The Link Between EMS & Growth
A recent study by the Department of Environmental, Food and Rural Affairs (Defra) has shown a link between accredited Environmental Management Systems and sustainable growth among SMEs that took part.
The government department, which has long encouraged organisations to implement Environmental Management Systems (EMS), sought to justify their view that embedding resource efficiency across business operations brings benefits to the whole organisation.
Similar to quality and safety management systems, an EMS can be a practical tool to help organisations manage, evaluate and improve their environmental performance in a verifiable way as well as meet their environmentally related legal obligations. Many organisations go on to get their EMSs assessed by a third party certification body to further demonstrate their commitment to the environment. Gaining certification to the ISO 14001 standard is a common way of doing this, with over 14,000 organisations already certified in the UK.
There are almost 3 million SMEs in the UK, which collectively exert significant pressures on the environment, but face a number of obstacles to addressing these pressures including lack of resources, specific expertise, information and awareness. Despite the vast number of SMEs out there, only a very small proportion hold a certified environmental management system (EMS).
The purpose of this study was to deliver robust evidence on the environmental and financial benefits of certified EMSs for SMEs by surveying selected SMEs from both manufacturing and service sectors. The subsequent aim was to use this evidence to increase SME uptake of accredited EMSs as a method of unlocking the latent environmental and financial savings that are believed to exist in the SME sector as a whole.
In the study, it was found that two thirds of businesses surveyed either increased sales, or expected to do so, since implementing an EMS. This breaks down into just over a third of SMEs in the study attributing their new business sales to implementing a certified EMS, and quoting an average value of £14,961 per £1m turnover in the year following certification, suggesting a payback period of 1 month for the new business sales alone versus EMS costs. Another third confirmed that they expected new sales to be achieved as a result of their EMS, but could not put a value on it.
Whilst commercial and marketing opportunities were the by far the most important trigger, nevertheless, certified EMSs delivered cost savings for the majority of the 31 SMEs, with an annual average saving over 2 years of £4,875 per £m turnover. The costs of certifying and implementing the EMS were calculated at £1,362 per £m turnover (annual average over 2 years), suggesting a payback period of 3 months for the cost savings.
Rob Fenn, Director of Marketing at the British Assessment Bureau commented on the findings;
“It can be a hard job convincing businesses of any size that environmental management is more than just a cost, or a ‘nice to have’. This is despite our own client surveys showing that a large proportion of businesses within the UK are winning business as a direct result of becoming ISO 14001 certified. We hope Defra’s study proves to be a further wake up call for businesses who are cynical about the benefits of becoming environmentally aware.”
To learn more about achieving ISO 14001 certification, visit the ISO 14001 page on the British Assessment Bureau website.