Environmental Management System (EMS) - that part of the overall management system which includes organizational structure, planning activities, responsibilities, practices, procedures, processes, and resources for developing, implementing, achieving, reviewing and maintaining the environmental policy.11.9 A properly designed EMS will provide the framework for practices designed to help a department or agency manage its environmental agenda and document and communicate its environmental performance. An EMS will help organizations ensure that major environmental risks and liabilities are properly identified, minimized and managed. At a minimum, an EMS helps departments and agencies ensure that operations are conducted in compliance with environmental laws.
11.10 On 25 April 1995, the Minister of the Environment tabled in the House of Commons proposed amendments to the Auditor General Act concerning the establishment of the Commissioner of the Environment and Sustainable Development. These amendments include the requirement for ministers of departments to table in Parliament, no later than two years after the amendments to the Auditor General Act come into force, sustainable development strategies and action plans to implement them. The Government has directed departments to report in Part III of their Estimates on their progress in meeting the objectives and implementing the plans set out in the strategies.
11.11 The federal government's A Guide to Green Government, issued in June 1995 , provides guidance to departments in preparing their sustainable development strategies, including the operational component. The Guide refers to the Greening of Government initiative, which includes a recommendation to implement environmental management systems (EMS).
11.12 In much the same way that financial auditors rely, at least to some extent, on financial management systems as part of their audit work leading to an opinion on financial statements, this Office would like to place some reliance on environmental management systems when carrying out its work on sustainable development strategies as well as on certain other environmental issues.
11.15 From the outset of our study, we decided not to restrict ourselves to any particular EMS model. It is the principles that are important, and similar principles are used in most of the EMS models we studied. However, to provide a framework for our interviews and analysis we selected ISO 14004, a guidance document for environmental management systems produced by the International Organization for Standardization. Although it has not yet been ratified formally, it is already gaining international acceptance. A companion document, ISO 14001, is a specification document that is prescriptive and contains only those elements of an EMS that can be audited objectively for certification purposes.
11.16 Our review focussed on good environmental management practices and impediments to them in public and private sector organizations in Canada, Europe and the United States. We interviewed consultants, specialists and members of standard-setting bodies in the private and the public sectors to identify good EMS practices and to understand the role and importance of the various elements of the environmental management systems in their respective organizations. Our selection of organizations to interview was based on each organization's environmental responsibilities, the nature of its business and its willingness to be interviewed. A list of the 36 organizations is included in Appendix II.
11.17 Our study was intended to identify key elements and practices of good environmental management, not to come to a conclusion about the general state of environmental management. Accordingly, we selected for our private sector interviews organizations that have been recognized by peers, standard-setting bodies and professional societies as having or likely to have good environmental practices. Three provincial Crown corporations that had been referred to us as good environmental practitioners were included as part of our private sector analysis because of their commercial operating environment. In each organization we interviewed environmental managers who gave us a perspective on the practical problems they faced in developing and applying an EMS.
11.18 From the public sector, we interviewed Canadian and American government departments and agencies that have begun to embrace the EMS concept by implementing environmental management practices. We conducted in-depth interviews with Canadian federal government officials in seven departments and agencies, including the Treasury Board Secretariat and Environment Canada.
11.19 We also visited two provincial departments, and five U.S. federal departments and agencies. These organizations were interviewed for background information only and were not included in our detailed analysis.
11.20 We also reviewed existing tools and methodologies for assessing EMS and developed, in co-operation with the Federal Committee on Environmental Management Systems (FCEMS), a questionnaire for the assessment of environmental management systems. The questionnaire is based primarily on the ISO 14004 guidance document but also reflects other recognized environmental management practices and the findings of our study.
11.21 A first draft of this questionnaire was tested in one federal department and reviewed by four others. We revised the questionnaire based on their comments and turned it over to the Federal Committee on Environmental Management Systems (FCEMS). The Committee has undertaken to revise the questionnaire further and make it available to all federal departments.
11.22 The questionnaire is a tool to help an organization move toward implementing an environmental management system. It provides advice to federal departments and organizations wishing to improve their environmental management practices, ultimately leading to improved environmental performance.
