Candid Views of Fortune 500 Companies

Executive Summary
Acronyms

1. Introduction
2. Methodology and Structure
3. QUESTION 1: Do Global U.S. and Asian firms have environmental management systems? What is their reaction to ISO 14001?
4. QUESTION 2: Do firms set supplier environmental conditions?
5. QUESTION 3: Do firms set standards for supplier environmental management systems? Is ISO 14001 a supplier condition for business with global firms?
6. Other Issues in Greening the Supply Chain
7. Summary and Implications of Findings

Notes
Annex: Survey Responses

EXECUTIVE SUMMARY

There is no greater buzzword today in relation to global environmental management or supplier environmental conditions than the new voluntary international standard for environmental management systems, ISO (International Organization for Standardization) 14001. The stakes are high, and ISO 14001 has galvanized interest in major issues of corporate environmental management. Is this standard a useful new tool for environmental management, or is it a condition that will be imposed on the marketplace?

Given projected investments in ISO 14001, particularly in Asia, this is a timely and crucial question. This survey set out to establish what global firms are doing in both corporate environmental management and supply-chain management and what role ISO 14001 is playing in each area.

The survey consisted of interviews by telephone, fax, and mail of environmental managers and executives at thirty major global companies, representing more than $650 billion1 in annual revenues. The findings are of strategic consequence for firms thinking about ISO 14001 as a tool to design or improve their environmental management systems (EMSs) and supplier environmental management.

Findings

Most global firms have EMSs in place that they consider to be more advanced than ISO 14001. They have formulated strategic positions on ISO 14001 in case it becomes a market condition, as did other ISO standards, particularly ISO 9001. But in practice, environmental managers have practical approaches to ISO 14001. They are taking out the "smart parts" where and if these can add value but are less interested in certification, which requires too many resources without adequate return for business, the public, or regulators.

Firms seeking to improve their customized EMSs are finding value in certain aspects of ISO 14001, ranging from audit criteria to documentation control. The value of this standard is that it may provide a systemic checklist for environmental managers seeking improvement areas and it allows them to introduce the idea of an EMS to other operating divisions.

Supply-chain environmental management is an emerging issue. Although various firms, industry sectors (automobiles, chemicals, and computers), and groups of firms have taken a lead on this, none of these initiatives integrate ISO 14001. In fact, in the minds of environmental managers, the issue of supply-chain environmental management is unrelated to ISO 14001. This presents a paradox, because ISO 14001 is viewed by suppliers as a looming "hammer," which is driving ISO 14001 to become the very instrument that they fear.

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ACRONYMS

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I. INTRODUCTION

There is no greater buzzword today in relation to global environmental management or supplier environmental conditions than the new voluntary international standard for environmental management systems, ISO (International Organization for Standardization) 14001. The stakes are high, and ISO 14001 has galvanized interest in major issues of corporate environmental management. Is this standard a useful new tool for environmental management, or is it a condition that will be imposed on the marketplace?

Given projected investments in ISO 14001, particularly in Asia, this is a timely and crucial question. This survey set out to establish what global firms are doing in both corporate environmental management and supply-chain management and what role ISO 14001 is playing in each area.

I. 1. Environmental and Product Management: Global Corporations on Voluntary Initiatives

Major global firms and international industry associations have historically been leaders in the areas of corporate environmental performance and voluntary initiatives for global environmental management. These organizations have made commitments to follow home-country standards abroad, follow or exceed international regulations, develop environmental management systems, and work with suppliers to improve environmental performance further down the supply chain.2

In the big picture of global environmental priorities, the private sector and large multinational businesses in particular have a unique and crucial role to play, and voluntary initiatives are especially important. However, promotion of voluntary environmental management initiatives by global corporations is a relatively recent phenomenon. A small number of leading firms, such as 3M, have had environmental policies from the mid-1970s. A larger group but still a small handful of firms has been working on this issue since the late 1980s. Within this group, environmental management systems (EMSs) have been developed as a tool to meet corporate, regulatory, and public environmental expectations.

In principle, supply-chain environmental management is a subset of environmental management. In practice, this is a far from well-developed theme. Part of the reason is that, in contrast to supplier practices in the areas of labor or human rights, which have been major media themes in the last few years, supplier environmental management has not reached public attention. Supplier environmental management has started to emerge as a theme in response to new environmental regulations, particularly in Europe and particularly in relation to product take-back requirements in automobile and electronics sectors. These sectors are now developing an active interest in more proactive supplier environmental management.

The two themes have recently been linked in the minds of many business people worldwide by the new voluntary international standard for environmental management systems ISO 14001. ISO 14001 is under consideration by most international companies and by many regulatory agencies as a mechanism for increasing voluntary corporate initiatives for environmental management. As a standard, ISO 14001 says nothing directly about supply-chain environmental management. However, most ISO standards have in the past become market conditions, and there is concern that ISO 14001 will be imposed by global customers on their global suppliers. This survey set out to establish what global firms are doing in both corporate environmental management and corporate supply-chain management and what role ISO 14001 is playing in each area.

I. 2. Practice in and Commitments to Global Environmental Management

Global environmental management refers to an integrated management structure for proactive planning for the proper handling of all corporate environmental concerns or impacts in the home and host countries.

Voluntary corporate initiatives for global environmental management are consistent with good business practice. Leading global firms are committed to voluntary environmental management and to sustainable industrial development. Leading Japanese firms--including the electronics manufacturer Hitachi and the chemical company Showa Denko--see a strong philosophical link between corporate health and human, social, and environmental health, stressing the integration of the firm and society.

• Hitachi, Environmental Protection Action Guidelines, Global Environmental Charter:

Deeply aware that a business enterprise is in itself a member of society, Hitachi is . . . resolved to strive as a good citizen of the community toward the realization of a truly prosperous society and, to this end, to conduct its corporate activities in a fair and open manner, promote harmony with the natural environment, and engage vigorously in activities that contribute to social progress.5

• Showa Denko, Guidelines on Actions for Protection of the Global Environment:

Participate eagerly in various activities for the protection of the global environment and contribute to the good of society by helping restructuring of the economic and social system into a more harmonious one with the environment.6

U.S. firms operating internationally have similar concerns. Leading firms from all regions are clear in their commitments to compliance with national and international law and to the application of home-country standards in host countries with lower environmental compliance obligations (see box 1). Leading firms generally display strong and confident approaches to innovation, creativity, and improvements in global environmental management.

Occidental Petroleum Corporation, for example, is governed in its Ecuadorian operations by a liberal "neighbor" policy that includes working with local government in providing basic services and "help[ing] native villages pursue sustainable, self-reliant economic development." Occidental argues that this has reduced infant mortality and malnutrition among children.3

Environmental policies and report writing are now common among larger global firms.4 Many firms, particularly in Europe and the United States, report on their environmental performance.

