Jachen Zeitz, CEO of Puma, said “Sustainability has been slammed as an obsolete idea and only the starting point for companies and brands to play their part in helping the environment, social well being and economic prosperity.” At the Boldness in Business Award Ceremony on March 16th he added, “We need a fundamental paradigm shift in the way we think and act beyond sustainability.” His point was that we cannot and should not delegate sustainability responsibility to one department. He emphasized that many shareholders are beginning to ask companies to behave in even more sustainable ways. “A bold business is one that takes sustainability into the center of its vision and mission.”
At CAPACCIO, we have been making the argument that sustainability must become part of every business decision and part of how every employee does their job, day-in and day-out. This is best accomplished by integrating sustainability into an overarching management system – a sustainability management system. By creating an integrated management system with the social responsibility guidance from ISO 26000, a company will go a long way toward making sustainability part of our daily tasks.
There are still countless publications addressing how different functional managers can address sustainability within the sphere of their control. It would be more productive to have these functional managers work together in a strong governance position to make sure that sustainability is indeed integrated into the fabric of the business. Instead of busting the silos as some pundits suggest, it is best to enable each specialized service to collectively use their skill to enable everyone to participate in this very important effort. Management review has long been a requirement in ISO 14001. The sustainability governance works on the same principle and enables all people to participate in the plan-do-check-act nature of sustainability in their business.
Every business has a number of sustainability practices already in place. Because the practices are spread across many operating functions, it may be difficult to identify all of them. We often compare this to the tiles in a game of “Scrabble.” You find the sustainability practices that you have in place, and then you strive to make sense with them. In Scrabble, you select the tiles and then arrange them on a board to make words. You link the words to other words to score more points. Your sustainability program activities need to be ordered similarly in a transparent way to contribute value to your organization.
Instead of the Scrabble board, you could use an integrated management system to help organize your sustainability effort. With the introduction of ISO 26000 (social responsibility standard), it is easier than ever to integrate all three responsibilities (environmental stewardship, social well being and economic prosperity) into a single program. This new guidance provides some of the program elements that need to be searched for within the scope of a sustainability assessment.
CAPACCIO uses a pre-visit questionnaire to help an organization locate the sources of information, in order to determine activities and processes that address each of these responsibilities. By conducting a site visit, it is possible to get a good picture of the current state of the sustainability program. The components of an integrated management system help to identify the gaps in the program. Sometimes there are not any gaps at all. This information just resides in different functions in the company and the activities just have not been communicated internally. The integrated management system provides a framework for both internal and external communications. It also inventories the environmental, social and economic elements that should be captured in this program.
It is very important to have a complete sustainability baseline before attempting to benchmark the program with competitors and customers. We always find more program elements than are captured in the pre-visit questionnaire. This is why it is prudent to have a different set of eyes involved in the sustainability assessment. You need someone that can communicate with all of the functional managers involved in the efforts. There is no “one-size-fits-all” list to use for the interviews. An experienced sustainability assessor will often find pertinent activities that are not on the “checklist.”
Once you begin to see the sustainability activities, you can form teams to link them just as you do in a game of Scrabble. By increasing the value of sustainability to the organization, there will be a drive to fill the gaps and create yet more links. It is now possible to create a “roadmap” to improve the program and getting more people involved. All this – thanks to ISO 26000 guidance.
I have recently seen a lot organizations struggling with defining the frequency for management reviews. ISO 14001:2004, section 4.6 “Management Review,” represents a top management review that’s conducted at defined intervals, as determined by each organization. The ISO 14001:2004 requires management review be conducted at planned intervals. The ISO requirements and implementation guidance documents do not define “frequency.”
The intent of management review is to provide a communication path to top management on how the EMS is performing (results of internal audits and corrective preventative actions), the organization’s compliance status (legal requirements and other requirements, external interested parties), the organization’s continual improvement projects (objectives targets and programs) and other potential impacts to the organization (changing circumstances).
It is recommended that the frequency of the management review be aligned with the organization’s current structure. At most organizations, an operational management review or quality management review is conducted. Best practice would be to align the EMS management review with these meetings and actually integrate EMS into them, as environmental is actually a branch of the organization’s operations anyway. To ease the process of management review, streamline the meetings by integrating the EMS management review into the organization’s existing structure and follow the frequency already defined.
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.