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Environmental Management Systems—History and New Tendencies

Chapter · December 2017


DOI: 10.1016/B978-0-12-409548-9.10529-9

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Gyula Zilahy
Budapest University of Technology and Economics
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G. Zilahy: Environmental Management Systems – History and New Tendencies
Associate professor - Budapest University of Technology and Economics, Hungary

Senior researcher – Institute of Advanced Studies, Kőszeg, Hungary

E-mail: zilahy@eik.bme.hu

Published in: M. A. Abraham: Encyclopedia of Sustainable Technologies, Elsevier, 2017, ISBN:


0128047925, 9780128047927

Abstract: An EMS is a voluntary management tool, which aims at the improvement of an organization’s
environmental performance through an integrated and systematic approach to dealing with
environmental issues. Firms and other types of organizations have been implementing environmental
management systems for more than two decades. They may design their own EMS or alternatively,
may follow the guidelines laid down by third parties, such as the International Standard Organization’s
ISO14001 standard or the European Union’s EMAS regulation. In 2015 more than 300 000 companies
operated environmental management systems certified according to the ISO14001 standard, while
more than 4400 firms followed the principles of EMAS.

Several different impacts of environmental management systems have been identified over the years.
Many of these are managerial in nature, which include better organization of work and reduction of
risks. On the other hand, however, a long lasting debate has emerged in the literature regarding the
environmental benefits of EMSs. Often, a positive impact can be shown when examining individual
organizations, while large scale surveys provide ambiguous results.

As a result, both the International Standard Organization and the European Union has recently revised
their guidelines to involve more concrete requirements regarding the collection of information and the
measurement of data relating to actual environmental performance.

Keywords: business sustainability, Eco-Management and Audit Scheme, environmental management


system, environmental performance, environmental regulation, ISO 14001, responsible businesses

1. Rationale and definition

By the late 1980’s businesses started to recognize the complex nature of environmental issues, their
implications for company management and an increasing interest towards these issues not only by
government authorities, but also by their other stakeholders, such as consumers and the general
public. The old fashioned reactive approach to environmental protection slowly started to give way to
a more sophisticated view, which realized that solving environmental problems may provide broader
benefits to the company. The ideas of pollution prevention and industrial ecology emerged and
integrated technological solutions complemented old fashioned end-of-pipe solutions.
Such a shift in the way of thinking about environmental problems, coupled with the emergence of new
technological solutions necessitated the development of tools available to company management, as
well as the integration of these tools in order to achieve optimum results (Morrow, 2002).

Further impetus was provided by emerging regulations, especially in Europe, which instead of dealing
with single processes and environmental media, takes a more systematic approach to improve the
state of the environment (see e.g. the European Union’s Integrated Pollution Prevention and Control
(IPPC) directive and the concept of Best Available Techniques, BAT).

As a result, environmental management systems appeared in company practice in the early 1990’s

An environmental management system is a management tool used in corporations and other types of
organizations with the primary objective of improving their environmental performance. Consisting of
internal management procedures regarding all important environmental aspects and impacts of the
organization’s operations, EMSs facilitate a systematic approach to environmental protection. An EMS
defines how the organization sets up its environmental goals and objectives and provides guidance to
each member of the organization regarding their tasks towards the achievement of these goals. EMSs
also contain provisions regarding the assessment of the organization’s environmental performance
and their own operations, as well as further actions required.

The implementation of environmental management systems should follow a number of guiding


principles. According to these, organizations should:

- evaluate their environmental aspects and impacts on a regular basis


- strive for compliance with environmental regulations
- improve their environmental performance
- set goals in order to achieve continuous development
- prevent pollution whenever possible and
- take a stakeholder approach when defining and implementing environmental goals and
strategies.

Through the implementation of these principles, organizations acknowledge that environmental


protection is not a one-time effort, but a pathway of continuously developing processes and products
in order to minimize environmental harm and thus improve environmental performance. Furthermore,
environmental performance is defined relative to set goals and objectives, which in turn should take
the regulatory environment and internal and external stakeholders into account.

