It was a fascinating project to be a part of, which I hope will help to direct future policy and action in this area. The thirty-five recommendations should help to begin a process of greater collaboration and improved understanding. As we move closer to the due date for the update of ISO 14001, many of the issues raised in the report may come into stark relief. So this is very timely research.

The commitment to legal compliance is fundamental to ISO 14001 and indeed to any company that considers itself socially responsible. Yet the concept and evaluation of compliance is complex and misunderstood. For many the challenge is keeping up to date with the rapidly changing legislative landscape, determining the impact of the devolved legislature or the range of interpretation and advice available. Business is constantly demanding consistency of approach in order to plan properly.

All of these issues are addressed in the report and the recommendations provide a framework for the environmental agencies to develop communication with key certification bodies. Although the main audience is the regulatory community, those in business should take the time to read the report (or the summary) and also to keep an eye on progress in the Environment Agency’s EMS+ project which has been running over the past year in England and Wales.

In a climate of government looking at deregulation, this type of project should provide valuable evidence to support the process of change.

Most businesses and their trade bodies will expend much time and money lobbying for relaxed regulation. Regulation is often cited as a barrier to profit and growth, it is often blamed for the continued recession in Europe. But then a controversy, like the one over past few weeks, hits the headlines and people question corporate reputations and processes. But at the same time questions are asked of the regulatory process. In fact, in many cases it is the reputation of the regulatory authority that is more exposed than the corporates. Why should this be the case? There are a number of possible answers to this question. In perhaps very simplistic terms in the case of the horse meat scandal, it might be because of those pesky foreign companies acting illegally and a failure to regulate their activities in the locality or a failure to prevent imports. But how are we going to ensure the stable door remains bolted in the future and what form should the bolt take?

Responsible sourcing is now a part of the licence to operate for many companies. It is necessary because of the complexity of the global supply chain and multiple players are involved. Gradual increased scarcity in raw materials and the environmental and social impact of their extraction, has created a further dimension. The complexity is not helped by the plethora of national, thematic or in-house supply chain and responsible sourcing schemes that are seemingly in competition. The resulting mosaic of standards, labels and certifications is confusing to all concerned.

A bit like the stable door, the perpetual debate between regulation and deregulation swings back and forth depending on our ability to remember the last transgression. Earned autonomy is a phrase that has recently emerged as a concept. It basically states that companies can earn a level of increased autonomy through good performance. The short-term business benefit is fewer regulatory visits and thus autonomy is earned.

I hope that no one would argue that we should have zero regulation – that business should be free to do exactly as it pleases, that it can push the boundaries of acceptable behaviour until something bad happens. It is equally the case that regulators can’t and shouldn’t run businesses. Finding a position between these two extremes and perhaps as importantly rewarding good behaviour with relaxed regulation, is what most politicians and responsible businesses want.

Put into this mix third-party certification against accepted standards creates a further level of complexity. Independent certification to standards is often, wrongly, equated with regulatory inspection. The two processes provide a complementary value to organisations and both come with a cost.

Ultimately when things go wrong we look for someone to blame. The complexity of the global economy and the supply chain, the complexity of certification and legislation and the desire to be competitive will always make the identification of fault very difficult. In some ways, it is the very dense nature of the undergrowth that means that the regulator with their apparently simple duty becomes the most exposed. Are they not, after all, the bolt?

From business’s perceptive is earned autonomy actually a poisoned challis? If business wants to be autonomous and work without inspection by a regulatory body then any disasters fall very clearly at the feet of the company whose brand is exposed. So it could be argued that the complexity of global trade provides a level of security for company reputations. Earned autonomy therefore might neither secure the door nor provide suitable cover for business when the horse is flying out the door – or as recently, off the shelves.

Following on from last week’s blog after the Oomph Seminar which explored the processes of evaluating legal compliance we have been working on a model discussed then.

