|ISO 14001 – Is Japan going green?
By Catherine Pawasarat
Japan Inc. has long been a target for criticism about environmental malfeasance. Now that the average Japanese is aspiring to a healthier environment, Japanese companies are adjusting, giving their image a tint of green. Companies brandishing ISO 14001 certification as “proof” of their ecological bent have been sprouting up like [italics]shiitake[italics] mushrooms here over the last several years, with no sign of abating.
So what is ISO 14001, anyway?
The Geneva-based International Standards Organization (ISO) issued 14001 in 1996 as a set of international standards governing environmental management systems (EMSs). As part of 14001 certification, companies and other organizations (like local governments) must include improved environmental performance among their management objectives.
The appeal of ISO 14001 lies in having an EMS that is internationally recognized, a big bonus for any concern with international operations. Moreover, an effective EMS can help conserve the environment while also improving an organization’s bottom line -- through increased efficiency, reduced waste, and lowered risk of costly fines or clean-up fees for environmental infractions.
By the end of January 2002, a total of 8,169 Japanese companies had obtained ISO 14001 certification. The country with the next most certifications, Germany, had only 3,380, while the U.S. trailed in sixth place (after the U.K., Sweden and Spain) with 1,650. By May, nearly 1,200 more Japanese organizations had jumped on the 14001 train.
Why are the Japanese embracing ISO 14001, and so much more than their western counterparts?
Once Burned, Twice Shy
One reason is historical. In 1987 ISO came out with its 9000 series, an international management practices standard.
“Japanese manufacturers had a lot of confidence in the quality of their products, and thought they didn’t need ISO 9000. They didn’t realize it wasn’t a question of product quality, but of management,” remarks Koichi Tsujii, an EMS consultant and creator of ISO World, an Internet information portal.
Not realizing the importance placed on the new standards by some European clients, the lack of certification caused some Japanese companies’ products to be “shut out” of the European market, according to Koichi Kawano, head of the Environment Ministry’s Environment and Economy Division.
“So Japanese companies came to think that ISO was important, and were waiting to adopt 14001 before it came out because of what happened with 9000.”
It’s All in the Image, Baby
Moreover, as anyone not living under a rock has noticed, the importance of an environmentally-friendly image has become a key selling point for products and companies, even for governments.
The ISO 14001 certification mark, affixed to corporate products and other materials, acts as a kind of corroboration of an organization’s green-ness, notes Kawano at the Environment Ministry.
“This is a big trend now. In Japan, if a product isn’t environmentally friendly, consumers won’t buy it. Things that are good for the environment are perceived as being ‘cool,’” remarks Meguri Aoyama, chief of the environment headquarters within the Japan Business Federation (Nippon Keidanren), a powerful lobby group of more than 1,300 Japanese companies.
Then there’s the homogeneity factor.
Keeping up with the Joneses … er, Tanakas
“Japan has this phenomenon of one person copying another. Rather than ISO 14001 certification being perceived as an advantage, people are afraid that if they [italics]don’t[italics] get it, they’ll be at a [italics]dis[italics]advantage,” laughs consultant Tsujii.
The copycat phenomenon is not just psychologically inspired. When an industry giant like Hitachi or Toyota decide to get ISO 14001 certification, this entails certification for numerous factories, subsidiaries, associated companies and, often, a chain of suppliers, points out Nippon Keidanren’s Aoyama.
“People make fun of us Japanese for following after one another, as though we are all going to leap into the sea in a single file line,” he jokes. “But it does have a positive side to it.”
Take recycling, for example, and the manufacture and purchasing of goods made from recycled materials, Aoyama argues. Though plastic PET bottles - once the symbol of Japan’s wasteful ’disposable society’ -- only became recyclable five years ago, now close to 50 percent of them are returned to their makers for recycling and a new life as a pen or clothing item.
“This is Japanese society: If it’s decided, everyone will do it. Recycling reduces waste, and in the end it’s good for profits,” he chirps.
Interestingly, this social characteristic was one of the reasons behind the Tokyo Metropolitan Government’s decision to get ISO 14001 certification, which it obtained in early 2000.
“We knew it would help spread the movement in a ‘domino-effect’ kind of way, since we have name value. Industry people would think that if we had it, and they didn’t, we might not give them contracts,” reports Yasuhiro Ando, in charge of Tokyo Metro’s Environment Bureau.
Tokyo Metro also simply wanted to make public its attempts to improve its eco-performance.
“We wanted to express a constructive approach to the environment. We figured that certification was a kind of proof that we were doing it, rather than just talking about it,” says Ando.
He estimates that the ISO 14001 process helped Tokyo Metro make major advances in resource conservation, and – with 14,000 employees in the Shinjuku facility – serious financial savings.
“The easiest to understand is our electricity use. Between 1995 and 1999 it came down 20 percent. Water usage also came down about the same amount,” he explains.
Nippon Keidanren’s Aoyama also points to a constructive eco-approach picking up steam in Japan.
“Society is thinking about the three Rs - reduce, reuse and recycle - and companies are trying to put this into effect,” he exhorts.
Sounds good, but still … Japan blazing a trail in environmental management?
Is This For Real?
Though no one seems unhappy about an increase in the use of environmental management systems in Japan, many sources caution not to be fooled by appearances.
