Continuously improving your environmental strategies

CES

INVESTING

FOCUS

IN ENVIRONMENTAL

PERFORMANCE

Continuously Improving Your Environmental Strateg lies .

BY TED J. COCHIN

A mental

cushnet’s

environmental

strategies

have

been shaped by lessons learned in achieving IS0 certification for quality and environmanagement

standards.

fairly straightforward production processes, achievement

These strategies

and include

the reduction

costs, the improvement of products the conservation of resources, of competitive

are

advantage

hopes of realizing broader environmental and economic goals. The actual implementation process also aids companies ronmental

such as Acushnet

performance

to measure its envi-

on an on-going basis.

of and the

in the mar-

Competitive Advantage In Acushnet’s case, the company first became interested in IS0 certification when analysts noticed

ketplace, and the integration of environmental concerns into business processes. With these strategies

modest gains in the stock prices of some companies that were IS0 9001 registered. Acushnet felt the

in place,

improvement

Acushnet’s

environmental

has improved, material and regulatory declined, and business has grown. IS0 14001 certification

performance costs have

requires firms to integrate

in stock performance

might have been

due to stockholder perceptions of better quality management. Executive management at Acushnet then decided to seek certification

to the quality stan-

strategic environmental management into company operations through the elements of an effective envi-

dard. Since the implementation of IS0 9001, Acushnet’s revenues have grown 25 percent, and 200

ronmental

employees

management

system

(EMS). This EMS

provides an outline for integrating strategic environmental management into company operations in

have been added. In addition,

defined

a standard

odic customer TED J. COCHIN is currently working for the U.S. EPA’s Design for the Environment Program where he facilitates their research on environmental management systems and the integration of environmental and business concerns in small to mid-sized firms. He previously assisted the Acushnet Rubber Company in developing their EMS for IS0 14001 certification. He holds a MS. degree in Environmental Studies from the University of Massachusetts, Lowell.

the num-

ber of quality audits at the New Bedford plant have decreased dramatically; IS0 9001 certification

While proven

this with

of excellence

that replaced

peri-

quality audits of suppliers. type IS0

of correlation

has not

been

14001, Acushnet

believes

that

many customers are concerned that production may be adversely affected by environmental, health, and safety concerns. IS0 14001 certification can define a standard of environmental excellence that meets the expectations of these external stakeholders.

V5N2

TED J. COCHIN

Unlike Europe,

the

United

Asia, and

environmental

States,

South

programs

companies

deliberated,

14000. Acushnet

ing support

Acushnet’s

corporate

community

management

in U.S.

man-

embracing

cited the growfor EMS

as well as the fact that IS0 9000 had

a requirement

the European

for many industries

market

14000 certified.

as reasons

As a supplier

auto and office machine saw IS0 certification advantage

While

for British and Irish standards

and auditing, become

countries

are mandating

for industry.

agers foresaw the European IS0

many

America

to become

to many

manufacturers,

as a method

in the European

to enter IS0

European Acushnet

to gain strategic

Step

One:

IS0

policies

and

training

programs,

A major focus of IS0 14000 is to provide a framework for companies to look at their environ-

IS0

14001 audit

management corrective

reporting action

of Acushnet’s

systems,

system,

at

documents

structure,

measurement

and

audit program

and

and other related

environmental,

grams. In conducting selected

organizational

performance

aspects

health, and safety pro-

the review, auditors and interviewed

examined

key Acushnet

employees at the corporate and operations level. Generally, an IS0 14000 auditing body will conduct the EMS audits to ensure conformance The EMS audit

passes all activities,

The Road to IS0 14000 Certification

The

procedures,

14001 standards.

Community.

Audits.

