Environmental Management Systems: A guide for Welsh SMEs
Environmental Management Systems – A guide for Welsh SMEs
Consuming electricity and water, producing waste, operating machinery and processing natural resources – these are just some of the ways that businesses interact with the environment at operational level and through their supply chains.
Businesses of all sizes are realising the need to understand, manage and improve their environmental impacts to ensure they can operate and grow sustainably. An Environmental Management System (EMS) proportionate to the size and activities of the organisation is a key framework for helping businesses to do this.
However, it can be more challenging for SMEs to measure, manage and report on climate and environmental goals, due to constraints of time, cost and human resources. So, what are the options? Do you need to comply with the internationally recognised ISO 14001 or are there alternatives?
We hope that this guide will help with understanding (i) the key elements of an EMS, (ii) the benefits and opportunities they bring for SMEs and (iii) provide an overview of the different certification standards for EMS implementation and support for SMEs in Wales.
Remember, there are many benefits to gaining an EMS certification but it is the journey towards it that counts in terms of practical actions and outputs. All certifications will require resource. If this is not possible for your organisation right now we hope that this guide will still be valuable to steering you towards meaningful actions.
1. What is an EMS?
An EMS is a structured framework of policies, procedures and practices which help organisations assess, manage and improve their environmental impact.
The primary goals of an EMS are to ensure:
- Compliance with environmental requirements (for example, under an environmental permit issued by Natural Resources Wales)
- The efficient use of resources
- Waste reduction and minimal pollution
- The continual improvement of environmental performance
(see: https://www.iso.org/climate-change/environmental-management-system-ems)
A core strength of any EMS should be enabling continual improvement of environmental performance. Continual improvement as defined in ISO 14001, refers to recurring activities to enhance environmental performance. For example, organisations can identify improvement opportunities through audits and monitoring progress against objectives and targets.
For an SME, this could be implementing behaviour change initiatives to support carbon reduction and nature related goals, such as eliminating deforestation. However, from a wider perspective, continuous improvement might look like an increasing number of business areas or processes being covered by the EMS, or an accumulation of knowledge and skills in dealing with environmental issues. Overall, it’s about a move from operational management of the environment to a more strategic approach.
2. The benefits of implementing an EMS for SMEs in Wales
- Manage and improve environmental impacts: by integrating environmental considerations into their operations, SMEs can minimise their ecological footprint and reduce negative impacts on the environment.
- Risk Management: The tools within an EMS provide a systematic approach to identifying and managing environmental risks and help SMEs to future proof their business and avoid potential liabilities and disruptions.
- Cost savings: Implementing efficient resource management practices can lead to cost savings for SMEs. By optimising energy and water usage, reducing waste generation, and implementing recycling initiatives, SMEs may see reductions in utilities bills and other financial benefits from more efficient and innovative processes.
- Compliance with regulations: An EMS helps SMEs comply with environmental regulations and legal requirements. By staying up to date with environmental legislation, SMEs can avoid penalties and legal issues.
- Enhanced reputation and competitive advantage: Demonstrating a commitment to environmental sustainability is important for many potential employees and customers. Increasingly, it is also a requirement for public sector buyers to take into account the sustainability of their contractors. For example, in Wales, the Social Partnerships and Public Procurement (Wales) Act introduced a Socially Responsible Procurement Duty and at UK level, PPN 06/21 mandates that carbon reduction plans be taken into account in major government procurement contracts.
- Improved access to finance: An EMS can help SMEs to identify and manage steps they can take to fulfil requirements under Business Wales’ Green Growth Pledge. It can also act as the catalyst for innovation financing, for example, the Green Business Loan Scheme from Development Bank of Wales.
3. EMS Standards and Certifications
When starting out to create an EMS, there are a number of standards available for SMEs in Wales. The main ones covered in this guide are:
- ISO 14001:2015 (Environmental Management Systems – Requirements and Guidance for Use)
The most widely used voluntary EMS standard globally, providing a holistic framework ‘encompassing all aspects of an organisation’s environmental management and offering tools for continuous improvement’. Certification is available for organisations that have implemented the requirements of ISO 14001.