An environmental management system can also be interpreted as an instrument, which integrates all
other environmental management tools available to company management in order to enhance their
effectiveness. Tools, which can be integrated in an EMS include:

- environmental performance evaluation


- environmental accounting
- eco-design, life cycle approach
- environmental/responsible supply chain management
- environmental communication and marketing
- environmental training etc.

Environmental performance evaluation and environmental accounting provide the necessary


information regarding environmental impacts and their financial implications for planning and
objective setting, as well as for the evaluation of results – all of them central to the operation of
environmental management systems.
POEMS (Product Oriented EMS) integrates eco-design (Design for Environment, DfE) initiatives into
existing EMS using the life-cycle approach. POEMS may facilitate better identification of material and
energy flows and a move from a process focus to a broader set of objectives taking all other life cycles
of products and services into account. On the other hand, EMS can help DfE initiatives by making them
more systematic, permanent and consistent (Tourais et al., 2016).

In line with the life cycle perspective to product design, environmental management systems make
provisions regarding the environmental characteristics of the supply of raw materials, energy
resources and services. As a result, organizations operating an EMS set environmental criteria
regarding their purchases, which in turn motivates firms along the supply chain to introduce
environmental measures and often their own environmental management sys tems. This way
environmental management systems are useful tools for environmental/sustainable supply chain
management (see e.g. Gonzales et al., 2008).

2. Structure and elements

Environmental management systems rely on formalized management processes to achieve their


objectives, which are not predefined, but emerge as a result of an iterative improvement process using
the PDCA-cycle (also called the Deming-cycle). The elements of the PDCA-cycle are:

- Planning: analysis of current status and opportunities for development, setting up of objectives
and creation of a plan describing the way objectives will be met
- Doing: implementation of the plan, experimentation and adjustment of processes, recording
of results
- Checking: comparison of results to set objectives, analysis of achievements and deviations
from plans; checking of the completeness and appropriateness of the plan
- Acting: integration of the lessons learned from the entire process, depending on results either
adjustment of the goal, the change of methods or the reformulation of the whole theory.

The elements of an environmental management system should follow the logic of the PDCA-cycle and
work effectively together towards continuous performance improvement. The effective operation of
an EMS requires the commitment of top management and is based on environmental performance
indicators (e.g. based on the guidance provided by the ISO14031 standard), which facilitate goal
setting, implementation and measurement of results.

The elements of an EMS are as follows.

1. Identification of environmental aspects (processes, products and services) and their impacts
on the environment (air, water, soil etc.); evaluation of impacts using environmental
performance indicators and selection of significant impacts based on a systematic approach
2. Identification of relevant legal and other requirements; assessment of compliance
3. Planning of activities within the EMS: definition/revision of environmental policy and the
setting of objectives and targets regarding each significant impact; setting up of an
environmental management program
4. Establishment of the structure of the EMS; securing management commitment and the
assignment of responsibilities; provision of appropriate resources
5. Training and increasing environmental awareness and required competences
6. Establishment of processes for internal and external communications; maintenance of
information on the EMS and related documents
7. Effective management of procedures and other system documents
8. Management of operations and potential emergencies in line with established policy and
procedures
9. Monitoring of key activities and tracking of performance and compliance with legal
requirements
10. Identification and correction of problems and prevention of their recurrence
11. Maintenance and management of records
12. Verification and review of EMS with intended objectives and continuous development in mind

3. Standards and other frameworks

Organizations may develop and maintain their own environmental management systems or they may
follow third party frameworks developed with different objectives in mind. International standards
(such as the BS7750 passed in 1992 and later replaced by the ISO 14001 issued by the International
Standard Organization in 1996) have been developed to facilitate the implementation of
environmental management systems around the world. Regulations, such as the European Union’s
EMAS regulation have been developed to promote EMS in the member states and to improve
organizations’ environmental performance. Additionally, a number of guidelines and frameworks have
been developed to assist organizations with specific needs, such as Small and Medium Sized
Enterprises (SMEs), local governments and institutions of higher education etc.

