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Going Green(HKTDC Hong Kong Trade Services, Vol 01,2004)

Vol 1, 2004


Going Green

Going Green

It has taken time to catch on, but more and more companies in Hong Kong and on the Chinese mainland are applying for an internationally recognised certificate that proves corporate environmental responsibility.

Introduced in 1996, ISO 14001 is fast becoming a business necessity, according to Chris Yau, technical manager (training) of SGS Hong Kong Ltd, the local arm of global verification, testing and certification provider the SGS Group.

"At first companies didn't see the benefit, but it started picking up around 2000, and now our ISO 14001 business is increasing dramatically," notes Yau.

Initially many of those setting their houses in order for certification did so because their clients insisted on it, but now, Yau says, more and more of them are seeing that business efficiency and environmental responsibility go hand in hand and can lead to significant savings.

"When we talk about 'environmental protection' we're not eliminating pollutants, we're just stopping them going out into nature - it's what we call an 'end-of-pipe' treatment - while with ISO 14001 we're trying to reduce the pollutants at source," Yau explains.

"This model fits perfectly with ISO 9001 and a lot of clients who are certified to both standards have innovative ideas about combining the two standards to form integrated systems that can work really well."

ISO 9001 certification is not a prerequisite for ISO 14001 applicants, but almost all the organisations which have applied through SGS have it, and a culture of quality management has accordingly already been fostered in these companies.

These include big corporations in Hong Kong such as Philips, Sony and Ricoh, and small and medium-sized enterprises (SMEs), which Yau estimates account for between "one-third and one-quarter" of the certificates SGS has issued to date.

"ISO 14001 was designed to accommodate all sorts of businesses, but large corporations will have a bigger margin for taking advantage of ISO 14001 compared to small companies, because they have more environmental issues to handle," Yau notes.

According to SGS, ISO 14001 certification applicants need to understand that the certificate is not an environmental performance standard, an environmental product standard, a substitute for compliance with legal requirements in any jurisdiction, or an upgrade of ISO 9001.

"ISO 14001 certifies that the company to which it is awarded has put in place an Environmental Management System, or EMS, which meets a high, measurable and ongoing performance standard," Yau explains.

"That EMS is part of the organisation's overall management system, and its purpose is to meet that organisation's environmental policy objectives and control its significant environmental impacts."

Companies wanting to obtain the certificate can get help from environmental consultants in developing a system, or call in specialists such as SGS as system assessors and trainers.

SGS Hong Kong Ltd was founded in 1959 and is currently equipped with a strong team of 500 multi-disciplinary professionals who offer high-level expertise in testing, verification and inspection of products from various industries as well as training, consultation and certification for commercial clients, governments and international institutions.

The first step in obtaining ISO 14001 certification, says Yau, is getting a real commitment to the objective, forming and training a team to implement the EMS and then conducting an environmental impact assessment.

"This compares what you do to where the standards are, and once you know the gap, you try to fill it - for example if your water discharge is not up to standard, you may need to build a water treatment plant," Yau explains. "How long it takes depends on how much work needs to be done and how urgently the certification is required."

Although some organisations can afford to take their time over implementing ISO 14001, others may be suppliers to companies such as Philips that have put them on a compliance deadline on which future orders depend.

From start to finish, however, Yau believes most operations need "a good year", of which 3-9 months is spent getting ready for certification. "Then we'll provide a quotation and arrange an on-site visit to the facility before issuing a report," Yau notes. "There is also a certification visit about two months later, and if everything is in order the actual certificate is then issued."

The costs involved in obtaining ISO 14001 certification vary considerably from business to business, depending on the nature and the extent of the environmental impact of its activities.

On the southern Chinese mainland, for example, the majority of companies seeking the certificate are in the electronics, mechanical equipment, chemical and construction industries; while in Hong Kong many are property management companies carrying out cleaning activities which involve the use of chemicals.

"The certification fee is of the order of HK$10,000-40,000, but the main costs are investment in human resources and hardware," Yau adds. "If a factory is already legally compliant, there is probably minimal spending involved, but if it is not compliant it could be rather more."

He believes most companies quickly see tangible benefits to implementing the ISO 14001 EMS, over and above common motivations such as satisfying business partner requirements and enhancing public image.

"These include waste control, reduction of energy use, savings on the recycling and reuse of materials, and last but not least, avoidance of increasingly onerous financial penalties for non compliance with the laws," Yau concludes.

"Ultimately, ISO 14001 provides a framework for organisations to establish, document and maintain effective Environmental Management Systems as a means of ensuring that their product or service will meet their customers' requirements and other regulatory and mandatory environmental requirements."


Certain savings

The savings came quickly for Hong Kong-based consumer electronics product company Fook Tin Technologies Ltd after it decided to apply for ISO 14001 certification in early 2002.

The company first invited SGS Hong Kong Ltd tutors to train its staff on the Environmental Management System (EMS) requirements. The two organisations previously worked together on Fook Tin's successful ISO 9001 application in 1998. "Before the company was certified one of its main environmental impacts was water," SGS Hong Kong Ltd technical manager (training) Chris Yau recalls.

"Fook Tin redesigned its spray painting process and created a water treatment plant, saving 92% of the water used and significantly saving the paint required."

Fook Tin received an Integrated Management System or IMS certification for both its Hong Kong headquarters and its manufacturing facility in Shenzen on the southern Chinese mainland.

The certificate encompassed both ISO 14001 and ISO 9001, and recognised Fook Tin's success in making its Quality Management System and its new Environmental Management System work in tandem.

"Achieving ISO 14001 is not and should not be easy," observes Fook Tin executive director John Chai. "By choosing SGS we were able to ensure our key staff received practical advice and assistance from initial application right through to final certification. SGS encouraged our people to adopt a team spirit, which helped us pull together and solve the various problems we faced along the way."

Not, perhaps, entirely co-incidentally, in 2003 Fook Tin won not only the Productivity Grand Award but also the Environmental Performance Grand Award and a Quality Certificate of Merit in the Hong Kong Awards for Industry - yet another argument that environmental accountability is ultimately good for business.

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