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Mechanisms to effectively address the common challenges involved in EMS implementation and maintenance in large organisations

Loretta J McLaughlin1, Alison Packwood1, Caroline Grant2, Paul Cunsolo3, Grant Pearce4

1GHD Pty Ltd, 10 Bond Street, Sydney, 2000, New South Wales, www.ghd.com.au
2
GHD Pty Ltd, 201 Charlotte Street, Brisbane, 4000, Queensland
3
GHD Pty Ltd, Level 8, 180 Lonsdale Street, Melbourne, 3000, Victoria
4
GHD Pty Ltd, 2A Helen Street, Mt Gambier, 5290, South Australia

Abstract

No matter what industry sector our clients operate within, the fact remains that organisations are increasingly obliged to demonstrate sound environmental management practices. The introduction and development of the environmental management systems (EMS) standard, ISO 14001, has had a major impact, not only on the way organisations conduct their business, but on the markets within which they operate, and on community and customer expectations.

Beyond compliance, there are other domestic and international business drivers to reduce environmental impacts. And while EMSs have been part of business for many years, the complexity of environmental management issues to be addressed continues to grow. Key issues facing business and which may be addressed through an effective EMS include:

  • Climate change strategies;
  • Sustainability strategies;
  • Maintaining effective EMS in corporate restructuring;
  • Maintaining market presence through EMS certification;
  • Managing the increasing cost of natural resources;
  • Integrating EMS into the larger corporate risk management framework and IT systems;
  • Identifying measurable benefits for business (compliance, marketing, community goodwill); and
  • Maintaining continuous improvement and achieving long term stabilisation of the EMS through involvement of personnel at all levels.

Drawing on experience with large a corporate EMS, this paper will explore some of the barriers to the effective implementation of an EMS and identify mechanisms by which effective solutions can be achieved.

Introduction

In a recent internal technical conference, GHD personnel identified the following issues as the most significant barriers to the effective implementation of an EMS:

  • Transfer of EMS ownership;
  • Planning – Setting Objectives/Targets/Programs/Controls;
  • Tools available for implementing the EMS;
  • Communication;
  • Lack of assessment of compliance;
  • Competence of auditors; and
  • Training.

Transfer of EMS ownership

A common misconception is that either an internal or external resource can be appointed to “do the EMS”. While it is certainly true that dedicated internal or external resources can complete the initial planning phases and specific tasks, eventually the operation of the EMS must become part of the organisation's mainstream business activities. The EMS should therefore not be viewed as a “once off” project, but rather a long term program of activities and review aimed at achieving effective environmental risk management and compliance. Management must recognise, understand and support this view to ensure that adequate resources are provided to ensure the ongoing operation of the EMS.

Transfer of EMS ownership, and responsibility for action, needs to occur at several levels to achieve long term stability and effectiveness. Ultimately, a successfully operating EMS is one in which all personnel have interaction.

Executive level direction

Without question, the most successfully implemented and operational EMS are those that are driven and supported by the senior executive and centred on the business planning process. The management of environmental risks and compliance mirror the business operation in relation to finance (tax laws, budgeting, capital expenditure), legal, OH&S, IT, and so on.

External service providers and internal EMS Working Group

If an external services provider has been used to assist in developing and/or improving the EMS, then any documentation or tools associated with the EMS need to be developed in close consultation with a dedicated internal EMS Working Group. It is difficult for an external service provider to deliver an effective EMS if organisational stakeholders are not actively involved in driving the direction of the EMS.

Our experience has shown that the most effective way to use an external resource is through secondment into the client organisation.

Transfer from the EMS Working Group to all staff

The longer term goal of an effective EMS is dissemination of risk management activities to all staff. This can be achieved through participation in the development and implementation of the operational elements of the EMS.

Planning – Setting effective objectives, targets, programs and controls

By managing the environmental aspects of a business through the annual corporate or strategic business planning processes, objectives and targets and environmental programs can be built into the business plans of each business unit. Objectives and targets, improvement programs and new operational controls can be set in context with the nature of the business and the markets in which it operates. The ‘Plan-Do-Check-Review’ cycle can be implemented through the business planning cycle to encourage dissemination of responsibility for action across the business in an integrated way.

