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

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

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

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 be useful for SMEs?

ISO – 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”

ISO – 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

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

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

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

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

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

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

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

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

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

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

Conclusions ISO 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

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

Questions?