- ISO 14005:2019 (Environmental Management Systems – Guidance for a flexible approach to phased implementation)
This standard provides guidance for a phased approach to establish, implement, maintain and improve an EMS. It may be particularly useful for SMEs as it provides flexibility and allows organisations to develop their EMS at their own pace. Full implementation of the guidance will result in an EMS that aligns with ISO14001.
Note that BSI’s earlier guidance standard for SMEs, BS8555, which also provided a phased approach to EMS implementation has now been withdrawn and replaced by ISO 14005.
Green Dragon is a UK based environmental accreditation awarded to ‘businesses that take action to understand, monitor and control their impacts on the environment’. It operates on a staged based system over five levels, allowing a business to progress in its own time. At Level 5 the Green Dragon standard is equivalent to ISO 14001. One of the advantages of Green Dragon is its recognition and support from Business Wales and its acknowledgement in Welsh Government procurement processes.
- Green Key / Gorian Gwyrdd
Green Key is an eco-accreditation awarded to businesses operating in the tourism sector. Green Key certified businesses meet a set of high standard environmental requirements across 13 areas including environmental management, staff involvement, energy and water conservation, waste management, and food and beverage. In Wales, Green Key is operated by Keep Wales Tidy on behalf of the Foundation for Environmental Education (FEE).
EMAS is the EU’s voluntary scheme applicable to all organisations in the public and private sectors who want to evaluate, manage and improve their environmental performance. EMAS is broader and more rigorous than ISO14001 (as explained below) but ISO 14001 satisfies the requirements for the EMS component. Following Brexit, the UK no longer has a ‘competent body’ responsible for EMAS, however, organisations doing business in the EU might find EMAS Global registration useful and we have included information about the main requirements and links to further information in this document for completeness.
It is worth noting that businesses do not need to adhere to a certain standard for their EMS and might decide to design a bespoke system. However, using one of the available standards might well be less resource intensive and can help to ensure a robust EMS that provides reassurance to stakeholders.
The following sections of this guide provide a bit more detail about the above standards to help you identify which might be the right approach for your business.
Please note this is a guide based on a summary of available online information. Please check the web links given for the most accurate and up to date details.
4. International EMS standards
ISO14001:2015 (Environmental Management Systems – Requirements and Guidance for Use)
ISO 14001:2015 is an internationally recognised, holistic framework for an EMS, encompassing all aspects of an organisation’s environmental impact and offering tools for continuous improvement.
What is involved?
The basis of ISO 14001 (as with other EMS standards) is the management system process Plan-Do-Check-Act (PDCA). The PDCA cycle is applied to the overall EMS, as well as individual processes, and enables organisations to achieve continual improvements to their environmental performance through improvements to the EMS.
The Guidance describes the requirements for setting up and implementing an EMS including:
- An environmental policy: A statement that outlines an organisation’s commitment to environmental sustainability.
- Planning: This involves identifying environmental aspects and objectives of an organisation, setting targets and establishing programmes to achieve them.
- Implementation: This stage involves putting plans into action, allocating resources and assigning responsibilities.
- Checking: Regular monitoring of performance against objectives and targets is critical to ensure the timely implementation of corrective actions.
- Management review: A formal review of the EMS supports its continued effectiveness and suitability.
EMS Plan-Do-Check-Act Model (Source: Westcon,2017, online)
Costs, Certification and Training
The standard can be purchased from the ISO website for approximately £130 and businesses can choose to implement the standard without the costs of certification. There are also various free and IEMA accredited training modules to assist with implementation.
As mentioned above, certification is optional but can provide both organisations and their customers assurance that ISO 14001 has been implemented in a robust manner.
Costs of certification from organisations accredited by The UK Accreditation Service (UKAS) vary but online quotes without commitment can be readily obtained.
