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ISO 14001 for the right reason: The Bottom Line

“Many companies implement ISO 14001 out of genuine concern for the environment. Nevertheless, for the vast majority of companies, altruism goes only so far in the boardroom.”

From the "Environmental Management Report" Dated May, 1998 published by McGraw-Hill.

Many companies implement ISO 14001 out of genuine concern for the environment. Nevertheless, for the vast majority of companies, altruism goes only so far in the boardroom.

What companies really want to know is: Does ISO 14001 produce bottom line results? The answer is yes if one utilizes ISO 14000 as a business tool!

As in the case of ISO 9001:2000 implementation, it is incumbent upon companies to find opportunities to get payback from their implementation investments.

The same holds true of ISO 14001. It takes some initiative to utilize ISO 14000 to reduce your environmental costs.

The standard can be a marvelous tool for doing so if used properly. Savings can be accomplished through the continuous improvement aspects of ISO 14001. They can also be accomplished by broadening your understanding and approach in identifying environmental aspects and impacts.

You should first attempt to baseline and capture all of your environmental costs up front, preferably at the start of an ISO 14001 implementation when you are identifying your environmental impacts and aspects. Once that's accomplished, you can zero in on the highest environmental cost areas.

Establish targets and objectives towards making improvements and reducing costs.

Add a continuous improvement philosophy, and you can actually look for continued cost savings over time.

Design ISO 14001 systems with an eye toward encouraging employee involvement, reducing environmental impacts and residual waste.

ISO 14001 requires you to identify these aspects and impacts. However, the standard doesn't tell you that you should also be looking at these as environmental costs that hold the potential for tremendous savings.

Simply looking at natural resource consumption, for example, provides an opportunity to influence energy costs - electric, gas, these types of expenses. In the case of hazardous materials, your ISO 14001 system can influence transportation costs, landfill costs, and permitting fees.

You might want to consider a program for material substitution. Substituting biodegradable materials for materials that go into landfills, or using solvents that have less of an environmental impact, can produce big savings.

Focus on the way materials are packaged at your company. Alternative packaging methods may reduce residual waste such as banding materials. Place an emphasis on cheaper, more environmentally friendly materials.

If done right, ISO 14001 implementation should more than pay for itself. It should drive a bottom-line return of at least three times the initial investment.

These savings can be immediate in the case of new technologies or material substitution, or it might be incremental in the case of better employee involvement in reviewing and controlling their practices and making suggestions for process improvements.

Countries may not recognize their own environmental costs and they don't consider these costs as variable.

Many companies recognize environmental costs as being final; it's a cost of doing business. Not so. You must first change your mindset to look for opportunities to reduce environmental costs.

ISO 14001 tells companies that they must be dedicated to continually improving their environmental performance. The smart companies will take this as a challenge to continually reduce associated environmental expenses.

We haven't even touched on the potential savings from fewer environmental incidents and fines. Obviously, these are opportunities for improvement as well. You may be surprised to identify new technologies and processes that are not environmentally friendly but cheaper in the long run.

Moreover, don't forget to make environmental savings part of the agenda for your management reviews. You'll be glad you did and so will your controller.

Vincent Zottola is the Manger of Field Operations of the environmental division of TQS, Inc., a management system consulting firm specializing in ISO 14001 implementation. He is the author of the 'ISO 14001 Toolkit' which was published by McGraw-Hill Companies. He has assisted in numerous successful ISO 14001 registration efforts.

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