The European Union’s Eco-Management and Audit Scheme (EMAS)

The European Union’s EMAS regulation was first issued in 1993 (Council Regulation (EEC) No 1836/93)
based on the now defunct BS7750 standard of the British Standard Organisation. EMAS prescribes
tasks and responsibilities for member states regarding the promotion and registration of
environmental management systems within the European Union and provides guidance to
organizations regarding the implementation of their EMSs.

EMAS requires that member states:

- designate Competent Bodies, which are responsible for the registration of organizations and
provide them with appropriate resources
- appoint Accreditation Bodies responsible for the accreditation of environmental verifiers
- provide assistance to organizations relating to compliance to environmental regulations
- provide information about EMAS to the public
- promote EMAS to small organizations
- report to the European Commission regarding the status of implementing EMAS.

Moreover, member states may modify other legal instruments or provide regulatory relief in order to
promote the participation of organizations in EMAS.
Since 2004, the EMAS regulation (EMAS II. – Regulation (EC) No 761/2001) integrates the provisions of
the ISO 14001 standard, but EMAS registered organizations should go beyond the international
standard since – additional to the requirements of ISO 14001 – EMAS requires the followings from an
organization:

- an initial environmental review to identify its environmental aspects


- the demonstration of full compliance with environmental legislation
- open dialogue with employees and interested parties, including stakeholders, local authorities
and suppliers and
- the provision of a public statement of its environmental performance (European Communities,
2011)

The latest EMAS regulation (EMAS III. – Regulation (EC) No 1221/2009) passed in 2009 brings about a
number of changes in order to increase the popularity of the system among organizations and to pose
more rigorous requirements for certification:

- EMAS is applicable worldwide, thus organizations from all around the world may receive
certification
- small and medium enterprises (under 250 employees) and local municipalities may request
an extension of the renewal frequency of EMAS registration to the Competent Bodies
- sectoral reference documents are developed by the European Commission to help
implementation
- organizations with several sites need to apply for one single registration
- organizations should report a number of core indicators in their environmental statements
(UGA, 2010)

The European Commission brands EMAS as a ‘premium label’ for organizations implementing and
maintaining an EMS, since it incorporates more rigorous requirements than other frameworks.

The ISO14000 family of standards

The International Standard Organization has first issued its ISO 14001 management standard in 1996
(ISO 14001:1996). ISO 14001 is a process standard that grants facilities flexibility in the types of
environmental goals they wish to establish (Arimura et al., 2008).

The main rationale behind the creation of the standard was to facilitate international trade by
harmonizing different environmental management standards and to provide guidance relating to
corporate sustainability practices (Delmas, 2002).

The ISO 14001 standard is part of a family of environmental management standards aiming at the
different elements of a management system and its practical implementation. The ISO 14000 family
includes requirement standards and guidance standards relating to: environmental labels and
declarations (ISO 14020); environmental performance evaluation (ISO 14031); life cycle assessment
(ISO 14040); eco-efficiency assessment of product systems (ISO 14045) and material flow cost
accounting (ISO 14051) etc.

Moreover, the ISO 14000 family of standards was developed to be easily integrated with other
management standards issued by the International Standard Organization, such as ISO 9000 describing
quality management systems, ISO 25000 on energy management systems and ISO 26000 on social
responsibility.

The latest version of the ISO 14001 standard, namely ISO 14001:2015 requires:

- Environmental management to be more prominent within the organization’s strategic


direction
- A greater commitment from leadership
- The implementation of proactive initiatives to protect the environment from harm and
degradation
- A focus on life-cycle thinking, to consider the environment from development to end-of-life
- The addition of a stakeholder-focused communication strategy

It also allows for easier integration into other management systems thanks to the same structure,
terms and definitions.

Alternative frameworks

Alternative models of environmental management have been developed over the years for
organizations with special needs, such as small and medium enterprises (SMEs), local municipalities
and institutions of higher education.

Although the majority of EMAS registered companies are SME’s and ISO 14001 implementation may
be even more popular among them (Heras and Arana, 2010), a number of alternative tools have been
developed, which offer lower administrative burdens, better adaptation to local/regional
circumstances and/or sectors, cheaper (or no) certification, dissemination and political/financial
support (Heras and Arana, 2010).

