voluntary commitments. These could include activities identified on the analysis of a facility’s environmental aspects. Subject to Other Voluntary Requirements Activities and/or performance levels to which an organization voluntarily subscribes. Examples could include commitments made under voluntary programs like CMA’s Responsible Care Program or other industry codes of practice. Performance Relative to Legal Environmental Requirements Performance of the organization in relation to laws, rules, orders, permits, decrees, agreements or contractual obligations directed by, affirmed through or authorized under appropriate local, state, federal or other statutory jurisdictions. Serious Violations A violation is serious based on factors considered under applicable federal, state, local or other statutory jurisdictions with enforcement authority that take into account harm or threat of harm to humans, and/or the environment. 20
  21. 21. Matrix 2: Management Process MANAGEMENT FRAMEWORK Management systems and practices can originate from the outside (e.g. suppliers and industry standards) or be developed internally. They may relate to narrow business objectives, efficiency or productivity goals, or larger strategies such as sustainable development. For example, there are guiding principles and sometimes professional standards covering Total Quality Management, ISO 9000, strategic business planning, full accrual accounting and materials accounting. To fill in the management framework matrix, a menu of systems and practices relevant to the ISO 14001 pilot project effort are listed below: Total Quality Management, ISO 9000, BS 7750, strategic business planning, sustainable business planning, environmental accounting, activity based accounting, full cost accounting, life cycle analysis, process reengineering, contingent liability management, risk assessment and management, materials accounting, product stewardship, contingent liability management, just in time delivery, advanced manufacturing systems, employee involvement, natural resources capital stewardship, green design, product stewardship, other. A menu of voluntary business programs also may be listed such as: Responsible Care, Design for the Environment, International Chamber Charter for Sustainable Development, CERES Principles, Businesses for Social Responsibility, Green Star Program, Great Printers Project, other. 21
  22. 22. METHOD OF REDUCTION If the data presented in the column Normalized Production Levels in Matrix 1: Environmental Performance indicates a reduction in pollution discharges, use this list to identify the method of reduction implemented. The use of this list will help to determine if pollution prevention was the primary means of reduction. Indicate the appropriate number from Table 1, in the Method of Reduction column in Matrix 1. Table 1 WASTE REDUCTION OPTIONS or leak sources OPERATING PRACTICES 18. Other (specify) 1. Segregate hazardous waste to make RAW MATERIAL MODIFICATIONS more amenable to recycling 19. Increased purity of raw materials 2. Segregate hazardous waste from 20. Substituted raw materials non-hazardous waste 21. Other (Specify) 3. Improved maintenance scheduling, PROCESS MODIFICATIONS recordkeeping, or procedures 22. Instituted closed-loop recycling 4. Changed production schedule to 23. Modified equipment, layout, or minimize equipment and feedstock piping changeovers 24. Instituted better controls on 5. Other changes in operating practices operating conditions (flow rate, (Specify) temperature, pressure, residence INVENTORY CONTROL time) 6. Instituted procedures to ensure that 25. Other (specify) materials do not stay in inventory PRODUCT MODIFICATIONS beyond shelf-life 26. Changed product specifications 7. Began to test outdated material -- 27. Modified design or composition continue to use if still effective 28. Modified packaging 8. Eliminated shelf life requirements for 29. Other (specify) stable materials OTHER POLLUTION PREVENTION 9. Instituted better labeling procedures ACTIVITY 10. Instituted clearinghouse to 30. Specify exchange materials that would CONTROL TECHNOLOGY otherwise be discarded 31. Specify 11. Other (specify) SPILL AND LEAK PREVENTION 12. Improved storage or stacking procedures 13. Improved transfer for loading, unloading, and transfer operations 14. Installed overflow alarms or automatic shut off valves 15. Installed secondary containment 16. Installed vapor recovery 17. Implemented inspection or monitoring program of potential spill 22
  23. 23. COST/BENEFIT Self -declared value to stakeholders. Stakeholders may include those listed in Table 2. Table 2 Management Investors/stockholders, Directors and board members, Chief Executive officer, chief operating officer, Other officers, Facility management and officers, Insurers, Suppliers, Lenders Employees Process employees (most usually managing a waste stream), Facility employees working in the ISO-qualified facility, Organization employees working throughout all aspects and areas of the organization, Sector employees working throughout the sector covered by the ISO EMS Community Neighbors, Larger community Advocacy Groups within Community, State Local advocacy group within the or Region community. State advocacy groups. or National advocacy groups. International monitoring, advocacy, etc. Customers Primary, such as wholesalers, distributors, etc., Secondary, such as retail, Domestic in the US, Global, such as exports, Sector, as a part of the supply chain Government Local, State, Federal
