ISO 14001: A revised standard linking strategy, risk, resilience & improvement
With the publication of ISO 14001:2015 due later this year, IEMA's Martin Baxter shares his views on the challenges and opportunities businesses will face under the revised environmental standard.
The global environmental management system (EMS) standard, ISO 14001, is now entering the final stage of a major revision that will introduce significant changes. A two-month international ballot to adopt the final text starts today (2 July), ahead of publication at the beginning of September.
The changes are far-reaching and will help over 300,000 certified organisations in 170 countries to enhance their environmental performance, risk management and resilience. However, its effects will be felt on a much wider scale; as many more will be part of the supply chains of those using the standard. This is a terrific opportunity for businesses to make positive impacts on a global scale.
The revision to 14001 needs to be considered in a broad economic and environmental context – particularly as the new standard will in all probability be around until the mid-2020s. The economic issues are pretty straightforward – ISO 14001 has to help organisations cut costs, improve productivity, capitalise on business opportunities, maintain and enhance brand and reputation, and reduce business risks. However, the environmental context is changing, as is the way the businesses view the way that the environment impacts on their ability to create long-term value. More and more organisations are seeing the benefits of taking a longer-term perspective on the way that the environment will influence their future success. This has formed part of the thinking behind the revision of ISO 14001 – while we have been keen to ‘fix’ any problems with the current standard, we have had a focus on the environmental issues that businesses will be facing in 2020 and beyond.
IEMA has been at the forefront of the revision, engaging members at all stages and reflecting their views and experience in national and international meetings. It’s been a real ‘bottom-up’ process of surveying and listening to users of the standard about what works well and what needs to be improved. This level of interaction gives fantastic insight, and confidence that we’ve focussed on the right issues.
Building stronger links between EMS and overall strategic direction
To remain at the fore of driving integration of the environmental considerations into decision-making, IEMA members were very clear (95% support) that the revised standard must make stronger links between EMS and an organisation’s overall strategy.
ISO’s new high-level structure for management systems standards is being used as the basis for the revision and new sections on context and leadership provide the basis of achieving this. There are new requirements around understanding key internal and external factors, which will provide a high-level strategic understanding of important issues relating to managing environmental responsibilities. There is also a new requirement on understanding the needs and expectations of interested parties. This overall context will help determine the scope of the EMS, developing criteria for evaluating environmental aspects and organisational risks and opportunities, and in communications.
The new section on leadership received strong support from IEMA members. There are three key points which enhance the standard. First is the requirement that top management takes accountability for the effectiveness of the EMS. Second is the requirement that environmental management must be integrated into core organisational processes. Finally, top management must ensure that the EMS and environmental objectives are aligned with the organisation’s strategy. Taken together, these reinforce the role of the EMS as a tool to support the overall goals and direction of the business and is crucial to ensuring that environmental management isn’t a marginalised activity, but belongs at the heart of the organisation.
Impacts from a changing environment
The focus of ISO 14001 has largely been on managing and improving the impacts of an organisation on the environment. Increasingly, however, organisations are managing the impact of a changing environment on the organisation – for example adapting to climate change and issues around resource security– and the risks and opportunities associated with these. There is strong support within IEMA’s membership (86% of survey respondents) for ISO 14001 to adopt this approach, particularly as it’s a key part of enhancing business resilience, and it’s been incorporated into the standard.
A core element of an EMS is the environmental policy and the development of a management system to implement the policy commitments. Whereas the current ISO 14001 requires organisational commitments to legal compliance, prevention of pollution and continual improvement, the revised draft ISO 14001 adopts a broader approach. The commitment to prevention of pollution is strengthened by a requirement to commit to environmental protection.. In addition, the environmental protection commitments must be specific to the context of the organisation, a requirement that should mean that the environmental policy is closely aligned to key business drivers.
Risks and Opportunities
The revised standard takes a much broader approach to identifying and evaluating the consequences arising from an organisation’s interface with the environment. New language has been introduced based around risks and opportunities. They are defined and used throughout the standard as a combined term “potential adverse effects (threats) and potential beneficial effects (opportunities)”. Crucially, risks and opportunities can relate to the organisation and/or the environment.
In addition, the process of identifying environmental aspects and impacts will need to consider a life-cycle perspective – ensuring that the EMS takes a broader consideration of what the organisation can control and influence.
Greater emphasis on managing impacts across the value chain
There is widespread recognition that taking a holistic environmental perspective across the whole value chain helps to identify business and environmental improvements that might not otherwise be obvious. 84% of members who responded to IEMA’s survey believe that ISO 14001 should place greater emphasis on managing impacts across the whole life-cycle of products and services and their supply chains.
This section of the revised standard adopts this approach, stretching appropriate consideration of environmental requirements into product development life cycle stages, and into procurement and supply chain management
Strengthen requirements on demonstration of legal compliance and performance improvement
The language around “legal requirements and other requirements to which the organisation subscribes” (ISO 14001:2004) has been replaced with “compliance obligations” – i.e. those legal requirements that an organisation has to comply with and other optional or formal requirements. The organisation will need to ensure its EMS is developed to achieve all of these.
The requirements on the evaluation of compliance have been extended when compared with the existing standard, such that an organisation will need to specify the frequency that it will periodically evaluate compliance, and maintain knowledge and understanding of its compliance status.
Requirements on internal and external communication are significantly enhanced compared to the existing standard. The most significant change is the requirement for the organisation to ensure the reliability of environmental its communications. This points to internal assurance processes that will ensure the quality and consistency of externally reported performance data, including that required for regulatory purposes.
Building organisational capability
Ensuring that the content of the revised ISO 14001 captures the essential elements of an effective EMS for the 2020s is clearly important. The real challenge, however, will be in implementation – both internally in organisations and externally in terms of third party auditors.
The proposed changes are significant, and will require a much broader application of environmental management throughout the organisation, integrating environmental management into core business processes. Ensuring that those with EMS responsibilities have the skills and capabilities to implement the new requirements effectively will become an increasing focus of IEMA’s work programme. So too will be the support offered to ensure the workforce of every organisation is equipped to play their part.
Martin Baxter is IEMA’s chief policy advisor, leading the UK’s input on the ISO working group that is revising ISO 14001.