Organisations that implement an environmental management system (EMS) within the European Union's Eco-Management and Audit Scheme (EMAS) improve their environmental performance. If an EMS is fully integrated throughout the organisation, it also stands to benefit from greater competitive performance, according to a new study.
Environmental Management Schemes (EMS) are voluntary schemes designed to help organisations provide good environmental management. Two widely-used schemes are the international standard for environmental systems, ISO/EN 14001 1, and the EU's Eco-Management and Audit Scheme (EMAS)2.
Although still voluntary, EMAS has legal status within Member States, and goes further than the ISO/EN 14001 by requiring an organisation to continually improve environmental performance, to undergo an audit to demonstrate compliance, to provide public information through annual reporting and to ensure the active involvement of employees.
However, there is debate over the extent to which an EMS can provide both environmental and competitive improvements. Using information collected from the EU-funded EVER project3, the researchers examined whether an EMS, and EMAS in particular, was able to enhance the competitive performance of an organisation, as a result of improved environmental performance.
The study found that the longer an organisation had implemented an EMS, the greater the level of environmental performance. This was mainly achieved by continuous improvement of environmental performance and learning from experience. However, the ability to improve can decline over time through, for example, the increasing cost of abating pollution and difficulties in identifying new opportunities for improvement every year.
There is a strong link between incorporating an EMS and being able to successfully plan and achieve environmental targets. If an organisation can thoroughly integrate the EMS and include environmental criteria in daily operational plans and activities, it will achieve greater environmental performance.
Innovative capabilities, such as new technologies and organisational solutions which improve environmental performance were linked to a competitive advantage. An organisation that invests in finding innovative environmental measures is more capable of developing and managing new technologies.
However, other signs of strong competitiveness, such as market performance (for example, feedback from customers), intangible assets (such as human capital) and resource productivity (operating performance) could not be closely related to a strong environmental performance.
In contrast to other studies, the researchers suggest that the length of EMS registration does not improve competitiveness. Rather, it is the degree to which the EMS is embedded within an organisation that provides business results, implying that even newly registered organisations can gain competitive benefits provided the scheme is well implemented and managed.
Source: Iraldo, F., Testa, F., Frey, M. (2009). Is an environmental management system able to influence environmental and competitive performance? The case of the eco-management and audit scheme (EMAS) in the European Union. Journal of Cleaner Production. 17:1444-1452.>