For the most part, Australian Directors have adopted the trend towards Triple Bottom Line (TBL) reporting as means of demonstrating good corporate governance. One such company, the South Australian Forestry Corporation, or ForestrySA, approached the implementation of their EMS through a Corporate Risk Management framework. Senior management took the view that the existing management systems (EMS, OHS, QMS, IT, Finance etc) were all aimed at achieving the same objective i.e. managing the risk associated with the respective business issues.

The Australian Risk Standard 4360:2004 was adopted as the basis of their Corporate Risk Management framework. The Corporate Risk Management framework was designed to go beyond the three ISO based standard management system pillars of OHS, Quality and Environment, to include IT, Finance, other operational matters, Fraud, and Fire Fighting. Maintaining the effectiveness of the EMS and the other certifications remained a key focus.

ForestrySA also went one step further and integrated the Corporate Risk Management framework into their Corporate Strategic Planning process. The focuses of strategic planning and risk management led to an integrated approach between Strategic and Operational Contexts, as illustrated in the flow chart shown in Figure 1. In this type of approach, all facets from policy through to management planning and reviews are centered at Senior Management level. Operational elements of the EMS, for example communications, monitoring and measurement, training and development of control procedures, are addressed through the Operational Context.

Significant advantages can be gained by this integrated management approach including:

  • Efficient use of resources (financial and other);
  • Streamlined operational procedures and reporting formats, eliminating duplication;
  • Reduced system maintenance costs;
  • Simplification and streamlining of the management review processes; and
  • Getting the system working for the people, not the people working for the system!

Beyond compliance issues, other issues such as changing markets, climate change, sustainability and social issues can also be built into the EMS at the strategic level.

Figure 1. ForestrySA’s Corporate Risk Management Framework

Using IT Systems to implement the EMS

Large organisations now operate with complex information technology (IT) systems, including intranet sites, email, financial management systems, and a host of other IT based tools. These need to be carefully considered as one of the primary platforms for implementation and operation of the EMS. When considering the use of IT systems, benefits to consider include:

  • Provision of a central repository or system for storage of EMS related documentation;
  • Achievement of consistency in the system;
  • Rationalisation/reduction in the number of tools being used across an organisation;
  • Use of inline document control;
  • Communications management through email repositories;
  • Team rooms;
  • Records management and retrieval; and
  • Monitoring and measurement.

These features are even more valuable for those organisations with large geographical spread and large numbers of facilities.

Information can be fed into a data reporting system, and various reports from operational risk incidents to performance of Strategic Planning can be produced to inform staff, managers, Directors and Board members of issues as they emerge.

Communications

Managing EMS related communications can be challenging for large organisations, where key individuals or groups may receive several hundred communications each week. Figure 2 demonstrates the potential for gaps and loop holes for the EMS working group when considering management of communication in a large organisation. It is not possible for a single person or small team of people to be responsible for keeping on top of all communications relating to environmental matters at all times.

Figure 2. A simplified diagram showing the potential gaps and loop holes when considering communications for a large organisation.

Ways in which an organisation can address this include:

  • use of IT systems, as described above; and
  • regular meetings between representatives from different groups that may receive communications relevant to the EMS.

It should remain the goal of the EMS team to identify and assess the scope of the activities of the different business groups and ensure the maintenance of the autonomy of these groups, while advising and building in effective environmental management controls.

Assessment of compliance

The assessment of compliance with the EMS should be done through internal (or external) audit. An internal EMS Audit should be an independent function within any organisation. It should assist management by reviewing, assessing and helping to improve the implementation and development of the EMS, as well as providing assurance that the organisation is complying with their legal and other standard obligations.

An internal EMS Audit should be a systematic and documented verification process of objectively obtaining and evaluating evidence to determine whether the organisation’s EMS conforms to the criteria set by the organisation, and for communication of the results of this process to management. This includes the review and assessment of:

  • Clearly identified environmental aspects of the organisations activities which have a significant impact on the environment;
  • The relevance of established policies, plans and procedures, and the extent of compliance with these;
  • Compliance with legal and other requirements;
  • The competence and appropriateness of organisational, personnel and supervision arrangements;
  • The integrity of data collation/monitoring systems, including those under development;
  • The appropriateness, reliability and integrity of the environmental performance data along with other management information and the means used to identify, measure, classify, report and act upon that information; and
  • The follow-up action taken to remedy previously identified weaknesses in the system.