11.23 We would like to express our appreciation to all those private and public sector organizations who so willingly provided their time, advice and information. Without their assistance, the completion of this study would not have been possible.
11.25 The Treasury Board Secretariat, within the general context of its responsibilities in the expenditure management system, is the organization responsible for providing general management guidance and directives. It has been active in several aspects of environmental management, promoting environmental auditing and environmental stewardship in the federal government.
11.26 Environment Canada is responsible for administering legislation related to the environment. It is also the federal government's technical expert on environmental matters. It has provided guidance to departments to help enhance their environmental performance through several initiatives. These initiatives have evolved through the years from the Environmental Stewardship initiative to the recent government initiatives on the ``greening of government."
11.27 Environment Canada's Office of Federal Environmental Stewardship promotes the ``greening of government operations" by providing tools and information to assist departments in making their operations more environmentally responsible. The Office hosts workshops on topics ranging from environmental assessment and waste reduction to environmental recognition programs and "green" printing. The Office also supports environmental projects and training programs and promotes environmental stewardship "success stories".
11.28 The Treasury Board Secretariat, Environment Canada, Industry Canada, Public Works and Government Services Canada, the Canadian International Development Agency, and the Office of the Auditor General of Canada have all contributed to the development of environmental standards through their involvement with bodies such as the Canadian Environmental Council, the Canadian Standards Association (CSA) and the Canadian Institute of Chartered Accountants. Specifically, Environment Canada has been active with the technical committee for the CSA's voluntary guidelines on environmental management systems; and it provided input to the Society of Management Accountants (SMAC) Accounting Guideline Implementing Corporate Environmental Strategies .
11.29 The Treasury Board Secretariat and Environment Canada have created an Environmental Accountability Partnership (EAP). The EAP Steering Committee is co-chaired by senior officials from the Treasury Board Secretariat and Environment Canada and includes members from six other federal departments. The Steering Committee may create working groups to address environmental issues as required. At the present time, there are seven EAP working groups. Federal roles in environmental management for government operations are summarized in Exhibit 11.1 .
11.30 The Federal Committee on Environmental Management Systems (FCEMS) works to identify and overcome common barriers and share experiences and best practices in the implementation of environmental management systems. This committee also focusses on the important role of environmental management systems in effective risk management. The FCEMS and its member departments have worked closely with the Office of the Auditor General's EMS study team; we appreciate their contribution to and support for this study.
11.32 Principle-based management models are not limited to specific practices or activities. According to Stephen Covey, internationally recognized speaker and author on leadership, a practice that works in one circumstance will not necessarily work in another. While practices are specific, principles are deep fundamental truths that have universal application.
11.33 Environmental management principles provide the framework within which an organization can pattern its environmental management practices. Many existing environmental management models may be used. The exact content of a particular EMS model is not as important as the principles it embodies. Principle-based management systems have the inherent flexibility necessary to make changes associated with evolving conditions. However, the difficulties associated with implementing such systems in those circumstances should not be underestimated.
11.34 Sound environmental management principles are not different from good management principles. Similar to a principle-based management approach, a principle-based environmental management approach is both team-driven and oriented toward the improvement of environmental performance. An EMS should be a complementary system to an organization's general management framework, integrated and aligned with the existing management structures wherever possible.
11.36 The environmental management principles as defined by ISO 14004 are:
To ensure success, an early step in developing or improving an EMS is obtaining commitment from the top management of the organization to improve the environmental management of its activities, products or services. The ongoing commitment and leadership of the top management are crucial.11.39 It is critical that management put its commitment into operation by participating in environmental activities, defining its responsibilities and establishing the appropriate accountability mechanisms for the organization's environmental performance.
11.40 In the current economic climate of restraint and very limited resources, senior management must genuinely believe in the value of an EMS and be in a position to demonstrate its benefits (financial and otherwise). Where commitment by top management was not visible in the organizations we interviewed and the EMS was promoted and initiated from the bottom up, the EMS did not succeed.
