The positive application of ISO 14001

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Philip Sutton
Director, Policy and Strategy
Green Innovations Inc.
Tel & fax: +61 3 9486 4799
22 April 1999
Version 1.d.w:iii

Paper marked up in HTML format
by Anthony Cameron
Diagrams prepared by Martin Powell
Tables prepared by Callie Jordan

Originally published in:

Sheldon, C. (ed.) (1997) ISO 14001 and beyond: Environmental management in the real world. Greenleaf Publishing: Sheffield UK

Copies can be obtained from Greenleaf:


About the author

Philip Sutton is the Director of Policy and Strategy of Green Innovations Inc., a not-for-profit think tank and consultancy organisation. He developed the Flora and Fauna Guarantee legislation for the Australian State of Victoria, and now works on the implementation of environmental management systems for sustainability-promoting organisations.


Has your firm adopted an ISO 14001 conforming corporate environmental management system (EMS) to help minimise its own environmental impact? Or is it using the EMS to help it contribute to society´s achievement of ecological sustainability?

If your answer is "yes" to the former and "no" to the latter then you are missing most of the social and commercial value of ISO 14001.

ISO 14001 is a major step forward for environmental management in many countries. However, a 'default' approach to EMSs has arisen because the first firms to introduce EMSs had major direct environmental impacts, often caused by pollution, and were subject to tough regulatory requirements, high materials costs, and critical public scrutiny. This 'default' approach however is not suitable for firms that want to contribute most effectively to the achievement of sustainability.

Alternative approaches are possible and this paper develops the framework for a sustainability-promoting interpretation of ISO 14401. If this framework for applying ISO 14401 is adopted widely it will dramatically improve the chances of achieving sustainability.

This paper is written for those who want to know how their firms could become sustainability-promoting or those who need to know what drives sustainability-promoting firms and how they can use ISO 14001. For example, it is written for:

Changing times, changing needs

Over the last hundred years three changes have given rise to a major increase in environmental impacts around the globe. There has been a consistent long term trend for (a) resource intensive goods to get cheaper, (b) for populations to grow and (c) for the scale of economic activity per head in the rich countries to rise. The use of resources has therefore risen dramatically. This in turn has generally translated into greater levels of environmental impact with a consequent need for stronger environmental laws, first at the local level, and then progressively for higher and higher jurisdictions, culminating in international law.

It is now widely recognised that the historic trend of rising environmental damage and resource use is unsustainable and must be reversed.

Sustainability: what does it mean?

So there is much talk about the need for communities, governments and firms to pursue sustainable development. While it is generally agreed that sustainable development is a good thing, there is a lot of uncertainty about what it means and what its implications are.

Sustainable development is development that brings about ecological, social and economic sustainability while contributing to the achievement of society´s other goals.

Ecological sustainability involves both:

Social sustainability involves, at a minimum, maintaining society´s ability to solve major social problems and more generally it means maintaining at least a given level of community caring, vibrancy, tolerance and stability. Economic sustainability means that at least a minimum level of economic welfare is maintained in perpetuity.

The rest of this paper will largely focus on ecological sustainability.

Sustainability is a system characteristic. An ecosystem, human community or an economy together with the associated environment can be ecologically sustainable whereas a stand alone product, material, technology or factory cannot. A firm might be economically sustainable (ie. last indefinitely) but it cannot be ecologically sustainable by itself since it is connected to the environment.

Given the global interconnections of ecological systems, societies and economies, it is not possible to have local sustainability without global sustainability.

Since it is only societies with their environment that can be judged to be ecologically sustainable, an EMS can only be judged to be consciously contributing to ecological sustainability if it is focused on effectively helping society to become sustainable rather than just helping the firm to reduce its own environment impact.

The emergence of the ´sustainability´ market

A gradual but intensifying process of ´greening´ has been under way in many markets around the world for the last few decades. This evolution has been punctuated by two major surges of growth in environmental concern. The first was in the late 1960s - early ´ 70s and the second occurred in the late 1980s - early ´ 90s.

The first surge alerted the community to the extent of bad environmental practice throughout industry and the community. The second surge, triggered by a deepened realisation of the global dimensions of environmental decline, alerted people to the need for sustainable development. But it will take a third surge to push societies over the threshold so that they make sustainable development as defined above actually happen (2).

What might trigger such a third surge? The next decisive surge is likely to occur as:

Scientific evidence: People are unlikely to make difficult adjustments unless they know they have to change. So, for example, the recent scientific consensus conclusion of the Intergovernmental Panel on Climate Change that "the balance of evidence suggests a discernible human influence on global climate" (Houghton et al., 1994) is an important motivator.

Transformative technologies have the power to dramatically change the environmental impact of industry. But even more importantly, by altering the industrial structure, they will change the relative influence of different industry sectors and they will change public perceptions about what is possible. For example, Amory Lovins and co-workers at the Rocky Mountain Institute have been promoting an new car design, based on a hybrid electric drive and a carbon fibre shell, that could reduce energy use by 75-90% for the same performance level as current cars. They have attracted about 25 significant companies to invest around US $1000m in this development and expect to see the new cars rolling out of factories by about the year 2000.

