Automotive Industry Trends
March 2006
Environmental Management: The Greening of the Automotive Industry
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Environmental management, the effort to bring business practices in line with environmental regulations and other green initiatives, has been in the process of evolution for decades. Early in this process, many companies put together their own systems. They hoped that these in-house projects would be well enough conceived to meet the needs of a continually changing environmental landscape. As time passed, however, alarms began to sound around the issue of trade. In response, the International Organization for Standardization (ISO) worked with a large cadre of experts to create the 14000 series of ISO standards for Environmental Management. These standards followed the successful pattern of the 9000 series for Quality Management. Released in September 1996, ISO 14001, Environmental Management Systems: Specifications and Guidance for Use, the first in a series of more than twenty standards, offered an overall framework for companies to establish a comprehensive environmental management system (EMS).
The purpose of ISO 14001 was to provide companies with a way to integrate planning, processes, operations, resources, and responsibilities in order to achieve stated environmental objectives. In the standard, the term environment includes entities within the company, from the physical dimensions of its plants to the people who work in them, and extends outward to encompass
- air, land, water
- resources
- flora, fauna, humans
- interrelations between these entities
The scope of this definition allows the system to reach out to the entire global system of interaction and interdependency.
ISO 14001 was designed to balance the practical needs of business with the protection of the environment. It put forward the principles that companies would clearly define their environmental objectives, establish systems and procedures to support those goals, and work diligently toward continual improvement, regularly assessing their progress and acting on feedback.
Early data from pilot facilities demonstrated benefits that made implementation an attractive idea. Competitive advantages included
- Cost Savings: Companies found that the EMS brought them savings in waste and waste disposal costs, reduced costs from conserving raw materials and recycling programs, and reduced expenses for energy and water use.
- Improved Public Image: The ability to demonstrate concern for the environment and concerted effort on its behalf improved the facilities’ standing in the eyes of customers and employees. It also smoothed the way to trade with Europeans who are acutely aware of environmental issues. A successfully operating EMS further improved relations with state and federal environmental authorities.
- Reduced Liability: The possibility of expensive remediation or clean-up was reduced. Facilities that fully analyzed their operations reduced the hazard of compliance violations and their penalties.
- Improved Performance: Companies that participated in pilot implementation found that through analysis and restructuring of their businesses to meet the requirement of ISO 14001, they actually increased performance in other areas, and these improvements resulted in additional cost savings and competitive advantage.
Once the benefits were clear, the rush was on to implement a 14001-based EMS. Numbers of certifications rose quickly, and companies sprinted to issue press releases announcing their accomplishment. In 2000, the government followed in industry’s footsteps. President George W. Bush signed Executive Order 13148, Greening the Government through Leadership in Environmental Management, which requested EMS implementation by all federal facilities by December 2005. The automotive industry took steps to create green avenues up and down the supply chain. The Big Three auto makers announced that their suppliers had to be 14001 registered by late 2002 (GM) and early or mid-2003 (Daimler-Chrysler and Ford, respectively).
In 2004, ISO issued a revision of 14001, which made it easier to understand, clarified the requirement intent, and put more emphasis on compliance and compatibility with ISO 9000:2000 for businesses that were interested in combining their EMS and Quality Management Systems. All 1996 certifications will expire May 14, 2006, and by that date all enterprises who want to be certifiably green must have upgraded to the 2004 revision level.
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