  24. 24. Matrix 3: Stakeholder Confidence This section provides guidance to design questions to measure stakeholder confidence in relation to the following three topics (the vertical axis on Matrix 3: Stakeholder Confidence) PERFORMANCE INDICATOR SELECTED • Regulated Aspects -- Are stakeholders confident that the EMS addressed environmental aspects important to them? • Unregulated Aspects -- Are stakeholders confident that the EMS addressed environmental aspects not subject to regulatory requirements that were important to them? This may also address opportunities such as habitat restoration, reintroduction of species, and aesthetic enhancement. • Socio-economic Aspects -- Are stakeholders confident the EMS addressed their priority needs from an economic, community development, or competitive standpoint? This may address jobs, quality of life, or community infrastructure. EMS DESIGN AND IMPLEMENTATION Voluntary Environmental Policy -- Are stakeholders satisfied with their roles in assessing, planning, implementing and reviewing the EMS? Was their involvement meaningful even if all of their needs may not have been met? • Demonstrated Conformity -- Are stakeholders confident in the integrity, competence, and credibility of the process and the party (first, second, third) verifying or certifying conformity of the EMS? Table 3 Choose from this list of options to identify the method chosen by the organization in documenting conformity to the ISO 14001 standards. Enter the appropriate number that describes the method chosen by the organization. 1. First party, self (e.g. SAE oil) 2. Second party, buyer (e.g. auto, defense, NASA, DOE, supply chain, lenders, insurers) 3a. Third party, accredited registrar (e.g. UL, Good Housekeeping, Accredited registrars) 3b. Third party, professional/technical organization (e.g. ADA, AMA) 3c. Third party, business/trade group (e.g. Am Gas Assn, Am Rose Selections, Home Appliance Manuf.) 3d. Third party, government, federal (e.g. DOT, USDA, NOAA) 3e. Third party, government, state (e.g. Penn. Dept. of Ag, Fl citrus, CA Air equip) 3f. Third party, government professionals (e.g. building codes, air managers)
  25. 25. • Information usability -- Do stakeholders find the information provided through the EMS to be of value in terms of confirming performance of the organization, enhancing understanding, reducing fear or apprehension, instilling confidence or enabling the stakeholder(s) to take personal action to benefit the stakeholder or the environment. • Outcome Indicators -- Do the EMS outcome indicators by virtue of their clarity and the data they produce engender confidence in the EMS an the organization? Do the indicators measure the “right” things in the eyes of the stakeholders? MOTIVATING FACTORS − In a word or two, what are the motivating factors each stakeholder group holds important in its participation in the EMS. Examples: jobs, profitability, eco-system management, zero discharge, sustainability, toxic reductions, etc. COMPONENTS OF CONFIDENCE In designing research to learn about stakeholder confidence, these questions may be asked or points addressed on these issue areas: • Data Confidence: Data are credible in light of how they were collected, who collected them, their frequency of collection, how they were put into context after collection for understanding or action. Do people believe the data? • Process Confidence: Process is credible in light of when (how early) stakeholder was involved, the means used to involve the stakeholder (e.g. meetings, personal contact, newsletters, etc.), the ability of stakeholder to influence issues of import, the feedback provided stakeholder on progress, results and difficulties. Were stakeholders involved early and meaningfully? Were disagreements resolved? • Organization’s Confidence: The organization is credible in the stakeholder’s eyes in light of the processes used by and performance of the institution or/and EMS certified organization. An important question will relate to confidence in the organization certifying compliance with the EMS. Is there trust in the organization and its people? • Needs Met: Stakeholders believe their EMS identified needs have been met in a tangible, credible fashion. Were the needs identified early on and in tangible ways? Were expectations realistic? And did the organization produce? Did stakeholders respond positively and publicly? • Stakeholder Relations: Relationships between and among stakeholders are credible by virtue of their involvement in or because of the benefits derived from the EMS. Do people get along better because of the ISO 14001 EMS process? • Ownership: Stakeholders, by virtue of their involvement in or because of the EMS, have a greater or lesser degree of internalized ownership in the greater environmental performance possible through the EMS. Did the stakeholders feel like they benefited less from the EMS or did all share in the results?