One of the challenges of evaluating legal compliance is that different techniques are required for different pieces of legislation. And as was most pointedly commented on: just having a tick-list with a mark beside each legal instrument is not an evaluation of compliance.Outline Matrix to assist in the Evaluation of Legal Compliance is a simple approach that we have constructed and which is relevant to UK legislation that could help. There is a health warning we need to attach – this is not comprehensive but indicative and designed to show how differences in evaluation are necessary. But all comments gratefully received and all present felt it was a useful way to think about what is needed.

• Our fourth Oomph seminar has been informed by the proposed changes to ISO14001 and our involvement with a number high level roundtables and contributions to opinion pieces. The style of this seminar was very discursive with contributions from everyone being moderated by us to keep things moving (which actually wasn’t needed very often). So rather than chart the conversation, we have distilled some of the key points and areas of discussion into five groups.

1. Leadership and Management Review
2. Systems integration
3. External auditor involvement and personal confidence
4. Accreditation, certification and supplier selection
5. EMS value and strategic priorities.

Oscar Wilde would tell us that the cynic knows the price of everything and value of nothing. Let me start by saying that I am not a cynic but I do desire change to the existing situation, one I see recurrently and one where third-party certification of EMS doesn’t seem to be worth it.

We must first describe what value third-party certification could bring. At its most basic, value is gained from assuring stakeholders that the policy commitments that an organisation makes in an EMS are being met.

In order to determine that any organisation is complying with legislation, the auditor must have extensive knowledge of the law. Frequently I see EMS that do not recognise planning or wildlife conservation legislation, refer to out of date or irrelevant legislation and do not adequately connect environmental aspects with relevant laws. Many auditors simply don’t possess sufficient knowledge and experience of regulatory processes. This most basic value is rarely delivered.

Pollution prevention is a broad area, largely determined by the organisation’s activities, products and services. EMS frequently and exclusively focuses on activities – without reference to products and services. A third-party auditor must require the EMS to recognise if they are relevant. All too often an auditor allows an EMS to be a facilities management or operations system and gets nowhere near to the commercial activities (marketing, sales and procurement) of a company. Fault here is not solely with the certification bodies (CB) as often the organisation will have an exclusive scope or not engage with their commercial functions because it is “too difficult”.

Often the environmental impact of manufacturing a product is a small part of the total impact when raw materials, use and disposal are also considered.  As raw material and energy costs escalate, and scarcity increases, an EMS must address this and third-party auditors must raise concerns when focus is only on operational performance.

The final area of value is attention and demonstration of continual improvement. Why go through the process if, at the end, there is no change? Too many EMS contain weak statements of aspiration which are impossible to audit. Too many auditors accept promises of improvement and when none is delivered seem to shrug their shoulders and allow the practice to continue.

Many organisations need third-party certification to meet customer requirements. It is also noteworthy that many, truly leading companies do not use ISO14001 as a supplier requirement, perhaps because of its limited value to their selection process, which is built on relationships.

Perhaps part of the concern for third-party certification in my mind is the growth of unaccredited certification. Companies that are asked by customers to achieve ISO14001 can buy an off-the-shelf EMS and certification. The ultimate in box-ticking.

The solution is not simple and will involve all the parties involved. While it is easy to point an accusatory finger at the certification bodies, organisations with EMS need to review their commitments. CBs and UKAS need to review the evaluation of auditor competence – mere sector experience is not enough there must be some recognition of understanding of the commercial elements involved. Updating of knowledge of legislation is a basic part of continuing professional development of auditors.

In the current economic climate it is so tempting to focus on price, but negotiating a better price may compromise the value. In so many ways, business as usual for all involved is not an option. If ISO14001 EMS is to become truly central and valuable to company development and commercial sustainability, then certification must address the issues made here and in other recent commentaries including by SustainAbility. It starts with the organisation and its EMS, auditors must be capable and supported for true value to exist. Then third-party certification will be worth it.

For those that have been out of the country or not paying much attention, the original idea was to create a scheme which rewarded performance, was fiscally neutral and created economic incentives to encourage organisations to increase their energy efficiency and so reduce their carbon emissions. Companies could gain high ranking through ‘early action metrics’ by gaining the Carbon Trust Standard and introducing automatic metering (AMR). By coming high in the rankings organisations could be rewarded, while poor performance would be penalised. Since the 2010 general election this has been amended to become, basically a carbon tax. The rankings still exist but without any rewards. Organisations simply pay out in proportion to their carbon footprint.

