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Re: EMS and P2

If there was a uniform government enforced playing field for the financial
auditing of EMS & P2 performance then I think it would be easier to answer
the question of whether it pays to invest in an EMS & P2.

I wrote this one version of the issue in this commentary:

Do you know of any stakeholder organization which is demanding government
(ie.SEC) to draw up stricter environmental accounting and auditing standards
(ie.FASB & AICPA) and then mandate full transparency of EMS performance by
publicly traded companies?

If EMS financial accounting departures to stakeholders are part of our
financial culture then a lot of creative cooking of the books can go on
either under ISO14000 and or any EMS for that matter.

Donald Sutherland

-----Original Message-----
From: Butner, Robert S <butner@BATTELLE.ORG>
To: 'Kelly D. Moran' <kmoran@tdcenvironmental.com>; p2tech
Date: Saturday, April 21, 2001 1:51 PM
Subject: RE: EMS and P2

Ah, spring time comes to North America, and with it, the perennial question
of "does ISO 14000 cause P2?" is born anew, as are the dandelions in my
yard, the restlessness in my soul, the Seattle Mariner's hopes for a World
Series pennant, and the rhithrogena morrisoni mayflies which are even now
drifting down the Yakima River, to their ultimate destiny of becoming trout
food (grow big and fat, little fishies.  I'll be coming to visit soon).

But, lest I succumb to that particular diversion, back to the topic at hand
-- to wit:  In a recent (4/20/2001) post to P2TECH, Kelly Moran
(kmoran@tdcenvironmental.com) writes (in part, (and without parentheses)):

> Does anyone have any data that shows that
> ISO 14000 certification and/or implementation of an EMS can be linked to
> implementation of P2 or other environmental improvement?  This is a
> topic of ongoing debate here in CA.

As it even in the lesser developed parts of the country, Kelly (i.e.,
everywhere OTHER than California).

I should note that this question have been raised to the P2TECH group before
(on at least two occasions) and the ensuing threads ought to be available in
the archives, but it's worth raising again because there's new data
available.  The persistence of this question probably lies in the fact that
it's a good question, with ambiguous enough answers to thwart attempts at

Although, in my darker moments a more cynical explanation comes to mind....

So, anyway,  ! was interested in the same question several years ago
(actually, I still am interested, but my attention has moved on to other
things, as it is wont to do), and was lucky enough to get some EPA Region 10
support to look at it in some depth  (those folks up in the Northwest can
spot a trend a thousand miles away!  I think it has something to do with all
the caffeine).  After a reasonably extensive review of the literature
available at the time, I came to the preliminary conclusion (preliminary
because at the time the ISO standard had just been finalized, and little
opportunity existed to actually collect empirical data) that implementation
of an Environmental Management System (and particularly registration to a
procedural EMS standard such as ISO 14001) was not likely to be a necessary
OR sufficient condition, much less a causal factor in bringing about
pollution prevention.

However, this assertion (provided in its expanded form below) probably ought
to be re-evaluated in light of new data, which is starting to appear.  Which
brings me to my main reason for posting a response to the question (other
than feeling guilty that I haven't contributed much to P2TECH of late).  The
following two web sites are probably enough to keep you busy for quite a

Environmental Law Institute's National Database on EMS's
This site includes a recent (March 2001) report, a whopping 200+ pages
dealing with the preliminary findings of the ELI's effort to maintain a
national database for EMS pilots.  Note that the findings are based on
baseline study, not the results of EMS implementation ("post mortem"
results, though I suppose a better term could be found).  The site also
includes a lot of links to related research papers, public versions of the
baseline data, and an opportunity to participate.

Multistate Working Group (MSWG)
Though their web site hasn't been updated in the past year, as far as I can
tell, the MSWG is still an important source for information on research
examining the effectiveness of EMS's.

So what do I think?   I'm not sure that what I think is relevant anymore
(some would argue never was), since new data are surfacing to fill in the
gaps I faced when examining the issue in 1995/96.  But I've never let
creeping irrelevance get in my way.   Here's the appropriate excerpt from
"Environmental Management Standards: A Critical Review of Policy
Implications,"  a 1996 report to US EPA Region 10's Office of Innovation, by
RS Butner, M Skumanich and E Besnainou, Battelle Seattle Research Center
(not published but available from the author).


Success of the ISO 9000 standards.

