What are the new requirements for leadership?
The clause on leadership originated in ISO’s “Annex SL” core text for all management systems standards, with additional requirements specifically for environmental management systems. The clause includes nine bullet points, the first of which makes top management accountable for the effectiveness of the EMS. This is crucially important, as it recognises that in the real world, senior managers delegate their responsibilities. However, they must still ensure that those tasked with carrying out the delegated tasks undertake them effectively. The buck stops with senior management.
The remaining bullets either contain specific requirements for senior management to undertake themselves, or identify tasks that can be delegated. The former includes:
- communicating the importance of effective environmental management,
- supporting staff with environmental responsibilities and
- promoting continual improvement.
These are intended to involve senior management in exhibiting genuine leadership in relation to environmental performance, by demonstrating and communicating their own commitment to environmental management, as an integral part of business performance and culture. In addition, senior management are responsible for ensuring (potentially through delegation) that:
- the EMS is properly resourced
- it is integrated as necessary into other business processes and the EMS achieves its intended outcomes.
Who does it apply to?
The leadership clause focuses on “top management”, defined as “person or group of people who directs and controls an organization at the highest level”. A note explains that this is related to the scope of the EMS, i.e. to those responsible for the part of the organisation covered by the EMS (should it not apply to the entire organisation).
In the case of an SME, top management could be a single person, the owner, who makes all commercial and operational decisions. In a larger company, potentially with multiple divisions or sites, the situation may not be so straightforward and depends on the scope of the EMS. If the organisation has a single EMS applying to all parts of the company, then senior management (the board) would be subject to this clause. However, should the organisation have separate EMSs for individual parts of the business, then each should be considered individually. In the case of an autonomous business division, where all decisions related to the direction and control of the business are taken by senior management within that division, then leadership may be contained entirely within that entity. However, in a smaller business unit, although many commercial and operational decisions may be taken by senior management within that entity, some form of control may be exercised by corporate management. For example, the corporate finance director may have to approve capital expenditure applications for investment in energy-saving plant. In order to make that decision in the best interests of the company, the finance director needs to understand the context of the smaller entity and the implications of that investment for the overall goals of the entity and the company as a whole.
How to identify top management?
The identities of decision-makers in small organisations may be obvious, although it can be less straightforward to determine them in larger businesses. These roles may already have been established where an entity has management systems for quality or health & safety. If that is not the case, then the company management structure and governance processes should be reviewed to ensure that all roles capable of exerting direction and control of the entity within the scope of the EMS have been established.
Guiding top management on their responsibilities
Earlier versions of ISO 14001 allowed top management to delegate almost all their responsibilities to an environmental manager. In reality, that meant that they merely signed the environmental policy, approved the objectives and participated in an annual review. The new requirements are far more onerous, and top management need to understand them.
- A key goal of the new standard is that environmental performance is recognised as being an important element of overall business performance. Top management need to understand this, through appreciating the organisation’s context and its stakeholders’ expectations, for example in relation to meeting compliance obligations, delivering innovative products and services, and applying robust environmental management practices to boost business performance. They also need to appreciate that environmental management has to become part of day-to-day management and business culture.
- Top management have an important role to play in ensuring that these new approaches to environmental management become embedded. Some companies are deliberately (and effectively) applying the same techniques used to elevate health and safety culture, with top management actively involved in environmental inspections and discussions with staff. They also ensure that environmental issues feature prominently in briefings and other communications, and are seen to be given priority in decision-making. Top managers’ remunerations increasingly depend on meeting environmental targets.
- Enlightened top management will seize the opportunity for their businesses to innovate and differentiate themselves. They should encourage all functions within the organisation to contribute to this, for example by identifying customer needs, applying eco-design and circular economy principles and promoting the environmental and associated benefits of new products and services.
If you would like more information on the transition and support available, please get in touch by contacting Nigel at email@example.com. The next article in this series will address sustainability and life cycle control and influence.