Among many environmental professionals there was a sense of inevitability about the shift in policy and a resignation that all the past three years’ planning and preparation had been largely undone. While it remains true that reducing carbon emissions through becoming more energy efficient has its own financial rewards, there are other considerations.

An environmental professional seeks to work to identify and minimise the risks to their organisation or client. When policy shifts so dramatically with a change of government, the environmental professional loses credibility but more importantly the organisation starts to review its position on environmental issues. If Government and its regulations are perceived as not taking an issue seriously then organisations are likely to reflect this.

It is perfectly acceptable to modify legislation after a period of time to test its effectiveness or if it was proving costly to regulate, but a change based entirely on political doctrine leaves a very nasty taste. As we have subsequently discovered the u-turn over CRC was a precursor for many others.

This policy shift, is however only the tip of the iceberg in relation to the problems that CRC has created.

The scheme has always been complex, both to understand and then to use. While the scheme provided incentives and penalties, there was a value to the complexity. With the 2010 change of policy, this complexity has remained and serves virtually no value. Indeed it could be said that leaving the complexity in place was a deliberate ploy to discredit a scheme now viewed as politically unnecessary. On the one hand one could argue that leaving things as they were in terms of process provides the opportunity to return to the original fiscally neutral scheme where good performance was to be rewarded.  On the other hand, and if one was being cynical, keeping the system complicated would support the argument that legislation is bureaucratic and thus support calls for deregulation.

The complexity of CRC creates a huge drain on time and a requirement for new expertise. There will be instances when organisations will inaccurately report – either disadvantaging themselves or under reporting. An example of this is that one can obtain an end of year statement from energy suppliers, however some companies have found discrepancies between internally derived consumption figures and those from their suppliers. Without the internal capacity to check and verify, reliance on energy company data could lead to errors and potential financial implications for CRC participants.

In the early days before the 2010 changes, the Carbon Trust Standard (CTS) offered forward-thinking organisations an opportunity to gain credits for the early action metrics and thus improve their initial ranking position with associated cost benefits as outlined above. Initially CTS did not have any competition, but following successful lobbying other equivalent schemes (e.g. CEMARS by Achillies, Kitemark for Energy by BSi and Carbon & Energy Management Scheme by LRQA) have become established. All of these schemes, however, are not directly comparable with CTS because they require certification to or verification against an additional ISO standard – ISO 14064 or ISO 16001. This additional element is not required by CRC and leads to additional complexity and internal resource to service and maintain the data and monitoring for apparently little additional benefit – at a time for many organisations when resources are stretched to near breaking. Since 2010 it would appear that the Carbon Trust still dominates the UK market however the demand for the CTS has fallen off since the u-turn on CRC.

Automatic Meter Reading or AMR is the other CRC early action metric.  In large organisations with many, diverse and sometimes remote sites, the practicalities of installing AMR have been over-looked and regarded over-simplistically by government and regulator. To gain 100% on AMR the difference in effort and cost in getting there is huge if comparing an organisation which needs two AMR against one that needs 6,000. One could argue that this is organisations having a bit of whinge – “it’s not fair that we’re a big company” (said in the tone of a slightly sulky teenager). There are practical issues for companies with remote sites with limited mobile signal – as AMR work using mobile phone networks – a small quarry in deepest Devon or remote water pumping station in rural Northumberland might simply not be able to communicate. There are a surprising number of these types of sites and for some organisations to achieve 100% on this early action metric would be impossible.

