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ISO 14001 is the international standard for environmental management systems. Many small and medium-size enterprises (SMEs) are certified to the ISO 14001 standard. The figures suggest that this can be a brilliant business move. But that is just part of the story…
A certified environmental management system can deliver thousands of pounds worth of cost savings for SMEs. Take into account the new business sales generated and the payback period for a certified environmental management system can be less than one month (see Defra, 2011 Evidence-based study into the benefits of EMSs for SMEs). Yes, the cost of getting a certified environmental management system can be recouped within one month in some cases!
Which begs the question, why doesn’t every small business have a certified environmental management system?
The evidence suggests that, when it comes to businesses at the smaller end of the scale, standard environmental management systems aren’t fit for purpose. Specifically, they are:
- too complex;
- too time-consuming; and
- too expensive.
A major report examining the use of environmental management systems in SMEs across North America found that a successful environmental management system can deliver multiple benefits. However, the report also found that experiences varied considerably. It concluded that:
“most SMEs face.. many difficulties in implementing environmental management systems… Even if they are familiar with the concept of an environmental management system, many smaller businesses lack the technical expertise and resources needed to develop and implement one.” (Commission for Environmental Cooperation (2005) Successful practices of Environmental Management Systems in Small and Medium-Size Enterprises: A North American perspective).
Developing and implementing a standard environmental management system is a complex task for any small business.
One commentator speculated as to whether ISO (the authors of ISO 14001) stands for ‘irritate small organisations’.
Achieving a standard that was designed to meet the needs of all companies, including hugely complex multinational operations, is always going to be a daunting challenge for small businesses. Reflecting on the tendency of procurement managers to require the ISO standards, the same commentator suggested:
“By specifying ISO14001 certification to any keen SME that wants to be green, the procurement manager is crushing their spirit… Don’t demand they wade through pages of documentation and fill out forms – at least not at the start.” (Large, C (2012) ISO14001: loved by procurement, hated by SMEs).
And even where a small business successfully manages to wade through the guidance, interpret all of the jargon, carry out their risk assessments, develop all of the necessary procedures and produce all of the documentation, a standard environmental management system will often feel like an ill-fitting suit for most small businesses. Particularly for those who have limited environmental impacts, a standard environmental management system will feel disproportionate in it’s size and complexity.
Disproportionate complexity leads to disproportionate time being needed both to prepare and to manage standard environmental management systems.
Bigger businesses often appoint dedicated environmental managers or pay external consultants to look after environmental management systems on their behalf. For smaller businesses without that luxury, developing and implementing a standard environmental management system can simply be a step too far. Just getting through the multiple daily challenges of running the business can be quite enough.
A standard certified environmental management system isn’t cheap. Even six years ago, a UK Government study found that initial costs to small businesses were more than £2,700 ($3360), followed by annual certification costs of more than £1,100 ($1370) (Defra, 2011 Evidence-based study into the benefits of EMSs for SMEs). Even those convinced about the potential payback may struggle to find the necessary finance to cover the upfront costs.
Interestingly, the study found that the costs of an environmental management system implementation do not fall proportionally in line with turnover. This means that smaller businesses have to spend a higher proportion of their turnover to get the same output. This is as clear an indication as any that standard environmental management systems are simply ill-suited to the small business sector.
So what are the alternatives?
I have been an environmental consultant for many years, advising governments, other public agencies and private businesses on topics such as energy, waste and climate change. I have helped develop environmental management systems for organisations and businesses, large and small.
The irony is that even in the small environmental consultancies I have worked in, whilst advising others on protecting the environment we have struggled to manage our own environmental impacts. The mainstream standards and approaches have simply been too onerous and expensive.
Alternatives to ISO 14001 are now available, including many offered at the local level. However, not many are genuinely fit-for-purpose in the case of businesses at the smaller end of the scale. And none that I’m aware of would be realistic options for sole traders or the self-employed. Yet there are many such businesses with a desire to be ‘green’ and to be seen to be green.
On the back of my frustrations with mainstream environmental management systems, but with a firm belief in their potential, I have now developed Green Small Business. It provides small businesses and other small organisations with a simple system which is proportionate to their environmental impacts and recognises that their finances and time are precious.
For more information, download our free guide.