On the one hand, SMEs are often motivated to implement certified management systems by
environmental requirements posed by their customers thus diffusing EMSs along the supply chain. On
the other hand, SMEs may face a number of barriers regarding the implementation of EMS, inclu ding
high administrative burdens, high costs and a priority of other issues within the organization.

Trying to identify the barriers, opportunities and drivers of EMS adoption in the sector, Hillary (2004)
concludes that while benefits from adopting environmental management systems have been
demonstrated for SMEs, many are still not convinced. The author emphasizes the role of internal
barriers, such as negative company culture towards the environment and a culture of inaction on the
environment. Moreover, SMEs are also skeptical about the benefits of EMS and gaps in their awareness
regarding environmental issues coupled with a lack of consumer pressure add to the situation (Hillary,
2004). SMEs also lack time and other resources (skills, human resources, money) when it comes to the
implementation of EMSs.

One of the early attempts to set up a management system framework with SMEs in mind was the
design of Ekoscan by IHOBE, the Basque Agency of Environmental Management aiming at industrial
SMEs in the Basque country. Since its inception in 1998, more than 600 firms used the program and
more than 200 have been certified according to Ekoscan (certification is possible since 2003).
The Ekoscan method is based on an Environmental Improvement Plan (EIP), which should be viable
from both a technical and a financial standpoint (IHOBE, 2004, in: Heras and Arana, 2010). This
planning process should include the followings:

- the identification of potential minimization methods for each aspect selected


- the selection of the specific methods to be analyzed
- documented analysis of the technical, financial and environmental viability of the measures
considered, including the potential improvement results
- definition of the Environmental Improvement Plan
- approval of the EIP by top management (IHOBE, 2004, in: Heras and Arana, 2010).

Ekoscan is a standalone approach with regard to its methodology, which incorporates the principles
and techniques of cleaner production as a tool to improve environmental performance. While
pollution prevention has always been one of the guiding principles of ISO 14001, the Ekoscan model
has a closer focus on the use of preventative approaches and actually ensures that this requirement is
adhered to by the companies (Heras and Arana, 2010).

Other models of EMS for SMEs include the Eco-Lighthouse program, Norway’s most widely used
environmental management system, which has more than 5000 certificates.

Developed especially for SMEs by the Efficiency Agency of North Rhine -Westphalia, the PIUS Check is
a process-oriented material flow analysis. Its objective is to improve the resource-efficiency and cost-
efficiency of SMEs in the region by providing them with guidance.

Apart from business organizations other types of institutions have also implemented EMSs, such as
municipalities, government authorities and institutions of higher educati on. While the principles of
environmental management systems can be easily adopted to the needs of these organizations, their
motivations may be different from businesses. Moreover, environmental impacts induced by these
types of institutions are often indirect, which makes them hard to identify and measure.

ICLEI, an association of more than one thousand local governments worldwide ran a successful project
called IDEMS (Integration and Development of Environmental Management System) with the objective
of integrating EMAS with two other frameworks: ‘City and Local Environmental Accounting and
Reporting’ (CLEAR) and ‘ecoBudget’ in order to help local authorities improve the effectiveness of their
environmental politics and to continuously improve their urban environmental management practices.

Another project, the EURO-EMAS (Pan-European Local Authority Eco-Management and Audit Scheme)
project also aimed at increasing the involvement of local municipalities in environmental management
activities and the improvement of their environmental performance.

Based on previous project results and acknowledging the importance of the engagement of the public
sector in sustainable development, the Joint Research Centre of the European Commission is itself
working on a sectoral reference document for the public sector with focus on municipalities and local
authorities.

4. Worldwide implementation
The number of organizations maintaining environmental management systems has been growing
rapidly over the last 25 years (statistical data is readily available regarding facilities certified according
to the international ISO 14001 standard or the European Union’s EMAS scheme).

According to the latest survey of the International Standard Organization, a total of 319 324 ISO 14001
certifications were issued in 201 countries in 2015, an increase of 8% over the previous year. This
makes the environmental management standard the second most popular ISO management system
standard worldwide (ISO 9001 leading with one million certifications and followed by ISO/TS 16949
addressing quality management in the automotive supply chain with about 63 000 certifications in
2015) (ISO, 2015a).

