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ISO 14001 Certification in Multinational Firms: The
Paradoxes of Integration1
Olivier Boiral Associate Professor
Management Department
Faculty of Administration
Pavillon Palasis-Prince, Office 1638
University Laval
Cité Universitaire
Québec City, Canada
G1K 7P4
Tel.: (418) 656-2131 (ext. 4776)
Fax: (418) 656-2624
Email: [email protected]
2
Abstract
The development of a new international standard for environmental management systems has
given rise to numerous unavoidable questions for firms, in particular multinationals. Adopted
by more than 15,000 companies around the world four years after its launching, ISO 14001
could become, in the same way as ISO 9000, a passport that opens doors to certain markets.
Even though the number of certified companies varies considerably from country to country,
numerous companies have decided to adopt the standard for all of their international
activities. The motivations behind this choice are less environmental than they are
commercial, institutional or organizational. If ISO 14001 meets genuine needs in certain
companies and constitutes a first step towards an integration of environmental issues in daily
management, its implementation creates new challenges for which managers are often poorly
prepared. To begin with, the documentation demands and the standard’s intended universal
application cannot always be easily adapted to the management philosophy of certain
companies and the cultural differences in their management. Furthermore, the standard
requires considerable documentation and traditional management, which consequently could
lead to a ritual integration rather than a genuine questioning of practices and their subsequent
environmental impacts. This article examines these challenges as well as the paradoxes
between the internal and external outcomes of the ISO 14001 system. The standard’s
foundations are presented, followed by an examination of the external pressure which
motivated its adoption and the implications for companies, in particular multinationals. An
integrated model that makes it possible to represent the different ways of integrating the
standard in response to internal and external pressure is then examined.
Key Words - ISO 14001
- Environmental management systems
- International management
- Motivations
- Paradoxes and contradictions
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Adopted by more than 15,000 companies around the world, the ISO 14001 standard has
grown rapidly since its launching in 1996, particularly in multinational companies. In the
same way as ISO 9000, upon which it is modeled, the new standard for environmental
management systems seems to be on the verge of imposing itself as a sort of passport that
opens doors to certain markets. It also allows companies to demonstrate their social
responsibility and provides them with a structured framework for the management of their
environmental issues. Finally, the development of ISO 14001 is part of the growing
globalization of the world economy, which requires the adoption of international standards
that facilitate exchanges and communication between countries. Although numerous
environmental management systems were developed in the past, ISO 14001 seems to be on its
way to becoming the accepted model, taking the place of other systems which are not as well
established.2
The integration of this new standard in company practices seems to be occurring effortlessly,
because it addresses issues that have received considerable media coverage and allows
companies to promote an image of social responsibility. However, this process gives rise to
numerous questions and challenges, particularly for multinational companies. First, the
adoption of the standard presently seems to be more motivated by a proactive attitude rather
than by genuine pressure. To what extent will the standard become a new requirement on
international markets? Will the standard make it possible to improve relationships with public
authorities or take the place of certain regulatory controls? Are some countries more receptive
to this standard than others. Second, even though environmental commitment is a mobilizing
theme which appeals to the “citizenship” of the companies and their personnel, employee
adhesion to the standard does not necessarily occur spontaneously. On top of the rather heavy
documentation requirements, the guidelines put forward in the ISO 14001 system are not
necessarily in agreement with the managerial philosophy of companies or their subsidiaries.
Cultural differences in management practices or the institutional context may mean that
certain countries are more or less ready for ISO 14001 requirements.
The above questions call for a better understanding of the foundations of this new standard
and its implications for company management. The objective of this article is to contribute to
this understanding by examining the motivations and the developmental issues of the ISO
14001 standard, particularly for multinational companies. This analysis is based on studies
conducted since 1996 of environmental management systems and of the adoption of the ISO
4
14001 standard in Canadian companies.3 First, the main requirements of the ISO 14001
standard will be analyzed and put into perspective with respect to traditional management
principles. The international development of this new standard as well as the main challenges
that it presents to multinationals will then be examined. Finally, the expectations created by
the standard and the paradoxes involved in its integration in companies will be discussed. By
examining the standard in relation to internal motivations and external pressure, the different
approaches to the implementation of the ISO 14001 system are highlighted, namely ritual
integration, mobilizing integration, proactive integration and reactive integration. In
conclusion, the implications for public authorities of this system’s implementation will be
discussed.
1- Towards a Greening and Renewing of Management Practices?
Since the end of the 1980’s, most discussions about “environmental management” have
focused on the need to implement management systems which allow the environmental
concerns of companies to be integrated into their daily activities. The goal of these
environmental management systems is to provide formal and systematic policy in order to
better respond to regulatory demands and control the company’s environmental impact.4
According to ISO 14001, an environmental management system is “that part of the overall
management system which includes organizational structure, planning activities,
responsibilities, practices, procedures, processes and resources for developing,
implementing, achieving, reviewing and maintaining the environmental policy”. This broad
definition stresses the intended general application of environmental management systems,
which are centered on management processes rather than on specific technical or
environmental issues.