11.41 Commitment must extend beyond the management level to individuals at all organizational levels ( see Exhibit 11.2 ). The Canadian Standards Association states, ``It is the commitment of the individuals in an organization that transforms the environmental management system from what otherwise might be simply paperwork into an effective process."
11.42 In our interviews, we found more evidence of senior management awareness and support for an EMS in the private sector than in the Canadian federal government. The higher level of environmental awareness and support among senior managers in the private sector may be due to the greater risks associated with their operations and the threat of litigation.
11.43 Furthermore, several private sector companies we interviewed recognize that sound environmental management can translate into increased profits for the corporation. Although Canadian federal government organizations may have somewhat different objectives, mandates, and vehicles for raising operating capital, they need to identify opportunities for savings through improved environmental performance. Leveraging environmental investments by demonstrating a positive return on investment appears to be a key to success.
11.46 Typically, commitment from senior management is clearly articulated in the environmental policy. Although many major organizations have developed an environmental policy, there is a great variety in what the policy includes.
11.47 We noted some policies that included only vague statements about sound environmental behaviour. These did not provide sufficient direction for the organizations. At the other extreme, some policies were too detailed and would have to be amended too often to accommodate even minor changes in circumstances. The wording of policies should give clear direction to the organization without getting into specifics, which fall under planning.
11.48 Organizations should consider including in their environmental policy a commitment to continual improvement of both the EMS and environmental performance, and provide for setting and publishing environmental objectives. A policy can state which of the organization's activities are covered by the EMS, and indicate how the achievement of the environmental objectives will be reported.
11.49 Some private sector organizations have established additional good practices, including stakeholder consultation and participation in the policy's development; communication of the policy to all stakeholders; emphasizing benefits as well as costs; and periodic review of the policy's relevance and appropriateness.
11.50 Two of the Canadian federal government departments we interviewed had environmental policies. These policies share the positive attributes of the good policies observed in our sample of private sector organizations.
11.51 Environmental policies also cover a wide range of issues. Most address compliance issues, such as compliance with environmental and health and safety legislation and regulations. More advanced policies deal with questions of due diligence, product stewardship and life cycle management. The most advanced policies address questions of sustainable development. To ensure that the organization supports the implementation of a sustainable development or advanced environmental management policy, an appropriate corporate culture is essential. Exhibit 11.3 illustrates a sustainable development policy.
11.54 We observed that some federal government departments have developed risk assessment criteria to assign an order of priority to their environmental activities. One department has adopted a risk management strategy and is gathering information to conduct a site-by-site analysis, to be followed by action commensurate with the results of the analysis. However, none of the federal government departments we interviewed has carried out a comprehensive risk analysis that looks at all of its activities and identifies and assesses the associated potential environmental impacts.
11.56 As outlined in the recent "greening of government" initiative, the Canadian federal government is committed to meeting or exceeding federal environmental standards and regulations in its own operations. Under this initiative, compliance by federal departments with provincial regulations, although not a legal requirement, should be considered for the sake of federal-provincial harmony.
11.58 Internal performance criteria in the federal government departments we interviewed consisted primarily of procurement standards. The apparent lack of additional internal performance criteria may be related to a lack of rigorous risk analysis. However, the federal government is making progress toward developing government-wide standards and promoting good practices for the management of waste, energy and water. One illustration is noted in Exhibit 11.4 .
11.60 We noted established objectives and targets in more than half of our private sector sample. Similarly, two of the six operating federal government departments interviewed have established objectives. However, we observed targets in only one of those two. One other department that did not have objectives did have targets.
11.61 We acknowledge that it can be a challenge to obtain senior management agreement on which objectives are achievable in terms of resources, costs and the applicability of industry standards. One useful approach that can promote consensus building is to involve, in the establishment of objectives, the people who are responsible for achieving them. Other good practices we observed include communicating the objectives throughout the organization, identifying benefits as well as costs, designing the objectives to capture business opportunities as well as to address liabilities, establishing both short-term and long-term objectives, and establishing a process for review.