This technology will have very serious implications for the oil and steel industries whose products will be virtually displaced in the automobile market (Lovins et al., 1996).

Another transformative technology that is expected to come on stream by about the year 2000 is grid-connected solar photovoltaic electricity generation that will be price competitive with coal-based electricity. This technology, pioneered by Pacific Solar in Australia, will fundamentally shake up the coal and electricity generation industries(3).

Community lifestyle programs: Already programs like the Global Action Plan are spreading through Europe, North America and beyond. They involve householders in reviewing their environmental impact and their consumption patterns. Once an educational feedback loop back to business is added to these programs they will become a very powerful influence on ´green´ product development and uptake.

Win-win macro-economic policies: There will not be much corporate enthusiasm for the pursuit of ecological sustainability while most businesses think the economy will suffer as a result. But there is increasing awareness that win-win economic strategies can be developed to deliver superior environmental, employment and GDP results (4). The European Union is leading this development, but interest is being generated elsewhere in the world.

Green business tools for sustainability: Businesses will not be able to become proactive in their pursuit of sustainability until tools are readily available to help them manage themselves as sustainability-promoting firms. A number of organisations are developing just such tools (5).

Key corporations go for sustainability: With the globalisation of the economy, large multinational corporations have become the dominant players in business. Until a number of these firms break away from the pack to pursue ecological sustainability as a serious source of competitive advantage, the bulk of firms will not see sustainability as having more than public relations significance. A small but influential band of large multinationals are now moving tentatively in the direction of such a transformation (6).

Media interest: It is rare for major shifts in public, corporate or government thinking to occur until the issues are picked up by the media. The globalisation of the media has gone so far that local media outlets usually only treat an issue as newsworthy after the international news networks have picked it up in what they see as the trend-setting countries.

Ecological sustainability and the role of firms

To achieve ecological sustainability, society will most probably have to do the following:

What are the consequences of objectives such as these? Let´s take the example of CO2 reductions. Let´s assume that we will accommodate expected levels of population increase and economic growth and avoid the widespread adoption of nuclear power. Under these circumstances it would be possible to achieve a 60% reduction in CO2 from the 1988 levels if the global efficiency of resources use was improved by about 5% per annum (8).

Improvement at this rate is technically feasible but the implied rate of social and technical change is extremely testing. Certainly this magnitude and pace of change will not be achieved if significant forces in society are opposed to the changes, causing the reform process to become deadlocked.

So the rate and scale of change needed cannot be achieved without the support of strategic sections of industry. But, if this support is to be worth having, it has to be won without compromising the commitment to the achievement of ecological sustainability.

To achieve ecological sustainability an increasing number of firms, large and small, will have to take on an internal commitment to help catalyse the change. These firms need to become ´sustainability-promoting´. The most effective way to do this is to adopt a sustainability-promoting environmental management system. However this is easier said than done.

Almost all EMS activity at present falls into a very predictable 'default' pattern which unfortunately is particularly unsuited to the pursuit of sustainability because of its restricted focus, as is explained below.

A typology of environmental action

Before describing the 'default' approach a number of concepts used in the following discussion need to be explained. In this paper a distinction is made between three contrasting pairs of terms:

The 'default' implementation of EMSs and its limitations

Environment management systems were first developed to help firms that:

These firms were particularly concentrated in sectors such as chemicals, heavy manufacturing and mining. Their EMSs were introduced to facilitate major improvements in past bad practice. The key issues covered were pollution, waste minimisation and energy conservation. These were the environmental issues that were most easily kept in front of operations managers on a routine basis (10).

Firms were often motivated to act because of concerns about legal compliance, risk management and cost saving, all issues that had a very direct bearing on the welfare of the firm (11).

The 'default' approach, by focussing on direct, negative environmental impacts, caused firms to concentrate on their own production processes first. Some firms´ EMSs eventually led them to manage the indirect, negative impacts of their products on a life-cycle basis (product stewardship). Only rarely did the EMSs lead to the introduction of new classes of products to help customers contribute to the ´greening´ of society.

The 'default' approach to EMSs made sense for the heavy industry sectors, especially while firms were actively bringing their performance up to a high environmental standard. But the 'default' approach is not very relevant to a significant majority of business whose indirect impacts are greater than their direct impacts (12). This helps explain why the majority of firms is taking a long time become interested in adopting an environmental management system. Firms with low direct impacts are either unaware that they could or should be managing their indirect impacts or they feel that conventional EMS approaches do not provide an appropriate framework for them.

Unfortunately, what made sense for certain industries for a certain period of time is now being generalised by many environmental practitioners as the way to implement an EMS in all industry in all circumstances. Indeed many practitioners find it hard to imagine how ISO 14001 could be implemented in a non-'default' way.

But there are major limitations to the 'default' approach. These are summarised in Figure 1.

Figure 1.