  26. 26. MATRIX 1: ENVIRONMENTAL PERFORMANCE OBJECTIVE MEDIA Signifi- Non- Subject Subject NOT Subject To Performance Normalized SOURCE QUALITY RELATIVE COMMENTS METHOD of cant as significant to to Subject Other Relative To to OF OF VALUE REDUCTION Identified as Specific Other to Voluntary Legal Production DATA DATA (1-10) Levels thru Identified Legal Legal Legal Commitments Environ- Organiza- thru Environ- Environ- Environ- mental Tech # Poll. tional Organiza- mental mental mental Requirements (Table 1, Prev.? EMS tional EMS Discharge Require- Require- pg. 22) (Y/N) Limits ments ments ENVIRONMENTAL PERFORMANCE INDICATORS (ISO/CD 14031, SEC 4.1.2, ASPECTS, IMPACTS INVENTORY) 1. Specific pollutant Air Required & Quantitative, 10 Develop facility discharges supplemental high quality specific profile monitoring from aspects/ derived from impacts EMS inventory Water Land 2. Aggregated pollutant Air Required & Quantitative, 7 Facility specific discharge (Aggregate using supplemental high quality profile scientifically appropriate monitoring substance or risk categories) derived from EMS Water Land 3. Risk weighted discharge-- Air Monitoring & Semi- 10 Facility specific substance specific (based on literature quantitative profile, easy to impact assessment) very difficult to obtain Water Land 4. Aggregate risk (Sum of #3) Air Monitoring & Semi- 5 Difficult to literature quantitative interpret Water Land
  27. 27. MATRIX 1: ENVIRONMENTAL PERFORMANCE OBJECTIVE MEDIA Significant Non- Subject Subject NOT Subject To Performance Normalized SOURCE QUALITY RELATIVE COMMENTS METHOD of REDUCTION as significant to to Subject Other Relative To to OF OF VALUE Identified as Specific Other to Voluntary Legal Production DATA DATA (1-10) Levels thru Identified Legal Legal Legal Commitments Environ- Tech # Poll. Organiza- thru Environ- Environ- Environ- mental (Table 1, Prev.? tional EMS Organiza- mental mental mental Requirements pg. 22) (Y/N) tional EMS Discharge Require- Require- Limits ments ments 5. Spills, Unscheduled Air Required Quantitative, 10 Readily discharges reports high quality available Water Land 6. Water use Water EMS document- ation 7. Water discharge EMS document- ation 8. Energy use EMS document- ation 9. Energy release/Thermal Air Calculations Water 10. Material Use Materials --nonhazardous Accounting 11. Material Use -- hazardous Materials Accounting 12. Chemical Use 13. Air Emissions 14. Land Effects 15. Other
  28. 28. MATRIX 1: ENVIRONMENTAL PERFORMANCE OBJECTIVE MEDIA Significant Non- Subject Subject NOT Subject To Performance Normalized SOURCE QUALITY RELATIVE COMMENTS METHOD OF as significant to to Subject Other Relative To to OF OF VALUE REDUCTION Identified as Specific Other to Voluntary Legal Environ- Production DATA DATA (1-10) Levels thru Identified Legal Legal Legal Commitments mental Organiza- thru Environ- Environ- Environ- Requirements Tech. # Poll. tional EMS Organiza- mental mental mental (Table 1, Prev.? tional EMS Discharge Require- Require- pg. 22) (Y/N) Limits ments ments ENVIRONMENTAL C0NDITION INDICATORS (ISO/CD 14031, SEC, ANNEX A) 1. Ambient air quality (near Air Local Quantitative, 8 Important, facility), [pollutant levels, odor, agency, high quality but difficult opacity, noise, temperature] facility to interpret records 3rd party audits 2. Ambient water quality (near Water Monitoring Facility facility) [contaminant levels, , agency specific grd. & surface, D.O., turbidity, records profile temperature] EMS document- ation 3. Land quality [ambient Studies, Facility contaminant, nutrient, erosion] records, specific profile 4. Flora [contaminant, Plants, crops, EMS Facility vegetation quality, population, vegetation document- specific diversity] ation profile 5. Fauna [contaminant levels, Animal EMS Facility population, diversity] tissue, health document- specific ation profile 6. Human, health, welfare Epi. data, Facility cultural value specific profiles 7. Global measures Atmosphere EMS EMS oceans, ... document- document- ation ation 8. Other
  29. 29. MATRIX 1: ENVIRONMENTAL PERFORMANCE OBJECTIVE MEDIA Significant Non- Subject Subject NOT Subject To Performance Normalized SOURCE QUALITY RELATIVE COMMENTS METHOD OF as significant to to Subject Other Relative To to OF OF VALUE REDUCTION Identified as Specific Other to Voluntary Legal Environ- Production DATA DATA (1-10) Levels thru Identified Legal Legal Legal Commitments mental Organiza- thru Environ- Environ- Environ- Requirements Tech. # Poll. tional EMS Organiza- mental mental mental (Table 1, Prev.? tional EMS Discharge Require- Require- pg. 22) (Y/N) Limits ments ments ENVIRONMENTAL COMPLIANCE INDICATORS 1. Serious Violations 2. Non-serious Violations 3. Prompt Discovery of Violations 4. Prompt Correction/ Remediation of Violations 5. Prevention of Recurrence 6. Other(s)