5
A New International Metastandard for Environmental Management
The unveiling of the ISO 14000 standards marked the conclusion of a long consultation
process which was launched in 1991 by the International Organization for Standardization
(ISO) to study the development of international standards in the area of environmental
management. The consultation process was given shape with the creation of the Technical
Committee on Environmental Management (TC 207), which was responsible for co-
ordinating the work of various groups of international experts and for preparing the ISO
14000 series of standards. These standards were to cover various aspects of environmental
management, such as environmental audits, labeling, environmental performance evaluations,
life cycle assessments, and terms and definitions. However, only the ISO 14001 standard,
launched in the summer of 1996, features a certification process. To achieve ISO 14001
certification, an organization has to guarantee that its management system conforms to the
principles defined in the standard, this compliance being verified by an accredited
independent organization. ISO 14001, the most important of the ISO 14000 series, is now
considered to be the accepted model in the area of environmental management.
The implementation of this standard calls for much more wide-spread and demanding changes
than those normally required by the specifications of traditional standards relating to inputs
and outputs, namely performance measurement, material resistance, sampling procedures and
technical specifications. Indeed, contrary to input and output standards with which companies
have long been familiar, the implementation of the ISO 14001 and ISO 9000 standards should
normally involve calling into question the entire management system. This questioning does
not pertain to specific and already defined products or procedures but rather to management
and organization principles upon which the companies’ activities are founded. Through its
systematic and integrated environmental management approach, the ISO 14001 standard may
thus be qualified as a “metastandard”: “ Rather than writing detailed instruction manuals,
standards writers can create lists of design rules to guide the creation of entire classes of
management systems. Since systems theorists use the term metasystem for lists of this type, it
follows that this type of management standard should be referred to as a metastandard.”5
6
A Traditional Framework to Promote New Environmental Practices
In order to favor the integration of environmental practices in company management systems,
the requirements of the ISO 14001 standard are founded on five management principles,
namely:
- commitment and policy: managers must implement a policy demonstrating their
environmental commitment;
- planning: a company has to define its plans and objectives on the basis of an
assessment of its environmental situation;
- implementation and operation: people whose work may have a significant impact on
the environment must receive the required training and information, and appropriate,
regularly updated documents must be provided concerning procedures and individual
environmental responsibilities;
- checking and corrective action: discharges to the environment must be systematically
measured and compared with targets, and non-conformance with the system must be
rectified using corrective measures;
- Management review and continual improvement: regular environmental audits must
be held and the environmental management system (EMS) must be reviewed
periodically by company management.
Although they are most often presented as innovative practices6, these guidelines, as well as
the management philosophy which underlies them, are in reality based on traditional
management principles. The image often associated with organizations dominated by
traditional management principles is that of a machine.7 The organization is thus comparable
to a well-lubricated mechanism which functions predictably and in a perfectly rational way. In
this functionalist view of organizations, the employees play a passive role like cogs in a
machine. Their role is limited to mechanically carrying out orders and following procedures
dictated by others. In order for this system to function harmoniously, the employees must
submit themselves to the authority of executives, who manage the future of the company
unilaterally. The organizational decisions and changes therefore follow a hierarchical path,
from top to bottom. Management is seen as a science which obeys principles and its own
laws. Henri Fayol is considered as the first theoretician to have attempted to understand and
systematize these principles.8 Having become a company executive after time in the army and
7
a career as an engineer, Fayol decided to try to systematize the main principles of
administration so as to turn management into a science that could guide the work of
managers. These principles, namely planning, organizing, leading and controlling, are
considered to be the foundation of traditional management and are the elements at the core of
most introductory management manuals.
These principles likewise form the basis of the ISO 14001 standard which, through its use of
checklists, conforms to the main guidelines of traditional management. Figure 1 summarizes
these principles and proposes an integrated framework to help clarify the main areas of
research in the EMS literature. The starting point of this literature is the development of an
“environmental” policy based on an analysis of both the external pressure and the internal
environmental situation of companies. This policy is embodied in plans, procedures, and a
monitoring and measurement system. This control system provides input for the audits and
review of a company's environmental management in accordance with a “continual
improvement” process. The role and responsibilities of three types of actors are generally
defined. First, the environmental commitment of the executives, which precedes the initial
development process of the system, plays a fundamental role, most notably through the
implementation of an environmental policy. Second, the employees are required to apply
plans and procedures rigorously. Third and finally, the environmental department plays a
major role in all of the technical aspects of the environmental management system, namely
plans, procedures, measurement of “environmental performance”, auditing and advice for the
management.
8
Figure 1. General model of environmental management
The whole system is orchestrated by “plan-do-check” principles and by a mechanistic process
modeled on traditional management. Considered as the “one best way” to conduct
environmental management, all deviations from these managing principles must be treated as
“non-conformities”. The requirements of the ISO 14001 management system, like those for
the use of a new machine, entail substantial documentation that must be applied to the letter.
