Advanced Natural Resources Stewardship and Environmental Advocacy

Journal of Cleaner Production 12 (2004) 561–569 www.elsevier.com/locate/jclepro

Environmental management systems and the smaller enterprise Ruth Hillary ∗

Network for Environmental Management and Auditing (NEMA), 174 Trellick Tower, Golborne Road, London W10 5UU, UK

Received 8 October 2001; accepted 29 August 2003

Abstract

Small and medium-sized enterprises (SMEs) make up the vast majority of businesses in Europe. These enterprises are vitally important for a healthy dynamic market economy. However, the environmental impact of small firms is not known either at national or regional levels. Voluntary self-regulatory initiatives such as the eco-management and audit scheme (EMAS) and the international environmental management system (EMS) standard ISO 14001 seek to provide all businesses with the means to develop systematic approaches to improve environmental performance. All purport to be relevant and applicable to small and medium-sized firms; however, their uptake by SMEs has been patchy at best and down right miserable at worst. This paper sheds some light on the barriers, opportunities and drivers for EMS adoption by the SME sector. Drawing on original research investigating EMAS implementation across the European Union and a major detailed review of 33 studies which explore the sector’s use of EMS, this paper estimates the number of SMEs registered to EMAS and ISO 14001 and identifies a range of issues which influence the adoption of formalised EMS. Despite these problems, the paper suggests SMEs do find real benefits from adopting EMS.  2003 Elsevier Ltd. All rights reserved.

Keywords: Environmental management system; SME; Enterprise ISO 14001; EU; EMAS self-regulation

1. Introduction

Small firms make up the vast majority of businesses in Europe and the UK. In 1996, around 90% of European businesses were classified as small and medium-sized enterprises (SMEs)1 [7] and in 1998 there were 3.7 million businesses in the UK, of which 99% were small businesses employing less than 50 people and only 25 000 were medium sized employing between 50 and 249 people [16]. The environmental impact of small firms is not known either at national or regional levels. It is often and widely quoted that, as a sector, SMEs2 could contribute up to 70% of all industrial pollution [21].

∗ Tel./fax: +44-20-8968-6950. E-mail address: [email protected] (R. Hillary).

1 Employing less than 250 people. 2 The EU defines SMEs based on employee numbers, turnover or

balance sheet total and ownership. SME has less than 250 employees and either an annual turnover not exceeding 40 million ECU, or an annual balance sheet total not exceeding 27 million ECU, and is an independent enterprise, i.e. 25% or more of the capital or voting rights cannot be owned by larger enterprise/s [10].

0959-6526/$ - see front matter  2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.jclepro.2003.08.006

The heterogeneous nature of the small and medium- sized firms sector makes it difficult to generalise about the environmental impacts and strategies of the sector. The environmental issues facing a sole trader or partner- ship will have little similarity to those of a firm employing 249 people; and yet they are lumped together in the SME sector. The lack of knowledge about the impacts of the sector and the recognition of its impor- tance in helping to ensure a healthy economy has stimu- lated a growing interest in the sector. In the EU engaging SMEs in environmental improvements is viewed as a vital part of the drive towards sustainable development [8]. As part of a broader strategy to provide businesses

with tools to more effectively manage their environmen- tal impacts and contribute to sustainable development, the EU developed the eco-management and audit scheme (EMAS) regulation [9] on the back of the British environmental management system (EMS) standard BS 7750 [4]. BS 7750 generated interest in EMS in the inter- national standards world, this standard has been super- seded by the international EMS standard ISO 14001 [5]. The voluntary Regulation and the EMS standards sought to provide all businesses with the means to develop sys-

562 R. Hillary / Journal of Cleaner Production 12 (2004) 561–569

tematic approaches to environmental performance. These initiatives complemented normative regulation. All purport to be relevant and applicable to small and medium-sized firms. This paper presents the findings of two studies, which

sought to investigate EMAS and the EMS standards in the SME sector. The first study was a pan-EU assess- ment of the implementation of EMAS undertaken for the Commission of the European Communities (CEC) [24]. The purpose of the study was to investigate the current implementation practices of EMAS in the different member states. It provided data on EMAS registered sites, their use of EMS standards, EMAS implementation periods, the support needed to participate in the scheme and the benefits of participation. The second study was a review study that evaluated 33 different studies that investigated the practical implementation experience of SMEs with EMSs and the attitudes of smaller firms to the environment [34]. The aim of the evaluation was to identify the barriers, opportunities and drivers for smaller firms in the adoption of EMS.