Certification is typically awarded for three years, subject to annual surveillance visits. The standard itself undergoes revisions periodically (typically every 5-10 years).
ISO 14005:2019 (Environmental Management Systems – Guidance for a flexible approach to phased implementation)
Whilst ISO 14001 is applicable to all types and sizes of organisation, the full implementation of an EMS at the same time might be prove challenging for some organisations and particularly SMEs where time, cost and human resources can be limited.
At international level, a phased approach to implementing an EMS was therefore developed (previously the BSI standard BS8555:2016 which has been subsumed by ISO 14005) to encourage and guide SMEs to meet the requirements of ISO 14001.
What is involved?
The phased approach in ISO 14005 is designed to provide flexibility for an organisation to develop their EMS over a number of phases to ultimately meet the requirements of ISO 14001.
The number of phases an organisation chooses to implement at any one time is flexible and can be determined depending on resources and priorities. Each phase is broken down into six consecutive stages to be completed over time. SMEs can monitor progress using the maturity matrix in Annex A of ISO 14005 and the free supporting documents provided by ISO 14005.
The Assessment Sheet (on the supporting documents page) provided by ISO is a helpful tool that enables organizations to monitor and record progress through five levels of maturity corresponding to each EMS subclause. An EMS that satisfies the maturity Level 1 (Column 1) through to full maturity at Level 5 (Column 5) meets all the requirements for a particular clause of ISO 14001:2015.
Costs, Certification and Training
The Guidance can be downloaded from the ISO website for approximately £130. As the aim of ISO 14005 is to assist SMEs with reaching 14001, there is no separate certification for this standard. However, it is a good reference to turn to for ideas and practical examples on how to make your implementation of ISO 14001 more effective.
5. Alternative EMS standards recognised in Wales
For SMEs based in Wales, there are alternatives to the above standards that are administered by national organisations and recognised by the public sector in the procurement process.
5.1 Groundwork Green Dragon Environmental Accreditation
The Green Dragon Environmental Accreditation is a comprehensive standard administered by Groundwork, a UKAS accredited inspection organisation. It is awarded to businesses that take action to understand, monitor and control their impacts on the environment.
What is involved?
Similar to ISO 14005, the standard operates on a staged based system (Levels 1-5), allowing organisations to join at any stage and progress their EMS in their own time.
The five levels are:
- Level 1: Commitment to Environmental Management
- Level 2: Understanding environmental responsibilities
- Level 3: Managing environmental impacts
- Level 4: Environmental Management Programme
- Level 5: Continual environmental improvement
Organisations can choose which level is appropriate to the nature and scale of their activities and upon completion of each level they will receive a certificate. At level 5, the Green Dragon standard is equivalent to ISO 14001.
Groundwork provides several useful documents on its website to accompany the standard, including an Environmental Review Workbook. There is also a list of organisations across Wales who have achieved Green Dragon accreditation.
Certification and costs
To achieve and maintain the Green Dragon Environmental Standard, an annual audit with Groundwork is required. The cost of the audit varies depending on the level, with Level 3 being the most common entry point for organisations and costing.
5.2 Green Key – A sustainability standard for the tourism sector
Green Key is an international environmental certification programme for the tourism and hospitality industry. It has been awarded to more than 3,200 businesses from across the sector in 65 countries and is open to businesses from across the sector.
Globally, Green Key is operated by the Foundation for Environmental Education (FEE) who work with national partners on certification. In Wales, the Green Key certificate is managed by Keep Wales Tidy.
Green Key promotes sustainable practices and recognises businesses that meet specific criteria related to environmental management and sustainability. Criteria are set out over 13 thematic areas including energy and water conservation, waste management, sustainable procurement, and environmental education.
The FEE has developed criteria and explanatory notes for businesses in six different categories (hotels and resorts, small accommodation, campsites, restaurants, attractions and conference centres).
