Greening of Industry, 15-17 June 2007 Wilfred Laurier University, Waterloo Ulrik Jørgensen, Prof.

1. Flexible interpretations of EMSand the need for a standards reform- the case of ISO 14001 revisited Greening of Industry, 15-17 June 2007 Wilfred Laurier University, Waterloo Ulrik Jørgensen, Prof. IPL / Innovation and Sustainability, Technical University of Denmark and Michael Søgaard Jørgensen, IPL, Kaare Hendriksen, DANAK, Stig Hirsbak, Hirsbak Cons., Nils Thorsen, Ernest & Young Denmark

2. Background • studies of EMS in Danish industries as supplement to environmental regulation • the ISO 14001 concept and institutional history • company/institution studies in Thailand/Malaysia searching for the standard as a travelling concept • other studies of the standards implementation • renewed in the audit society and the legitimation and trust problem • working group including the third party levels

3. The success of EMS • the ISO 14001 standard: success in several ways • sells as well as the quality standards • has made management systems obdurate • growing numbers of companies in Europe, Japan, South East Asia and now China are certified • viewed as demonstrating environmental concerns • the irony: less popular in the US for its demand of audits and policies

4. Origins of EMS • British flaw in environmental regulation made government and industry focus on self-regulation • management accounting system copied from the quality standards • antagonistic responses and limitations in outreach of command & control policies of northern Europe • demand for beyond compliance policies in industry • need for management support for company internal competence building on environmental issues

5. Self-regulation or complement • at the genesis of EMS several stakeholders were present and put their spells on the system • the tension between self-regulation and beyond compliance was part of this • e.g. at GIN in Heidelberg German consultants attacked strict environmental regulations • compromise between environmentalists and business • accounting system embedded in a regulatory context and with implicit environmental objects

6. Negotiated design • comprising of environmental consultants, industries environmental professionals and researchers • forming a rather homogeneous group concerning knowledge and experiences • continued discussion on the relation between accounting system and performance • reference points: legal requirements, suppliers, environmental aspects, significance, and risks • building a market for certifying companies and accreditation bodies as ‘independent’ third parties

7. What is the ‘angel’ guarding? • ISO 14001 certificates and alike as a documentation of their performance and reliability • it works as a translation device and a boundary object between internal practices and stakeholders • differences in interpretations become crucial, as they may have short term and long impacts on the building of trust • the certificate is expected to demonstrate serious engagements in environmental improvements while it documents the existence of an accounting system

8. Critical elements • ISO 14000 a series including performance elements, but only 14001 appears in most audits • several interpretations of legal requirements: laws, circulars, standards, permits, ‘good intentions’ • environmental aspects has a certain common sense element, but the objects are not documented • choice of significance and policy is completely left to the certifying body and the company • continuous improvements stays as a good idea • conformity assessments, inconsistency, site limits

9. Translations of EMS • BS 7750 was an improvement in relation to both low environmental priorities in policy and to the need for business and management involvement • but the context was deregulation and self-control • ISO 14001 was created by professionals and businesses in northern Europe to introduce beyond compliance policies • the context was knowledge and objects maintained by networks of professionals building coherence • EMS is spread to countries lacking these elements

10. Performance and trust • shift: internal quality checks on environmental policy implementation – external communication to stakeholders • easily obtained in relation to product quality specifications but less obvious for ‘hidden’ environmental qualities • the obdurate state of EMS and its basis as an accounting systems creates institutional stability • customers cannot rely on the certificate but install own performance standards as does governments

11. The ‘jump’ to a next level? • ‘social responsibility’ and ‘sustainability’ are on the agenda for companies and standards organisations • ISO is working with a 26000 series on SR including changes in their organisation involving stakeholders to build legitimacy • back mirror demonstration of a perceptive change from ‘objective’ accounting to ‘trust building’ • but the scary part is the reference to the success of the accounting basis of EMS and quality standards

12. Elements of a reform • strict definition of legal requirements to be accounted for • specification of demands from customers to be included in audits • significant aspects as mandatory part of a companies environmental policy • strengthening quality of auditors environmental and performance competences • disclosure of performance data based on sector standards

13. The rise and fall of EMS? • in food and electronics customers are establishing their own standards and audit systems • an ISO 14001 certificate may at best be the entry level, but even not mandatory • the travelling of EMS has without doubts an impact event on companies environmental performance • but the translations are serious • growing mistrust in the certificates, the companies carrying them, and the third party institutions and consultants