A glance at the historic trends of the number of certified organizations shows that annual growth rates
were highest in the late 1990’s and early 2000’s, while increases in annual numbers reduced to single
digits after 2010 with 2013 showing a decline of 3%.

Regional patterns are also characteristic: Europe and East Asia and the Pacific providing almost 90% of
the certifications, while North America’s share reduced from 7% in 1999 to 2.7% in 2015. After an early
uptake of the standard in Europe (51.8% of the certifications in 1999, East Asia and the Pacific having
36.6% in the same year), the continent ranked only second in 2015 (now East Asia and the Pacific
having 51.9% of the certifications and Europe 37.5%) (Table 1).

Rank Country Number of ISO 14001


certificates (2015)
1 China 114303
2 Japan 26069
3 Italy 22350
4 United Kingdom 17824
5 Spain 13310
6 Romania 10581
7 Germany 8224
8 France 6847
9 India 6782
10 United States of America 6067

Table 1 Top 10 countries for ISO 14001 certificates – 2015 (Source: International Standard
Organization, 2015)

High early implementation rates in Europe resulted from a combination of experience gained from
already existing environmental management system standards such as BS7750 and EMAS and a strong
support on behalf of European authorities limiting transaction costs associated with the
implementation of the standard (Delmas, 2002).

Contrary to the situation in Europe, U.S. businesses have been more reluctant to implement the
standard as a result of being fearful about the transparency regarding their environmental data. Lower
implementation rates on the North-American continent can also be contributed to a lack of interest
on behalf of stakeholders and missing government support (Delmas, 2002).
Moreover, examining country differences regarding the number of national ISO 14001 certifications
Corbett and Kirsch (2001) found that the existence of ISO 9000 management systems, exports and
environmental attitudes are the most important factors.

Regarding the uptake of the standard by different industrial sectors, patterns reflect the early adoption
in sectors characterized by high environmental risks (e.g. chemical products, machinery and
equipment). More recently these industry sectors have been overtaken by sectors characterized by a
large share of small and medium sized enterprises – probably a result of the increasing importance of
environmental considerations within supply chains.

Rank Industry sector – 1999 Industry sector – 2015


1 Electrical and optical equipment (2147) Construction (43759)
2 Chemicals, chemical products and fibers Basic metal & fabricated metal products
(693) (24171)
3 Machinery and equipment (569) Electrical and optical equipment (22183)
4 Other transport equipment (312) Wholesale and retail trade, repairs of motor
vehicles (17967)
5 Construction (298) Machinery and equipment (14024)

8 Chemicals, chemical products and fibers
(10884)

15 Other transport equipment (3933)

Table 2 Top industrial sectors for ISO 14001 certificates – 1999 and 2015 (Based on: International
Standard Organization, 2015)

According to the European EMAS Helpdesk, 4034 organizations and 9271 sites were registered in the
European Union in May, 2016. These figures show a marked reduction compared to the number of
organizations registered in 2010 (4470), while the number of sites increased considerably ( 7667). A
small increase in the numbers compared to 2015 possibly shows a reversing trend.

Service sectors play a key role in the above mentioned numbers with 399 institutions of public
administration, 240 institutions of education and 215 different accommodation services registered
with EMAS. The waste and disposal sector leads the number of industrial organizations with 466
registrations, followed by the electricity and gas sector and the chemicals sector (275 and 173
registrations respectively).

An important feature of the Eco-Management and Audit Scheme is a pronounced interest of Small and
Medium Enterprises towards certification. 17% of registered organizations are micro enterprises, 30-
30% are small or medium while only 23% of EMAS organizations are large (EMAS Register).
5. Benefits and costs of environmental management systems

Environmental management systems are usually associated with a number of potential benefits for
companies adopting them, as well as for society at large. Companies may improve the effectiveness of
their management processes, their competitive position and save resources and reduce emissions
through EMS, which in turn results in financial and environmental benefits. The nature and magnitude
of these benefits varies across organizations operating in different settings (e.g. regulatory, cultural)
and – as a result – are not easy to quantify.