Acushnet was performed by TUV, a German certification company, and included an assessment of the

products,

to the IS0

schedule

encom-

and services that are

related to environmental, safety, and health impacts. The schedule is planned on the basis of status and importance of the activity.

mental strategy-making process. The development of an EMS which focuses on areas including, continuous improvement and environmental impact

While the EMS audit indicates whether a company will be eligible for IS0 14001 certification, other,

evaluation. Most of the costs for IS0 14000 are upfront-approximately $30,000 for audit costs, plus

The process of conducting regular audits is an important part of an EMS. Therefore, documentation and management systems related to the audit function

training

and

consultant

fees-while

more long-term. Acushnet’s environmental

savings

strategy for eight years

has been tied to the 1989 Massachusetts Reduction companies

Toxics Use

Act (TURA), which requires regulated to report annually on their inventories

and emissions compliance, products

are

of applicable Acushnet

chemicals.

redesigned

To achieve

processes

and

to use inputs more efficiently, which caused

a decrease in chemical

use and costs. The experience

more routine

audits are also performed

at Acushnet.

are scrutinized during the IS0 14000 audit. At Acushnet, the internal audit system is seen as a good way to find the weak points in the system. Two teams of internal auditors perform the audits at Acushnet; the teams audit functions are related to their responsibilities.

One team conducts

audits

at

the site level, concentrating on day to day environmental issues. The other team focuses on business practices, addressing such factors as management’s

of complying with TURA provided the foundation for IS0 14000 at Acushnet. The management con-

commitment to EH&S performance, allocation of resources for policy implementation, and the review

trols, proactive processes, and corporate endorsement of environmental responsibility as good busi-

and continuous improvement processes. The result of all internal audits are documented

ness, are cornerstones

and

of both programs.

Acushnet Rubber Company Inc.

Acushnet Rubber Company Inc., designs and manufactures elastomeric products, including liquid cast polyurethane product lines serving several specific niches within key indu!&ial markets such as the automotive, office product, and high performance o-ring seal markets. Acushnet’s customers include Ford, Chrysler, General Motors, Lexmark, and Xerox, The company employs close to a thousand workers in the Cii of New Bedford, Massachusetts, at three locations.

used

Management Review Group (MRG). The MRG is made up of the President, Vice

President

by

the

for Technical

Development,

Director

of

Human Resources, Quality Director, and business managers of all plants. This group meets at least once every six months to review the EMS to ensure its continuing suitability and effectiveness. This review includes study of EH&S policy, procedures, and documentation for suitability and improvement. The status and progress of the EH&S objectives and targets, are reviewed and updated if progress is not evident-appropriate corrective

__________~__________________________________________________________~~__________~~~__________~~~________~_~~~_____ 58

CORPORATE ENVIRONMENTAL STRATEGY

V5N2

INVESTINGIN ENVIRONMENTAL PERFORMANCE

Process Scoring Likelihood Impact on Remarks/ Waste cost of Toxics of noninput natural Action EHS Impact compliance Energy resources Total Dept Disp. on Humans Material Rating Plan ____________________________________________________________--____________-__________________-____________________ mill room powder Regulated ________~________________~______~_____~~_____~~______~_______~~~~___~~~~___~~~___~~~___~______~_____~~____________ 4 4 finishing mixing 1 1 1 14 3 No Action die press (~24) Exhibit 1 actions

are initiated.

addresses

tives and other internal

The

Management

the need for changes elements

of the EMS, in light of

audit results, changing

the commitment

Review

to the policy, objeccircumstances,

to continuous

and

regulatory

and disposal costs associated

objective

and target had to be communicated

appropriate

improvement.

personnel

ified, alternatives Step

Two:

Environmental

Impact

results

Evaluation.

with its use.

Acushnet’s objective was to reduce, or eliminate, use of TCE degreasing. To accomplish this,

the the

to the

so the processes could be mod-

tested,

and cost estimated.

of this work are significant:

The

the degreasers

is the

have been

shut down, and the process of cleaning

Environmental Impact Evaluation. This evaluation is used to identify environmental impacts of prod-

production

parts was eliminated.

ucts and processes. It is required that a system be in place to continuously identify the impacts. Once a company has identified all environmental aspects of

annually. This was only one of many cost saving measures realized by Acushnet.

(see Exhibit 2, below)

its business, the standard requires that they evaluate those impacts resulting from identified aspects. Consistent criteria must be developed to determine

Step Three:

Improvement.

