Tag: ISO 14001

Water Scarcity and Greenhouse Gas Emissions Are Environmental Aspects Worthy of Management System Attention

Posted on by John Shideler

Two of the most successful International Standards of the last 25 years are ISO 9001 and ISO 14001. ISO 9001, a quality management system standard now used by more than one million organizations, first gave international prominence to the “systems approach” to management. It has become one of the all-time best-selling standards of the International Organization for Standardization (ISO).

Its success helped launch ISO 14001, an environmental management system based on the “plan-do-check-act” virtuous cycle of policy-driven planning, managing to meet objectives, establishing operational control, and monitoring and measuring progress towards meeting identified objectives and targets. Several hundred thousand organizations around the world have adopted ISO 14001, usually as an enhancement of a quality management system which has the goal of managing processes for delivering quality goods and services and satisfying customers.

Fundamental to an environmental management system is the identification of the environmental aspects of an organization. These are the “elements of the organization’s activities, products and services that have or can have an impact on the environment,” whether adverse or beneficial. Identifying environmental aspects is key to the successful implementation of the management system, because it helps organizations proactively manage “those that can have a significant impact on the environment.”

Many early adopters of ISO 14001 environmental management systems reaped major benefits from their efforts. Energy efficiency, waste reduction, prevention of pollution, improved compliance with environmental legal requirements, all paid returns that contributed to the organizations’ bottom line while improving their standing among stakeholders, driving improvements through the supply chain, and augmenting workforce morale. Alas, the more the environmental management system standard became commonplace, the greater was the tendency of some later-adopting organizations to use the system as a regulatory compliance management tool and for little else.

In such cases, the true potential of the environmental management system is shortchanged. Properly implemented, ISO 14001-based systems should identify all environmental aspects that have the potential to create significant environmental impacts, whether they are currently regulated or not. Two prominent issues that fall in this category are water consumption and greenhouse gas emissions.

With the world population approaching seven billion, water scarcity is a growing concern. Organizations fortunate enough to be located in water-rich regions can ill afford to be complacent. Although “water wars” have not broken out recently in the United States, regions not normally considered water constrained have experienced some skirmishes. The contested northern boundary of the state of Georgia comes to mind, where claims of a flawed early nineteenth century survey that demarcated the boundary with Tennessee recently were raised. Why the sudden interest on behalf of the state of Georgia in a small strip of land that for nearly two centuries had been recognized as part of Tennessee? The explanation is access to the Tennessee River, which could have been tapped to relieve a drought that recently afflicted northern Georgia.

Another example is public opposition in Minnesota, the land of ten thousand lakes, to commercial development of the state’s water resources to feed an ever-expanding consumer thirst for bottled water. No thank you, say Minnesotans, who much prefer to keep their water for themselves.

Reducing greenhouse gas emissions is another issue that concerns many stakeholders. Regulation of greenhouse gas emissions is now occurring in California and has become an important consideration for the siting of new power plants across the country. For many companies, however, regulation of carbon dioxide is an issue for some time in the future, not today.

However, US companies ignore greenhouse gases at their peril. Aircraft operators landing in Europe or taking off from there face regulation from 2012 as part of an expanded European Union Emissions Trading System. This includes all US transatlantic carriers, and even some general aviation. France and other EU countries have proposed legislation that would mandate disclosure of the “carbon footprint” of products sold in that country from as early as January 2011. Imports from the US would be affected.

Identifying water consumption and greenhouse gases as potentially significant environmental aspects in an ISO 14001–based management system makes good business sense today, in advance of regulations. Doing so helps organizations take early actions to tackle critical issues before the mandates arrive.

© 2010, Futurepast: Inc.

Taking the Measure of Organizations’ Supply Chain Climate Risks and Opportunities: Reporting Upstream and Downstream Greenhouse Gas Emissions

Posted on by John Shideler

An emerging focus of managing climate change risks centers on greening the supply chain. Organizations do this for a variety of reasons. They want to ensure the dependability of the raw or intermediate materials they source, and materials produced and transported in an environmentally sound manner have lower risk profiles. They take an interest in the readiness of their supply chain partners to meet new greenhouse gas regulatory requirements and to absorb potentially higher or more volatile energy costs. And they seek to protect their corporate reputations by dealing with supply chain partners that conduct their businesses sustainably and in compliance with legal requirements and ethical principles.

