by Russell V. Thornton

The goal of this mandate is to guarantee that suppliers have processes and procedures in place aimed at ensuring cleaner operations, continued environmental improvement, assessment of future risks, and commitment to further voluntary initiatives.

The automobile industry position was summarized in remarks made by Harold R. Kutner, group vice president of Worldwide Purchasing and North American Production Control and Logistics for General Motors. GM will require its suppliers to implement an environmental management system by December 31, 2002. Said Kutner, "Working together with our suppliers, we can accomplish much more to improve the environment than GM can alone. We believe it is in all our interests to make improvements in the environmental arena."

According to Dennis Manino. GM vice president for environment and energy, and chief environmental officer, "This commitment to high environmental performance throughout our entire business is not new, but this requirement further enhances our partnership with our suppliers and is a natural step toward our drive to environmental stewardship."

What this means is that many companies will be facing a lot of work on ISO 14001 certification between now and December 31, 2002. Unless that work is done, many of them will be sidling up to a dry bar when their business evaporates a little over two years from now.

The basic problem raised by the automakers' mandate is that many suppliers are still a long way from achieving environmental certification. There can be substantial costs involved in achieving certification. Moreover, the company must develop a certification strategy, including consideration of technical, business, and management (organizational) issues.

The good news is that there is still plenty of time to solve the problem for those companies that begin the journey now. Most organizations are able to achieve that "next step" and accomplish compliance and certification within 6 to 12 months (although it can take longer).

Prudent organizations are looking at a "Three Cs" strategy: communicate. comply, and certify. Before reviewing the components of this strategy, let's take a brief look at the factors that are pushing the auto industry toward ISO 14001.

Currently, the automobile industry is leading the United States in numbers of organizations compliant with and certified to ISO 14001. That is excellent news because the industry has created a pool of relevant information in which smaller organizations can swim as they are getting started.

Not only are the major automobile manufacturers communicating, complying, and certifying, they now expect their suppliers to do the same. The manufacturers also are willing to share information that will be of assistance in the ISO 14001 effort.

Some of the reasons for the acceleration of interest in ISO 14001 within the automobile industry are:

• The influence of Toyota. Perhaps because space is so limited in Japan, or because there are many manufacturing-related environmental problems, Toyota has always been ahead of the industry in terms of environmental commitment. They have plants certified to ISO 14001 worldwide.

• Retention of present market shares. The auto industry is a fiercely competitive, global industry. Market share is king, and much of the buying public is influenced by the environmental perceptions (and realities) they associate with a particular company.

• Brand protection. Positive and negative publicity must be kept in balance in order to protect a brand name—and this includes environmental publicity. Recently, there has been a lot of publicity about big, heavy, gas-guzzling SUVs. The auto industry is very sensitive to this kind of attention, and knows that negative publicity is bad for business.

Long before writing new procedures and work instructions, management needs to communicate a "snapshot in time" that informs all members of the organization where the company stands relative to the environment. Companies can use a variety of different tools for this communication, including e-mail, letters from top management, memos, phone calls, and meetings.

More and more, organizations are recognizing the value of creating an internal "green publication" that can focus resources on compliance and certification to the ISO 14001 standard. (See bottom section, "Publishing a 'Green' Newsletter.") As momentum builds, many organizations begin circulating the publication to stakeholders outside the company. They use the publication to inform stakeholders and interested parties about environmental management activities within the organization

A standard like ISO 14001 can force a company to examine itself and helps impose discipline on behavior patterns within the organization; putting out a regular publication (whether by hard copy, on the Web, or both) can instill a similar discipline by requiring the organization to "agree for publication" on the way the company is to be presented.

That old adage, "You won't know where you are going without first finding out where you are," holds true here. Organizations must honestly evaluate where they are in terms of environmental management, contemplate what that means, and then set forth an environmental management goal and a strategy to reach that goal. However, unless that goal and the accompanying strategy are understood and "bought into" by all employees, failure is more likely than success.