Another

component

of IS0

if an impact is significant,

certification

it is up to the organization

to define what it means by “significant.” To initiate

this process, Acushnet

plant leader-

functioning of the company. Impacts were grouped in six categories: air emissions; water effluent; solid waste; energy use; toxicity and chronic health effects; and labor intensity Impacts in these categories were negative

consequence

exceeded

regulatory

above) Regulated

and

according to degree of whether

compliance.

operations

or not

they

(see Exhibit

are monitored

1,

as a legal

requirement and continually addressed-no rating score is assigned. All totals exceeding a score of 24 were documented these

problems

and action

plans initiated.

were addressed,

14000

from this change

Acushnet

Continuous

standard

focuses

The estimated

alone

has been

cost-

$60,000

The

on continuous

IS0

improve-

ment. Therefore, the Acushnet EMS implementation plan included a framework for tracking and measuring

ship and supervisors met to identify all environmental aspects and impacts associated with the daily

scored, ranked, and prioritized

savings

environmental

include

periodic

performance

performance.

These

measurements,

Cost Savings from Changes at Acushnet Changes Made Annual Cost Savings __________________________~~~~___~~__~_____________ Replaced the adhesive spray with a dipping tank and centrifuge. Eliminated the use of trichloroethylene (TCE).

$25,000 $100,000

Once

Instituted a water conservation program.

could

Replaced methylene chloride wlth dibasic ether (DBE).

$60,000

Instituted an electricity conservation program.

$50,000

move beyond compliance. The first significant aspect addressed was the degreasing of metal parts using solvents containing trichloroehtylene (TCE). TCE ranked high on Acushnet’s impact consequence list due to the health risks it poses to workers and the environment, and the

as

well as systems audits and management reviews to achieve continual improvement. Acushnet’s Environmental Management System enables operating groups to fulfill their responsibilities for the

Distilled mineral spirits from used rags. Total Annual Cost Savings

$1,750,000

$150,000 $2,135,000

hhibit 2

_____-________-_--__________________________~-~~~~____~~~~~~~___~~~~~_____~~___________~____________-________________

CORPORATEENVIRONMENTAL STRATEGY

59

I

I 8

V5N2

TED J. COCHIN

implementation

of Acushnet’s

tinuously

improving

tal performance. members

Improvement

of production,

0

Teams,

are required

annual

management

self-assessment

action

plans, thereby

able cycle of continuous

initiating

into all a sustain-

technologies.

solutions

The Road Beyond IS0 14000 Certification An example of Acushnet’s ship

is the

environmental

experimentation

with

leader-

new packaging

tant

many larger customers

to change.

companies mental

Now that

Acushnet

For example,

having parts shipped to them reduce inventory; they assumed

own

environmen-

way of thinking

has

of new cost saving ideas.

a shop floor worker in the adhesives area noticed

that the metal parts spray-

incorporated

which

a huge

was both

degree

inefficient

of excess and

posed

and other workers. The work-

er suggested that the metal parts be dipped in a vat of adhesive and then spun in a centrifuge. The new

were reluc-

process decreased

use. The resulting lower costs will enable the new system to pay for itself in less than six months. (see Exhibit 2)

one GM plant

was

one at a time, to this practice saved

health

risks and reduced

adhesive

Conclusions

money. In actuality, GM was using excess cardboard, and paying unnecessary transportation costs

The combination of increased revenues coupled with the cost savings from increased efficiency

because

should be reason enough for any company to pursue IS0 14000 certification. The more elusive competi-

their shipping

company

charged a flat rate

for all packages. GM agreed to receive parts in larger quantities, and their transportation and packaging expenses Acushnet ,

new

Employees

is certified,

are willing to listen to advice on environ-

matters.

and

to eval-

up with their

the company’s

This

health risks to himself

designs to ship finished auto parts. Even though these new designs would save cardboard, plastic, and other resources,

spraying,

prepared

options.

to come

in the generation

ing process

depart-

materials

cost, and risk of the alterna-

to traditional

to improving

For example,

levels of the

from different

They are also better

tal performance.

application I

employees,

tives compared

resulted

improvement.

at different

Many components

ments and levels, to look at alternative

now feel empowered

as well as

are incorporated

involvement

the organization.

