Implementing ISO 14000:

Taking the First Steps

by Caroline G. Hemenway and Gregory J. Hale

Today, almost all of your company's business decisions are made with the bottom line in mind.
In most companies, funding for projects is scrutinized heavily, and getting senior management
support for something that may not show an immediate profit can be difficult.

This is one reason the framers of the ISO 14000 series of environmental management system
standards and guidelines have worked to ensure that the documents will minimize additional
economic burdens on companies. However, the cost to you in implementing the ISO 14001 EMS
specification standard- the core standard in the series and the only one with auditable
requirements- your company, the sophistication of existing EMS elements, whether you have a
management system such as ISO 9000 to build on and whether you have set the proper limits on
the scope of implementation.

You can minimize the cost of implementation and maximize the benefits- both immediate and
long-term - by conducting an initial review of your current position with regard to the
environment or by doing a gap analysis, according to experts. In fact, in its informative annex,
the ISO 14001 standard strongly suggests that if you have no existing EMS, you should do an
initial review of your current management system to determine if your procedures and practices
can be integrated into the formal requirements of ISO 14001. The review should aim at
considering all of your organization's environmental aspects as a basis for establishing an EMS.

If you have an operating EMS, you need not do such a review, according to the annex. However,
experts advise you to do a gap analysis that addresses all ISO 14001 requirements to pinpoint
missing or weak elements. These experts agree that the assessment must provide enough
information to your company so that you can draw up a clear action plan, including the
allocation of human and financial resources, and a timetable for implementation.

An initial assessment or gap analysis will also help you determine if ISO 14001 is an appropriate
standard for the needs and wants of your particular company.

Understanding the difference between an initial assessment and a gap analysis may be the
difference between "going to jail or not" says Cornelius "Bud" Smith, director of environmental
management services for ML Strategies and chairman of the U.S. Technical Advisory Group
working on environmental auditing standards.

"I recommend that any company considering an initial assessment do it under the umbrella of the
attorney-client privilege," says Smith. " The company may turn up compliance-type issues and
discover they are not following the letter of the law, and nobody wants that information to wind
up in the wrong hands."

Tools and tips

Several tools are being developed to help you perform an initial assessment or gap analysis and
should be available in early or mid-1996. NSF International is developing a checklist to help
companies determine the extent to which they meet the requiremen ts outlined in ISO 14001.

Bureau Veritas North America, ML Strategies and ERM Rocky Mountain are among U.S.
management consulting organizations developing gap-analysis criteria. Also, the German
delegation that helped write the ISO 14000 standards is developing a draft standard on "Initial
Environmental Review" to submit to the European Union\rquote s standards organization
sometime in 1996.

The U.S. TAG has an ad-hoc working group developing ISO 14001 audit guidance documents to
be used internally or externally to determine the status of your EMS. These working documents
may become an index of ISO 14011/1, the auditing procedures standard in the ISO 14000 series.

Perhaps one of the most useful tools is ISO 14004, the EMS guidance document filled with
principles and step-by-step guidance on implementing an EMS, though not necessarily ISO
14001. Some experts caution that the suggestions in this document should not be construed as
comprehensive, but only illustrative. In addition, numerous private-sector organizations are
writing guides, handbooks and textbooks on implementation.

Following is some specific advice on getting started:

Understand your motivation

The first issue you should tackle is determining your motivation for implementing the standard,
according to Herve Wilczynski, EMS program manager for Bureau Veritas North America Inc.

"This will help define the future strategy and get the commitment of all the staff," says
Wilczynski.

He explains that, depending on your company's core business, its regulatory posture and its
experiences with management systems, the following are possible examples of motivation:

Improve your compliance posture

Manage your regulatory burden
Integrate different existing management systems and practices
Optimize and formalize your current EMS
Achieve savings
Achieve competitive advantage
A company must decide early if it wants to put a "really good program in place or merely pursue
a pretty certificate to hang on the wall," says Douglas Wall, corporate environmental manager
for SSI Technologies Inc., a medium-sized supplier to the auto industry located in Janesville,
Wisconsin. For example, SSI is committed to pollution prevention as the key goal of its EMS,
says Wall. The company implemented a program to eliminate hazardous materials use. At the
same time, they provide regular comment to Wisconsin state lawmakers concerning proposed
regulations.

"You can't expect the guy sitting up on Capitol Hill to know what companies are facing in the
trenches" if you don't send him comment," notes Wall.

Set limitations
As Stephen Covey puts it in the 7 Habits of Highly Effective People, "Begin with the end in
mind." If you don't, you can run into several pitfalls as you conduct your initial assessment, most
often because you did not do the proper planning, say EMS experts. You can eliminate confusion
and allow management to gain a clear picture of the processes already in place by knowing
where to set limits and by spelling out specifically what you are assessing.

ISO 14001 can be implemented at the corporate, divisional, site or operational unit level.
Therefore, determining the scope of the assessment, or of a gap analysis, is essential to the
success of the exercise.