It has become popular for large U.S. firms to issue reports on their performance under some of the voluntary initiatives of the U.S. Environmental Protection Agency (EPA), such as the Superfund Amendment and Reauthorization Act (SARA) and the EPA's Voluntary Reduction Program, called "33/50." IBM, for example, reports internationally on chemicals in the reporting categories of SARA.

I. 3. Practice in and Commitments to Supply-Chain Environmental Management

Supply-chain environmental management can loosely be defined as efforts by global companies to impose environmental conditions on the products and processes of their suppliers. The objective of such initiatives is to mitigate risk in the face of increasing environmental regulations and liability issues.

Within the general area of corporate environmental self-regulation, placing environmental conditions on the supply chain represents perhaps the greatest opportunity for raising industrial environmental performance on a global basis. Imagine the opportunity: at one stroke, a single global firm's policy commitment to use only those suppliers who provide environmental assurances can raise the environmental performance of thousands of supplier companies. Moreover, this can be done without any intervention or cost to the state or to the consumer--an excellent example of the possibilities of corporate environmental self-regulation, nationally or internationally.

In some sectors, customers are often willing to work with their key suppliers to achieve the requisite environmental levels. This is increasingly sound business practice, particularly because of the widespread use of "just-in-time" manufacturing, which requires the purchasing organization to work in conjunction with its suppliers essentially as a multidisciplinary acquisition team. In other words, the purchaser's environmental performance stipulations are not necessarily intended as threats. Rather, they are often accompanied by a desire to secure and strengthen customer-supplier relationships and by technology transfer, particularly with key suppliers.

In practice, large customers are increasingly willing to abandon some competitive concerns and come together on a sectoral basis to establish common voluntary standards for suppliers. A good example is the Apparel Industry initiative of the U.S. Agency for International Development (USAID) and the U.S.-Asia Environmental Partnership (US-AEP).7 Other examples can be found in the computer, chemical, and chemical distributor sectors. These will be referenced later in this report.

I. 4. ISO 14001

ISO 14001 is the new voluntary international environmental systems standard for industry, adopted by vote of participating national standard-setting bodies in June 1996 and published in January 1997. In itself, ISO 14001 is a systems standard. It represents neither the leading edge nor best practice in environmental management.

Important debates about global, voluntary environmental management and about supply-chain environmental management have converged because of the current debate spurred by ISO 14001. The new standard has had two important consequences for the subjects of this report:

• On the one hand, it has raised questions for all firms: What are the limits and possibilities of a process-oriented environmental management system as an instrument of environmental performance improvement? How are global firms using this instrument as a tool in their efforts toward voluntary corporate environmental management?
• On the other hand, it has raised concerns: Will ISO 14001 become a market condition? Will it be imposed on suppliers by the major global firms? These concerns are based on the experience of the previous ISO international quality systems standard ISO 9001, which led to the view that ISO standards are often voluntary in name only and tend to become tickets of admission to international markets. Many firms, small and large, are concerned that ISO 14001 will at some point become a market trade barrier and are reacting to this perception.

The answers to these questions are important for all firms competing globally. If ISO 14001 is simply an additional instrument in the growing set of tools for voluntary global environmental management, it is important to know which firms are using the standard, how they use it, and what results are obtained. If ISO 14001 becomes a market condition, its voluntary, experimental characteristics could be replaced by an inexorable race for certification. National standard-setting bodies, particularly those in developing countries where global market access is crucial to the national economy, will be under heavy pressure to minimize the barriers to certification. This may erode the value of certification, and it could jeopardize the potential utility of the standard as a tool for better global environmental management. Firms would offer their ISO 14001 certificates as evidence that they had met satisfactory environmental standards, thereby stalling other initiatives.

The reality is complex, and the current picture and future trends are not easy to read. This survey is intended to provide some insight into the major issues in a debate characterized by more controversy than vision. One problem of research to date is that the findings are difficult to interpret. What should environmental management practitioners do with information that says, on the one hand, that U.S. firms are "sitting on the fence" and not certifying and, on the other, that they are performing gap analyses and becoming "ISO 14001 ready" (see box 2)?

These issues raise strategic investment decisions for the thousands of firms in Asia (and elsewhere) that are suppliers to global Asian and U.S. firms. If supplier certification becomes a general market condition, there will be a multibillion dollar market for ISO 14001 services in Asia. This market will have a number of stakeholders, including supplier firms, government environmental regulatory agencies seeking to promote self-regulation as a means of securing environmental protection, national standard-setting bodies needing to provide some form of certification services, and industry associations representing member firms.8 ISO 14001 consultants, therefore, have significant incentives to encourage the belief that certification will become a condition of market access.

What is the impact on suppliers if supplier certification becomes a market condition in some industry sectors, such as electronics or automobiles? Will customers accept ISO 14001 from any certification agent? Could suppliers self-certify? Are local certification and accreditation authorities acceptable, or will they need to use those of the customer country or a developed country? What relationship will the customer firm see between this process standard and demonstrable compliance and environmental performance standards? Is ISO 14001 adequate on its own, or will the customer require additional compliance and performance assurances? What will these be? What will the audit and inspection practices be? These are some of the questions addressed in this survey.

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II. METHODOLOGY AND STRUCTURE OF THE REPORT

The survey team contacted and interviewed some of the largest manufacturing companies in the world. In Asia, the team contacted global firms and also used a list furnished by US-AEP.

Thirty firms responded to the survey: twenty-four from the United States, three from Japan, and one each from South Korea, the Philippines, and Thailand. Senior environmental managers or directors in the following companies were interviewed for the final survey:

The survey team contacted environmental managers and directors who are in charge of environmental management issues. However, these are not the only sources of potential information. A large organization could have more than one individual, such as the quality manager or purchasing manager, interested in ISO 14001 and supplier issues. In some cases, it was clear that, whereas the issue of environmental management rests with the environmental managers, the impetus for ISO 14001 could come from another department. For example, Apple Computer's ISO 14001 initiative is sponsored by the Quality Department.

Survey responses are attached in the annex. Interviews were conducted on the phone and in some cases by fax. Telephone interviews were transcribed and sent back to the interviewee for comment and/or changes. In some cases the interviewee sent additional materials, most often their firm's environmental policy or report. In other cases the interviewee wrote a supplementary note in response to the questionnaire. The survey questions are reproduced below in box 3.

This survey does not represent a statistical sample. It would be meaningless and misleading to say that 20 percent of the firms had one opinion and 80 percent had another. All of these firms are significant global actors, and each of their responses has strategic value and interest. This report cannot identify trends from global firms or from a particular sector.