11.62 Once the objectives are established, targets can be set to achieve them within a specified time frame ( see Exhibit 11.5 ). The development of targets is often constrained by the limitations of the available baseline data. Wherever possible, the achievement of targets should be linked to a reward system at all levels in the organization.
11.64 In a recent survey by KPMG Environmental Services Inc. on Canadian environmental management, 63 percent of respondents indicated that they did not have an EMS in place because they dealt with issues "as required". This approach may not cover issues adequately and it deals with events after the fact. A comprehensive environmental management program that identifies specific actions in their order of priority for the organization provides better assurance that all significant environmental aspects will be brought to the attention of the responsible senior managers and will be properly addressed.
11.65 Despite its importance, only half of the private sector organizations we interviewed and only one federal government department had developed a comprehensive environmental management program. Most cited inadequate resources and lack of support from staff and managers as major constraints. Support for an environmental management program may require a change in corporate culture. We note, however, that the majority of federal government departments interviewed have developed short-term environmental action plans to address specific issues.
11.66 Organizations with long-term environmental management programs in place explained to us that a well-thought-out program helps to foster commitment throughout the organization, particularly when it is integrated into the overall business plan and has been approved by senior management.
11.68 Translating comprehensive environmental or sustainable development policies and objectives into operational terms is a major undertaking that affects the entire organization. According to the Institute for Sustainable Development,
It [implementing environmental/sustainable development policies] involves changing the corporate culture, management and employee attitudes, defining responsibilities and accountability and establishing organizational structures, information systems and various operational practices.11.69 It is not realistic to assume that an organization can be transformed overnight. The majority of organizations claim that these changes are fairly substantial and require a three-year to five-year implementation plan.
11.70 This is not to say that a new bureaucracy, with its associated costs, should be created. By adhering to a strategic and pragmatic environmental management program, an organization should be able to develop priorities and begin the implementation process in a logical and rational way. The EMS should fit into the existing management structure. ISO suggests that, in order to achieve its environmental objectives, an organization should focus and align its people, systems, strategy, resources and structure.
11.71 ISO 14004 breaks down the principle of implementation into two components: ensure capability and support action . ISO identifies the following elements that are required to ensure capability :
11.73 Obtaining resources is a major challenge for federal government organizations. Overall, resources have been reduced significantly and organizations may feel hard pressed to allocate resources to meet their own mandates. Furthermore, the benefits of improved environmental performance may not flow back to the department or agency that expended the resources. In such a case, only the most environmentally sensitive manager could be expected to voluntarily allocate significant resources to the environment.
11.74 However, an organization must be prepared to allocate the resources needed to meet its environmental obligations and to prevent it from incurring environmental liabilities. There are also many low-cost environmental initiatives, such as reducing paper consumption and waste generation, that can yield significant financial and environmental benefits.
11.76 All of the federal government departments we interviewed have begun to integrate "green" activities into their operations. They recognize that more work needs to be done to integrate environmental management systems fully into their management process.
11.78 In some organizations in both the private and the public sectors, the assignment of environmental responsibilities is unclear: in some cases there is duplication and in other cases there are gaps. Some federal government officials expressed concern over the lack of existing controls and mechanisms to ensure that management and employees are held accountable for environmental performance.
11.80 We were told by several of our interviewees that motivating employees was a particular challenge in organizations that had recently been through a downsizing exercise or had a recent history of labour-management disputes. Federal government employees may have difficulty accepting the idea that resources should be assigned to environmental initiatives while other programs, services and jobs are being eliminated.
11.82 None of the federal government departments we interviewed had developed a comprehensive environmental training program that addressed the risks associated with its products, services or activities. However, four departments have provided environmental training related to specific environmental issues. One department is in the process of developing an analysis of training needs. Another department has completed such an analysis and is now developing a comprehensive environmental training program.
11.83 ISO identifies the following elements to support action :
11.85 In the private sector, most organizations have come to appreciate the importance of reporting environmental performance information and it is quickly becoming common practice. Reporting on Environmental Performance , which was published by the CICA in October 1994, reviewed the main topics that could be covered when reporting on environmental performance. The nature of the organization's business and the target audience determines what information is relevant. The CICA study states, "An organization needs to report some general information about how environmental issues affect the organization, and what impact its activities and products have on the environment."