Assemble a team of employees that represent all areas of your company that will be affected by
ISO 14001, advises Dawne Schomer, corporate environmental health and safety manager for
Texas Instruments Inc. TI is including health and safety in its ISO 14001, so the team there
contains several employees with health and safety responsibilities.

"It is very important that a company give a lot of thought to what information the initial
assessment will provide before just jumping in," says Schomer."ISO 14001 is not just a tool for a
company to take off the shelf and use once, but rather an instrument to be used continuously to
expand and improve the scope of the assessment."

When you look at any one of the ISO 14001 elements, you will discover that the management
system can be "scoped" large or small, depending on your company's needs, says Schomer. She
suggests that you could take environmental aspects to mean, at a basic level, those arising from
regulatory requirements only. However, you could also " scope" the management system to
include what many consider to be an environmental impact assessment, defining how each aspect
affects the entire \"ecosystem, from the flora to the fauna," she explains.

"Consider carefully the variety of applications that could be applied to each of the elements you
are assessing at each site," advises Schomer. " If the facility is proactive and has state-of-the-art
systems, etc., then generally its scope will be wider than a company that is more in the middle-
of-the-road, consistent-compliance mode."
Schomer contends that you need to have a success story to build on so you can convince both
internal and external stakeholders of your company's good intentions.

"A company just in the firefighting mode of management has no business being esoteric; it needs
to get down to basics first," she says. " If the scope is too large, then the culture of the company
will never fully reflect the management system idea."

If "scoped" appropriately, the assessment will focus on three or four elements of the standard on
which a company needs to do major work, two or three additional areas that need some minor
work, and others that don't require any extra effort at all.

Doing this can save you a lot of money and time down the road, Schomer points out. She adds
that TI's scope may eventually include life-cycle assessment and design for the environment
concepts if they prove successful.

"I like to think of 14001 as the sun in the solar system,\rdblquote she says. "It covers not [just]
the basics, but proactive, less obvious things also."

But be inclusive
Schomer warns against creating "silos" when implementing ISO 14001. She says the more
elements you can integrate into your EMS, the more departments will embrace environmental
concerns. Other experts in industry advise you to get as many departments of the company
involved in implementing an EMS as is feasible. Some suggest that, without buy-in from the
financial department especially, finding the necessary resources to implement and maintain an
EMS will prove almost impossible.

Get management to support "dollar-saver" projects first and use the positive experience to get
more resources for future projects focused on environmental management, suggests Wall.

"Get upper management to agree to return the savings back to the department or company for
projects that may not necessarily show a quick profit," he says.

Cover the bases

Annex A of ISO 14001 provides you with guidance on what to look for during an initial
assessment or review. According to the annex, the review should cover the following four key
areas:

Legislative and regulatory requirements An identification of significant environmental aspects

An examination of all existing environmental management practices and procedures

An assessment of feedback for the investigation of previous incidents

ISO 14004 elaborates by suggesting to companies that " consideration should be given to the full
range of operating conditions, including possible incidents and emergency situations." Experts
suggest using checklists, interviews, flowcharts and/or direct inspection and measurement results
from previous audits or management reviews as tools to gather data for this review.

Do a flowchart
Creating a flowchart that breaks down the inputs and outputs is a key step for any company
conducting an initial assessment or g ap analysis, according to James Highlands, president of
Management Systems Analysis Inc. and leader of the U.S. TAG on EMS. A flowchart will allow
your company to determine the environmental impacts associated with its processes. Too often,
companies don't know where to start because they try to make the task more daunting than it has
to be, he says.

Highlands is quick to point out that not only must you consider normal operations when
assessing your current management systems but also abnormal operating conditions that include
emergency provisions. He uses a production of a lathe to illustrate some possible inputs and
outputs involved in a normal machining process: "You have raw materials coming into the
process, such as cutting oils and cleaning fluids. Outputs would be metal chips."

Flowcharting provides a simple method of extracting information about your processes that can
be applied to every aspect of your company and will result in a comprehensive list of
environmental aspects.

Identify significant aspects

Taking that list of aspects and evaluating which ones are significant is the key to implementing
ISO 14001, according to several experts. This is the process that you use to determine your EMS
objectives and targets, and the process that an auditor will look to when determining if you are
continually improving your EMS. Highlands suggests that you use a screening process to weed
out aspects that may not have a significant impact on the environment.

The bulk of your potential significant aspects will come from laws and regulations addressing
specific environmental media, says Highlands. The ISO 14001 annex provides a list of possible
aspects. The standard suggests that you address the following environmental media, where
relevant:

Emissions to air
Releases to water
Waste management
Contamination of land
Impact on communities
Use of raw materials and natural resources
Other local environmental issues
These may include provisions under the Clean Air Act, Clean Water Act, Resource Conservation
and Recovery Act, Superfund and other regulatory requirements, explains Highlands.

