The Importance of Internal Audits Reply

Environmental, Health and Safety (EH&S) auditing is about reducing risks. EH&S auditing, whether driven by external factors or internal, is an independent, objective review of activity designed to add value to an organization’s operations. Auditing brings a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, operational controls, and processes. Completing proactive EH&S audits can ensure the effectiveness and efficiency of operations, the reliability and integrity of operational information, and the safeguarding of assets and compliance with laws, regulations, and contracts…all of which have a direct relationship to the organizations financial performance.

For example, EH&S efficiencies and the organization’s public image can have a substantial impact from a direct and indirect cost standpoint. A proactive EH&S audit program can drive improved efficiencies which will reduce direct costs (e.g. using less material to create a product) and improve indirect costs (create more in a shorter period of time – energy savings). An EH&S audit program ensures regulatory obligations are being sustained, which, in turn, prevents a negative public image. In addition, an EH&S audit program provides recommendations for improvement in those areas where opportunities or deficiencies are identified.

The intent of EH&S auditing is to provide objective data that assures top management that internal controls are effective and working as intended. An EH&S audit program directly supports risk management by providing an organization with data and the ability to control and make decisions to prevent financial loss and reduce an organization’s EH&S risks.

New ISO Handbook/CD Package Unveils ISO 14001 for Small- and Medium-sized Enterprises 2

As more companies begin to track environmental issues through the supply chain, there is a growing need to address environmental management at small- and medium-sized enterprises (SMEs).  The automotive industry required its supply chain to certify to ISO 14001, however, other industries are not quick to follow suit even though ISO 14001 certification now stands at nearly 250,000 companies in 2009 – an increase of 18% over the previous year. 

ISO has issued a handbook and CD designed in the form of a checklist to guide the SME in asking and answering a series of questions regarding the environmental activities of their organization.  The checklist is in 16 parts.  Each part covers a particular ISO 14001 requirement and begins with an explanation of the requirement as well as guidance on how to incorporate this guidance into an EMS that meets the needs of the organization and, perhaps, its customer.  The CD provides the convenience of electronic navigation through the requirements and enables responses to each question to be saved and then printed in pdf format.  This could provide evidence to the customer that there has been progress in implementing an EMS.

It is well known that companies have improved their operations and reduced the impact of their activities, processes, products, and services on the environment by using a systematic approach that seeks continual improvement. The benefits of addressing environmental issues, however,  not only cover protection of the environment, but are also linked to business performance and profitability while improving the company’s image, enhancing access to export markets, providing a common reference for communicating environmental issues with customers, regulators, the public and a host of other stakeholders.  So, what’s not to like!

SMEs are afraid of the cost associated with implementing an ISO 14001 program.  Even while there is an eventual payback associated with the efforts, there will be a considerable amount of up-front money.  They know that they will have to purchase the standard and make a lot of changes in how they operate.  Believing that one has to be certified in order to get credit for using ISO 14001 keeps many companies from considering this important standard.  They only need to certify if a customer requires certification.  Using a checklist could be of value even if the ultimate aim is not third-party certification of the standard.  To order this checklist, you can go to the ISO website:  http://www.iso.org/iso/publications_and_e-products/checklists.htm#PUB100268 

 Some companies are taking a more direct approach with the SMEs in their supply chain.  A consulting firm is hired to perform a gap assessment at each facility in the first tier.  The suppliers will realize that they are already doing many of the things that are required for an ISO 14001-conforming EMS.  It might be easier for them to use the recommendations for improvement to assemble a sound EMS.  In time, the SME will have a viable EMS in place.  At that time, they can decide to use ISO 14001 to check their own system for conformance.  The customer can have a “second party audit” performed to help the SME further improve its program.  All of this can be accomplished without ever seeking third party certification. 

There are a number of internet resources available to SMEs when their customer does not get directly involved as described above.  No matter what the motivation, SMEs can gain some significant recognition from their customers by paying attention to their EMS.

Energy Management System Standards Reply

For those of you who are still eagerly awaiting the release of  the ISO 50001 energy management system standard (due to be released early next year), there is a British Standard, BS EN 16001, that can be used now.  This British energy management system standard has been a key priority for European delegates contributing to the development of the ISO standard in the much slower international standards setting arena.  These delegates are working closely with ISO to make sure there will be no disincentive for the early adopters of EN 16001 when ISO 50001 is released.  The use of this standard is also providing some information to those writing the ISO 50001 standard. 

The aim of this European standard is to help organizations establish the systems and processes necessary to improve energy performance and make reductions in both cost and emissions of greenhouse gases.  Launched in July 2009, this standard effectively presents a business with a roadmap of the various steps to be taken to ensure it is viewed as being serious about energy management.  The promotion of the standard notes that the combination of energy reduction and risk management is more financially advantageous than merely buying additional carbon credits or offsets to lower the carbon emissions that are reported to the public. 

The standard helps businesses ask the right questions of themselves and adjust their internal processes and decision-making accordingly.  These businesses use the plan-do-check-act (PDCA) framework to establish objectives and processes, implement some changes, monitor their results and finally act again to deliver incremental improvements in performance over time.  Some companies in the UK are required to certify to this standard because of the “Carbon Reduction Commitment Energy Efficiency Scheme” that was launched in April 2010 to support attempts to reduce the greenhouse gas emissions in accordance with the Climate Change Act of 2008.  There are similar requirements in the European Union.

To keep up to the demand in the United States, the US Department of Energy is making draft copies of ISO 50001 available to certain technical assistance providers to use for their own energy conservation programs.  However, no climate change legislation has been enacted in the United States.  A company can purchase a draft of ISO 50001 and use it while the final standard is being subject to its final international ballot.  You do not need to be involved in these Department of Energy projects to do so.

It is important to note that the “aspects” determination in ISO 14001 was designed for looking at all resources:  water, energy and materials.  Energy is very important to all companies and their stakeholders.  Unless you find that you need to certify to an energy management standard, you may be better off looking at both the BS EN 16001 and the draft ISO 50001 and using the information to strengthen your existing ISO 14001 program.

ISO 26000:2010 (Social Responsibility Guidance) Released 1

The ISO 26000:2010 social responsibility guidelines have been finalized and published.  It is now possible to add social responsibility “core subjects” from this new standard to an ISO 14001:2004 or ISO 9001:2008 program.  This would create an integrated sustainability management standard.  ISO 26000:2010 cannot be used alone as a sustainability management system.

CAPACCIO likes this standard since it clearly articulates a wide range of social responsibility issues that sustainable companies need to watch closely; e.g., community involvement, human rights, labor issues, and consumer/customer issues.  Incorporating conformance to social issues within a management system will help coordinate those who manage the environmental responsibilities with those that manage the social responsibilities.

A recent survey found that 86% of employees are not engaged by their employers on sustainability even though the same amount – 86% – said that their organization promotes employee sustainability.  It is possible to engage employees more effectively using a management system rather than relying on only on training and awareness.  A properly implemented management system can make sustainability part of what every employee does every day by including it in the work instructions and every aspect of their involvement with the organization.  CAPACCIO is already seeing this make a difference with our clients that are integrating their sustainability efforts directly with their sustainability efforts.  The new ISO 26000:2010 standard will make this effort easier and more effective.

CAPACCIO is preparing a “white paper” on how to use ISO 26000:2010 with your management systems.  Please reserve a copy by contacting Bob Pojasek at rpojasek@capaccio.com or calling him – 508-970-0033 Ext. 137.