The survey did identify several industry initiatives toward supply-chain environmental management, which are referenced in this report.

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III. QUESTION 1: Do Global U.S. and Asian Firms Have Environmental Management Systems? What Is Their Reaction to ISO 14001?

Answers:

• EMSs and ISO 14001 are not synonymous.
• Responses to ISO 14001 vary, but all firms had formulated a strategic position.
• None of the interviewed firms reported that their customers now require ISO 14001 certification.

III. 1. EMSs and ISO 14001 Are Not Synonymous

Environmental management systems are not new, and global firms frequently have in place EMSs that they consider to be more advanced than ISO 14001. In countries with developed environmental infrastructures, just staying in compliance requires some form of environmental management system. In addition, many companies submit nonpublic reports to their industry associations under programs such as Responsible Care�, which was developed by the Chemical Manufacturer's Association (CMA). The combination of a robust regulatory infrastructure and strong industry voluntary environmental guidelines such as those of CMA results in higher environmental standards than those required for ISO 14001 certification.14 For example, more than half of the largest nonfinancial companies in the world produce public environmental reports.15 It is unlikely that these firms would produce such reports if they did not have some form of EMS.

A recurring theme in the survey was that firms do not consider ISO 14001 and EMSs to be synonymous. Union Camp notes:

There is a tendency, an inappropriate one in my belief, to consider environmental management systems and a certifiable ISO 14001 program as being synonymous. I cannot imagine that any manufacturer in the United States could sustain compliance with the myriad of regulations that govern our environmental conduct without some form of EMS. Union Camp's environmental management "culture" has evolved over two decades and led to a collection of practices, which we would characterize as our environmental management system. In many respects, that system parallels some features of the ISO 14001 standard.

III. 2. Responses to ISO 14001 Vary Widely, But All Firms Surveyed Had Formulated a Strategic Position

All firms surveyed had formulated a strategic position to ISO 14001, but these varied widely. Some are committed to ISO 14001 adoption and certification as a global corporate standard for environmental management systems. Others have rejected ISO 14001 in favor of their existing EMS. Firms that had no or little interest in ISO 14001 as an EMS standard nevertheless retain a pragmatic attitude: they are aware that there may be market reasons for adopting it and have made preparations to do so if the conditions arise. Some firms perceive that market conditions already exist, often in a specific region or sector. Lockheed, for example, believes that the electronics sector will require ISO 14001 and is therefore certifying its electronics division.

Between these extremes were firms that incorporate ISO 14001 in some fashion but are less interested in certification. Some firms prefer voluntary self-declaration, in which a company proclaims its EMS to be consistent with, or beyond, the requirements of ISO 14001, without the formal certification process (Bristol Myers Squibb). Others have taken the approach of integrating the "smart elements" of ISO 14001 into their EMSs (Apple, Canon, and GM).

This middle position needs to be carefully understood. Firms such as Apple, Canon, and GM are interested in developing high standards of global corporate environmental management. GM is a CERES (Coalition of Environmentally Responsible Economies and Societies) endorser, and Apple used CERES,16 Agenda 21, PERI (Public Environmental Reporting Initiative)17 and ISO 14001 as sources for its new environmental policy. These companies concur with the distinction expressed above by Union Camp: ISO 14001 may be a useful additional tool for corporate environmental management, but it is not synonymous with an EMS.

This distinction is crucially important because of its implications for the market. Statements in the trade press that firms such as GM or Lockheed intend to apply ISO 14001 to their global operations tend not to make this distinction. Such statements can cause or exacerbate supplier's fears that market conditions may be imposed by some of their major customers. This issue is addressed in detail below.

The range of positions expressed by global firms in response to this survey are summarized below and are organized as follows:

1. ISO 14001 as the EMS solution
2. ISO as a preferred instrument for global environmental management
3. ISO as a tool toward a customized EMS
4. ISO as a potential market issue

1. ISO 14001 as the EMS solution: ISO is an appropriate environmental management system for global application in our company.

• Rockwell decided to pursue companywide ISO 14001 certification because it considers the standard to be a management tool to ensure that its facilities achieve a proactive environmental program. Rockwell's position is not based on customer demand. Rather, it is a corporate decision to be at the forefront of major environmental initiatives. The firm was ISO 9000 certified and views ISO 14001 as "the next wave." Rockwell also believes that ISO 14001-certified firms will have a competitive advantage.

2. ISO as a preferred instrument for global environmental management: ISO 14001 is our self-declared global corporate standard, but we are not obliging sites to certify.

• Bristol Myers Squibb learned in June 1997 that it was the first large global company to self-declare that its entire environmental, health, and safety (EHS) management system worldwide was consistent with ISO 14001. The decision to become certified has been left to the discretion of each individual facility, because the company believes that, in certain parts of the world, certification would be a competitive advantage.
  
  
• Georgia-Pacific believes that its EMS is more advanced than ISO 14001 because it includes a performance and compliance auditing component. The company recognizes, however, that ISO 14001 is site specific, whereas Georgia-Pacific's EMS is corporatewide. Even if the principles and practices of the EMS apply to all locations, verification takes time.

Our approach to EMS is, simply, to fill in any gap of our EMS with ISO 14001. We will not delete "willy-nilly" any additional requirement present in ours, since they [were included for] a good reason originally. ISO 14001 accepts additional, nonconflicting requirements. We will verify it is uniformly implemented in all locations. In the case of any customer's insistence on such standard certification, we will arrive at a decision as to whether or not to certify.

• Kodak's customized EMS includes a performance criterion that is identical to one of the standards of ISO 14001. Kodak extends the impact of this standard because its EMS applies to EHS issues. Kodak's approach to ISO 14001 certification, approved by senior management in August 1995, is for all of the firm's major facilities to be ready for ISO 14001 certification by year-end 1998, within two years of the publication of the standards. However, the decision to certify is left to the discretion of each facility; it is not a corporate requirement.

3. ISO as a tool toward a customized EMS: "We will incorporate the 'smart elements' of ISO 14001 into our management approaches."

The purpose of ISO 14001 is to create a standardized methodology for environmental management systems, not standardized results. ISO 14001 includes provisions regarding a "commitment to compliance with applicable regulations" (which vary from country to country) and the firm's voluntary policy obligations (which vary from sector to sector and from firm to firm). Other practical options are provisions for firms to self-certify or obtain third-party certification. Consequently, the implications of implementing or certifying to ISO 14001 can in practice be quite different for each firm.