Although industry opinion over the impact of ISO 9000 quality standards is
hardly unanimous , there seems to be little disagreement that compliance
with the standards has become an important business factor(1) .  Although
the analogy with ISO 14000 is not perfect* , some industry leaders expect
ISO 14000 certification to become a de facto requirement for global
businesses and their direct suppliers.

[...blah blah blah]

Review of ISO 9000 literature does not support a causal relationship between
ISO 14001 and improved environmental performance.

Much of the regulatory interest in the EMS standards is based on a
presumption that the creation, documentation and third party certification
of an environmental management system will naturally lead to improved
environmental performance.  Review of the empirical data does not yet appear
to support this presumption, which is built largely on the argument that
increased managerial attention to environmental issues (a hard-to-dispute
benefit from ISO 14001 registration) will eventually and certainly lead to
environmental improvement .(2)

In light of the short history of the standard, it is not surprising that
relatively little empirical data has been collected relating the effect of
EMS implementation to environmental performance.   However, as has been
noted elsewhere in this report, the ISO 14000 standard is similar in many
respects to the ISO 9000 quality standard.  These parallels led the author
to examine the ISO 9000 literature in hopes of documenting causal
relationships between ISO 9000 and product quality.  Given the similarities
between the standards, such links might be expected to provide insight into
the relationship between ISO 14000 and environmental performance.

Unfortunately, the connection between ISO 9000 and product quality
improvements does not appear to be as well documented as one would expect,
given the extensive industry experience with the standard.   In fact, a
review of the literature and postings to ISO 9000 discussion groups elicited
only a small number of empirical studies of the relationship between ISO
9000 and product quality(3) .  Surprisingly, none of these studies was able
to document a correlation between registration to ISO 9000, and objective
measures of product quality.

While the above data do not support a direct cause-effect relationship
between registration to ISO 9000 and product quality, few people would
interpret this to mean that the ISO 9000 standard has no role in promoting
or documenting quality.  There is a large body of anecdotal and case-study
information available indicating a relationship between conformance to the
standard and improvements in quality.  And regardless of the actual impact
(or lack of impact) of the registration process on quality at the facility
level, most would agree that the presence of the standard has reflected (and
perhaps driven) an overall trends towards higher quality of products at the
industry sectoral level.  The bottom line message seems to be that while the
overall effect of ISO 9000 on industry has been to promote improved product
quality, it is neither a necessary nor sufficient indicator when applied at
the level of the individual company or facility.

In light of the assumed parallels between ISO 9000 and ISO 14000, this is an
important finding.  Much of the policy discussion of EMS standards has
revolved around whether or not registration to and EMS standard serves as an
effective indicator of environmental performance at the corporate or
facility level.  Based on the review of ISO 9000 literature, it may be safer
to conclude that widespread adoption of EMS standards are likely to improve
overall environmental performance of industry, as contrasted to viewing EMS
adoption as a meaningful indicator of facility environmental performance.
The result of such a conclusion would be to shift emphasis from regulatory
streamlining to technical assistance, and to favor broad-based outreach and
incentive efforts over demonstration and pilot programs (which typically
affect “early adopters” who tend to have already high environmental

*As industry leaders themselves are quick to point out, the management of
quality and the management of environmental performance are not synonymous.
The primary stakeholder in a quality context is the customer; the
stakeholder community for environmental performance is much broader and more
diverse in expectations.  Hence, compliance to ISO 14000 standards may have
a less direct financial benefit than ISO 9000 compliance, although the
overall indirect benefit (including increased efficiency of materials use,
etc.) may be similar.

Cited References (updated 04/21/2001)
(1)  "More than a Passport to European Business:  Most U.S. Outfits Meeting
ISO 9000 Rules Find Paybacks Galore," Business Week,  November 1, 1993; Pg
146H; Number 3343

(2) Diamond, Craig.  “Environmental Management System Demonstration
Project,” Final Report, NSF International, Ann Arbor, MI.

(3) "Are Companies Earning Return on Their Investment in ISO 9000
Registration? A Review of the Empirical Evidence"
Chris FitzGibbon  http://www.orioncanada.com/Rev-art.htm

Hope this helps.

Scott Butner (butner@battelle.org)
Senior Research Scientist, Environmental Technology Division
Pacific Northwest National Laboratory
MS K6-04
PO Box 999, Richland, WA  99352
(509)-372-4946 voice/(509)-372-4995 fax