“ISO 14001 consists of guidelines, and does not actually set requirements for meeting certain standards of environmental performance. It’s totally voluntary, and so depends completely on what the organization itself wants to achieve. The ISO does not have any power to ensure that the organizations perform well environmentally,” says Makiko Yoshiro, a project coordinator in the United Nation’s Environment and Sustainable Development section in Tokyo.
Moreover, ISO 14001 is an internal tool, and the results do not have to be made public.
“In fact ISO 14001 does not really prove that a company or product is environmentally-friendly. A different certification, ISO 14031, is about environmental performance, and it addresses things like what level emissions are at, how much they are decreasing, etc,” comments the Environment Ministry’s Kawano.
On the other side of the fence, there are environmentally-friendly companies that aren’t certified, points out Tokyo Metro’s Ando.
Why wouldn’t a green company get certified? Partly, no doubt, because ISO 14001 can be a pricey endeavor. According to the Japan Standards Association, just the initial audit and registration costs a minimum of Y1.5 million yen, with subsequent annual maintenance ringing in at a minimum of Y1 million per year. This doesn’t include all the certification prep, including actually setting up the EMS.
Consulting fees to help an organization get ISO 14001 certification vary from pro bono to infinity, depending on the type of concern and its situation, says EMS consultant Tsujii. “But over a million yen is average.”
The Color of Money – is also green
ISO proponents point out that environmental auditing naturally indicates inefficient areas in the business stream – whether this be in raw material purchasing, waste treatment, office supplies, utilities, what have you – thereby encouraging more efficient operations. Ideally, this results in the happy marriage of lowering both operating costs and environmental impact.
“Another example of how a company benefits is through green purchasing. When a company is looking to buy products from another company, they may prioritize companies that have EcoAction 21 [or ISO 14001] certification, leading to improved profits for the certified company,” says the Environment Ministry’s Kawano.
“This kind of prioritization of eco-friendly businesses definitely happens, as we've been observing it for the last year. Unfortunately it's hard to measure because there are so many different industries involved.”
But there’s also the cultural tendency in Japan to go for form over content.
“Some companies are doing ISO 14001 just for appearance’s sake, and don’t understand the real meaning behind it. Or they don’t use it properly, and can’t enjoy the benefits. Most consultants are just trying to help the company get certified, and aren’t looking at it from an environmental nor a cost-cutting perspective,” laments consultant Tsujii.
The Environment Ministry offers a simpler and less costly alternative, called EcoAction 21. A mix of 14001 and the more environmentally substantial 14031, it can be used in lieu of the ISO certification as “proof” of environmental-friendliness. It’s also available in English.
“A big business can get ISO 14031, but it might be too expensive for small and mid-sized companies. EcoAction 21 is good for these,” enthuses Dr. Hiroshi Takatsuki, an eco-expert at Kyoto University’s Environment Preservation Center.
Cleaning out those skeletons in the closet
With dioxin levels above permissible levels and the toxic legacy of Japan’s rapid industrial development beginning to surface in topsoil around the country, it doesn’t take a soothsayer to perceive the future of this country’s environmental management. Consequently, as Aoyama at Nippon Keidanren indicates, many of Japan’s mega-companies are taking a pro-active stance.
Some are even going one better than ISO 14001, with public disclosure.
This year esteemed economic publication Toyo Keizai presented its fifth annual Green Reporting Award to Seiyu Ltd., with other awards going to Kirin Brewery, Ricoh, and the likes of Seiko Epson, Sony, Toyota Motors and Matsushita Electric. There were 242 entries, 50 more than last year. Meanwhile, the Environment Ministry has its own prize for outstanding environmental reporting, won last year by automaker Nissan.
“In Japan right now there are about 500 companies doing public environmental reporting. For these, we know things like how much they are decreasing their emissions. We are trying to increase this trend,” says the Environment Ministry’s Kawano. At present the ministry’s main incentive is its prize, which would be a boon for corporate image, he notes.
The ISO 14001 guidelines do clearly call for ongoing improvement in an organization’s environmental management, and can be used as a tool towards this end, points out the UN University’s Yoshiro. But again, without public disclosure, whether a company does this or not is anyone’s guess.
Last year Ito Yokado, the parent company of Seven-Eleven Japan, put a pioneering on the EMS phenomenon, by releasing its first annual sustainability report.
“Eighty percent of environmental reports are just that, environmental reports. This is different from a sustainability report, in the sense that the former doesn’t necessarily have any societal responsibility,” says Toshihiko Ito, the chairman of Ito Yokado’s environment committee.
Though the company put out an environmental report since1995, stakeholders wanted more: “They requested that we disclose everything,” Ito reveals.
Such reports will most likely increase in the near future, he predicts, “because there have been so many scandals.”
Though there are plenty of loopholes for organizations who have not yet gone green but would like to look as though they have, nonetheless ISO 14001 certification surely does more good than harm.
“I think ISO 14001 is a good step in the right direction. It’s a top-down tool, so if an organization gets certified, even people who don't have a direct connection with the environment will become more environmentally aware,” says eco-expert Dr. Takatsuki.
The adage goes that if you’re not part of the solution, you’re part of the problem. ISO 14001 may be the reverse: By becoming less of a problem, organizations are joining the solution.