The Environmental Impact of EMSs: Findings from the Literature

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• The Environmental Impact of EMSs Findings from
  the Literature
• Cary Coglianese
• John F. Kennedy School of Government
• Harvard University
• Presentation at the Institute of Medicine
• Washington, D.C.
• October 13, 2004

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Introduction The Impact of EMSs

• Do Environmental Management Systems Causally
  Affect Firms Environmental Performance?
• Dependent Variable Environmental performance,
  meaning reduced pollution or resource use
• Independent Variable Environmental management
  systems, formal plans and procedures adopted by
  companies to improve environmental compliance or
  performance
• What do we know about EMSs impact?

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Case Study Literature

• Case studies show that companies with EMSs have
  made improvements in environmental performance
• An Alcoa subsidiary in South Carolina cut waste
  generation in half after implementing an EMS
  (Rondinelli Vastag, 2000)
• Following adoption of an EMS, a Louisiana Pacific
  facility found a way to recycle wood chips,
  reducing waste and saving money (Coglianese
  Nash, 2000)
• USEPAs EMS website contains links to a dozen
  case studies (http//www.epa.gov/ems/studies/inde
  x.htm)

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Large N Studies Florida Davison (2001)

• Survey responses from 214 manufacturing
  facilities in Pennsylvania
• Larger percentages of facilities with EMSs or
  pollution prevention (P2) programs reported
  improvements in environmental performance
• Reductions in air pollution (75 compared with
  40)
• Reductions in electricity use (45 to 30)
• Reductions in solid waste (50 to 40)
• (All differences significant at the 0.01 level)

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Large N Studies Matthews (2001, 2004)

• Study of the approximately 50 facilities within
  the automotive assembly sector
• On average, no significant differences between
  facilities with EMSs and those without EMSs in
  terms of the following regulated measures
• TRI emissions
• Criteria air pollutant emissions
• RCRA hazardous wastes
• Instances of noncompliance with regulations

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Large N Studies Russo (2001)

• Study of 247 facilities within electronics
  sectors
• Using log of index based on TRI emissions as
  dependent variable, found two statistically
  significant results
• Older facilities had higher TRI emissions
• Facilities with EMSs had somewhat lower TRI
  emissions

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Potential Limitations of Existing Studies

• EMS adoption has been voluntary
• Selection bias may affect results
• Facilities adopting an EMS are likely to have
  environmental impacts that rise above a threshold
• Facilities adopting an EMS voluntarily are likely
  to have managers who are committed to improving
  environmental performance

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Is Management Commitment the Key Factor?

• Firms that volunteer to adopt an EMS do so
  because of some preexisting commitment to
  improving their environmental performance and are
  therefore less likely to implement these systems
  merely in token way.
• Firms that adopt and use EMSs but have a low
  commitment to making environmental improvements
  will implement their EMSs only in token or
  ritualistic ways, doing the bare minimum needed
  to be considered a firm that uses an EMS without
  making any significant environmental
  improvements.
• Cary Coglianese Jennifer Nash, Regulating from
  the Inside
• Can Environmental Management Systems Achieve
  Policy Goals? (2001)

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Kagan et al. Study of Pulp Paper Sector

• Why have some pulp mills done a better job in
  reducing pollution than others? It is not due to
  differences in the volume of mill production
  effluent levels were not correlated with
  production level. Nor is it due to differences
  in the stringency of the mills various
  regulatory licenses the 14 pulp mills level of
  environmental performance did not correlate
  closely with the regulatory jurisdiction in which
  they operated, or the type of regulatory regime
  they faced. Moreover, mills environmental
  performance was not consistently correlated with
  profitability or size (in terms of sales) of the
  parent corporation.
• Robert Kagan, Environmental Management Style and
  Corporate Environmental Performance, in Cary
  Coglianese Jennifer Nash, eds., Leveraging the
  Private Sector Management-Based Strategies for
  Improving Environmental Performance (forthcoming
  2005)

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Management Commitment Appears to Matter

• In our efforts to explain inter-facility
  differences, the strongest relationship found was
  between environmental management style and
  environmental performance. . Average emissions
  for True Believers were generally lower than
  those for Environmental Strategists, whose
  emissions were substantially lower than the
  average for Committed Compliers, whose emissions
  were substantially lower than the average for
  Reluctant Compliers.
• Robert Kagan, Environmental Management Style and
  Corporate Environmental Performance, in Cary
  Coglianese Jennifer Nash, eds., Leveraging the
  Private Sector Management-Based Strategies for
  Improving Environmental Performance (forthcoming
  2005).

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Andrews et al. Study of Auto Suppliers

• Survey results of 617 facilities in the auto
  supply chain, both those subject to customer EMS
  mandates and those not subject to them.
• Based on self-reported measures of environmental
  performance, there were no significant gains
  reported by EMS facilities in air or water
  pollution or use of chemicals.
• EMS facilities did report making more
  improvements in energy efficiency and managing
  spills.
• Richard N. L. Andrews, Andrew Hutson, and Daniel
  Edwards Jr.,
• Environmental Management Under Pressure How Do
  Mandates Affect Performance?, in Cary Coglianese
  Jennifer Nash, Leveraging the Private Sector
  Management-Based Strategies for Improving
  Environmental Performance (forthcoming 2005).

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Facility Response to P2 Planning Laws

• 14 states have adopted laws mandating that
  facilities using high amounts of toxic chemicals
  develop plans for identifying ways of preventing
  toxic pollution.
• A recent study by Lori Snyder Bennear (2004) used
  a differences in differences estimation strategy
  to analyze TRI emissions from over 30,000
  facilities nationwide.
• Bennear found facilities in states with P2
  planning laws reduced TRI releases by about
  62,000 pounds on average (or about 30).

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Conclusions

• Facilities with EMSs can and do make improvements
  in their environmental performance
• However, management commitment appears to explain
  some, if not most, of these improvements.
• Nevertheless, even facilities that are required
  to adopt management systems or P2 plans still
  show performance improvements.
• It appears that once facilities are forced to
  invest the resources to find win-win
  opportunities, they are willing to implement
  them.

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Remaining Question Longevity of Gains?

• Hendrickson, Matthews and Lave (2004) report that
  once a facility has certified an EMS to the
  ISO 14001 standard, improvements in environmental
  performance did not accelerate from past
  performance. In some cases, facility performance
  was actually worse after an EMS was implemented
  and certified to the ISO 14000 standard.
• Bennear (2004) found that facilities subject to
  P2 planning laws stopped making gains after 6
  years.
• Current study by Coglianese and Nash (2004)
  indicates that most facilities subject to
  Massachusetts toxic use planning law now view
  planning as a paper exercise.