Costs and Benefits of Implementing ISO 14001

[rajaw]

Costs and benifits of implementing ISO 14001

Are the costs involved in registering a company under ISO 14001 covered by the (extra) financial returns (if any) from implementation? Also I would like to discuss the costs involved in implementation e.g. registration costs, employee training, and other resources employed for the same. I am sure we have some tangible returns from implementing the environmental management systems.

Thanks in advance for your input.

 

[Sidney Vianna]

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Identifiable savings
Performance improvements in spill reduction at the Endicott oil field on the North Slope have resulted in overall annual cost savings of $525,000. These are not fuzzy numbers like deferred costs, says Ingram. These are real dollars of annual expenditure for the asset

 

[db]

This is a bit complicated, so bear with me.

Let's say we all wanted to get into shape. There are some of us that are already in good shape and would not need a lot of "extra work" to get there. There are those of us that are in, shall we say, not very good shape (not pointing at you, Randy ). We would need to put a lot of resources into getting into shape. At the same time we would see the greatest benefit.

The same applies to your EMS. I've seen companies where just one program paid for the entire implementation. Where cost savings pay for the annual registration expenses. I've also seen companies where they have gained very little extra benefits.

The costs for implementation will very greatly based on your organization, what your aspects are, and the level of integration into any existing systems you currently have.

I will try to look up some specific numbers, based on some of our clients, but as the saying goes; your mileage will vary.

 

[SteelWoman]

We implemented 14 zillion and I must confess I'm not entirely sure what it's worth has been. Many/most of the elements in that standard were either ALREADY in place due to various federal, state, local municipalities regulations or were in place already because of other plant-wide programs like QS, TS, Human Resources programs, etc. It's not DIFFICULT to comply with ISO 14001, from what I can see... but is it worth it? I suppose some companies might use it as the impetus to pay more attention to that kind of thing, but with OSHA and such regs already in place you HAVE to be conforming to most of that stuff anyway, or you don't stay in business. It's a LOT of expense for a negligible return, IMHO of course! I would think it'd be very easy to say you are "ISO 14001 compliant." We would have gone that route if we had not had a corporate dictate to get certified. Would have SAVED a lot of money!

How about an Environmental Management Program / Continuous Improvement effort to rid yourself of ISO certification to save money?! Think that would fly?

Thank goodness it's Friday!

 

[db]

How about an Environmental Management Program / Continuous Improvement effort to rid yourself of ISO certification to save money?! Think that would fly?

This is why I really don't like mandated systems. ISO 14K (ISO 9K) is a good thing. And it can really help an organization. But, is it worth registration costs? It all depends. If you have the self-discipline to maintain the system, then it probably isn't. If you don't have the self-discipline, then registration might be the only thing that keeps you going.

But, if you could set up a program that resulted in your position being eliminated...would you?

 

[SteelWoman]

I think the ISO guys do the OPPOSITE - set up new systems to ENSURE their positions never get eliminated!!

Look, honestly there are nights I go home and really wonder what I do all this for. What, we never made safe cars before QS9000? Puhhhlease. As market conditions and consumer awareness and demand increase, cars get better and better, with OR without my quality system or yours keeping an eye on it all. Sometimes I fear all we've accomplished is to add enough layers to the process to add a couple thousand to the cost of your car.

Which is why I ride a motorcycle! zoom, zoom.

 

[Marc]

Benefits of Implementing ISO 14001

Well maybe I'll recoup my expenditure... I just finished BSi's EMS Lead Auditor course. According to ISO 14004:1996, Section 0.2:

Having an EMS can help an organization provide confidence to it's interested parties that:

1. A management commitment exists to meet the provisions of its policy, objectives and targets,
2. Emphasis is placed on Prevention rather than Corrective Action,
3. Evidence of reasonable care and regulatory compliance can be provided; and
4. The systems design incorporates the process of Continual Improvement.

There are 13 additional 'Potential' benefits listed but I'm too tired to type them in right now.

 

[Sidney Vianna]

Allow me, monsieur - ISO blah blah blah

Marc, let me help.

The following is from ISO 14004:2004 DIS

Economic benefits can be gained from implementing an EMS. An organization whose management system incorporates an EMS has a framework to balance and integrate economic and environmental interests. These may be identified in order to demonstrate to interested parties the value to the organization of sound environmental management. It also provides the organization with the opportunity to link environmental objectives and targets with specific financial outcomes and thus to ensure that resources are made available where they provide the most benefit in both financial and environmental terms. An organization that has implemented an EMS can achieve significant competitive advantages.

The potential benefits associated with an effective EMS include
 improved environmental performance;
 assuring customers of commitment to demonstrable environmental management;
 maintaining good public/community relations;
 satisfying investor criteria and improving access to capital;
 obtaining insurance at reasonable cost;
 enhancing image and market share;
 meeting vendor certification criteria (tenders);
 improving cost control;
 reducing incidents that result in liability;
 demonstrating reasonable care;
 conserving input materials and energy;
 facilitating the attainment of permits and authorizations and meeting their requirements;
 fostering development and sharing of solutions to environmental problems;
 improving industry-government relations.

 

[rajaw]

Costs are hard to value

Sydney.
Thanks for the reply and articles. I was actually looking for any finaicial figures which prove that registration costs this much and the system (after it is established) pays off (some figure in $$$$).
Costs are hard to value since it may be not only be in their financial meaning, but they may also include the allocation and deployment of more resources
such as training, time of employees, probably some equipment, etc.

 

[Randy]

Hi rajaw and welcome

In many ways 14K is like a computer....GIGO. Resulting benefits are in many ways equal to or proportional to input X committment / desired output.

Benefits can be tangible (cost savings, clean water/air etc) or intangible (perceptions of customers, neighbors, etc).

You're hitting on a topic here that has been and will be batted and bounced around quite a bit.