With such a complex scheme, guidance needs to be effective and accessible. In practice this is not universally so. Guidance is often vague and has to be discussed with the help-line, and when guidance is compared it has sometimes been found to be inconsistent. This all adds to the time needed to comply with the regulations. An example of inconsistent guidance is the interpretation on how to treat and exclude EU Emission Trading Scheme (EUETS) operations within CRC. This is especially so when considering the treatment of renewable energy supplies in small-scale power generation. Due to the multiple layers of emission trading (and purchase of credits), environmental permitting, and renewable obligation certificates (ROCs) there will inevitably be examples of double accounting or disincentives for the use of renewable fuels.

And so to sum it all up – it would appear from talking to many people over the past year that are closely involved with the CRC – it’s a bit of a mess and the over-riding sentiment is frustration. Frustration with the changes, frustration with the complexity and time-consuming nature of the data gathering and frustration in the lack of consideration of the effect of all this on organisational strategy. Many now feel that if CRC is in effect a Carbon Tax then remove the complexity and simply levy a fixed sum per MW of energy and charge it through the energy bill. But this will not have the desired outcome as many companies will pass it on to the customer, while others such as local authorities and water utilities will not be allowed to do the same. It’s a muddle which needs to get sorted out.

This blog is my views based on many conversations with professionals and reading on this subject – I have not attributed comments and have decided to make some of the comments generic rather than specific to a particular company or sector.

My recent experience has led to me write this blog because there are some home truths that need to be aired.

First and foremost – companies being certified don’t seem to value the certificate. Getting it on the wall seems to be enough. Auditors are not challenged and there seems little passion to defend the system by the company. ISO 14001 is a good standard, systems are valuable tools for companies to take control and deliver improvement, but there seems to be a great gulf in expectation. Please can we move from a tick-box mentality to a value added assessment process. This needs to be delivered from both sides.

I recently heard that an auditor had to have the Carbon Reduction Commitment (CRC) explained. What is going on here? An auditor must at the very least be up to date on the legal requirements. I was almost speechless when I heard this – and for those that know me that is a rare occurrence.

On the other hand the company needs to give a damn too. I’ve seen systems that do not meet the basic requirements of ISO 14001 and that have been passed as fit for purpose. The company wants the badge and that’s good enough. Keep quiet and hope that no difficult questions are asked.

Am I being too harsh? Perhaps, but at the moment I have seen very few environmental management systems (EMS) recently that either meet ISO 14001 (and carry the badge) or actually add value to the company. In a world becoming more interested in sustainability and environmental issues, the world of management systems seems to be mired in obsessive detail, inadequate challenge and poor governance.

So what should happen? Below are some very simple guidelines that I think should help to improve the credibility of management systems certification and add value to companies.

1. Companies must challenge their auditor. If they believe that an individual auditor is not competent they should challenge them and if no satisfaction is obtained, they should escalate it. Companies are too afraid to rattle the cage in case the beast is unleashed. Rattle the cage! Auditors are entrusted with testing the compliance of the system, their views are key and listened to and too many are not competent in the role.

2. Auditors must understand the business of their client. An EMS that is disconnected to the commercial or business processes of their client is unlikely to add anymore value than a basic level of assurance of legal compliance (however if 1. above is not met then even that is likely absent). In practice a lot of attention is given to selecting auditors based on ‘sector experience’, but this is from a technical perspective and not from a commercial perspective.

3. Companies – and their consultants – must integrate as much of the EMS into the basic business processes. One of the most obvious ones and one that still seems to be missed is training. In most organisations there is a perfectly good training delivery function, get them involved in the EMS. Too many consultants and EMS managers want to keep hold of training. Let go. And when it comes to communications, well just don’t get me started. Engage and integrate the EMS into the business is the way to give it greater longevity.

4. Improvement and EMS seem disconnected. Businesses are pushing ahead with change in energy efficiency and waste minimisation, but all too often the EMS doesn’t properly reflect the strategy. If this continues then I’m afraid for the future of an EMS and for environmental managers, as it and they become increasingly divorced from the nature of the business.

5. Internal EMS audit is not seen as a key part of business governance. It is too often performed by junior staff without authority and credibility. In one recent case, I had to untrain some auditor bad habits. I think it is fair to say the client couldn’t believe the transformation, not only in the audits that are now produced but in the attitude of the audit team members and of managers. Senior management need to be engaged with and involved throughout internal audit. Do this and systems will be maintained and will improve.