Some firms are customizing ISO 14001 to fit their specific operational needs and corporate culture:

• Apple Computers has a new EHS Policy (available on the Internet at www.apple.com) and has released a summary of the company's EMS. The summary states that Apple is "continuing to pursue continual improvement in our overall Environmental Management System through plans to establish ISO 14001 as the companywide EMS standard." However, the description provided by Apple's director of environment, health, and safety is more complex:

Apple's EHS Policy was just rewritten. The previous policy did not conform to ISO 14001 in terms of the issues of continual improvement and . . . pollution prevention. Last year [1996], we improved the policy to conform with ISO 14001, the ICC Guidelines [the International Chamber of Commerce Business Charter on Sustainable Development],18 EMAS, and Agenda 21. We also did a gap analysis on ISO 14001. In 1996, we started filling in the gaps, and now we are reviewing our standard operating procedures, guidelines, communications plan, and document control to close the gaps. We are, therefore, becoming ISO 14001 ready, and if Apple management feels it is necessary to move to ISO 14001 for the balance of the company, then we will be able to do so fairly quickly. We are aiming for 80 percent compliance, with 20 percent remaining. The sponsor for the ISO 14001 team is the vice president of quality, and now they are revisiting their 9002 program trying to combine 9002 and 14001 so that a single standard drives through Apple.

Apple is using the elements of ISO 14001 that it believes add something to its own EMS, and then creating a unique corporate EHS standard that conforms with most of the requirements of ISO 14001 but goes beyond them in substance. Apple's policy commitments, for example, to the application of its own EHS standards "where laws and regulations do not reflect best management practices" is a leading statement in this sector, as is the company's commitment to "strive to create products that are safe in their intended use, conserve energy and materials, promote safety, and prevent pollution throughout the product life cycle including design, manufacture, use, and end-of-life management." The application of ISO 14001 as an instrument to achieve this policy will result in an EMS that is quite different from that of a company with minimum ISO 14001 policy commitments. It is also interesting to note that leadership for Apple's ISO 14001 team comes not from its EHS managers but from the Quality Department.

• Weyerhaeuser has developed a program that does not simply meet the requirements of ISO 14001. The firm reviewed the EMAS scheme, BS7750, EPA audit policy, and the Department of Justice guidelines, identified the common elements of what all parties agree is an acceptable and preferable EMS, and is modelling the company's system around these elements.
• General Motors has a similar customized approach to ISO 14001. As a CERES endorser, the application of ISO 14001 at GM will have a quite different result for its environmental management system than for a company without a CERES commitment.

GM believes that ISO 14001 is a sound, practical model for a structured EMS -- a model that an organization can implement beneficially as is or a foundation to which additional elements can be added. In GM's case, an example of such an additional element is our Environmental, Health, and Safety Report, published annually, consistent with our corporate commitment to public accountability and our mutual endorsement with CERES of each others' environmental principles.

Canon is also an industry leader in the area of environmental policy. Its original EMS includes all the requirements of ISO 14001, plus regulations and additional internal performance criteria. The company plans for all of its group sites to be officially certified (twenty-five as of July 1997 and the rest expected in the near future). Canon's environmental policy is notable for its commitment to evaluating the firm's environmental impact against social and ethical rules, to "ongoing reductions in environmental impact," and to "actively disclos[ing] environmental information."

4. ISO as a potential trade issue. ISO less stringent than some standards for environmental management, but we are ready if it becomes a market condition.

Some global firms think that ISO 14001 does not advance the issue of environmental management. John Deere, for example, is not considering certification because "there is no perceived value in becoming ISO 14001 certified." Monsanto notes:

Several major corporations that have looked more closely than Monsanto at ISO 14001 have questioned the added value of becoming certified. One major company has stated that it cost them $250,000 per plant site to become ISO 14001 certified, and the company does not see added value to their business after the certification was completed. . . There is honest scepticism as to who is driving ISO 14001, and there is a concern that it is those who are running the system, the consultants, and those who will be conducting the audits.

Firms with this view, however, will consider certification if it becomes a market necessity. Most have invested in work to identify the gaps between their current EMS and ISO 14001.

• Compaq has a formal, customized EMS that does not include ISO 14001. The company's system was in place long before ISO 14001 was developed, and its comprehensive management system is more complicated and performance oriented than ISO.

For us, if you look at the ISO process, it is actually a step backward rather than a step forward. Our system is much more detailed than ISO. ISO is very general, and there are no specific goals and measurements toward performance.

Compaq may consider ISO 14001 certification if it becomes a customer requirement, but the company does not feel it will improve performance.

• Occidental Petroleum believes that its existing EMS, structured in line with Responsible Care�, "is deeper and broader in scope than ISO 14001."

III. 3. None of the Interviewed Firms Reported That Their Customers Now Require ISO 14001 Certification

Quite obviously, all firms would consider ISO 14001 certification if their customers require it. However, many respondents to this survey reported that, to date, this has not been an issue with their customers. The response from Union Camp is indicative:

For now, customers are not asking for it, environmental groups are suspicious of it, regulators cannot decide how to incorporate it into our traditional command and control system, there is little or no competitive advantage, and the benefits do not justify the costs. In the interim, we will incorporate the "smart elements" into our management approaches and track the changing interests of customers, agencies, and other stakeholders.

However, this is not the only view. Some companies regard ISO 14001 as an emerging competitive issue on a regional or sector basis. The trends are complex, and the survey did not ask for additional detail. It is clear, however, that different interpretations of the same events are leading to different strategic decisions.

• DuPont, with a corporate EMS based on Responsible Care� rather than ISO 14001, sees ISO 14001 as a competitive issue in Asia and is certifying its facilities in that region. Certification is also under way at other DuPont facilities, but it is not a corporate requirement outside of Asia.
• Texas Instruments also believes that ISO 14001 certification is gradually becoming an issue in Europe and Asia, although not in the United States or Japan. However, it does not intend to certify its facilities.
• Lockheed believes that ISO 14001 is a competitive issue for electronics firms. Its electronics sector will be certified by mid-1998, although "Lockheed as a corporation does not intend to become ISO 14001 certified."

Lockheed's sense that ISO 14001 will be a supplier requirement "by 1998" is widely discussed among environmental managers. However, survey respondents in the electronics industry-including Microsoft, Motorola, Apple, and Digital-indicated that their customers have not asked for ISO 14001 certification.

• Motorola perceives no customer demand for ISO 14001 and therefore has little interest in certification. The only customer that has requested EMS information of any kind has been a European automobile company. Japan, however, presents an interesting case. Whereas Motorola has received no requests for certification from its customers in that country, Japanese firms see it as a condition of doing business with Europe. The survey respondent speculated that this momentum within the industry and not direct customer demand may lead Motorola's Japanese semiconductor facility to seek certification. (This observation is in direct contrast to the position held by Texas Instruments that ISO 14001 is not an issue in Japan).

