1. Voluntary Environmental Management for SMEs: Alternatives Models for ISO 14001 Adoption Lisa Greenwood Environmental Management Leadership Symposium VII May 2, 2011

2. Outline Background – SMEs – ISO 14001 – what and why? Conformity assessment options Alternative Models Future Research Questions

3. Background SMEs: smaller footprints BUT comprise > 95% of employer firms – Significant aggregate impact – Large share of industrial pollution, water and energy consumption – Present an opportunity to reduce global environmental burden

4. Background Voluntary Environmental Programs – Globalization + public pressure  voluntary environmental programs, EMS Environmental Management Systems – Better management  better environmental performance – ISO 14001: most prevalent – Can ISO 14001 be useful for SMEs?

5. ISO 14001 – What and Why? International environmental management system standard – EMS specification standard – voluntary or integrated in policy Systematic approach to managing environmental impacts – Focused on continual improvement – Deming model Typically involves certification of conformity by an independent third party Functional purpose: - Systematic control of adverse environmental impact - Achievement of objectives and targets Source: EPA/Glover-Stapleton Applied purpose: - signal to external stakeholders that a firm is “Green”

6. ISO 14001 – Effective? Not always conclusive, no clear consensus Performance varies considerably among adopters – Variables include motivations/drivers; commitment, available resources, EMS maturity, etc. U.S. –based research suggests at least modest improvements for adopters – Reduced pollutant releases – Reduced Energy use – Increased recycling

7. ISO 14001 – Effective for SMEs? ISO is very conscious of low uptake by SMEs – Strategic SME task force – Alternative standard – ISO 14005 – Guidance materials aimed at SMEs Intended for use by any type/size organization….. Presents specific challenges and potential barriers for SMEs

8. SMEs – Costs Do costs outweigh benefits? – additional staff /manpower needs – internal education and training – external consulting – internal auditing – environmental control measures – third party certification reviews and audits

9. SMEs - Resources Technical, human resource constraints limited environmental management capabilities – Weak resource and management capacity – Lack of EMS expertise, technical skills, knowledge base

10. Conformity Assessment Depends on: Customer and regulator requirements Consumer expectations Resources and cost Needs of the organization Self-Declaration Internal verification Third-Party Certification Independent verification Second-Party Verification Verification by interested party Verification by external party Independence LOWHIGH

11. Conformity Assessment Depends on: Customer and regulator requirements Consumer expectations Resources and cost Needs of the organization Self-Declaration Internal verification Third-Party Certification Independent verification Second-Party Verification Verification by interested party Verification by external party Independence LOWHIGH

12. AMEMs? Alternative Models for Environmental Management Primary Types: – EMS “lite” – Phased EMS – Joint EMS/Group Certification – Mentor approach

13. AMEMs? - EMS “lite” – Phased EMS – Joint EMS/Group Certification – Mentor approach

14. AMEMs? - EMS “lite” – Phased EMS – Joint EMS/Group Certification – Mentor approach

15. AMEMs? - EMS “lite” – Phased EMS – Joint EMS/Group Certification – Mentor approach

16. AMEMs Alternative Models Cost?EM Capability? Option to Certify? EMS “light” approach – YES*NONO** Phased EMS approach – NO YES Joint/Group approach – YES Mentor Approach YES Key Point: - Effectiveness is not dependent on Certification

17. Conclusions ISO 14001 certification – may not be appropriate for most SMEs AMEMs – Potentially more flexible, cost-effective – Credible, 2 nd party process utilization – Can be applied with certification if desired – Focus for SMEs should be on Joint EMS and Mentoring options

18. Future Research Environmental Policy Framework – ISO 14001 as policy tool (for organizational policy) – ISO 14001 as alternative policy paradigm ecological modernization Position on Baker’s Ladder of SD – Pollution control  weak sustainability

19. Questions?