Greenhouse gas emissions from supply chain partners increasingly are analyzed to detect missed opportunities to increase energy efficiency and reduce emissions. This scrutiny may begin when an organization inventories its “Other Indirect” greenhouse gas emissions, also known as “scope 3” emissions. Other Indirect emissions are those that are influenced by a reporting organization, rather than emitted directly as combustion, process or fugitive emissions. Other Indirect emissions are also distinguished from “Energy Indirect” emissions, which result from the consumption of purchased electricity, steam or cooling. Other Indirect emissions from the production and transportation of raw or intermediate materials that occur outside the organizational boundary of the reporting organization are known as “upstream emissions.” Other Indirect emissions resulting from wholesale and retail distribution of products, and during the use and disposal phases of a product’s life cycle, may be called “downstream emissions.”

Other Indirect emissions can be more difficult for organizations to quantify and report than either Direct or Energy Indirect emissions. Often, the data needed to inventory these emissions reside outside the reporting organization in its supply chain, and are difficult to access. Complicating matters further are questions of allocation, which arise when a supplier furnishes a diverse set of products for multiple customers and then is asked to account for only the emissions associated with a subset of those. Practical questions include “how much to count,” and “how far upstream and downstream” the supply chain accounting should go.

Requests for business-to-business greenhouse gas emission information are becoming more common, and are likely only to increase. Business customers, particularly those with well-known brand names to protect, want assurance that suppliers are managing their risks, including those related to climate change. The concern does not stop with emissions accounting, as a broad examination of climate risks include physical risks from climate change, regulatory risks, and shifting consumer preferences. The first category of risks includes increased frequency of extreme weather conditions, flooding and sea level rise, and changing temperature and rainfall patterns. Resource scarcity is a corollary impact from climate change, which may be triggered by decreasing biodiversity, higher rates of disease, or an increase in desertification. Regulatory risks include the potential imposition of cap-and-trade programs, carbon taxes, or requirements for installation of Best Available Control Technology (BACT). Changes in consumer preferences can impact organizations by shifting consumption from one product category to another, enhancing or harming reputations, and creating markets for new products and services.

Business drivers for taking action now are gaining board room attention. According to PriceWaterhouseCoopers analysts who interviewed more than one thousand CEOs from the world’s leading companies for the Carbon Disclosure Project, “48% of CEOs were already making changes in their supply chain in response to climate change or would start in the next 12 months. 66% of these CEOs were already making a return on this investment or expected to do so within the next 12 months. We have seen a number of examples delivering real cost reductions as a result of using carbon as the value driver within the supply chain. For example, one major clothing retailer recently reduced their supply chain operating costs by 17% and saved over 4,500 tonnes of carbon by redesigning their distribution and logistics chain.” (CDP Supply Chain Report 2009, p. 7, accessed on 2010-01-10 at www.cdproject.net/reports.asp.)

For companies whose primary customers are other businesses, meeting the demand for information concerning their greenhouse gas emissions and other climate risk management strategies can be challenging. Many corporate staffs find it difficult to respond, with in-house expertise thinned and overextended. What’s more, the desired response from customers seeking climate change related information is not satisfied with the provision of a copy of the supplier’s environmental policy or ISO 14001 registration certificate. Real data are demanded that meet data quality standards and adequately characterize uncertainty.

Help is available from specialized consultancy firms like Futurepast. And new international standards and consensus-based protocols are under development. One of the first documents specifically to address supply chain reporting of greenhouse gas emissions is the Scope 3 Accounting and Reporting Standard, to be published as a Supplement to the GHG Protocol Corporate Accounting and Reporting Protocol. This document is available in draft form (November 2009) from the Greenhouse Gas Protocol Initiative, at www.ghgprotocol.org/standards/product-and-supply-chain-standard (accessed on 2010-01-10).

The International Organization for Standardization (ISO) also has begun to develop a document. ISO Technical Report 14069, Greenhouse gases – Quantification and reporting of GHG emissions for organizations (carbon footprint of organizations) – Guidance for the application of ISO 14064-1, is intended to complement the ISO 14064 Part 1 standard published in 2006. Publication of the ISO technical report is not likely before the end of 2012. Futurepast’s president, John Shideler, serves as a US Expert on the ISO working group developing this document.

The main purpose for counting Other Indirect emissions is, of course, to manage them better. Once quantified, organizations in all parts of the supply chain can focus on initiatives to design more sustainable products, improve energy efficiency in manufacture, optimize transportation and logistics resources, and promote end-of-life recycling. Some observers will see connections to other business planning tools such as Six Sigma and Lean Manufacturing which now will be applied to help meet the goals of reducing carbon emissions and managing climate risks.