2. Methods employed

The pan-EU EMAS survey employed a five part con- fidential questionnaire: ‘Questionnaire on the Implemen- tation Status of EMAS’, in a telephone survey, between October 1997 and February 1998, to gather in-depth objective information from four populations of respon- dents in the regulation, i.e. the competent bodies or administrative individuals, accreditation bodies, accredited environmental verifiers (AEVs), and EMAS registered sites. The EMAS Help Desk provided the con- tact details for each group (http://www.emas.lu/). The large numbers of EMAS registered sites (1211

sites in 12 member states) meant that interviewees were randomly selected. Random selection criteria were developed to select a representative 10% sample for those member states where large numbers of EMAS registered sites existed, i.e. in Austria, Denmark, Fin- land, France, Germany, the Netherlands, Sweden and the UK. The review study analysed 33 different studies at a

UK and EU level dating from 1994 to 1999. Study reports were identified from academic and government sources; support organisations, e.g. green business clubs; expert individuals, e.g. members of the British Standards Institution (BSI) Small Firms Panel; non-governmental organisations (NGOs); consultants and companies. Each report was read and analysed and relevant details entered into four standardised tables on internal and external bar- riers, benefits and disbenefits, and stakeholder pressures, and drivers. There is a scarcity of quality studies into SMEs and

the adoption of formal EMSs. Not all of the selected

studies examine the formal EMSs of EMAS and ISO 14001 (BS 7750, is included as some studies prior to and around 1996, refer to the British EMS standard [4]). Some studies look at SME environmental awareness and attitudes towards the environmental issues they face and provide an insight into the reasons why EMSs are not adopted.

3. EMAS and ISO 14001

Improving the environmental performance of SMEs is important, irrespective of their total as yet unknown impact, because they are a vital part of the enterprise society that collectively can contribute to sustainable development. One means of bringing about improved environmental performance is through the adoption of EMSs. The two formal EMSs in the market place are EMAS and ISO 14001. Common to both initiatives is the need for an organisation to implement a number of management system stages to formalise the organis- ations polices, procedures and practices that control environmental aspects. EMAS has the added require- ment of an environmental statement, which publicly reports the environmental performance of a site. Both purport to be applicable to both large and small firms. ISO 14001 was reportedly written with the chip shop owner in mind and as a safeguard of its relevance to SMEs a working group was convened at the Inter- national Organisation for Standardisation (ISO) to inves- tigate this issue [15]. The EMAS Regulation is less cer- tain of the unaided participation of SMEs in EMAS and suggests supporting measures should be introduced by Member States to assist smaller companies registration to the scheme.

3.1. EMAS and ISO 14001 registrations as a percentage of UK businesses

The official UK and EU lists of EMAS registered sites are the most reliable source of data on registration num- bers. The UK competent body asks companies regis- tering sites to EMAS to supply enterprise size data. The estimation of SMEs registered to EMAS in UK is 24% of those registered on the 15 September 1999 were SMEs. The EU list holds no enterprise size data. Based on the pan-EU EMAS study that ascertained site sized of a randomly selected number of sites it was estimated 18% of registered sites in February 1998 were SMEs [24]. There are no official UK or EU lists of ISO 14001

certified organisations. Reliable commercial, but unof- ficial sources of UK ISO 14001 numbers can be found, e.g. the EGA Environ Environmental Consultancy list. However, size data of enterprises is not collected. Esti- mating SME registration to ISO 14001 is therefore dif-

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ficult, nevertheless the standards popularity in compari- son with EMAS would suggest the percentage of SMEs registered to ISO 14001 is likely to be higher than for EMAS. In any event, the numbers of registrations are a miniscule proportion of the total of number of busi- nesses.