These complexities in the marketplace and the difficulty of making strategic decisions in such a context are well known by environmental managers. Despite the talk about ISO 14001 as a supplier condition in the electronics sector, global electronics and computer firms based in the United States that are interested in supplier environmental management have produced a new standard to govern this issue. Consequently, they do not see a relationship between ISO 14001 and supplier environmental management.

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IV. QUESTION 2: Do Firms Set Supplier Environmental Conditions?

Answers:

• Price and quality drive purchasing decisions except when environmental risk or compliance must be considered.
• Some purchase contracts ask environmental questions but may not then impose environmental standards in a purchasing decision.
• The most common environmental "requirements" relate to packaging, recycled paper, and ozone-depleting chemicals.
• When purchasing agreements have environmental requirements in auditing quality and responsibility vary.

IV. 1. Price and Quality Drive Purchasing Decisions Except When Environmental Risk or Compliance Must Be Considered

Price and product quality drive purchasing requirements. However, purchasers may impose additional conditions when the product will bring environmental/EHS issues into the plant, a supplier's environmental practices might delay delivery or undermine quality, or a supplier's questionable environmental reputation might affect the customer.

• Kodak requires that packing inks may not contain any intentionally added cadmium or lead. The company purchases significant quantities of packaging materials and is therefore concerned about compliance with regulations in some U.S. states and some countries prohibiting these elements in products or packaging.
• Lockheed does not place environmental requirements on its suppliers except in the production of critical components. In general, the company's policy is that suppliers should monitor their own compliance. They are more involved, however, in cases in which only one vendor exists for a critical component, because a lack of compliance on the part of this vendor would cause Lockheed to fail in its contractual obligations.

Greening the supply chain is a maturing issue. Lockheed is a contractor, not an owner, and if our client, particularly government customers, require us to put environmental conditions on these purchases, [Lockheed] would. For example, the Department of Defense at some point may require us to green the supply chain, and at that point we will do it as long as they will pay for it. Lockheed is being greened, it is not . . . greening the supply chain.

IV. 2. Some Purchase Contracts Ask Environmental Questions But May Not Then Impose Environmental Standards in a Purchasing Decision

Purchase contracts could include environmental questions, but specific environmental standards may not or may not yet be used to judge the answers. Of course, these questions may set the stage for firms to impose environmental conditions at a later date.

• Kodak is developing a series of environmental questions that it will ask key suppliers (see box 5). However, it has not set standards for suppliers or imposed its internal environmental requirements on them. For example, although it may ask a supplier if it has conducted an environmental audit, it does not require that an audit be performed.

• Union Camp asks potential suppliers to submit business proposals, with the implicit understanding that environmental stewardship will be among the evaluation factors. Each potential supplier is invited to make a presentation that includes information on its environmental performance. Union Camp does not set specific environmental standards, nor is there a checklist against which performance is gauged.

IV. 3. The Most Common Environmental "Requirements" Relate to Packaging, Recycled Paper, and Ozone-Depleting Chemicals

Some areas of environmental criteria are more advanced. These areas typically have a regulatory driver, such as ozone depletion, or involve recycling or waste-management techniques.

• BankAmerica does not think its activities have significant environmental impacts, but it does consider its use of paper to be an area in which it can address environmental issues. The company is therefore considering ways to better manage its suppliers and increase the recycled content of paper used by the bank.
  
  
• ARCO requires that the quality of the products it purchases is consistent with what is stated in the supplier's Material Safety Data Sheets (MSDS). In addition, EHS requirements may be imposed on packaging and delivery procedures to ensure that they are environmentally sound.
  
  
• Georgia-Pacific does not currently have specific environmental requirements for the products that it purchases. However, its purchasing agreements include environmentally based provisions such as those prohibiting ozone-depleting substances and setting concentration limits for certain heavy metals in packaging materials and their components (inks, glues, and so forth). Georgia-Pacific specifies recycled content for some purchases.

IV. 4. When Purchasing Agreements Have Environmental Requirements in Auditing Quality and Responsibility Vary

If the customer demands environmental quality, who pays for it? As mentioned in the example from Lockheed, the client "at some point may require us to green the supply chain, and at that point we will do it as long as they will pay for it." Customers seem to agree.

• Compaq relies on supplier self-appraisals during the selection process. During this process, Compaq's environmental standards are explained, and the potential suppliers completes a questionnaire in which they evaluate their own performance against these standards. Compaq then audits all suppliers at its own expense with priority attention given to those that scored poorly on the evaluation.
  
  
• Apple is thinking of developing a vendor/supplier scoring system. Apple argues that physical audits are difficult in the computer industry because of the number of suppliers, each of which has its own supply chain. Apple's umbrella agreement with its suppliers does not extend to lower tiers or suppliers of suppliers.
  
  
• Premier Group conducts lab tests, on-site plant visits, and third-party lab tests to confirm product standards, but the process that is utilized varies with the importance of the products. The supplier pays for the audit when a contract is involved. In a joint venture involving the manufacture or use of a material, Premier assumes responsibility for the audit.

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V. QUESTION 3: Do Firms Set Standards for Supplier Environmental Management Systems? Is ISO 14001 A Supplier Condition for Business with Global Firms?

Answers:

• ISO 14001 is not currently a supplier environmental condition among the majority of firms surveyed.
• A minority of global firms are exploring ISO 14001 as a supplier condition, but the issues are compliance and performance assurances, not certification.
• Supplier environmental performance standards are an emerging issue.

V. 1. ISO 14001 Is Not Currently a Supplier Environmental Condition among the Majority of Firms Surveyed

The question of how leading firms will interact on environmental issues with their suppliers is important, and firms are beginning to address it. Two firms surveyed--BankAmerica and Nissan--expressed an interest in using ISO 14001 as the instrument to address environmental management. The BankAmerica decision is unique in the financial industry. Nissan's responses are in line with "wisdom on the street" about automobile and electronics companies.

• Nissan, which intends to certify globally, "does/will require ISO 14001 certification of suppliers."
  
  
• BankAmerica, a CERES endorser, believes that its operations do not have a negative environmental impact except in the area of paper. Like many firms (Xerox, Kodak, and Sun Microsystems), BankAmerica intends to buy a greater percentage of recycled paper in an attempt to reduce its negative environmental impact and develop markets for recycled paper. However, BankAmerica issues mixed signals on ISO 14001 to paper suppliers. Despite the fact that BankAmerica is not interested in pursuing certification itself, it does ask suppliers if they are certified:

What BankAmerica is trying to do is to send a signal . . . that at some point we may have a policy that says we will give preference to a supplier that is ISO 14001 certified.