Periodic auditing verifies whether or not the operation of the “organizational machine”
conforms to the requirements set by the standard's designer, namely the International
Organization for Standardization. Moreover, the ISO acronym comes from the Greek word
“isos”, meaning that which is similar or identical to something else.9 The development of ISO
metastandards thus contributes to the standardizing of management practices by following a
predefined model. The ISO standards for management systems, or “metastandards”, do not
take into consideration cultural differences, the complexity of organizational behavior,
practices specific to certain companies or activity sectors. The employees are seen as
performers in the implementation of a management system which is considered as a model to
imitate.
9
These ties with traditional management do not mean that the standard's requirements are, in
themselves, outdated or irrelevant. For companies that have not developed an environmental
management system, the ISO 14001 system may offer a structured framework which helps
guide the main stages of the implementation and monitoring of an environmental policy. This
framework’s simplicity and lack of innovation reflect, above all, the wish of the standard's
designers to propose a management system that is easy to understand, use, and adapt to
different sorts of companies. This includes small and medium-sized firms (SMFs), in which
environmental management is often not well-structured.10 For companies that already have a
well-established environmental management system, the standard may constitute a tool for the
evaluation, recognition and improvement of the existing system. Finally, since ISO 14001
requirements are based on a “top-down” approach and on traditional principles of order and
discipline, its implementation gives organizations considerable latitude. These organizations
may thus request that employees participate, to a greater or lesser extent, in the definition of
the plans, procedures and control mechanisms required by the standard. The mobilizing,
rallying character of environmental issues, which constitute an important concern outside of
the work place, facilitates this participatory approach.
The internal implications of the implementation of the ISO 14001 system are therefore not
predetermined. They depend in particular on the role played by employees in this process and
on how well the standard's requirements can be adapted to a company's culture and the
leadership of its executives. However, the internal needs leading to the systematic
development of environmental policies, programs, procedures and monitoring and
measurement systems are not the sole factors involved in the implementation of an ISO 14001
EMS. This implementation is also part of a strategic approach whose objectives go beyond
ecological concerns. The motivations leading a company to adopt an ISO 14001
environmental management system (see figure 1) generally involve two dimensions that are
traditionally taken into consideration in a company's strategic analysis of its external
environment, namely11:
- Ward off threats by responding to societal pressure, anticipating regulatory standards,
reducing the risk of crises, etc.12
- Seize opportunities by improving the companies’ image, meeting client demands,
conserving resources and energy, reducing depollution costs, etc.13
10
These motivations cannot be solely explained in terms of local pressure. The intended
international application of ISO 14001, its development in many countries and its adoption by
a growing number of multinational firms suggest that adhesion to this standard is a response
to concerns which transcend national borders.
2- The Next Passport to the Global Market?
ISO’s recognition by international markets and its utilization as a new contractual requirement
depend mainly on its development in the leading industrialized countries as both a system for
internal company management and as a substitute for national standards. Indeed, in the same
way as most of the other standards issued by the International Organization for
Standardization, ISO 14001 was developed in order to reduce the risk that flourishing local
and national standards, in this case in the area of environmental management, create
unnecessary barriers for the growth of international trade. This is the objective that the
International Organization for Standardization hoped to achieve when it proposed, in its
mission statement, to “promote standardization and related activities in order to facilitate
international exchange of goods and services”. This mission cannot be fully achieved unless
two conditions are met: one, the 111 countries constituting the organization must reach a
common agreement to accept the new standards as the universal model; and, two, the use of
these standards must then become widespread in industry. Although the launching of the ISO
14001 standard is relatively recent, both these conditions are on their way to being met. On
the one hand, most of the national standards dealing with environmental management, such as
France’s X 30-200 standard, issued in 1993, Britain’s BS 7750, in 1992, or even Canada’s
Z750 standard, in effect since 1994, are used less and less often by companies. Because it is
recognized internationally, national companies now often prefer to adopt the ISO standard
before their own national standards. Consequently, the ISO 14001 certification of companies
is undergoing exponential growth.
11
Internationalization and Exponential Growth of ISO 14001
Since its launching, in September, 1996, the number of certified ISO 14001 companies has
undergone rapid and steady growth. The novelty of the standard partly explains its
exponential growth but also makes it difficult to make a long-term prediction. However, in
addition to some 15,000 certified firms, numerous organizations are currently engaged in one
stage or another of implementing this standard. Considering that certification is a process
which can take two to three years, and that a number of companies are adopting a “followers”
attitude towards the implementation of this standard, the growth in the number of firms
obtaining ISO 14001 certification is likely to continue in the years to come. Furthermore,
even though the ISO 14001 standard is still too recent so as to be a completely unavoidable
requirement in certain market areas, there are a number of factors indicating that it will at
some point, as is the case with the 9000 series, become a passport to the global marketplace.