If EMS is driven ONLY by: Then: So:
Legal compliance Firms will only be sensitive to those issues that are the subject of strong, well-enforced laws Issues such as biodiversity, soil, and heritage conservation and urban planning will be missed.
Issues caused directly by the firm Indirectly caused impacts will be missed (eg. biodiversity loss, poor land use planning) Firms will not contribute actively to ‘whole system’ solutions.
Negative impacts Firms will not try to provide solutions to problems caused by others Opportunities for developing new products or new areas of business will be missed. Opportunities to significantly advance society’s capacity to be ecologically sustainable will be lost.
Issues that generate politically significant stakeholder reactions Issues will be ignored until politically significant stakeholder reactions build up A lot of avoidable damage will be done before action is taken.Problems that are not immediate or acute in their impact on humans or that affect a small percentage of any given population are likely to be ignored.
Significant materials costs Firms will not take action if money cannot be saved and they are also unlikely to take action if materials costs are a small percentage of total costs Large sections of industry will fail to conserve resources (even when doing so is cost effective).
Legal compliance, risk reduction and cost saving Firms will not explore all opportunities for competitive advantage (eg. non-price or opportunity rather than constraint-based advantages) Opportunities for improving the quality of products environmentally or for developing new products or new areas of business will be missed.
Short-sighted self interest Firms will not exhibit corporate responsibility or enlightened self-interest and thus they will not tune in to the customer’s needs as a whole in the context of their family (for people) or strategic alliance network (for firms), the local and global community and the wider environment Opportunities for a positive relationship between the firm on the one hand, and its customers and the community on the other, will be lost. Opportunities for product improvement or new product development based on a wider perspective of customer need will not be identified

Opening up possibilities beyond the 'default'

Far from the 'default' approach being the only way to frame an EMS, it merely represents one of four possible focuses for action (see Figure 2.):

Also, it draws upon only one of two major sets of motivations: These wider possibilities can be grouped into two EMS models or paradigms:
Figure 2.


Product-and-organisation improvement program

Sustainability-empowerment program

Direct environmental impact

Focus on production process improvement

(Not applicable)

Indirect environmental impact

Focus product life-cycle performance improvement
(product stewardship)

Focus on:

  • the creation of new products
  • programs of influence

- as means of improving society’s environmental performance

The 'default' model starts with production process improvement and might eventually progress to new product development if the incentives and opportunities are strong enough. The preferred model, explores opportunities first in the area of new product development and the use of the firm´s influence and then progresses through product stewardship to process improvement (see Figure 3).

Figure 3.


The ‘default’ model or
"Flight from bad practice"

The preferred model or
"Race to sustainability"

Main motivation

Primarily private interest (the firm’s and the direct customer’s)

Both society’s need and
private interest

Main drivers

Pursuit of private opportunity within social constraints set by laws and economic incentives

Pursuit of social needs and
private opportunity

Typical action sequence

Production process improvement >> product stewardship >> new product development

New product development >> product stewardship >> production process improvement

New product development is needed to achieve win-win results for the environment and for economic performance. Incremental improvements in products will not achieve sufficiently large and rapid improvements in environmental performance, nor will they achieve this while maintaining the community´s standard of living. The transformative technologies discussed earlier show what is needed and what is often possible when sufficient creativity is applied to the task.

Under a preferred sustainability-promoting model, EMSs should not only help firms to ´do things right´ (ie. minimise the environmental impact existing processes or products) but more importantly they should ensure that firm are ´doing the right thing´ (ie. producing appropriate products and exercising influence in an appropriate fashion).

So firms should design their EMSs to help them to simultaneously create maximum environmental value for society (ie. ecological sustainability) and gain maximum competitive and strategic benefit for themselves. Their EMSs should help them develop green markets and position themselves so that they are ideally suited to satisfy these markets.

Developing ´green´ markets involves more than marketing and product development. Firms will also need to be active in encouraging governments to create appropriate incentive structures to help bring forth such markets.

Although ISO 14001 does not require an EMS to be framed in the 'default'-style, the specification standard and the 14004 implementation guidelines are written in a way that powerfully, if unintentionally, reinforces the 'default' rather than a sustainability-promoting approach.

Unless there is something in the ISO 14001 or 14004 procedures that can be relied upon to lead firms ´out-of-the-box´ and to a sustainability-promoting orientation, their original preoccupations (with pollution, compliance, risk and liability reduction, cost saving, and reducing the firm´s direct impacts rather than helping to achieve sustainability for society) will create a lasting culture that defines and limits what environmental management means for them.

ISO 14001 builds in four mechanisms that some might argue have the potential, over time, to draw a firm across to a sustainability-promoting orientation. These are:

The adoption of life-cycle assessment methodologies, encouraged by ISO 14001, will widen firms´ focus from direct effects to include the consideration of indirect effects. But the existing methods for life-cycle assessment cannot handle the explicit consideration of indirect impacts on biodiversity so this issue will still be overlooked by the majority of businesses. Even if indirect effects are considered, this doesn´t mean that their management has to become a major priority.

The ISO 14001 requirement to comply with relevant legislation and regulations means that if society legislates to control new issues or manage existing issues differently in order to achieve ecological sustainability, firms will have to respond. However if firms are not internally committed to promoting sustainability they are just as likely to lobby to prevent the legislative change, while maintaining an ISO 14001 conforming EMS.

ISO 14001 requires firms to institute a program for continual improvement in their environmental management systems in line with their own environmental policy. So long as firms commit themselves to legal compliance and pollution prevention and as long as their certifiers think that their EMS policy is appropriate to the nature, scale and environmental impact of their activities, products or services, they are not obliged to take on a sustainability-promoting approach (14). So a firm that was committed to the 'default' approach would simply have to get better at that approach to remain ISO conforming.

ISO 14001 requires firms to determine their issues-scope and environmental directions in their environmental policy. The views of interested parties are only required to be considered when the already-determined-policy is translated into objectives and targets. So, for example, an oil company that committed itself in its policy to reducing the environmental impact of oil production, could ignore arguments from interested parties that the firm should shift from fossil fuel-based oil to renewable energy production when the objectives and targets of the EMS are set.

Given the lack of effective drivers for the adoption of a sustainability-promoting approach in the ISO 14001 process, a firm wanting to avoid the reflex adoption of the 'default' will have to take its own deliberate and self-motivated steps to ensure that it moves in a different direction. Simply following the ISO 14001 requirements and the ISO 14004 guidelines will not be enough to turn things around.

Practical idealism

Firms are unlikely to commit themselves to the alternative EMS model if they think it is pie-in-the-sky.

Practical experience shows just how hard it is to make relatively small changes in products or production processes. So how can the vast and seemingly impossible changes needed for ecological sustainability be achieved. And how can the complexity of the task be managed?

Zero defects? Impossible!

Goal-directed innovation can be used to achieve win-win solutions in, what appear to be, impossibly demanding situations. A good illustration of this is the Japanese pursuit of ´zero defects´ in manufacturing after the Second World War.

To compete with the Americans, the Japanese needed to lift product quality while maintaining their cost advantage.

To reduce their defect rate American firms´ inspected their output. If a higher quality of shipped product was needed the Americans simply increased the proportion of output inspected, allowing them to weed out a higher proportion of defective units. But in the process the cost per item despatched was significantly increased.

To overtake the Americans the Japanese decided to adopt a much faster and cheaper improvement process.

The Japanese set ´zero defects´ as their goal even though it was technically and economically impossible to achieve at that time.

Innovation programs were set in motion, inspired by the goal. Rather than taking current best practice as their benchmark, the Japanese used an ideal goal and then ´reverse engineered´ a solution that approached the ideal ever more closely. Instead of controlling quality using inspection, they concentrated on manufacturing improvements to make it highly probable that the product was produced correctly the first time. This quality improvement process decreased costs and gave the Japanese a decisive competitive advantage.

The economics and management theory of inspirational stretch goals

In the short term it is almost always true that the further a goal is pursued, the higher the unit costs will be (see Figure 4 for a typical static cost curve).

[Fig. 4. The static 'optimum'.]

Fig. 4. The static 'optimum'

But if an effective innovation program is implemented, new methods or solutions can lower the static cost curve for each time period (see Figure 5), causing costs to plummet over time (see Figure 6).

[Fig. 5. The dynamic 'optimum'.]

Fig. 5. The dynamic 'optimum'

[Fig. 6. The declining cost of a given level of activity.]

Fig. 6. The declining cost of a given level of activity.

Stretch goals are used to inspire both a steady stream of incremental improvements and leapfrog or breakthrough innovations.

Inspirational ´green´ stretch goals

Du Pont, which has a 190 year history of pursuing a ´zero accidents´ policy, now has an accident rate less than one thirtieth of the average for all US industry and one tenth of the average for comparable industries globally. With this experience under its belt the company is now extending its approach to the environment. In 1994 it established company goals of ´zero waste and emissions´ (Du Pont, 1994). Many other companies have similar inspirational goals.

So highly demanding inspirational goals are already a reality in business. But for a sustainability-promoting firm it is necessary to reformulate the stretch goals. This is because the inspirational goals have to drive the firm´s sustainability-empowerment program and not just its product-and-organisation improvement program. Consequently the goals need to focus on what must be done to help society to become ecologically sustainable.

Appropriate inspirational stretch goals for a sustainability-promoting firm would be to foster the creation of an economy and society that aims to achieve:

These inspiration stretch goals will be more easily acted on if a vision of what they mean can be developed and shared widely. For example a closed-cycle economy (see Figure 7) could be pictured as one where materials are cascaded down through applications that can use recycled materials of ever lower quality. This is then followed by regenerative recycling of these materials to restore their quality ready for another cycle of cascade use (17).

[Fig. 7. The closed-cycle economy.]

Fig. 7. The closed-cycle economy.

The magic of whole-system design

Over the last couple of decades, the Rocky Mountain Institute has shown that large energy savings can often be achieved more cheaply than small ones in buildings, motors and many other technical systems through the use of whole-system redesign (Lovins et al., 1996).

Others have also discovered the magic of whole-system design, that is, the potential for win-win solutions. It underpins, for example, the power of TQM techniques, business process reengineering, Eli Goldratt´s Theory of Constraints, cleaner production, eco-redesign and life-cycle assessment.

When societies, economies and technologies become complex, most people focus on incremental improvements in the parts of the system. This leaves a vast reservoir of economic and environmental efficiency gains to be made by those who can handle complexity.

If firms are to improve their chances of tapping this reservoir, they must give their EMSs the widest possible scope. For example it should cover (a) the development of new technologies, competencies and products, (b) the use of influence to change the rules of the game and to mobilise alliances of firms, (c) the lifecycle improvement of products and (d) the upgrading of production processes (see Figure 8).

[Fig. 8. Areas for business action on the environment.]

Fig. 8. Areas for business action on the environment.

Whole system design is not just a very good source of productivity gains, it is also the only way that ecological sustainability can be achieved - because, as stated earlier sustainability is system characteristic and cannot be achieved by focussing on uncoordinated changes in parts of the system. This is why the 'default' application of ISO 14001, which emphasises introspective improvements in the firm´s own product and organisational performance, cannot result in society becoming ecologically sustainable.

Managing complexity: standardised system frameworks

Knowing that whole system design is the key to achieving ecological sustainability with win-win productivity gains is one thing. Doing something about it is another.

There are two reasons why whole system design is not undertaken often. One is that most people have not been trained to handle this approach. The other is simply that it is harder to do whole system design and implement whole system changes than it is to deal with incremental changes. That is why those looking for fast pay-off action tend to leave the area alone.

One very important way to reduce the difficulty of handling whole systems is to use techniques that reduce the complexity of change.

One reason that incremental change is easier than system change is that most of the factors affecting the process are fixed or predetermined. But once a change to the wider system is proposed things become much more uncertain because, while there is one present there can be many possible futures.

This uncertainty can be reduced however by creating shared visions around which individual actions can coalesce. Commercial early mover risk can be reduced even further if shared visions are adopted as standardised system frameworks and are formalised as industry standards.

Standardised system frameworks can also be used to maintain the sustainability of the system over time. A number of standardised system frameworks could be designed which, when combined, are known to be sustainable. Then, as long as each product is designed to fit into one of these frameworks, the sustainability of the system as a whole is likely to be maintained.

For example all products could be required to be recycled through a limited number of standard take-back and reprocessing systems (eg. kerb-side mixed paper collection, parcel-post-style return system for high value-low bulk products). A product would only be allowed onto particular regional markets if it could be handled by the available systems or if the product manager was prepared to develop and implement a viable alternative return-recycling system, that is, they take responsibility for creating a new standardised system framework.

An analogous approach is now being used in software development, the construction of very large office towers, sophisticated aircraft, and to the coordination of inter-related product offerings from a range of independent companies. In these areas systems are reaching such high levels of complexity that no one person can comprehend all the detail of the system.

To make it possible for many people to work together on these products or projects, it is necessary to treat the components of the products or indeed whole products as modules of a larger system. A shared standard is developed, or adopted defacto. Then the components or products can be designed and fabricated semi-independently and yet they still work together finally.

It might be appropriate for standardised system frameworks to be developed by joint government-industry-community working groups. National and international standardisation bodies might play a role too.

Standardised system frameworks should be considered in the EMS process before the EMS objectives and targets are set. The need to fit into existing standardised system frameworks would be determined in the review stage of the EMS. Then, in the EMS strategy process, the need for new frameworks would be considered. Applicable standardised system frameworks would guide the setting of objectives and targets.

An EMS structure for a ´non-default´ sustainability-promoting interpretation of ISO 14001

How can all these ideas be brought together to create an interpretation of ISO 14001 that promotes sustainability-promoting?

An EMS that conforms to ISO 14001 is a mechanism for ensuring that a firm:

For a sustainability-promoting firm, it is desirable to group these steps into a four stage cycle (see Figure 9), starting with a review and the setting of directions. See Figure 10 for an examination of the differences between a by-the-book application of ISO 14001 and a possible sustainability-promoting interpretation.

[Fig. 9. Implementation and continual improvement cycle.]

Fig. 9. Implementation and continual improvement cycle for a sustainability-promoting interpretation of ISO 14001/14004.

Figure 10.

By-the-book application of ISO 14001/4

‘Sustainability-promoting’ interpretation of ISO 14001/4 (SPI)


0 - Initial environmental review 1 - Review and set directions Initial review not required by BTB if EMS already operating
  Values review BTB equivalent is under ‘Environmental policy’
Review of views of interested parties Review of society’s environmental needs and society’s environmental strategies Systematic assessment of environmental needs not specifically required by BTB
Identification of environmental aspects Review of significant -ve environmental impacts and aspects for the product-and-organisation improvement program If initial review not required, BTB equivalent is under ‘planning’
Legislative and regulatory requirements (14001) and voluntary requirements (14004) Requirements review (legal, voluntary, etc.) If initial review not required, BTB equivalent is under ‘planning’
Examination of all existing environmental management practices and procedures; evaluation of feedback from the investigation of previous incidents Management review If initial review not required, BTB equivalent is under ‘management review’
1 - Environmental policy Policy development  
  Strategy development Not required by BTB
  Identification of significant environmental aspects for the sustainability-empowerment program Not specifically required by BTB
2 - Planning 2 - Plan  
Environmental aspects   The SPI equivalent is under ‘review and set directions’
Legal and other requirements   The SPI equivalent is under ‘review and set directions’
Objectives and targets Objectives and targets  
Environmental management programs Environmental management programs  
3 - Implementation and operation 3 - Do  
Structure and responsibility; training, awareness and competence; EMS documentation; document control; operational control; emergency preparedness and response Same as BTB  
4 - Checking and corrective action 4 - Check and correct  
Monitoring and measurement; non-conformance and corrective and preventive action; records; EMS audits. Same as BTB  
5 - Management review   The SPI equivalent is under ‘review and set directions’

Underpinning the EMS cycle for a sustainability-promoting interpretation of ISO 14001 is top level and organisation-wide commitment to the values that drive the firm´s environmental action and commitment to capability building, real action outcomes and continual improvement. The issue of ´commitment´ and the ´review and set directions´ and ´plan´ steps are discussed in detail below.


Every step in a sustainability-promoting EMS cycle needs to be underpinned by a commitment to values, capability, outcomes and continual improvement.


The key values underpinning a sustainability-promoting approach are:

[Fig. 11. Environment as a goal and a constraint.]

Fig. 11. Environment as a goal and a constraint.

The adoption of these values represents a growth in environmental maturity along the spectrum from compliance with externally imposed constraints, to keeping ahead of society´s constraints, to proactively pursuing the achievement of society´s goals as a commercial strategy.


A sustainability-promoting firm will need skills not required by other firms. They will need skills in:

[Fig. 12. A firm's potential, positive knock-on effects.]

Fig. 12. A firm's potential, positive knock-on effects.

Review and set directions

The ´review and set directions´ stage of a sustainability-promoting EMS cycle integrates the ISO 14001-14004 steps of:

ISO 14001 establishes the environmental policy as the key driver of the whole EMS. It is therefore vital the policy document is highly strategic and avoids the inadvertent commitment of the organisation to the 'default' EMS approach. The policy can only do this if an effective review processes starts every turn of the EMS cycle.

The review

There are five suggested elements of the review part of the ´review and set directions´ process.

A values review: a firm will not be fully aware of the objectives behind the EMS review process, its choice of EMS scope, the classes of environmental issues to be managed and the roles that the firm wants to play unless it clarifies its values at the start of the process.

An assessment of environmental needs: a sustainability-promoting firm should not rely wholly on interested parties and stakeholders to draw its attention to society´s environmental needs. The firm should take responsibility for proactively identifying these needs as part of its normal customer needs assessment process. In this case the focus is on the 5-in-1 Customer.

The identification of significant negative environmental impacts and the environmental aspects for the product-and-organisation improvement program: this corresponds to the 'default' consideration of impacts and environmental aspects. Unlike in the by-the-book ISO process, this step should be taken routinely ahead of the policy step so that the results inform policy development. An assessment should also be made of the relative impact of direct versus indirect (life-cycle) impacts.

A review of requirements (legal or voluntary): This is the same as the by-the-book ISO implementation. This review should also routinely feed into policy development.

A management review of the defacto or formal EMS: ISO 14001 requires an environmental management system review at the end of each formal EMS cycle and prior to the policy-making step at the start of the next cycle. However, firms implementing an EMS for the first time are not required to assess their defacto EMS in the initial review phase that precedes policy making. Failure to carry out this assessment, however, could lead to weaknesses in the EMS policy and hence in the first formal EMS. Setting directions

There are three suggested elements of the direction setting part of the ´review and set directions´ process.

The development of policy: The EMS policy (´environmental policy´ in ISO by-the-book jargon) for a sustainability-promoting firm must much more rigorously set the framework for setting objectives and targets than is the case for a 'default'-style firm. So the policy may need to be longer than the typical inspirational one pager. If the EMS policy has to be longer or complex than is appropriate for inspirational and educational purposes, then a separate inspirational summary policy should be produced.

The EMS policy can refer to externally developed sets of guiding principles. A sustainability-promoting firm might wish to refer to the Guiding Principles.

Strategy development: reactive firms do not need strategies, proactive ones do. A sustainability-promoting firm must therefore include a strategy step in their EMS cycle. The strategy should be guided by the EMS policy or at least a good draft of it. Then some of the key insights or directions that emerge from the strategy development process may need to be included in the final EMS policy.

The objective of the strategy is to help the firm decide how it can best help society achieve ecological sustainability while at the same time advancing its own competitive or strategic interests. The strategy will need to guide the firm on the best combination of action:

For each area of action, the firm will need to use the strategy process to decide on the appropriate degree of urgency, magnitude of change and timeframe. Given society´s need for leapfrog change and the firm´s need for products to be commercially viable at each point in time, it might be appropriate for firms to work on the development of more than one generation of product improvements or new products at any one time.

Overall, sustainability-empowerment programs (product or influence-based) benefit society more than product-and-organisation improvement programs, despite the very considerable importance of the latter. Fortunately in many cases firms will also gain the greatest long term commercial advantage from pursuing an empowering program of product development.

The identification of significant environmental aspects for the sustainability-empowerment program: It has always been possible under ISO 14001 to look at the environmental aspects associated with an empowering program. But the structure of the typical or 'default' ISO EMS cycle makes it very difficult to identify them. Environmental aspects for the product-and-organisation improvement program are relatively easy. For example, when a firm works out what it is doing to cause pollution it has identified the relevant improvement aspect. To find a sustainability-empowerment aspect, a firm would have to decide which action, out of the infinite possibilities, it should take to help society achieve ecological sustainability. A strategy is needed to decide on the best choice of activity. Only then can the firm work out the sustainability-empowerment aspects of its operations that need to be managed well to implement its choice.


The ´plan´ stage of a sustainability-promoting firm´s EMS cycle needs to be different from the ISO by-the-book cycle. It is desirable to start the ´plan´ stage of a sustainability-promoting EMS cycle with the setting of objectives and verifiable targets that cover three program areas:

Instead of undertaking the identification of environmental aspects for the product-and-organisation improvement program and the legal and other requirements at the ´planning´ stage, as is done in the by-the-book application of ISO 14001, these activities are best carried out for all sustainability-promoting firms in the ´review and set directions´ stage.

After setting objectives and targets, a sustainability-promoting firm develops practical how-to programs for sustainability-empowerment, product-and-organisation improvement and EMS quality assurance. These implementation programs can contain fast track actions and actions with longer term pay-offs.

Strategic stances

Sustainability-promoting firms can exhibit a number of different orientations towards environmental issues. The three stances of most interest to a sustainability-promoting firm are:

The ethical opportunist firm encourages a general improvement in the environmental performance of all its products and all its processes. Ethical opportunist firms need to have well developed search skills for finding the best available methods and product ideas and they need to be adept at taking on new methods and technologies.

Many firms that eventually adopt an ethical opportunist stance, may start out as ´cynical opportunists´ (20). For example, successful experience with ´green´ niche marketing or with the application of an EMS may create a positive climate in which the shift can occur.

The catalyst stance is reflected in the cultural or policy influence the organisation attempts to achieve in order to promote sustainability. Advertising, customer and employee education programs, sponsorships and policy advocacy are some of the channels for achieving influence. They are often used at present to promote the self-interest of firms rather than the public good. However this need not be the case if firms are actively repositioning themselves to make a living by pursuing the public good. This stance is relevant for all organisations but sometimes it might be the only one that can be pursued actively if it is not possible, at a particular point in time, to make rapid progress developing or improving products or production processes.

The pioneering stance is likely to be most successful where complete management units are involved. This allows all the management structures and processes to be aligned with the stance. Such an alignment is necessary if the organisation is to have the sticking power to make the necessary breakthroughs. Pioneering management units can exist within an organisation that is opportunistic overall.

The catalyst stance would almost always be found in combination ie. with ethical opportunism or pioneering. Because of the risk and cost associated with pioneering, it would be rare for an organisation to pioneer in everything it did, even where pioneering is a core strategy.

Guiding principles for a sustainability-promoting organisation

The following guiding principles could be referred to in the EMS policy of a sustainability-promoting organisation.

If firms want to be classed as 'sustainability-promoting' there are five things they need to do as their minimum commitment:

There are six additional actions that it would be desirable for sustainability-promoting firms to take to magnify their effectiveness. They should: If sustainability-promoting organisations proliferate, then the chance of achieving sustainability will switch from ´vanishingly small´ to ´virtually certain´.


For many firms, the last three decades years have been a confusing time. No sooner have governments set environmental standards than the community has demanded higher standards. It seems that trade-offs between environmental quality and economic production are not respected and the goal-posts keep shifting.

However, once firms adopt a sustainability orientation this constant change is no longer seen as a lack of faith but as continual improvement leading to a win-win environmental and economic outcome, that is, to sustainable development.

Firms will improve their chances of long term success if they understand the destination and can position themselves to take advantage of the change. So when firms design their environmental management system it is essential that they adopt a sustainability-promoting interpretation of ISO 14001. Anything less than this is not best practice.


I would like to thank Manningham City Council in Melbourne, Australia for their vision and pioneering spirit in pursuing sustainability-orientated environmental management. No words can express the debt that I owe Kathy Preece for her continuing support.


1 Other bodies include those that provide education services and that engage in research and development.

2 Sustainable development is often wrongly defined as development that takes environment into account in a ´balanced´ way, that is, environmental objectives are not pursued too vigorously so as to reduce the perceived risk of a major trade-off with economic, employment and income objectives.

3 Pacific Solar is owned by the largest electricity generator in Australia. See Lawley, 1996.

4 See DRI, 1994 and Jacobs, 1994.

5 For example, European Partners for the Environment/SustainAbility/Wuppertal Institute in Europe, the Natural Step Environmental Institute in Sweden, Australia and the US and Green Innovations Inc. in Australia are developing sustainability orientated management tools for business.