11.86 The data and information from the EMS are used to prepare the analysis of environmental performance information and to support the discussion and analysis of actual performance and corrective actions taken. Environmental reports should also include a discussion of any plans to improve environmental performance in the future.
11.87 Good external reporting practices that we observed in federal government departments include the dissemination of environmental information through such sources as the information highway and the Estimates. However, the reporting of environmental performance information has yet to be developed fully.
11.89 A few organizations raised concerns about the potential for overemphasizing documentation. EMS documentation can be time-consuming and costly to generate and should be generated, therefore, only to add value to the environmental management system.
11.90 Benefits cited by the private sector companies we interviewed included the usefulness of EMS documentation for preparing environmental audits and compliance reviews and for demonstrating due diligence.
11.91 Organizations seeking certification under ISO14001 will have to meet specific documentation requirements. Similarly, federal departments and agencies wanting to substantiate their environmental performance may also wish to document their EMS.
11.93 In both the private and the public sectors, about one third of the organizations we interviewed identified specific environmental operational controls. Private sector organizations that have such controls in place claim that, when combined with heightened employee awareness, they can significantly reduce environmental risks and liabilities.
11.95 We recognize that emergency planning is not static and that updates can be costly. There may also be a significant amount of training and retraining required. Nonetheless, at a minimum, all major environmental risks should be identified and documented, and organizations should have appropriate emergency response plans that are reviewed, tested and revised as appropriate.
11.98 In the private sector, approximately half of our sample population had comprehensive environmental measuring and monitoring systems in place, some of which clearly identify the key performance indicators to be tracked. The incentives for developing these indicators have largely been external reporting requirements and public expectations. The scope and content of such systems are usually identified and outlined in an organization's long-term environmental program.
11.99 The federal government departments we interviewed have not yet established such systems for each of their lines of business, covering their products, services and activities. One of the departments measures and monitors its waste management activities. A second department measures and monitors its hazardous waste clean-ups.
11.100 Capturing reliable environmental data may require specialized skills, instruments and techniques ( see Exhibit 11.8 ). The data must then be analyzed to determine if improvements and corrective actions are necessary. Despite the complexity and the challenges that a comprehensive measuring and monitoring system present, several private sector organizations suggested that it is a good idea to begin measuring as early as possible, and not to wait for the perfect system. Through continuous improvements to the measuring and monitoring systems, an organization can encourage the appropriate kinds of changes leading to improved environmental performance and accountability.
11.103 The government has directed departments to report in their Estimates their progress toward attaining environmental sustainability. Clearly, therefore, they will have to develop good EMS records and information management systems.
11.105 Approximately half of the private sector organizations we interviewed have audited their EMS. Most of these organizations audit their EMS regularly and, wherever feasible, document its benefits, including cost reductions and the avoidance of legal fines.
11.106 The environmental management systems in the federal government have not yet evolved to the point where a department is actually auditing its EMS as a separate system. Two departments have had consultants review their environmental management process and make recommendations for developing an EMS. Another has audited various aspects of its environmental management process and is integrating environmental issues in many of its program audits.
11.107 EMS audits are not to be confused with the term "environmental audit", which is generally applied to compliance reviews and environmental site assessments. These "environmental audits" can nevertheless be quite useful, particularly when an organization is in the early stages of developing and implementing an EMS. The International Organization for Standardization is developing internationally accepted definitions of environmental auditing, which include a standard that should define the parameters of an EMS audit. These are expected to be issued as draft international standards later in 1995.
11.110 Some organizations have found it a good practice to use people in the organization rather than outside consultants, particularly when reviewing the policy, objectives or procedures.
11.111 As we have noted, most environmental management systems in the federal government are in their early stages of development. Although none of the departments we interviewed has reviewed its EMS as such, some departments are undertaking reviews of their environmental activities, defining action plans and identifying responsible individuals.