Indeed, efforts to obtain ISO certification are often motivated by demands written into
contracts by international clients.14 These demands are, to a large extent, dictated by ISO
standards themselves, which tend to trigger a cascade effect. As such, the ISO 9000 standards
require that certified companies receive the assurance that their suppliers and subcontracting
partners have already set a quality insurance system in motion, and that this system be
documented. In order to avoid costly checking and audits, the latter are then urged to obtain
ISO 9000 certification. The proliferation of the ISO 9000 standards is largely due to this
positive feedback process as well as to the various intermediaries characterizing international
commercial relations.
Even though the ISO 14001 standard requires no systematic procedures for the evaluation of
suppliers, it does require that certified companies establish and maintain “procedures related
to the identifiable significant environmental aspects of goods and services used by the
organization and communicating relevant procedures and requirements to suppliers and
contractors”. Although it is still too early to observe whether there is significant market
pressure to obtain ISO 14001 certification, many companies have already begun the process.
In a recent letter sent by IBM to more than 950 of its suppliers, the company invited them to
begin the ISO 14001 certification process “because of the increasing interest for
environmental matters in the international community”15. In Great Britain, a number of firms
in the automotive sector, such as Toyota, Honda and the Rover Group, have made ISO 14001
certification or the adoption of another equivalent environmental management system a
12
formal supplier-selection criterion.16 In the printed-circuit-board industry, both European and
American clients have required that their Asian suppliers be capable of proving that they are
able to meet the international standard's environmental requirements.17
This type of commercial pressure is particularly being developed in sectors where ISO 9000
standards have already been established. Indeed, these standards are based on similar
management principles and more and more companies are attempting to integrate them into a
common system.18 The comparison of certified ISO 9001-2-3 and ISO 14001 companies by
activity sector thus shows a strong correlation between the two standards. As figures 2 and 3
show, in roughly forty activity sectors described in the statistics of the International
Organization for Standardization, the ranking of the first five sectors in terms of the number
of certified companies is roughly the same for ISO 9000 and ISO 14001.19 In both cases, the
electrical and optical equipment sector is the most receptive to ISO standards. This
receptiveness is partially related to the commitment of numerous Japanese companies in the
electric and electronic industries to the certification process and the ensuing domino effect of
this commitment.20 The machinery and equipment sector as well as the construction sector are
also among the first five sectors in terms of ISO 9000 and ISO 14000 certification. It is worth
noting that the three above-mentioned sectors – electrical and optical equipment, machinery
and equipment, construction – are not particularly sensitive to industrial pollution. This
situation seems to confirm the hypothesis that environmental concerns do not constitute the
main motivation for the adoption of the ISO 14000 standard, and that commercial pressure
plays a decisive role. Given that these statistics were only collected two years after the
launching of the ISO 14001 system, it is difficult to draw precise conclusions.
13
Electrical and optical equipment Basic metal &
fabricated metal products
Machenery and equipment Construction Wholesale and
retail trade
0
10000
20000
30000
40000
Highest number of ISO 9 000 certificates by industrial sector (1998)
Figure 2 The five main sectors in ISO 9001-2-3 certification
Electrical & optical equipment
Chemicals, chemical products & fibres Machenery and
equipment Other transport equipment Construction
0
500
1000
1500
2000
2500
Highest number of ISO 14 001 by industrial sector (1998)
Figure 3 The five main sectors in ISO 14001 certification
New Challenges for Multinational Companies
Multinational firms play a key role in the growth and internationalization of the standard.
According to a 1999 French study of ISO 14001 companies21, 75% of certified institutions22
exported and 59% were under foreign control. Indeed, most of these certified French
14
companies either exported or were subsidiaries of large multinational companies. For these
companies, ISO 14001 not only represents a commercial argument but also an internal
management tool. As explained by T. Tibor and I. Feldman in their work on the ISO 14000
standards, “The acceptance of a single international environmental standard can reduce the
number of environmental audits conducted by customers, regulators or registrars. By
avoiding conflicting requirements, multinational corporations could reduce the cost of
multiple inspections, certifications, and other conflicting requirements. ”23 The ISO standard
is thus tending to become a tool for the standardization, control and acknowledgement of
environmental management. This tool is not only for external stakeholders but also for
intramural practices. Certain large companies, such as Ford, IBM, Alcan, Bombardier, and
Renault, have already decided to adopt ISO 14001 in their production facilities around the
world. This standardization procedure and systematization of environmental management
brings several economic, strategic and cultural issues to the fore.
First of all, though savings can be made by applying this standard, its investment costs are
nonetheless considerable. The documentation, staff training, auditing, certification and
development of tools to measure environmental performance make demands on time and
resources that should not be underestimated. The overall implementation and certification
process can cost from $100,000 up to $1 million for a large factory.24 A multinational
company that intends to certify all of its sites must undertake detailed financial planning
before doing so.
