Environmental Management System: A Tool Whose Time has Passed

by Dr. Braden Allenby, former AT&T EH&S Vice President
(Reprinted with permission from the Green Business Letter)

Anyone who has any familiarity with current environmental practices and issues is familiar with the concept of environmental management systems. These may be homegrown internal sets of processes for managing environmental and, usually, safety issues: virtually all firms of any size in developed countries will have such a basic system (and most will have fairly sophisticated ones). Such an EMS will usually be somewhat idiosyncratic based on the specifics of the firm and its culture, and will be used primarily for internal management purposes.

Recently, however, a lot of effort is being expended to create more generic, prescriptive environmental management systems, such as ISO 14001 and the European Union's eco-management and audit scheme (EMAS). Both of these gain in generality by reducing flexibility, especially in the case of EMAS, which reflects the formal EU process which gave it birth.

Needless to say, both of these programs - as well as other variations on the theme - have generated substantial heated debate and consumed enormous effort. Are they worth it? Are these systems progressive, comprehensive answers to environmental issues, as they are usually portrayed?

EMSs as currently designed undoubtedly have some utility, especially in manufacturing sectors with a slow clock time, where layers of process do not inhibit firm performance or conflict with slower rates of technological evolution. This reflects the fact that modern environmentalism and its tools (e.g., EMSs) have focused primarily on manufacturing and emissions from such activities, and tend to be part of a culture of "environment as overhead," rather than encouraging integration of environmental considerations into all aspects of a firm's operations.

But EMSs as generally proposed are relatively blind to services, which now constitute some 70 to 80 percent of developed countries' economies. EMAS, for example, is site specific: "the scheme is open to companies operating a site or sites where an industrial activity is performed" (Article 3). This works for a manufacturing firm, with a relatively few number of manufacturing sites with significant environmental implications.

For a company like AT&&T, however, with thousands of sites each one of which poses insignificant environmental risk in itself, EMAS is simply inapplicable. ISO is somewhat less rigid, providing for a range of approaches, but it is still a system better attuned to point, rather than non-point, industrial structure.

More importantly, the value of service firms is the ability of services to enable discontinuous improvements in environmental efficiency across the economy as a whole, through innovations such as internet publishing, teleworking, and efficient product and mail delivery algorithms. These enablers of environmental efficiency arise not from the traditional environmental function within the firm, which EMSs are a part of, but from the intelligent development and diffusion of core technologies, which EMSs are not designed, and are manifestly unable, to comprehend.

To sum up, then, the current proposals for generic EMSs would be potentially applicable to about 20 to 30 percent of economic activity, and, within that 20 to 30 percent, the vast majority of firms of significant size already have EMSs. EMSs fail to capture the vast majority of improvements in environmental efficiency; to the contrary, they continue the unfortunate positioning of environment as overhead.

It is hard to avoid the strong suspicion that, while in 1970, EMSs would have been an important policy initiative, they are redundant and passé in 1999. Depending on the country, they may provide interesting trade barriers, particularly for products from developing countries, but they will have a marginal, and probably not efficient, impact on environmental performance.

So why the interest in generic EMSs? The principle drivers seem to be two: 1) a desire to show that voluntary, cooperative business-government initiatives work, and 2) a desire for transparency in corporate environmental performance so environmental impacts can be assessed. If these are the goals, EMSs would appear to be an inefficient means to meet them. There are other cooperative mechanisms, such as the Dutch covenant system, which would appear to offer more substantial performance improvements.

If the concern is improvement in environmental impacts, the best course is to develop environmental system monitoring capabilities, linked to research programs, that begin to tell us which economic activities are producing real environmental impacts, rather than simply gathering data and encouraging practices which may or may not be relevant. Company specific EMSs are unquestionably useful, but the generic EMSs currently occupying the policy community are far more limited tools than most current commentary is ready to admit.

Dr. Allenby is former Environment, Health and Safety VP for AT&T.