To manage the activities within an organization that can have significant impacts upon the environment.

To ensure that the environmental management processes continually improve.

Environmental Business Pressures

There are many pressures that companies face, financial pressures are obviously particularly relevant to businesses. However, environmental pressures are becoming increasingly significant both locally and on an international scale.

Legislation

One of the strongest proponents for environmental control by legislation has been the EU; probably as a result of strong political green lobbies, especially in countries such as Germany, environmental thinking at an academic level in countries such as Sweden and Holland, and pressure from international bodies such as Greenpeace.

As a result of this the amount of EU environmental legislation has increased dramatically in the last three decades. Full implementation of legislation often takes some time and there are many measures that are either waiting to be finally ratified by the EU or are still waiting to be adopted into national law.

Most companies and individuals are now aware that environmental legislation will have some impact on their businesses or way of life. The expanding amount of environmental legislation will have an increasingly real impact on all businesses especially as it progressively widens to cover areas such as energy, agriculture, transport and tourism that were targeted alongside industry in the EU Fifth Environmental Action Program - Towards Sustainable Development.

There has been a shift in policy, both nationally and internationally, from remediation towards prevention (this is embodied in the Precautionary Principle) and also towards making the producers more responsible for the pollution they cause (the Polluter Pays Principle).

All of these changes place increased responsibility on companies and their management teams for the environmental impacts resulting from their operations.

Customer Pressure

Over the past few years the public has become increasingly concerned about environmental issues and this is often reflected in their behavior as consumers. There is greater demand for products that do not damage the environment. For example, CFC-free or 'ozone friendly' aerosols, phosphate free washing powder or timber grown in sustainably managed forests. There is also demand for products that are produced in an 'environmentally friendly' manner such as free-range eggs and organically grown produce.

Customer pressures are reinforced through environmental pressure groups, which concentrate on companies considered to have a major impact on the environment. This produces publicity, which leads to an increase in public awareness and can add to consumer pressure for a cleaner environment and more responsible industry.

Environmental awareness now also plays a significant role within primary and intermediate education. We are therefore producing future generations of customers and consumers whose expectations are likely to be greater than ours. Retail suppliers are therefore under increasing pressure to supply 'environmentally sound' products or face the prospect of being struck off lists of approved suppliers. Lack of management awareness or commitment in this field can easily lead to lost markets.

Competition and Costs

If your customer does not take the initiative your competitor may. Although many companies are hesitating over implementing an environmental strategy, and even more are unaware that they need one, the most advanced are enthusiastically grasping the opportunity. Pro-active companies have recognized the internal benefits that improved management systems bring, as well as the very real commercial advantages.

Just as commercial customers became aware of, and now often insist upon, their suppliers having QMS certification, so a similar trend could make EMS's a prerequisite for business, particularly with the public sector. Whether this will apply to all suppliers of goods and services or just for the major ones remains to be seen.

In almost every instance, the immediate response from manufacturing industry to the Polluter Pays Principle, is that the end prices will have to rise. Yet, since it is not possible to see how consumers can continue to accept price rises, some cost increases must be shouldered by companies themselves, or alternatively they must find cheaper means of compliance.

In many cases, companies who implement environmental management systems frequently find that the increased focus on production technology and management efficiency actually reduces costs.

Banking and Insurance

Banks are major investors in industry. Back in 1992, a joint statement by 31 international banks based in 23 countries and issued through the United Nations Environmental Program (UNEP), accepted their responsibilities:

We recognize that environmental risks should be part of the normal check list of risk assessment and management. As part of our credit risk assessment, we recommend, when appropriate, environmental impact assessments.

The possibility of major pollution catastrophes from landfill or other industrial practices invites a potential for vast claims. Experience with the US 'Superfund' has shown that costs can become prohibitive. This was a system involving compulsory insurance, where public bodies were allowed to force the clean up of contaminated sites and then recover costs on the basis of strict, joint, several and retrospective liability. This meant that claims for clean up costs could be sought from any party linked to a site, whether or not the contamination was their fault and for contamination that was the result of past activities. Under the provisions of the contaminated land regime, enacted by Section 57 of the Environment Act 1995 and implemented by the Contaminated Land (England) Regulations 2000, operators whose land is contaminated by historical pollution can be ordered to remediate it to the satisfaction of the regulatory authorities and at their own expense.

Companies seeking insurance against environmental problems resulting from their actions will have to satisfy increasingly rigorous examination of their environmental policy and practice. An accredited EMS is strong evidence of the environmental integrity of an organization.

Uptake of Environmental Management Systems

The effect on organizations of pressures from different quarters can be shown in how they respond. The figure below shows the different business strategy approaches of compliance and market-led organizations, and some of the different factors that direct such organizations towards environmental management.

Compliance-led and market-led strategies can both lead to the implementation of an EMS although, in reality these two strategies are likely to interact and the decision to develop environmental management for compliance reasons is likely to lead to a realization of the market benefits.

EMS's are normally run as part of the overall management system and the reasons for establishing an EMS include provision of control over an organization's business and cutting down on bureaucracy and paperwork. For very large organizations and for those that run very complex processes, an EMS can be required for purely internal reasons such as control of operations, compliance with regulations and for development and investment purposes. Certain industries, for example the chemicals industry, are pushing for a new approach from regulators. This would involve an easing of regulatory oversight in return for the adoption of EMS standards. The UK Environment Agency is looking seriously at how this might be made possible.

The advantages of an EMS can include:

Improved environmental performance.

Competitive advantage.

Improved public relations.

Marketing tool.

Improved relations with regulators.

Identification of cost savings.

Mechanism for controlling environmental legislation requirements.

Useful for formalizing and coordinating existing systems.

Raises environmental awareness within the organization.

Improves relationships with local community.

Possibility of cheaper insurance.

Pro-active approach.

Effective, non-bureaucratic documentation system.

The disadvantages of an EMS can include:

Exposure of environmental liabilities (could be an advantage if prevents action by the regulatory authorities).

Long term commitment, including resources.

Increase in work-load initially (then decrease as not dependent on the fire-fighting approach).

Increase training requirements.

Uncontrolled environmental information; providing environmental information to the public may not always be advantageous as it can highlight areas that an organization might not want in the public domain. Also once information is released you have no control over what the public or media do with it.