For the most part, as with the previous question on EMSs, firms surveyed for this report make a distinction between ISO 14001 and supply-chain management.

Given the strength of the concern that ISO 14001 will become a market condition, the findings of this survey offer an important reassurance: ISO 14001 is not generally being considered by global firms as a basis for supplier environmental management.

The position taken on ISO 14001 and suppliers by the $35 billion consumer products company Proctor and Gamble is consistent with the survey findings. A recent interview with the associate director of the company's Global Environmental Department revealed that "P&G would like to see the same trend [as ISO 9000] with the ISO 14001 series and is working to head off any threat that might make consumer product companies feel they are under market pressure to certify to 14001 in a competitive flurry."19

V. 2. A Minority of Global Firms Are Exploring ISO 14001 As a Supplier Condition, But the Issues Are Compliance and Performance Assurances, Not Certification

In most cases, companies did not express intentions to make ISO 14001 a supplier condition. However, most are struggling to find a means to obtain environmental assurances from their suppliers, and some are considering ISO 14001 as a tool.

• General Motors encourages but does not require its suppliers to evaluate the benefits of implementing structured environmental management, with ISO 14001 as one model.
  
  
• Kimberly Clark may require ISO 14001 certification of its suppliers in the future. The company does not currently make it a requirement.
  
  
• Kodak does not require its suppliers to become ISO 14001 certified. This is not likely to change in the near future, because the company's basic supplier relationship is internal. Kodak's selection criteria for external suppliers include environmental considerations, such as whether the suppliers of their pulp obtain trees from sustainable forests. Kodak communicates its environmental expectations to its suppliers and, in a sense, imposes these criteria on suppliers by selecting them.

Companies that are considering using ISO 14001 as a tool in their supplier environmental management systems are not seeking assurances of certification; they are seeking assurances of compliance and performance.

• Canon is an example of a company committed to worldwide ISO 14001 certification and supplier environmental management. Suppliers are closely managed for the reasons previously addressed: compliance and standardization. Canon believes that a purchasing company must indirectly take responsibility for managing its suppliers. It therefore established a worldwide policy for the purchase of environmentally responsible materials, parts, and products. Canon is also establishing a comprehensive environmental procurement evaluation system. This system includes environmental product and process standards and a customized EMS for suppliers, which is a simplified ISO 14001. Canon contracts exclusively with suppliers that comply with its standards. Compliance is confirmed by written assurances, combined with biannual audits of suppliers that Canon considers to have significant environmental impacts.
  
  
• General Motors implements a number of supplier initiatives that focus primarily on performance improvement. Examples include (a) promoting the use of returnable as opposed to disposable, shipping containers, (b) demonstrating to suppliers how to identify and reduce material and energy waste in manufacturing operations, (c) communicating GM's guidelines for designing for recyclability, (d) broadly disseminating its list of restricted or reportable chemicals, and (e) communicating success stories to the supplier community as examples of what can be done.

GM recently participated in a multi-industry benchmarking study to learn about additional methods and practices to promote improved supplier environmental performance. After evaluating the results of this study, GM will develop and discuss proposals regarding those approaches that show the most potential to add value to the existing initiatives.

V. 3. Supplier Environmental Performance Standards Are an Emerging Issue

Several companies interviewed described this theme as an emerging issue. As mentioned, Kodak has created a questionnaire for key suppliers, General Motors has just commissioned a research project to establish best practices, and several industry groups are working to produce standardized guidelines for suppliers. The groups and companies most advanced in this area are producing standardized questionnaires for their company (Kodak) or sector (Chemical Distributors), and some are hoping that these standards will become generally used (Computer Industry Quality Conference).

• Lockheed Electronics will only consider imposing environmental conditions on its suppliers if this is required by its customers (its largest customer is the U.S. government). The respondent believed that Lockheed is not greening the supply chain; rather, "Lockheed is being greened" by U.S. government procurement policies. At this point, Lockheed is not required to extend this greening to the supply chain, but it may be required to do so in the future.
  
  
• Kodak places no specific environmental requirements, such as ISO 14001 certification, on suppliers. In the last year, Kodak revised its procurement process to include a survey that contains key questions on EHS issues (see box 5). The responses to these questions are used internally to assess whether any reason exists why the company should not be a supplier to Kodak. The survey is currently being used with the most critical suppliers. It may be extended to a broader range of suppliers in the future.
  
  
• Motorola stated that, in the wake of a request from a British automobile manufacturer for EMS information, some Motorola divisions began to survey their suppliers voluntarily. No information was provided on the substance of these survey instruments.
  
  
• DuPont has taken a leadership position in supply-chain environmental management. The DuPont commitment includes a section stating that DuPont will "work with our suppliers, carriers, distributors, and customers to achieve similar product stewardship, and we will provide information and assistance to support their efforts to do so."

DuPont also subscribes to the Responsible Care� Product Stewardship Code of Management Practice, which requires that adherence to sound EHS principles be factored into procurement decisions.

In Asia, where DuPont purchases nitric acid, the company has reviewed the supplier's ship loading and movement of the material to DuPont's facility. It conducts on-site environmental audits of companies who do contract manufacturing. As a further indicator of environmental performance, DuPont monitors community reaction around many of its larger suppliers.

Most firms interested in the subject of greening the supply chain are not considering ISO 14001 as their instrument of choice. They are interested in tools that will assure them of (in order of priority): (a) supplier regulatory compliance, (b) recycling and waste management (particularly in packaging and particularly where this can reduce costs), and (c) risk reduction. In all of these areas, customers and suppliers are keen to avoid the proliferation of standards and to develop a common tool.

In the automobile and electronics sectors, product "takeback" laws in some European countries are driving materials considerations back down the supply chain. In the chemical industry, the Responsible Care� Product Stewardship Code of Management Practice, developed by the Chemical Manufacturers' Association, states under "Risk Management" that "each company shall have an ongoing product stewardship process that:

Requires suppliers to provide appropriate health, safety and environmental information and guidance on their products. Factors adherence to sound health, safety, and environmental principles, such as those contained in Responsible Care� into procurement decisions.

Taking up this initiative, the National Association of Chemical Distributors (NACD) produced a Responsible Distribution ProcessSM (RDP) with guiding principles and a code of management practice. Third-party verification of this process is designed, among other benefits, to reduce supplier (chemical company) audits.

Survey respondents in the chemical industry, such as Occidental Petroleum, believe that the Responsible Care� Product Stewardship Code mirrors good business practice. Occidental's director of environmental affairs stated that "competitive pressures and market forces in the chemical industry have driven out those firms which failed to recognize the true costs of environmental mismanagement. Only those firms that pursue a path of continuous improvement are sustainable in the long run."