According to the International Standard Organization the ISO 14001 standard can assist implementing
organizations by:

 demonstrating their compliance with current and future statutory and regulatory
requirements
 increasing leadership involvement and engagement of employees
 improving company reputation and the confidence of stakeholders through strategic
communication
 achieving strategic business aims by incorporating environmental issues into business
management
 providing a competitive and financial advantage through improved efficiencies and reduced
costs
 encouraging better environmental performance of suppliers by integrating them into the
organization’s business systems (ISO, 2015b).

The proposition of the International Standard Organization makes it clear that most direct benefits
associated with certified management systems are managerial in nature or are closely related to the
reputation of organizations, while environmental gains can be achieved through these indirectly.

Environmental benefits

While companies are confident in environmental management systems – as it is demonstrated by the


ever increasing number of certified organizations (see above) –, there is considerable ambiguity in the
literature regarding their environmental benefits.

Acknowledging the increasing interest in corporate activities regarding the management of waste
streams, Melnyk et al. assessed the impacts of environmental management systems on corporate
environmental performance (Melnyk et al., 2003). Analyzing the attitudes of North American managers
towards EMS and ISO 14001, they conclude that firms with certified EMSs experience greater impact
on performance compared to their counterparts with formal, but not certified systems. They also
noted that as experience grows in organizations regarding environmental management systems they
are more likely to choose environmentally sound options (Melnyk et al., 2003).

Kolln et al. come to the conclusion that firms’ perceptions of the costs and benefits related to the
implementation of environmental management systems are largely determined by domestic factors.
This implies that the right mix of incentives is needed in each country to promote the implementation
of environmental management systems (Kolln and Prakash, 2002).
Arimura et al. (2008) examine the environmental performance of Japanese firms as a function of EMS
implementation and the publication of environmental reports. They investigate whether these two
management tools have an impact on natural resource use, solid waste generation and wastewater
effluent and find that both of them, especially ISO 14001 management systems reduce environmental
impacts and that environmental regulations do not weaken their effects. They also come to the
conclusion that local governments can successfully promote the implementation of these
management tools and thus command and control and voluntary approaches to regulation can
complement each other (Arimura et al., 2008).

Examining S&P 500 companies Anton et al. (2004) found that ‘a more comprehensive EMS has a
significant negative impact on the intensity of toxic releases and that this impact is greater on firms
that have inferior past environmental records’ (Anton et al., 2004, p. 652). The authors also distinguish
between different approaches to environmental protection stating that the adoption of EMSs leads to
the use of pollution prevention type measures and a reduction in end-of-pipe activities can be
observed (Anton et al, 2004). Regarding the types of measures motivated by EMS, Wagner (2008)
found that environmental management systems are usually associated with process innovations, not
product innovations.

Dyllick and Hamschmidt (2006) examined 150 Swiss firms regarding their environmental performance
and come to the conclusion that although they are largely satisfied with their performance as a result
of their EMS, there is still room for improvement regarding integration, audit culture, strategic
objective and authority relationships (Dyllick and Hamschmidt, 2006).

Hertin et al. (2008) summarize evidence in the literature regarding environmental performance vs.
EMS implementation and demonstrate that results are mixed. Moreover, using three independent
statistical methods to examine the relationship between EMS and environmental performance, the
authors themselves found that there is little evidence of certified firms performing significantly and
consistently better then firms without certification (Hertin et al., 2008). They articulate a number of
possible explanations for this phenomena:

- EMSs may be necessary, rather than sufficient tools of the reduction of resource use and
emissions
- there may be shortcomings in the implementation of EMS
- specific circumstances (e.g. regulatory environment, country etc.) may influence the impact of
EMS on environmental performance (Hertin et al., 2008)

The authors argue that although there are a number of regulatory incentives to implement
environmental management systems these are not justified in light of scientific evidence and care
should be taken when implementing them. However, they also note that while an improvement in
environmental performance is not obvious, other benefits, such as regulatory certainty, improved
external and internal communication or awareness raising are possible (Hertin et al., 2008).