4. Internal and external benefits of SMEs adopting EMSs

Numerous internal and external benefits are expected from the implementation of formal EMSs such as EMAS, ISO 14001 and the now defunct BS 7750. In the review study, 22 studies identified benefits from EMS implementation experiences of SMEs [34]. All but one of these studies drew their findings from practical experi- ence of SMEs implementing EMSs.

4.1. Internal benefits

Internal benefits are positive outcomes from the implementation of an EMS which relate to the internal operation of an SME. The internal benefits identified from the review are grouped into the following three categories and show with examples in Table 1:

1. Organisational benefits 2. Financial benefits 3. People benefits.

Numerous organisational improvements and efficiencies are achieved in the SME from the adoption

Table 1 Internal benefits categories and examples

Organisational benefits Financial benefits People benefits

EMS enhanced quality and investor in people Cost savings from material, energy and waste Increased employee motivation, awareness and systems reductions and efficiencies qualifications ISO 14001 possible to combine with quality Improved economic condition of SME Improved employee morale systems (ISO 9000 series of standards Quality of management improved Enhanced skills and improved knowledge in

SME Improved quality of training Creates a better company image among

employees Improved working conditions and safety Provides a forum for dialogue between staff

and management Improved quality of environmental information Legal compliance is documented and can be demonstrated Encourage innovation Review and improve procedures Stimulate process, transport, raw materials and packaging changes Demonstrate environmental responsibility Provide a strategic overview of environmental performance

of an EMS and are not solely related to the EMS, i.e. spin-off management benefits arise from the implemen- tation of an EMS. For example, quality systems are improved [25], the overall quality of management rises [28], training is introduced where previously there was none [25] and innovation is encouraged [33]. The range of financial savings and payback periods

for investments generated in SMEs adopting EMSs is as diverse as the sector itself and are frequently mentioned (see for example [14,17,19,28]). The pan-EU survey of EMAS sites identified cost savings as the top benefit cited by both large, medium-sized and small companies from the implementation of EMAS [24]. However, SMEs place cost savings as the second ranked benefit behind better image. Communication channels, skills, knowledge and atti-

tude are all improved in SMEs adopting EMSs [24,25,28]. EMS implementation opens up new interac- tions between staff and management and provides intan- gible benefits like enhanced morale, which is seen as very important for both small firms and medium-sized ones [24,31].

4.2. External benefits

External benefits are positive outcomes from the implementation of an EMS that relate to the external interactions of an SME. The external benefits identified from the review study are grouped into three categories and are shown with examples in Table 2:

1. Commercial benefits 2. Environmental benefits

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Table 2 External benefit categories and examples

Commercial benefits Environmental benefits Communication benefits

Gain new customers/business and satisfy Improved environmental performance Create a positive public image existing customers Gain a competitive/marketing advantage Assured legal compliance Develop better customer relationships Receive discount on annual insurance Increased energy and material efficiencies Develop better co-operation and relationships premiums with regulators and administrative bodies Stay in business Increased recycling Improve communication with stakeholders Develop more environmental friendly products Reduced pollution Set an example for other companies in a sector

3. Communication benefits.

SMEs found numerous financial, competitive and business rewards from adopting formal EMSs. For many, ISO 14001 and EMAS are living up to the claims of those that promote the initiatives. Key benefits for SMEs are the attraction of new business and customers and the satisfaction of customer requirements [6,17,21,27]. These benefits are closely linked to cus- tomers in their role as the paramount driver for the adop- tion of EMSs in the SME sector. However, the pan-EU EMAS survey indicated that, for SMEs, gaining more customers and greater customer satisfaction, was not a paramount benefit from EMAS implementation [24]. Only one small firm cited this as a benefit and 23% of medium-sized firms considered it a benefit. Alongside the commercial benefits, SMEs found posi-