Second, the disparities observed in the number of certified companies among the various
countries around the world (see figure 4) may undermine the undifferentiated overall
implementation strategy of the ISO 14001 standard. Indeed, these disparities reflect the
different levels of receptiveness and openness towards the standard. This standard may
therefore be seen as a management system developed by and for certain rich countries that are
trying to impose their practices in other parts of the world. Thus, European and Asian
countries represent more than 80% of certified companies, whereas North American countries
represent less than 7%. A comparison of countries illustrates these marked disparities.
15
Figure 4. International distribution of ISO 14001 certified companies25
For example, in April 2000, the companies of the first four certified countries alone, that is
Japan, Germany, Sweden and the United Kingdom, represented close to 50% of certified
companies around the world. At the same date in time, Sweden had over 1,000 certified ISO
14001 companies, 33% more than in the United States. Japan had more than 60% of all the
certified companies in Asian countries. Finally, in numerous countries in Africa, South
America and Eastern Europe, the number of certified companies is often fewer than ten or
even zero. It is quite likely that the globalization of economies and the political
standardization adopted by numerous multinational firms will gradually reduce these
differences. Moreover, the promotion of ISO 14001 in countries that have been impervious to
the standard may be able to bridge these gaps and meet genuine needs. However, such a
policy also risks appearing as overly centralizing or even as poorly adapted to local needs in
as much as local requirements for environmental content can be very different from one
country to another.
The third, remaining challenge is cultural and organizational. Inspired by a rationale that
stresses the “plan, do, check” aspects, the ISO 14001 standard tends to impose a monolithic
organizational mode that reflects Western views of rationality and order. As such, these
values and management principles are not necessarily well adapted to the needs or specific
activity sectors of the cultures in which the standard is liable to require implementation. The
16
re-examination of the intended universal application commonly attributed to many
management methods is, incidentally, at the center of most of the research being conducted in
the field of intercultural management.26 For example, Anglo-Saxon countries have a long
tradition of written rules and contractual relationships. Explicit and formal communication
styles are thus predominant in the business sphere.27 These “low context cultures”, in Hall’s
terms28, provide fertile ground for the development of a process which is, by its very nature,
contractual and wrought with procedure, as is the case with the process underlying the ISO
standard. In contrast, the cultures found in African or Latin American nations, which are
characterized by a more implicit communication context, are, initially, less open to the
processes involving the implementation of standards. The high rate of illiteracy in certain
countries may also compromise the implementation and monitoring of the documentation
upon which ISO 14001 is based.
In order to circumvent these difficulties, multinational firms can adopt a progressive
implementation policy which initially favors facilities located in countries which seem to
show greater openness to the standard's requirements. Another approach consists in helping
subsidiaries which are considering the implementation of ISO 14001 by providing advice,
auditing, financing, etc., and then letting this decision be made by local authorities. This more
decentralized procedure tends to favor the adaptation of the standard to local needs and
reduces general implementation costs. Nevertheless, it risks appearing as a “laisser-faire”
policy with regard to environmental issues, which are left to the discretion of the authorities in
charge of the facilities and which are dependent on a local context that is not always sensitive
to these issues.
The choice between the adaptation of an EMS to the local characteristics of each facility or
the adoption of the same standard for the whole company is a strategic decision which
depends on the degree of independence that the executives grant to the various subsidiaries.29
Whatever the strategy chosen, companies most ensure coherency between the internal and
external issues associated with the implementation of an EMS.
17
3- Reconciling Internal and External Issues of ISO 14001
If market pressure and the need for external recognition are often at the basis of the
certification process, internal implications of such a process should not be neglected. What
effects does the standard have on management practices and the motivation of the personnel?
Are the standard's requirements adapted to the company's management philosophy? In what
way would the implementation of this management system genuinely improve
“environmental performance”? These kinds of questions not only concern multinational firms
but also all organizations concerned with the intrinsic efficiency of the ISO 14001 system and
its organizational implications. These internal implications are not always compatible with
external pressure in favor of the standard. Indeed, reconciling these internal and external
issues constitutes one of the main challenges of companies which choose to adopt the
standard. As Rondinelli and Vastage point out in their study of environmental risks and the
ISO 14001 system, “Both endogenous and exogenous dimensions of environmental risk are
complex and they differ in their implications. The first dimension –environmental risks
created by the internal operations of a company- is more clearly under the control of
management and regulatory authorities. The second dimension –environmental risks created
by externalities- usually is beyond the influence or control of either the company or
regulators.”30 This distinction shows the importance of adapting management practices to the
external context related to the company's location, namely the ecological sensitivity of the
site, public attitude towards technological risks, population density, and so on. However, the
implementation of a management system, such as ISO 14001, rarely has as its first objective
to reduce environmental risks as they pertain to a local ecosystem's characteristics. The issues
associated with the implementation of the standard must rather be seen in a larger perspective
which takes into consideration the true motivations expressed by the executives.
