Environmental Management System (EMS)

Introduction

In a globalized market, ISO 14001 is increasingly being used to certify Environmental Management Systems (EMS). Implementing EMS ISO 14001 in a small company manufacturing lithium-ion batteries will attract many advantages, particularly when the company is seeking to expand into the European market. This report focuses on the benefits and costs that the firm will accrue from implementing EMS ISO 14001.

Environmental Management System (EMS)

An EMS refers to a set of practices and processes that allow an organization to improve its operating efficiency and decrease its impact on the environment (United States Environmental Protection Agency, 2021). The EMS is a framework that enables organizations to accomplish their environmental goals through consistent improvement, evaluation, and review of their environmental performance. Engaging in consistent review and evaluation makes it possible for an organization to reveal opportunities for improvement of the organization’s environmental performance (United States Environmental Protection Agency, 2021). The EMS does not demand that organizations achieve a particular level of performance as each organization can customize its EMS according to its targets and objectives. The elements of EMS include:

1. Analysis of the organization’s compliance obligations and environmental impacts.
2. Reviewing the environmental goals of the organization.
3. Setting the organization’s environmental targets and objectives will help conform with compliance requirements and reduce environmental impacts.
4. Ensuring the environmental competence and awareness of employees.
5. Setting up programs to accomplish the established targets and objectives.
6. Reviewing the progress of the environmental management system and register improvements (United States Environmental Protection Agency, 2021).

Goals of an EMS

The goals of the EMS include waste reduction and improving compliance (US Department of Energy, 2015). Compliance is about attaining and maintaining required policy, legal, and regulatory standards. Failing to comply with regulatory compliance could expose the organization to various penalties and fines that may make it hard to operate. With the EMS, an organization can develop, coordinate, monitor, implement, and manage environmental policies. The process of waste reduction commences with the design phase to prevent pollution and minimize waste through processes such as recycling (US Department of Energy, 2015).

As an international standard, the EMS aimed to provide organizations with a framework to respond to dynamic environmental conditions. The EMS specifies the requirements that enable organizations to achieve their objectives. Other goals of the EMS include strengthening environmental performance, working to help an organization attain its compliance obligations, and mitigating or preventing environmental impacts (US Department of Energy, 2015).

Compliance and Reduced Liability Exposure

The EMS can help the organization to comply with environmental laws. As a Lithium-ion batteries (Li-ion) manufacturer, the company is subject to various environmental regulations. One of the regulations is the Resource Conservation and Recovery Act (RCRA). The hazardous wastes from Li-ion batteries exhibit characteristics such as toxicity, reactivity, and ignitability (Bird et al., 2022). Companies are being urged to manage their environmental effects related to increased pollution, a major threat to the global ecosystem. Firms are compelled to proactively seek approaches to reduce their exposure to risk and embrace active methods for management of the environment (da Rosa et al., 2019). As such, firms have to adopt EMS and use it to monitor business activities and set compliance standards to prevent and mitigate environmental impacts. EMS can be described as a structured tool useful in integrating the company’s decision-making chain and strategies into environmental aspects (da Rosa et al., 2019). The EMS comprises two steps that include uncovering ways the firm will use to decrease environmental impacts, increase productivity, reduce costs, and coordinate environmental activities of the organization to reach higher levels of organizational effectiveness and efficiency (da Rosa et al., 2019). The EMS comprises economical and technical decision-making criteria. It is shaped by external factors such as competitive advantage, consumer pressures, regulatory compliance pressures, and internal applications related to innovation, corporate culture, and the workplace. Implementation of EMS ensures that the organization remains responsible for its operational activities related to the environment (da Rosa et al., 2019).

In the US, the local, state, and federal governments have authority over the recycling and disposal of Li-ion batteries. A manufacturer of Li-ion batteries needs to comply with stringent federal laws and regulations on the hazardous waste that govern the storage, treatment, handling, generation, international and national transportation, and the disposal of hazardous wastes (Bird et al., 2022). US federal policies incentivize or mandate the recovery or reuse of Li-ion batteries and address battery energy storage system decommissioning issues. The RCRA is an important law that guides the recycling of Li-ion batteries as it provides a legal framework for the disposal of hazardous and non-hazardous solid waste. Li-ion batteries have the potential to explode once they catch fire. As a result, they demand proper storage (Bird et al., 2022). Individual countries in the European Union have different policies for recycling Li-ion batteries. For example, Li-ion battery manufacturers in the EU need to comply with laws such as the Battery Recycling Act, the German Recycling Law, and the Scrap Automotive Recycling Act (Bird et al., 2022). Implementing EMS will make it possible for the company to comply with these laws due to carrying out periodic reviews. Considering that a firm can be penalized for violating environmental laws, the adoption of EMS will lead to reduced legal liability due to increased compliance with legal and regulatory requirements.