Internal EMS Auditors should work with the Environment Team and other Managers to help improve internal controls within their organisations, thereby reducing the risk of the organisation failing to meet its Policy commitments.

Some of the issues that may compromise assessment of compliance include:

  • Internal auditors have been ‘allocated to do the job’ but are not suitably competent and need further training in audit techniques;
  • Organisations do not have internal auditor capability;
  • The internal audit function does not have sufficient resources to cover the geographical or numerical spread of facilities; or
  • The organisation considers internal audit to be a non-core activity so there is a requirement for an external provider.

Competence of auditors

The internal EMS Auditor is required by the international environmental standard ISO 14001:2004 to be appropriately competent to conduct a detailed assessment and review of an organisation’s EMS. This includes academic qualifications, work experience, environmental work experience, auditor training and experience of auditing. It should be noted that audits conducted by personnel that are not suitably competent will not be recognised by an ISO 14001:2004 certification body.

The benefits to an organisation of having dedicated internal EMS Auditors include:

  • Continuous review of the EMS and internal controls;
  • Compliance assessment and review;
  • Assistance to staff requiring further information on environmental issues;
  • Assistance to external auditors;
  • Financial and operational efficiency;
  • Provides assurance to management that processes and controls effectively manage the organisation’s environmental risks; and
  • Demonstrated Director support for ensuring compliance.

Ways in which organisations can address this include:

  • Having staff complete an Internal Auditor Training Program run by a certified training body; or
  • Contract Internal Audit Support.

Training

We have already touched on a number of issues central to the effective implementation and ongoing maintenance of an EMS, such as transfer of ownership and competence of auditors. Achieving effective transfer of ownership of the procedures and processes central to the success of an EMS can be improved by shared responsibility for developing training packages with the different business groups. Table 1 is an example drawn from a recent EMS which shows how a simple chart can help account for and manage the implementation of training requirements into daily business processes of a number of different business groups.

Table 1. Sample table for the development of training guides

Task

Business Group (1-5)

Resources/Responsibility

Due

Allocated aspects

32

BGMs / EMS Unit

Jun 07

Controls identified

24

BGMs / EMS Unit

Aug 07

Training Guides required

5

BGM (1,3,5) / EMS Unit

Sep 07

Training Guides developed

1

BGM 1 / EMS Unit

Jun 07

Not all personnel need to understand the EMS, the ISO standards, and environmental legislation. Consider, for example, the financial management system of a business. There may be a dedicated department and senior business manager whose role it is to understand the implications of tax laws, cash flow, organisational budgets and other “technical” matters. The senior executive would be responsible for reviewing and approving changes. Individuals may be responsible for authorising expenditure and ensuring invoices are signed and delivered to accounts payable. In the same way, a trained internal environmental auditor will know how the EMS works, and have a knowledge of ISO14001 and relevant environmental legislation, while individuals may simply need to know how to follow a procedure to protect the environment within their scope of work.

Conclusion

An effective EMS has the power to efficiently manage an organisation’s environmental risks, and improve an organisation’s profile by demonstrating sound environmental management practices. Significant barriers to the effective implementation of an EMS identified by GHD personnel, and some of the mechanisms by which these barriers can be overcome, include:

  • Transfer of EMS ownership: EMS ownership must be transferred from the external providers to all staff through an internal EMS Working Group, or similar. It is also important that the EMS has the support of the senior executive;
  • Planning: setting of effective objectives, targets, programs and controls will most likely be achieved by incorporating environmental management into the corporate management framework;
  • Tools available for implementing the EMS: It is worth considering the use of IT systems as the primary platform for implementation and operation of the EMS;
  • Communication: Management of EMS related communications can be daunting in a large organisation – this may be addressed by use of IT systems and regular meetings between various groups;
  • No assessment of compliance: Compliance should be regularly assessed by internal (or external) audits in order to gain value from the EMS;
  • Competence of auditors: Internal (or external) auditors must be appropriately trained in order to gain the most value from the auditing process; and
  • Training: achieving the most out of the EMS and EMS training can be achieved by sharing responsibility for developing training packages with the different business groups. Not everyone needs to know the details of the EMS, they just need to know how it applies to their scope of work.

This paper has touched on a number of the barriers to the effective implementation of EMS in large organisations and presented some thoughts and experience about the ways in which these can be addressed.

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