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Chapter 1: Introduction

Provided by the International Finance Corporation

This manual is a step-by-step guide designed to help enterprises implement Environment Management Systems (EMSs) and comply with IFC's environmental policies. The manual's primary goal is to help businesses use environmental reviews to identify cost-saving measures. It is also intended to be a resource for companies to ensure positive environmental impacts while benefiting their own organization.

Defining an EMS

An Environment Management System, or EMS, is a comprehensive approach to managing environmental issues, integrating environment-oriented thinking into every aspect of business management. An EMS ensures environmental considerations are a priority, along with other concerns such as costs, product quality, investments, PR productivity and strategic planning.

An EMS generally makes a positive impact on a company's bottom line. It increases efficiency and focuses on customer needs and marketplace conditions, improving both the company's financial and environmental performance.  By using an EMS to convert environmental problems into commercial opportunities, companies usually become more competitive.

Business Benefits of an EMS

An EMS is an important component of a company's strategy for marketplace success. Environmental issues and sustainable development are capturing  the world's attention more than ever, and industry is often seen as a major source of environmental problems.

An EMS  addresses such concerns and leads to significant environmental improvements. In addition, an EMS can improve product quality, competitiveness, and production processes; reduce expenses, liabilities, insurance premiums and waste management costs; and enhance market responsiveness. An EMS also creates a more attractive company from an employment and investment perspective.

An EMS can favorably benefit key areas for a business, including:

  • Trade Customers and Consumers are becoming more environmentally conscious, and are selecting products that do not harm the environment. Major customers have started requiring suppliers to adopt an EMS. Customer trust is enhanced by commitment to demonstrable environmental management. Globalization has expanded markets and an EMS helps meet international consumer demand.  Consumer pressure has been shown to be an increasingly influential force demanding particular environmental standards for products.
  • Employees, whose skills, morale and management effectiveness are enhanced by an EMS. An EMS also improves employee retention and efficiency, and can create a safer and healthier workplace. In addition, an EMS can help build employee awareness about the production process by encouraging employee involvement in identifying problem areas.
  • Investors, whose criteria may demand strong environmental practices, thus facilitating access to capital. An EMS can also improve relationships with investment bankers, lenders, and stocks and bonds brokers.
  • Trade,  particularly the export as well as internal market advantage can benefit by a company adopting an EMS whereby many countries and economic trading blocks have introduced 'ecolabelling' schemes.
  • Local Community. An EMS helps maintain good community relations and enhance public image, as well as fostering development through the sharing of environmental solutions. Organizations with an EMS are better able to understand the communities in which they operate. Healthier communities result from reduced exposure to hazardous wastes and chemical materials, which may be called for by an EMS. A company's networks and reputation are also strengthened by an EMS. Improved relations with local and national NGOs will also result. 
  • Government. Implementation of an EMS may help companies obtain permits and authorizations. Industry-government relations may be improved among companies with an EMS. An EMS also helps demonstrate compliance with  environmental legislation. Legal and administrative costs are reduced by an EMS. An EMS can also reduce legal liability and risk of prosecution.
  • Sales and Marketing. Companies may increase their market share by minimizing the environmental impact of their operations through better product designs and cleaner production. An EMS can serve as a valuable marketing and promotion tool, and can improve a company's competitive advantage. Companies without sound environmental practices may not be able to take advantage of  new commercial opportunities, while companies with an EMS are more competitive in the global marketplace.
  • Productivity. An EMS can reduce operation costs by using less raw materials and conserving energy. It can also reduce the costs of doing business and increase profits, since greater efficiency means using less materials, time and energy. Efficiency, environmental and business performance, and compliance with mandatory standards can also be improved by implementing an EMS.
  • Insurance. By using an EMS, a company may be able to obtain insurance at lower cost. Companies that implement an EMS can reduce incidents that result in liability, while companies lacking sound environmental practices may be exposed to financial and environmental risk.
  • Waste Disposal. By implementing an EMS, companies can improve pollution prevention. An EMS can minimize waste, thus lowering operating costs, as well as eliminating waste transportation, storage and disposal costs. Costs for compliance with waste disposal regulations may also be reduced with an EMS. Additional revenues from recovery and sale of reusable wastes may be obtained by using an EMS.

Implementing an EMS

The process of creating and developing an EMS is described.  The first step is building awareness among both management and employees, helping them re-orient their thinking about the environment to better understand its relevance and impact on the company, regardless of company size, its products or services. The second step is for companies to become more proactive toward environmental issues. Finally, once an organization develops a new environmental culture, it will constantly look for new suitable solutions to improve its operations.


This manual is an advisory intended to help enterprises evaluate the impact they are having on the environment, how to identify environmental protection opportunities and improve awareness of the benefits of implementing an EMS. Compliance with environmental and occupational safety and health legislation is the responsibility of each individual business, and is not the focus of this manual. This manual is adapted from a number of sources providing detailed accounts of how to implement an EMS and of environmental regulations and guidelines, including the environmental management system standard ISO 14001. This document has been prepared by the ESRU of IFC and we welcome feedback on its content and applicability.  Judgements expressed herein do not necessarily reflect the views of IFC's Board of Directors or the governments they represent.


Copyright © 2000 - 2016, International Finance Corporation. All Rights Reserved.

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