tive outcomes in terms of improved environmental per- formance [22,28], assured legal compliance [28,32] and energy and material efficiencies [17,31,33]. The most frequently cited improvements were those related to reduced energy consumption and waste minimisation. Coupled with these benefits, SMEs found image was enhanced and dialogue and relationships with stake- holders improved [17,21,27]. Indeed, improved image was the most important benefit for SMEs implementing EMAS cited in the pan-EU EMAS survey and this became more important as the size of the firm decreased; i.e. 38% of medium-sized companies and 54% of small companies cited it as the first benefit from the adoption of EMAS [24]. Some studies identified that SMEs saw distinct bene-

fits of ISO 14001 over EMAS [2,22,23]. The two key ones were that ISO 14001 did not have an environmental statement requirement and that ISO standards are well known and accepted concepts. A caveat needs to be added to the overly positive

image given by SMEs of formal EMSs. Some of the studies in the review study were uncritical in their pres- entation of case study findings (see for example, [25,31,33]). These case studies were often adjuncts to survey results and presented positive messages about the adoption of EMSs by SMEs.

5. Disbenefits of SMEs adopting EMSs

Few studies (7) in the review study identify disbenefits [34]. The probable cause of this is that many reports present best practice case studies and seek to “sell” EMSs to the SME sector. Disbenefits are negative outcomes or non-materialis-

ation of benefits from the adoption of EMSs. The dis- benefits identified in the review study are grouped into the following three categories and shown with examples in Table 3:

1. Resources 2. Lack of rewards 3. EMS surprises.

SMEs found that more resources than expected, in terms of cost, time and/or skills were required for EMS implementation [20,32]. SMEs also faced implemen- tation surprises that had impact on resources. Compo- nents of the EMS failed to meet their expectations. For example, they found problems meeting stakeholder expectation [32], or the EMS did not integrate smoothly into the quality systems [22,32], or they had underesti- mated the EMS requirements such as the audit cycle in EMAS could be less than 3 years [22]. A major source of irritation for SMEs, surfacing in a

number of studies, is the cost of certification/validation [20,22,24,26]. They are also aggrieved by the cost and quality of consultants advising them [22,26,28]. It is apparent that some have been misadvised and developed bureaucratic and ineffective systems [26]. Such cases feed back into the general impression some SMEs have of the inappropriate nature of formal EMSs for smaller firms, this was identified as an internal barrier in some studies [14,22]. Identification of non-compliance was viewed as a dou-

ble-edged sword, being a benefit if the SME could read- ily rectify the cause of the non-compliance and a dis- benefit if action could not be taken because of lack of, or unwillingness to allocate resources [17,22]. In the lat- ter case, an attitude of “ignorance is bliss” seemed to exist.

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Table 3 Disbenefit of implementing EMSs in SMEs

Resources: costs/time/skills Lack of rewards EMS surprises

Higher than expected staff costs Lack of market rewards Consultants over-emphases documentation and over complicate system

Unexpected capital expenditure required Paper work emphasised instead of environmental performance

Certification fees higher than expected Underestimation of external communication aspects of EMSs

Time and cost required to develop EMAS Problems meeting different stakeholders environmental statement demands

Linking the EMS to quality system restricted the scope of the EMS and disrupted the quality system Non-compliances identified Complexity of approach EMAS audit cycle can be set at less than 3 years

Some studies cited SMEs dissatisfaction with the fact that benefits had not materialised as expected [24,27]. It is apparent that SMEs have been “sold” the benefits of EMSs on benefits such as cost savings, and when they fail to materialise the SMEs feel cheated.

5.1. Internal and external barriers to the adoption of EMSs by SMEs

Internal and external barriers to EMS implementation are extensively covered in 28 study reports in the review study [34]. Ten of the reviewed study reports do not discuss EMS implementation but detailed SME attitudes, which act as barriers to EMS adoption by SMEs.