6. Internet-based management systems are a great development, but they have a tendency become a monster. An old-fashioned management system based on paper can sit unused on a shelf, but the same is true of internet-based systems. The latter can provide greater connectivity between elements of the EMS, but they can become so large that no one can find their way around.

I have recently come back into the world of management systems and have enjoyed the challenges presented to me. It is somewhat depressing that too many are wanting in so many departments. We need to get away from thinking of EMS as a risk management tool and turn it into a business improvement tool. This needs a change in approach from the companies and their certification bodies. An EMS should not be a straight-jacket, it should be a dynamic device that is regularly used to control and improve the business and its environmental performance.

If companies expect to be taken seriously and they use their certification as evidence then, at the very least, they must ensure that their basic systems are in good order and adding value. How can we expect the public to take these system certifications seriously when the process of assurance is so flawed?

In these stories there is criticism of failures to prove performance meets values and commitments and in the other, praise for being open and willing to answer questions. What seems to distinguish these two situations is that on the one hand supermarkets have not enforced simple rules for their suppliers and in the other the company has asked people what they think and want to know. Certification – such as the means by which fish is sourced – can set simple to follow rules but what it can’t do is react to public perception.

So as perception matures and consumers realize that the means of fishing (line vs. trawling), but the place and timing as well as the choice of species are all interwoven in a complex equation that describes how sustainable the fish is. Such an equation, which is ever changing in a nuanced way (nature’s like that), can’t ever be described effectively by a committee of experts, often huge in number, taking many years to agree how to dot the ts and cross the is. Standards that can be certified across widely diverse economic sectors can never, perhaps, be responsive enough to deliver the vicarious opinions of the consumer.

But I hear you cry, “many of the world’s standards are set to help in business to business transactions and not in business to consumer dealings!” And it is a worthy point – however as businesses move rapidly towards being and aspiring to be more sustainable and therefore require higher standards from their suppliers, so the international standards become unsatisfactory in meeting their requirements. Much more important is the ability to listen and learn – as Jordan’s are doing.

I’ve been a part of the certification industry at several points in my career and I am highly critical of some of the practices employed by both the certifier and the certified (if you’ll pardon the expression). Corners are cut, auditors sit in offices not venturing into the business, top management doesn’t engage and is rarely challenged by the auditors or internal managers, I’m sure you can add your own experiences.

What does this tell us? It suggests that while the standards which are out there – such as ISO14001, Forest Stewardship Council, and Fairtrade to name but three of a long list of possible accolades a company can buy – have logic and value, all too often the companies implementing them are doing so for the wrong reasons, or at best not for all the right reasons (not quite the same thing). Sometimes (in fact I dare say all too often) values and standards do no more than nod towards each other rather like regular commuters on a train – they pass-by occasionally but then go their separate ways never knowing what it is the other does.

Why do some companies seem to be magnets for all sorts of certification and others don’t seem to bother too much? Does having a lot of certificates on the wall make you any better?

Standards are a stage on the Path, but to gain real, lasting relevance the company must not use standards instead of its own values. Values that are true to its business, products and services and to its customers. Standards don’t really do this, they help provide structure, allow a process to be tested by an external body – but surely they shouldn’t be the substance of leadership.

As Jordan’s have demonstrated – by asking your stakeholders what they think, you are much more ready and able to respond and plan for the future. There will always be criticism about certifiable standards because by-and-large they only set an acceptable standard. And when people are looking for excellence and only find mediocrity then they will often complain. So to answer the question set in the title – yes, I think they do hold back progress.

It is easy to sit here and say values and brand authenticity are vital, finding and articulating them is another issue. Sadly standards replace values as the latter ends up in the “too difficult’”pile. It is also true to note that in large and complex organizations with many products and locations, serving a variety of markets, values tend to be a bit anonymous. It is in smaller companies with simpler propositions that values can ring true and add real substance. But that is a whole other blog subject – keep watching and reading.