uate the performance,

an

to measure

These findings,

those from EH&S audits,

of

and environto conduct

It has also increased within

EMS encourage

the use

comprised

management,

staff. Groups

business ,

through

mental

progress in each element. ,

poli-

safety, health, and environmen-

This is facilitated

of Continuous I

environmental

cies, and ensures that processes are in place for con-

in a number ous initiatives

went down by 75 percent. has also taken a strong leadership of EH&S initiatives.

role

The EPA has vari-

such as Project XL, which is intended

I

to give regulatory

I

third party certification

flexibility

to companies

who seek

of their EMS. Acushnet

is

with the EPA to be included

in

tive advantages in marketing will start to become more evident as time goes on and more companies require IS0

14000 from their suppliers.

In addition,

opportunities for industry leadership roles are already surfacing through EMS stewardship programs at the Federal and State level. Environmental success stories are beginning to increase the interest

I

currently

working

one such program, the EPA Region 1 Star Track Program. Under Star Track, a company agrees to assess their environmental pliance performance, independent third 8

, 0 I I

I I I

management

and com-

in these programs, ber of companies

and may result in a greater numpursuing

IS0

14000 certification.

The IS0 14000 processes represents but one cycle of an ongoing EMS system designed to develop long-

and then be certified by an party: a public document

term plans that identify and manage environmental issues. As in Acushnet’s case, developing an IS0

describing those performance results. In return, the company is recognized as an environmental leader by EPA Region 1. Region 1 staff is currently reviewing providing possible benefits such as limited

14000 process can provide a company with the strategic framework and tools for evaluating and managing the relevant issues of environmentally conscious manufacturing and design. *

penalty amnesty, elimination of routine inspections, simplified reporting, and expedited permitting. Acushnet’s EMS has increased awareness of environmental management at the shop floor level.

I

60

CORPORATE ENVIRONMENTAL STRATEGY

CES

INVESTING

IN

FOCUS

ENVIRONMENTAL

EXECUTIVE

PERFORMANCE

S

U

Niagara Mohawk IS0 14001:

Acushnet

EMS for the Deregulated Energy Industry

corporate

M

M

A

mission

the environment.

Environmental management and the sale of “green” power may well become the survival talisman of the utility industry in the 21st Century. Herein is the tale of how one utility, Niagara Mohawk, is beginning to position itself to meet the challenge of the next decade and beyond.

than

just

to

reduce

a pat

on

and

the

back

for

Acushnet. It represented a call for all companies to evaluate environmental

the benefits

management

of proactive

practices.

Capturing the Business Value of EH&S Excellence PETER A. SOYKA AND STANLEY J. FELDMAN

TED J. COCHIN

business benefits to corporations

Browner

costs

Carol Browner’s speech was

As the environmental,

U.S.

IS0

while helping to protect

Continuously Improving Your Environmental Strategies When

believes

fits within their overall

improve performance more

Y

where management

14001 certification

BY THOMAS R. FAIR AND CHRISTOPHER R. KOL.ARZ

R

(EH6S)

health,

and safety

function continues to evolve from a

compliance orientation

to a more value-added

perspective,

persist

questions

regarding

the

conferred by

EPA Administrator

Carol

EH6S excellence. Broadly applicable evidence one way or the other is scant. Recent ICF

at the Acushnet

Rubber

Kaiser research has shown, however, that con-

spoke

Company in New Bedford, Massachusetts, February 24,1997,

she applauded

on

the compa-

tinued

investments

in EH6S

initiatives

beyond

the point of regulatory

compliance

ny’s efforts in reducing the use of toxic chemicals in production processes while simultaneously adding 200 new employees. Administrator Browner offered these achieve-

yield financial benefits to the organization that are more significant and far-reaching

ments as proof that environmental

culminating in practical advice on how corpo-

protection

and economic growth are not mutually exclusive. This ideology drives executive strategy at

52

than previously recognized. Here, CES publishes results of this research, rate EH6S and other executives can capture the full business value of EH6S excellence.

CORPORATEENVIRONMENTALSTRATEGY