Consider the green example of Spartech Corporation of St. Louis, Mo. A leading producer of specialty polymeric compounds, the company has integrated recycling into its business practices since it began manufacturing in 1960. By reprocessing plastics into new products and regularly sweeping up plastic pellets from receiving areas, the company in 2001 salvaged more than two million pounds of waste that would otherwise have ended up in landfills. This resulted in millions of dollars of savings for the company. In that same year, the company also shaved more than $211,000 from its landfill and packaging costs by recycling corrugated cardboard and wooden pallets.
Spartech is in the vanguard of ISO 14000 certification, with eight of its 43 plants having met the environmental benchmarks of the International Organization for Standardization. The company is seeing the green in going green. But will other companies follow its lead? Will ISO 14000 standards become as ubiquitous as ISO 9000?
Off to a Fast Start
In manufacturing today, ISO 9000 quality standards are almost universally accepted. They dictate everything from the calibration of equipment to auditing of manufacturing processes. The newer ISO 14000 targets for environmental performance are just beginning to catch on in the United States. However, as the International Organization for Standardization noted in its 2001 annual report, “the initial global adoption of ISO 14000 is, if anything, higher than experienced by its predecessor, ISO 9000.” In fact, by the end of 2001, nearly 37,000 organizations in 112 countries had implemented ISO 14000.
A Whole Suite of Benchmarks
Like the earlier rating system, ISO 14000 comprises a series of many standards. The first of these, ISO 14001, covers the development of an environmental management system, which helps companies analyze and control the impact of their activities on the environment. Once a company is certified as complying with ISO 14001, it may adopt other components in the series, including:
- ISO 14040 -- environmental performance of products throughout their lifecycle
- ISO 14062 -- integration of environmental performance into the design and development of products
- ISO 14020 -- design of product labels and other product information
- ISO 14063 -- communication of environmental performance
- ISO 14030 -- monitoring of environmental performance
- ISO 14011 -- monitoring of the company’s EMS
Like ISO 9000, the ISO 14000 certification process was introduced at a propitious moment – when corporations, organizations, and government agencies throughout the world were facing increased global pressure to clean up the environment.
ISO 9000 standards were established in 1987, a time when quality management and globalization were among the most compelling business issues of the day. Initially, leading companies viewed ISO 9000 registration as an opportunity to gain competitive advantage. Certification provided third-party validation that the company was following best practices throughout its operation. The only way for competitors to neutralize the advantage was to become ISO 9000 registered as well. As the number of companies meeting the standards increased, ISO 9000 registration became a prerequisite for doing business in most industries. ISO 9000 was updated in 2000 to embrace the philosophy of continuous improvement, also part of the ISO 14001 standards.
Geneva-based ISO introduced 14000 registration in 1996 to specifically target environmental performance. As before, many companies seeking the new certification do so because they believe it will provide them with a competitive edge. Leading firms in the automotive, defense, health care, telecommunications, and electronics industries have already made ISO 14001 certification a requirement for their suppliers.
Benefits of ISO 14000
While some companies still resist strict environmental standards when compliance is not mandated, more enlightened companies recognize that what’s good for the environment is also good for business. Environmental responsibility not only enhances a company’s public image, but it boosts the bottom line. Studies increasingly demonstrate that companies can gain from cost reductions, quality improvements, increased profitability, and access to new and growing markets, while avoiding potential liabilities. Another key benefit is increased employee interaction with the management system, which results in commitment, broadened responsibility and improved communication.
Just what is required to achieve ISO 14001 certification? In the case of Spartech, the company integrated environmental and health and safety programs with existing quality control procedures to create an overall environmental management system that serves the company and each of its plants. Spartech’s Integrated Management System (IMS) incorporates a review of every operation in each plant to ensure that the company is making continuous improvements in utilizing resources efficiently, whether raw materials, energy, or waste materials.
Guided by its IMS, Spartech initiated a series of waste-reduction programs -- some spearheaded by employees, others by major vendors or the U.S. Environmental Protection Agency. For example, the company develops new products from leftover trim materials collected not only internally, but from customers. Its custom sheet and rollstock division can reuse up to 35% of this material in its manufacturing.
Spartech has also developed a new plastic pallet for transporting goods to its customers. Although they cost four to five times more than wood, the plastic pallets can be reused 10 times or more. Wood pallets, by contrast, can be reused on average only three times. The program benefits Spartech’s customers, because they no longer have to pay for the disposal of wooden pallets.
ISO 14001 certification at Spartech has already paid for itself many times over. Further enhancement of the bottom line is likely to accrue as the company brings its other plants into alignment and as the ISO standards themselves are continuously upgraded and fine-tuned.
Businesses in the U.S. may have not yet have embraced ISO 14000 as readily as they did ISO 9000. They should, though, when they notice that their competitors are using ISO 14000 to gain market share, save money and penetrate new markets.
Jackson W. Robinson is president and portfolio manager of Winslow Management Company, a Boston-based investment management firm specializing in green investing. He is on the board of directors of Spartech Corporation.
This article was first published in the April 2003 issue of the Winslow Environmental Newsletter.