18
Expectations for the Standard: Highly Contrasting Attitudes
The improvement of environmental performance does not constitute the main objective of the
ISO 14001 standard. Since this system constitutes, above all else, a “metastandard” aimed at
promoting management practices rather than obtaining precise results, it does not guarantee
certified organizations that there will be a concrete improvement in their environmental
situation. As the standard states, “It should be noted that this standard does not establish
absolute requirements for environmental performance beyond commitment, in the policy, to
compliance with applicable legislation and regulations and continual improvement. Thus, two
organizations carrying out similar activities but having different environmental performance
may both comply with its requirements.” In an empirical study of 80 executives and
employees of the Alcan Smelters and Chemicals Ltd. (AS&C) involved in environmental
issues, most of the respondents seemed to be very perplexed about the ecological benefits of
the ISO 14001 standard.31 The expected advantages principally concerned the control of
environmental practices (rigor, monitoring, cost control, etc.) and the meeting of external
expectations (market pressure, company image, etc.). These motivations were found in a
recent study of 85 French facilities which were certified or in the process of certification (see
figure 5).
Figure 5. The main internal and external motivations behind the adoption of ISO 1400132
19
The main external issues expressed by the respondents were:
- A response to the demands of public authorities: the implementation may be a way to
improve relations with the authorities in charge of environmental protection or to meet
requests to adopt this management system. It also makes it possible to confirm the
executives' due diligence and to prove their good faith in case of law suits or inquiries
related to environmental incidents33;
- External recognition: ISO 14001 certification may constitute a public relations’ tool
which helps improve the environmental image of the company in the eyes of citizens
and environmental groups. For companies subjected to strong ecological pressure or
suffering from a bad public image, the standard thus offers the opportunity to prove
the social responsibility of their executives;
- The development of a commercial advantage: in an ever more competitive and global
economic context, the adoption of the standard may be perceived as a competitive
advantage that proves the company's seriousness and its control of production
operations;
- Market access: the use of the standard by suppliers as a selection criterion seems to be
on the rise, although this practice is still limited in most activity sectors.
The most often expressed internal motivations were:
- Management method: for certain executives, the guidelines of the new standard allow
for a certain rigor and coherency regarding environmental management issues;
- Personnel motivation: since it deals with concerns that transcend the companies’
borders and strictly economic objectives, the ISO 14001 standard is likely to mobilize
employees around a common, social cause and thereby heighten their pride. This
mobilization of the personnel is essential to the success of EMS implementation34;
- Cost reduction: although it may represent a non-negligible investment when seen by
itself, an EMS implementation could contribute to the reduction of certain
expenditures associated with environmental problems, such as waste management,
energy, water and resource consumption, and so on;
- Technological innovation: the environmental commitment of the company can lead to
a questioning of production methods and to the use of new, less polluting, more
efficient procedures.
20
These motivations show that the ISO 14001 standard may meet quite varied expectations
which are not shared by all executives. Consequently, public authorities and ecological groups
do not attribute the same degree of usefulness and relevance to the standard. Similarly,
commercial pressure in favor of the adoption of the standard still remains sporadic. In terms
of the internal issues of the standard, the expectations regarding technological innovation and
expenditure reduction are all relatively weak. Finally, executives are far from being
unanimous in expecting improvements in management methods and in the motivation of the
personnel.
Integration Paradoxes
Though the standard meets certain expectations, it also gives rise to a certain apprehension
within companies. Empirical studies that we conducted in the aluminum industry 35 show that
this fear primarily concerns the standard's unwieldy bureaucratic nature and possible conflicts
with the company's management philosophy. The unwieldy bureaucracy particularly concerns
the procedural and work instruction documentation required by ISO 14001. The
implementation and the up-dating of this documentation inevitably implies the establishment
of written rules to which individuals must adhere. According to many managers, this
formalization is more advantageous for the auditors in charge of verifying the standard than
for the companies themselves. As an executive of an electrolysis factory explained, “We
should focus less on system bureaucratization and more on performance. If we start to use
ISO 14001 only with certification in mind, it will mean auditing and auditors. And whenever
you say auditor, you say proof and therefore paper work. The unwieldiness of ISO 14001 is in
the paper work”.
The requirements of the standard seem to be in contradiction with several major tendencies in
company management.36 The perverse effects of the formalist application of supposedly
universal “recipes” modeled on traditional management have been thoroughly denounced.37
The development of a more participatory form of management, with the intention of
reinforcing employee empowerment and appealing to their intelligence and creativity, is
generally at the center of current debates on the renewal of management practices.38 Although
managers dispose of a fairly large degree of flexibility in the implementation of the standard,
there are no recommendations, for example, that encourage the participation or consultation
21
of personnel when addressing environmental issues. Rather, the proposed management system
is limited to the expression of the commonplace precepts of traditional management that
companies must follow to the letter if they wish to avoid any “unconformity” which could
keep them from obtaining certification. Numerous executives that we met feared that
conformity to the standard would compromise the team spirit, collaboration and assuming of
responsibility that had gradually been developed among the employees: "There is a danger of
cutting out all initiative. How can you implement ISO 14001 without calling into question the
general orientation of company management towards more decentralization and employee
responsibility? How can you reconcile the ISO standard with this management philosophy?