5.2. Internal barriers of SMEs adopting EMSs

Internal barriers are obstacles that arise within the firms and prevent or impede EMSs implementation or the adoption of EMSs. The internal barriers identified in the review study are grouped into the following four categories and shown with examples in Table 4:

1. Resources 2. Understanding and perception 3. Implementation 4. Attitudes and company culture.

Human rather than financial resources are the major barriers impeding EMS implementation and frequently cited in the studies (see for example, [13,20,29]). Lack of human resources and the multifunctional nature of staff becomes ever-increasing importance as the size of the company decreases not only to the implementation but also to the maintenance of EMSs [23,32]. SMEs are largely ill informed about EMSs, how they

work and what benefits can be derived from their

implementation [2,13,26,31]. As such, ISO 14001 and EMAS hold relatively little interest for the sector. Fur- thermore, EMAS has its public reporting component that frightens SMEs [22,26] and ISO 14001 has an added disadvantage amongst small companies who have had negative experiences with one of the ISO 9000 stan- dards [22]. Negative corporate attitudes towards EMSs and an

unfavourable company culture, often cited in SMEs, conspire to create a climate that deprives the EMS implementation process of support [18,22,28,30]. Incon- sistent top management support is frequently cited as a factor in the stop/start approach SMEs and small firms in particular, take to the implementation of an EMS [13,22]. Implementation in SMEs is an interrupted and inter-

ruptible process losing momentum and resources. Practi- cal difficulties, such as how to achieve internal auditor independence and how to determine environmental aspects and assign significance, also scupper implemen- tation [11,22,23,32]. In the pan-EU EMAS survey, the environmental review and the EMS elements took SMEs the most time to implement, were cited as the most dif- ficult to understand and the elements which required additional guidelines [24]. Fear of de-registration for minor breaches of legislation also make EMAS an unat- tractive proposition for many firms [17].

5.3. External barriers of SMEs adopting EMSs

External barriers are obstacles that arise outside the firms and prevent or impede EMS implementation from the adoption of EMSs. The external barriers identified in the review study are grouped into the following four categories and shown with examples in Table 5:

1. Certifiers/verifiers

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Table 4 Internal barriers to EMS implementation

Resources Understanding and perception Implementation Attitudes and company culture

Lack of management and/or staff Lack of awareness of benefits Implementation is an interrupted Inconsistent top management time for implementation and and interruptible process support for EMS implementation maintenance Inadequate technical knowledge Lack of understanding of EMAS Inability to see relevance of all Management instability and skills environmental statement or value stages

of reporting Lack of training Lack of knowledge of formalised Internal auditor independence Low management status of person

systems difficult to achieve in a small firm spearheading EMS implementation Multifunctional staff easily Uncertainty and concern over Doubts about ongoing Resistance to change distracted by other work possible de-registration (from effectiveness of EMSs to deliver

EMAS) for minor breaches of objectives legislation

Loss of environmental champion Perception of bureaucracy Difficulties with environmental Lack of internal marketing of EMS aspects/effects evaluation and the determination of significance

Lack of specialist staff Perception of high cost for Uncertainty about how to maintain Negative view or experience with implementation and maintenance continual improvement ISO 9000 standards rubs off on

ISO 14001’s acceptance Transient workforce Confusion between ISO 14001 and

EMAS and how they relate Requirement for capital expenditure

Table 5 External barriers to EMS implementation

Certifiers/verifiers Economics Institutional weaknesses Support and guidance

High cost of Changing economic climate alters Lack of promotion of EMSs Lack of experienced consultants of certification/verification which the priority given to an EMS in quality to assist SMEs disproportionally penalises small SME firms Lack of experienced verifiers Insufficient drivers and benefits Lack of accessible financial Inconsistent approach of

support consultants to EMS implementation

Duplication of effort between Uncertainty about the value of an Lack of clear or strict legislative External assistance, e.g. verifiers/certifiers and internal EMS in the market place framework consultants needed to interpret ISO auditors 14001 and required for

environmental review and EMS implementation

Verifiers exceeding their role e.g. Absence of a central source of Lack of sector specific influencing audit cycle length information on environmental implementation tools and examples

legislation Variations in verifiers approach to Absence of a single authoritative Absence or lack of trade EMAS validation body to interpret EMAS association or business network

support Distortion in the verifier market Inadequate institutional ISO 14004 [5] not used and

arrangement for EMAS (not largely irrelevant referred to in UK)

Lack of explanation of concepts and more guidance needed on environmental aspects and significance evaluation Poor quality information and conflicting guidance given

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2. Economics 3. Institutional weaknesses 4. Support and guidance.