In each category, there are ‘imperative’ and ‘guideline’ criteria. For example, creation of a sustainability policy and interaction with stakeholders are imperative criteria, whilst a target to reduce carbon footprint is a guideline criteria. Each organisation applying for a Green Key certificate must achieve all imperative criteria and then for each subsequent year that they apply they must meet an additional 5% of the guideline criteria.
In addition to the general benefits of EMS implementation, Keep Wales Tidy highlights that travellers and tourists are increasingly keen to support sustainable businesses and that investment in a Green Key certification is a key market differentiator. Keep Wales Tidy has collated case studies of organisations across Wales who have invested in Green Key.
Certification and costs
The application process for certification consists of three parts:
- Sending the application documents
- Receiving on-site audits
- Decision by an independent entity (third-party verification)
More information about the application process in Wales can be found on the Keep Wales Tidy website.
Keep Wales Tidy aims to keep certification costs affordable and to ensure Green Key is accessible to all tourism providers. Investment levels therefore vary depending on the size of the business:
Costs are paid as part of the application prcess and then annually following updated verification (for more information see https://keepwalestidy.cymru/our-work/awards/green-key/).
5.3 Seren Scheme
The Seren Scheme is based on BS8555 and follows the same phased approach. Organizations can choose to use the Seren Scheme to achieve other EMS standards such as ISO 14001 or EMAS, or register at a phase that aligns with the nature and scale of their business and remain at that phase.
The Seren Scheme is applicable to both large and small organizations and places a strong focus on continuous improvement.
BS8555 is divided into 5 phases:
- Stage 1: Leadership, context, and commitment
- Stage 2: Ensure compliance
- Stage 3: Plan and develop the EMS
- Stage 4: Implement the EMS
- Stage 5: Check and update the EMS
As long as organizations pass an annual inspection, they can stay at that particular phase indefinitely and use their EMS to demonstrate their commitment to environmental management to stakeholders and customers.
The Seren Scheme is administered by a private company called Tarian Inspection Services, which conducts inspections in a friendly, down-to-earth, and highly practical manner. They ensure that companies have a robust Environmental Management System that enhances their credibility, good management, and cost savings.
Further information can be found at http://www.serenscheme.com/.
6. EU’s Eco-Management and Audit Scheme (EMAS)
EMAS is a voluntary environmental management scheme designed by the European Commission. Its overall aim is to enable continuous improvement in the environmental performance of companies, language similar to that in ISO 14001. However, ISO 14001 aims for continual improvement of the system itself hopefully leading to improved environmental performance of the organisation. EMAS requires improved environmental performance of the organisation to be assessed through indicators relating to six core areas – energy efficiency, material efficiency, emissions, water, waste and land use with regards to biodiversity.
EMAS is more rigorous than ISO 14001, however, ISO 14001 satisfies the EMS component of EMAS requirements.
Registration with the scheme requires the following steps:
- Conduct a preliminary environmental review – this will be the baseline for improvement
- Adopt an environmental policy and programme in which you involve employees and external stakeholders
- Establish and implement an EMS
- Prepare an environmental statement
- The EMS and environmental statement to be verified and validated by an environmental verifier.
Recognising the challenges faced by SMEs, EMAS has amended rules for SMEs to encourage participation in the scheme. These include verification every four years (rather than three) and publication of the environmental statement every two years, rather than annually. There is also financial support available in some Member States and a number of tools and guidance to assist SMEs.
For more information, please see:
In summary...
SMEs increasingly need to demonstrate an understanding of environmental impacts and a strategic approach to minimising climate and environmental impacts to satisfy potential customers and to future proof their business.
In light of the prevalent tick-box culture in environmental matters, many organisations are seeking broader and more engaging systems, examining the impacts on their staff, communities, and supply chains.
Regardless of the framework used for environmental, biodiversity, sustainability, or ESG reporting, businesses still need to adhere to similar concepts: focus on leadership and staff ownership, understand impacts, prioritise, plan, communicate, implement, and review.
If you need further support or advice with any of these activities please reach out to our sustainability advisors.
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