11.114 Our overall impression is that the private sector organizations we interviewed were generally further advanced than the federal departments and agencies in implementing comprehensive environmental management systems. Nevertheless, very few of the elements are fully developed in either the private or the public sector.
11.115 The federal government has taken steps, through initiatives such as the Environmental Accountability Partnership, to improve its environmental management practices.
11.117 In combination with our review of the literature, feedback from our study participants consistently supports the importance and usefulness of all of the elements of the ISO 14004 model. The model is universal; it simplifies compliance, increases competitiveness, and minimizes administrative costs and oversight. Depending on the nature of the organization's business, some elements of the model may be more important to it than others.
11.119 Generally, the successful implementation of an EMS will depend on the sequential development of the principles. For example, the EMS must have the support and commitment of senior management before it is planned; the support capability must be developed before the system can be successfully implemented; and the EMS must be measured and evaluated before it is reviewed and improved. Similarly, within each principle, development of one element may be a prerequisite for the development of another.
Audit Team
John Affleck
Gary Barber
Pablo Fonte
Jacques Leduc
Lucie Talbot
For further information, please contact Wayne Cluskey, the responsible auditor.
British Standards Institute: BS7750 : Implementing the Environment Management Standard and the EC Eco-Management Scheme.
Canadian Chemical Producers' Association : Responsible Care: A program with environmental codes of practice for members that are conditions of membership.
Canadian Standards Association (CSA), CSAZ750 : Guideline For a Voluntary Environmental Management System, Canadian Standards Association, Draft revision 8.0, November 1993.
European Community : Eco-Management and Auditing Scheme (EMAS)
Global Environmental Management Initiative (GEMI) : Environmental Self-Assessment Program, First Edition 1992. (based on the ICC's Business Charter for Sustainable Development)
International Chamber of Commerce (ICC) : A Guideline for Corporate Environmental Reporting (Toronto:1992).
International Institute for Sustainable Development (IISD) : Business Strategy for Sustainable Development - Leadership and Accountability for the 90s.
International Organization for Standardization (ISO), ISO 14004 : Environmental management systems - General Guidelines on Principles, Systems and Supporting Techniques ISO/DIS 1400X ISO/TC 207 SC1 N83. June, 1995
U.S. Environmental Protection Agency; Office of Federal Facilities Enforcement : Draft Code of Environmental Management Principles (CEMP) for Federal Agencies.
We acknowledge the contribution of the following organizations that provided their valuable information and time to the study.
Private sector companies and Crown corporations included in our review of good practices:
3M Canada Inc.
Alcan Smelters and Chemicals Ltd.
Bell Canada
BC Hydro
Chevron Canada Resources
CP Rail System
Domtar Inc.
Dow Chemical Canada Inc.
DuPont Canada Inc.
Hercules Canada Ltd.
Hydro Quebec
Kodak Canada Inc.
Noranda Inc.
Northern Telecom Canada Ltd.
Ontario Hydro
Petro-Canada
Shell Canada Ltd.
TransAlta Utilities Corporation
WestCoast Energy Inc.
Canadian federal departments and agencies included in our review of federal government practices:
Agriculture and Agri-food Canada
Correctional Service Canada
Environment Canada
National Defence
Public Works and Government Services Canada
Transport Canada
Treasury Board Secretariat
Other organizations interviewed for background information:
BC Ministry of Transportation and Highways
Canadian Standards Association
Horner Frank W. Ltd.
Ontario Ministry of Transportation
U.S. Department of Energy
U.S. Department of Defense
U.S. Environmental Protection Agency - Office of Federal Facilities Enforcement
U.S. Federal Aviation Agency
U.S. General Accounting Office
Wyeth Ayerst Canada
The federal government has adopted a Code of Environmental Stewardship, which covers all areas of federal activity. It is a statement of principles to guide all federal government decision making. The Code commits the government to the principle of sustainable development in all aspects of its operations, from facilities and real property management to procurement and waste management.
The Government of Canada fully supports the principle of sustainable development. To reflect this commitment in all aspects of its operations and activities, from facilities and real property management to procurement and waste management, the Government commits: