Monday, 6 July 2015

14031: MANAGING BY NUMBERS





When ISO started revising 14001, the standard for environmental management systems (EMS), it emphasised the importance of measuring, monitoring and managing performance. Under the clauses in the draft standard covering objectives and targets and in the section on performance evaluation, organisations are required to adopt performance indicators. The draft defines an indicator as a measurable representation of the condition or status of operations, management or conditions. This definition originates from ISO 14031, which provides guidance on environmental performance evaluation (EPE).

14031 is referenced in the 14001 draft as well as in the proposed changes to 14004, the guide on applying the EMS standard, which is also being revised. Both drafts recognise that 14031 could make a significant contribution in assessing environmental performance, as well as potentially providing organisations with a means to track their progress towards a more circular and sustainable economy.

But this begs the question as to why the 14031 guidelines have had little impact so far, other than fragmented applications and often in research-focused investigations. After all, the current edition was published in 2013 some 14 years after ISO first brought out the guide. Surely if 14031 had any real value, it would have made a much larger impact.


IN THEORY…

The UK national standards organisation, BSI, says 14031 can help an organisation maximise the management of its environmental impacts. It does this by providing users with a set of tools to identify, measure, assess and then communicate their environmental performance.

The intention of EPE is to give an organisation a better and more detailed understanding of its environmental risks so that it can manage them more effectively. Simply, EPE set out in 14031 is designed as a management process that combines the input-process-output model, the plan-do-check-act (PDCA) cycle and three types of key performance indicators (KPIs). The inputs include resources while the management of the activities processing them will affect the quality of the environment through the outputs. The KPIs chosen to quantify the inputs, processes and outputs reveal an organisation’s past and current environmental performance. 14031 also encourages the use of ratios to normalise indicators, thus improving their comparability.

The three types of indicators described in 14031 focus on:
  • environmental condition (ECI);
  • operational performance (OPI); and
  • management performance (MPI).

The ECIs describe the state of the environment affected or influenced by an organisation. For example, an ECI could be the noise levels caused by the organisation and received by residents of a nearby housing estate. An OPI could be the levels of noise generated by machinery and the activities of an organisation’s employees on site. Noise incidents and the organisation’s objectives and targets for employee training in noise monitoring and control could serve as MPIs. ECIs, OPIs and MPIs can therefore be applied in a related manner.

14031 encourages the use of indicators to examine causes and effects, and hence manage an environmental impact better. The indicators that an organisation chooses will depend on its activities and its significant environmental aspects. The panel (p.18) shows examples of ECIs, OPIs and MPIs.


… AND IN PRACTICE

Shortly after ISO published 14031, there was an intense spell of activity exploring and reporting its use. As part of this, the international standards organisation published a technical report, ISO/TR 14032, with more than 30 examples of its successful application. These showed that EPE can be adaptable across a range of organisations.

The organisations showcased in the report varied from a small furniture manufacturer in Germany employing 11 people, to multinational companies with more than 100,000 employees. In all cases, the use of 14031 highlighted several common factors: it provided a useful basis for identifying significant aspects, managing their impacts, and encouraging employee participation and continual improvement. The case studies also demonstrated that the 14031 guidelines are invaluable for reporting, communicating and influencing.

Indicators to assess environmental performance are not unique to 14031. They are also a feature of the EU eco-management and audit (EMAS) scheme. The regulations implementing EMAS have specified the use of performance indicators since 2001. The regulations have always been prescriptive when compared with 14001, which suggests that complying with EMAS should itself lead to consistency and comparability when using indicators, so eliminating the need for 14031.

A team of Italian researchers looked into this by examining the EMAS statements of 111 municipalities in Italy. Their findings, which were published in 2012, showed that, although the EMAS regulation specified a limited set of indicators, the municipalities used more than 2,000 types of indicators between them, with relatively few in common. The researchers concluded that the disparate and fragmented way that the municipalities used indicators made benchmarking performance almost impossible. Indeed, the team noted that many of the indicators were poorly designed or irrelevant.

So how does the EMAS compare with the use of 14031? Two other teams of Italian researchers explored this subject. In the first investigation, researchers from the Faculty of Environmental Engineering at the Politecnico di Torino examined the use of 14031 in the automotive sector. They sent a questionnaire to manufacturers in north-west Italy, deliberately choosing one sector and companies that had been 14001-certified for at least three years. Although only one-third of the companies answered in detail, their responses were very informative. All reported that indicators based on 14031 provided a good understanding of their environmental aspects and impacts, an effective means for continuous improvement, and resulted in cost savings. The responses also revealed that the companies using indicators focused consistently on resource efficiency and waste minimisation.

In the second study, a group from the department of chemical processes in engineering at the University of Padua looked at whether 14031 was an effective tool for municipalities in relation to Local Agenda 21 (LA21) – the non-binding, voluntarily implemented action plan on sustainable development that was a product of the 1992 Earth summit. The study revealed that 14031 had proved valuable for analysing the complexity of environmental aspects in a municipality and provided a “clear and well-developed picture of the level of sustainability” in a city. 14031 was also found to be effective in supporting decision-making and communicating performance. The researchers concluded: “14031 is absolutely consistent with the fulfilment and management of the LA21 process and plan-do-check-act cycle.”


RAISING THE PROFILE

14031 describes a systematic process for analysing environmental aspects and then setting indicators to measure, monitor and manage environmental performance. Nonetheless, its use has been fragmented and hardly widespread. This may simply be due to a lack of awareness. However, two things should change that. First, BSI has been publicising and promoting 14031, with support from bodies such as IEMA. Second, the references to 14031 in the revised versions of 14001 and 14004 will lead to a much greater awareness of its potential benefits. The use of ECIs, for example, will support organisations in determining their environmental context, while the application of OPIs and MPIs is now well proven for understanding and improving environmental performance.


The benefits of 14031

  • Improved identification and understanding of environmental aspects and impacts – and hence a better management of environmental performance.
  • The use of ratios can help identify areas of processes that have the potential to be circular and sustainable – for example, the proportion of recycled and renewable materials in a product or process.
  • The use of ratios helps to identify processes to support the more efficient use of resources, reducing waste.
  • A stronger environmental performance gives a greater assurance to stakeholders and can increase both credibility and reputation.
  • Supports implementation of an environmental management system because environmental performance evaluation can help identify significant risks, set objectives and targets, and track performance.
  • Recognition of good performance management can help an organisation improve its risk rating and compliance with legislation, potentially reducing annual charges for permits and consents.
  • Organisations can harmonise and streamline significant performance indicators in sectors, assisting benchmarking.

The Value Of Environmental Performance Indicators

The new version of ISO 14001 requires the “integration of environmental management system [EMS] requirements into the organisation’s business processes”. It makes sense to use other business processes for integrating EMS thinking into business planning. This is where the approach used in ISO 14031 has significant value because it specifically identifies performance measures that enable evaluation of improvements, which will deliver an overall business benefit.

14031 supports 14001 in other ways too. It includes guidance to help determine objectives (draft 14001 standard clause 6.2) and measure performance (9.1). It can also be used to show how an organisation considers its impacts in context (4); its leadership and integration of environmental objectives in the business (5.1); how the significant environmental aspects are clearly identified (6.1.2) and planned (8.1); and how they are appropriate and how performance is evaluated (9.3).

The model used by 14031 relates to the business context for EMS, but also a best practice approach for sustainability in general, identifying three key performance indicators:
  • Management performance – for example, by identifying how leaders are making business decisions which lead to an overall improvement in outcomes or a measurement of how users of products and services are influenced.
  • Operational performance – for example, measurement of impacts related to manufacture or consumption of products and services, such as the amount of carbon dioxide attributed to the manufacture of each product.
  • Environmental condition – for example, indicators that establish a baseline against which change over time can be measured, and specifically demonstrate value or the impact of an environmental programme, such as pollution emissions on local air quality.

Many organisations do adopt operational and management performance indicators, but few recognise environmental condition indicators (ECI). Barclays provides an example of one that does.

Banking is a relatively low polluter in its direct operations; the sector’s greatest environmental impacts arise from lending and investments. Here ECIs can be crucial and used to manage local environment impacts in a globally consistent and beneficial way, such as through the positive selection and investment of sustainable operations and technology.

There is evidence of all three types of indicator at Barclays. An example of an MPI is the inclusion of environmental categories in business cases and capital investment plans, which support effective decision-making and enable the tracking of the environmental impacts of decisions.

On OPIs, Barclays has been developing stringent environmental criteria to improve its operational footprint

both directly and indirectly. In recent years, Barclays has established comprehensive and robust systems to measure electricity consumption, water use, waste disposed and recycled and its carbon footprint.

In terms of ECIs, Barclays has established an environmental, social and governance taskforce to create a holistic view of its sustainability and a vision known as Ambition 2020. This aligns key initiatives throughout the organisation to key sustainability objectives. The aim is to measure the value and impact of the environmental programme and enable Barclays to benchmark itself within the finance industry.


Examples Of Indicators

Environmental Condition
  • Noise levels at sensitive locations, such as houses and schools.
  • Groundwater levels and quality.
  • Ambient concentrations of nitrogen dioxide and particulate matter.
  • Chemical and biological indices for local streams, rivers and lakes where discharges occur.
  • Tree cover.
  • Biological diversity of the surrounding land, such as lichen variety and abundance.
  • Soil quality and contaminant concentrations.

Operational Performance
  • Total consumption of electricity.
  • Ratio of renewable energy to fossil-fuel generated energy.
  • Ratio of energy use to units of production.
  • Indirect and direct emissions of greenhouse gases.
  • Ratio of total emissions of greenhouse gases per unit of production.
  • Combined ratio of energy consumption and emissions of greenhouse gases per unit of production.
  • Water use per unit of production.
  • Ratio of raw water to recycled water.
  • Ratio of hazardous waste produced per unit of production.
  • Energy cost of waste per unit of production.

Management Performance
  • Degree of compliance for internal environmental audits.
  • Ratio of level of compliance for energy-management procedures and energy consumption per unit of production.
  • Proportion of staff with a measured level of understanding of sustainability.
  • A ratio of the level of understanding and decrease in waste production or energy consumption per person hour in the office.

Sources: Rick Gould, IEMA, Barclays.



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