Companies Increasingly Go Green, but ISO 14001 Certification Lags in U.S.

May 1, 2013

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There are many ways for American corporations and businesses to show the public that they are environmentally conscious, and doing everything they can to make sustainability a major part of their practice. For the past two decades, one major way companies have shown the public and their fellow business associates that they're serious about sustainability and going green is by achieving ISO 14001 standard.

In the early 1990s the International Organization for Standardization (ISO) began creating a family of standards that related to environmental management; these standards were designed to help companies minimize how their work negatively impacts the environment, how it complies with laws of the country the business is based in, and ensures that the company is producing a product consistently and in a manner that also minimizes any damage to air or water quality.

To put it more simply, this is how ISO 14001 certification works, in a nutshell: A company decides it wants to set up an in-house program that will measure and maintain a certain level of standard at the company. After spending approximately $10,000 to 15,000 to set the program up, the ISO comes and investigates how the company is doing on its program, and gives its official seal of approval.

Then every year third-party registrars come into your business to do an audit of your ISO 14001 program, making sure that the company is doing what it's supposed to do to meet the agreed-upon international standards, and every three years companies are required to renew their ISO certification.

These ISO regulations have been adopted worldwide in the past 20 years, and for a while U.S. companies were right up there with the rest of the world when it came to rate of adoption.

But in the past several years, it seems that American businesses are far less interested than those in the rest of the world when it comes to ISO 14001.

Take a look at the 2010 ISO survey of companies who have added ISO 14001 in the past 17 years and a few numbers jump out:

  • In 1993 46,571 companies worldwide had ISO 14001 certification; in 2012 it was 285, 844.
  • In 1993 Europe had 37,000 companies that were 14001 certified; in 2010 it was 530,000.
  • In Asia in 1993, 1,583 companies were 14001 certified; in 2010 it was 428,755
  • In 1993 North American companies accounted for 2,613 ISO 14001 certifications, and in 2010 that number rose to 36,632
So while North American companies are still looking to get certified, they're doing it in much smaller numbers, percentage-wise, than the rest of the world.

To find out why, I interviewed a half-dozen American consultants who either help companies set up their current ISO 14001 programs, or have done so in the past.

As usual with consultants, there was no consensus and quite a bit of disagreement!

ISO14001.cycle

First, we talked about their personal experience with clients, and if they were still getting a lot of requests to set up new programs.

"I've got three or four customers right now who are involved in it, and it has remained fairly steady the last few years," said Lane Reeves, a Texas-based consultant working independently. "Some of them combine it with the new R2 environmental certification and do both programs at once."

Jim Robison of Quality Management Exchange in Florida said he's seen "a stable market" for ISO 14001. But Gail Jones, a consultant with Sterling Quality Services in Dallas, has had a different experience. "I really don't see much of it at all, and the other people in the field I talk to don't seem to be doing much of it either," Jones said.

Deb Iafrate, a consultant with Eagle Group USA in Michigan, said she as well saw a "very flat" level for ISO 14001 companies.

The reasons the experts saw for the North American numbers growing slower than in other areas of the world were varied. For one, the 400-pound gorilla in any discussion of U.S. business over the last five years is the recession; the economic slowdown that hit in 2007 and 2008 had an adverse effect on companies that wanted to add any expense whatsoever, even a $15,000 ISO 14001 program.

Then there's the fall-off in manufacturing in the U.S. over the past decade, as fewer and fewer companies were able to continue making profits.

Another factor in an ISO 14001 slow growth is the bureaucracy involved in assigning employees of your company to monitor the program once it's established. But the biggest reason the consultants who felt ISO 14001 had slowed cited as the cause was the risk/reward aspect.

"If you're going to shell out the expense and the resources to set up a program and keep it going, you have to decide if it's that big of a deal, financially, to show that you're ISO 14001 compliant," Jones said.

Iafrate said that the hassle of setting up a 14001 is "not that big of a deal" but that many companies simply can't afford to stay ISO 14001 compliant.

But can they afford not to do it? That's where the opposing view comes in. ISO 14001 is still important, some consultants argued, because a lot of major corporations like Toyota, Ford, and 3M are now requiring the companies they work with to be ISO 14001 certified.

"What I see is that companies don't get certified unless the end-customers are requiring it," said Jim Lee, a consultant at SimpleQue, an Ohio-based firm. "The quality standards like ISO 9000 or 14001 are not happening unless customers are requiring it.

"You have to take into consideration that when a major company like that says they won't work with you, how much business are you going to lose if you don't get (14001) certified?" Reeves said. "If you have no other choice but to get certified, and it makes financial sense, you're going to do it."

There are other reasons besides "being forced to" that companies are choosing to get certified. One reason is that it's still a sign to the public that your company is keeping up with the times and doing its best to be sustainable and environmentally aware.

"Yes, I think it does mean a lot, as far showing a formal commitment  to EMS (Environmental Management Systems)," Robison said. "I think it can add a lot of value that the organization has gone green."

As more companies think about whether or not to get ISO 14001 certified, there's another factor to consider on the horizon: In 2015 the ISO is tightening its regulations when it comes to 14001, moving to a standard of "compliance" as opposed to the current "conformance" standard.

"What that means is that this revision is going to have some significant teeth to it," Iafrate said, "and making it a compliance standard is going to mean a lot of companies are going to have to prove to ISO that they're continuing the practices they started when the put the program in.

"I think you're going to see it be a lot harder for companies to get certified initially," Iafrate continued, "and harder for them to maintain that status. If you're not properly disposing of your waste, let's say, they're going to know about it and it will hurt you."

 

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