A series of Q&A questions. (case study) The knowledge of Business and Sustainable Development is required

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Module6MGMT2004Lecture_EMSISO14001.ppt
Home>Business & Finance homework help>A series of Q&A questions. (case study) The knowledge of Business and Sustainable Development is required

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Lecturer: Dr Hossein Mohammadi

School of Management, Curtin University

MGMT 2004 | Business and Sustainable Development

Lecture 5

Lecture 5

Environmental Issues in Business 201

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Environmental Issues in Business 201

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ELECTRONIC WARNING NOTICE FOR COPYRIGHT STATUTORY LICENCES

Environmental Management Systems (EMS) and ISO Certification

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At the end of this lecture you will be able to:

  • describe the nature and implementation of EMS;
  • identify the obstacles for businesses concerning the uptake of ISO certification;
  • assess the benefits and drawbacks of recognised certification schemes.

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Environmental Issues in Business 201

Solutions Environmental Management Systems

Plan for the hour

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  • Credentials and Standards
  • International Organization for Standardization (ISO)
  • ISO Process
  • Environmental Management Systems (EMS)
  • EMS in practice (Video clip)
  • Potential and Pitfalls of ISO 14001
  • Recap

Can ISO certified EMS contribute towards CSR and Sustainable Development?

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Per Capita Egg Consumption: > 200/year

Number of Egg Producers (commercial): ~ 500

Gross Value of the Egg Sector: > 1 billion

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  • Australian Model Code of Practice for Poultry (2002) defines “free range” as 1,500 birds/hectare
  • QLD recently adopted “free range” as 10,000 birds/hectare [not based on evidence or science]
  • Business and consumers can benefit from the consistency of labels for different types of eggs

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  • Credentials have always been important as a way to set and sell standards in the business world
  • Claims of product safety, lab tested performance or celebrity endorsements have helped businesses to grow for decades

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  • Improved transparency & communication
  • Commonly agreed parameters
  • Fill regulatory vacuum

Market-based substitute to government regulation

  • Facilitate world trade based on trust
  • Foster benchmarking of products

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Environmental Issues in Business 201

The world’s leading institution that prepares and publishes International Standards for all electrical, electronic and related technologies.

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  • ISO is a group of voluntary standards adopted universally (160+ countries around the world)/ EMAS is a quasi regulation issued by the European Union

  • EMAS covers only industrial productions whereas ISO is much wider in scope, production, distribution, services i.e. only production sites are eligible for certification under the EMAS

  • EMAS is more holistic in nature and in comparison ISO certified companies need to go through stringent hoops in order to be EMAS certified

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  • ISO also means ‘equal’ (as in isobar, isometric, isotope)
  • Develops international standards in all technical areas except electrical and electronics (responsibility of IEC)
  • Promotes development of standardization in the world with the aim of easing international trade of goods and services
  • Has a portfolio of over 22,500+ standards for all three sectors (business, state, & civil society) that provide practical tools related to triple bottom-line (economy, environment & society).

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  • Quality refers to all those features of a product (or service) which are required by the customer

Quality management means what the organization does to ensure that its products or services satisfy the customer's quality requirements and comply with any regulations applicable to those products or services.

  • ISO 9001 certification deals with how organizations:

enhance customer satisfaction, and

achieve continual improvement of its performance

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Environmental Management is relatively a ‘new turf’ for business

There is much confusion as to what is expected of firms as many environmental aspects are not subject to regulation or standards

There is a wide range of company practices, which are difficult to compare

There is a recognised need for a standardised approach for environmental management in business

ISO 14001: certification for Environmental Management Systems

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https://isotc.iso.org/livelink/livelink?func=ll&objId=18808772&objAction=browse&viewType=1

There are more than 300,000 ISO 14001 certifications in 171 countries around the world. 