Perhaps the most significant factor accelerating ISO 14001 compliance is the ever-increasing globalization that characterizes the auto industry. More and more, auto manufacturing is mirroring airplane manufacturing: parts and components might be manufactured anywhere, and assembly might occur anywhere.

This means that a single automaker can have multiple facilities all over the world, under the same corporate umbrella, which require a consistent EMS and measurable results in order to operate competitively. ISO 14001 is one of the best ways to ensure that these needs are met.

Today’s marketplace forces organizations to strive continuously for improvement in all business functions. Since the competition is always trying to do better, your organization must do the same. This includes improving your organization’s ability to create more favorable interactions with the environment.

Companies have long recognized that integrating quality into products at the planning and design stage achieves better results at a lower cost than trying to fix problems later. This understanding of the need to build in quality "up front" is now being expanded to include environmental issues. Pollution prevention is replacing pollution control as the better, less expensive choice. This is a great improvement over the attitude seen in the past, in which there was often no attempt at prevention, and pollution control occurred only when the organization was forced into it.

Carmakers are now recognizing that compliance to a standard like ISO 14001 can make life a lot easier. Customers have become less tolerant of failures and defects—and environmental issues are now near the top of their list of concerns. Notice how the air pollutants emitted by automobiles have been decreasing, and how the air conditioning systems currently placed in autos have been designed with the environment in mind.

Most experts agree that one of the toughest challenges facing the automobile industry is improving their ability to deliver better cars at an ever-faster pace. That ability will surely increase when a carmaker has an EMS in place that can deal with environmental aspects and impacts as they arise.

Increasingly, the car industry must operate with shorter and quicker supply chains, less inventory, continued cost reductions, and lean manufacturing principles. Accordingly, the industry needs an EMS that reduces costs, helps speed up supply chains, and complements lean manufacturing tenets. ISO 14001 is clearly the best available tool for meeting these goals.

As the focus on results forces changes within the auto industry, the role of supply chains becomes critical. Says Joseph R. Dunbeck, chief executive officer of the Registrar Accreditation Board, which accredits ISO 14001 registrars in the United States, "No organization can afford to have bad quality coming in the front door, or environmental problems going out the back door."

In order to prevent these problems, companies have begun to focus on making quality initiatives and environmental activities "cascade down" through their supply chains. Automakers can have a very significant and direct effect on their suppliers' behavior with regard to quality, safety, and environmental performance. Automakers are using that influence to encourage suppliers to adopt new and improved processes that will reap additional benefits for the whole supply chain.

Many companies believe that simply declaring themselves in compliance with a standard (whether quality or environmental) is enough; they do not consider formal certification to be necessary. These companies in effect are saying, "We know where we are, and you can depend on us to tell you," Unfortunately, the reply that other organizations make is generally, "No you don't, and we cannot afford to just believe you."

To be certain of compliance to all ISO 14001 requirements, you must work with an accredited registrar. Registrars almost always find some nonconformities during an audit, and a robust audit invariably identifies areas where improvement is possible.

Certification also helps standardize the organization's procedures and policies with respect to any chemicals and compounds the company may be using, many of which they may have to disclose to their customers, either currently or in the future. Increasingly, customers want to understand the environmental implications of the products they buy (including product components). They want to know how the product should be handled while it is in use, what health and environmental effects it might have, and how it needs to be disposed of.

Just as financial accounting assures all parties of a company’s fiscal state, ISO 14001 certification assures all parties that the company is working diligently to improve environmental performance, and is willing to go on record with their objectives and results.

With the stakes so high, and the stakeholders so numerous, why not certify your EMS if you have "the goods" to back it up? The savings you realize by doing so will almost always outweight the costs. Moreover, the community you operate in is likely to recognize and appreciate the benefits of certification. The "community" includes the people living and working near your plant (and any schools, hospitals, or other facilities that may be nearby), and your local, state, and national government bodies. ISO 14001 certification can be particularly important in developing countries, where many sensitive environmental issues may arise.