These perverse effects demonstrate that whatever the external issues are in the
implementation of the standard, its requirements may be in conflict with the practices and
internal needs of a company. Conversely, the standard may be perceived as a useful and
efficient management tool without its implementation being the object of precise external
pressure or incentives. The integration level of the standard in the daily practices of the
company depends on the intensity of these internal and external issues. As shown in figure 6,
four situations may be considered.
22
Figure 6. Reconciling internal and external motivations and issues
- Ritual integration: even though leaders or employees may not necessarily be
convinced of the internal relevance of the proposed internal management system, the
standard may be adopted in answer to external pressure or opportunities, such as client
demands, a search for a competitive advantage or an improvement in the company's
image or relations with public authorities. This attitude may be explained by the
attainment of a low pollution level that is independent of any formalized management
system. The demands of the standard may likewise be considered as incompatible with
the management philosophy of the company or local culture. Whatever the invoked
reasons may be, ISO 14001 is thus perceived more as a marketing instrument than as
an efficient tool for environmental protection. The lack of a mobilized, committed
personnel acts as an obstacle to the integration of the standard's requirements in the
daily management of the company. Seen from this viewpoint, the certification process
appears as a sort of “ceremony” (in Meyer and Rowan' terms39) which aims to ensure
the social legitimacy of the company. As Catasus and Lundgren underline when
discussing the “de-coupling” that occurs between environmental and organizational
23
issues, “These processes can be described as “rituals of double talk”, i.e., they are
designed for the purposes of demonstration or for exhibition to the outside world.
Procedures become more important than the results.”40
- Mobilizing integration: when the adoption of the standard meets internal and external
needs, its integration into management practices is greatly facilitated. The ISO 14001
system then takes on a strategic dimension. On the one hand, it allows external
opportunities or threats to be addressed, and, on the other, to satisfy internal
management needs. This virtuous reasoning implies an active leadership on the part of
the executives, who must be convinced of the relevance of ISO 14001. They must also
communicate their conviction to employees in order to mobilize the latter and foster
their commitment. This commitment will be all the more meaningful if the
environment is an integral part of a company's mission. Take, for instance, the case of
the Canadian company Stablex, which was the first in its sector in North America to
adopt this standard. Specialized in waste treatment and located in an urban area, this
company was committed to the certification process in order to build customer
confidence and improve its public image. This process also allowed the integration of
the ISO 9001 and 14001 standards into one single management system, thereby
reducing procedures and bureaucracy. Finally, the calling into question of old habits
and the improvements that ensued from the implementation of this system brought on
substantial savings.
- Proactive integration: the lack of external motivation should not dissuade
organizations from adopting the new standard. First, market or government pressure
can eventually develop. The implementation of the standard may thus play a
preventative role rather than aiming, in the short term, to obtain certification. Second,
the standard's guidelines may primarily meet internal needs, such as training, internal
communication, implementation of an environmental policy, or better monitoring of
environmental procedures. For example, the Kronenbourg brewery of Obernai was the
first brewery to be certified ISO 14001. In the absence of external pressure, the main
objective of this process was that the company make a formal environmental
commitment and recognize employee effort in this area. The possibility of
implementing an EMS is sometimes put forward by employees. In an investigation of
425 large companies and the motivations behind their environmental commitment,
24
meeting the expectations of personnel came in third position after regulatory pressure
and the responsibility of top management.41 - Reactive integration: when internal and external motivations are weak, the
implementation of the standard becomes more difficult to implement, except in
reaction to unexpected changes. These changes might occur with respect to customer
demand, the attitude of public authorities or competition. Similarly, the opinions of
executives and employees regarding this system are not fixed in stone and can change
in favor of the standard.
Conclusions and Implications for Government Policy
The development of the new ISO 14001 international standard meets the need to provide
companies with a structured management system that fosters their environmental commitment
and facilitates the recognition of this commitment by stakeholders. Despite its intended
universal application, the formalist and monolithic character of this system cannot be adapted
to all companies, since differences in culture, management practices and environmental
problems can be too great to be covered by a single model. In many cases, the adoption of the
standard runs the risk of turning into a “ritual integration”, intended, above all, to satisfy
external expectations or pressure which are likely to develop with the increase in certified
companies. This type of standard integration may eventually constitute a first step in a
progressively increasing provision for environmental concerns in company practices.
However, it risks creating, in the short- and medium-term, a rift between the environmental
commitment displayed outside of the company and the internal management of environmental
issues.
