Expanding on the environment makes business sense for SMEs

As the European Commission’s enterprise directorate recommends that EU governments should boost small businesses’ uptake of environmental management systems, Richard J Martin, project manager for the NetRegs website, examines the commercial benefits of implementing one.

Small businesses are responsible for an estimated 60% of the commercial waste in England and Wales and for as much as 80% of pollution incidents. Limited time and resources mean that many smaller businesses ignore environmental issues to concentrate on core business, but in doing so they could be risking costly prosecution and missing out on commercial benefits that have a real impact on the bottom line.

This is why the UK’s environmental regulators joined force to develop NetRegs, a free website to help small businesses to understand their environmental obligations. The website provides clear guidance on the environmental legislation affecting a range of business sectors, as well as good practice advice on issues such as waste management and water and energy efficiencies.

However, while NetRegs is an excellent free resource for businesses, it is only part of the bigger picture. To change environmental performance in the long term it is crucial that environmental issues become central to the overall management processes of a business, rather than merely an afterthought.

An environmental policy is a good starting point. This is a set of fundamental principles and goals which helps a company to assess its environmental impacts and put its environmental commitment into practice. It is essential that an environmental policy is backed up by an action plan to ensure that it has practical effects within the business.

Having an environmental policy in place can give businesses a real competitive advantage in winning new contracts as, increasingly, larger companies and public sector organisations will insist that their suppliers demonstrate that they have an environmental policy in place. However, less than a quarter of the 8,000 small businesses we surveyed had any form of environmental policy.

An effective environmental policy provides a good foundation upon which a more formal environmental management system (EMS) can be built. An EMS is a continual cycle of planning, documenting, implementing, reviewing and improving the processes and actions that a company undertakes to meet its business and environmental goals.

Although implementing an EMS requires an initial investment of internal resources, it can have many far-reaching benefits for a business, including:

  • Avoiding the risk of costly prosecution by keeping up-to-date with the environmental legislation governing the business’s activities;
  • Achieving significant cost savings through improved efficiencies in areas such as water, energy and raw materials;
  • Improving environmental performance and reducing the risk of pollution incidents and associated liability costs;
  • Offering access to new business opportunities where an EMS is a requirement;
  • Enhancing credibility with customers, stakeholders and the general public;
  • Providing evidence of sound management; and
  • Boosting staff morale and improving their awareness of their environmental responsibilities.

For businesses in the UK, there are two types of independent accreditation for an environmental management system. These are:

  • ISO 14001 – The International Standards Organisation’s scheme, administered by the British Standards Institute in the UK; and
  • EMAS – The Eco-Management and Audit Scheme, a European Standard administered by the Institute of Environmental Management and Assessment in the UK.

Key requirements for both include the following:

  • Commitment from senior management to an environmental policy that incorporates prevention of pollution, compliance with environmental legislation and continual improvement;
  • Establishment and maintenance of environmental legal and stakeholder requirements (such as climate levy agreements etc.) of the business;
  • Identifying and evaluating the environmental aspects of the business – the elements of an organisation’s activities, products or services that can interact with the environment;
  • Formulation of environmental objectives and targets for the business, based on the environmental policy, legal requirements and environmental aspects over which the business can be expected to have an influence;
  • Making a plan which outlines how the business proposes to achieve the objectives and targets;
  • Implementation of the plan: developing the capabilities, resources and support mechanisms required to achieve the plan’s objectives;
  • Measurement and evaluation of the plan by internal and external auditors; and
  • Continuous review and improvement of the plan.

The British Standards Institute has recently launched a new standard BS 8555 which outlines an implementation process that can be undertaken in up to six separate phases and allows for phased acknowledgement of progress towards full EMS implementation. This has particular reference for small businesses, although it is applicable to any organisation, regardless of the nature of the business activity undertaken, location or level of maturity. It includes advice on:

  • The integration and use of environmental performance evaluation techniques during the implementation process; and
  • The co-ordination of an EMS with other management systems.

BS 8555 will help all businesses to improve their environmental performance and will demonstrate to interested parties that progress is being made towards the target level of environmental management.

Increasingly environmental criteria are being set in contract tenders and even existing clients may start to ask suppliers for proof of their environmental credentials. Soon it may become less a case of can small businesses afford to put in place an environmental management system and more a case of can they afford not to?

For more information on ISO 14001 and BS 8555 visit http://www.bsi.org.uk

For more information on the EMAS scheme visit http://www.iema.net

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