6 Given the slowness with which even the leading countries are putting an ecological sustainability compatible industrial base, leading-edge ´green´ firms may have to support the establishment from scratch of such an industrial base in one or more of the newly developing countries. Historically major shifts in industrial paradigm are associated with a geographical shift in the technological frontier or leading edge (the frontier moved from craft production in the UK to production based on interchangeable parts/mass production in the US, and from there to Japan with the development of lean production). See Wallace 1996.

7 The predicament that gives rise to the need for such massive changes is well described in Meadows et al. 1992. This study also make it clear that the restructuring of the economy needs to begin urgently.

8 If solar electricity rapidly displaces coal generation and is used to produce hydrogen as an oil and gas substitute then the 5% per annum improvement in resource use efficiency could be lowered while still achieving the necessary greenhouse gas reduction targets.

9 A firm can exert influence via advertising, public relations, training, strategic alliances, lobbying, etc.

10 For most heavy industries, issues such as flora and fauna, soil conservation, and urban planning tend to attract attention as direct environmental impacts only occasionally, for example when capital works are undertaken and after that they are forgotten again. (Mining is an exception with flora and fauna protection being a continuing issue.) Even where organisations try to manage their indirect impacts, most life-cycle assessment techniques do not deal with issues such as flora and fauna, soil conservation, and urban planning because they are hard to reduce to a small number of simple, quantifiable indices.

11 Issues that caused difficulty mainly for society or the natural environment, rather than for the firm, were much less likely to be dealt with.

12 Even in a resource intensive economy like Australia´s, the sectors of the economy that include firms with high direct impact (ie. mining, agriculture, forestry, fishing, energy production, manufacturing, construction, transport and tourism) only constitute about 40% of the total economy. Since not all firms in these high impact sectors themselves have high direct impact, the 'default' approach to EMSs would not apply well to more than 60% of the Australian economy. (Figures based on data from ABS 1996.)

13 Being driven by society´s interests means much more than being ´market-led´. Many firms undertake extensive market research to find out what the public´s needs or desired are. However, this research usually only discovers aggregated private needs and interests. Even where public opinion polling deliberately searches for people´s views on what is good for the community-as-a-whole asking for off-the-cuff comments is not good enough because of the complexity of the issues involved. The results of in-depth consultations and research studies would need to be drawn on as well.

14 It is unlikely that certifiers will see the promotion of ecological sustainability as the logical end point of ISO 14001 continual improvement programs.

15 The Wuppertal Institute in Germany has adopted this goal and is promoting it in industry through its Factor 10 Club.

16 Where virtually all the throughput resources (those not recycled in the economy) are derived from renewable sources (eg. solar energy and biological materials).

17 The regenerative recycling of non-toxic biodegradable material is possible now using natural processes (eg. composting and digestion to decompose biodegradeable materials and vegetation growth as a way of building the breakdown products back into useful complex materials). However, a comprehensive system for the regenerative recycling of toxic and non-biodegradable materials is still to be developed.

18 ISO 14001 requires compliance with relevant legislation and regulations. This sets the standard´s only environmental performance requirements.

19 Eli Goldratt is actively disseminating methods for achieving ´no major trade-off´ outcomes in industry. See The Avraham Y. Goldratt Institute, 1994 and Goldratt, 1994

20 A cynical opportunist organisation is interested in environmental issues only as a source of commercial opportunities and for no other reason. Cynical opportunist firms add ´green´ products to the range as market research shows that there is demand. However, products with poor environmental performance are continued without improvement for as long as demand exists. Cynical opportunist companies are more likely to perform well in the ´green´ market if their product development and production staff servicing ´green´ niches personally have ethical opportunist or pioneer orientations. A team made up entirely of cynics will find it hard to identify ´green´ opportunities and is unlikely to have the commitment or insights necessary to make ´green´ initiatives work well.

Only the ethical opportunist, catalyst and pioneer stances match the spirit of ISO 14000. However, the ISO 14000 series definition of continual improvement (improvement up to the level set in the EMS policy) and the ability to apply ISO 14001 to only parts of an organisation suggests that a cynical opportunist organisation could successfully meet the technical requirements of the standard and be certified if it wrote its policy carefully.

21 'Sustainability take-off' is as a condition where concern for the sustainability is embedded in the culture, where action to achieve sustainability is continuous over decades, where sustainability programs do not get significantly wound back during economic down- turns (or better still they are advanced in ways that are appropriate to that stage of the business cycle), where changes in government do not significantly set back sustainability-promotion, where public policy is driven by a vision of a preferred sustainable future and where the leading sections of the business community are sustainability-promoting. A discussion of the related concept of ecological take-off can be found at:

22 The author calls this the 5-in-1 Customer concept where the firms tries to simultaneously serve the needs of five 'customer' classes: the immediate user of the product, as well as the local community, people globally, future generations and nature. 23 Pioneering involves developing new capacities or qualities from scratch. Leapfrogging involves significant advances that go beyond incremental change.


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Last modified: 22 April 1999

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