Reasons for Adoption and Expected Benefits of Environmental Certifications and Standards

Environmental certified management standards (ECMS) are adopted by organizations (typically for-profit companies) to improve environmental performance. These programs entail a set of standards a company agrees to follow, where compliance is determined by a third-party. ECMS programs exist within industry, such as the Forest Stewardship Council, and across industries like the ISO 140001 Environmental Management.

There are three major reasons companies adopt voluntary programs. The first is stakeholder-signaling, where companies can communicate their values through certifications. These programs create transparency, and thus accountability, of the firm. The second reason is to create competitive barriers to others. Firms with greater control over standard outcomes, especially within industry standards, may erect barriers that make it harder for competitors to achieve certification while tailoring standards to their own needs. Additionally, early adopters signal a stronger commitment to risk management, giving some firms a leg up on ethical consumers. Lastly, companies are interested in such voluntary standards for the benefits of improved environmental performance such as lower energy costs.

Firms aim to benefit in three major ways by the adoption of standards. First is the financial profit, or ‘the business case for sustainability,’ which suggests there is improvement in profit margin given the up-charging eco label permits. Second is the reputation boost to consumers and even to the state or activists. And finally, firms may ensure compliance with local law by evaluating environmental risk.

The future effectiveness of these standards relies on their substantive components and avoidance of becoming watered down or adopted only as symbolic action.

This entry on ECMS provided a general overview of voluntary standards. My critique lies heavily in the scope and language used. Environmental certified management standard is simply too broad a term to capture the various ways environmental standards are managed. The single most important element of voluntary sustainability standards, certifications, or eco-labels is the element of third-party verification. These standards ought not be influenced by industry. This review of ECMS appeared to lump industry environmental management standards with third-party certifications. I do not think these two acts ought to be conflated. 

Additionally, I felt like the history of ECMS was left out- why did these programs arise? Did firms adopt them on their own or was their outside pressure? In the last decade the presence of ECMS has grown massively, yet there was little attention given to both their proliferation or subsequent concern over businesses ‘shopping’ for the lowest priced certification. Finally, the author utilized ‘environmentally-friendly’ as a descriptor of certification impacts, which communicate nothing about what these environmental programs seek to affect. While it was a good start, and organized concisely, the entry did not acknowledge the complexities surrounding such programs.

Brooke Lahneman discusses environmental certification and standards in Companion to Environmental Studies (pg. 620, Kindle).

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