New research proposes three ways small and medium enterprises (SMEs) can tackle ISO 14001 certification.
ISO 14001 is an international certification standard designed to help companies reduce their negative impacts on the environment, comply with environmental laws and regulations, and continually improve their performance in the first two areas. To date only a small percentage of SMEs have adopted ISO 14001, even after a 2004 review that clarified the standard’s objectives and made the content more accessible to SMEs.
Sandrine Berger-Douce of the École des Mines de St-Étienne sought to discover why SMEs are reluctant to adopt the ISO 14001 standard and what concrete measures would encourage them to initiate the certification process. Berger-Douce conducted a case study with three French SMEs that had implemented the ISO 14001 standard. The companies included a water-less car wash, a manufacturer specializing in material ionization and a manufacturer of materials used in high-heat applications such as kilns and furnaces.
Challenges to Adopting ISO 14001
SMEs often lack the financial, human and information resources needed to adopt the standard. The direct cost of getting ISO 14001 certified is $8,000 CAD. However, even for companies with fewer than 100 employees, the indirect costs associated with certification are approximately $27,500, not including the average annual salary of the responsible manager. Indirect costs include $6,900 CAD for analysis and $21,600 to implement the environmental management system. As for “information resources” – a chronic lack of information and expertise is a key challenge for SMEs. They rarely have employees on hand who are already trained in ISO 14001 management.
Reasons for Adopting ISO 14001
Considering the challenges associated with adopting ISO 14001, many SME managers would rather simply pay the fines associated with environmental regulations than initiate a costly and seemingly complex management standard.
“(…) successful implementation of the ISO 14001 standard in SMEs is highly correlated to the chief officer’s engagement.”
Berger-Douce asked the general managers and environmental managers at the three subject companies how they approached ISO 14001 certification. She discovered each organization used a different approach for adopting the standard and labeled them “Individual,” “Collective” and “Progressive.”
The Individual Approach
The most common approach to adopting the ISO 14001 standard, the Individual Approach involves hiring a specialized consulting firm to guide the company through the certification process. The “customized support” associated with this approach ensures they achieve certification quickly and increases the likelihood of them receiving a grant for up to 20 per cent of the certification fee. This approach solves the problem of SMEs lacking internal expertise but comes with a relatively high price tag.
The Collective Approach
The Collective Approach involves an organization such as the Chamber of Commerce joining with local industry and one or more consulting firms to inform, educate and guide SMEs through the ISO 14001 certification. The advantage of this approach is that companies can learn from peers’ shared experiences and get access to experts (“information resources”) without bearing the financial burden themselves. However, the Collective Approach takes longer to implement than independent certification, and the participating companies may have different expectations.
The Progressive Approach
The Progressive Approach breaks the certification process into three successive levels and is based on a 2006 initiative by the Quebec Estrie Regional Council of Environment.
The first level requires the company to summarize its current practices, the second level to implement an environmental management system adapted to its practices, and the third level to finalize the environmental management system and conduct an audit to verify compliance with ISO 14001. Completing each of the three levels eventually translates into concrete adoption of the ISO 14001 certification standard.
The Progressive Approach offers a number of benefits: it respects the company’s pace of work and encourages greater ownership by employees of the ISO standard. However, the approach is still marginal, having only been in existence since 2006.
Deciding whether the Individual, Collective or Progressive approach is best for your company depends on your company’s size, internal resources, and whether a previous quality management system already exists.
Berger-Douce maintains that successful implementation of the ISO 14001 standard in SMEs depends upon the boss’ involvement in the process: “Successful implementation of the ISO 14 001 standard in SMEs is highly correlated to the chief officer’s engagement.”
So, before picking an adoption approach, be sure to get your president or CEO on board.
This Research Insight is based on an academic article published in a French management journal. Identified and summarized by NBS’s French office in Montreal, this RI presents the unique perspective of French-speaking sustainability researchers and delivers business insights previously unavailable to the English-speaking community.
Berger-Douce, S. 2010. “Gestion environnementale et certification : le cas de trois PME”, Revue internationale de gestion, Vol. 5, no. 1, p. 10-17.
Céline Fiorucci and the NBS team