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Chart1

1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Australia
ISO 14001 Certifications: Australian Trend
708
1049
1370
1485
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1898
1778
1964
749
1125
1432
1472
1882
2000
3339
4191
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3938

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Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Australia 708 1049 1370 1485 1250 1898 1778 1964 749 1125 1432 1472 1882 2000 3339 4191 4400 4247 3938

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Australia
ISO 14001 Certifications: Australia

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EMS is an integrated tool, designed to help companies not only realise legal compliance but environmental, economic and social benefits through waste minimisation and efficiency gains

  • It includes the organisational structure, planning and resources for developing, implementing and maintaining policy for environmental protection

  • The main purpose of an EMS is to systematically control adverse environmental impacts and ensure that established objectives are met. It helps in scrutinizing environmental performance … (Massoud et al., 2010)

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To develop, implement, manage, coordinate and monitor corporate environmental activities for compliance and efficiency:

Compliance = reaching/maintaining the legal standards

Efficiency = improved economic bottom-line

To provide an independent means of external verification that can vouch for - reliable and comprehensive system to implement, monitor and evaluate their environmental initiatives

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  • Plan what is needed

  • Do it

  • Check that it works

  • Act to correct any problems

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  • Management must commit

Senior management needs to be committed and involved in EMS

  • Evaluate legal requirements

Specific legal requirements against company’s operations must be cross-referenced

  • Provide adequate resources

Requisite human, financial and physical resources required, including allocations for training and EMS coordination

  • Set relevant SMART targets

Objectives and targets should be specific, measurable, action oriented, realistic and relevant and time bound

  • Continuously improve your EMS/Recognise the marketing benefits

Use of external audits in order to improve the process/feature EMS as a core part of your CSR to your customers (with the help of ISO)

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  • Financial Drivers

Ethical investment

Quality ratings

Liability protection

Financial damages

  • Regulatory Drivers

Environmental regulation

National/Local green agenda

Public disclosure requirements

Resource efficiency regulation

  • Market Drivers

Green consumerism

First mover advantage

Cost reduction advantage

Market access!!!

  • Social Drivers

Public opinion

Media attention

Community pressure

Employee expectations

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Drivers of Certification

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http://youtu.be/HK6AeQSCLt4

Tute Question of the Week:

Demonstrate the strengths and weaknesses of ISO 14001

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  • Minimise environmental liabilities (risk management)
  • Maximize the efficient use of resources (reduce cost)
  • Demonstrate a good corporate image (market advantage)
  • Build awareness of environmental concern among employees (organisational culture)
  • Improve recognition outside the market sector (community groups, state agencies)
  • Gain a better understanding of the environmental impacts of business activities (improved eco-efficiency/do less harm)

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  • Is not a product standard
  • Is not a performance standard
  • Is not a tool of change for doing better
  • Does not require or establish limits of pollution
  • Does not mandate best practice technology
  • Dependent on the credibility and work-ethic of a certifying agency
  • Resource intensive (time/cost/interruption)
  • Does not consider ethics i.e. weapon manufactures can be certified (Krut and Glecckman 2013)

It is not the environment that is being managed but, business activities that have adverse impacts on the environment

ISO 14001 does not state specific environmental performance criteria (ISO, 2018 para 3).

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Bansal and Bogner (2002) reported that firms were certified for estimated costs ranging from $10,000 (for small firms) to $200,000 (for large firms).

Cost associated with developing and implementing the ISO 14001 includes:

  • Acquiring information necessary for completing the certification requirements;
  • Record keeping and documentation, and changes in practices necessary for meeting the requirements of the ISO 14001;
  • Employee training (the opportunity costs)
  • Time associated with auditing (both internal and third party) to verify that the policies and practices meet the standards;
  • Registration (paid to the national agency that oversees ISO standardization).
  • Renewal of certification (need to do it every three years)

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  • The Federal Court upheld the Australian Competition and Consumer Commission (ACCC) case against Steggles that the company deliberately misled consumers by claiming its chickens were “free to roam”. Reality is that each bird had a space of less than 8 x 10 inches [ABC, 2013]

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Comparison between 42 ASX listed/ISO 14001 certified companies and 60 ASX listed/non-certified and found that certified companies were no better than non-certified companies in terms of environmental engagement.

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ISO 14001 certification reflects on the practice of an Environmental Management System (EMS) – a tool designed to help companies realise legal compliance as well as TBL performance

EMS is an internal process to manage environmental risks and opportunities. Whereas ISO 14001 is an external certification of that process but not the outcome.

ISO certified EMS is certainly a positive way forward in terms of CSR, but it is not the ideal blueprint to achieve sustainable development.

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Can ISO certified EMS contribute towards CSR and Sustainable Development?

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Environmental Issues in Business 201