Benefits

Many benefits emanate from the implementation of EMS. The implementation of the EMS comes with the potential benefit of pollution prevention (Curkovic & Sroufe, 2011). Preventing pollution reduces the cost of production and increases the firm’s profit. EMS will provide the company with unique environmental benefits, capabilities, and resources that contribute to the firm’s competitive advantage. Further, implementing the EMS is a sign of corporate social responsibility (Curkovic & Sroufe, 2011). The implementation of the EMS will allow the company to use its scarce resources wisely, comply with the laws, regulations, and requirements of the US Department of Energy, minimize adverse environmental impacts, minimize waste, and also comply with the applicable requirements that protect the public health, resources, and the environment (US Department of Energy, 2015). Further, implementation of the EMS will make it possible for the company to implement sustainable environmental stewardship practices that improve the protection of natural resources such as land and water (US Department of Energy, 2015). Disposing of spent Li-ion batteries in landfills instead of taking them to the recycling process induces different environmental problems such as explosion hazards and the release of toxic substances such as heavy metals, organic solvents, and conductive salts (Pinegar & Smith, 2019). Most of these elements are non-biodegradable and are recognized as toxic pollutants to the food chain, plants, water, and soil. The leaching of heavy metals such as nickel, cobalt, and copper can have disastrous consequences on the ecosystem and human health (Pinegar & Smith, 2019). Other benefits arising from the implementation of EMS include conservation of resources through recycling, increasing compliance, increased efficiency, and reduced costs.

ISO 14001

ISO 14001 is an international standard that provides a framework to be followed by the organization for effective EMS. The standard comprises a systematic framework that ensures compliance with environmental regulations by establishing measurable environmental targets and ensuring their effectiveness through conducting a regular review. ISO 14001 standard is promoted as an initiative that can help companies realize sustainable development goals. Some of the benefits associated with the standard include cost savings arising from enhanced energy efficiencies and supporting the company to create legitimacy with stakeholders abroad, thus leading to expansion of the market for products produced by the company. With ISO 14001 standard, the company will also be able to demonstrate environmental stewardship to customers across the world hence attracting increased interest in its products. From a social point of view, continuous environmental improvement can act as a route to enhance the quality of life by reducing the potential of environmental hazards such as health problems.

The benefits of ISO 14001 include driving down costs, reducing waste, improving resource efficiency, gaining competitive advantage from the design of the supply chain, providing the assurance that the company is measuring environmental impact, improving the company’s overall environmental impact, consistent management of environmental obligations, improve customer trust, expand new business opportunities, and enhance customer and stakeholder trust (Di Noia & Nicoletti, 2016). As such, this report recommends that the company should seek to be certified with ISO 14001.

Drawbacks associated with the implementation of ISO:14001 include lack of resources, high cost of adoption and certification process, resistance to change, time constraints, and excessive documentation and bureaucracy (Boiral et al., 2018). Despite the benefits of the standard, the organization must be able to deal with these drawbacks. Considering that the company is small, it may face huge financial obstacles related to the high cost of certification and implementation, where such costs can also lead to the diversion of scarce resources from initiatives that are currently more profitable (Boiral et al., 2018). Implementing ISO 14001 includes the costs associated with record keeping, employee training, auditing costs, and the cost of acquiring information to complete the certification process (Boiral et al., 2018). Estimates of costs to implement ISO 14001 depend on the organization’s size in terms of employees (Yiridoe & Marett, 2004). The cost of certification ranges from $10,000 for small companies to $200,000 for large companies (Yiridoe & Marett, 2004).

Conclusion

The EMS ISO 14001 can help the organization comply with environmental laws hence reducing exposure to legal liability. A company manufacturing Li-ion batteries is subject to various environmental laws in the US and Europe. Proactive measures are required to ensure compliance and prevent violation of environmental regulations. The implementation of EMS allows the company to evaluate and review its environmental performance hence ensuring compliance with applicable laws. Further, it is possible to customize an EMS to the organization’s specific needs.

References

Bird, R., Baum, Z. J., Yu, X., & Ma, J. (2022). The Regulatory Environment for Lithium-Ion Battery Recycling.

Boiral, O., Guillaumie, L., Heras‐Saizarbitoria, I., & Tayo Tene, C. V. (2018). Adoption and outcomes of ISO 14001: A systematic review. International Journal of Management Reviews, 20(2), 411-432.

Curkovic, S., & Sroufe, R. (2011). Using ISO 14001 to promote a sustainable supply chain strategy. Business Strategy and the Environment, 20(2), 71-93.

da Rosa, F. S., Lunkes, R. J., & Brizzola, M. M. B. (2019). Exploring the relationship between internal pressures, greenhouse gas management and performance of Brazilian companies. Journal of Cleaner Production, 212, 567-575.

Di Noia, A. E., & Nicoletti, G. M. (2016). ISO 14001 certification: Benefits, costs and expectations for organization. Studia Oeconomica Posnaniensia, 4(10), 94-109.

Pinegar, H., & Smith, Y. R. (2019). Recycling of end-of-life lithium ion batteries, Part I: Commercial processes. Journal of Sustainable Metallurgy, 5(3), 402-416.

United States Environmental Protection Agency. (2021, September 28). Learn about environmental management systems. US EPA. https://www.epa.gov/ems/learn-about-environmental-management-systems

US Department of Energy. (2015). Environmental Management System Description. https://www.energy.gov/sites/prod/files/2015/04/f21/S04346_EMSDescrip.pdf

Yiridoe, E. K., & Marett, G. E. (2004). Mitigating the high cost of ISO 14001 EMS standard certification: lessons from agribusiness case research. International Food and Agribusiness Management Review, 7(1030-2016-82663), 37-62.