SMEs face inconsistencies in and barriers from the certification system for ISO 14001 and verification sys- tem for EMAS [20,26,28,32]. EMAS verifiers and the verification process come in for greater criticism, whereas little comment is made about the certification process for ISO 14001. This does not mean the certifi- cation system is perfect; more that it has not been inves- tigated and presented in the analysed studies. SMEs found cost of certification to be a problem. In the pan- EU EMAS survey, it was found that small firms were charged the most per day for their verification to EMAS (1085 ECU/day) and large firms the least (878 ECU/day) [24]. Many SMEs experience insufficient drivers for EMS

adoption and are uncertain about the market benefits of EMSs [2,6,14,27]. The pan-EU EMAS survey indicated that just under half (49%) of all sites did not believe the market had rewarded them for achieving EMAS regis- trations [24]. Medium-sized enterprises were less critical of the scheme with 46% stating they had received market rewards whereas 54% of small enterprises stated they had not received any market benefits. In addition, the changing economic fortunes faced by SMEs alter their priorities and pushes the environment to the bottom of the list, further depressing interest in ISO 14001 and EMAS [19,22]. Shortcomings in the institutional framework, which

facilitates the operation of EMAS and ISO 14001, inhibit SME uptake of the two initiatives [12,26,32]. Some of these shortcomings apply to EMAS, for example, the lack of a Competent Body or the absence of accredited verifiers [24,26], and are not found in the UK, but others, such as the absence of a single body to interpret EMSs and the absence of a central source of information on legislation, do apply [12,22]. SMEs appear to need support and guidance, in parti-

cular for the environmental review and environmental aspects and significance evaluation, but experience prob- lems gaining consistent quality information and experi- enced consultants of good quality [1,14,26,28]. ISO 14004 is rarely used by SMEs [3]. The lack of sector specific guidance and material tailored to different sizes of firms, especially very small firms, is a frequently referred to external barrier [29].

5.4. Stakeholder pressure and drivers to adopt EMSs

SMEs are subjected to a variety of stakeholder press- ures related to their environmental performance and their adoption of EMSs. The review study sought to identify which stakeholders influence SME behaviour in the adoption of formal EMSs.

In the review study, 22 studies identified stakeholder pressures experienced by SMEs of which 16 studies identified key stakeholders as drivers for the adoption of EMSs and six studies identified the stakeholders that are influencing SMEs’ attitudes towards environmental per- formance [34]. The stakeholder identified, as one of the main drivers for the adoption of a formal EMS is the customer (see for example, [3,20,24,27]). Table 6 shows stakeholders identified in the review study and listed in order of priority. Customer and supply chain are also prominent in driv-

ing SMEs environmental improvements [13]. However, the regulator and local authorities exert greater influence on the general environmental performance of SMEs, in particular medium-sized enterprises, than customers [21,24,29,31]. The pan-EU EMAS survey identified the three main

stakeholders site environmental statements were targeted at [24]. Customers were the paramount audience for the EMAS statement for both small companies and medium- sized companies. Just under half (46%) of all SMEs cited local government and regulators as key audiences for their EMAS statements; however small firms (62%) were more interested in this stakeholder group than medium-sized firms (38%).

6. Conclusions

Extensive benefits accrue to SMEs adopting formal EMSs and this is widely reported in the analysed studies. These benefits may also arise in small firms that implement non-formal EMSs. Disbenefits also exist, although there are less of them and fewer studies give them coverage. Some studies are uncritical of the practi- cal experience of SMEs with EMSs and do not address disbenefits and this may be why they are underrepres- ented, though there may genuinely not be that many. Internal and external benefits, however, are real, valuable and demonstrated in the studies and appear possible to duplicate in other SMEs, but the large majority of SMEs still remain unconvinced of the need to tackle environ- mental issues given the findings of Mori [31] and Gallup surveys [21] and the low uptake of formal EMSs which is less than 1% of the total UK enterprise population.