When all is said and done, it is the customer’s reaction that will determine the cussess of ISO 14001 certification throughout the auto industry. Therefore, it is crucial that the Three Cs strategy permeate the entire industry supply chain in order to define a direction, increase knowledge, and produce improvements.

If you are an organization faced with meeting the auto industry ISO 14001 mandate, you should recognize that you need to adopt the Three Cs (communication, compliance, and certification) to remain competitive. Fortunately, a ready path is available.

Begin by having a specialist evaluate what you have in terms of environmental management against what you need. Start the communications effort necessary to move your organization toward focusing on ISO 14001 compliance and certification. Involve a third-party registrar that takes a "robust" approach to audit activities. Remember, the registrar represents the "bridge" between your current environmental management position and the position you want to reach, so involve them early.

Continue to use communication (such as a green publication) to condidly inform all concerned parties about your progress. As soon as you compliant to ISO 14001, get certified. Once certified, continue to inform stakeholders through your publication, and work to maintain your ISO 14001 certificate.

Special thanks to Jay Kohler, vice president of ISO Communications. His insights and knowledge were extremely valuable in creating the sidebar on publishing a green newsletter.

Publishing a Green Newsletter

Newsletters have become quite popular as a means for companies to communicate environmental information to customers, supply chain members, and other interested parties. Newsletters now appear both in print and on company websites. Here, we present some tips that your organization should consider when publishing a "green' newsletter.

Companies routinely audit their quality systems and their environmental systems. But how many audit their communications—or have outside, capable professionals evaluate them for effectiveness? The answer is: very few.

A recent study found that 80 percent of chief executives believe that communicating with employees and stakeholders benefits the bottom line. However, only 22 percent of them communicate on a regular basis.

An even smaller percentage are capable of producing newsletters (for environmental or other purposes) that can win readers. It is important to recognize that you are competing with many "slick" newspapers and magazines; the audience you want to reach may already be reading those.

The following checklist covers a number of questions that should be addressed before you launch your green newsletter. Do not necessarily assume that you will have all of the answers internally. Be willing to listen to outside experts who have experience publishing the type of newsletter you would like to create.

1. Who is this publication designed to reach? (Define your intended audience. Is it oriented toward environmental or quality issues, or both? Does it include employees, stakeholders, supply chain members, or others?)

2. What kind of articles should be featured?

3. What is the budget for the newsletter?

4. What is the appropriate format for the newsletter?

5. How frequently should the newsletter be published?

6. What is the desired approval process for material published in the newsletter?

Companies should be willing to hire outside help to assist with newsletter conceptualization, design, and graphics, as well as with ongoing tasks such as interviewing sources, writing copy, providing photographs, and doing layout. Seek a professional organization that can assist you in areas of weakness, and that can help you grow the publication for eventual self-production.

In a recent study, more than 90 percent of organizations interviewed said they had excellent communications (including publications). However, 75 percent of the employees in these organizations said they did not read the company publications. The percentage fell even lower when people outside the organizations were interviewed.

Almost every organization should have its communications activities audited by a third party. Following the audit, the organization should initiate a new publication, or continue an existing one, only if it can answer yes to the following questions:

• Do we have the commitment of top management and the budget to complete the mission?

• Are we committed to being consistent, publishing both the good and the bad on a regular basis? ("Sanitized" or inconsistently presented information often is not believed by readers, and may quickly be disregarded.)

• Can we be candid and innovative?

Before you proceed with a publication, obtain a professional evaluation of your present communications activities. Decide on your publication needs for the next 12 months, and set deadlines. (Many organizations find that quarterly publications are most effective.) Have professionals design, and become partners in, the publication.

Use your newsletter to inform stakeholders about environmental issues and to improve the quality of your supply chain.