  30. 30. MATRIX 2: MANAGEMENT PROCESS MANAGEMENT FRAMEWORK (Section III, pg. 21) NONE Primary Mgmt. System Supporting Tools & Practices Voluntary Business Programs POLLUTION PREVENTION Information Stakeholders Input Location OBJECTIVE Employees Public Interest Government To what degree was Policy emphasis in policy statement statement on pollution prevention Pollution prevention plan developed. If yes, required by state law? Appropriate pollution Training prevention training given records to all employees Pollution prevention Company teams formed information / team reports Pollution prevention Mgmt involves suppliers Framework Pollution prevention Marketing involves customers Plan Pollution prevention in Mgmt
  31. 31. all business plans Framework Pollution prevention Personnel behavior rewarded Plan Design for Environment Mgmt practices followed Framework What pollution Company prevention objectives information and targets were set? MATRIX 2: MANAGEMENT PROCESS COSTS/BENEFITS Internalized Externalized Unit of Bench Perf Yrs to Self-declared Value to Stakeholders (Yes/no) (yes/no) Msmt mark Targets result (high -medium-low) Table 2, pg. 23 Mgmt. Emp. Comm. Adv. Cust. Gvmt. QUANTITATIVE COST/BENEFIT FACTORS A. Industry · EMS Design · EMS Implementation & Maintenance · ISO 14001 Certification or other form of verification · Obtaining/maintaining permits · Other reporting/documention · Waste treatment and disposal onsite · Waste treatment and disposal offsite · P2 investments (capital, raw materials, energy
  32. 32. and payback) · Insurance rates (health, fire, liability) · Cost of capital · Stock value (public companies) · Stakeholder activity . Other(s)
  33. 33. MATRIX 2: MANAGEMENT PROCESS COSTS/BENEFITS Internalized Externalized Unit of Bench Perf Yrs to Self-declared Value to Stakeholders (Yes/no) (yes/no) Msmt mark Targets result (high -medium-low) Table 2, pg. 23 Mgmt. Emp. Comm. Adv. Cust. Gvmt. B. Agency · Permit issuance (staff time) · Compliance monitoring (staff time) · Staff training ($/person) · Technical assistance provided · Stakeholder activity . Other(s) C. Public/Local Government · Local economic indicators (expanded tax base, POTW infrastructure capacity; staff time) . Other(s)
  34. 34. MATRIX 2: MANAGEMENT PROCESS COSTS/BENEFITS Internalized Externalized Unit of Bench Perf Yrs to Self-declared Value to Stakeholders (Yes/no) (yes/no) Msmt mark Targets result (high -medium-low) Table 2, pg. 23 Mgmt. Emp. Comm. Adv. Cust. Gvmt. QUALITATIVE COST/BENEFIT FACTORS A. Industry · Public image · Worker effectivenss · Product quality . Market share/acess to new markets · Risk/liability . Other(s) B. Agency · Public confidence · Environmental performance [see elsewhere] . Other(s)
  35. 35. MATRIX 2: MANAGEMENT PROCESS COSTS/BENEFITS Internalized Externalized Unit of Bench Perf Yrs to Self-declared Value to Stakeholders (Yes/no) (yes/no) Msmt mark Targets result (high -medium-low) Table 2, pg. 23 Mgmt. Emp. Comm. Adv. Cust. Gvmt. C. Public/Local Government · Health and quality of life · Involvement in local decisions/ opportunites provided · Local job creation · Risk of environmental harm . Other(s)
  36. 36. MATRIX 3: STAKEHOLDER CONFIDENCE Stakeholder Category Confidence Issues Text Reference Management’s Employees’ Community’s Advocate’s Customers’ Government See pg 25 Confidence Confidence Confidence Confidence Confidence Confidence PERFORMANCE INDICATOR SELECTED Regulated Env. See pg. 24 Benchmark Aspects After EMS Unregulated Env. See pg. 24 Benchmark Aspects After EMS Socio-economic See pg 24 Benchmark Aspects After EMS EMS DESIGN & See pg. 24 IMPLEMENTATION Voluntary See pg. 24 Benchmark Environmental Policy • assessing • planning After EMS • implementing • reviewing Demonstrated EMS Verifying Benchmark Conformity party* (See confidence in EMS Table 3, pg. certifier After EMS 25)
  37. 37. MATRIX 3: STAKEHOLDER CONFIDENCE Text Reference Management’s Employees’ Community’s Activists’ Customers’ Government Confidence Confidence Confidence Confidence Confidence Confidence Information, EMS See pg. 25 Benchmark System Performance Reporting, and Feedback • information policy • information participation (need and feedback) • information monitoring and quality assurance • information After EMS availability and user-friendliness • information type, context, and consequence (risk-related) • information authority or provider (ambient and performance) Outcome Indicator See pg. 25 Benchmark Confidence Level • (comparative confidence in EMS versus non- After EMS ISO 14000 EMS approaches ) MOTIVATING See pg. 25 FACTORS