Trying to shed some light on these perplexing findings, Nawrocka et al. performed a meta-analysis of
23 studies connecting environmental performance to environmental management systems. They
come to the conclusion that the reason why earlier studies were inconclusive about the effectiveness
of environmental management systems is twofold. First, there is no general agreement what
environmental performance means for the company and how to measure it and second, there is no
consensus regarding how and why environmental management systems should improve
environmental performance. The researchers conclude that performance implications should be
examined on a case by case basis taking individual firm characteristics into account and it is much more
useful to examine how environmental management systems affect environmental performance rather
than whether they do have an impact or not (Nawrocka et al., 2009).

The scientific debate regarding the issue has still not died away. A more recent study of more than 100
Swedish enterprises found mixed results concerning the re lationship between the implementation of
the ISO 14001 management standard and the environmental performance of companies. Examining
the rate of improvement in six selected environmental fields (air emissions, water emissions, resource
use, energy use, waste, and overall environmental performance) the author could not establish a
statistically significant difference between improvement rates of firms with certification and firms
without one (although results show possible positive effects of EMS implementation regarding energy
use and overall environmental impact, while improvement rates regarding air pollution seem to be
higher in companies without EMS (Zobel, 2016).

Arimura et al. (2016) point at the importance of institutional pressures arising from differences in
regulatory settings across and within countries. They suggest that ‘countries with stronger regulatory
settings tend to incur more environmental costs which creates incentives for facilities to implement
ISO 14001 differently’ Arimura et al., 2016, p.557).

Managerial and financial benefits

Using the case study approach Rondinelli et al. uncovered improvements in employee and managerial
awareness, operation efficiency and effectiveness among companies adopting environmental
management systems (Rondinelli et al., 2000). The authors point out that even firms, which already
perform well in the environmental domain may benefit from the implementation of environmental
management systems and that their benefits are not limited to changes in management practices, but
an improvement in environmental performance can also be observed (Rondinelli et al., 2000).

Based on an OECD survey conducted in Canada, Germany, Hungary and the U.S, Darnall et al. (2008)
conclude that the implementation of EMSs can provide financial gains to the firms. They distinguish
between two types of pressures in order to understand the impact of EMS on company performance,
namely institutional pressures and resources and capabilities available to the company. They come to
the conclusion that both of these pressures encourage more comprehensive EMS adoption, but
resources and capabilities have a stronger effect. This, they argue, may be a result of companies
pushed by institutional pressures using EMSs ‘as symbolic actions to increase external legitimacy’
(Darnall et al., 2008, p. 374.). These organizations lack the necessary capacity and resources to
implement and maintain comprehensive EMSs and thus may only gain short term financial benefits by
increasing external legitimacy.

Costs of environmental management systems

The costs of implementing and maintaining an EMS in the organization are diverse and their
quantification may pose methodological problems. In the narrow sense, costs of an EMS include items,
which are more directly linked to the adoption of the system, such as the cost of documentation and
human resources required, the fees of consultants and the cost of certification. In a broader sense
environmental management systems may lead to other activities requiring expenditure on behalf of
the organization, such as the costs of cleaning up and other environmental activities, as well as
investments into more efficient and clean technologies. The implementation of these, however, may
have other motivations apart from the environmental case and thus should not necessarily be
accounted for the implementation of an environmental management system.

The costs of implementation may depend on various factors. According to Darnall and Edwards (2006)
costs for publicly traded companies may be lower, since they have more capabilities complementary
to environmental management system implementation before the actual adoption of the system. To
the contrary, government facilities and privately owned enterprises face higher adoption costs as a
result of being less experienced.

Regarding financial gains Bansal and Bogner (2002) note that anecdotal evidence of savings as a result
of EMS implementation may be criticized as being ‘naïve’ since total environmental costs and benefits
of firms are seldom aggregated; a firm’s environmental impact is more complex than savings identified
as a result of individual projects; savings may be one time only and such evidence does not provide
guidance regarding how savings should be attained (Bansal and Bogner, 2002).