Readily available tools such as the company's material safety data sheets will help you consider
your operation's obvious and not-so-obvious environmental aspects. Taking into consideration
the scale, severity and duration of each aspect, you can now begin to eliminate nonsignificant
aspects from the list.

Identify significant impacts

Once you complete this phase of the assessment, it is essential that you seek out personnel with
informed judgment to identify those aspects that can have a significant impact on the
environment, stresses Highlands. He advises you to ask the following questions for each aspect
on the list:

Is the aspect easily controllable?

Is the aspect only temporary?
Is it a major and/or ongoing process?
Is the aspect important to the community?

"Obviously, if you have a major aspect that is an ongoing process, you have a significant
impact,\rdblquote says Highlands." This is also the time when a company may want to establish
guidelines for addressing nonsignificant environmental aspects."

For example, making a commitment to recycle paper does not require serious resources or a
comprehensive program, therefore companies have no excuse not to recycle, he says. While
technically you cannot be given a nonconformance notice for not managing no nsignificant
aspects, Highlands questions why you would not go ahead and address those aspects that require
little extra effort or expense.

Like Schomer, Wall is integrating ISO 14001 with the company\rquote s health and safety
program and wants feedback from different areas of the facility. During SSI's struggle to identify
environmental aspects, SSI recruited a cross-section of employees, including staff from the
maintenance department, production lines, accounting and the secretarial pool, to provide input
to the process.

Wall organized the employees into four-person teams and challenged them to come up with
environmental aspects related to the facility, the community, the state and the world. He divided
the facility into categories based on the function (raw material transportation, process, disposal
and process waste recycling). Then, based on employee feedback, he listed the following media
as areas for identifying possible aspects:

Energy
Resources
Air
Water
 Soil
Noise
Human beings
Climate
Ecology

By ranking their effect based on a scale of 1- not applicable, to 5- highest, determined by the
severity and frequency of the company\rquote s contact with the media, SSI was able to identify
its effects and potential significant impacts successfully.

Keep top management committed

These experts agree that doing an initial assessment or gap analysis is both time-consuming and
resource-intensive. Getting upper-level management commitment may not be easy, but
experience with ISO 9000 quality systems has shown that not many organizations demonstrate
continuous improvement without it.

Consultants and industry representatives differ on strategies for management buy-in, but both
groups stress that taking the time to educate senior management on the advantages and potential
incentives associated with implementing an EMS is crucial.

Wilczynski emphasizes that exhaustive knowledge of your environmental impacts represents the
cornerstone of your EMS and the basis of continual improvement. This is because the impact
analysis results determine the depth of your environmental policy, objectives, targets, tasks and
programs- and the extent of resulting improvements in environmental performance.

It is common for companies that focus only on achieving regulatory compliance to never fully
realize the rewards associated with a well-implemented and well-maintained EMS, according to
several consultants.

Implement
Conducting the initial assessment or gap analysis is only the first step in the ISO 14001
implementation process. Next, you will begin forming an official implementation plan based on
initial assessment results and ensure that your company environmental policy is in place. You
must also set attainable objectives and targets, aimed at improving overall environmental
performance. A more complete understanding of all your company's environmental effects and
subsequent impacts will emerge as you do this, according to EMS experts.

Next, you will conduct an internal or external EMS audit, depending on whether you simply
want to ensure compliance with the standard\rquote s requirements or whether you seek third-
party certification. After the audit, your company's management must conduct periodic reviews
to ensure ongoing compliance and to identify areas for improving the EMS.
And finally . . . there is no finally. The standard is a living, dynamic document that requires
continuous care and feeding of your EMS. After all, that\rquote s the whole point.

FYI
The International Organization for Standardization is a worldwide federation founded in 1947 to
promote the development of international manufacturing, trade and communication standards.
ISO Technical Committee 207 on EMS is made up of 63 ISO members. The U.S. representative
to ISO is the American National Standards Institute.

Environmental aspects is defined in ISO 14001 as: an element of an organization's activities,

products or services that can interact with the environment.

Significant environmental impacts is defined as: any change to the environment, whether adverse
or beneficial, wholly or partially resulting from an organization\rquote s activities, products or
services.

Environmental objectives are overall environmental goals, arising from the organization\rquote s
environmental policy, that an organization sets itself to achieve, and which is quantified where
practicable.

About the authors . . .

Caroline G. Hemenway is publisher of CEEM Information Services in Fairfax, Virginia. Gregory
J. Hale is associate editor of "International Environmental Systems Update," a monthly
newsletter on ISO 14000 developments and implications. CEEM publishes "IESU" and several
other ISO 14000 and other management systems products. For more information, contact CEEM
at (800) 745-5565 or (703) 250-5900; fax (703) 250-4117.

Copyright 1995 by QCI International. It is unlawful to reprint, retransmit, or otherwise reproduce

this article, except for personal use, without the written permission of QCI International (which
gladly grants permission when asked). Call (800) 527-8875 or fax (916) 527-6983.

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