In the automobile, electronics, and chemical industries, new experiments are under way in supplier "shared savings," in which both customer and supplier have financial incentives to minimize resource consumption and waste. These have shown significant financial and environmental dividends.20 The "shared savings" concept is being actively pursued in the U.S. chemical sector. Although the idea was not discussed by respondents to the survey, the concept should be understood and developments tracked by environmental managers and purchasing managers.

General Motors, Kodak, and Monsanto noted new initiatives or revived interest in supply-chain environmental management. Firms leading in environmental management, particularly in electronics, have been grappling on their own with these issues for some time. As electronics is perceived to be the sector most likely to impose environmental conditions on suppliers, the attitudes of some of its leading firms should be explored.21

• Xerox Corporation is producing a "Xerox Multinational Supplier Environment, Health, and Safety Requirement" as part of its supply chain policy:

The objective of this Supply Chain policy is "to maintain regulatory compliance, develop waste-free products and facilities, fulfil customer environmental preferences, and satisfy environmental ecolabel criteria. . . . Xerox Global Purchasing and EHS are developing an expanded set of requirements for suppliers; "Xerox Multinational Supplier Environment, Health, and Safety Requirements," outlining EHS objectives and supplier requirements. . . . Xerox is enhancing its current supplier assessment process with the development of a precise, consistent method for assessing suppliers against expanded criteria related to cost, quality, delivery, safety and environmental impacts. This process is to be applied to all Xerox multinational suppliers, whether they provide materials, services, or equipment."

• Advanced Micro Devices, a $2 billion company based in California, is evaluating how to expand its environmental evaluation of suppliers. The company's World Class Suppliers Council has incorporated goals in waste minimization and recycling for several years and is evaluating EHS criteria for inclusion in the supplier service quality assessment process.
  
  
• Raytheon evaluates its suppliers' EHS programs as a condition of certification as a Raytheon supplier.
  
  
• IBM expects environmental responsibility in its suppliers and hazardous-waste vendors. High risk suppliers and all hazardous waste vendors are evaluated and approved. Afterward, they are periodically re-evaluated to ensure that their environmental operations remain satisfactory. IBM noted in its 1995 Progress Report that it is "stepping up the effort to purchase recycled goods and goods with recycled content." Part of this includes a program to produce printed materials on recycled paper, which is due to become a worldwide program. IBM is a member of the group that produced Computer Industry Quality Conference (CIQC) Standard 0014 on supplier environmental performance, which is described below.

On a sector basis, there is coordinated activity coming from fifteen to twenty global computer firms within the CIQC, working in collaboration with the Pacific Industry Business Association (PIBA). The resulting CIQC Standard 0014 -- a Supplier Environmental Performance Review Questionnaire -- is instructive. Of the firms surveyed in this report, Apple Computers, Compaq, and Hewlett Packard are involved in creating and promoting this standard. Its objectives are as follows:

As supply chain management becomes more complex in today's procurement processes, supplier environmental management has become important to assure environmental compliance, to build awareness for continuous cost and environmental improvement opportunities, to minimize business risks and liabilities, and to support long-term growth. Furthermore, proliferation of customer queries on environmental performance has become a burden to suppliers. Common tools enhance supplier relationships.22

For firms interested in minimizing liability and risk, supplier environmental performance is key. For this reason, the CIQC STD 0014 is intended:

To provide a common tool to gather supplier environmental practice information, and to optimize the transfer of environmental performance information between purchasers and suppliers.

It is important to note that CIQC STD 0014 was negotiated in parallel with the ISO 14001 negotiation process, because the architects of CIQC STD 0014 did not feel that their needs for compliance and performance assurances were being met by ISO 14001.23

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VI. OTHER ISSUES IN GREENING THE SUPPLY CHAIN

VI. 1. Consumer Demand is Currently Inadequate to Impose Supplier Requirements

End-use customers, focusing on price and quality, often do not see the relatively minor environmental impact of their individual purchases. Bulk manufacturers, by contrast, are aware of the aggregate impact of their products. They believe, however, that they cannot act without consumer demand and education, which would allow the producer to build in additional environmental costs. NEC's respondent stated:

The problem is cost. The products with environmentally conscious design are still expensive here in Japan, so we need to cooperate with citizens to raise environmental awareness, especially toward environmentally conscious products, and to lower their costs.

By contrast, some of Microsoft's environmental innovations actually reduce costs for both the company and its customers. However, customer awareness of these benefits is limited:

Microsoft has had a huge marketing and sales push over the last three to four years to move businesses from purchasing a packaged product or a product with manuals, etc. to licensing their products. When the business houses the product on a server at a central location, based on their payment to Microsoft, the business is allowed to copy software onto their desktops. This requires only a license.

For example, if a business has 100 computers, it needs to buy only one package, which consists of a CD which is put on a server. Microsoft sends them only one piece of paper that says all 100 are licensed product. Once the business has the authorization number, it can download the program from its internal server onto each of those computers. Four years ago, licensing represented about 15 percent of their business. This year [1997] it will be 55 percent.

This is an economic benefit for Microsoft and a waste-stream benefit for their customers. They pass along these savings by lowering prices from 5 to 20 percent, depending on volume, to businesses that opt for this approach. Some customers are aware of it, and some are not.

VI. 2. Governments Can Induce Significant Greening of the Production Chain

Many companies regard greening the supply chain as a cost, and they believe that it would put them at a competitive disadvantage if they were to undertake this expense if other companies do not do the same. These firms favor a strong potential role for government in levelling the playing field, rather than relying on voluntary corporate initiative.

Among the survey respondents, Rockwell believed that government regulation would be more effective than voluntary initiative, whereas Occidental Petroleum argued against regulation and in favor of government incentives, such as purchasing conditions. Monsanto argued for a range of governmental incentives, such as investment tax credits and accelerated depreciation rates on older plants.

Of course, in a global trade arena covering developed and developing countries with vastly differing governmental and environmental infrastructures, this scenario may have to be revisited. Clearly there are different opportunities and constraints for home-country governments and for corporate initiatives in a multinational environment than in one country. Leadership taken by groups of global firms in developing private-sector standards for foreign suppliers is one example of a way forward. Government agencies may play an important role in supporting these efforts and facilitating their expansion.