Table 6 Stakeholders driving EMS adoption

Top 5 stakeholders Other important stakeholders

Customers Insurers Local government General public Local community Suppliers Regulators Larger companies Employees Banks

568 R. Hillary / Journal of Cleaner Production 12 (2004) 561–569

Small and medium-sized firms face internal and exter- nal barriers when seeking to address their environmental issues and adopt and implement EMSs, but it is the internal barriers that initially have the more significant role in impeding progress. Negative company culture towards the environment and the disassociation between positive environmental attitudes of personnel and taking action cause the uptake of environmental performance improvements and EMS adoption to stumble at the first hurdle. On top of this general culture of inaction on the

environment, SMEs are also very sceptical of the bene- fits to be gained from making environmental improve- ments. In many cases, especially for the smaller organis- ations, low awareness and the absence of pressure from customers (the most important driver for environmental improvements and EMS adoption) and insufficient other drivers mean that few efforts are made to address environmental issues. SMEs also face the problem of locating, and having the time to locate, good quality advice and information. Once a smaller company has embarked on EMS

implementation, the process is often interrupted and resources are frequently diverted to core business activi- ties. It is the lack of human resources, not financial ones, which SMEs find most difficult to secure and maintain for EMS implementation, this is particularly the case for micro firms. The more multifunctional the staff, as is common in micro and small companies, the more likely the process of implementation will be interrupted. Some studies indicate that SMEs, once on the route to certified EMSs, face inconsistency and high charges in the certi- fication system and poor quality advice from consultants. Customers are the key driver for the adoption of EMSs

and have influence far beyond any of the other stake- holders cited in the analysed studies. Paradoxically, cus- tomers also show lack of interest in, or are satisfied with SMEs current environmental performance. Micro enterprises, in particular, found their customers to be uninterested in their environmental performance. This may be because the customers, like the micro firms, con- sider micro firms’ environmental impacts to be negli- gible. Legislation and the regulators are more important drivers for general environmental improvements in SMEs than customers. The SME sector3 is not a homogenous sector. It is

diverse and heterogeneous. Studies which seek to inves- tigate the sector and draw conclusions about it, are to some extent, comparing not just apples and pears, but the whole fruit bowl. This paper’s conclusions have this limitation. It is recommended that future research con-

3 The EU definition for SMEs is the standard used in the analysis for this report. However, the sector is not a homogeneous group of companies and the definition for SME is a very blunt instrument when understanding the variety of enterprises in the sector.

sider parts of the sector either as sub-groups by size, i.e. micro, small and medium, or by industrial sector.

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the micro-company sector and the development of a tool to meet those needs. Plymouth: Payback Business Environmental Associ- ation for the Southwest, 1999.

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[31] Smith A, Kemp R. Small firms and the environment 1998—a Groundwork report. Birmingham: Groundwork, 1998.

[32] University Bocconi. EMAS Pilot Projects Third Progress Report from the European Co-ordinator of the 39 Commission DG XI Pilot Projects, Milan, 1997.

[33] WWF and NatWest Group. The better business pack. World Wildlife Fund for Nature (WWF), Godalming, 1997.

[34] Hillary R. Evaluation of Study Reports on the Barriers, Opport- unities and Drivers for Small and Medium-sized Enterprises in the Adoption of Environmental Management Systems. London: Department of Trade and Industry, 1999.

Ruth Hillary (Ph.D.) is the founder of the Network for Environmental Management and Auditing (NEMA) and UK expert to ISO TC207/SC 1 Working Group 2 feeding into the deliberation on ISO 14004 and ISO 14001. She is Editor in Chief for the Elsevier’s journal of environmental leadership: Corporate Environmental Strategy and is the Series Editor of the Business and the Environment Practitioner Series. Her Ph.D. is The Eco-management and Audit Scheme: Analysis of the Regulation, Implementation and Support, Imperial College, University of London. She is widely published and is editor of Environmental Management Systems and Cleaner Production (J Wiley & Sons) and Small and Medium Sized Enterprises and the Environment (Greenleaf). She acts as a consultant to industry on ISO 14001 and has worked for the European Commission on EMAS and been project manager on many EU and UK projects. Her recent study for the UK Department of Trade and Industry was on the opport- unities and barriers facing SMEs implementing environmental manage- ment systems like ISO 14001.