6. Conclusions and future tendencies

Environmental management systems were brought about by the increasing complexity of the
relationship between business organizations and the natural environment. As a result of ever stricter
legal requirements and increasing awareness of the burden posed by industrial activities on natural
eco-systems, companies started to implement complex technological solutions, which in turn required
state of the art management procedures. Further, businesses with environmentally sound offers
started to reap the benefits of their efforts and new market niche s have evolved.

Environmental management systems aim at the effective and efficient organization of work within
businesses and other types of organizations. They present advantages to a wider set of stakeholders
including customers, those living nearby and even the representatives of future generations by
improving environmental performance, but their main beneficiaries remai n the organizations
implementing them. As a consequence, while environmental management systems are generally
regarded as proactive tools of corporate environmental management, allowances should be made for
their limitations.

1. Environmental management systems perform differently in various regulatory and cultural


settings.
2. Improvements of performance defined in relative terms (e.g. eco-efficiency) are often
outweighed by increases in production volumes and thus may be misleading.
3. Success is usually defined in terms of the organization’s own environmental performance and
performance evaluation lacks the broader context.
4. Indicators used within environmental management systems are often far-removed from
indicators measuring the state of the environment.

These issues have been identified early on and resonate with the literature about the benefits of
environmental management systems introduced earlier. Steger, for example, notes that the benefits
of environmental management systems stem ‘mainly from the fact that a systematic and
comprehensive approach to environmental management leads to the discovery and exploitation of
new ‘win–win’ potential, not more ambitious or new goals’, since goal setting is usually
independent of the EMS (Steger, 2000, p. 26.). As a result, he calls for ‘ecological limits-driven’ EMSs,
which would put company operations into context by linking the EMS to a specific condition or set of
conditions regarding a specific eco-system, like e.g. the Forest Stewardship Council (Steger, 2000).

More recently, the Global Reporting Initiative (GRI), which provides guidance to corporations regarding
their environmental and sustainability communication, faces similar critique. While GRI has already
formulated its Sustainability Context Principle, which "involves discussing the performance of the
organization in the context of the limits and demands placed on environmental or social resources at
the sector, local, regional, or global level" (GRI, 2013, p. 17), the latest G4 guidelines provide no further
instructions how this should be implemented in practice.

Based on a survey of S&P 500 firms, Anton et al. (2004) demonstrate d that the most important motives
behind the implementation of a more comprehensive EMS are liability threats and pressures from
stakeholders, such as consumers, investors and the public. They also found that consumer pressure
was especially important for firms to increase the comprehensiveness of their EMSs when other factors
did not warrant such activities.

Further, according to critics, ‘the standards merely assume that a company that certifies its EMS has a
management system in place to deal effectively with its environmental impacts. Certification implies
that companies meet regulatory mandates and go beyond legal requirements to achieve continuous
environmental improvements, but there is no way of externally verifying that such improvements
actually occur’ (Rondinelli et al., 2000).

Slowly, international organizations responsible for EMS frameworks, such as the International
Standard Organization and the European Union seem to take up the gauntlet and modify their
frameworks taking these critics. While the EMAS regulation has been always more concerned with the
actual environmental performance of organizations, its latest reincarnation takes a step even further
by setting provisions regarding core environmental indicators, as well as by providing sectoral guidance
documents to organizations. The ISO 14001 standard, which has traditionally been more lax regarding
transparency and environmental performance, now incorporates a number of measures towards more
stringent requirements (e.g. a focus on the life cycle approach and communication towards
stakeholders).

These modifications, aiming at more robust environmental benefits, are necessary in a world more and
more concerned with local, regional and global environmental problems. Companies neglecting their
environmental responsibilities may not survive in the long run or will have to suffer major setbacks
while others can benefit from the advantages of a more proactive approach to environmental
protection. Risk avoidance should be replaced by cooperation with all relevant stakeholders, while
narrow profit objectives should give way to a broader set of objectives. Along the way environmental
management systems can be beneficial, since they are flexible enough to incorporate these new ideas
if there is a strong will to move towards a more sustainable future by all interested parties.

7. References

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