Occidental Petroleum expressed the view that government should support national industry initiatives and their international outreach programs:

The way that [government] can be most effective in furthering environmental self-regulation as far as the chemical industry is concerned is to push the furtherance of Responsible Care� in developing countries through seminars, implementation assistance, emergency response programs and systems, etc. This can be accomplished with the help of the CMA or the International Council of Chemical Associations (ICCA) via the CMA. The ICCA has a very active and progressive program to do just that and would welcome assistance to hold seminars, and consult on Responsible Care�. . . . By concentrating on practical application of pollution reduction tools and management systems . . . [government] will likely find a willing and cooperative industry audience around the world, and can be very effective in fostering the achievement of real environmental benefits.

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VII. SUMMARY AND IMPLICATIONS OF FINDINGS

This survey set out to establish what global firms are doing in both corporate environmental management and supply-chain management and what role ISO 14001 is playing in each area.

1. Corporate environmental management and the role of ISO 14001.

Global firms are interested in ISO 14001 as an environmental management tool and greatly interested in customizing ISO 14001 to a company's existing EMS. In that case, the focus shifts from ISO 14001 certification to determining what parts of ISO 14001 can add value to the firm's environmental management system.

• Implications for global firms with EMSs in place. Certification to ISO 14001 may not be as important as it was for ISO 9001. The utility of ISO 14001 may lie in its contribution as a checklist to identify areas for improvement in corporate EMSs.
• Implications for suppliers to global firms. Customers are looking for demonstrably better environmental management from their suppliers. ISO 14001 may not be adequate in and of itself, and suppliers should communicate with their key customers to establish what information and results they will seek.

2. Supply-chain management and the role of ISO 14001.

Greening the supply chain is an emerging question for environmental management. Because few consumers are concerned about this, it is not a major strategic issue for most global companies. However, environmental regulations in countries where the end-product is sold (particularly product take-back regulations in several European countries) are driving a concern for supplier environmental management, especially in the automobile, electronics, and computer sectors. As a result of this concern, environmental managers are more interested in compliance and risk-reduction tools than in ISO 14001.

• Implications for global firms and their suppliers. Several initiatives are currently underway in the electronics, semiconductor, and chemical sectors to establish standards for supplier environmental management. Firms should get involved with these initiatives or at least stay informed about them.
• ISO 14001 may become a market condition. Most firms consider it possible that ISO 14001 will become a market condition. They believe that one or two major firms, most likely from Asia, could create a domino effect by requiring supplier ISO 14001 certification. Some of the world's largest firms believe they are held hostage to this market possibility.

NOTES

1. Unless otherwise indicated, all dollar amounts in this document are U.S. dollars.
   
   
2. U.N. Conference on Trade and Development (UNCTAD), Self-Regulation of Environmental Management, UNCTAD/DTCI/29, Environment Series #5.
   
   
3. Occidental Petroleum Corporation, 1996 Annual Report on Health, Environment and Safety (Los Angeles, 1996): 14.
   
   
4. Benchmark Environmental Consulting, Global Environmental Management: A Benchmark Evaluation of the Global Reporting Practices of the Fortune 100 (White Plains, NY: Bench Press, forthcoming).
   
   
5. Hitachi Ltd., "Global Environmental Charter," reprinted in For the Earth: Hitachi's Approach to Environmental Issues (no date, c.1995).
   
   
6. K. K. Showa Denko, "Action Plan for Environmental Protection" (Japan: April 1993). The "Guidelines" were written for the Rio Earth Summit and were established on June 1, 1992.
   
   
7. Apparel Working Group for the Environment, "Water Quality Initiative," wastewater guidelines developed by members of the Working Group on the Environment, Businesses for Social Responsibility.
   
   
8. UNCTAD, ISO 14001, International Environmental Management Systems Standards: Five Questions from Developing Countries (Geneva: United Nations, 1996).
   
   
9. ML Strategies, Boston; ADL, Boston; Digital Equipment, Boston.
   
   
10. "ISO 14001 Survey," Asian Environmental Review (April 1997).
    
    
11. Microelectronics and Computer Technology Corporation (MCC), 1996 Electronics Industry Association Environmental Roadmap (MCC Technical Report MCC-ECESM-001-96, June 1996).
    
    
12. The West Coast Working Group (WCWG) is a group of firms and consultants interested in ISO 14001. Further information is available on the Internet at www.wcwg.org.
    
    
13. Lynne Anderson, Chair, West Coast Working Group and head of the U.S. Working Group on Type Ecolabeling, survey of WCWG members (presentation of materials as of June 1997). Further information may be posted on the Internet at www.wcwg.org in the future.
    
    
14. Stephanie Gitter, "Assessment of Potential Benefits Incurred by Implementing ISO 14001: Five Case Studies from the New Jersey Chemical Industry" (masters thesis, New Jersey Institute of Technology, May 1997).
    
    
15. Benchmark Environmental Consulting, op. cit.
    
    
16. The Coalition of Environmentally Responsible Economies and Societies is a nonprofit organization that promotes the CERES Principles for sustainable corporate environmental management and reporting. Several Fortune 500 companies, including Sun Oil and General Motors, as well as progressive firms such as Ben and Jerry's, Patagonia, Polaroid, Timberland endorse these principles.
    
    
17. The PERI Guidelines were developed in 1992-93 by a multisectoral group of companies with input from other stakeholders. PERI is committed to increasing good corporate citizenship through environmental reporting. Companies involved in PERI include IBM.
    
    
18. International Chamber of Commerce, Business Charter for Sustainable Development: Principles for Environmental Management (Paris, France: International Chamber of Commerce 1991).
    
    
19. "Proctor & Gamble, Foregoing 14001 Registration, Opts for Independent Assessment," in Business and the Environment's ISO 14001 Update, vol. III, no. 7 (Arlington MA: Cutter Publications, July 1997).
    
    
20. "Nortel: Shared Savings for Chemicals and Waste Reduction," ENDS Report 267 (April 1997): 20-23.
    
    
21. Following information is drawn from Riva Krut, Sustainable Industrial Development: A Benchmark Evaluation of Policies and Reports in the Electronics Industry (Washington, DC, Environmental Protection Agency, Office of Policy Planning and Evaluation, Industry Strategies Division, October 1997) and Sustainable Industrial Development: A Benchmark Evaluation of Policies and Reports in the Photographics Industry (Washington, DC, Environmental Protection Agency, Office of Policy Planning and Evaluation, Industry Strategies Division, October 1997).
    
    
22. Computer Industry Quality Conference, CIQC STD 0014: Supplier Environmental Performance Review Questionnaire (October 10, 1996). Available on the Internet at www.sun.com/CIQC.
    
    
23. Some readers may assume that there is an intended parallel between ISO 14001 and CIQC STD 0014. The numeric parallel is coincidental. The supplier standard happens to be the 14th standard published by the CIQC; the environmental management systems standard happens to be number 14,000 in the ISO.

ANNEX