ISO 14001:2015 and Environmentally Conscious Management

eSPARC Notes: The ISO 14001 standard, known as the international standard for environmental management, is a process-based system adopted to enable the inclusion of environmental considerations into an organization’s decision making process. The new ISO 14001:2015 standard requires organizations to adopt a more holistic approach to environmental management, one that takes into account external factors, such as climate change and resource scarcity, and to consider both future risks and opportunities related to the environment. While the new standard marks a departure from the original in several key areas, it is well suited to serve as the backbone for most ESG and CSR programs, SEC reporting requirements, and other voluntary and compulsory reporting mechanisms. The new standard is expected to be issued in September of this year and will provide a three-year transition window for companies to become certified under the new standard.

It wasn’t long ago when most companies simply took a here-and-now snapshot of their operations when assessing which environmental concerns were important to them. As a result, their analysis was largely confined to what immediate impact the company had on its surrounding environment. However, over the past ten years, increasing attention has been paid to not only to how company operations impact the global environment and resource supply, but how the environment impacts them, their operations, and their success. It is with this shift that companies, investors, regulators, and consumers have been making a push for more sustainable, resilient organizations with greater awareness of both short-term and long-term environmental concerns. These concerns have translated over the years into filing requirements for publically traded companies, environmental social governance (ESG) and corporate sustainability reporting for investors and financial institutions, and emerging mandates such as the European Commission Non-Financial Reporting Directive of 2014.

To meet these demands, the new ISO system builds on the original in a manner consistent with the growing sustainability movement. It requires looking outside the four walls of an organization and into such issues as climate change mitigation and adaptation, sustainable resource management, and value supply chain control. It also requires organizations to consider the impact of their operations outside the doors of their facility by becoming more aware of their supply chain and the end-of-life treatment of their products. If implemented effectively, the new ISO standard can organize and streamline the environmental management process, meet the emerging voluntary and mandatory reporting programs, and enable companies to not only better assess the environmental risks of their operations, but also take advantage of emerging and latent opportunities.

Once an ISO system is in place, companies can choose to have their program certified for international recognition by an accredited registrar. While companies can adopt ISO management guidelines into their management system without becoming certified, we recommend that certification by a reputable registrar be obtained whenever possible as it not only bolsters the program, but can also increase access to new business ventures and partnerships. For those companies currently operating under the 14001:2004 standards, one notable change within the new standard is its shift away from the structure it shared with its health and safety cousin, OSHS 18001, toward the suite of other ISO standards. While the change in structure may require a reorganization of prior procedures, it is still equipped to be integrated harmoniously with OSHS 18001 and allow integrated audits. The ISO technical committee has provided a three-year transitional period for existing certified organizations.