Environmental Management

Systems
Introduction

 Sustainability has two meanings within the

context of an environmental management
system (EMS).
 The first meaning, the ability to preserve and
stretch resources is achieved through
◦ pollution prevention and dedicated source reduction
programs;
◦ waste minimization and recycling enable
companies to stretch finite resources, thereby
ensuring resource availability for future years of
operation.
 The second interpretation of sustainability is in
terms of future risks to a business.
 In this regard, we borrow a term from the legal
profession: liability.
 All companies, regardless of the industry
sector within which they operate or how good
their compliance records are, face future
liabilities.
 What is a well-managed waste problem in
today's context may not be in the future. This is
often thought of by corporations as an
intangible cost for environmental compliance.
 This is a mistake, for many corporations that
acted within the existing legal environmental
framework for many years subsequently faced
huge liabilities that threatened the very
existence of their businesses.
Environmental Cost
Accounting
 Financial calculation tools applied to the
analysis of investment decisions and life-cycle
costing (LCC, also life-cycle costs) are closely
related techniques for evaluating investments
involving expenditures for equipment,
installation, services, and various infrastructure
investments needed to maintain and grow a
business.
 These investments have present and future
benefits or will have an impact on future costs.
 Readers familiar with business financial
management will recognize the process of
evaluating and selecting from among
investment alternatives having the same
objectives as capital budgeting.
 Among engineers this process is referred to as
engineering economic analysis.
 The process of economic evaluation and
comparison of investment alternatives
encompasses a collection of analytical
techniques that are tools for investment
decision making.
 For environmental management, these tools
enable a company to assess the financial
benefits of alternative strategies or compare
such strategies to the status quo.
 Ideally, investments in terms of costs, cost
saving, and potential for reducing risk of
environmental liability are the foundation on
which smart companies base their long-term
strategies, just as they do for any business.
 Unfortunately, there still exists a mentality
among enterprises to manage the
environmental issues separate from the overall
business planning and strategic investments,
which are the mainstream of the business.
 This is mistake, because in today’s world it is
not possible to separate the mainstream
business from that business’s environmental
obligations.
 The essence of any investment is to sacrifice
now in favor of future benefits.
 A typical investment decisions asks this
fundamental question: Do the future net
benefits from the investment outweigh the
initial costs?
 Benefits may be in the form of additional future
income or revenues, or they may be intangible
and possibly nonpecuniary in nature.
 LCC addresses the question of how best to
accomplish a particular task. In other words,
it assists in defining the least-cost method,
taking into consideration both the initial outlay
and future operating costs.
 LCC also involves risk assessment, in the
sense that some of the strategies or
initiatives under consideration require larger
initial outlays and achieve lower future
costs than others.
 In developing criteria for an investment
portfolio, a business should focus on the
direct costs for investments and the potential
for reducing long-term liabilities.
 In terms of the environmental issues facing
companies, this requires that attention be
given to the several cost tiers.
 Decisions on investing in pollution
management strategies that rely heavily on
end-of-pipe treatment technologies are
the result of ignoring or not recognizing
the true or total costs associated with
pollution control and waste management.
 To account for all of the costs we need to
recognize that they fall into four distinct
categories or tiers (examples of each
category follow):
 1. Usual or normal costs.
 2. Hidden or indirect costs.
 3. Future liability costs.
 4. Less tangible costs.
 The Difference between an
Environmental Program and an EMS
 An environmental management system
(EMS) is a systematic approach to handling
the environmental aspects of an organization.
 It is a management tool that enables an
organization of any size or type to control
the impact of its activities, products, or
services on the natural environment.
 Every company today will claim that it has
an environmental management system.
 It will point to the fact that it has an
environmental manager or that the plant
manager is responsible for environmental
reporting issues, permits, meeting compliance
requirements, and the like.
 It will point to the fact that it has personnel and
perhaps even a dedicated department that
manages the environmental aspects of its
business operations.
 Some will highlight the fact that they have a
formal waste minimization program.
 However, this is not an EMS but a collection
of components loosely linked together and
applied to address environmental compliance
issues.
 There is a fundamental difference between
managing environmental issues with
corporate resources under a program within
an environmental department and adopting
an EMS, which is a systematic approach to
linking and managing all aspects of a
business to the environmental interactions
of the operations and products.
The key elements of an EMS
are
• An environmental policy. The
environmental policy and the requirements to
pursue this policy via objectives, targets, and
environmental programs.
• Planning. The analysis of the environmental
aspects of the organization (including its
processes, products, and services as well as
the goods and services used by the
organization).
• Implementation and operation.
Implementation and organization of processes to
control and improve operational activities that are
critical from an environmental perspective
(including both the products and services of an
organization).
• Checking and corrective action. Checking and
corrective action, including the monitoring,
measurement, and recording of the
characteristics and activities that can have a
significant impact on the environment.
• Management review. Review of the EMS by
the organization's top management to ensure
its continuing suitability, adequacy, and
effectiveness.
• Continual improvement. The concept of
continual improvement is a key component of
the environmental management system; it
completes the cyclical process of plan,
implement, check, review, and continually
improve.
 An EMS is based on a set of standards.
There are several versions of an EMS, we
recognize the ISO 14000 series.
 The standards in the ISO 14000 series fall
into two major groups: organization-oriented
standards and product-oriented standards.

 The organization-oriented standards provide
comprehensive guidance for establishing,
maintaining, and evaluating an EMS. They
are also concerned with other organization
wide environmental systems and functions.
 The product-oriented standards are
concerned with determining the
environmental impacts of products and
services over their life cycles and with
environmental labels and declarations.
 These standards help a business gather
information it needs to support its planning
and decisions and communicate specific
environmental information to consumers and
other interested parties.
Understanding the Elements
of an EMS
 A simplified view of any EMS is in terms of the
continual improvement cycle.
 In essence, what an EMS challenges an
organization to do is continually improve its
environmental performance.
 By continually improving the environmental
performance of a facility, even when the
improvements are incremental, over time,
the performance improves measurably.
The continual improvement
cycle consist of four basic steps:
 1. Plan.
 2. Do.
 3. Check.
 4. Revise.
In the planning stage,
• We formulate environmental policy.
• We identify environmental compliance needs.
• We identify and set priorities for other
environmental performance improvement
needs.
• We design programs and action plans to
improve environmental compliance and
performance.
 In the doing or implementing stage, we
implement the environmental programs and
action plans devised under step 1.
In the "check" step,
 We monitor environmental performance.
 We evaluate the progress of the
environmental programs and action plans.
In the "revise" step,
• We revise the environmental programs and
action plans.
• We consider changes in the environmental
policy.
• We consider new environmental compliance
and other performance improvement needs.
 The ISO series of standards address the
needs of organizations worldwide by providing
a common framework for managing
environmental issues.
 ISO 14001 is the part of the standard most
pertinent to our discussions.
 Figure 1-2 relates the five basic steps and
elements essential to implementation of the
continual improvement cycle.
 There are also direct benefits that affect
on the financial wellness of a business.
 Among those recognized are
Assuring customers of commitment to
demonstrable environmental management.
Maintaining good public and community relations.
Satisfying investor criteria and improving access
to capital.
Obtaining insurance at reasonable cost.
Enhancing image and market share.
Meeting vendor certification criteria.
Improving cost control.
Reducing incidents that result in liability.
Demonstrating reasonable care.
Conserving input materials and energy.
Facilitating the attainment of permits and
authorizations.
Fostering development and sharing environmental
solutions.
Improving industry-government relations.