This potential rift does not only concern companies. Indeed, because they deal with
environmental issues, the premises underlying ISO 14001 transcend organizational borders
and concern the whole society, including ecologists, citizens, municipalities, governments,
professional associations and firms. Very few activity sectors and social actors will remain
untouched by the challenges and constraints inherent in the need to gain control over various
kinds of pollution. The consequences of adopting ISO 14001 in order to improve
25
environmental performance therefore represent a major challenge for our societies. Although
the standard's use is still too recent for us to know its exact contribution to pollution
reduction, the subject has sparked interest, especially in North America. The Environmental
Protection Agency (EPA) has sponsored a number of studies in cooperation with government
organizations, municipalities and firms to evaluate what effect adopting environmental
management systems such as ISO 14001 has on conformance to regulatory standards and on
reducing the impact on natural habitats.42 The EPA has also undertaken a public consultation
program focusing on the type of information that should be verified when evaluating the
genuine effectiveness of environmental management systems. In addition to these government
programs, a number of associations have undertaken similar research. NGO Initiative, an
association formed to counterbalance the almost complete lack of non-governmental
organizations in the ISO 14000 standard-setting processes, is a case in point. It brings together
numerous institutions and ecological groups whose main concern is to monitor the impact of
the standard on environmental management systems.
More is at stake in these questions about the effectiveness of the ISO 14001 standard than
strictly environmental issues since political and regulatory matters also come into play.
Indeed, environmental issues have become increasingly regulated since the early seventies.
Even though regulatory constraints have played an important role in creating environmentally
friendly attitudes within firms, current application still remains difficult to verify. On the one
hand, the problem of measuring environmental performance and, therefore, the degree of
conformance to environmental standards is somewhat complex, and, moreover, is also highly
controversial.43 On the other hand, most environmental-protection agencies, including those
in wealthy countries, do not have the means to enforce regulation. For instance, in Canada, a
country which tends to view itself as a leader in the field of promoting sustainable
development internationally, barely 3% of public spending, both at the provincial and at the
federal levels, goes toward the environment. Deregulation and cutbacks have particularly
harmed organizations dedicated to protecting the environment and, in general, have
heightened existing difficulties. In fact, the ongoing development of environmental standards
on a voluntary basis that is being brought about by globalization and that is resulting in
external pressure for firms to obtain certification could, in all probability, represent a way for
governments to promote environmental commitment at much lower costs than those involved
in the complete underwriting of enforcement. Further development of this approach also
represents a way to promote corporate self-rule. ISO 14001 certification has likewise been
26
applied more coercively. An illustrative case is that of General Motor’s Wilmington plant
which, in 1998, was condemned to obtain ISO certification before the year 2000 or pay a fine
of $200,000 for harm caused to the environment.44
Integrating ISO 14001 into the regulatory apparatus is therefore a double-edged sword.
Contrary to regulatory standards, ISO 14001 is not based on any precise environmental-
performance objectives but rather on objectives that involve documenting and implementing
management principles. The substitution of a “command and control” process based on a
management system implemented by and for companies for a “command and control”
regulatory process based on environmental performance represents a transfer of
responsibilities from the public to the private sector. This transfer can only be justified if the
intrinsic effectiveness of the ISO 14001 standard is proven and if the legislator maintains a
strict regulatory framework. Otherwise, there will be little obligation for certified companies
to take the regulations into account in their environmental policies, and ISO 14001 will
become an “empty shell”. This danger is particularly present in developing countries which
might consider using the new standard to help fill in gaps in their current environmental
regulations. Government endeavors to promote the development of a voluntary standard
whose effects on pollution reduction are still not well known must be developed with
prudence. These endeavors must not endanger the upholding of traditional regulatory controls
but rather must complement the latter and ensure that companies abide by them. The
promotion of the standard as an efficient environmental tool rather than a subterfuge destined
to provide ritual answers to external pressure constitutes a major challenge, as much for
governments as for certified organizations worried about reducing their impact on the natural
environment.
1 The author would like to thank Zhan Su, Marie-Josée Roy, Pierre-Lefrançois, Céline Poncelin and
Louicius Michel, professors at Laval University, and Anne Mesny, professor at HEC Montreal, for the
relevance of their comments and suggestions. Thanks are also due to translator Richard Whelan. 2 Numerous environmental management systems have been developed since the end of the 1980’s by
professional associations, government institutions and companies. For example, the program
Responsive Care, launched by the Canadian Chemical Producer’s Association, is based on an
environmental and health-and-safety management system which was relatively successful in the
chemical industry. 3 An empirical study of the ISO 14001 standard was conducted in 1996 with 80 employees from the
27
Alcan company. This study was comprised of individual interviews and visits to roughly ten
companies. For a description of this study, see xxx and Sala (1998). More theoretical studies of the
epistemological foundations of environmental management systems xxx (1998) and of the
implications of their implementation for the improvement of "environmental performance" are also in
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importance in the decision to implement the ISO 14001 standard in each of the examined companies.
29
The respondents were primarily employees responsible for environmental issues and company
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